Anderson, R.; Johnson, A.; Kelso and Milbert were excused.

Olson, E., was excused until 2:50 p.m.

The Chief Clerk proceeded to read the Journal of the preceding day. Anderson, B., moved that further reading of the Journal be suspended and that the Journal be approved as corrected by the Chief Clerk. The motion prevailed.

There being no objection, the order of business advanced to Motions and Resolutions.

Jefferson introduced:

House Resolution No. 5, A house resolution congratulating the Minneapolis North High School boys basketball team for winning the 1995 Minnesota state boys basketball championship.

Jefferson moved that the rules be so far suspended that House Resolution No. 5 be now considered and be placed upon its adoption. The motion prevailed.

A house resolution congratulating the Minneapolis North High School boys basketball team for winning the 1995 Minnesota state boys basketball championship.

Whereas, the Minneapolis North Polars were undefeated during the 1994-1995 season, finishing with a record of 30-0; and

Whereas, the Polars outscored their opponents by more than 20 points per game during the season; and

Whereas, the Minnesota State High School League recognized only one boys basketball champion in 1995 for the first time since 1970; and

Whereas, several North High School players received individual honors for their achievement during the season; and

Whereas, the North High School boys basketball team won the Class AA championship in 1980 and were runners-up in 1933, 1938, 1984, 1985, and 1990; Now, Therefore,

Be It Resolved by the House of Representatives of the State of Minnesota that the Minneapolis North High School boys basketball team is congratulated for winning the 1995 Minnesota State High School League boys basketball championship and continuing its strong tradition.

Be It Further Resolved that the Chief Clerk of the House of Representatives is directed to prepare an enrolled copy of this resolution, to be authenticated by his signature and that of the Speaker, and transmit it to Minneapolis North High School.

Jefferson moved that House Resolution No. 5 be now adopted. The motion prevailed and House Resolution No. 5 was adopted.

There being no objection, the order of business reverted to Reports of Chief Clerk.

S. F. No. 16 and H. F. No. 33, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Dawkins moved that the rules be so far suspended that S. F. No. 16 be substituted for H. F. No. 33 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 204 and H. F. No. 139, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Pawlenty moved that the rules be so far suspended that S. F. No. 204 be substituted for H. F. No. 139 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 320 and H. F. No. 110, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Dorn moved that the rules be so far suspended that S. F. No. 320 be substituted for H. F. No. 110 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 447 and H. F. No. 460, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Entenza moved that the rules be so far suspended that S. F. No. 447 be substituted for H. F. No. 460 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 893 and H. F. No. 1130, which had been referred to the Chief Clerk for comparison, were examined and found to be identical.

Simoneau moved that S. F. No. 893 be substituted for H. F. No. 1130 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 965 and H. F. No. 1434, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Dauner moved that the rules be so far suspended that S. F. No. 965 be substituted for H. F. No. 1434 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 1055 and H. F. No. 724, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Kelley moved that the rules be so far suspended that S. F. No. 1055 be substituted for H. F. No. 724 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 1060 and H. F. No. 1145, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Perlt moved that the rules be so far suspended that S. F. No. 1060 be substituted for H. F. No. 1145 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 1086 and H. F. No. 1106, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Cooper moved that the rules be so far suspended that S. F. No. 1086 be substituted for H. F. No. 1106 and that the House File be indefinitely postponed. The motion prevailed.

The following communications were received:

April 5, 1995

The Honorable Irv Anderson

Speaker of the House of Representatives

The State of Minnesota

Dear Speaker Anderson:

It is my honor to inform you that I have received, approved, signed and deposited in the Office of the Secretary of State the following House Files:

H. F. No. 367, relating to debt; providing for prompt payment of subcontractors of municipal contractors; modifying certain provisions relating to liens and performance bonds.

H. F. No. 321, relating to game and fish; continuing the authorization for residents under the age of 16 to take deer of either sex.

Warmest regards,

Arne H. Carlson

Governor

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

I have the honor to inform you that the following enrolled Acts of the 1995 Session of the State Legislature have been received from the Office of the Governor and are deposited in the Office of the Secretary of State for preservation, pursuant to the State Constitution, Article IV, Section 23:

                                    Time and          

S.F.         H.F.   Session Laws    Date ApprovedDate Filed

No.           No.    Chapter No.             1995      1995

214 30 10:05 a.m. April 5 April 5

367 31 10:00 a.m. April 5 April 5

321 32 10:02 a.m. April 5 April 5

739 33 9:58 a.m. April 5 April 5

Sincerely,

Joan Anderson Growe

Secretary of State

Munger from the Committee on Environment and Natural Resources to which was referred:

H. F. No. 345, A bill for an act relating to state lands; authorizing private sale of certain tax-forfeited land that borders public water in Kandiyohi county.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Long from the Committee on Local Government and Metropolitan Affairs to which was referred:

H. F. No. 379, A bill for an act relating to cities; permitting cities to close certain unlawful businesses; proposing coding for new law in Minnesota Statutes, chapter 415.

Reported the same back with the following amendments:

Page 1, line 10, after "city" insert "zoning or licensing" and after the period, insert "The city must have in place a proper notification procedure and have followed the procedure prior to requesting the enforcement of this section.

Sec. 2. [EFFECTIVE DATE; APPLICATION.]

Section 1 is effective August 1, 1995, and applies to a business established or licensed on or after that date."

With the recommendation that when so amended the bill pass.

The report was adopted.

Kahn from the Committee on Governmental Operations to which was referred:

H. F. No. 493, A bill for an act relating to retirement; modifying administrative provisions relating to the Minneapolis employees retirement fund; amending Minnesota Statutes 1994, section 422A.05, by adding a subdivision.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. [EVELETH POLICE AND FIREFIGHTERS; BENEFIT INCREASE.]

Notwithstanding any general or special law to the contrary, in addition to the current pensions and other retirement benefits payable, the pensions and retirement benefits payable to retired police officers and firefighters and their surviving spouses by the Eveleth police and fire trust fund are increased by $100 a month. Increases are retroactive to January 1, 1995. If the city of Eveleth fails to contribute an amount required in a given year sufficient to amortize the unfunded actuarial accrued liability of the police and fire trust fund by December 31, 1998, the increases under this section in the following year are not payable.

Sec. 2. [DULUTH TEACHERS RETIREMENT FUND ASSOCIATION; SPECIAL SERVICE PURCHASE AUTHORIZATION FOR CERTAIN FORMER DULUTH TECHNICAL COLLEGE TEACHERS.]

(a) A retired member of the Duluth teachers retirement fund association who:

(1) was born on April 29, 1932;

(2) was initially employed by independent school district No. 709 on September 8, 1970;

(3) terminated employment as a teacher at the Duluth technical college on July 1, 1994;

(4) retired from the Duluth teachers retirement fund association effective on July 15, 1994; and

(5) did not receive certification of eligibility for an early separation incentive from the chancellor of the higher education board in a timely fashion, but did eventually receive the required certification on October 24, 1994;

may purchase two years of additional service credit from the Duluth teachers retirement fund association as provided in Laws 1994, chapter 572, section 3, subdivision 3, paragraph (e), clause (2), item (i), as though otherwise qualified, to have the person's retirement annuity from the Duluth teachers retirement fund association recomputed based on the additional service credit, and to have any medical insurance premiums that the person paid subsequent to retirement reimbursed by the Duluth technical college on the basis of the provisions of Laws 1994, chapter 572, section 3, subdivision 3, paragraph (e), clause (1).

(b) The purchase of additional service credit must be made within 30 days of the effective date of this section.

(c) The recomputed retirement annuity must be based on any optional annuity form selected upon retirement and must be subject to the early retirement reduction imposed upon retirement. The recomputed annuity accrues as of the effective date of retirement and any omitted retirement annuity amounts from the date of retirement to the date of recomputation must be paid in a lump sum as soon as practicable following the recomputation and must include annual interest on the omitted amounts at the rate of six percent, expressed as a monthly rate, and compounded monthly.

(d) If the retired member seeks reimbursement for medical insurance premiums, the retired member must furnish the president of the Duluth technical college with reasonable verification of medical insurance coverage and of prior medical insurance premiums paid.

Sec. 3. [MINNEAPOLIS EMPLOYEES RETIREMENT FUND; TEMPORARY OPTION.]

Notwithstanding any law to the contrary, a retired member of the Minneapolis employees retirement fund who elected a joint and survivor optional annuity form at the time of retirement and who has a living designated optional annuity recipient may select a substitute joint and survivor option under which the retired member will receive a normal single-life annuity if the previously designated recipient dies before the retired member. This substitute optional annuity must be the actuarial equivalent of the joint and survivor annuity option amount in effect at the time this option substitution is selected. This option must be exercised before July 1, 1996, according to procedures specified by the board of the Minneapolis employees retirement fund.

Sec. 4. [WEST ST. PAUL POLICE CONSOLIDATION ACCOUNT; CERTAIN SURVIVING SPOUSE BENEFITS.]

(a) Notwithstanding Minnesota Statutes, section 353A.08, the surviving spouse of a person described in paragraph (b) is entitled to receive survivor benefits provided under paragraph (c).

(b) This section applies to the surviving spouse of a person who was:

(1) employed as a police chief by the city of West St. Paul;

(2) an active member of the West St. Paul police relief association on February 8, 1993, when the governing body of West St. Paul, in accordance with Minnesota Statutes, section 353A.04, subdivision 5, gave preliminary approval to the consolidation of the association with the public employees retirement association;

(3) whose intention, upon consolidation, to elect benefits provided under the relevant provisions of the public employees retirement association police and fire fund benefit plan was recognized by the governing body of West St. Paul in a resolution adopted March 16, 1994;

(4) who died in April 1993, before the governing body of West St. Paul, on August 23, 1993, gave final approval to the consolidation in accordance with Minnesota Statutes, section 353A.04, subdivision 8; and

(5) who was thus unable, before his death, to carry out his intent to elect public employees retirement association benefits under Minnesota Statutes, section 353A.08.

(c) As of the effective date of this section, benefits for the surviving spouse identified in paragraph (b) computed under provisions of the West St. Paul police relief association plan terminate and survivor benefits computed under relevant provisions of the public employees retirement association police and fire plan commence. The relevant provisions of the public employees retirement association police and fire plan are survivor benefits computed under section 353.657, assuming the deceased police officer was covered by that plan at the time of death. The benefit will include adjustments, if any, under section 353.271. Retroactive payment of benefits is not authorized.

Sec. 5. [EDEN PRAIRIE VOLUNTEER FIREFIGHTERS RELIEF ASSOCIATION SERVICE PENSIONS.]

Subdivision 1. [SERVICE PENSION VESTING REQUIREMENT.] (a) Notwithstanding any provision of Minnesota Statutes, section 424A.02, subdivision 2, to the contrary, if the bylaws of the relief association so provide, the Eden Prairie volunteer firefighters relief association may pay an unreduced service pension to a member of the association who has terminated active service as a firefighter in the Eden Prairie fire department, who has at least ten years of service as an active firefighter in good standing with the department and at least ten years of membership in good standing in the association, and who meets all other applicable eligibility requirements of the association for entitlement to a service pension.

(b) Notwithstanding any provision of Minnesota Statutes, section 424A.02, subdivision 2, to the contrary, if the bylaws of the association so provide, the association may pay a reduced service pension to a member of the association who has terminated active service as a firefighter in the department, who has at least five years of service but less than ten years of service as an active firefighter in good standing with the department and at least five years but less than ten years as a member in good standing in the association, and who meets all other applicable eligibility requirements of the association for entitlement to a service pension. The amount of the reduced service pension is the amount determined by multiplying the total service pension amount as specified in the articles of incorporation or bylaws of the association that is appropriate for the number of completed years of service to the credit of the retiring member by the applicable percentage, as follows:

Completed years of serviceApplicable percentage

5 40percent

6 52percent

7 64percent

8 76percent

9 88percent

10 and thereafter100percent.

Subd. 2. [POSTRETIREMENT SERVICE PENSION ADJUSTMENTS FOR DEFERRED RETIREES.] (a) A "deferred retiree" is a former Eden Prairie volunteer firefighter who has completed at least five years of service as a firefighter in good standing with the Eden Prairie volunteer fire department and five years as a member in good standing in the Eden Prairie volunteer firefighters relief association and has separated from active service as a firefighter before attaining the earliest age for immediate receipt of service pension from the association as provided in the articles of incorporation or the bylaws of the association.

(b) Notwithstanding any provision of Minnesota Statutes, section 424A.02 to the contrary, if the articles of incorporation or bylaws of the association so provide, and if the Eden Prairie city council approves the deferred service pension increase under Minnesota Statutes, sections 69.773, subdivision 6, and 424A.02, subdivision 10, a deferred retiree who has credit for at least 15 years of active service with the department and who has not elected to receive a lump sum service pension as an alternative to a monthly service pension, may receive the same postretirement increase in the amount of that deferred monthly service pension that is approved and is payable to an association service pension recipient under Minnesota Statutes, section 424A.02, subdivision 9a.

(c) A deferred retiree who has credit for less than 15 years of active service with the department is not eligible for a postretirement increase.

Sec. 6. [RETURNING ANNUITANT.]

(a) Notwithstanding any provision of Minnesota Statutes, section 353.37 to the contrary, an eligible person described in paragraph (b) will be treated as specified in paragraph (c).

(b) An eligible person is a person who:

(1) was born on December 9, 1936;

(2) terminated from the Carlton county human services department as a financial eligibility specialist and retired from the public employees retirement association on April 1, 1992; and

(3) returned to Carlton county employment as a financial worker.

(c) As of the effective date of this section, annuity payments from the public employees retirement association terminate for an eligible person described in paragraph (b). As of that date the person is considered to have elected a deferred annuity under Minnesota Statutes, section 353.34, subdivision 3, with deferred annuity payments to commence upon the termination of the person's present employment. During the person's present employment, the person is entitled to participation in the public employees unclassified plan, and the person and the county shall make the contributions required under Minnesota Statutes, section 353D.03, paragraph (a).

Sec. 7. [EFFECTIVE DATE.]

(a) Section 1 is effective on approval by the Eveleth city council and compliance with Minnesota Statutes, section 645.021.

(b) Section 2 is effective on the day following approval by the board of education of independent school district No. 709 and compliance with Minnesota Statutes, section 645.021.

(c) Section 3 is effective on approval by the Minneapolis city council and compliance with Minnesota Statutes, section 645.021.

(d) Section 4 is effective on the day following approval by the governing body of the city of West St. Paul and compliance with Minnesota Statutes, section 645.021, subdivision 2.

(e) Section 5 is effective on the day following compliance with Minnesota Statutes, section 69.773, subdivision 6, approval by the Eden Prairie city council, and compliance with Minnesota Statutes, section 645.021, subdivision 3.

(f) Section 6 is effective on the day following approval by the Carlton county board and compliance with Minnesota Statutes, section 645.021.

Section 1. [CONSOLIDATED CRYSTAL-NEW HOPE VOLUNTEER FIREFIGHTERS RELIEF ASSOCIATION; CREATION.]

Notwithstanding any provision of law to the contrary, if the cities of Crystal and New Hope enter into a joint powers agreement under Minnesota Statutes, section 471.59, to establish and operate a joint powers fire department, the Crystal volunteer firefighters relief association and the New Hope volunteer firefighters relief association shall consolidate into a single volunteer firefighters relief association. The consolidated volunteer firefighters relief association must be governed by sections 1 to 7 and the applicable provisions of Minnesota Statutes, chapters 69, 356, 356A, and 424A.

Sec. 2. [CONSOLIDATED VOLUNTEER FIREFIGHTERS RELIEF ASSOCIATION.]

Subdivision 1. [ESTABLISHMENT.] The consolidated volunteer firefighters relief association for the joint powers fire department serving the cities of Crystal and New Hope must be incorporated under Minnesota Statutes, chapter 317A. The incorporators of the consolidated relief association must include at least one board member of the

Crystal volunteer firefighters relief association and at least one board member of the former New Hope volunteer firefighters relief association. The consolidated relief association must be incorporated within 90 days of the establishment of the joint powers fire department. The joint powers fire department is established on the date specified in the joint powers agreement.

Subd. 2. [GOVERNANCE OF CONSOLIDATED VOLUNTEER FIREFIGHTERS RELIEF ASSOCIATION.] (a) Notwithstanding Minnesota Statutes, section 424A.04, subdivision 1, the consolidated volunteer firefighters relief association is governed by a board of trustees consisting of nine members, as provided in the bylaws of the consolidated relief association, composed of:

(1) six firefighters in the joint fire department elected by the membership of the consolidated relief association; and

(2) three appointed members, including the fire chief of the joint fire department, one member appointed by the city council of the city of New Hope, and one member appointed by the city council of the city of Crystal.

(b) The board must have three officers, including a president, a secretary, and a treasurer. The membership of the consolidated volunteer firefighters relief association must elect the three officers from the nine board members. A board of trustees member may not hold more than one officer position at the same time.

(c) The board of trustees must administer the affairs of the relief association consistent with sections 1 to 7 and the applicable provisions of Minnesota Statutes, chapters 69, 356A, and 424A.

Subd. 3. [SPECIAL AND GENERAL FUNDS.] (a) The consolidated volunteer firefighters relief association must establish and maintain a special fund and may establish and maintain a general fund.

(b) The special fund must be established and maintained as provided in Minnesota Statutes, section 424A.05.

(c) The general fund must be established and maintained as provided in Minnesota Statutes, section 424A.06.

Sec. 3. [CONSOLIDATION OF FORMER RELIEF ASSOCIATIONS.]

Subdivision 1. [EFFECTIVE DATE OF CONSOLIDATION.] On the first business day occurring 30 days after the establishment of the consolidated volunteer firefighters relief association under section 2, which is the effective date of consolidation, the administration, records, assets, and liabilities of the prior Crystal volunteer firefighters relief association and of the prior New Hope volunteer firefighters relief association transfer to the consolidated volunteer firefighters relief association and the Crystal volunteer firefighters relief association and the New Hope volunteer firefighters relief association cease to exist as legal entities.

Subd. 2. [TRANSFER OF ADMINISTRATION.] On the effective date of consolidation, the administration of the prior relief associations is transferred to the board of trustees of the consolidated volunteer firefighters relief association.

Subd. 3. [TRANSFER OF RECORDS.] On the effective date of consolidation, the secretary and the treasurer of the Crystal volunteer firefighters relief association and the secretary and the treasurer of the New Hope volunteer firefighters relief association shall transfer all records and documents relating to the prior relief associations to the secretary and the treasurer of the consolidated volunteer firefighters relief association.

Subd. 4. [TRANSFER OF SPECIAL FUND ASSETS AND LIABILITIES.] (a) On the effective date of consolidation, the secretary and the treasurer of the Crystal volunteer firefighters relief association and the secretary and the treasurer of the New Hope volunteer firefighters relief association shall cause to occur the transfer of the assets of the special fund of the applicable relief association to the special fund of the consolidated relief association. Unless the applicable secretary and treasurer decide otherwise, the assets may be transferred as investment securities rather than as cash. The transfer must include any accounts receivable. The applicable secretary shall settle any accounts payable from the special fund of the relief association before the effective date of consolidation.

(b) Upon the transfer of the assets of the special fund of a prior relief association, the pension liabilities of that special fund become the obligation of the special fund of the consolidated volunteer firefighters relief association.

(c) Upon the transfer of the prior relief association special fund assets, the board of trustees of the consolidated volunteer firefighters relief association has legal title to and management responsibility for the transferred assets as trustees for persons having a beneficial interest in those assets arising out of the benefit coverage provided by the prior relief association.

(d) The consolidated volunteer firefighters relief association is the successor in interest for all claims for and against the special funds of the prior Crystal volunteer firefighters relief association and the prior New Hope volunteer firefighters relief association, or the cities of Crystal and New Hope with respect to the special funds of the prior relief associations. The status of successor in interest does not apply to any claim against a prior relief association, the city in which that relief association is located, or any person connected with the prior relief association or the city, based on any act or acts that were not done in good faith and that constituted a breach of fiduciary responsibility under common law or Minnesota Statutes, chapter 356A.

Subd. 5. [DISSOLUTION OF PRIOR GENERAL FUND BALANCES.] Before the effective date of consolidation, the secretary of the Crystal volunteer firefighters relief association and the secretary of the New Hope volunteer firefighters relief association shall settle any accounts payable from the respective general fund or any other relief association fund in addition to the relief association special fund. Any investments held by a fund of the prior relief associations in addition to the special fund must be liquidated before the effective date of consolidation as the bylaws of the relief association provide. Before consolidation, the respective relief associations shall pay all applicable general fund expenses from their respective general funds and any balance remaining in the general fund or in a fund other than the relief association special fund as of the effective date of consolidation must be paid to the new general fund of the consolidated volunteer relief association.

Subd. 6. [TERMINATION OF PRIOR RELIEF ASSOCIATIONS.] Following the transfer of administration, records, special fund assets, and special fund liabilities from the prior relief associations to the consolidated volunteer firefighters relief association, the Crystal volunteer firefighters relief association and the New Hope volunteer firefighters relief association cease to exist as legal entities. The city manager of the city of Crystal and the city manager of the city of New Hope must notify the following government officials of the termination of the respective relief associations and of the establishment of the consolidated volunteer firefighters relief association:

(1) Minnesota secretary of state;

(2) Minnesota state auditor;

(3) Minnesota commissioner of revenue; and

(4) commissioner of the federal Internal Revenue Service.

Sec. 4. [EFFECT ON PREVIOUS BENEFIT PLAN COVERAGE.]

Subdivision 1. [BENEFIT COVERAGE FOR CURRENT RETIRED MEMBERS.] (a) A person who is receiving a monthly service pension, a monthly disability benefit, or a monthly survivorship benefit from the Crystal volunteer firefighters relief association or from the New Hope volunteer firefighters relief association on the effective date of consolidation is entitled to a continuation of that pension or benefit, including any death benefit or monthly survivorship benefit provided for in the benefit plan document of the applicable prior relief association in effect on the day before the effective date of the consolidation, from the consolidated volunteer firefighters relief association. Unless paragraph (b) applies, the amount of the pension or benefit payable after the effective date of consolidation must be identical to the amount payable before the effective date of consolidation. The pension or benefit payable after the effective date of consolidation is subject to the same terms, conditions, and qualifications as were in effect before the effective date of consolidation.

(b) If the board of trustees of the consolidated volunteer firefighters relief association establishes the option, a pension or benefit recipient to whom paragraph (a) applies is entitled to elect an alternative pension or benefit amount as offered by the relief association board. To provide this alternative pension or benefit, the relief association board may arrange for a lump-sum payment or the purchase of an annuity contract for the pension or benefit recipient in place of a direct payment from the relief association to the person. The annuity contract may be purchased only from an insurance company that is licensed to do business in this state, regularly undertakes life insurance and annuity business, and is rated by a recognized national rating agency or organization as being among the top 25 percent of all insurance companies undertaking life insurance and annuity business. The alternative pension or benefit payable monthly may be in an amount greater than the pension or benefit payable before the effective date of consolidation, but may not exceed the maximum service pension or benefit payable under Minnesota Statutes, chapter 424A. In electing the alternative pension or benefit payable under an annuity contract from a qualified insurance company, the affected person must waive in writing the person's eligibility and entitlement to any direct future pension or benefit payments from the consolidated volunteer firefighters relief association.

Subd. 2. [BENEFIT COVERAGE FOR CURRENT DEFERRED MEMBERS.] (a) A person who is not an active member of the Crystal volunteer firefighters relief association or an active member of the New Hope volunteer firefighters relief association but who has sufficient service credit with one of the relief associations to be entitled to a future service pension from the appropriate relief association remains entitled to the receipt of that service pension, upon application, when the person attains at least the minimum age for receipt of a service pension unless the person elects an alternative service pension under paragraph (b). A deferred member may transfer the member's current service pension to a member's individual account established under subdivision 3, paragraph (c), subject to the same conditions of individual accounts for active members, and remain entitled to receipt of a service pension when the member reaches the normal retirement age.

(b) If the board of trustees of the consolidated volunteer firefighters relief association establishes the option for benefit recipients under subdivision 1, the deferred service pensioner described in paragraph (a) may elect the same alternative service pension as established under subdivision 1, paragraph (b), except that the deferred service pensioner may not receive the alternative service pension at an age younger than the normal retirement age in effect for the prior applicable relief association.

Subd. 3. [BENEFIT COVERAGE FOR NEW FIREFIGHTERS AND CURRENT VESTED AND NONVESTED ACTIVE MEMBERS.] (a) The benefit coverage for persons who become firefighters for the joint fire department for the first time after the effective date of consolidation and for persons who are active members of the consolidated volunteer firefighters relief association as of the effective date of consolidation is a defined contribution plan governed under this subdivision and Minnesota Statutes, section 424A.02, subdivision 4.

(b) For an active member of the consolidated volunteer firefighters relief association as of the effective date of consolidation, that member's prior service as a firefighter in the prior Crystal fire department or the prior New Hope fire department must be converted into a dollar accumulation by multiplying each full year of prior service as a firefighter in the prior fire department of Crystal or the prior fire department of New Hope by not less than $3,000. A member's prior service of a partial year will be converted into a dollar accumulation by prorating the full year of prior service yearly amount by the number of months served in the partial year. The total calculated dollar accumulation must be credited to the member's individual account established under paragraph (c).

(c) For each active member of the consolidated volunteer firefighters relief association covered by the defined contribution plan, an individual account must be established, as provided in Minnesota Statutes, section 424A.02, subdivision 4, with an initial balance based on the conversion accumulation determined under paragraph (b), if applicable. Notwithstanding Minnesota Statutes, section 424A.02, subdivision 4, the amount of fire state aid and the amount of regular municipal contributions must be credited to individual active firefighter accounts as specified in section 6, subdivision 4.

Sec. 5. [ACTUARIAL VALUATIONS REQUIRED.]

(a) Unless all benefit recipients and deferred service pensioners elect alternative pensions or benefits under section 4, subdivisions 1, paragraph (b); and 2, paragraph (b), a special actuarial valuation of the consolidated volunteer firefighters relief association must be prepared as soon as practicable following the benefit selection under section 4, subdivision 1. The actuarial valuation must be prepared under the applicable provisions of Minnesota Statutes, sections 356.215 and 356.216.

(b) Subsequent actuarial valuations must be prepared as required under Minnesota Statutes, section 69.773, subdivisions 2 and 3, if any person is entitled or is reasonably anticipated to be entitled to a direct future monthly benefit from the consolidated relief association.

Sec. 6. [ANNUAL RELIEF ASSOCIATION FUNDING.]

Subdivision 1. [SOURCES.] In addition to investment income earned by the special fund, the sources of the annual funding of the consolidated volunteer firefighters relief association are the fire state aid received by the city of Crystal, the fire state aid received by the city of New Hope, the regular municipal contribution from the city of Crystal, and the regular municipal contribution from the city of New Hope.

Subd. 2. [FIRE STATE AID.] The fire state aid received by the city of Crystal and the fire state aid received by the city of New Hope must be deposited in the special fund of the consolidated volunteer firefighters relief association, for allocation as provided in subdivision 4.

Subd. 3. [REGULAR MUNICIPAL CONTRIBUTION.] (a) Annually, as part of the municipal budget setting process, the city council of the city of Crystal and the city council of the city of New Hope must jointly establish the amount of the regular municipal contribution by each city to the consolidated volunteer firefighters relief association.

(b) The regular municipal contribution in total must be at least equal to (1) the amount of the fire state aid received by the city of Crystal and the fire state aid received by the city of New Hope, plus (2) whatever additional amount is needed to equal the sum determined by multiplying $1,811 by the total of the number of active firefighters who are members of the consolidated volunteer firefighters relief association.

(c) The established amount for each city must be included in the budget of the respective city, and, if not payable from a municipal revenue source other than the city's property tax levy or fire state aid, must be included in the property tax levy of the respective city. The regular municipal contribution must be allocated in the manner specified in subdivision 4.

(d) If a direct service pension or entitlement is payable under section 4, subdivision 1, paragraph (a); or subdivision 2, paragraph (a), to a retiree or deferred retiree, the applicable city remains responsible for any amount of service pension that is payable beyond the relief association assets allocated for the retiree or deferred retiree. Following any actuarial valuation of the consolidated relief association, if there is a net mortality loss attributable to the applicable city, the city shall make a contribution in addition to the regular municipal contribution under paragraphs (a) to (c) equal to the amount of that net mortality loss. The municipal contribution under this paragraph is payable on or before the last business day of the month next following the completion of the actuarial valuation.

Subd. 4. [ALLOCATION OF FUNDING AMOUNTS.] (a) The annual fire state aid and the regular municipal contribution, after deduction for payment of administrative expenses as specified in subdivision 5, must be allocated to individual active firefighter accounts based on the level of firefighting services rendered by the individual active firefighter as stated in the bylaws of the consolidated volunteer firefighters relief association.

(b) Investment income earned by the special fund of the consolidated relief association must be allocated to each individual account based on the proportion of the total assets of the special fund represented by the account.

Subd. 5. [PAYMENT OF RELIEF ASSOCIATION ADMINISTRATIVE EXPENSES.] (a) The payment of authorized administrative expenses of the consolidated volunteer firefighters relief association shall be from the special fund of the relief association according to Minnesota Statutes, section 69.80, and as provided for in the bylaws of the consolidated relief association and approved by the board of trustees of the consolidated relief association. The allocation of these administrative expenses to the individual member accounts must occur as provided in the bylaws of the consolidated relief association.

(b) The payment of any other expenses of the consolidated relief association shall be from the general fund of the consolidated relief association according to Minnesota Statutes, section 69.80, and as provided for in the bylaws of the consolidated relief association and approved by the board of trustees of the consolidated relief association.

Sec. 7. [VALIDATION OF CURRENT BENEFIT PLANS AND PRIOR ACTIONS.]

Notwithstanding any provisions of Laws 1969, chapter 1088, as amended by Laws 1978, chapters 562, section 32, and 753; Laws 1979, chapter 201, section 44; or Laws 1981, chapter 224, section 250; or Laws 1971, chapter 114, as amended by Laws 1979, chapters 97, and 201, sections 27 and 44; and Laws 1981, chapter 224, section 254, the benefit plans of the Crystal volunteer firefighters relief association and of the New Hope volunteer firefighters relief association as reflected in each relief association's articles of incorporation and bylaws as of December 15, 1993, are hereby ratified and validated. Any acts previously taken by the Crystal volunteer firefighters relief association and by the New Hope volunteer firefighters relief association with those ratified articles of incorporation and bylaws are also ratified and validated.

Sec. 8. [REPEALER OF PRIOR SPECIAL LAWS.]

Laws 1969, chapter 1088; Laws 1971, chapter 114; Laws 1978, chapters 562, section 32, and 753; Laws 1979, chapters 97, and 201, section 27; and Laws 1981, chapter 224, sections 250 and 254, are repealed.

Sec. 9. [EFFECTIVE DATE.]

Sections 1 to 7 are effective on the day following final approval by the city council of the city of Crystal and by the city council of the city of New Hope and compliance with Minnesota Statutes, section 645.021, subdivision 3. Section 8 is effective on the effective date of consolidation of the Crystal volunteer firefighters relief association and the New Hope volunteer firefighters relief association.

Section 1. [ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION; POSTRETIREMENT ADJUSTMENTS.]

Subdivision 1. [AUTHORITY FOR AMENDMENT.] Under Minnesota Statutes, section 354A.12, authority is granted for the St. Paul teachers retirement fund association to amend its articles of incorporation or bylaws as required to provide postretirement adjustments after June 1, 1995, in accordance with this section.

Subd. 2. [CALCULATION OF 13TH CHECK POSTRETIREMENT ADJUSTMENT.] Retired members and survivors of retired members from the St. Paul teachers retirement fund association are entitled to receive an annual lump sum postretirement increase granted at the discretion of the board of trustees under this subdivision. If granted, the lump sum postretirement increase is payable to all eligible annuitants and benefit recipients who have been retired for at least one year on July 1 following the June 30 fiscal year end. The lump sum amount must be determined as follows:

(1) the years of service and years of annuity or benefit payment receipt of each eligible annuitant or benefit recipient must be determined by the executive secretary as of each June 30, based on the records of the association and are called units;

(2) the unit value of the lump sum adjustment is one percent of the actuarial value of fund assets divided by the total of all units determined in clause (1);

(3) the amount payable to each eligible annuitant or benefit recipient is the product of the number of units allocated to that annuitant or beneficiary multiplied by the unit value determined in clause (2); and

(4) the lump sum postretirement adjustment determined under this clause is payable annually to each eligible annuitant or beneficiary and must be paid no sooner than six months following the fiscal year end. In lieu of a lump sum payment, the annuitant or beneficiary may annuitize the lump sum to a lifetime annuity or benefit increase using the interest and mortality assumptions required for the annual actuarial valuations of the fund.

Subd. 3. [INVESTMENT PERFORMANCE POSTRETIREMENT ADJUSTMENT.] (a) Annually, following the fiscal year end, the board of trustees of the St. Paul teachers retirement fund association shall use the procedures in paragraph (b) to determine whether an additional investment performance postretirement adjustment is payable and the amount of that additional investment performance postretirement adjustment.

(b) Annually, as of each June 30, the rate of return, after deduction of any investment-related expenses, must be determined using the method described in Minnesota Statutes, section 11A.04, clause (11), and the return above the assumed interest rate specified in Minnesota Statutes, section 356.215, must be determined and certified by the board of trustees to the actuary performing the annual actuarial valuation of the retirement fund. The amount of excess investment earnings, the funding ratio, and the actuarial accrued liability must be determined by the actuary preparing the annual actuarial valuation as specified in Minnesota Statutes, section 356.215, and must be used to determine the amount of an excess earnings postretirement adjustment, as follows:

(1) the amount of excess investment return must be determined by the actuary as of the end of the fiscal year end;

(2) the retiree percentage of the total fund actuarial accrued liability must be determined and must be multiplied by the amount of excess investment return determined in clause (1);

(3) the amount determined in clause (2) must be multiplied by the accrued liability funding ratio to determine the amount of excess investment return available for the postretirement increase;

(4) one-fifth of the amount determined in clause (3) must be allocated equally to the current year postretirement adjustment and one-fifth to each of the subsequent four years;

(5) the amount determined in clause (4) must be combined with the amount of excess investment return available for the postretirement increase allocated to the same fiscal year in prior years;

(6) if the amount determined in clause (5) is not positive, then no adjustment under this subdivision is payable; and

(7) the postretirement adjustment increase percentage rate must be determined by dividing the amount determined in clause (6) by the actuarial accrued liability for annuitants and benefit recipients in the year preceding the most recent fiscal year actuarial report.

(c) The additional postretirement adjustment rate determined in paragraph (b) applies to all annuitants and benefit recipients eligible for the regular lump sum postretirement increase determined in subdivision 2.

Subd. 4. [PAYMENT.] Any additional postretirement adjustment determined under subdivision 2 or 3 is payable to eligible annuitants and benefit recipients on January 1 following the fiscal year end.

Sec. 2. [REPEALER.]

Laws 1979, chapter 109, section 1; Laws 1981, chapter 157, section 1; Laws 1985, chapter 259, section 3; and Laws 1990, chapter 570, article 7, section 4, are repealed.

Sec. 3. [EFFECTIVE DATE.]

Sections 1 and 2 are effective upon approval by the board of education of independent school district No. 625, St. Paul, and compliance with Minnesota Statutes, section 645.021."

Delete the title and insert:

"A bill for an act relating to retirement; various local public employee pension plans; providing for various benefit modifications and related changes that require local governing body approval; repealing Laws 1969, chapter 1088; Laws 1971, chapter 114; Laws 1978, chapters 562, section 32; and 753; Laws 1979, chapters 97; 109, section 1; and 201, section 27; Laws 1981, chapters 157, section 1; and 224, sections 250 and 254; Laws 1985, chapter 259, section 3; and Laws 1990, chapter 570, article 7, section 4."

With the recommendation that when so amended the bill pass.

The report was adopted.

Trimble from the Committee on Regulated Industries and Energy to which was referred:

H. F. No. 597, A bill for an act relating to metropolitan government; providing for coordination and consolidation of public safety radio communications systems; providing governance and finance of the state and regional elements of a regionwide public safety radio communication system; extending the public safety channel moratorium; authorizing the use of 911 emergency telephone service fees for costs of the regionwide public safety radio communication system; authorizing the issuance of bonds by the metropolitan council; appropriating money and authorizing the issuance of state bonds; amending Minnesota Statutes 1994, section 352.01, subdivision 2a; proposing coding for new law in Minnesota Statutes, chapters 174; and 473.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. [174.70] [PUBLIC SAFETY RADIO COMMUNICATIONS.]

The commissioner of transportation may exercise the powers granted in this chapter and in sections 473.891 to 473.905, to plan and implement the communications system as provided in sections 473.891 to 473.905.

Sec. 2. [473.891] [DEFINITIONS.]

Subdivision 1. [APPLICATIONS.] The definitions in this section apply to sections 473.891 to 473.905.

Subd. 2. [BOARD.] "Board" or "radio board" means the metropolitan radio board.

Subd. 3. [FIRST PHASE.] "First phase" or "first phase of the regionwide public safety radio communications system" means the initial backbone which serves state and regional agencies.

Subd. 4. [LOCAL ELECTED OFFICIALS.] "Local elected officials" means any elected official of a local government.

Subd. 5. [LOCAL GOVERNMENT.] "Local government" means any county, home rule charter or statutory city, or town, lying in whole or in part within the metropolitan area.

Subd. 6. [NPSPAC CHANNELS.] "NPSPAC channels" or "National Public Safety Planning Advisory Committee channels" means the following 800 megahertz channels: 821 to 824 and 866 to 869 megahertz.

Subd. 7. [PLAN.] "Plan" or "regionwide public safety radio system communication plan" means the plan adopted by the metropolitan radio board for a regionwide public safety radio communications system.

Subd. 8. [SUBSYSTEMS.] "Subsystems" or "public safety radio subsystems" means systems identified in the plan as subsystems interconnected by the first phase backbone in subsequent phases and operated by local government units for their own internal operations.

Subd. 9. [SYSTEM; BACKBONE SYSTEM.] "System" or "backbone system" means a regionwide public safety radio communication system that consists of a shared regionwide infrastructure network, the elements of which are identified in the regionwide public safety radio communications system plan, and subsystems interconnected by the shared regionwide network.

Sec. 3. [473.893] [BOARD; MEMBERSHIP, ADMINISTRATION.]

Subdivision 1. [GENERAL.] The metropolitan radio board is established as a political subdivision. The board shall be organized, structured, and administered as provided in this section. Until funds to administer the board become available under section 473.894, subdivision 19, the metropolitan council shall provide office space and administrative support to the board at no cost.

Subd. 2. [MEMBERSHIP.] The board consists of 18 members. Sixteen members shall be local officials and shall include:

(1) one county commissioner appointed by each respective county board from each of the seven metropolitan counties;

(2) an elected official from each of the cities of Minneapolis, St. Paul, Bloomington, and Eden Prairie appointed by each respective city governing body;

(3) two elected officials from other metropolitan cities appointed by the governor, who shall consider recommendations made by the Association of Metropolitan Municipalities when making these appointments;

(4) an elected official from a county or a city within a county in Minnesota that is contiguous to the metropolitan area appointed by the governor, who shall consider recommendations made by the League of Minnesota Cities when making this appointment;

(5) a sheriff appointed by the governor, who shall consider recommendations made by the metropolitan sheriffs association when making this appointment; and

(6) a police chief appointed by the governor, who shall consider recommendations made by the Minnesota police chiefs association when making this appointment.

The 17th member shall be a member of the metropolitan council appointed by the council. The 18th member shall be the director of electronic communications of the Minnesota department of transportation. As provided in section 473.894, subdivision 20, the chair of the technical operations committee serves as an ex officio member of the board.

The members shall be appointed within 30 days of the effective date of this act. Upon the effective date of this act, the metropolitan council shall inform the entities listed in this subdivision of the appointments required by this subdivision and shall provide whatever assistance is necessary to facilitate the appointment process and establish the radio board.

Board members have no set term and remain on the board until a successor is appointed as provided by this subdivision. However, with respect to those board members who, under this subdivision, must be elected officials, a successor must be appointed as provided by this subdivision no later than the date that a member is no longer an elected official, unless the member dies while in office, in which case a successor must be named as soon as practicable.

Subd. 3. [OFFICERS.] The officers of the board are: chair; vice-chair; secretary; and treasurer. The chair shall preside at all meetings of the board, and in the chair's absence, the vice-chair shall preside. The secretary shall keep a complete record of the minutes of each meeting. The treasurer shall keep the financial records of the board. The chair and vice-chair of the board shall be selected by a majority vote from the members of the board. The secretary and treasurer need not be members of the board.

Subd. 4. [CONTRACTS.] Contracts and other written instruments of the board shall be signed by the chair or vice-chair and if the board has an executive director, by the executive director of the board pursuant to authority from the board.

Subd. 5. [BYLAWS.] The board shall conduct its business in accordance with bylaws duly adopted by a majority of the board.

Subd. 6. [VOTING.] Each member has one vote. The majority of the voting power of the board constitutes a quorum although a smaller number may adjourn from time to time. Any motion, other than adjournment, shall be favored by a majority of the voting power of the board in order to carry.

Sec. 4. [473.894] [POWERS OF THE BOARD.]

Subdivision 1. [GENERAL.] The board has the powers necessary and convenient to discharge the duties imposed on it by law, including those listed in this section.

Subd. 2. [PLANNING.] The board shall review and, within 90 days of the effective date of this act, adopt the regionwide public safety radio system communication plan prepared by the metropolitan radio systems planning committee pursuant to Laws 1993, chapter 313, section 3, subdivision 2, for using the 800 megahertz and other frequencies available for public safety use. The plan must include, at a minimum:

(1) a system design recommended by the Minnesota commissioner of transportation for the first phase consisting of a shared regionwide infrastructure network;

(2) a system design for subsequent phases; and

(3) a plan for assignment of frequencies to the regional network and to each subsystem.

No later than 30 days prior to adoption of the plan by the board, the board shall submit the plan to the metropolitan council for review in accordance with section 473.165, clause (1). The council may make comments to the board about the plan in accordance with section 473.165, clause (2), except that the deadline for comments shall be made within 30 days after submission of the plan to the council.

If, within the 30-day review period, the council has made no comment on the plan or has made no findings as provided in section 473.165, clause (2), the plan shall go into effect as of the date of adoption by the board.

If, within the 30-day review period, the council has made findings as provided in section 473.165, clause (2), the board and the council shall follow the procedure provided in section 473.165, clause (2). The board may adopt revisions to the plan in the same manner as is provided in this subdivision for adoption of the plan.

Subd. 3. [APPLICATION TO FCC.] Within 180 days from adoption of the regionwide public safety radio system communication plan the commissioner of transportation, on behalf of the state of Minnesota, shall use the plan adopted by the board under subdivision 2 to submit an extended implementation application to the Federal

Communications Commission (FCC) for the NPSPAC channels and other public safety frequencies available for use in the metropolitan area and necessary to implement the plan. Local governments and all other public or private entities eligible under part 90 of the FCC rules shall not apply for public safety channels in the 821 to 824 and 866 to 869 megahertz bands for use within the metropolitan counties until the FCC takes final action on the regional application submitted under this section. Exceptions to the restrictions on the application for the NPSPAC channels may be granted by the radio board. The Minnesota department of transportation shall hold the master system licenses for all public safety frequencies assigned to the metropolitan area issued by the FCC under the board's plan and these channels shall be used for the implementation of the plan. Local governments and other public and private entities eligible under part 90 of the FCC rules may apply to the FCC as colicensees for subscriber equipment and those portions of the network infrastructure owned by them. Application for colicensing under this section shall require the concurrence of the radio board.

Subd. 4. [PLAN IMPLEMENTATION.] The board shall supervise the implementation of the regionwide public safety radio system communication plan adopted under subdivision 2 and must ensure that the system is built, owned, operated, and maintained in accordance with the plan. The board will work with the region 22 NPSPAC committee to incorporate the board's adopted plan into federal communication system regulations.

Subd. 5. [REQUIRED MINIMUM LEVEL OF SERVICE FOR LOCAL GOVERNMENTS.] Subject to system capacity and channel availability, the board shall ensure that all local governments, quasi-public service operations, and private entities in the metropolitan counties that are eligible to use radio frequencies reserved for public safety use have adequate communications capacity and intercommunications capability.

Subd. 6. [BACKBONE AND SUBSYSTEMS.] In the regionwide public safety radio system communication plan, the board shall define the backbone consistent with the recommendations made by the commissioner of transportation and the subsystems of the system, the timing and phasing of system development, the geographic scope of the system, the timing and extent of participation in the system including participation by additional entities, and standards for system performance. System performance standards shall be developed in consultation with the commissioner of transportation. The initial backbone shall serve state and regional agencies and shall include capabilities for regionwide mutual aid and emergency medical services communications and potentially provide alternative routing for 911 services.

Subd. 7. [EXISTING CHANNEL ALLOCATION.] The board shall coordinate allocation of existing radio channels made available to the board by conversion to 800 megahertz or other public safety frequencies.

Subd. 8. [COST APPORTIONMENT.] The board shall determine how capital, operating, and administrative costs of the first phase system will be spread across users of the regionwide public safety radio communication system, including costs for additional participants.

Subd. 9. [EXCESS CAPACITY ALLOCATION.] The board shall determine how excess capacity provided in the initial system design in the regionwide public safety radio communication system will be allocated.

Subd. 10. [SYSTEM ENHANCEMENT REGULATION.] The board shall determine the extent to which local governments, quasi-public service corporations, and private entities eligible to use the system may provide system enhancements at their own direct expense.

Subd. 11. [PERFORMANCE STANDARDS.] The board shall set performance standards for operation of the backbone and subsystems and may modify standards as necessary to meet changing needs.

Subd. 12. [USE PRIORITIES.] The board shall establish priorities or protocols for use of the system.

Subd. 13. [FIRST PHASE CONSTRUCTION.] In order to implement the first phase backbone, the board shall contract with the state of Minnesota, through the commissioner of transportation for construction, ownership, operation, maintenance, and enhancement of these elements of the first phase backbone as defined in the plan. The commissioner, under appropriate state law, shall contract for, or procure by purchase or lease, (including joint purchase and lease agreements), construction, installation of materials, supplies and equipment, and other services as may be needed to build, operate, and maintain the first phase system network. In accordance with the terms of the contract entered into with the radio board under this subdivision, the department of transportation will own, operate, and maintain those elements identified by the radio board in the plan as the first phase. The state will finance and pay for its share of the first phase.

Subd. 14. [EXECUTIVE DIRECTOR.] The board may employ and fix the duties and compensation of an executive director who shall supervise the implementation of the plan including the design, ownership, construction, and operation of the first phase system and shall administer the business affairs of the board. The executive director is eligible for membership in the Minnesota state retirement system. Until funds to administer the board become available under subdivision 19, the metropolitan council shall provide to the board an executive director who will be a staff member of the council.

Subd. 15. [SYSTEM USE BY NONGOVERNMENTAL ENTITIES.] The board may contract with entities in the metropolitan counties eligible to use the public safety channels other than local governments, to provide them with public safety radio communication service. The board may contract with eligible jurisdictions and entities outside the metropolitan counties for inclusion in the regionwide public safety radio communication system.

Subd. 16. [MINUTES OF BOARD MEETINGS.] The board shall keep proper minutes of all its proceedings which shall be open to public inspection at all reasonable times.

Subd. 17. [ACCOUNTING.] The board shall keep proper and adequate books of accounts showing all its receipts and disbursements by date, source, and amount. The board must be audited at least once each year. The board may elect to be audited by a certified public accountant or by the state auditor.

Subd. 18. [INSURANCE.] The board may obtain suitable, proper, and adequate public liability and workers' compensation insurance and other insurance as it deems necessary, including but not limited to, insurance against the liability of the board or its officers and employees for personal injury or death and property damage or destruction, with the force and effect stated in chapter 466, and against risks of damage to or destruction of any of its facilities, equipment, or other property.

Subd. 19. [USER FEES.] In accordance with the plan authorized in subdivision 2, the board may establish and impose user fees on entities using the first phase system to cover the board's costs of implementing the plan and the costs of operating the first phase system in the metropolitan area. The metropolitan council will collect the user fees.

Subd. 20. [TECHNICAL OPERATIONS COMMITTEE.] The board shall establish a technical operations committee composed of representatives of the following functional categories to advise it in carrying out its purposes:

(1) Minnesota department of public safety;

(2) Minnesota department of transportation;

(3) sheriffs;

(4) police;

(5) fire protection;

(6) emergency medical service;

(7) public works;

(8) civil defense;

(9) metro 911 telephone board;

(10) entities using 800 megahertz prior to initiation of the regional system;

(11) managers or purchasing agents possessing expertise from a general perspective;

(12) representatives of local units of government; and

(13) regionwide public safety radio communication system users.

The members of the technical operations committee serve without compensation. The chair of the technical operations committee is an ex officio member of the radio board.

Subd. 21. [CONTRACTS.] The board may enter into contracts necessary to carry out its responsibilities.

Subd. 22. [PROPERTY.] The board may acquire by purchase, lease, gift, or grant, property, both real and personal, and interests in property necessary for the accomplishment of its purposes and may sell or otherwise dispose of property which it no longer requires.

Subd. 23. [GIFTS; GRANTS.] The board may apply for, accept, and disburse gifts, grants, or loans from the United States, the state, or from any person for any of its purposes. It may enter into an agreement required for the gifts, grants, or loans and may hold, use, and dispose of money or property received according to the terms of the gift, grant, or loan.

Subd. 24. [AUTHORITY TO LITIGATE.] The board may sue and be sued.

Sec. 5. [473.895] [ADVERSE INTERESTS OF BOARD MEMBERS.]

As provided in section 471.87, no member of the board shall have any personal or financial interest in any sale, lease, or other contract made by the board. Any violation of section 471.87 may make the sale, lease, or other contract voidable by the board. Upon conviction for a violation of section 471.87, a board member is automatically disqualified from further service on the board.

Sec. 6. [473.896] [COMPENSATION OF BOARD MEMBERS.]

Subdivision 1. [PER DIEM AND EXPENSES.] Except as provided in subdivision 2, and unless otherwise prohibited by law, each board member of the radio board shall be reimbursed for actual and necessary expenses incurred in the performance of duties. The chair shall be paid a per diem in the same amount as is provided in section 15.0575, subdivision 3, for attending meetings, monthly, executive, and special, and board members shall be paid a per diem in the same amount as is provided in section 15.0575, subdivision 3, for attending meetings, monthly, executive, and special. A board member who receives a per diem from the board member's county or city shall not be paid a per diem for the same day by the board for attending meetings of the board. The annual budget of the board shall provide, as a separate account, anticipated expenditures for per diem, travel, and associated expenses for the chair and members, and compensation or reimbursement shall be made to the chair or members only when budgeted.

Subd. 2. [LIMITATION.] A board member whose annual public salary is $25,000 or more shall only be reimbursed for expenses related to travel.

Sec. 7. [473.897] [FINANCE.]

Subdivision 1. [BUDGET PREPARATION; REVIEW AND APPROVAL.] The board shall prepare a proposed budget by August 1 of each year. The budget shall include operating revenues and expenditures for operation, administration, and maintenance. In addition, the budget must show for each fiscal year of the state biennium:

(1) the estimated operating revenues from all sources including funds on hand at the beginning of the year, and estimated expenditures for costs of operation, administration, maintenance, and debt service;

(2) capital improvement funds estimated to be on hand at the beginning of the year and estimated to be received during the year from all sources and estimated cost of capital improvements to be paid out or expended during the year, all in such detail and form as the council may prescribe; and

(3) the estimated source and use of pass-through funds.

As early as practicable before August 15 of each year, the board shall hold a public hearing on a draft of the proposed budget. Along with the draft, the board shall publish a report on user charges. The report must include an estimated analysis of the changes in user charges, rates, and fees that will be required by the board's budget. Not less than 14 days before the hearing, the board shall publish notice of the hearing in a newspaper having general circulation in the metropolitan area, stating the date, time, and place of hearing, and the place where the proposed budget and report on user charges may be examined by any interested person.

Following the hearing, the board shall publish a report of the hearing that summarizes the comments received and board's response. The council shall approve or disapprove the entire budget by October 1 of each year. The council may disapprove only if the budget does not have adequate reserves to meet debt service. If the council disapproves the budget in accordance with this subdivision, the board shall, by November 1, resubmit to the council for approval, a budget which meets the requirements for council approval as provided in this subdivision. The council shall approve or disapprove the entire resubmitted budget by December 1.

Before December 15 of each year, the board shall, by resolution, adopt a final budget. The board shall file its final budget with the council on or before December 20 of each year. The council shall file the budgets with the secretary of the senate and the clerk of the house of representatives not later than January 1 of each year. Before adoption, the board must submit any budget amendment which would affect debt service reserves to the council for review. The council has 15 days to approve or disapprove the amendment. The council shall disapprove the budget amendment only if the budget does not have adequate reserves to meet debt service.

Except in an emergency, for which procedures must be established by the board, the board and its officers, agents, and employees may not spend money for any purpose, other than debt service, without an appropriation by the board, and no obligation to make such an expenditure shall be enforceable except as the obligation of the person or persons incurring it. The creation of any debt obligation or the receipt of any federal or state grant is a sufficient appropriation of the proceeds for the purpose for which it is authorized, and of the tax or other revenues pledged to pay the obligation and interest on it whether or not specifically included in any annual budget. After obtaining the approval of the council, the board may amend the budget at any time by transferring any appropriation from one purpose to another, except appropriations of the proceeds of bonds issued for a specific purpose. The council shall disapprove only if the amended budget does not have adequate reserves to meet debt service.

Subd. 2. [PROGRAM EVALUATION.] The budget procedure of the board must include a substantive assessment and evaluation of the effectiveness of each significant part of the regionwide public safety radio communication system implementation plan adopted by the board with, to the extent possible, quantitative information on the status, progress, costs, benefits, and effects of each program.

The board shall transmit the evaluation to the metropolitan council annually.

Subd. 3. [COUNCIL REPORT TO LEGISLATURE.] Biennially the council shall submit a report to the legislature detailing the board's activities and finances for the previous year, the extent to which the system has been expanded beyond the metropolitan area, and the appropriateness of transferring responsibility for the metropolitan radio board to a state agency.

Subd. 4. [RESALE OF SERVICES OR CAPACITY PROHIBITED.] Neither the council, the board, or any local government unit may resell any service or capacity of this system to a nonpublic entity.

Sec. 8. [473.898] [REVENUE BONDS; OBLIGATIONS.]

Subdivision 1. [AUTHORIZATION.] The council, if requested by a vote of at least two-thirds of all of the members of the metropolitan radio board may, by resolution, authorize the issuance of its revenue bonds for any of the following purposes to:

(1) provide funds for regionwide mutual aid and emergency medical services communications;

(2) provide funds for the elements of the first phase of the regionwide public safety radio communications system that the board determines are of regionwide benefit and support mutual aid and emergency medical services communication including, but not limited to, costs of master controllers of the backbone; or

(3) refund bonds issued under this section.

Subd. 2. [PROCEDURE.] The bonds shall be sold, issued, and secured in the manner provided in chapter 475 for bonds payable solely from revenues, except as otherwise provided in sections 473.891 to 473.905 and the council shall have the same powers and duties as a municipality and its governing body in issuing bonds under chapter 475. The bonds may be sold at any price and at public or private sale as determined by the council.

The bonds shall be payable from and secured by a pledge of the emergency telephone service fee provided in chapter 403 and shall not represent or constitute a general obligation or debt of the council and shall not be included in the net debt of any city, county, or other subdivision of the state for the purpose of any debt limitation.

Subd. 3. [LIMITATIONS.] The principal amount of the bonds issued pursuant to subdivision 1, exclusive of any original issue discount, shall not exceed the amount of $10,000,000 plus the amount the council determines necessary to pay the costs of issuance, fund reserves, debt service, and pay for any bond insurance or other credit enhancement.

Subd. 4. [SECURITY.] The bonds may be secured by a bond resolution or a trust indenture entered into by the council with a corporate trustee within or outside the state which shall define the fee pledged for the payment and security of the bonds and for payment of all necessary and reasonable debt service expenses until all the bonds

referred to in subdivision 1 are fully paid or discharged in accordance with law. The pledge shall be a valid charge on the emergency telephone service fee provided in chapter 403. No mortgage of or security interest in any tangible real or personal property shall be granted to the bondholders or the trustee, but they shall have a valid security interest in the revenues and bond proceeds received by the council and pledged to the payment of the bonds as against the claims of all persons in tort, contract, or otherwise, irrespective of whether the parties have notice and without possession or filing as provided in the Uniform Commercial Code, or any other law, subject however to the rights of the holders of any general obligation bonds issued under section 473.903. In the bond resolution or trust indenture, the council may make covenants as it determines to be reasonable for the protection of the bondholders.

Neither the council, nor any council member, officer, employee, or agent of the council, nor any person executing the bonds shall be liable personally on the bonds by reason of their issuance. The bonds are not payable from, and are not a charge upon, any funds other than the revenues and bond proceeds pledged to their payment. The council is not subject to any liability on the bonds and has no power to obligate itself to pay or to pay the bonds from funds other than the revenues and bond proceeds pledged. No holder of bonds has the right to compel any exercise of the taxing power of the council, except any deficiency tax levy the council covenants to certify under section 473.902, or any other public body, to the payment of principal of or interest on the bonds. No holder of bonds has the right to enforce payment of principal or interest against any property of the council or other public body other than that expressly pledged for the payment of the bonds.

Sec. 9. [473.899] [DEPOSITORIES.]

The metropolitan council shall, from time to time, designate one or more national or state banks, or trust companies authorized to do banking business, as official depositories for money of the board and shall require the board's treasurer to deposit all or a part of such money in those institutions. The designation shall be in writing and shall set forth all the terms and conditions upon which the deposits are made and shall be signed by the chair and treasurer and made a part of the minutes of the board. Any bank or trust company designated shall qualify as a depository by furnishing a corporate surety bond or collateral in the amounts required by section 118.01. No bond or collateral shall be required to secure any deposit insofar as it is insured under federal law.

Sec. 10. [473.900] [MONEY; ACCOUNTS; INVESTMENTS.]

Subdivision 1. [TREASURER'S DUTIES.] All money received by the metropolitan council under section 473.894, subdivision 19, shall be deposited or invested by the board's treasurer and disposed of as the board may direct in accordance with its budget, provided that any money that has been pledged or dedicated by the metropolitan council to the payment of obligations or interest on them or expenses incident to them, or for any other specific purpose authorized by law, shall be paid by the board's treasurer into the fund to which they have been pledged.

Subd. 2. [FUNDS AND ACCOUNTS ESTABLISHED.] The metropolitan council shall establish funds and accounts as may be necessary or convenient to handle the receipts and disbursements of the board in an orderly fashion.

Subd. 3. [DEPOSITORIES; INVESTMENTS.] The money on hand in the funds and accounts may be deposited in the official depositories of the metropolitan council or invested as provided in this subdivision. The amount not currently needed or required by law to be kept in cash on deposit, may be invested in obligations authorized for the investment of municipal sinking funds by section 475.66. The money may also be held under certificates of deposit issued by any official depository of the metropolitan council.

Subd. 4. [USE OF BOND PROCEEDS.] The use of proceeds of all bonds issued by the metropolitan council for the purposes enumerated in section 473.898, subdivision 1, other than investment of all money on hand in any sinking fund or funds of the council, shall be governed by the provisions of chapter 475, the provisions of resolutions authorizing the issuance of the bonds, and by the trust indenture.

Sec. 11. [473.901] [USE OF EMERGENCY TELEPHONE SERVICE FEE; BUDGETS; APPROPRIATION TRANSFERS; AUDITS.]

Subdivision 1. [COSTS COVERED BY FEE.] Beginning July 1, 1995, the following costs shall be paid from money appropriated to the commissioner of administration for those costs from the 911 emergency telephone service account established under section 403.11:

(1) debt service costs and reserves for bonds issued pursuant to section 473.898;

(2) repayment of the right-of-way acquisition loans;

(3) costs of design, construction, maintenance of, and improvements to those elements of the first phase that support mutual aid communications and emergency medical services; or

(4) recurring charges for leased sites and equipment for those elements of the first phase that support actual aid and emergency medical communication services.

Money appropriated from the 911 emergency telephone service fee account shall be used to pay annual debt service costs and reserves for bonds issued pursuant to section 473.898 prior to use of fee money to pay other costs eligible under this subdivision. In no event shall the money appropriated from the 911 emergency telephone service fee account for the first phase radio system exceed an amount equal to four cents a month for each customer access line or other basic access service, including trunk equivalents as designated by the public utilities commission for access charge purposes and including cellular and other nonwire access services.

Subd. 2. [ANNUAL BUDGET OF RADIO BOARD.] The metropolitan council shall transmit the annual budget of the radio board to the commissioner of administration no later than December 15 of each year. The commissioner of administration shall include eligible costs for the regionwide public safety communication system in its request for legislative appropriations from the 911 emergency telephone service fee account. All eligible costs approved by the radio board shall be included in the commissioner of administration's appropriation request.

Subd. 3. [APPROPRIATION TRANSFERS.] Each month, before the 25th day of the month, the commissioner of administration shall transmit to the metropolitan council 1/12 of its total approved appropriation for the regionwide public safety communication system.

Sec. 12. [473.902] [OPERATING COSTS.]

Subdivision 1. [ALLOCATION OF OPERATING COSTS.] The current costs of the board in implementing regionwide public safety radio communication plan system and the first phase system shall be allocated among and paid by the following users, all in accordance with the regionwide public safety radio system communication plan adopted by the board:

(1) the state of Minnesota for its operations using the system in the metropolitan counties;

(2) all local government units using the system; and

(3) other eligible users of the system.

Subd. 2. [PAYMENTS TO RADIO BOARD; AMOUNTS DUE BOARD WHEN PAYABLE.] Charges payable to the board by users of the system may be made payable at those times during each year as the board determines, but those dates shall be fixed with reference to the dates on which tax, assessment, and revenue collections become available to the government units required to pay such charges.

Subd. 3. [COMPONENT MUNICIPALITIES OBLIGATIONS TO BOARD.] Each local government and other eligible users of the first phase system shall pay to the board all sums charged to it under this section, at the times and in the manner determined by the board. The governing body of each local government shall take all action that may be necessary to provide the funds required for these payments and to make them when due.

Subd. 4. [POWERS OF GOVERNMENT UNITS.] To accomplish any duty imposed on it by the council or radio board, the governing body of every local government in the metropolitan area may exercise the powers granted any municipality by chapters 117, 412, 429, 475, and by sections 115.46, 444.075, and 471.59.

Subd. 5. [DEFICIENCY TAX LEVIES.] If the governing body of any local government using the first phase system fails to meet any payment to the board under subdivision 1 when due, the metropolitan council may certify to the auditor of the county in which the government unit is located the amount required for payment of the amount due with interest at six percent per year. The auditor shall levy and extend the amount due, with interest, as a tax upon all taxable property in the government unit for the next calendar year, free from any existing limitations imposed by law or charter. This tax shall be collected in the same manner as the general taxes of the government unit, and the proceeds of the tax, when collected, shall be paid by the county treasurer to the board and credited to the government unit for which the tax was levied.

Sec. 13. [473.903] [SALE OF GENERAL OBLIGATION BONDS.]

Subdivision 1. [AMOUNT; PURPOSES.] The metropolitan council may by resolution authorize the issuance of general obligation bonds of the council, in an amount outstanding and undischarged at any time not more than $3,000,000, for which its full faith and credit and taxing powers shall be pledged for the council's share of the first phase. The metropolitan council may also issue general obligation bonds to refund outstanding obligations issued under this section. The amount of refunding bonds that may be issued from time to time shall not be subject to the dollar limitation contained in this subdivision nor the refunding bonds be included in computing the amount of bonds that may be issued within that dollar limitation.

Subd. 2. [SALE, TERMS, SECURITY.] The metropolitan council shall sell and issue the bonds in the manner provided in chapter 475 and shall have the same powers and duties as a municipality issuing bonds under that law, except that the approval of a majority of the electors shall not be required and the net debt limitations shall not apply. The bonds shall be secured in accordance with section 475.61, subdivision 1, and any taxes required for their payment shall be levied by the council, shall not affect the amount or rate of taxes which may be levied by the council for other purposes, and shall be levied without limitation of rate or amount upon all taxable property in the transit taxing district and transit area as provided in section 473.446, subdivision 1.

Subd. 3. [TEMPORARY LOANS.] The metropolitan council may, after the authorization of bonds under this section, provide funds immediately required for the purposes of subdivision 1 by effecting temporary loans upon terms as it shall by resolution determine, evidenced by notes due in not exceeding 24 months from their date, payable to the order of the lender or to the bearer, to be repaid with interest from the proceeds of the bonds when issued and delivered to the purchaser. The temporary loans may be made without public advertisement.

Sec. 14. [473.904] [LOCAL PLANNING.]

Subdivision 1. [COUNTY PLANNING PROCESS.] No later than two years from the date of enactment of this act, each metropolitan county shall undertake and complete a planning process for its public safety radio subsystem to ensure participation by representatives of local government units, quasi-public service organizations, and private entities eligible to use the regional public safety radio system and to ensure coordination and planning of the local subsystems. The radio board shall encourage the establishment by each metropolitan county of local public safety radio subsystem committees composed of representatives of local governments and other eligible users for the purposes of:

(1) establishing a plan for coordinated and timely use of the regionwide public safety radio system by the local governments and other eligible users within each metropolitan county; and

(2) assisting and advising the board in its implementation of the regional public safety radio plan by identification of local service needs and objectives.

The board shall also encourage the establishment of joint or multicounty planning for the regionwide public safety radio system and subsystems.

The board may provide local boards with whatever assistance it deems necessary and appropriate.

Subd. 2. [CITIES OF FIRST CLASS; PLANNING PROCESS.] Each city of the first class in the metropolitan counties shall have the option to participate in the county public safety radio subsystem planning process or develop its own plan.

Subd. 3. [SUBMISSION OF PLANS TO BOARD.] Each metropolitan county and each city of the first class in the metropolitan area which has chosen to develop its own plan shall submit the plan to the board for the board's review and approval.

Subd. 4. [LOCAL GOVERNMENT JOINDER.] Local government units, except for cities of the first class in the service organizations, and private entities eligible to use the regional public safety radio system cannot join the system until its county plan has been approved by the board.

Sec. 15. [473.905] [OPTIONAL LOCAL USE OF REGIONAL SYSTEM.]

Subdivision 1. [OPTIONS.] Use of the regional public safety radio system by local governments, quasi-public service organizations, and private entities eligible to use the system shall be optional and no local government or other eligible user of the system shall be required to abandon or modify current public safety radio communication systems

or purchase new equipment until the local government or other eligible user elects to join the system. Public safety radio communication service to local governments and other eligible users who do not initially join the system shall not be interrupted. No local government or other eligible users who do not join the system shall be charged a user fee for the use of the system.

Subd. 2. [REQUIREMENTS TO JOIN.] Local governments and other entities eligible to join the regional public safety radio system which elect to join the system must do so in accordance with and meet the requirements of the provisions of the plan adopted by the radio board as provided in section 473.894, subdivision 2.

Sec. 16. [FIRST BUDGET; TEMPORARY FUNDING.]

Subdivision 1. [FIRST BUDGET.] The budget of the board prepared in 1995 need not be submitted to the council until October 1, 1995, and the council has 30 days to approve or disapprove the entire budget. The council may disapprove only if the budget does not have adequate reserves to meet debt service.

Subd. 2. [TEMPORARY FUNDING.] For fiscal year 1996, the appropriation from the 911 emergency telephone service fee account shall be $563,000.

Sec. 17. [APPROPRIATION; BOND AUTHORIZATION.]

(a) $15,000,000 is appropriated from the bond proceeds fund to the commissioner of transportation for the purposes of implementing the first phase of the public safety radio communications system as provided in Minnesota Statutes, sections 174.70 and 473.894.

(b) To provide the money appropriated by this section from the bond proceeds fund, and to pay bond sale expenses, the commissioner of finance, on request of the governor, shall sell and issue bonds of the state in an amount up to $15,000,000 in the manner, on the terms, and with the effect prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota Constitution, article XI, sections 4 to 7.

Sec. 18. [APPLICATION.]

Sections 1 to 16 apply in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington counties.

Sec. 19. [EFFECTIVE DATE.]

Sections 1 to 18 are effective the day after final enactment.

Section 1. Minnesota Statutes 1994, section 352.01, subdivision 2a, is amended to read:

Subd. 2a. [INCLUDED EMPLOYEES.] (a) "State employee" includes:

(1) employees of the Minnesota historical society;

(2) employees of the state horticultural society;

(3) employees of the Disabled American Veterans, Department of Minnesota, Veterans of Foreign Wars, Department of Minnesota, if employed before July 1, 1963;

(4) employees of the Minnesota crop improvement association;

(5) employees of the adjutant general who are paid from federal funds and who are not covered by any federal civilian employees retirement system;

(6) employees of the state universities employed under the university activities program;

(7) currently contributing employees covered by the system who are temporarily employed by the legislature during a legislative session or any currently contributing employee employed for any special service as defined in clause (8) of subdivision 2b;

(8) employees of the armory building commission;

(9) permanent employees of the legislature and persons employed or designated by the legislature or by a legislative committee or commission or other competent authority to conduct a special inquiry, investigation, examination, or installation;

(10) trainees who are employed on a full-time established training program performing the duties of the classified position for which they will be eligible to receive immediate appointment at the completion of the training period;

(11) employees of the Minnesota safety council;

(12) any employees on authorized leave of absence from the transit operating division of the former metropolitan transit commission who are employed by the labor organization which is the exclusive bargaining agent representing employees of the transit operating division;

(13) employees of the metropolitan council, metropolitan parks and open space commission, metropolitan sports facilities commission, or the metropolitan mosquito control commission, or metropolitan radio board unless excluded or covered by another public pension fund or plan under section 473.141, subdivision 12, or 473.415, subdivision 3;

(14) judges of the tax court; and

(15) personnel employed on June 30, 1992, by the University of Minnesota in the management, operation, or maintenance of its heating plant facilities, whose employment transfers to an employer assuming operation of the heating plant facilities, so long as the person is employed at the University of Minnesota heating plant by that employer or by its successor organization.

(b) Employees specified in paragraph (a), clause (15), are included employees under paragraph (a) providing that employer and employee contributions are made in a timely manner in the amounts required by section 352.04. Employee contributions must be deducted from salary. Employer contributions are the sole obligation of the employer assuming operation of the University of Minnesota heating plant facilities or any successor organizations to that employer."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Economic Development, Infrastructure and Regulation Finance.

The report was adopted.

Kahn from the Committee on Governmental Operations to which was referred:

H. F. No. 617, A bill for an act relating to retirement; teachers retirement association; making various changes in administrative and benefits practices; amending Minnesota Statutes 1994, sections 354.05, subdivisions 5, 35, and 40; 354.06, subdivision 4; and 354.52, subdivision 4a; repealing Minnesota Statutes 1994, section 354A.05, subdivision 4.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. [356.305] [LOSS OF ENTITLEMENT TO BENEFITS FOR SURVIVOR CAUSING DEATH OF PENSION PLAN MEMBER.]

Subdivision 1. [DEFINITIONS.] (a) Each of the words or terms defined in this subdivision has the meaning indicated.

(b) "Public pension plan" means any retirement plan or fund enumerated in section 356.20, subdivision 2, or 356.30, subdivision 3, any relief association governed by section 69.77 or sections 69.771 through 69.775, any retirement plan governed by chapter 354B or 354C, the Hennepin county supplemental retirement plan governed by sections 383B.46 through 383B.52, or any housing and redevelopment authority retirement plan.

(c) "Public pension plan member" means a person who is a participant covered by a public pension plan, a former participant of a public pension plan who has sufficient service to be entitled to receive a future retirement annuity or service pension, a recipient of a retirement annuity, service pension, or disability benefit from a public pension plan, or a former participant of a public pension plan who has member or employee contributions to the person's credit in the public pension plan.

(d) "Survivor" means the surviving spouse, a former spouse, a surviving child, a joint annuitant, a designated recipient of a second or remainder portion of an optional annuity form, a beneficiary, or the estate of a deceased public pension plan member, as those terms are commonly understood or defined in the benefit plan document of the public pension plan.

(e) "Survivor benefit" means a surviving spouse benefit, surviving child benefit, second or remainder portion of an optional annuity form, a death benefit, a funeral benefit, or a refund of member or employee contributions payable on account of the death of a public pension plan member as provided for in the benefit plan document of the public pension plan.

Subd. 2. [SUSPENSION OF SURVIVOR BENEFITS UPON FELONY CHARGE.] During the pendency of a charge of a survivor of a felony that caused the death of a public pension plan member, of criminal liability for a death by wrongful act felony, or of conspiracy to commit a death by wrongful act felony, the entitlement of that survivor to receive a survivor benefit is suspended.

Subd. 3. [FORFEITURE OF SURVIVOR BENEFITS UPON FELONY CONVICTION.] Upon final conviction of a survivor of a felony that caused the death of a public pension plan member, of criminal liability for a death by wrongful act felony, or of conspiracy to commit a death by wrongful act felony, the entitlement of that survivor to receive a survivor benefit is forfeited, including entitlement for any previously suspended survivor benefits under subdivision 2.

Subd. 4. [SUSPENSION OR FORFEITURE ACTIONS SEPARATE.] The charge of one survivor under subdivision 2 or the conviction of one survivor under subdivision 3 does not affect the entitlement of another survivor to a survivor benefit.

Subd. 5. [RECOVERY OF CERTAIN BENEFITS.] If monthly benefits or a refund or balance of a participant or former participant's account have already been paid to an individual who is later charged or convicted as described under this section, the executive director or chief administrative officer of the public pension plan shall attempt to recover the amounts paid. Payment may be made to the next beneficiary or survivor only in an amount equal to the amount recovered and in the amount of any future payments that would legally accrue to another survivor under the applicable laws of the retirement plan.

Subd. 6. [DISPOSITION OF FORFEITED SURVIVOR BENEFITS.] If the benefit plan document governing the public pension plan does not provide for the disposition of forfeited benefits, survivor benefits forfeited under this section must be deposited in the general fund of the state.

Sec. 2. [EFFECTIVE DATE.]

Section 1 is effective on the day following final enactment and applies to all applicable felony charges pending as of that date.

Section 1. [PURCHASE OF FULL-SERVICE CREDIT FOR SABBATICAL LEAVE.]

Subdivision 1. [ELIGIBILITY.] Notwithstanding Minnesota Statutes, section 354.092, subdivision 3, a member of the teachers retirement association described in subdivision 2 may make a direct payment under subdivision 3 to the association to receive service credit for a period of uncovered service due to a sabbatical leave during the 1975-1976 fiscal year for which the member failed to make employee payments on the difference between salary during the leave and the salary for a comparable period during the year immediately preceding the leave.

Subd. 2. [APPLICATION.] Subdivision 1 applies to a member who was on a sabbatical leave of absence during the 1975-1976 fiscal year, whose additional payment permitted for that fiscal year was $313.46, who was attending an institute of higher education outside Minnesota during the period of the leave, and whose original payment deadline was June 30, 1977.

Subd. 3. [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit for prior service under this section, there must be paid to the teachers retirement association an amount equal to the present value, on the date of payment, of the amount of the additional retirement annuity obtained by the purchase of the additional service credit. Calculation of this amount must be made by the executive director of the teachers retirement association using the applicable preretirement interest rate of the association specified in Minnesota Statutes, section 356.215, subdivision 4d, and the mortality table adopted for the association. The calculation must assume continuous future service in the association until, and retirement at, the age at which the minimum requirements of the fund for normal retirement or retirement with an annuity unreduced for retirement at an early age, including Minnesota Statutes, section 356.30, are met with the additional service credit purchased. The calculation must also assume the person's actual salary and a future salary history that includes annual salary increases at the applicable salary increase rate for the fund or association specified in Minnesota Statutes, section 356.215, subdivision 4d. In order to purchase the service credit, the individual must establish in the records of the association proof of the sabbatical leave for which the purchase of prior service applies. The manner of proof must be in accordance with procedures prescribed by the executive director of the association.

(b) Payment must be made in one lump sum prior to July 1, 1995.

(c) Payment of the amount calculated under this subdivision must be made by the member. However, the current or former employer of the member may, at its discretion, pay all or any portion of the payment amount that exceeds $313.46 plus interest at the rate of 8-1/2 percent a year compounded annually from June 30, 1977, to the date on which the payment is made. If the employer agrees to payments under this paragraph, the employee must make the employee payments required under this paragraph prior to July 1, 1995. If that employee payment is made, the employing unit payment under this paragraph must be remitted to the executive director of the teachers retirement association within 30 days of receipt by the executive director of the employee payments specified under this paragraph.

Subd. 4. [SERVICE CREDIT GRANT.] Service credit for the purchase period or periods must be granted to the account of the eligible person upon receipt of the purchase payment amount specified in subdivision 3.

Sec. 2. [CERTAIN CITY ATTORNEY; ANNUITY COMPUTATION.]

A retired member of the public employees retirement association who terminated a contract for employment as city attorney for the city of West St. Paul on January 30, 1994, but who continued to perform legal services for the city as an independent contractor until the city retained a successor legal counsel on May 9, 1994, may be deemed to have terminated public service on January 30, 1994, and is eligible for the increased accrual rate retirement incentive provided by Laws 1993, chapter 192, section 108, subdivision 3, notwithstanding the fact that there was no interruption of legal service for 30 days after January 30, 1994.

Sec. 3. [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF PRIOR SERVICE CREDIT.]

Subdivision 1. [ELIGIBILITY; MANKATO STATE UNIVERSITY PROFESSOR.] (a) Notwithstanding any provision of Minnesota Statutes, section 354.094, to the contrary, an eligible person described in paragraph (b) is entitled to purchase allowable service credit in the teachers retirement association for the period described in paragraph (c) by paying the amount specified in subdivision 3.

(b) An eligible person is a person who was granted an extended leave of absence from employment by Mankato State University on June 19, 1991, for the period September 11, 1991, through June of 1994, and which leave was erroneously characterized as an educational leave.

(c) The period for service credit purchase is the period from September 11, 1991, through June 1994.

Subd. 2. [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit under subdivision 1, there must be paid to the teachers retirement association an amount equal to the present value on the date of payment, of the amount of the additional retirement annuity obtained by purchase of the additional service credit.

(b) Calculation of this amount must be made by the executive director of the teachers retirement association using the applicable preretirement interest rate specified in Minnesota Statutes, section 356.215, subdivision 4d, and the mortality table adopted for the coordinated program of the retirement association. The calculation must assume continuous future service in the association until, and retirement at, the age at which the minimum requirements of the retirement association for normal retirement or retirement with an annuity unreduced for retirement at an early age, including Minnesota Statutes, section 356.30, are met with the additional service credit purchased. The calculation must also assume a future salary history that includes annual salary increases at the salary increase rate specified in Minnesota Statutes, section 356.215, subdivision 4d.

(c) The eligible person must establish in the records of the association proof of the leave of absence for which the purchase of service credit is requested. The manner of the proof must be in accordance with procedures prescribed by the executive director of the retirement association.

(d) The portion of the total cost of the purchase payable by the eligible person is specified in subdivision 3. The remaining portion of total cost is to be paid by the employing unit as specified in subdivision 4.

Subd. 3. [ELIGIBLE PERSON PAYMENT.] (a) To receive credit for the period of service credit purchase specified in subdivision 1, paragraph (c), the eligible person specified in subdivision 1, paragraph (b), must pay a member contribution equivalent amount.

(b) The member contribution equivalent amount is an amount equal to the applicable employee contribution rate specified in Minnesota Statutes, section 354.42, applied to the person's actual salary rate in the year immediately preceding the extended leave, plus 8.5 percent annually compounded interest from June 30 of each year of the leave until payment is made. Payment must be made in a lump sum. Authority to make the member contribution equivalent amount expires 90 days after the effective date of this section or at the time of retirement, whichever is earlier.

Subd. 4. [MANDATORY EMPLOYING UNIT PAYMENT.] (a) Within 30 days of the receipt by the executive director of the teachers retirement association of the payment from the eligible person under subdivision 3, the employer employing the eligible person described in subdivision 1, paragraph (b), immediately before the leave described in subdivision 1, shall pay the difference between the amounts specified in subdivisions 2 and 3.

(b) The mandatory employing unit payment amount is payable by the governmental employing unit in a lump sum.

Subd. 5. [SERVICE CREDIT GRANT.] Service credit for the purchase period must be granted to the account of the eligible person upon receipt of the purchase payment amount specified in subdivision 2.

Sec. 4. [PURCHASE OF PRIOR SERVICE CREDIT.]

Subdivision 1. [ELIGIBILITY.] (a) Notwithstanding Minnesota law to the contrary, an employee of Swift county who is a current coordinated member of the public employee retirement association, who was born in 1948, who first had sufficient salary to meet minimum statutory salary thresholds for association membership on March 1, 1990, but who was not reported for membership until January 1991, may purchase allowable service credit in the public employees retirement association for the periods of uncovered service during which the employee had sufficient salary to meet minimum statutory salary thresholds for public employee retirement association membership.

(b) In order to purchase the service credit, the individual must establish in the records of the association proof of the service for which the purchase of prior service applies, and proof that the individual had sufficient salary during all or part of that period to meet minimum statutory salary thresholds for public employee retirement association membership. Payments cannot be made if the executive director determines that the member was eligible for coverage during this period by another Minnesota public pension plan other than a volunteer fire plan to which Minnesota Statutes, section 69.771, subdivision 1, applies. The manner of proof must be in accordance with procedures prescribed by the executive director of the association.

Subd. 2. [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit for prior service under this section, there must be paid to the public employees retirement association an amount equal to the present value, on the date of payment, of the amount of the additional retirement annuity obtained by the purchase of the additional service credit. Calculation of this amount must be made by the executive director of the public employees retirement association using the applicable preretirement interest rate of the association specified in Minnesota Statutes, section 356.215, subdivision 4d, and the mortality table adopted for the association. The calculation must assume continuous future service in the association until, and retirement at, the age at which the minimum requirements of the fund for normal retirement or retirement with an annuity unreduced for retirement at an early age, including Minnesota Statutes, section 356.30, are met with the additional service credit purchased. The calculation must also assume the person's actual salary and a future salary history that includes annual salary increases at the applicable salary increase rate for the fund or association specified in Minnesota Statutes, section 356.215, subdivision 4d.

(b) Payment must be made in one lump sum prior to July 1, 1996.

(c) Payment of the amount calculated under this subdivision must be made by the member. However, the current or former employer of the member may, at its discretion, pay all or any portion of the payment amount that exceeds an amount equal to the employee contribution rates in effect during the period or periods of prior service applied to

the actual salary rates in effect during the period or periods of prior service, plus interest at the rate of 8-1/2 percent a year compounded annually from the date on which the contributions would otherwise have been made to the date on which the payment is made. If the employer agrees to payments under this paragraph, the employee must make the employee payments required under this paragraph prior to July 1, 1996. If that employee payment is made, the employing unit payment under this paragraph must be remitted to the executive director of the public employees retirement association within 60 days of receipt by the executive director of the employee payments specified under this paragraph.

Subd. 3. [SERVICE CREDIT GRANT.] Service credit for the purchase period or periods must be granted to the account of the eligible person upon receipt of the purchase payment amount specified in subdivision 2.

Sec. 5. [EFFECTIVE DATE.]

(a) Section 1 is effective the day following final enactment.

(b) Section 2 is effective the day following final enactment and the annuity payable under section 2 must be recalculated and paid retroactively to the date that the annuity was first paid to the retiree.

(c) Section 3 is effective July 1, 1995.

(d) Section 4 is effective the day following final enactment.

Section 1. Minnesota Statutes 1994, section 352.12, subdivision 1, is amended to read:

Subdivision 1. [DEATH BEFORE TERMINATION OF SERVICE.] If an employee dies before state service has terminated and neither a survivor annuity nor a reversionary annuity is payable, or if a former employee who has sufficient service credit to be entitled to an annuity dies before the benefit has become payable, the director shall make a refund to the last designated beneficiary or, if there is none, to the surviving spouse or, if none, to the employee's surviving children in equal shares or, if none, to the employee's surviving parents in equal shares or, if none, to the representative of the estate in an amount equal to the accumulated employee contributions plus interest at the rate of six percent per annum compounded annually. Interest must be computed as provided in section 352.22, subdivision 2, to the first day of the month in which the refund is processed and based on fiscal year balances. Upon the death of an employee who has received a refund that was later repaid in full, interest must be paid on the repaid refund only from the date of repayment. If the repayment was made in installments, interest must be paid only from the date installment payments began. The designated beneficiary, surviving spouse, or representative of the estate of an employee who had received a disability benefit is not entitled to interest upon any balance remaining to the decedent's credit in the fund at the time of death, unless death occurred before any payment could be negotiated.

Sec. 2. Minnesota Statutes 1994, section 352.12, subdivision 2, is amended to read:

Subd. 2. [SURVIVING SPOUSE BENEFIT.] (a) If an employee or former employee has credit for at least three years allowable service and dies before an annuity or disability benefit has become payable, notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the employee may elect to receive, in lieu of the refund with interest under subdivision 1, an annuity equal to the joint and 100 percent survivor annuity which the employee or former employee could have qualified for had the employee terminated service on the date of death.

(b) If the employee was under age 55 and has credit for at least 30 years of allowable service on the date of death, the surviving spouse may elect to receive a 100 percent joint and survivor annuity based on the age of the employee and surviving spouse on the date of death. The annuity is payable using the full early retirement reduction under section 352.116, subdivision 1, paragraph (a), to age 55 and one-half of the early retirement reduction from age 55 to the age payment begins.

(c) If the employee was under age 55 and has credit for at least three years of allowable service credit on the date of death but did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent joint and survivor annuity based on the age of the employee and surviving spouse at the time of death. The annuity is payable using the full early retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of the early retirement reduction from age 55 to the age payment begins.

The surviving spouse eligible for surviving spouse benefits under paragraph (a) may apply for the annuity at any time after the date on which the deceased employee or former employee would have attained the required age for retirement based on the employee's allowable service earned. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c) may apply for the annuity at any time after the employee's death. The annuity must be computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 1a, and 3. Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or surviving spouse benefit payable under this subdivision. The annuity must cease with the last payment received by the surviving spouse in the lifetime of the surviving spouse, or upon expiration of a term certain benefit payment to a surviving spouse under subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions credited to the account of the deceased employee in excess of the total of the benefits paid and payable to the surviving spouse must be paid to the deceased employee's or former employee's last designated beneficiary or, if none, as specified under subdivision 1.

Any employee or former employee may request in writing that this subdivision not apply and that payment be made only to a designated beneficiary as otherwise provided by this chapter.

Sec. 3. Minnesota Statutes 1994, section 352.12, subdivision 2a, is amended to read:

Subd. 2a. [SURVIVING SPOUSE COVERAGE TERM CERTAIN.] In lieu of the 100 percent optional annuity under subdivision 2, or refund under subdivision 1, the surviving spouse of a deceased employee or former employee may elect to receive survivor coverage in a term certain of five, ten, 15, or 20 years, but monthly payments must not exceed 75 percent of the average high-five monthly salary of the deceased employee or former employee. The monthly term certain annuity must be actuarially equivalent to the 100 percent optional annuity under subdivision 2.

If a survivor elects a term certain annuity and dies before the expiration of the specified term certain period, the commuted value of the remaining annuity payments must be paid in a lump sum to the survivor's estate.

Sec. 4. Minnesota Statutes 1994, section 352.12, subdivision 6, is amended to read:

Subd. 6. [DEATH AFTER SERVICE TERMINATION.] Except as provided in subdivision 1, if a former employee covered by the system dies and has not received an annuity, a retirement allowance, or a disability benefit, a refund must be made to the last designated beneficiary or, if there is none, to the surviving spouse or, if none, to the employee's surviving children in equal shares or, if none, to the employee's surviving parents in equal shares or, if none, to the representative of the estate in an amount equal to accumulated employee contributions. The refund must include interest at the rate of six percent per year compounded annually. The interest must be computed to the first day of the month in which the refund is processed and be based on fiscal year balances as provided in section 352.22, subdivision 2.

Sec. 5. Minnesota Statutes 1994, section 352B.105, is amended to read:

352B.105 [TERMINATION OF DISABILITY BENEFITS.]

Disability benefits payable under section 352B.10 shall terminate at the end of the month the beneficiary becomes 55 65 years old. If the beneficiary is still disabled when the beneficiary becomes 55 65 years old, the beneficiary shall be deemed to be a retired member and, if the beneficiary had chosen an optional annuity under section 352B.10, subdivision 5, shall receive an annuity in accordance with the terms of the optional annuity previously chosen. If the beneficiary had not chosen an optional annuity under section 352B.10, subdivision 5, the beneficiary may choose to receive either a normal retirement annuity computed under section 352B.08, subdivision 2, or an optional annuity as provided in section 352B.08, subdivision 3. An optional annuity must be chosen within 90 days of attaining age 65 or reaching the five-year anniversary of the effective date of the disability benefit, whichever is later. If an optional annuity is chosen, the optional annuity shall begin to accrue the first of the month following attainment of age 65 or the five-year anniversary of the effective date of the disability benefit, whichever is later.

Sec. 6. Minnesota Statutes 1994, section 354.05, subdivision 5, is amended to read:

Subd. 5. [MEMBER OF FUND ASSOCIATION.] "Member of fund association" means every teacher who joins and contributes to the teachers retirement fund as provided in this chapter who has not retired, except a teacher covered by section 354B.02, subdivision 2 or 3, who elects to participate in the individual retirement account plan under chapter 354B, or a teacher who exercises an option to elect coverage under another public pension plan enumerated in section 356.30, subdivision 3. Any former member of the fund association who is retired and subsequently resumes teaching service is a member of the fund association only for purposes of social security coverage.

Sec. 7. Minnesota Statutes 1994, section 354.05, subdivision 35, is amended to read:

Subd. 35. [SALARY.] (a) "Salary" means the compensation, upon which member contributions are required and made, that is paid to a teacher before employee-paid fringe benefits, tax sheltered annuities, deferred compensation, or any combination of these employee-paid items are deducted.

(b) "Salary" does not mean:

(1) lump sum annual leave payments;

(2) lump sum wellness and sick leave payments;

(3) payments in lieu of any employer-paid group insurance coverage;

(4) payments for the difference between single and family premium rates that may be paid to a member with single coverage;

(5) employer-paid fringe benefits including, but not limited to, flexible spending accounts, cafeteria plans, health care expense accounts, day care expenses, or automobile allowances and expenses;

(6) any form of payment made in lieu of any other employer-paid fringe benefit or expense;

(7) any form of severance payments;

(8) workers' compensation payments;

(9) disability insurance payments including self-insured disability payments;

(10) payments to school principals and all other administrators for services in addition to the normal work year contract if these additional services are performed on an extended duty day, Saturday, Sunday, holiday, annual leave day, sick leave day, or any other nonduty day;

(11) payments under section 356.24, subdivision 1, clause (4)(ii); and

(12) payments made under section 125.12, subdivision 7, except for payments for sick leave accumulated under the provisions of a uniform school district policy that applies equally to all similarly situated persons in the district.

Sec. 8. Minnesota Statutes 1994, section 354.05, subdivision 40, is amended to read:

Subd. 40. [TIMELY RECEIPT.] An application, payment, return, claim, or other document that is not personally delivered to the association on or before the applicable due date is considered to be a timely receipt if officially postmarked on or before the due date or delivered or filed under section 645.151.

Sec. 9. Minnesota Statutes 1994, section 354.06, subdivision 4, is amended to read:

Subd. 4. [TREASURER; DUTIES BOARD; EXPENSES.] All members of the board shall serve without compensation. A member shall receive necessary expenses to attend meetings of the board and its committees, and association functions and presentations authorized by the board. The necessary expenses must be paid out of the fund. Members of the board shall suffer no loss of compensation from their employing units by reason of service on or for the association, the board, or any committee authorized by the board. Necessary expenses may include the salary of any substitute teacher which the employing unit is required to hire in the absence of the board member. The board may reimburse the employing unit for the cost of the substitute teacher.

Sec. 10. Minnesota Statutes 1994, section 354.44 is amended by adding a subdivision to read:

Subd. 9. [DETERMINING APPLICABLE LAW.] An employee who returns to covered service following a termination and who is not receiving a retirement annuity under this section must have earned at least 85 days of credited service following the return to covered service to be eligible for improved benefits resulting from any law change enacted subsequent to that termination.

Sec. 11. Minnesota Statutes 1994, section 354.52, subdivision 4a, is amended to read:

Subd. 4a. [MEMBER DATA REPORTING REQUIREMENTS.] (a) An employing unit shall initially provide the following member data or any of that data not previously provided to the association for payroll warrants dated after June 30, 1995, in a format prescribed by the executive director. Data changes and the dates of those changes must be reported to the association on an ongoing basis for the payroll cycle in which they occur with the data under subdivision 4b. Data on the member includes:

(1) legal name, address, date of birth, association member number, employer-assigned employee number, and social security number;

(2) association status, including, but not limited to, basic, coordinated, exempt annuitant, exempt technical college teacher, and exempt independent contractor or consultant;

(3) employment status, including, but not limited to, full time, part time, intermittent, substitute, or part-time mobility;

(4) employment position, including, but not limited to, teacher, superintendent, principal, administrator, or other;

(5) employment activity, including, but not limited to, hire, termination, resumption of employment, disability, or death;

(6) leaves of absence;

(7) county district number assigned by the association for the employing unit;

(8) data center identification number, if applicable; and

(9) other information as may be required by the executive director.

Sec. 12. Minnesota Statutes 1994, section 354A.12, subdivision 3d, is amended to read:

Subd. 3d. [SUPPLEMENTAL ADMINISTRATIVE EXPENSE ASSESSMENT.] (a) The active and retired membership of the Minneapolis teachers retirement fund association and of the St. Paul teachers retirement fund association is responsible for defraying supplemental administrative expenses other than investment expenses of the respective teacher retirement fund association.

(b) Investment expenses of the teachers retirement fund association are those expenses incurred by or on behalf of the retirement fund in connection with the investment of the assets of the retirement fund other than investment security transaction costs. Other administrative expenses are all expenses incurred by or on behalf of the retirement fund for all other retirement fund functions other than the investment of retirement fund assets. Investment and other administrative expenses must be accounted for using generally accepted accounting principles and in a manner consistent with the comprehensive annual financial report of the teachers retirement fund association for the immediately previous fiscal year under section 356.20.

(c) Supplemental administrative expenses other than investment expenses of a first class city teacher retirement fund association are those expenses for the fiscal year that exceed the amount computed by applying the most recent percentage of pay administrative expense amount, other than investment expenses, for the teachers retirement association governed by chapter 354 to the covered payroll of the respective teachers retirement fund association for the fiscal year.

(d) The board of trustees of each first class city teachers retirement fund association shall allocate the total dollar amount of supplemental administrative expenses other than investment expenses among the various active and retired membership groups of the teachers retirement fund association and shall assess the various membership groups their respective share of the supplemental administrative expenses other than investment expenses, in amounts determined by the board of trustees. The supplemental administrative expense assessments must be paid by the membership group in a manner determined by the board of trustees of the respective teachers retirement association. Supplemental administrative expenses payable by the active members of the pension plan must be picked up by the employer in accordance with section 356.62.

(e) With respect to the St. Paul teachers retirement fund association, the supplemental administrative expense assessment must be fully disclosed to the various active and retired membership groups of the teachers retirement fund association. The chief administrative officer of the St. Paul teachers retirement fund association shall prepare a supplemental administrative expense assessment disclosure notice, which must include the following:

(1) the total amount of administrative expenses of the St. Paul teachers retirement fund association, the amount of the investment expenses of the St. Paul teachers retirement fund association, and the net remaining amount of administrative expenses of the St. Paul teachers retirement fund association;

(2) the amount of administrative expenses for the St. Paul teachers retirement fund association that would be equivalent to the teachers retirement association noninvestment administrative expense level described in paragraph (c);

(3) the total amount of supplemental administrative expenses required for assessment calculated under paragraph (c);

(4) the portion of the total amount of the supplemental administrative expense assessment allocated to each membership group and the rationale for that allocation;

(5) the manner of collecting the supplemental administrative expense assessment from each membership group, the number of assessment payments required during the year, and the amount of each payment or the procedure used to determine each payment; and

(6) any other information that the chief administrative officer determines is necessary to fairly portray the manner in which the supplemental administrative expense assessment was determined and allocated.

(f) The disclosure notice must be provided annually in the annual report of the association.

(g) The supplemental administrative expense assessments must be deposited in the applicable teachers retirement fund upon receipt.

(f) (h) Any omitted active membership group assessments that remain undeducted and unpaid to the teachers retirement fund association for 90 days must be paid by the respective school district. The school district may recover any omitted active membership group assessment amounts that it has previously paid. The teachers retirement fund association shall deduct any omitted retired membership group assessment amounts from the benefits next payable after the discovery of the omitted amounts.

Sec. 13. Minnesota Statutes 1994, section 354A.31, is amended by adding a subdivision to read:

Subd. 8. [DETERMINING APPLICABLE LAW.] An employee who returns to covered service following a termination and who is not receiving a retirement annuity under this section must have earned at least 85 days of credited service following the return to covered service to be eligible for improved benefits resulting from any law change enacted subsequent to that termination.

Sec. 14. Minnesota Statutes 1994, section 356.215, subdivision 4d, is amended to read:

Subd. 4d. [INTEREST AND SALARY ASSUMPTIONS.] (a) For funds governed by chapters 352, 352B, 353, 353C, and 354 by sections 352.90 through 352.951 and 353.63 through 353.68, the actuarial valuation must use a preretirement interest assumption of 8.5 percent, a postretirement interest assumption of five percent, and a future salary increase assumption of 6.5 percent.

(b) For funds governed by chapter 354A, the actuarial valuation must use preretirement and postretirement assumptions of 8.5 percent and a future salary increase assumption of 6.5 percent, but the actuarial valuation must reflect the payment of postretirement adjustments to retirees, based on the methods specified in the bylaws of the fund as approved by the legislature. For a fund governed by chapter 422A, the actuarial valuation shall use a preretirement interest assumption of six percent, a postretirement interest assumption of five percent, and an assumption that in each future year the salary on which a retirement or other benefit is based is 1.04 multiplied by the salary for the preceding year.

(c) For all other funds not specified in paragraph (a), (b), or (d), or (e), the actuarial valuation must use a preretirement interest assumption of five percent, a postretirement interest assumption of five percent, and a future salary increase assumption of 3.5 percent.

(d) For funds governed by chapters 3A, 352C, and 490, the actuarial valuation must use a preretirement interest assumption of 8.5 percent, a postretirement interest assumption of five percent, and a future salary increase assumption of 6.5 percent in each future year in which the salary amount payable is not determinable from section 3.099, 15A.081, subdivision 6, or 15A.083, subdivision 1, whichever applies, or from applicable compensation council recommendations under section 15A.082.

(e) For funds governed by sections 352.01 through 352.86, 353.01 through 353.46, and chapter 354, the actuarial valuation must use a preretirement interest assumption of 8.5, a postretirement interest assumption of five percent, and a graded rate future salary increase assumption as follows:

General stateGeneral public

employeesemployeesTeachers

retirement retirementretirement

ageplan plan plan

16 7.2500% 8.71% 7.25%

17 7.2500 8.71 7.25

18 7.2500 8.70 7.25

19 7.2500 8.70 7.25

20 7.2500 7.70 7.25

21 7.1454 7.70 7.25

22 7.1094 7.70 7.25

23 7.0725 7.70 7.20

24 7.0363 7.70 7.15

25 7.0000 7.60 7.10

26 7.0000 7.51 7.05

27 7.0000 7.39 7.00

28 7.0000 7.30 7.00

29 7.0000 7.20 7.00

30 7.0000 7.20 7.00

31 7.0000 7.10 7.00

32 7.0000 7.10 7.00

33 7.0000 7.00 7.00

34 7.0000 7.00 7.00

35 7.0000 6.90 7.00

36 6.9019 6.80 7.00

37 6.8074 6.70 7.00

38 6.7125 6.60 6.90

39 6.6054 6.50 6.80

40 6.5000 6.40 6.70

41 6.3540 6.30 6.60

42 6.2087 6.30 6.50

43 6.0622 6.30 6.35

44 5.9048 6.20 6.20

45 5.7500 6.20 6.05

46 5.6940 6.09 5.90

47 5.6375 6.00 5.75

48 5.5822 5.90 5.70

49 5.5405 5.80 5.65

50 5.5000 5.70 5.60

51 5.4384 5.70 5.55

52 5.3776 5.70 5.50

53 5.3167 5.70 5.45

54 5.2826 5.70 5.40

55 5.2500 5.70 5.35

56 5.2500 5.70 5.30

57 5.2500 5.70 5.25

58 5.2500 5.70 5.25

59 5.2500 5.70 5.25

60 5.2500 5.00 5.25

61 5.2500 5.00 5.25

62 5.2500 5.00 5.25

63 5.2500 5.00 5.25

64 5.2500 5.00 5.25

65 5.2500 5.00 5.25

66 5.2500 5.00 5.25

67 5.2500 5.00 5.25

68 5.2500 5.00 5.25

69 5.2500 5.00 5.25

70 5.2500 5.00 5.25

Sec. 15. Minnesota Statutes 1994, section 356.215, subdivision 4g, is amended to read:

Subd. 4g. [AMORTIZATION CONTRIBUTIONS.] (a) In addition to the exhibit indicating the level normal cost, the actuarial valuation must contain an exhibit indicating the additional annual contribution sufficient to amortize the unfunded actuarial accrued liability. For funds governed by chapters 3A, 352, 352B, 352C, 353, 353C, 354, 354A, and 490, the additional contribution must be calculated on a level percentage of covered payroll basis by the established date for full funding in effect when the valuation is prepared. For funds governed by chapter 3a, sections 352.90 through 352.951, chapter 352B, chapter 352C, sections 353.63 through 353.68, chapter 353C, chapter 354A, and chapter 490, the level percent additional contribution must be calculated assuming annual payroll growth of 6.5 percent. For funds governed by sections 352.01 through 352.86 and chapter 354, the level percent additional contribution must be calculated assuming an annual payroll growth of five percent. For the fund governed by sections 353.01 through 353.46, the level percent additional contribution must be calculated assuming an annual payroll growth of six percent. For all other funds, the additional annual contribution must be calculated on a level annual dollar amount basis.

(b) For any fund other than the Minneapolis employees retirement fund, after the first actuarial valuation date occurring after June 1, 1989, if there has not been a change in the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a change in the benefit plan governing annuities and benefits payable from the fund, a change in the actuarial cost method used in calculating the actuarial accrued liability of all or a portion of the fund, or a combination of the three, which change or changes by themselves without inclusion of any other items of increase or decrease produce a net increase in the unfunded actuarial accrued liability of the fund, the established date for full funding for the first actuarial valuation made after June 1, 1989, and each successive actuarial valuation is the first actuarial valuation date occurring after June 1, 2020.

(c) For any fund or plan other than the Minneapolis employees retirement fund, after the first actuarial valuation date occurring after June 1, 1989, if there has been a change in any or all of the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a change in the benefit plan governing annuities and benefits payable from the fund, a change in the actuarial cost method used in calculating the actuarial accrued liability of all or a portion of the fund, or a combination of the three, and the change or changes, by themselves and without inclusion of any other items of increase or decrease, produce a net increase in the unfunded actuarial accrued liability in the fund, the established date for full funding must be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the fund must be determined in accordance with the plan provisions governing annuities and retirement benefits and the actuarial assumptions in effect before an applicable change;

(ii) the level annual dollar contribution or level percentage, whichever is applicable, needed to amortize the unfunded actuarial accrued liability amount determined under item (i) by the established date for full funding in effect before the change must be calculated using the interest assumption specified in subdivision 4d in effect before the change;

(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance with any new plan provisions governing annuities and benefits payable from the fund and any new actuarial assumptions and the remaining plan provisions governing annuities and benefits payable from the fund and actuarial assumptions in effect before the change;

(iv) the level annual dollar contribution or level percentage, whichever is applicable, needed to amortize the difference between the unfunded actuarial accrued liability amount calculated under item (i) and the unfunded actuarial accrued liability amount calculated under item (iii) over a period of 30 years from the end of the plan year in which the applicable change is effective must be calculated using the applicable interest assumption specified in subdivision 4d in effect after any applicable change;

(v) the level annual dollar or level percentage amortization contribution under item (iv) must be added to the level annual dollar amortization contribution or level percentage calculated under item (ii);

(vi) the period in which the unfunded actuarial accrued liability amount determined in item (iii) is amortized by the total level annual dollar or level percentage amortization contribution computed under item (v) must be calculated using the interest assumption specified in subdivision 4d in effect after any applicable change, rounded to the nearest integral number of years, but not to exceed 30 years from the end of the plan year in which the determination of the established date for full funding using the procedure set forth in this clause is made and not to be less than the period of years beginning in the plan year in which the determination of the established date for full funding using the procedure set forth in this clause is made and ending by the date for full funding in effect before the change; and

(vii) the period determined under item (vi) must be added to the date as of which the actuarial valuation was prepared and the date obtained is the new established date for full funding.

(d) For the Minneapolis employees retirement fund, the established date for full funding is June 30, 2020.

(e) For the public employees retirement association police and fire fund, an excess of valuation assets over actuarial accrued liability will be amortized in the same manner over the same period as an unfunded actuarial accrued liability but will serve to reduce the required contribution instead of increasing it.

Sec. 16. Minnesota Statutes 1994, section 356.24, subdivision 1, is amended to read:

Subdivision 1. [RESTRICTION; EXCEPTIONS.] (a) It is unlawful for a school district or other governmental subdivision or state agency to levy taxes for, or contribute public funds to a supplemental pension or deferred compensation plan that is established, maintained, and operated in addition to a primary pension program for the benefit of the governmental subdivision employees other than:

(1) to a supplemental pension plan that was established, maintained, and operated before May 6, 1971;

(2) to a plan that provides solely for group health, hospital, disability, or death benefits,;

(3) to the individual retirement account plan established by sections 354B.01 to 354B.05;

(3) (4) to a plan that provides solely for severance pay under section 465.72 to a retiring or terminating employee;

(4) (5) for employees other than personnel employed by the state university board or the community college board and covered by section 354B.07, subdivision 1, to:

(i) the state of Minnesota deferred compensation plan under section 352.96; or

(ii) payment of the applicable portion of the premium on a tax sheltered annuity contract qualified under section 403(b) of the federal Internal Revenue Code, purchased from a qualified insurance company; if provided for in a personnel policy of the public employer or in the collective bargaining agreement of between the public employer with and the exclusive representative of public employees in an appropriate unit, in an amount matching employee contributions on a dollar for dollar basis, but not to exceed an employer contribution of $2,000 a year per employee;

(i) to the state of Minnesota deferred compensation plan under section 352.96; or

(ii) in payment of the applicable portion of the premium on a tax-sheltered annuity contract qualified under section 403(b) of the Internal Revenue Code, if purchased from a qualified insurance company, and if the employing unit has complied with any applicable pension plan provisions of the Internal Revenue Code with respect to the tax-sheltered annuity program during the preceding calendar year; or

(5) (6) for personnel employed by the state university board or the community college board and covered by sections 352D.02, subdivision 1a, and 354B.07, subdivision 1, to the supplemental retirement plan under sections 354B.07 to 354B.09, if provided for in a personnel policy or in the collective bargaining agreement of the public employer with the exclusive representative of the covered employees in an appropriate unit, in an amount matching employee contributions on a dollar for dollar basis, but not to exceed an employer contribution of $2,000 a year for each employee.

(b) A qualified insurance company is a company that:

(1) meets the definition in section 60A.02, subdivision 4;

(2) is licensed to engage in life insurance or annuity business in the state;

(3) is determined by the commissioner of commerce to have a rating within the top two rating categories by a recognized national rating agency or organization that regularly rates insurance companies; and

(4) is determined by the state board of investment to be among the ten applicant insurance companies with competitive options and investment returns on annuity products. The state board of investment determination must be made on or before January 1, 1993, and must be reviewed periodically. The state board of investment may retain actuarial services to assist it in this determination and in its periodic review. The state board of investment may

annually establish a budget for its costs in any determination and periodic review processes. The state board of investment may charge a proportional share of all costs related to the periodic review to those companies currently under contract and may charge a proportional share of all costs related to soliciting and evaluating bids in a determination process to each company selected by the state board of investment. All contracts must be approved before execution by the state board of investment. The state board of investment shall establish policies and procedures under section 11A.04, clause (2), to carry out this paragraph.

(c) A personnel policy for unrepresented employees or a collective bargaining agreement may establish limits on the number of vendors under paragraph (b), clause (4) (5), that it will utilize and conditions under which the vendors may contact employees both during working hours and after working hours.

Sec. 17. Minnesota Statutes 1994, section 383B.48, is amended to read:

383B.48 [PURCHASE OF SHARES IN MINNESOTA SUPPLEMENTAL INVESTMENT FUND.]

At the time a person becomes eligible for coverage and elects to obtain coverage by the Hennepin county supplemental retirement program and prior to July before November 1 of each subsequent year, a participant in the Hennepin county supplemental retirement program shall indicate in writing on a form provided by the county of Hennepin the account of the Minnesota supplemental investment fund in which the participant wishes salary deductions and county matching contributions attributable to salary deductions to be invested for that fiscal year the subsequent 12-month period. For that fiscal year 12-month period the county of Hennepin shall purchase with the salary deductions and county matching funds attributable to the salary deductions shares in the appropriate account of the Minnesota supplemental investment fund in accordance with the indicated preferences of the participant. However, the county of Hennepin has the authority to determine which accounts of the Minnesota supplemental investment fund will be available for participant investment. The shares purchased shall must stand in the name of the county of Hennepin. A record shall must be kept by the county of Hennepin indicating the number of shares in each account of the Minnesota supplemental investment fund purchased with the salary deductions and county matching funds attributable to the salary deductions of each participant. The record shall must be known as the "participant's share account record." The participant's share account record shall must show, in addition to the number of shares therein in the account, any cash balance of salary deductions or county matching funds attributable to those deductions which stand uninvested in shares. At the option of the county of Hennepin, and subject to any terms and conditions established and communicated in writing by the county to a participant, the participant may designate no more often than once each fiscal year calendar quarter that prior salary deductions and county matching contributions attributable to the salary deductions from prior fiscal years, together with any interest earned, be reinvested in another account of the Minnesota supplemental investment fund made available by the county of Hennepin.

Sec. 18. Minnesota Statutes 1994, section 383B.49, is amended to read:

383B.49 [SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF SHARES.]

When requested to do so, in writing, on forms provided by the county, by a participant, surviving spouse, a guardian of a surviving child or an estate a personal representative, whichever is applicable, the county of Hennepin shall redeem shares in the accounts of the Minnesota supplemental investment fund standing in a participant's share account record under the following circumstances and in accordance with the laws and regulations governing the Minnesota supplemental investment fund:

(1) A participant who is no longer employed by the county of Hennepin shall be is entitled to receive the cash realized on the redemption of the shares to the credit of the participant's share account record of the person. The participant may request the redemption of all or a portion of the shares in the participant's share account record of the person, but may not request more than one redemption in any one calendar year. If only a portion of the shares in the participant's share account record is requested to be redeemed the person may request to redeem not less than 20 percent of the shares in any one calendar year and the redemption must be completed in no more than five years. An election is irrevocable except that a participant may request an amendment of the election to redeem all of the person's remaining shares. All requests under this paragraph are subject to application to and approval of the Hennepin county board, in its sole discretion.

(2) In the event of the death of a participant leaving a surviving spouse, the surviving spouse shall be is entitled to receive the cash realized on the redemption of all or a portion of the shares in the participant's share account record of the deceased spouse, but in no event may the spouse request more than one redemption in each calendar year.

If only a portion of the shares in the participant's share account record is requested to be redeemed, the surviving spouse may request the redemption of not less than 20 percent of the shares in any one calendar year. Redemption must be completed in no more than five years. An election is irrevocable except that the surviving spouse may request an amendment of the election to redeem all of the participant's remaining shares. All requests under this paragraph are subject to application to and approval of the Hennepin county board, in their its sole discretion. Upon the death of the surviving spouse, any shares remaining in the participant's share account record shall must be redeemed by the county of Hennepin and the cash realized therefrom from the redemption distributed to the estate of the surviving spouse.

(3) In the event of the death of a participant leaving no surviving spouse, but leaving a minor surviving child or minor surviving children, the guardianship estate of the minor child is, or the guardianship estates of the minor children shall be are, entitled to receive the cash realized on the redemption of all shares to the credit of the participant's share account record of the deceased participant. In the event of minor surviving children, the cash realized shall must be paid in equal shares to the guardianship estates of the minor surviving children.

(4) In the event of the death of a participant leaving no surviving spouse and no minor surviving children, the estate of the deceased participant shall be is entitled to receive the cash realized on the redemption of all shares to the credit of the participant's share account record of the deceased participant.

Sec. 19. [FIRST CLASS CITY TEACHER PLANS; DETERMINING APPLICABLE LAW.]

In accordance with Minnesota Statutes, section 354A.12, subdivision 4, the Minneapolis teachers retirement fund association, the St. Paul teachers retirement fund association, and the Duluth teachers retirement fund association shall amend the articles of incorporation or bylaws of the respective association. This authorization is to provide that an employee who has service credit in the basic plan of the Minneapolis teachers retirement fund association, or the St. Paul teachers retirement fund association, or an employee with service credit in the Duluth teachers retirement fund association old law plan, who returns to covered service following a termination and who is not receiving a retirement annuity from the respective plan, must have earned at least 85 days of credited service following the return to covered service to be eligible for improved benefits resulting from any law change enacted subsequent to the termination.

Sec. 20. [INSTRUCTION TO REVISOR.]

In the next and subsequent issues of Minnesota Statutes, the revisor of statutes shall substitute "association" for "fund" in every instance where reference is to the teachers retirement organization in chapters 354 and 356. For purposes of this section, "organization" means the entity that administers the plans under chapter 354. The revisor shall substitute "fund" for "association" in every instance where reference is to the fund which receives contributions and is used to accumulate and invest assets to meet liabilities created by benefits offered under terms of the plan.

Sec. 21. [EFFECTIVE DATE.]

(a) Sections 1 through 9, 11, 12, 14, 15, 20, and 21, are effective on the day following final enactment.

(b) Sections 10, 13, and 19, are effective on July 1, 1995.

(c) Section 16 is effective the day following final enactment and applies to tax-sheltered annuity programs receiving employer matching contributions in operation at any time during the 1995 calendar year.

Section 1. Minnesota Statutes 1994, section 11A.23, subdivision 4, is amended to read:

Subd. 4. [COVERED RETIREMENT FUNDS AND PLANS.] The provisions of this section shall apply to the following retirement funds and plans:

(1) State university and state community college higher education board supplemental retirement plan established pursuant to sections 354B.07 to 354B.09 under chapter 354C;

(2) state employees retirement fund established pursuant to chapter 352;

(3) correctional employees retirement plan established pursuant to chapter 352;

(4) state patrol retirement fund established pursuant to chapter 352B;

(5) unclassified employees retirement plan established pursuant to chapter 352D;

(6) public employees retirement fund established pursuant to chapter 353;

(7) public employees police and fire fund established pursuant to chapter 353;

(8) teachers' retirement fund established pursuant to chapter 354;

(9) judges' retirement fund established pursuant to chapter 490; and

(10) any other funds required by law to be invested by the board.

Sec. 2. Minnesota Statutes 1994, section 352D.02, subdivision 1, is amended to read:

Subdivision 1. [COVERAGE.] (a) Employees enumerated in paragraph (b), if they are in the unclassified service of the state or metropolitan council and are eligible for coverage under the general state employees retirement plan under chapter 352, are participants in the unclassified program under this chapter unless the employee gives notice to the executive director of the Minnesota state retirement system within one year following the commencement of employment in the unclassified service that the employee desires coverage under the general state employees retirement plan. For the purposes of this chapter, an employee who does not file notice with the executive director is deemed to have exercised the option to participate in the unclassified plan.

(b) Enumerated employees are:

(1) an employee in the office of the governor, lieutenant governor, secretary of state, state auditor, state treasurer, attorney general, or an employee of the state board of investment;

(2) the head of a department, division, or agency created by statute in the unclassified service, an acting department head subsequently appointed to the position, or an employee enumerated in section 15A.081, subdivision 1 or 15A.083, subdivision 4;

(3) a permanent, full-time unclassified employee of the legislature or a commission or agency of the legislature or a temporary legislative employee having shares in the supplemental retirement fund as a result of former employment covered by this chapter, whether or not eligible for coverage under the Minnesota state retirement system;

(4) a person other than an employee of the state board of technical colleges who is employed in a position established under section 43A.08, subdivision 1, clause (3), or subdivision 1a, or in a position authorized under a statute creating or establishing a department or agency of the state, which is at the deputy or assistant head of department or agency or director level;

(5) the regional administrator, or executive director of the metropolitan council, general counsel, division directors, operations managers, and other positions as designated by the council, all of which may not exceed 27 positions at the council; and the chair, provided that upon initial designation of all positions provided for in this clause, no further designations or redesignations may be made without approval of the board of directors of the Minnesota state retirement system;

(6) the executive director, associate executive director, and not to exceed nine positions of the higher education coordinating board in the unclassified service, as designated by the higher education coordinating board before January 1, 1992, or subsequently redesignated with the approval of the board of directors of the Minnesota state retirement system, unless the person has elected coverage by the individual retirement account plan under chapter 354B;

(7) the clerk of the appellate courts appointed under article VI, section 2, of the Constitution of the state of Minnesota;

(8) the chief executive officers of correctional facilities operated by the department of corrections and of hospitals and nursing homes operated by the department of human services;

(9) an employee whose principal employment is at the state ceremonial house;

(10) an employee of the Minnesota educational computing corporation;

(11) an employee of the world trade center board; and

(12) an employee of the state lottery board who is covered by the managerial plan established under section 43A.18, subdivision 3;

(13) an employee of the state board of technical colleges employed in a position established under section 43A.08, subdivision 1, clause (3), or 1a, unless the person has elected coverage by the individual retirement account plan under chapter 354B; and

(14) an employee of the higher education board in a position established under section 136E.04, subdivision 2, unless the person has elected coverage by the individual retirement account plan under chapter 354B.

Sec. 3. Minnesota Statutes 1994, section 354.05, subdivision 2a, is amended to read:

Subd. 2a. [EXCEPTIONS.] (a) Notwithstanding subdivision 2, a person specified in paragraph (b) is not a member of the fund except for purposes of social security coverage unless (1) the person is covered by section 354B.02, subdivision 2, and remains a member of the fund for all purposes or, (2) the person is covered by section 354B.02, subdivision 1 or 5, or 354B.035 354B.21, and elects coverage by the teachers retirement association.

(b) A teacher is excluded from fund membership other than social security coverage under paragraph (a) if first employed as:

(1) a teacher in the state university system after June 30, 1989;

(2) a teacher in the state community college system after June 30, 1989; or

(3) a teacher in a technical college authorized under chapter 136C or 136D after June 30, 1995 the person is covered by the individual retirement account plan established under chapter 354B.

Sec. 4. Minnesota Statutes 1994, section 354A.011, is amended by adding a subdivision to read:

Subd. 14a. [DISTRICT.] "District" or "school district" means the employing school district or the higher education board.

Sec. 5. Minnesota Statutes 1994, section 354A.011, subdivision 27, is amended to read:

Subd. 27. [TEACHER.] "Teacher" means any person who renders service in a public school district located in the corporate limits of one of the cities of the first class which was so classified on January 1, 1979, as any of the following:

(a) a full-time employee in a position for which a valid license from the state department of education is required;

(b) an employee of the teachers retirement fund association located in the city of the first class unless the employee has exercised the option pursuant to Laws 1955, chapter 10, section 1, to retain membership in the Minneapolis employees retirement fund established pursuant to chapter 422A;

(c) a part-time employee in a position for which a valid license from the state department of education is required; or

(d) a part-time employee in a position for which a valid license from the state department of education is required who also renders other nonteaching services for the school district unless the board of trustees of the teachers retirement fund association determines that the combined employment is on the whole so substantially dissimilar to teaching service that the service shall not be covered by the association.

The term shall not mean any person who renders service in the school district as any of the following:

(1) an independent contractor or the employee of an independent contractor;

(2) an employee who is a full-time teacher covered by another teachers retirement fund association established pursuant to this chapter or chapter 354;

(3) an employee exempt from licensure pursuant to section 125.031; or

(4) an employee who is a teacher in a technical college located in a city of the first class unless the person elects coverage by the applicable first class city teacher retirement fund association under section 354B.02 354B.21, subdivision 1, or 354B.035. 2; or

(5) an employee who is a part-time teacher in a technical college in a city of the first class and who has elected coverage by the applicable first class city teacher retirement fund association under section 354B.21, subdivision 2, but (1) the teaching service is incidental to the regular nonteaching occupation of the person; (2) the applicable technical college stipulates annually in advance that the part-time teaching service will not exceed 300 hours in a fiscal year; and (3) the part-time teaching actually does not exceed 300 hours in the fiscal year to which the certification applies.

Sec. 6. Minnesota Statutes 1994, section 355.61, is amended to read:

355.61 [SOCIAL SECURITY COVERAGE FOR CERTAIN STATE UNIVERSITY OR COMMUNITY COLLEGE FACULTY MEMBERS EMPLOYED BY THE HIGHER EDUCATION BOARD.]

Plan participants under section 354B.02, subdivision 1, and persons electing participation under section 354B.02, subdivision 2 or 3, 354B.21 remain members of the teachers retirement association for purposes of social security coverage only, and remain covered by the applicable agreement entered into under section 355.02, but are not members of the teachers retirement association for any other purpose while employed in covered employment.

Sec. 7. Minnesota Statutes 1994, section 356.24, subdivision 1, is amended to read:

Subdivision 1. [RESTRICTION; EXCEPTIONS.] (a) It is unlawful for a school district or other governmental subdivision or state agency to levy taxes for, or contribute public funds to a supplemental pension or deferred compensation plan that is established, maintained, and operated in addition to a primary pension program for the benefit of the governmental subdivision employees other than:

(1) to a supplemental pension plan that was established, maintained, and operated before May 6, 1971;

(2) to a plan that provides solely for group health, hospital, disability, or death benefits, to the individual retirement account plan established by sections 354B.01 to 354B.05 chapter 354B;

(3) to a plan that provides solely for severance pay under section 465.72 to a retiring or terminating employee;

(4) for employees other than personnel employed by the state university board or the community college board and covered by section 354B.07, subdivision 1 the higher education board supplemental retirement plan under chapter 354C, to:

(i) the state of Minnesota deferred compensation plan under section 352.96; or

(ii) payment of the applicable portion of the premium on a tax sheltered annuity contract qualified under section 403(b) of the federal Internal Revenue Code, purchased from a qualified insurance company; if provided for in a personnel policy or in the collective bargaining agreement of the public employer with the exclusive representative of public employees in an appropriate unit, in an amount matching employee contributions on a dollar for dollar basis, but not to exceed an employer contribution of $2,000 a year per employee; or

(5) for personnel employed by the state university board or the community college board and not covered by sections 352D.02, subdivision 1a, and 354B.07, subdivision 1 clause (4), to the supplemental retirement plan under sections 354B.07 to 354B.09 chapter 354C, if provided for in a personnel policy or in the collective bargaining agreement of the public employer with the exclusive representative of the covered employees in an appropriate unit,

in an amount matching employee contributions on a dollar for dollar basis, but not to exceed an employer contribution of $2,000 a year for each employee.

(b) A qualified insurance company is a company that:

(1) meets the definition in section 60A.02, subdivision 4;

(2) is licensed to engage in life insurance or annuity business in the state;

(3) is determined by the commissioner of commerce to have a rating within the top two rating categories by a recognized national rating agency or organization that regularly rates insurance companies; and

(4) is determined by the state board of investment to be among the ten applicant insurance companies with competitive options and investment returns on annuity products. The state board of investment determination must be made on or before January 1, 1993, and must be reviewed periodically. The state board of investment may retain actuarial services to assist it in this determination and in its periodic review. The state board of investment may annually establish a budget for its costs in any determination and periodic review processes. The state board of investment may charge a proportional share of all costs related to the periodic review to those companies currently under contract and may charge a proportional share of all costs related to soliciting and evaluating bids in a determination process to each company selected by the state board of investment. All contracts must be approved before execution by the state board of investment. The state board of investment shall establish policies and procedures under section 11A.04, clause (2), to carry out this paragraph.

(c) A personnel policy for unrepresented employees or a collective bargaining agreement may establish limits on the number of vendors under paragraph (b), clause (4), that it will utilize and conditions under which the vendors may contact employees both during working hours and after working hours.

Sec. 8. [354B.20] [DEFINITIONS.]

Subdivision 1. [IN GENERAL.] Unless the content or subject matter indicates otherwise, as used in this chapter the terms in this section have the meanings given them.

Subd. 2. [BOARD.] "Board" means the higher education board.

Subd. 3. [CHANCELLOR.] "Chancellor" means the chancellor of the board.

Subd. 4. [COVERED EMPLOYMENT.] (a) "Covered employment" means employment by a person eligible for coverage by this retirement program under section 354B.21 in a faculty position or in an eligible unclassified administrative position.

(b) "Covered employment" does not mean employment specified in paragraph (a) by a faculty member employed in a state university or a community college if the person's initial appointment is specified as constituting less than 25 percent of a full academic year, exclusive of summer session, for the applicable institution.

Subd. 5. [COVERED SALARY.] (a) "Covered salary" means the periodic compensation paid to the participant before deductions for deferred compensation, supplemental retirement coverage, or other voluntary salary reduction program.

(b) "Covered salary" does not mean lump sum sick leave payments, severance payments, payments in lieu of employer-paid group insurance coverage, payments based on differences between single employer-paid group insurance coverage and insurance coverage including dependents, or workers' compensation payment.

Subd. 6. [ELIGIBLE UNCLASSIFIED ADMINISTRATIVE POSITION.] "Eligible unclassified administrative position" means the following:

(1) the chancellor of the board;

(2) a president of a state college or university; or

(3) an excluded administrator employed in a state university or college, by the board, or by the higher education coordinating board.

Subd. 7. [EMPLOYING UNIT.] "Employing unit," if the agency employs any persons covered by the individual retirement account plan under section 354B.21, means:

(1) the board;

(2) the higher education coordinating board; and

(3) the higher education facilities authority.

Subd. 8. [FACULTY.] "Faculty" means an employment position that meets the definition of either section 354.05, subdivision 2, or 354A.011, subdivision 27.

Subd. 9. [FIRST CLASS CITY TEACHER RETIREMENT FUND ASSOCIATION.] "First class city teacher retirement fund association" means a retirement plan, fund, and plan administration established under chapter 354A.

Subd. 10. [GENERAL STATE EMPLOYEES RETIREMENT PLAN.] "General state employees retirement plan" means the retirement plan administered by the Minnesota state retirement system and governed by sections 352.01 to 352.73.

Subd. 11. [HIGHER EDUCATION BOARD.] "Higher education board" means the governing board for the state universities, the community colleges, and the technical colleges established by section 136E.01.

Subd. 12. [PARTICIPANT.] "Participant" means a person who is employed in covered employment by the board and who elects coverage by the plan under section 354B.21.

Subd. 13. [PLAN.] "Plan" means the individual retirement account plan established by this chapter.

Subd. 14. [PLAN ADMINISTRATOR.] "Plan administrator" means the board employee or an independent contract agent designated by the board to perform the primary administrative functions relating to the plan.

Subd. 15. [SABBATICAL LEAVE.] "Sabbatical leave" means a sabbatical leave as specified in the applicable collective bargaining agreement or personnel policy of the board for its employees.

Subd. 16. [STATE UNCLASSIFIED EMPLOYEES RETIREMENT PROGRAM.] "State unclassified employees retirement program" means the retirement program established by chapter 352D.

Subd. 17. [SUPPLEMENTAL PLAN.] "Supplemental plan" means the retirement program established by chapter 354C.

Subd. 18. [TEACHERS RETIREMENT PLAN.] "Teachers retirement plan" means the retirement plan established by chapter 354.

Sec. 9. [354B.21] [COVERAGE.]

Subdivision 1. [ELIGIBILITY.] The following persons are eligible to have coverage by the individual retirement account plan and to be participants in the plan:

(1) employees of the board who are employed as faculty in an employment classification included in the state university instructional unit, the community college instructional unit, or the technical college instructional unit under section 179A.10, subdivision 2;

(2) the chancellor and employees of the board in eligible unclassified administrative positions;

(3) the employees in eligible unclassified administrative positions in the state universities;

(4) the employees in eligible unclassified administrative positions in the technical colleges; and

(5) the employees in eligible unclassified administrative positions of the higher education coordinating board or of the community colleges.

Subd. 2. [COVERAGE; ELECTION.] (a) An eligible person is entitled to elect coverage by the plan. If the eligible person does not make a timely election of coverage by the plan, the person has the coverage specified in subdivision 3.

(b) For eligible persons who were employed by the former state university system or the former community college system before May 1, 1995, the person has the retirement coverage that the person had for employment immediately before May 1, 1995.

(c) For all other eligible persons, the election of coverage must be made within 90 days of the date of enactment of this act or 90 days of receiving notice from the employer of the options available under this section, whichever occurs later.

Subd 3. [DEFAULT COVERAGE.] If an eligible person fails to elect coverage by the plan under subdivision 2 or if the person fails to make a timely election, the following retirement coverage applies:

(1) for employees of the board who are employed in faculty positions in the state universities or in the community colleges, the retirement coverage is by the plan established by this chapter;

(2) for employees of the board who are employed in faculty positions in the technical colleges, the retirement coverage is by the teachers retirement association established under chapter 354, unless the employee was a member of a first class city teacher retirement fund established under chapter 354A on June 30, 1995, and then the retirement coverage is by the Duluth teachers retirement fund association if the person was a member of that plan on June 30, 1995, or the Minneapolis teachers retirement fund association if the person was a member of that plan on June 30, 1995, or the St. Paul teachers retirement fund association if the person was a member of that plan on June 30, 1995; and

(3) for employees of the board who are employed in eligible unclassified administrative positions, the retirement coverage is by the plan established by this chapter.

Subd. 3a. [CONTINUATION OF PLAN COVERAGE IN CERTAIN INSTANCES.] For a person with retirement coverage by a first class city teacher retirement fund association instead of the individual retirement account plan under subdivision 3, clause (2), coverage by the applicable retirement fund association continues for the duration of the person's employment by the higher education board unless, within 90 days of a change in employment within the Minnesota state colleges and universities system, the person elects the individual retirement account plan for all future employment by the higher education board.

Subd. 3b. [COVERAGE OF CERTAIN FORMER TECHNICAL COLLEGE FACULTY MEMBERS.] A person who was employed as a teacher by a technical college before July 1, 1995, and who subsequently is reclassified into a different employment position while continuing to perform the same or essentially the same employment duties and consequently shifts from the technical college instructional collective bargaining unit to another state collective bargaining unit retains coverage by the teachers retirement association or the applicable first class city teachers retirement fund association, whichever applies.

Subd. 3c. [ELECTION OF TRA COVERAGE IN CERTAIN INSTANCES.] (a) A person who was employed as a teacher by a technical college before July 1, 1995, and who has retirement coverage for that technical college teacher employment by a first class city teacher retirement fund association under chapter 354A may elect to have future higher education system teacher employment retirement coverage by the teacher retirement association governed by chapter 354.

(b) The election to transfer prospective retirement coverage under paragraph (a) must be made by the technical college teacher by October 1, 1995, or within 90 days of initially being employed by the higher education system, whichever is later. The election must be made in writing on a form prescribed by the executive director of the teachers retirement association. The election, once filed with the executive director of the teachers retirement association, is irrevocable.

(c) An election to transfer prospective retirement coverage under paragraph (a) does not affect prior allowable service credit under section 354A.011, subdivision 4. The transfer of prospective retirement coverage does not make the person eligible for a refund of member contributions during the course of the person's employment by the higher education system.

Subd. 4. [COVERAGE IN THE EVENT OF ACTING, INTERIM, OR TEMPORARY APPOINTMENTS.] (a) A person previously employed by the board and subsequently appointed by the board to an acting, interim, or temporary faculty or eligible unclassified administrative position by the board retains the retirement coverage that the person had in the prior board position. If the participant's status becomes permanent, the participant has the option to make an election of retirement coverage appropriate to the retirement plan in which the employment position should have retirement coverage consistent with subdivision 2.

(b) A person who is appointed to an acting, interim, or temporary faculty position by the board and who was not employed in a faculty position by the board immediately before that appointment must elect coverage as provided in subdivision 2.

Subd. 5. [PAYMENT FOR CERTAIN PRIOR UNCOVERED SERVICE.] (a) A person employed in a faculty position by the board who was initially excluded from participation in the individual retirement account plan coverage, who was not covered by any other Minnesota public pension plan for that service, and who is subsequently eligible to participate in the individual retirement account plan may make member contributions for that period of prior uncovered teaching employment or eligible unclassified administrative employment with the board.

(b) The member contributions for prior uncovered board service are the amount that the person would have paid if the prior service had been covered employment. The payment must be made to the individual retirement account plan administrator and may be made only by payroll deduction. The payment must be made by the later of:

(1) 45 days of the start of covered employment; or

(2) the end of the fiscal year in which covered employment began.

(c) The board must contribute an amount to match any contribution made by a plan participant under this subdivision.

(d) Payments of contributions for prior uncovered board service under this subdivision must be invested in the same manner as the regular contributions made by or on behalf of the plan participant.

Subd. 6. [CONTINUATION OF COVERAGE.] Once a person is employed in a position that qualifies for participation in the individual retirement account plan and elects to participate in the plan, all subsequent service by the person as a faculty member employed by the board or other employing unit is covered by the individual retirement account plan.

Sec. 10. [354B.22] [IRAP COVERAGE IN ADDITION TO SOCIAL SECURITY COVERAGE.]

Subdivision 1. [SOCIAL SECURITY COVERAGE.] (a) Any employee of the board or other employing unit who elects coverage by this chapter is a member of the teachers retirement association solely for purposes of coverage by the federal old age, survivors, disability and health insurance program, and are covered by the agreement made under section 355.02.

(b) A person with federal social security coverage through teachers retirement association membership under paragraph (a) is not a member of the teachers retirement association for any other purpose while employed as a teacher by the board, and membership in the teachers retirement association for this limited purpose conveys no rights or benefit entitlement under chapter 354.

Subd. 2. [PUBLIC PENSION COVERAGE AS CONDITION OF EMPLOYMENT.] Coverage by a public pension plan under section 354B.21 is a condition of initial employment or continued employment as a faculty member or eligible unclassified administrative position by the board or other employing unit.

Sec. 11. [354B.23] [CONTRIBUTIONS.]

Subdivision 1. [MEMBER CONTRIBUTION RATE.] (a) Except as provided in paragraph (b), the member contribution rate for participants in the individual retirement account plan is 4.5 percent of salary.

(b) For participants in the individual retirement account plan who were otherwise eligible to elect retirement coverage in the state unclassified employees retirement program, the member contribution rate is the rate specified in section 352D.04, subdivision 2, paragraph (a).

Subd. 2. [MEMBER CONTRIBUTION METHOD.] Member contributions must be made by payroll deduction during each pay period.

Subd. 3. [EMPLOYER CONTRIBUTION RATE.] The employer contribution rate on behalf of participants in the individual retirement account plan is six percent of salary.

Subd. 4. [EMPLOYER CONTRIBUTION METHOD.] The employer contribution must be made by the employing unit of a plan participant during each pay period. The employer contribution must be made from the available revenue sources of the employing unit.

Subd. 5. [OMITTED MEMBER DEDUCTIONS.] (a) If the employing unit that employs a plan participant fails to deduct the member contribution from the participant's salary and a period of less than 60 days from the date on which the deduction should have been made has elapsed, the employing unit must obtain the omitted member deduction by an additional payroll deduction during the pay period next following the discovery of the omission.

(b) If the employing unit of a plan participant fails to deduct the member contribution from the participant's salary and that omission continues for at least 60 days from the date on which the deduction should have been made, the employing unit must pay the amount representing the omitted member contribution, and the full required employer contribution, plus compound interest at an annual rate of 8.5 percent. The contributions and any interest must be made within one year of the date on which the omission was discovered.

Subd. 6. [TRANSFER OF CERTAIN TRA MEMBER CONTRIBUTION AMOUNTS TO IRAP.] (a) Notwithstanding any provisions of chapter 354 to the contrary, a former member of the teachers retirement association who has less than three years of allowable service credit under section 354.05, subdivision 13, and who is a member of the individual retirement account plan may elect to transfer to the plan an amount equal to the refund that the person could have received under section 354.49, subdivision 2, if the person had been eligible to receive a refund.

(b) The transfer must be made from the teachers retirement association directly to the individual retirement account plan and credited to the appropriate account.

(c) No amount under this subdivision may be paid directly to the former teachers retirement association member.

(d) The election of this transfer must be made on a form prescribed by the executive director of the teachers retirement association, after consultation with the plan administrator.

Sec. 12. [354B.24] [SABBATICAL LEAVE.]

Subdivision 1. [CONTINUATION OF COVERAGE.] A person who is a participant in the individual retirement plan, and who goes on an approved sabbatical leave, must remain a participant in the plan for any period during which the person receives a salary from the board or during which the person makes an optional contribution provided for in subdivision 3.

Subd. 2. [MANDATORY CONTRIBUTIONS.] (a) From the salary paid to the person during the course of an approved sabbatical leave, the employing unit must deduct a member contribution as required under section 354B.23, subdivision 1.

(b) The employing unit must make the employer contribution on behalf of the plan participant as provided in section 354B.23, subdivision 3.

Subd. 3. [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) A plan participant on an approved sabbatical leave may make an optional additional member contribution. The optional additional member may not exceed the applicable member contribution rate specified in section 354B.23, subdivision 1, applied to the difference between the amount of salary actually received during the sabbatical leave and the amount of salary actually received for a comparable period of an identical length to the sabbatical leave that occurred during the fiscal year immediately preceding the sabbatical leave.

(b) Any optional additional member contribution must be made before the last day of the fiscal year next following the fiscal year in which the sabbatical leave terminates. The optional additional member contribution may not include interest.

(c) When an optional additional member contribution is made, the employing unit must make the employer contribution at the rate set forth in section 354B.23, subdivision 3, on the salary that was the basis for the optional additional member contribution under paragraph (a).

(d) An employer contribution required under this section must be made no later than 60 days after the date on which the optional additional member contribution was made.

Subd. 4. [REINSTATEMENT RIGHTS.] Notwithstanding the provisions of any sabbatical leave agreements, regular and optional additional member contributions and employer contributions under this section are permissible only if the plan participant retains the right to full reinstatement to an employment position with the applicable employing unit both during and at the conclusion of the sabbatical leave.

Sec. 13. [354B.25] [INDIVIDUAL RETIREMENT ACCOUNT PLAN ADMINISTRATION.]

Subdivision 1. [GENERAL GOVERNANCE.] The individual retirement account plan is the administrative responsibility of the higher education board. The higher education board may administer the plan directly or may contract out for administrative services with a qualified third-party plan administrative entity.

Subd. 2. [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS.] (a) The plan administrator shall arrange for the purchase of fixed annuity contracts, variable annuity contracts, a combination of fixed and variable annuity contracts, or custodial accounts from financial institutions which have been selected by the state board of investment under subdivision 3, as the investment vehicle for the retirement coverage of plan participants and to provide retirement benefits to plan participants. Custodial accounts from financial institutions shall include open-end investment companies registered under the federal Investment Company Act of 1940, as amended.

(b) The annuity contracts or accounts must be purchased with contributions under section 354B.23 or with money or assets otherwise provided by law by authority of the board and deemed acceptable by the applicable financial institution.

(c) In addition to contracts and accounts from financial institutions, the Minnesota supplemental investment fund established under section 11A.17 and administered by the state board of investment is one of the investment options for the individual retirement account plan.

Subd. 3. [SELECTION OF FINANCIAL INSTITUTIONS.] (a) The financial institutions provided for under subdivision 2 must be selected by the state board of investment. Financial institutions include open-end investment companies registered under the federal Investment Company Act of 1940, as amended.

(b) The state board of investment may select up to five financial institutions to provide annuity contracts, custodial accounts, or a combination, as investment options for the individual retirement account plan in addition to the Minnesota supplemental investment fund. In making its selection, at a minimum, the state board of investment shall consider at least the following:

(1) the experience and ability of the financial institution to provide retirement and death benefits that are suited to meet the needs of plan participants;

(2) the relationship of those retirement and death benefits provided by the financial institution to their cost; and

(3) the financial strength and stability of the financial institution.

(c) After selecting a financial institution, the state board of investment must periodically review each financial institution selected under paragraph (b). The periodic review must occur at least every three years. In making its review, the state board of investment may retain appropriate consulting services to assist it in its periodic review, establish a budget for the cost of the periodic review process, and charge a proportional share of these costs to the reviewed financial institution.

(d) Contracts with financial institutions under this section must be executed by the board and must be approved by the state board of investment before execution.

(e) The state board of investment shall also establish policies and procedures under section 11A.04, clause (2), to carry out the provisions of this subdivision.

Subd. 4. [BENEFIT OWNERSHIP.] The retirement benefits provided by the annuity contracts and custodial accounts of the individual retirement account plan are held for the benefit of plan participants and must be paid according to this chapter and of the plan document.

Subd. 5. [INDIVIDUAL RETIREMENT ACCOUNT PLAN ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary administrative expenses of the individual retirement account plan must be paid by plan participants in the following manner:

(1) from plan participants with amounts invested in the Minnesota supplemental investment fund, the plan administrator may charge an administrative expense assessment as provided in section 11A.17, subdivisions 10a and 14; and

(2) from plan participants with amounts through annuity contracts and custodial accounts purchased under subdivision 2, paragraph (a), the plan administrator may charge an administrative expense assessment of a designated amount, not to exceed two percent of member and employer contributions, as those contributions are made.

(b) Any administrative expense charge that is not actually needed for the administrative expenses of the individual retirement account plan must be refunded to member accounts.

Sec. 14. [354B.26] [DEFERRED ANNUITY ENTITLEMENT FOR CERTAIN FORMER TRA MEMBERS.]

Notwithstanding any provision of chapter 354 to the contrary, a person covered by this chapter who had less than three years of prior allowable service credit in the teachers retirement association is entitled to a deferred annuity and augmentation under section 354.55, subdivision 11.

Sec. 15. [354B.30] [PROHIBITION ON LOANS OR PRETERMINATION DISTRIBUTIONS.]

(a) No participant may obtain a loan from the plan or obtain any distribution from the plan at a time before the participant terminates the employment that gave rise to plan coverage.

(b) No amounts to the credit of the plan are assignable either in law or in equity, are subject to state estate tax, or are subject to execution, levy, attachment, garnishment, or other legal process, except as provided in section 518.58, 518.581, or 518.611.

Sec. 16. [354C.10] [ESTABLISHMENT.]

A supplemental retirement plan is established for certain employees of the higher education board. The supplemental retirement plan is the continuation of the plan established by Laws 1967, chapter 808, sections 1 to 6, as amended.

Sec. 17. [354C.11] [COVERAGE.]

Personnel employed by the higher education board who are in the unclassified service of the state, and who have completed at least two years of employment by the board or a predecessor board with a full-time contract are participants in the supplemental retirement plan, effective on the next following July 1, if the person is employed in an eligible unclassified administrative position as defined in section 354B.20, subdivision 6, or is employed in an employment classification included in one of the following collective bargaining units under section 179A.10, subdivision 2:

(1) the state university instructional unit;

(2) the community college instructional unit;

(3) the technical college instructional unit; and

(4) the state university administrative unit.

Sec. 18. [354C.12] [SALARY DEDUCTIONS AND MATCHING EMPLOYER CONTRIBUTIONS.]

Subdivision 1. [BASIC CONTRIBUTIONS AND DEDUCTIONS.] (a) The employer of personnel covered by the supplemental retirement plan as provided in section 354C.11 shall deduct a sum equal to five percent of the annual salary of the person between $6,000 and $15,000.

(b) The basic contribution deduction must be made in the same manner as other retirement deductions are made from the salary of the person under section 352.04, subdivision 4; 352D.04, subdivision 2; 354.42, subdivision 2; or 354A.12, whichever applies.

(c) The employer shall also make a contribution to the supplemental retirement plan on behalf of covered personnel equal to the salary deduction made under paragraph (a).

Subd. 2. [OMITTED DEDUCTIONS.] If the employer of personnel covered by the supplemental retirement plan as provided in section 354C.11 fails to deduct the member basic contribution from the covered employee's salary and a period of less than 60 days from the date on which the deduction should have been made has elapsed, the employer must obtain the omitted member deduction by an additional payroll deduction during the pay period next following the discovery of the omission. If the employer fails to deduct the member basic contribution from the covered employee's salary and that omission continues for at least 60 days from the date on which the member basic contribution deduction should have been made, the employer must pay the amount representing the omitted member basic contribution, and the full required omitted employer basic contribution, plus compound interest at an annual rate of 8.5 percent. The contributions must be made within one year of the date on which the omission was discovered.

Subd. 3. [ADDITIONAL DEDUCTIONS AND CONTRIBUTIONS.] If an agreement is made under section 356.24 for an additional employee deduction and an additional matching employer contribution, an amount equal to the additional employee contribution must be deducted from the employee's salary above $15,000. The employer must match the additional employee contribution deduction.

Subd. 4. [ADMINISTRATIVE EXPENSES.] The higher education board is authorized to pay the necessary and reasonable administrative expenses of the supplemental retirement plan. The administrative fees or charges must be paid by participants in the following manner:

(1) from participants whose contributions are invested with the state board of investment, the plan administrator may recover administrative expenses in the manner provided by section 11A.17, subdivisions 10a and 14; or

(2) from participants where contributions are invested through contracts purchased from any other authorized source, the plan administrator may assess an amount of up to two percent of the employee and employer contributions.

Any recovered or assessed amounts that are not needed for the necessary and reasonable administrative expenses of the plan must be refunded to member accounts.

Sec. 19. [354C.13] [ADMINISTRATION.]

The higher education board shall administer the supplemental retirement plan.

Sec. 20. [354C.14] [INVESTMENT OF DEDUCTIONS AND CONTRIBUTIONS.]

(a) The higher education board shall invest the deductions and contributions under section 354C.12, after deduction of administrative expenses under section 354C.12, subdivision 4, in annuity contracts or custodial accounts from financial institutions selected by the state board of investment under section 354B.25, subdivision 3.

(b) The retirement contributions and death benefits provided by annuity contracts or custodial accounts purchased by the higher education board are owned by the supplemental retirement plan and must be paid in accordance with those annuity contracts or custodial account agreements.

Sec. 21. [354C.15] [REDEMPTION OF SUPPLEMENTAL INVESTMENT FUND SHARES.]

(a) The higher education board shall redeem all shares in the accounts of the Minnesota supplemental investment fund held on behalf of personnel covered by the supplemental retirement plan upon the election by the person of an investment option other than the supplemental investment fund, except as provided in paragraph (b).

(b) The redemption of shares in the fixed interest account attributable to a guaranteed investment contract as of July 1, 1994, may not occur until the expiration date of the applicable guaranteed investment contract.

(c) The higher education board shall transfer the cash realized from a redemption of Minnesota supplemental investment fund shares to the financial institution or institutions selected by the state board of investment under section 354B.25, subdivision 3.

Sec. 22. [354C.16] [PAYMENT OF BENEFITS.]

(a) The withdrawal of member contributions, employer contributions, and accrued investment income, or a retirement benefit based on those amounts is payable immediately upon the death or termination of employment of the employee.

(b) An application by the employee or made on behalf of the employee by an appropriate third party must be filed before any payment of benefits may occur.

Sec. 23. [354C.165] [PROHIBITION ON LOANS OR PRETERMINATION DISTRIBUTIONS.]

(a) No participant may obtain a loan from the plan or obtain any distribution from the plan at a time before the participant terminates the employment that gave rise to plan coverage.

(b) No amounts to the credit of the plan are assignable either in law or in equity, are subject to state estate tax, or are subject to execution, levy, attachment, garnishment, or other legal process, except as provided in section 518.58, 518.581, or 518.611.

Sec. 24. [354C.17] [TAX SHELTER PROVISIONS.]

Subdivision 1. [AGREEMENTS; SALARY ADJUSTMENTS.] For the purpose of permitting participation in a tax shelter for employment income under the applicable pension provisions of the Internal Revenue Code, the higher education board may enter into agreements with its employees to reduce or to adjust downward the salaries for persons covered by the supplemental retirement plan under section 354C.11, and to pay as the employer an amount equivalent to the salary reduction or the salary downward adjustment in the same manner as deductions would have been paid by the employee under section 354C.12, subdivision 1.

Subd. 2. [RULES.] The higher education board may adopt rules and procedures consistent with this chapter to permit, if possible, participation in a tax shelter under the applicable provisions of the Internal Revenue Code.

Sec. 25. [354C.18] [RULES.]

(a) The higher education board may adopt rules to administer this chapter.

(b) The higher education board may deposit member contributions in a nontreasury account established under chapter 136, an account or accounts established under section 11A.17, or other appropriate accounts operated by the state board of investment for investment under procedures established by the state board of investment.

Sec. 26. [NO EFFECT ON CURRENT COVERAGE AND PRIOR SERVICE CREDIT AND CONTRIBUTIONS.]

(a) Nothing in sections 7 to 17 is intended to remove any current participant in the individual retirement account plan from future coverage by that plan for continued employment in the same employment position or to add any person to individual retirement account plan coverage or eligibility who was not eligible for that coverage under the laws in effect before July 1, 1995.

(b) Nothing in sections 7 to 17 may be construed to disqualify any period of employment covered by the individual retirement account plan or to disqualify any contributions to the credit of participants in the individual retirement account plan as reflected in plan records as of June 30, 1995.

Sec. 27. [NO EFFECT ON CURRENT COVERAGE AND PRIOR SERVICE CREDIT AND CONTRIBUTIONS.]

(a) Nothing in this recodification article is intended to affect the eligibility for coverage or the coverage by the supplemental retirement plan of any person covered by that plan on June 30, 1995.

(b) Nothing in this recodification article may be construed to disqualify any contributions to the credit of any person covered by the supplemental retirement plan as reflected in plan records as of June 30, 1995.

Sec. 28. [EFFECT OF UNCLASSIFIED PROGRAM COVERAGE CHANGE.]

The change in eligibility for retirement coverage by the unclassified employees retirement program of the Minnesota state retirement system provided for in sections 2; 9, subdivision 3; and 31, paragraph (d) may not be interpreted to disqualify from future retirement coverage by the unclassified employees retirement program any person who is a member of the unclassified employees retirement program on the date of enactment and may not be interpreted to disqualify from eligibility to elect future retirement coverage by the unclassified employees retirement program any person who was employed in state service any time before the date of enactment and who subsequently is employed in an eligible unclassified administrative position under section 8, subdivision 6.

Sec. 29. [INSTRUCTION TO REVISOR.]

In Minnesota Statutes 1995 Supplement and subsequent editions, the revisor of statutes shall correct any references to any provision of Minnesota Statutes, chapter 136E, in this article, replacing the incorrect reference with the appropriate reference.

Sec. 30. [INSTRUCTION TO REVISOR.]

In Minnesota Statutes 1995 Supplement and subsequent editions, the revisor of statutes shall renumber as chapter 354D the professional and supervisory employee individual retirement account law that is currently coded as chapter 354C and shall appropriately revise any statutory cross-references in light of that recoding.

Sec. 31. [REPEALER.]

(a) Minnesota Statutes 1994, sections 354B.01; 354B.015; 354B.02; 354B.035; 354B.04; 354B.045; 354B.05; and 354B.15, are repealed.

(b) Laws 1990, chapter 570, article 3, sections 10 and 11, as amended by Laws 1992, chapter 420, section 1, and Laws 1993, chapter 239, article 2, section 7; Laws 1993, chapters 192, section 89, and 239, article 5, section 2; and Laws 1994, chapters 508, article 1, section 14; and 572, sections 11 and 12, are repealed.

(c) Minnesota Statutes 1994, sections 354B.06; 354B.07; 354B.08; 354B.085; and 354B.09, are repealed.

(d) Minnesota Statutes 1994, section 352D.02, subdivision 1a, is repealed.

Sec. 32. [EFFECTIVE DATE.]

Sections 1 to 31 are effective on July 1, 1995."

Delete the title and insert:

"A bill for an act relating to retirement; various public pension plans; providing for the suspension or forfeiture of certain survivor benefits in the event of certain felonious deaths; making various individual and small group pension accommodations; making various pension plan administrative changes; recodifying the individual retirement account plan and making various other modifications; amending Minnesota Statutes 1994, sections 11A.23, subdivision 4; 352.12, subdivisions 1, 2, 2a, and 6; 352B.105; 352D.02, subdivision 1; 354.05, subdivisions 2a, 5, 35, and 40; 354.06, subdivision 4; 354.44, by adding a subdivision; 354.52, subdivision 4a; 354A.011, subdivision 27, and by adding a subdivision; 354A.12, subdivision 3d; 354A.31, by adding a subdivision; 355.61; 356.215, subdivisions 4d and 4g; 356.24, subdivision 1; 383B.48; and 383B.49; proposing coding for new law in Minnesota Statutes, chapters 354B; 354C and 356; repealing Minnesota Statutes 1994, sections 352D.02, subdivision 1a; 354B.01; 354B.015; 354B.02; 354B.035; 354B.04; 354B.045; 354B.05; 354B.06; 354B.07; 354B.08; 354B.085; 354B.09; and 354B.15; Laws 1990, chapter 570, article 3, sections 10 and 11, as amended; Laws 1993, chapters 192, section 89, and 239, article 5, section 2; and Laws 1994, chapters 508, article 1, section 14; and 572, sections 11 and 12."

With the recommendation that when so amended the bill pass.

The report was adopted.

Trimble from the Committee on Regulated Industries and Energy to which was referred:

H. F. No. 620, A bill for an act relating to telecommunications; allowing for alternative regulation of telephone companies for a limited period; authorizing rulemaking to promote fair and reasonable competition for local exchange service; making technical changes; amending Minnesota Statutes 1994, sections 237.01, subdivision 6; 237.09; and 237.16; proposing coding for new law in Minnesota Statutes, chapter 237.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1994, section 237.01, subdivision 6, is amended to read:

Subd. 6. [TELECOMMUNICATIONS CARRIER.] "Telecommunications carrier" means a person, firm, association, or corporation authorized to furnish one or more of the following telephone service services to the public, but not otherwise authorized to furnish local exchange service: (1) interexchange telephone service; (2) local telephone service pursuant to a certificate granted under the authority of section 237.16, subdivision 4, before August 1, 1995; or (3) local service pursuant to a certificate granted under section 237.16, for the first time after August 1, 1995, except if granted to a successor to a telephone company otherwise authorized to furnish local exchange service. Telecommunications carrier does not include entities that derive more than 50 percent of their revenues from operator services provided to transient locations such as hotels, motels, and hospitals. In addition, telecommunications carrier does not include entities that provide centralized equal access services.

Sec. 2. Minnesota Statutes 1994, section 237.035, is amended to read:

237.035 [TELECOMMUNICATIONS CARRIER EXEMPTION.]

(a) Telecommunications carriers are not subject to regulation under this chapter, except that only to the extent required under paragraphs (b) to (e).

(b) Telecommunications carriers shall comply with the requirements of section sections 237.121 and 237.74.

(c) Telecommunications carriers shall comply with section 237.16, subdivisions 8 and 9.

(d) To the extent a telecommunications carrier offers local service, it shall obtain a certificate under section 237.16 for that local service.

(e) In addition, a telecommunications carrier's local service is subject to this chapter except that:

(1) a telecommunications carrier is not subject to rate-of-return or earnings investigations under section 237.075 or 237.081; and

(2) a telecommunications carrier is not subject to section 237.22.

Sec. 3. Minnesota Statutes 1994, section 237.09, is amended to read:

237.09 [DISCRIMINATION PROHIBITED.]

Subdivision 1. [GENERALLY.] No telephone company, or any agent or officer thereof, shall, directly or indirectly, in any manner, knowingly or willfully, charge, demand, collect, or receive from any person, firm, or corporation, a greater or less compensation for any intrastate service rendered or to be rendered by it than it charges, demands, collects, or receives from any other firm, person, or corporation for a like and contemporaneous intrastate service under similar circumstances.

Subd. 2. [PARTICULAR SERVICES.] (a) A telephone company that offers or provides a service or services, service elements, features, or functionalities on a separate, stand-alone basis to any customer shall provide that service, service element, feature, or functionality pursuant to tariff to all similarly situated persons, including all telecommunications carriers and competitors. To the extent prohibited by the federal communications commission or public utilities commission, a telephone company shall not give preference or discriminate in providing services, products, or facilities to an affiliate or to its own or an affiliate's retail department that sells to consumers.

(b) For purposes of establishing an appropriate rate or price floor for a rate for a telephone service, a telephone company shall impute, on a service-by-service basis, into the rate or price for that service, the tariffed rate or price for the same services, service elements, or network functions that the company provides to others who use it to provide a service that competes with the telephone service offered by the company. A company is not required to impute a rate or price under this paragraph if it can demonstrate to the commission, in an expedited proceeding under section 237.61, that:

(1) the competitor can obtain substantially equivalent services, service elements, or network functions within the relevant market or geographic area on reasonably comparable terms and conditions through self-provision or from a provider other than the telephone company; or

(2) application of the imputation requirement otherwise would be inconsistent with the public interest.

Sec. 4. [237.121] [PROHIBITED PRACTICES.]

A telephone company or telecommunications carrier may not do any of the following with respect to regulated services:

(1) upon request, fail to disclose in a timely and uniform manner information necessary for the design of equipment and services that will meet the specifications for interconnection;

(2) intentionally impair the speed, quality, or efficiency of services, products, or facilities offered to a consumer under a tariff, contract, or price list;

(3) fail to provide a service, product, or facility to a consumer other than a telephone company or telecommunications carrier in accordance with its applicable tariffs, price lists, or contracts and with the commission's rules and orders;

(4) refuse to provide a service, product, or facility to a telephone company or telecommunications carrier in accordance with its applicable tariffs, price lists, or contracts and with the commission's rules and orders;

(5) impose restrictions on the resale or shared use of its services or network functions, provided that:

(i) it may require that residential service may not be resold as a different class of service; and

(ii) the commission may prohibit resale of services it has approved for provision for not-for-profit entities at rates less than those offered to the general public; or

(6) provide telephone service to a person acting as a telephone company or telecommunications carrier if the commission has ordered the telephone company or telecommunications carrier to discontinue service to that person.

Sec. 5. Minnesota Statutes 1994, section 237.16, is amended to read:

237.16 [CONSTRUCTING TELEPHONE LINES AND EXCHANGES LOCAL EXCHANGE COMPETITION, RULES.]

Subdivision 1. [LOCAL NEW SERVICE, CERTIFICATE OF AUTHORITY.] (a) For the purpose of bringing about uniformity of practice fair and reasonable competition for local exchange telephone services, the commission shall have has the exclusive right authority to grant authority to:

(1) authorize any telephone company person to construct telephone lines or exchanges for furnishing or to otherwise furnish local service to subscribers in any municipality of this state, and to prescribe the terms and conditions upon which construction or service delivery may be carried on,; and whenever the commission grants such authority, it shall be in the form of a permit of indeterminate duration -- coupled with the right to the municipality to purchase the telephone plant within the city, as hereinafter provided. No lines or equipment shall be constructed or installed for the purpose of furnishing local telephone service to the inhabitants or telephone users in any locality in this state, where there is then in operation in the locality or territory affected thereby another telephone company already furnishing such service, without first securing from the commission a declaration, after a public hearing, that public convenience requires such proposed telephone lines or equipment; but

(2) establish terms and conditions for the entry of telephone service providers so as to protect consumers from monopolistic practices and preserve the state's commitment to universal service.

(b) No person shall provide telephone service in Minnesota without first obtaining a determination that the person possesses the technical, managerial, and financial resources to provide the proposed telephone services and a certificate of authority from the commission under terms and conditions the commission finds to be consistent with fair and reasonable competition, universal service, the provision of affordable and high quality telephone service, and the commission's rules.

(c) The commission shall make a determination on an application for a certificate within 120 days of the filing of the application.

(d) The governing body of any municipality or town shall have the same powers of regulation which it now possesses with reference to the location of poles and, wires, and other equipment or facilities on, below, or above the streets, alleys or other public ground so as to prevent any interference with the safe and convenient use of streets and, alleys, and other public ground by the public.

(e) A telephone company or telecommunications carrier shall provide for repair or restoration of streets, alleys, and other public areas to their original condition if necessitated by the installation or operation of telephone or telecommunications carrier facility.

Subd. 2. [CERTIFICATE OF TERRITORIAL AUTHORITY.] All telephone companies operating exchanges in the state of Minnesota as of April 21, 1961, shall be entitled to receive a certificate of territorial authority from the commission authorizing such company to continue to serve the areas presently included within the exchange boundaries as indicated by the exchange boundary maps now on record with the commission provided however that such exchange boundaries shall be subject to review by the commission upon the filing of a complaint by any interested party, the time for filing such complaints to be limited to 60 days after the passage of Laws 1961, chapter 637. If more than one company files maps indicating service in the same territory, the commission shall, after hearing, on reasonable notice to the interested parties, determine, from such evidence as it may reasonably require, which of such companies shall be entitled to a certificate of territorial authority. In making such determination, the commission shall consider the ability of such company to furnish thereafter reasonably adequate service in the territory in question. Any company operating a switchboard that does not presently have a map on record with the commission shall have three months from April 21, 1961, to file such map showing the territory being served by such company.

Subd. 3. [MAPS; RULES.] The style, size and kind of map, together with the information to be shown thereon, shall be as required by Every company authorized to provide local telephone service under this section shall file a territorial map. The map must comply with the rules prescribed by the commission. Such rules shall indicate the time and place for filing such maps and shall require that such maps be kept current.

Subd. 4. [NEW AMENDED CERTIFICATE REQUIRED FOR EXPANSION.] No company authorized to provide local service shall construct or operate any line, plant or system, or any extension thereof, or provide local telephone service in any area for which it has not been certified nor shall any person acquire ownership or control thereof, of a telephone company either directly or indirectly, without first obtaining from the commission a determination that the present or future public convenience and necessity require or will require such construction, operation, or acquisition, and a new an amended certificate of territorial authority; provided that. The applicant for an amended certificate shall file with the commission notice of the expansion or acquisition, along with a new map under subdivision 3, identifying the territory to be served. Notice of the filing shall be served on any affected municipality and local telephone company certified in that territory. If no objection is filed with the commission by any interested party or raised by the commission within 20 days of the filing, it is considered approved, except if it involves an acquisition governed by section 237.23, in which case no certificate shall be granted until approval is obtained pursuant to that section and subdivision 1 of this section. If an objection is filed, the commission shall determine whether to approve the amendment in an expedited proceeding under section 237.61. This section shall not be construed to require a telephone company operating an exchange in Minnesota to secure a certificate for an extension within any territory within which such company has heretofore filed maps or for substitute facilities within such territories, or for extensions into territories contiguous to that already occupied by such company and not receiving similar service from another company if no certificate of territorial authority has been issued to or applied for by any other company.

Subd. 5. [REVOCATION.] Any certificate of territorial authority may, after notice of hearing and a hearing, be revoked by the commission, in whole or in part, for: the failure of the its holder thereof to furnish reasonably adequate telephone service within the area or areas determined and defined in such the certificate of territorial authority; or failure to meet the terms and conditions of its certificate; or, intentional violation of the commission's rules or orders.

Subd. 6. [EXPANSION OF SERVICE AREA NOT REQUIRED.] Nothing contained in This section shall be construed to does not require any telephone company operating exchanges providing local service in the state of Minnesota to render telephone service in any portion of any territorial area in which such not included on the telephone company does not render and does not propose to render telephone service company's territorial map.

Subd. 7. [EXISTING CERTIFICATES RETAINED.] This section does not limit the ability of telephone companies currently possessing certificates of territorial authority, including, but not limited to, certificates authorizing resale of local telephone service, to continue to provide telephone service within their designated territories.

Subd. 8. [RULES.] (a) Before August 1, 1997, the commission shall adopt rules applicable to all telephone companies and telecommunications carriers required to obtain or having obtained a certificate for provision of telephone service using any existing federal standards as minimum standards and incorporating any additional standards or requirements necessary to ensure the provision of high quality telephone services throughout the state. The rules must, at a minimum:

(1) define procedures for competitive entry and exit;

(2) require the provisions of equal access and interconnection with the company's network and other features, functions, and services which the commission considers necessary to promote fair and reasonable competition;

(3) require unbundling of network services and functions to at least the level required by existing federal standards;

(4) prescribe, if necessary, methods of reciprocal compensation between telephone companies;

(5) ensure that local telephone number portability is available;

(6) prescribe appropriate regulatory standards for new local telephone service providers, that facilitate and support the development of competitive services;

(7) protect against cross-subsidization, unfair competition, and other practices considered harmful to promoting fair and reasonable competition;

(8) prescribe methods of ensuring the preservation of universal and affordable local telephone services;

(9) prescribe appropriate standards for quality of service; and

(10) ensure the continued provision of local emergency telephone services under chapter 403.

(b) Before January 1, 1998, in a separate rulemaking, the commission shall adopt separate rules regarding these issues as may be appropriate to provision of competitive local telephone service in areas served by telephone companies with less than 50,000 subscribers originally certified to provide local telephone services before January 1, 1988.

Subd. 9. [UNIVERSAL SERVICE FUND.] (a) The commission shall establish and require contributions to a universal service fund, to be supported by all providers of telephone services, whether or not they are telephone companies under section 237.01, including, but not limited to, local telephone companies, independent telephone companies, cooperative telephone companies, municipal telephone companies, telecommunications carriers, radio common carriers, personal communication service providers, and cellular carriers. Services that should be considered universal include, at a minimum, single-party service with touch-tone capability, line quality capable of carrying facsimile and data transmissions, equal access, emergency services number capability, statewide telecommunications relay service for the hearing-impaired, and blocking of long-distance toll services. The fund must be administered and distributed in accordance with rules adopted under subdivision 8 by the commission and designed to preserve the availability of universal service throughout the state. Any state universal service fund must be coordinated with any federal universal service fund.

(b) The department shall make recommendations to the legislature by January 1, 1996, regarding a plan for contributions to and expenditures from the universal service fund. In particular, the department shall address the following issues:

(1) what services should be included in the basic set of essential telephone services which the state should encourage in its mandate to ensure universal service;

(2) whether and how expenditures from the fund should be used to ensure citizen access to local government and other public access programming; and

(3) whether expenditures from the fund should be used to encourage construction of infrastructure for, and access to, advanced services, especially in high cost areas of the state, and, if the department determines the fund should be used for this purpose, a plan to accomplish these goals.

(c) The department shall report annually, beginning January 1, 1998, on expenditures from the fund as well as any recommendations the department has with regard to the administration or implementation of the fund.

Subd. 10. [INTERIM AUTHORITY.] (a) Before implementing the rules required under subdivision 8, the commission shall grant an applicant a certificate to provide a proposed local telephone service when the commission finds that the applicant meets the conditions of subdivision 1. Any applicant for a certificate pursuant to subdivision 1 shall, at the time its application is filed, provide notice of its application to all local telephone companies authorized to provide local exchange service in the geographic area identified in the application. The applicant and telephone companies shall negotiate a temporary arrangement pertaining to interconnection matters for the effective interconnection of local exchange networks, pending the implementation of the rules under subdivision 8. If the applicant and the telephone companies fail to reach agreement within 60 days of filing the application, the commission shall set the terms of the temporary arrangement at the time of the issuance of the certificate.

(b) Any company previously certified to provide local telephone services may request a temporary arrangement for the effective interconnection with the local exchange network of another telephone company in the same territory, pursuant to the time frames and procedures of this subdivision.

(c) In addition, through and until the rules are implemented under subdivision 8, each telephone company serving more than 50,000 subscribers lines in the state shall:

(1) permit interconnection or discontinue interconnection for intrastate services to the same extent and in the same manner and time frame as the Federal Communications Commission requires interconnection or permits discontinuance of interconnection for interstate services; and

(2) unbundle its intrastate services and facilities used for intrastate services to the same extent and in the same manner as the Federal Communications Commission requires unbundling for interstate purposes.

Subd. 11. [INTERIM AUTHORITY IN AREAS SERVED BY TELEPHONE COMPANIES WITH LESS THAN 50,000 SUBSCRIBERS.] (a) Before implementing the rules required under subdivision 8 for telephone companies with less than 50,000 subscribers, when an applicant requests certification to provide local telephone service in an area served by a telephone company with less than 50,000 subscribers originally certified to provide local telephone service before January 1, 1988, the commission shall grant the application if it finds the applicant meets the requirements of subdivision 1. Any applicant for a certificate pursuant to subdivision 1 shall, at the time its application is filed, provide notice of its application to all local telephone companies authorized to provide local exchange service in the geographic area identified in the application. The commission shall make its determination on the application, including whether to provide a temporary arrangement for the effective interconnection of the local exchange networks, after a hearing under chapter 14 or expedited proceeding under section 237.61, within nine months of the application, and considering any facts unique to that telephone company. In addition, if an application is granted, that telephone company shall:

(1) permit interconnection or discontinue interconnection for intrastate services to the same extent and in the same manner and time frame as the Federal Communications Commission may thereafter require for that telephone company for interstate purposes.

(2) unbundle its intrastate services and facilities used for intrastate services to the same extent and in the same manner as the Federal Communications Commission may thereafter require for that telephone company for interstate purposes.

(b) If a telephone company with less than 50,000 subscribers is authorized by the Federal Communications Commission to provide video common carrier services before the rules required under subdivision 8 are promulgated, an application under this subdivision for certification to provide local telephone service in an area served by that telephone company shall be determined within 120 days of its filing.

Subd. 12. [EXTENSION OF INTEREXCHANGE FACILITIES.] In order to promote the development of competitive interexchange services and facilities, any interexchange facility that is owned by a certified telephone company, independent telephone company, telecommunications carrier or an affiliate and that is used to provide service to customers located in areas for which it has been previously certified to provide service may be extended to meet and interconnect with the facility of another telephone company, small telephone company, or telecommunications carrier, whether at a point inside or outside of its territories, without further proceeding, order, or determination of current or future public convenience and necessity, upon mutual consent with the other telephone company, small telephone company, or telecommunications carrier whose facilities will be met and interconnected. Written notice of the extension and interconnection must be provided to the public utilities commission and department of public service within 30 days after completion. The written notice must be served on all local exchange companies certified before January 1, 1988, in all areas where the facilities are located.

Subd. 13. [APPLICATION OF OTHER LAW.] Notwithstanding any provisions of sections 237.035 and 237.74 to the contrary, before implementing the rules adopted under subdivision 8, the local services provided by a telecommunications carrier are subject to this chapter in the same manner as those local services of a telephone company regulated under this chapter, except that the telecommunications carrier is not subject to section 237.22 and is not subject to rate-of-return regulation or earnings investigations under section 237.075 or 237.081. Before offering a local telephone service, a telecommunications carrier must be certified to provide local service under this section.

Sec. 6. Minnesota Statutes 1994, section 237.461, subdivision 2, is amended to read:

Subd. 2. [CIVIL PENALTY.] A person who knowingly and intentionally violates a provision of this chapter or rule or order of the commission adopted under this chapter shall forfeit and pay to the state a penalty, in an amount to be determined by the court, of at least $100 and not more than $1,000 $5,000 for each day of each violation. The civil penalties provided for in this section may be recovered by a civil action brought by the attorney general in the name of the state. Amounts recovered under this section must be paid into the state treasury.

Sec. 7. [237.76] [PURPOSE.]

A telephone company may petition the commission for approval of an alternative regulation plan under sections 237.76 to 237.774. The purpose of an alternative regulation plan is to provide a telephone company's customers with high quality service at affordable rates, to facilitate the development of telecommunication alternatives for customers, and to provide, where appropriate, a regulatory environment with greater flexibility than is available under traditional rate-of-return regulation as reflected in other provisions of this chapter.

Sec. 8. [237.761] [ALTERNATIVE REGULATION PLAN; SERVICES.]

Subdivision 1. [CLASSIFICATION OF SERVICES.] An alternative regulation plan must contain provisions that provide for classification of all telephone services as price regulated, flexibly priced, or nonprice regulated consistent with subdivisions 2 to 5.

Subd. 2. [PRICE-REGULATED SERVICE; DEFINITION.] For purposes of this section, the term "price-regulated service" includes only those services that are:

(1) essential for providing local telephone service and access to the local telephone network;

(2) integrally related to privacy, health, and safety of the company's customers; and

(3) for which no reasonable alternative exists within the relevant market or geographic area on reasonably comparable terms and conditions.

Subd. 3. [SPECIFIC PRICE-REGULATED SERVICES.] Price-regulated telephone services are the following:

(1) residential and business service for local calling, including measured local service, two-party service, private branch exchange (PBX) trunks, trunk-type hunting services, direct inward dialing, the network access portion of central office switched exchange service, and public access lines for customer-owned coin-operated telephones;

(2) extended area service;

(3) switched network access service;

(4) call tracing;

(5) calling number blocking;

(6) touch-tone service when provided separately from basic local exchange service;

(7) local exchange, white-page, printed directories;

(8) 911 emergency services;

(9) installation and repair of local network access;

(10) local operator services, excluding directory assistance; and

(11) toll service blocking and 1-900 or 976 access blocking.

Subd. 4. [FLEXIBLY PRICED SERVICES.] (a) A service not listed in subdivision 3, or not otherwise determined to be price regulated under subdivision 6 or 7 or nonprice regulated must be classified as a flexibly priced service.

(b) Flexibly priced services may be regulated consistent with section 237.60, subdivision 2, except that:

(1) rate decreases may be effective immediately upon filing and are considered approved if no objection is filed or raised by an interested party or the commission within ten days after the filing; and

(2) rate increases may be effective 20 days after filing and are considered approved if no objection is filed or raised by an interested party or the commission within 20 days after the filing.

Subd. 5. [NON-PRICE-REGULATED SERVICES.] (a) A service must be classified as nonprice regulated if the commission finds, based upon evidence filed by the telephone company and other evidence available to the commission and consistent with the company's proposed plan, that there is sufficient competition to justify classification as nonprice regulated. In making that determination, the factors the commission shall consider include:

(1) the number, size, and identity of competitors providing the same or functionally equivalent service;

(2) the geographic area in which competitive service is actually available to and being used by customers, to the extent this information is available to the commission;

(3) the importance of the service to the public; and

(4) the effect of classification of the service on the development of a competitive telecommunications market.

(b) Telephone companies shall file tariffs or price lists for non-price-regulated services with the commission, but the rates for these services are not subject to commission approval or investigation except as provided in subdivision 6 and sections 237.762, subdivision 6, 237.770, and 237.771.

Subd. 6. [RECLASSIFICATION.] An alternative regulation plan may contain provisions allowing for the reclassification of services during the course of the plan upon a showing that the service meets the criteria contained in subdivision 2, 3, 4, or 5, and the plan, for the requested classification.

Subd. 7. [NEW SERVICES; CLASSIFICATION; RATES.] At the time the company first offers a service, it shall file a tariff or price list and the proposed classification for the service under the plan along with a written explanation of why the proposed classification is consistent with this section. New services classified as flexibly priced or nonprice regulated may be offered on one day's notice to the commission and the department. New services classified as price regulated may be offered pursuant to the terms set forth in the plan. A service is not considered a new service if it consists of a repackaging including bundling, unbundling, or repricing of an already existing service. If no interested party or the commission objects to the company's proposed classification within 30 days of the filing of the petition, the company's proposed classification of the service is approved. If an objection is filed, the commission shall determine the classification of the service within 90 days of the filing of the new service.

Subd. 8. [INVESTMENT COMMITMENTS.] (a) An alternative regulation plan must also include a plan outlining the company's commitment to invest in telecommunications infrastructure improvements in this state over a period of not less than six years.

(b) An investment plan must include all of the following:

(1) a description of the level of planned investment in technological or infrastructure enhancement;

(2) a description of the extent to which planned investment will make new telecommunications technology available to customers or expand the availability of current technology; and

(3) a description of the planned deployment of fiber-optic facilities or broadband capabilities to schools, libraries, technical colleges, hospitals, colleges and universities, and local governments in this state.

Sec. 9. [237.762] [RATES; PRICES.]

Subdivision 1. [INITIAL RATES.] As part of its evaluation of an alternative regulation plan, the commission shall determine whether the telephone company's existing rates, rate design, and quality of service are appropriate in light of the proposed plan or whether changes should be made before the plan is implemented or phased in during the course of the plan. An initial alternative regulation plan approved by the commission under this section must provide that the recurring and nonrecurring rates or prices that may be charged by a telephone company for price-regulated services are no higher than the approved rate or prices on file with the commission for those services on the date of the filing of the plan. Furthermore, no plan may in any way change the terms or conditions of any access charge settlements approved by the commission or exempt any company from compliance with any commission access charge order issued before the filing of a plan. The plan must address implementation of additional access charge reductions that may occur during that portion of the plan that extends beyond expiration of commission-approved settlements.

Subd. 2. [NEW SERVICE; RATES.] For services offered by the telephone company for the first time after the effective date of this section, the rates or prices must equal or exceed the total service long-run incremental cost of the service.

Subd. 3. [RATE CHANGES.] (a) An alternative regulation plan must set forth the procedures under which the telephone company may reduce the rates or prices for price-regulated services below the initial rates or prices or thereafter increase the rates or prices during the term of the plan, and so long as the rates or prices are not reduced below the total service long-run incremental cost of providing the service, and so long as the rates or prices do not exceed the initial rates or prices for the service determined under subdivision 1, for the first three years. After a plan has been in effect for three years, price-regulated rates may be changed as appropriate under a procedure set forth in an approved plan. Rates for price-regulated services may not be increased unless the company has demonstrated substantial compliance with the quality of service standards set forth in the plan.

(b) An approved plan may also allow changes in rates for price-regulated services after three years to reflect:

(1) substantial financial impacts of government mandates to construct specific telephone infrastructure and increases or decreases in state and federal taxes, if the mandate applies to local telephone companies and the company would not otherwise be compensated through some other manner under the plan; and

(2) changes in jurisdictional allocations from the Federal Communications Commission, the amount of which the telephone company cannot control and for which equal and opposite exogenous changes are made on the federal level.

Subd. 4. [BUNDLED RATES.] When the rates or prices for services are unbundled, the price for each basic network function must be set to equal or exceed its total service long-run incremental cost. Before August 1, 1997, if the rates or prices for price-regulated services are bundled, the bundled rate or price may not exceed the sum of the unbundled rates or prices for the individual service elements or services or the total initial bundled rate or price for those service elements or services.

Subd. 5. [INCOME-NEUTRAL CHANGES.] Other than as authorized in this subdivision, an initial alternative regulation plan must not permit income-neutral rate changes for price-regulated services during the plan except as is necessary to implement extended area service or any successor to that service. Any plan must provide that after the rules issued pursuant to section 237.16 are implemented, rates for price-regulated services may be increased, as approved by the commission, to the extent necessary to carry out the purpose of those rules. However, rate increases, if any, for those services must be incorporated with a universal service fund so that the effective rate for the customers of those services does not increase during the first three years of the plan.

Subd. 6. [RATES FOR OTHER SERVICES.] The telephone company shall file price lists with the commission for all flexibly priced or non-price-regulated services. The rate or price for each flexibly priced and non-price-regulated service must be equal to or exceed the total service long-run incremental cost of providing that service. In any proceeding regarding the appropriateness of a rate or price for a flexibly priced or non-price-regulated service, the telephone company has the burden of proving that the rate or price is above the total service long-run incremental cost of providing that service.

Sec. 10. [237.763] [EXEMPTION FROM RATE-OF-RETURN REGULATION AND RATE INVESTIGATIONS.]

Except as provided in the plan and any subsequent plans, a company that has an alternative regulation plan approved under this section is not subject to the rate-of-return regulation or earnings investigations provisions of section 237.075 or 237.081 during the term of the plan. A company with an approved plan is not subject to the provisions of section 237.57; 237.58; 237.59; 237.60, subdivisions 1, 2, 4, and 5; 237.62; 237.625; 237.63; or 237.65, during the term of the plan. Except as specifically provided in this section or in the approved plan, the commission retains all of its authority under section 237.081 to investigate other matters and to issue appropriate orders, and the department retains its authority under sections 216A.07 and 237.15 to investigate matters other than the earnings of the company.

Sec. 11. [237.764] [PLAN ADOPTION; EFFECT.]

Subdivision 1. [PETITION, NOTICE, HEARING, AND DECISION.] (a) Before acting on a petition for approval of an alternative regulation plan, the commission shall conduct any public meetings it may consider necessary.

(b) The commission shall require the petitioning telephone company to provide notice of the proposed plan to its customers, along with a summary description of the plan provisions and the dates, times, and locations of public meetings scheduled by the commission.

(c) The company's petition shall contain an explanation of how ratepayers will benefit from the plan and a justification of the appropriateness of earnings levels and rates in light of the proposed plan as well as any proposed changes in rates for price-regulated services for the first three years of the proposed plan. If a telephone company has completed a general rate proceeding, rate investigation, or audit of its earnings by the department or commission within two years of the initial application for an alternative form of regulation plan, the commission order or department audit report, updated for the most recent calendar year, shall be sufficient justification of earnings levels to initiate the filing of an alternative regulation plan.

(d) The commission shall conduct a proceeding under section 237.61 to decide whether to approve the plan and shall grant discovery as appropriate.

(e) The commission shall issue findings of fact and conclusions concerning the appropriateness of the proposed initial rates and the proposed plan, or any modifications to it, but may not order that a modified plan take effect without the agreement of the petitioning telephone company. The commission shall issue its decision on a plan within six months after receiving the petition to approve the plan unless the commission and the petitioning company agree to an extension of the time for commission action.

(f) If a settlement is submitted to the commission, the commission shall accept, reject, or modify the proposed settlement within 60 days from the date it was submitted.

Subd. 2. [SETTLEMENT; STIPULATION; FINAL ORDER.] Upon receipt of a petition for an alternative regulation plan, the commission shall convene a conference including all interested parties to encourage settlement or stipulation of issues. Any settlement or stipulation must be submitted to the commission, which shall accept or reject the proposal in its entirety or modify it. If the commission modifies the proposal, all parties have 30 days to comment on the proposed modifications, after which the commission shall issue its final order. If the final order contains modifications to the proposal, each party to the settlement has ten days to reject the proposed modifications, in which case the matter must be decided under section 237.61. After appropriate notice and hearing for all parties, the commission may adopt a stipulation submitted by a substantial number of, but less than all, parties.

Subd. 3. [EFFECT ON INCENTIVE PLAN.] The approval of a plan under this section automatically terminates any existing incentive plan previously approved under section 237.625 upon the effective date of the plan approved under this section, provided, however, that an affected company remains obligated to share earnings under the terms of the incentive plan through the date of the termination of that plan and also is required to complete the performance of any other unexecuted commitments under the incentive plan.

Sec. 12. [237.765] [QUALITY OF SERVICE.]

For an alternative regulation plan to be approved by the commission under sections 237.76 to 237.774, the plan must contain and the commission shall require:

(1) evidence that current service is of sufficient quality as to justify lessened rate regulation;

(2) a baseline measurement of the quality of service levels as achieved by the company during the previous three years, to the extent the data are available, and specific statewide standards for measuring the quality of price-regulated and flexibly priced services provided by the company, including, but not limited to (i) time intervals for installation, (ii) time intervals for restoration or repair of service, (iii) trouble rates, (iv) exchange access line held orders, and (v) customer service answer time;

(3) provisions for reporting to the commission at least annually the company's performance as to the quality of service standards by quarter for the previous year;

(4) provisions that index quality of service standards for local residence services to similar standards for local business services;

(5) appropriate remedies, including penalties and customer-specific adjustments or payments to compensate customers for specific quality of service failures, so as to ensure substantial compliance with the quality of service standards set forth in the plan; and

(6) provisions for informing customers of their rights as to quality of service and how customers can register their complaints regarding service.

Any penalties under clause (5) may be paid into a universal service fund or returned to customers under a method set forth in the plan.

Sec. 13. [237.766] [PLAN DURATION.]

An alternative regulation plan approved by the commission under section 237.764 must remain in force as approved for the term specified in the plan, which must be for no less than four years. Within six months prior to the termination of the plan, the plan must be reviewed by the commission after notice to and comment by all interested parties and, with the consent of the company, revised or renewed consistent with sections 237.76 to 237.774 except that the justification of earnings levels in section 237.764, subdivision 1, paragraph (c), and the provisions prohibiting rate increases at the initiation of or during the first three years of a plan contained in section 237.762, shall not apply to a revised or renewed plan. The plan must specify the reports required of the telephone company for review of the plan and specify that the telephone company shall maintain records in sufficient detail to facilitate the review.

Sec. 14. [237.767] [DISCONTINUANCE OF SERVICE.]

Without the express approval of the commission, a telephone company subject to a plan may not discontinue the provision of a service or basic network function that has been classified as price regulated or flexibly priced.

Sec. 15. [237.768] [PERIODIC FINANCIAL REPORTS.]

In addition to the reports required under section 237.766, an alternative regulation plan may require a telephone company to file an annual report of financial matters for the previous calendar year on or before May 1 of each year on report forms furnished by the department of public service in the same manner as is required of other telephone companies on the effective date of this section. In addition, any company subject to a plan shall file with the commission and department a copy of any filings it has made to the Federal Communications Commission regarding the provisions of video programming provided through a video dial-tone facility in Minnesota. An alternative regulation plan may also require a telephone company to maintain its accounts in accordance with the system of accounts prescribed for the company by the commission under section 237.10.

Sec. 16. [237.769] [UNBUNDLING AND INTERCONNECTION.]

Every plan must contain, and the commission shall approve, rates for and procedures under which the telephone company will, on or before the effective date of the plan, permit interconnection with and unbundle its intrastate services and facilities to the same extent and in the same manner as the Federal Communications Commission requires the interconnection and unbundling for interstate purposes for that company. Any company under a plan is subject to any rules adopted under section 237.16 on the same date as those rules are applicable to other companies.

Sec. 17. [237.770] [SUBSIDIZATION.]

No telephone company shall subsidize flexibly priced or non-price-regulated services from other services. A telephone service is not subsidized if the aggregate revenues for the service equal or exceed the total service long-run incremental costs of providing the service. If the commission determines, after a proceeding under section 237.081, that subsidization exists, it shall order changes in rates to price the subsidized service above total service long-run incremental cost and may invoke any other remedies otherwise available under this chapter.

Sec. 18. [237.771] [DISCRIMINATION.]

The rates of a telephone company under a plan must be the same in all geographic locations of the state except for good cause. A plan may contain provisions that define good cause, including consideration of the ability to respond to competition. No telephone company operating under an approved plan shall unreasonably limit its service offerings to particular geographic areas unless facilities necessary for the service are not available and cannot be made available at reasonable costs. Sections 237.09 and 237.121 apply to a telephone company under a plan.

Sec. 19. [237.772] [COST STUDY METHODOLOGY.]

Subdivision 1. [TOTAL SERVICE LONG-RUN INCREMENTAL COST.] (a) For purposes of this chapter, total service long-run incremental cost (TSLRIC) means the total cost to the company of supplying a service, group of services, or basic network function. The term "long-run" implies a period of time sufficient so that all inputs are avoidable based on the total increment of service, group of services, or basic network function. This includes the relevant costs resulting from the company's decision to provide the service, group of services, or basic network function, holding constant the production levels of all other services, groups of services, or basic network functions provided by the company.

(b) A telephone company is not required to prepare or file TSLRIC or variable cost studies for all of its services as a prerequisite to filing a plan. However, the commission may order cost studies to be prepared for specific services as a condition of approval of the plan.

Subd. 2. [PETITION FOR VARIABLE COST STUDY.] To the extent that this section or the commission may require a company to provide a TSLRIC study, a company may submit a petition to the commission for permission to submit a variable cost study instead of a TSLRIC study. The commission shall grant the petition if the telephone company demonstrates:

(1) that a TSLRIC study is burdensome in relation to its annual revenue from the service involved;

(2) in the case of an existing service, that the service is no longer being offered to new customers; or

(3) if the telephone company shows other good cause.

Sec. 20. [237.773] [ALTERNATIVE REGULATION FOR SMALL TELEPHONE COMPANIES.]

Subdivision 1. [DEFINITION.] For purposes of this section, "small telephone company" means a local exchange telephone company with fewer than 50,000 subscribers that has made an election under subdivision 2, whether or not the company is subject to sections 237.58, 237.59, 237.60, subdivisions 1, 2, and 5, 237.62, and 237.625.

Subd. 2. [ELECTION; EFFECT.] A local telephone company with fewer than 50,000 subscribers may elect to become a small telephone company by notice to the commission, in writing, of its decision. The small telephone company may not revoke its election for three years after making the election. While that election remains in effect, a small telephone company is not subject to the rate-of-return regulation or earnings investigation provisions of sections 237.075 or 237.081.

If, before electing under this subdivision, a small telephone company has been found by the commission to have significant quality of service problems in violation of applicable commission rules, that company must either resolve the quality of service problems or develop a plan to resolve the quality of service problems in conformance with section 237.765. The quality of service plan must be approved by the commission in order for an election under this subdivision to be effective. The commission shall make a determination on the quality of service plan within 60 days after it is submitted.

Subd. 3. [LOCAL RATES.] (a) Except as provided in paragraph (b), a small telephone company shall not implement a rate increase for any service listed in section 237.761, subdivision 3, beyond the level in effect 60 days prior to an election under subdivision 2, until the later of January 1, 1998, or two years after making an election. However, a small telephone company may implement any new service and establish rates for any new service and may change rates for any other service at any time subject to the requirements of section 237.761, subdivision 4.

A small telephone company shall provide to its customers the ability to block, at no extra charge, any new service which it offers, provides, or bills. This requirement does not apply to services that require affirmative subscription by the customer. Nothing in this section prevents the commission from requiring blocking or other privacy or safety protections for other types of telecommunications services under section 237.081.

(b) At any time following one year after electing under subdivision 2, a small telephone company may change rates for local services except switched network access services, listed in section 237.761, subdivision 3, to reflect:

(1) changes in state and federal taxes;

(2) changes in jurisdictional allocations from the Federal Communications Commission, the amount of which the small telephone company cannot control and for which equal and opposite exogenous changes are made on the federal level;

(3) substantial financial impacts of investments in network upgrades which are made:

(i) if the investment exceeds 20 percent of the gross plant investment of the company; or

(ii) as the result of government mandates to construct specific telephone infrastructure, if the mandate applies to local telephone companies and the company would not otherwise be compensated.

A small telephone company may change rates for local services listed in section 237.761, subdivision 3, at any time, to implement extended area service or any successor to that service on an income-neutral basis.

A small telephone company proposing an increase under this subdivision, shall provide 60 days' advance written notice to the department and each of the company's customers including the individual rates affected and the procedure necessary for the customers to petition for investigation. If the department receives a petition within 45 days after the notice from five percent or 500, whichever is fewer, of the customers of the small telephone company, the department shall determine if the petition is valid and, if so, may investigate the rate change to determine if it conforms to the limitations of this subsection. The department shall report its findings to the commission, which shall either adopt the report or order changes to conform to this subdivision.

(c) On or after the later of January 1998, or two years after making an election under subdivision 2, a small telephone company may increase rates for local services, except switched network access services, listed in section 237.761, subdivision 3.

A small telephone company proposing an increase shall provide 60 days' advance written notice to its customers including individual rates affected and the procedure necessary for the customers to petition for investigation. If the commission receives a petition within 45 days after the notice, from five percent or 500, whichever is fewer, of the customers of the small telephone company, the department shall determine if the petition is valid and, if so, may investigate the proposed rate increase to determine if it is appropriate in light of rates charged by other local exchange telephone companies for comparable services, taking into account calling scope, quality of service, the availability of competitive alternatives, service costs, and the features available to the customers. The department shall file a report with the commission which shall then approve appropriate rates for those services. Rates established by the commission under this paragraph shall not be increased within one year of implementation.

Subd. 4. [ACCESS RATES.] (a) No election by a small telephone company may in any way change the terms or conditions of any interexchange access charge settlement approved by the commission before an election under subdivision 2.

(b) While any interexchange access charge settlement approved by the commission remains in effect, the commission and department shall enforce the agreement without further investigation of interexchange access charges or earnings relating to the interexchange access service. Except as specifically provided in this section, the commission retains all of its authority under section 237.081 to investigate other matters relating to interexchange access charges and to issue appropriate orders, and the department retains its authority under sections 216A.07 and 237.15 to investigate matters relating to interexchange access charges.

Subd. 5. [DEPRECIATION.] While an election under subdivision 2 is in effect, the company is subject to complaints by the department or others concerning its depreciation rates and practices pursuant to section 237.081, subdivision 1a, and shall submit to the department the information required by Minnesota Rules, parts 7810.7700 and 7810.7800, but is not otherwise subject to section 237.22 or the certification procedures of Minnesota Rules, part 7810.7000.

Sec. 21. [237.774] [OTHER LAWS.]

Except as provided in sections 237.76 to 237.773, a telephone company subject to a plan approved under section 237.764 shall comply with any state or federal laws governing the provision of telephone services. Nothing contained in sections 237.76 to 237.773 is intended in any way to change or modify the definitions contained in section 237.01 or what constitutes the provision of telephone service under this chapter or other laws.

Sec. 22. [PUBLIC ACCESS; REPORT.]

The department of public service shall investigate how to ensure citizen access to local government and other public access programming on emerging communication technologies such as video dial-tone and satellite transmission equivalent to that required of cable franchise operators pursuant to Minneota Statutes, chapter 238, and the alternatives available to the state to ensure that access. The department shall make recommendations to the legislature by February 15, 1996, concerning public access.

Sec. 23. [MUNICIPAL FRANCHISE FEES; UTILITIES; STUDY AND REPORT.]

The department of public service shall study the issue of franchise fees and related compensation paid to local governments by utilities and cable communication companies. The study must include a survey of fees and related compensation currently paid to municipalities by utilities and cable communication companies, and the purposes for which the franchise fees and related compensation are remitted to municipalities by utilities and cable communication companies. The department shall develop recommendations on a state policy regarding these fees and related compensation, particularly addressing the issues of the purposes for which such fees may be assessed and paid, the amount of the fees, and uses of such fee revenue and related compensation. The department shall report its findings and recommendations to the legislature by February 15, 1996.

Sec. 24. [STATEMENT OF INTENT.]

The revisions to Minnesota Statutes, section 237.16, subdivision 1, paragraph (d), are solely intended for clarification. No substantive changes in powers of regulation are intended, nor are to be implied.

Sec. 25. [TELECOMMUNICATIONS EMPLOYEE RETRAINING PROGRAM.]

By February 15, 1996, the commission shall submit recommendations to the legislature regarding the establishment of a telecommunications employee retraining program. The commission shall:

(1) describe the impact on the nature of telecommunications occupations, and the displacement of telecommunications employees, caused by changing markets, technological advances, changing methods of operations, and competition in the telecommunications industry; and

(2) recommend how telecommunications employee retraining funds should be raised and expended, what eligibility requirements would be appropriate for dispersing these funds, what an adequate amount per displaced telecommunications employee would be for retraining, how the retraining should be provided, and when such a program should be discontinued.

Sec. 26. [EFFECTIVE DATE; EXPIRATION.]

Sections 1 to 21 are effective August 1, 1995, and expire January 1, 2006."

Delete the title and insert:

"A bill for an act relating to telecommunications; allowing for alternative regulation of telephone companies for a limited period; authorizing rulemaking to promote fair and reasonable competition for local exchange service; requiring studies and reports; making technical changes; amending Minnesota Statutes 1994, sections 237.01, subdivision 6; 237.035; 237.09; 237.16; and 237.461, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 237."

With the recommendation that when so amended the bill pass.

The report was adopted.

Murphy from the Committee on Judiciary Finance to which was referred:

H. F. No. 701, A bill for an act relating to state government; setting salaries of administrative law judges; amending Minnesota Statutes 1994, sections 15A.081, subdivision 1; 15A.083, subdivisions 6a, 7, and by adding a subdivision; and 43A.18, subdivision 4.

Reported the same back with the recommendation that the bill be re-referred to the Committee on Governmental Operations without further recommendation.

The report was adopted.

Munger from the Committee on Environment and Natural Resources to which was referred:

H. F. No. 731, A bill for an act relating to natural resources; confidentiality of mineral resources data; amending Minnesota Statutes 1994, section 13.793.

Reported the same back with the recommendation that the bill pass and be re-referred to the Committee on Judiciary.

The report was adopted.

Munger from the Committee on Environment and Natural Resources to which was referred:

H. F. No. 806, A bill for an act relating to state lands; authorizing the commissioner of natural resources to sell certain land in Scott county.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Skoglund from the Committee on Judiciary to which was referred:

H. F. No. 840, A bill for an act relating to crime prevention; requiring certain information to be gathered from crime victims and presented at bail hearings; requiring notification to certain victims of bail hearings; requiring notification to local law enforcement agencies of the pretrial release of certain defendants; directing that a plan be developed and a pilot project funded for a child abuse telephone helpline; requiring certain persons who interview children to have specific training; appropriating money; amending Minnesota Statutes 1994, section 629.715, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 257; and 629.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. [257.81] [TRAINING FOR INTERVIEWERS OF MALTREATED CHILDREN; COMMISSIONER OF HUMAN SERVICES DUTIES.]

The commissioner of human services shall develop training programs designed to provide specialized interviewer training to persons who interview allegedly maltreated children. The training must include information on interviewing adolescents and address the best methods of so doing. All training shall be presented within a child development model framework and include information on working with children of color and children with special needs. To accomplish this objective, the commissioner shall:

(1) establish criteria for adequately trained interviewers;

(2) determine the number of trained interviewers and evaluate the extent of the need for interviewer training;

(3) offer forums and tuition to county professionals for specialized interviewer training where the need exists; and

(4) encourage counties to assess local needs and assist counties in making interviewer training available to meet those needs.

Sec. 2. [299A.61] [CRIMINAL ALERT NETWORK.]

The commissioner of public safety, in cooperation with the commissioner of administration, shall develop and maintain an integrated criminal alert network to facilitate the communication of crime prevention information by electronic means among state agencies, law enforcement officials, and the private sector. The network shall disseminate data regarding the commission of crimes, including information on missing and endangered children and attempt to reduce theft and other crime by the use of electronic transmission of information.

Sec. 3. [299C.135] [INTERNET DATA ACCESS FOR LAW ENFORCEMENT AGENCIES.]

The bureau shall make public criminal history data in its possession accessible to law enforcement agencies by means of the Internet.

Sec. 4. [609.5051] [CRIMINAL ALERT NETWORK; DISSEMINATION OF FALSE OR MISLEADING INFORMATION PROHIBITED.]

Whoever uses the criminal alert network under section 299A.61 to disseminate information regarding the commission of a crime knowing that it is false or misleading, is guilty of a misdemeanor.

Sec. 5. Minnesota Statutes 1994, section 629.715, subdivision 1, is amended to read:

Subdivision 1. [JUDICIAL REVIEW; RELEASE.] (a) When a person is arrested for a crime against the person, the judge before whom the arrested person is taken shall review the facts surrounding the arrest and detention. If the person was arrested or detained for committing a crime of violence, as defined in section 629.725, the prosecutor or other appropriate person shall present relevant information involving the victim or the victim's family's account of the alleged crime to the judge to be considered in determining the arrested person's release. The arrested person must be ordered released pending trial or hearing on the person's personal recognizance or on an order to appear or upon the execution of an unsecured bond in a specified amount unless the judge determines that release (1) will be inimical to public safety, (2) will create a threat of bodily harm to the arrested person, the victim of the alleged crime, or another, or (3) will not reasonably assure the appearance of the arrested person at subsequent proceedings.

(b) If the judge determines release under paragraph (a) is not advisable, the judge may impose any conditions of release that will reasonably assure the appearance of the person for subsequent proceedings, or will protect the victim of the alleged crime, or may fix the amount of money bail without other conditions upon which the arrested person may obtain release.

Sec. 6. [629.725] [NOTICE TO CRIME VICTIM REGARDING BAIL HEARING OF ARRESTED OR DETAINED PERSON.]

When a person arrested or a juvenile detained for a crime of violence or an attempted crime of violence is scheduled to be reviewed under section 629.715 for release from pretrial detention, the court shall make a reasonable and good faith effort to notify the victim of the alleged crime. If the victim is incapacitated or deceased, notice must be given to the victim's family. If the victim is a minor, notice must be given to the victim's parent or guardian. The notification must include:

(1) the date and approximate time of the review;

(2) the location where the review will occur;

(3) the name and telephone number of a person that can be contacted for additional information; and

(4) a statement that the victim and the victim's family may attend the review.

As used in this section, "crime of violence" has the meaning given it in section 624.712, subdivision 5, and also includes gross misdemeanor violations of section 609.224, and nonfelony violations of sections 518B.01, 609.2231, 609.3451, 609.748, and 609.749.

Sec. 7. [629.735] [NOTICE TO LOCAL LAW ENFORCEMENT AGENCY REGARDING RELEASE OF ARRESTED OR DETAINED PERSON.]

When a person arrested or a juvenile detained for a crime of violence or an attempted crime of violence is about to be released from pretrial detention, the agency having custody of the arrested or detained person or its designee shall make a reasonable and good faith effort before release to inform any local law enforcement agencies known to be involved in the case, if different from the agency having custody, of the following matters:

(1) the conditions of release, if any;

(2) the time of release; and

(3) the time, date, and place of the next scheduled court appearance of the arrested or detained person.

Sec. 8. [CHILD ABUSE HELPLINE.]

Subdivision 1. [PLAN.] The commissioner of human services, in consultation with the commissioner of public safety, shall develop a plan for an integrated statewide toll-free 24-hour telephone helpline to provide consultative services to parents, family members, law enforcement personnel, and social service professionals regarding the physical and sexual abuse of children. The plan must:

(1) identify methods for implementing the telephone helpline;

(2) identify existing services regarding child abuse provided by state and local governmental agencies, nonprofit organizations, and others;

(3) consider strategies to coordinate existing services into an integrated telephone helpline;

(4) consider the practicality of retraining and redirecting existing professionals to staff the telephone helpline on a 24-hour basis;

(5) determine what new services, if any, would be required for the telephone helpline;

(6) determine the costs of implementing the telephone helpline and ways to reduce costs through coordination of existing services; and

(7) determine methods of marketing and advertisement to make the general public aware of the telephone helpline.

Subd. 2. [PILOT PROJECT.] In conjunction with the planning process under subdivision 1, the commissioner of human services shall implement at least two pilot project telephone helplines. One of the pilots must be in the seven-county metropolitan area and one must be in greater Minnesota.

Subd. 3. [REPORT.] The commissioner of human services shall report to the legislature by January 1, 1996, concerning the details of the plan and the status of the pilot projects.

Subd. 4. [COORDINATOR.] The commissioner of human services may hire a person to coordinate and implement the requirements of this section.

Sec. 9. [DATA ACCESS ON INTERNET.]

The bureau of criminal apprehension and the department of public safety shall develop a plan for providing databases containing private or confidential data to law enforcement agencies on the Internet with appropriate security provisions.

Sec. 10. [APPROPRIATIONS; CHILD ABUSE HELPLINE; SPECIALIZED INTERVIEWER TRAINING.]

Subdivision 1. [SPECIALIZED INTERVIEWER TRAINING.] $....... is appropriated from the general fund to the commissioner of human services for the purpose of section 1 to be available until June 30, 1997.

Subd. 2. [CHILD ABUSE HELPLINE.] $....... is appropriated from the general fund to the commissioner of human services for the purpose of section 8 to be available until June 30, 1997.

Sec. 11. [APPROPRIATION; LAW ENFORCEMENT INTERNET ACCESS.]

$....... is appropriated from the general fund to the department of public safety to make grants on a one-to-one matching basis to local law enforcement agencies for training and to pay fees and buy equipment in order to connect to the Internet for purposes of sharing information about abducted children, and for general criminal apprehension purposes, including making connections with the criminal databases created by the bureau of criminal apprehension. Whenever possible, local law enforcement agencies shall connect to the Internet through existing government services. The sum is available until June 30, 1997."

Delete the title and insert:

"A bill for an act relating to crime prevention; requiring notification to certain victims of bail hearings; requiring notification to local law enforcement agencies of the pretrial release of certain defendants; directing that a plan be developed and a pilot project funded for a child abuse telephone helpline; requiring certain persons who interview children to have specific training; requiring the commissioner of public safety to develop an integrated criminal alert network; providing Internet access to law enforcement agencies; prescribing penalties; appropriating money; amending Minnesota Statutes 1994, section 629.715, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 257; 299A; 299C; 609; and 629."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Judiciary Finance.

The report was adopted.

Rest from the Committee on Taxes to which was referred:

H. F. No. 869, A bill for an act relating to economic development; requiring private businesses with state financial assistance to pay at least a poverty level wage and increase employment; proposing coding for new law in Minnesota Statutes, chapters 177; and 270.

Reported the same back with the following amendments:

Page 1, line 9, delete "LIVABLE" and insert "POVERTY LEVEL"

Page 1, delete line 26 and insert:

"(2) pay every employee at least a poverty level wage when they are hired to work in a job created by an economic development project or job growth project which receives assistance from a state grant, a state loan, or tax increment financing. For purposes of this section, a poverty level wage"

Page 2, line 2, after the period, insert "The commissioner of trade and economic development shall determine whether or not any job created is a result of an economic development project or a job growth project which receives assistance from a state grant, state loan, or tax increment financing."

Page 2, line 27, delete "eligible" and after "employee" insert "engaged in on-the-job training"

Page 3, after line 31, insert:

"Subd. 5. [EMPLOYEE EXEMPTION.] This section does not apply to an employee who is a blind or disabled eligible individual as that term is defined in United States Code, title 42, section 1382, paragraph (a)."

Page 3, line 34, delete "legislative auditor" and insert "commissioner of revenue"

Page 4, lines 1 and 7, delete "legislative auditor" and insert "commissioner of revenue"

Page 4, lines 8 and 9, delete "legislative auditor" and insert "commissioner of revenue"

Page 4, line 12, delete "grant" and insert "grants" and delete "loan" and insert "loans"

With the recommendation that when so amended the bill pass.

The report was adopted.

Skoglund from the Committee on Judiciary to which was referred:

H. F. No. 980, A bill for an act relating to crime; amending the definition of manslaughter in the first degree; amending Minnesota Statutes 1994, section 609.20.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1994, section 152.021, subdivision 3, is amended to read:

Subd. 3. [PENALTY.] (a) A person convicted under subdivision 1 or 2 may be sentenced to imprisonment for not more than 30 years or to payment of a fine of not more than $1,000,000, or both.

(b) If the conviction is a subsequent controlled substance conviction, a person convicted under subdivision 1 or 2 shall be committed to the commissioner of corrections for not less than four years nor more than 40 years or and, in addition, may be sentenced to payment of a fine of not more than $1,000,000, or both.

(c) In a prosecution under subdivision 1 involving sales by the same person in two or more counties within a 90-day period, the person may be prosecuted for all of the sales in any county in which one of the sales occurred.

Sec. 2. Minnesota Statutes 1994, section 152.022, subdivision 3, is amended to read:

Subd. 3. [PENALTY.] (a) A person convicted under subdivision 1 or 2 may be sentenced to imprisonment for not more than 25 years or to payment of a fine of not more than $500,000, or both.

(b) If the conviction is a subsequent controlled substance conviction, a person convicted under subdivision 1 or 2 shall be committed to the commissioner of corrections for not less than three years nor more than 40 years or and, in addition, may be sentenced to payment of a fine of not more than $500,000, or both.

(c) In a prosecution under subdivision 1 involving sales by the same person in two or more counties within a 90-day period, the person may be prosecuted for all of the sales in any county in which one of the sales occurred.

Sec. 3. Minnesota Statutes 1994, section 152.023, subdivision 3, is amended to read:

Subd. 3. [PENALTY.] (a) A person convicted under subdivision 1 or 2 may be sentenced to imprisonment for not more than 20 years or to payment of a fine of not more than $250,000, or both.

(b) If the conviction is a subsequent controlled substance conviction, a person convicted under subdivision 1 or 2 shall be committed to the commissioner of corrections for not less than two years nor more than 30 years or and, in addition, may be sentenced to payment of a fine of not more than $250,000, or both.

Sec. 4. Minnesota Statutes 1994, section 152.024, subdivision 3, is amended to read:

Subd. 3. [PENALTY.] (a) A person convicted under subdivision 1 or 2 may be sentenced to imprisonment for not more than 15 years or to payment of a fine of not more than $100,000, or both.

(b) If the conviction is a subsequent controlled substance conviction, a person convicted under subdivision 1 or 2 shall be committed to the commissioner of corrections or to a local correctional authority for not less than one year nor more than 30 years or and, in addition, may be sentenced to payment of a fine of not more than $100,000, or both.

Sec. 5. Minnesota Statutes 1994, section 152.025, subdivision 3, is amended to read:

Subd. 3. [PENALTY.] (a) A person convicted under subdivision 1 or 2 may be sentenced to imprisonment for not more than five years or to payment of a fine of not more than $10,000, or both.

(b) If the conviction is a subsequent controlled substance conviction, a person convicted under subdivision 1 or 2 shall be committed to the commissioner of corrections or to a local correctional authority for not less than six months nor more than ten years or and, in addition, may be sentenced to payment of a fine of not more than $20,000, or both.

Sec. 6. Minnesota Statutes 1994, section 401.02, subdivision 4, is amended to read:

Subd. 4. [DETAINING PERSON ON CONDITIONAL RELEASE OR PROBATION.] (a) The written order of the chief executive officer or designee of a community corrections agency established under this chapter is sufficient authority for peace officers and probation officers serving the district and juvenile courts of participating counties participating in the subsidy program established by this chapter may, without order or warrant, when it appears necessary to prevent escape or enforce discipline, to take and detain a probationer, or any person on conditional release and bring that person before the court or the commissioner of corrections or a designee, whichever is appropriate, for disposition. No probationer or other person on conditional release shall be detained more than 72 hours, exclusive of legal holidays, Saturdays and Sundays, pursuant to this subdivision without being provided with the opportunity for a hearing before the court or the commissioner of corrections or a designee.

(b) The written order of the chief executive officer or designee of a community corrections agency established under this chapter is sufficient authority for probation officers serving the district and juvenile courts of participating counties to release within 72 hours, exclusive of legal holidays, Saturdays, and Sundays, without appearance before the court or the commissioner of corrections or a designee, any person detained pursuant to paragraph (a).

(c) When providing supervision and other correctional services to persons conditionally released pursuant to sections 241.26, 242.19, 243.05, 243.16, 244.05, and 244.065, including intercounty transfer of persons on conditional release, and the conduct of presentence investigations, participating counties shall comply with the policies and procedures relating thereto as prescribed by the commissioner of corrections.

(b) (d) The written order of the chief executive officer or designee of a community corrections agency established under this chapter is sufficient authority for any peace officer or county probation officer to take and place in actual custody any person under sentence or on probation who:

(1) fails to report to serve a sentence at a local correctional facility, as defined in section 241.021, subdivision 1;

(2) fails to return from furlough or authorized temporary release from a local correctional facility;

(3) escapes from a local correctional facility; or

(4) absconds from court-ordered home detention.

(c) (e) The written order of the chief executive officer or designee of a community corrections agency established under this chapter is sufficient authority for any peace officer or county probation officer to take and place in actual custody any person on a court authorized pretrial release who absconds from pretrial release or fails to abide by the conditions of pretrial release.

Sec. 7. Minnesota Statutes 1994, section 609.10, is amended to read:

609.10 [SENTENCES AVAILABLE.]

Upon conviction of a felony and compliance with the other provisions of this chapter the court, if it imposes sentence, may sentence the defendant to the extent authorized by law as follows:

(1) to life imprisonment; or

(2) to imprisonment for a fixed term of years set by the court; or

(3) to both imprisonment for a fixed term of years and payment of a fine; or

(4) to payment of a fine without imprisonment or to imprisonment for a fixed term of years if the fine is not paid; or

(5) to payment of court-ordered restitution in addition to either imprisonment or payment of a fine, or both; or

(6) to payment of a local correctional fee as authorized under section 609.102 in addition to any other sentence imposed by the court.

As used in this section, "restitution" includes:

(i) payment of compensation to the victim of the defendant's offense; and

(ii) if the victim is deceased or already has been fully compensated, payment of money to a victim assistance program.

Sec. 8. Minnesota Statutes 1994, section 609.125, is amended to read:

609.125 [SENTENCE FOR MISDEMEANOR OR GROSS MISDEMEANOR.]

Upon conviction of a misdemeanor or gross misdemeanor the court, if sentence is imposed, may, to the extent authorized by law, sentence the defendant:

(1) to imprisonment for a definite term; or

(2) to payment of a fine, or to imprisonment for a specified term if the fine is not paid; or

(3) to both imprisonment for a definite term and payment of a fine; or

(4) to payment of court-ordered restitution in addition to either imprisonment or payment of a fine, or both; or

(5) to payment of a local correctional fee as authorized under section 609.102 in addition to any other sentence imposed by the court.

As used in this section, "restitution" includes:

(i) payment of compensation to the victim of the defendant's offense; and

(ii) if the victim is deceased or already has been fully compensated, payment of money to a victim assistance program.

Sec. 9. Minnesota Statutes 1994, section 609.185, is amended to read:

609.185 [MURDER IN THE FIRST DEGREE.]

Whoever does any of the following is guilty of murder in the first degree and shall be sentenced to imprisonment for life:

(1) causes the death of a human being with premeditation and with intent to effect the death of the person or of another;

(2) causes the death of a human being while committing or attempting to commit criminal sexual conduct in the first or second degree with force or violence, either upon or affecting the person or another;

(3) causes the death of a human being with intent to effect the death of the person or another, while committing or attempting to commit burglary, aggravated robbery, kidnapping, arson in the first or second degree, tampering with a witness in the first degree, escape from custody, or any felony violation of chapter 152 involving the unlawful sale of a controlled substance;

(4) causes the death of a peace officer or a guard employed at a Minnesota state or local correctional facility, with intent to effect the death of that person or another, while the peace officer or guard is engaged in the performance of official duties;

(5) causes the death of a minor under circumstances other than those described in clause (1) or (2) while committing child abuse, when the perpetrator has engaged in a past pattern of child abuse upon the child and the death occurs under circumstances manifesting an extreme indifference to human life; or

(6) causes the death of a human being under circumstances other than those described in clause (1), (2), or (5) while committing domestic abuse, when the perpetrator has engaged in a past pattern of domestic abuse upon the victim and the death occurs under circumstances manifesting an extreme indifference to human life.

For purposes of clause (5), "child abuse" means an act committed against a minor victim that constitutes a violation of the following laws of this state or any similar laws of the United States or any other state: section 609.221; 609.222; 609.223; 609.224; 609.342; 609.343; 609.344; 609.345; 609.377; 609.378; or 609.713.

For purposes of clause (6), "domestic abuse" means an act that:

(1) constitutes a violation of section 609.221, 609.222, 609.223, 609.224, 609.342, 609.343, 609.344, 609.345, 609.713, or any similar laws of the United States or any other state; and

(2) is committed against the victim who is a family or household member as defined in section 518B.01, subdivision 2, paragraph (b).

Sec. 10. Minnesota Statutes 1994, section 609.20, is amended to read:

609.20 [MANSLAUGHTER IN THE FIRST DEGREE.]

Whoever does any of the following is guilty of manslaughter in the first degree and may be sentenced to imprisonment for not more than 15 years or to payment of a fine of not more than $30,000, or both:

(1) intentionally causes the death of another person in the heat of passion provoked by such words or acts of another as would provoke a person of ordinary self-control under like circumstances, provided that the crying of a child does not constitute provocation;

(2) causes the death of another in committing or attempting to commit a misdemeanor or gross misdemeanor offense with such force and violence that death of or great bodily harm to any person was reasonably foreseeable, and murder in the first or second degree was not committed thereby;

(3) intentionally causes the death of another person because the actor is coerced by threats made by someone other than the actor's coconspirator and which cause the actor reasonably to believe that the act performed by the actor is the only means of preventing imminent death to the actor or another; or

(4) proximately causes the death of another, without intent to cause death by, directly or indirectly, unlawfully selling, giving away, bartering, delivering, exchanging, distributing, or administering a controlled substance classified in schedule III, IV, or V; or

(5) causes the death of another in committing or attempting to commit a violation of section 609.377, and murder in the first, second, or third degree is not committed thereby.

As used in this section, a "person of ordinary self-control" does not include a person under the influence of intoxicants or a controlled substance.

Sec. 11. Minnesota Statutes 1994, section 609.205, is amended to read:

609.205 [MANSLAUGHTER IN THE SECOND DEGREE.]

A person who causes the death of another by any of the following means is guilty of manslaughter in the second degree and may be sentenced to imprisonment for not more than ten years or to payment of a fine of not more than $20,000, or both:

(1) by the person's culpable negligence whereby the person creates an unreasonable risk, and consciously takes chances of causing death or great bodily harm to another; or

(2) by shooting another with a firearm or other dangerous weapon as a result of negligently believing the other to be a deer or other animal; or

(3) by setting a spring gun, pit fall, deadfall, snare, or other like dangerous weapon or device; or

(4) by negligently or intentionally permitting any animal, known by the person to have vicious propensities or to have caused great or substantial bodily harm in the past, to run uncontrolled off the owner's premises, or negligently failing to keep it properly confined; or

(5) by committing or attempting to commit a violation of section 609.378, and murder in the first, second, or third degree is not committed thereby.

If proven by a preponderance of the evidence, it shall be an affirmative defense to criminal liability under clause (4) that the victim provoked the animal to cause the victim's death.

Sec. 12. Minnesota Statutes 1994, section 609.323, subdivision 2, is amended to read:

Subd. 2. Whoever, not related by blood, adoption, or marriage to the prostitute, while acting other than as a prostitute or patron, intentionally receives profit, knowing or having reason to know that it is derived from the prostitution, or the promotion of the prostitution, of an individual in circumstances described in section 609.322, subdivision 2, clause (3), may be sentenced to not more than three years imprisonment or to payment of a fine of not more than $5,000, or both.

Sec. 13. Minnesota Statutes 1994, section 609.323, subdivision 3, is amended to read:

Subd. 3. Whoever, not related by blood, adoption, or marriage to the prostitute, while acting other than as a prostitute or patron, intentionally receives profit, knowing or having reason to know that it is derived from the prostitution, or the promotion of the prostitution of an individual 18 years of age or above may be sentenced to imprisonment for not more than one year or to payment of a fine of not more than $3,000, or both.

Sec. 14. Minnesota Statutes 1994, section 609.323, is amended by adding a subdivision to read:

Subd. 3a. [EXCEPTIONS.] Subdivisions 1a, 2, and 3 do not apply to a minor who is dependent on an individual acting as a prostitute and who may have benefited from or been supported by the individual's earnings derived from prostitution.

Sec. 15. Minnesota Statutes 1994, section 609.498, subdivision 1, is amended to read:

Subdivision 1. [TAMPERING WITH A WITNESS IN THE FIRST DEGREE.] Whoever does any of the following is guilty of tampering with a witness in the first degree and may be sentenced as provided in subdivision 1a:

(a) intentionally prevents or dissuades or intentionally attempts to prevent or dissuade by means of force or threats of injury to any person or property, a person who is or may become a witness from attending or testifying at any trial, proceeding, or inquiry authorized by law;

(b) by means of force or threats of injury to any person or property, intentionally coerces or attempts to coerce a person who is or may become a witness to testify falsely at any trial, proceeding, or inquiry authorized by law;

(c) intentionally causes injury or threatens to cause injury to any person or property in retaliation against a person who was summoned as a witness at any trial, proceeding, or inquiry authorized by law, within a year following that trial, proceeding, or inquiry or within a year following the actor's release from incarceration, whichever is later;

(d) intentionally prevents or dissuades or attempts to prevent or dissuade, by means of force or threats of injury to any person or property, a person from providing information to law enforcement authorities concerning a crime;

(e) by means of force or threats of injury to any person or property, intentionally coerces or attempts to coerce a person to provide false information concerning a crime to law enforcement authorities; or

(f) intentionally causes injury or threatens to cause injury to any person or property in retaliation against a person who has provided information to law enforcement authorities concerning a crime within a year of that person providing the information or within a year of the actor's release from incarceration, whichever is later.

Sec. 16. Minnesota Statutes 1994, section 609.52, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] In this section:

(1) "Property" means all forms of tangible property, whether real or personal, without limitation including documents of value, electricity, gas, water, corpses, domestic animals, dogs, pets, fowl, and heat supplied by pipe or conduit by municipalities or public utility companies and articles, as defined in clause (4), representing trade secrets, which articles shall be deemed for the purposes of Extra Session Laws 1967, chapter 15 to include any trade secret represented by the article.

(2) "Movable property" is property whose physical location can be changed, including without limitation things growing on, affixed to, or found in land.

(3) "Value" means the retail market value at the time of the theft, or if the retail market value cannot be ascertained, the cost of replacement of the property within a reasonable time after the theft, or in the case of a theft or the making of a copy of an article representing a trade secret, where the retail market value or replacement cost cannot be ascertained, any reasonable value representing the damage to the owner which the owner has suffered by reason of losing an advantage over those who do not know of or use the trade secret. For a check, draft, or other order for the payment of money, "value" means the amount of money promised or ordered to be paid under the terms of the check, draft, or other order. For a theft committed within the meaning of subdivision 2, clause (5), (a) and (b), if the property has been restored to the owner, "value" means the value of the use of the property or the damage which it sustained, whichever is greater, while the owner was deprived of its possession, but not exceeding the value otherwise provided herein.

(4) "Article" means any object, material, device or substance, including any writing, record, recording, drawing, sample specimen, prototype, model, photograph, microorganism, blueprint or map, or any copy of any of the foregoing.

(5) "Representing" means describing, depicting, containing, constituting, reflecting or recording.

(6) "Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

(7) "Copy" means any facsimile, replica, photograph or other reproduction of an article, and any note, drawing, or sketch made of or from an article while in the presence of the article.

(8) "Property of another" includes property in which the actor is coowner or has a lien, pledge, bailment, or lease or other subordinate interest, and property of a partnership of which the actor is a member, unless the actor and the victim are husband and wife. It does not include property in which the actor asserts in good faith a claim as a collection fee or commission out of property or funds recovered, or by virtue of a lien, setoff, or counterclaim.

(9) "Services" include but are not limited to labor, professional services, transportation services, electronic computer services, the supplying of hotel accommodations, restaurant services, entertainment services, advertising services, telecommunication services, and the supplying of equipment for use.

(10) "Motor vehicle" means a self-propelled device for moving persons or property or pulling implements from one place to another, whether the device is operated on land, rails, water, or in the air.

Sec. 17. Minnesota Statutes 1994, section 609.5312, is amended by adding a subdivision to read:

Subd. 4. [VEHICLE FORFEITURE FOR FLEEING A PEACE OFFICER.] (a) A motor vehicle is subject to forfeiture under this subdivision if it was used to commit a violation of section 609.487 and endanger life or property. A motor vehicle is subject to forfeiture under this subdivision only if the offense is established by proof of a criminal conviction for the offense. Except as otherwise provided in this subdivision, a forfeiture under this subdivision is governed by sections 609.531, 609.5312, 609.5313, and 609.5315, subdivision 6.

(b) When a motor vehicle subject to forfeiture under this subdivision is seized in advance of a judicial forfeiture order, a hearing before a judge or referee must be held within 96 hours of the seizure. Notice of the hearing must be given to the registered owner within 48 hours of the seizure. The prosecuting authority shall certify to the court, at or in advance of the hearing, that it has filed or intends to file charges against the alleged violator for violating section 609.487. After conducting the hearing, the court shall order that the motor vehicle be returned to the owner if:

(1) the prosecutor has failed to make the certification required by this paragraph;

(2) the owner of the motor vehicle has demonstrated to the court's satisfaction that the owner has a defense to the forfeiture, including but not limited to the defenses contained in subdivision 2; or

(3) the court determines that seizure of the vehicle creates or would create an undue hardship for members of the owner's family.

(c) If the defendant is acquitted or the charges against the defendant are dismissed, neither the owner nor the defendant is responsible for paying any costs associated with the seizure or storage of the vehicle.

(d) A vehicle leased or rented under section 168.27, subdivision 4, for a period of 180 days or less is not subject to forfeiture under this subdivision.

Sec. 18. Minnesota Statutes 1994, section 609.582, subdivision 1, is amended to read:

Subdivision 1. [BURGLARY IN THE FIRST DEGREE.] Whoever enters a building without consent and with intent to commit a crime, or enters a building without consent and commits a crime while in the building, commits burglary in the first degree and may be sentenced to imprisonment for not more than 20 years or to payment of a fine of not more than $35,000, or both, if:

(a) the building is a dwelling and another person, not an accomplice, is present in it when the burglar enters or at any time while the burglar is in the building;

(b) the burglar possesses, when entering or at any time while in the building, any of the following: a dangerous weapon, any article used or fashioned in a manner to lead the victim to reasonably believe it to be a dangerous weapon, or an explosive; or

(c) the burglar assaults a person within the building or on the building's appurtenant property.

Sec. 19. Minnesota Statutes 1994, section 609.713, subdivision 1, is amended to read:

Subdivision 1. Whoever threatens, directly or indirectly, to commit any crime of violence with purpose to terrorize another or to cause evacuation of a building, place of assembly, vehicle or facility of public transportation or otherwise to cause serious public inconvenience, or in a reckless disregard of the risk of causing such terror or inconvenience may be sentenced to imprisonment for not more than five years or to payment of a fine of not more than $10,000, or both. As used in this subdivision, "crime of violence" has the meaning given "violent crime" in section 609.152, subdivision 1, paragraph (d).

Sec. 20. Minnesota Statutes 1994, section 609.713, subdivision 2, is amended to read:

Subd. 2. Whoever communicates to another with purpose to terrorize another or in reckless disregard of the risk of causing such terror, that explosives or an explosive device or any incendiary device is present at a named place or location, whether or not the same is in fact present, may be sentenced to imprisonment for not more than three years or to payment of a fine of not more than $3,000, or both.

Sec. 21. Minnesota Statutes 1994, section 617.80, subdivision 2, is amended to read:

Subd. 2. [BUILDING.] "Building" means a structure suitable for human shelter, a commercial structure that is maintained for business activities that involve human occupation, or any portion of such structures, or the curtilage of such structures. If the building is a multiunit dwelling, a hotel or motel, or a commercial or office building, the term "building," for purposes of sections 617.80 to 617.87, means only the dwelling unit, room, suite of rooms, office, or other unit of space in which a nuisance is maintained or permitted.

Sec. 22. Minnesota Statutes 1994, section 617.80, subdivision 4, is amended to read:

Subd. 4. [PROSTITUTION.] "Prostitution" or "prostitution-related offenses activity" means the conduct defined in sections 609.321 to 609.324.

Sec. 23. Minnesota Statutes 1994, section 617.80, subdivision 5, is amended to read:

Subd. 5. [GAMBLING.] "Gambling" or "gambling-related offenses activity" means the conduct described in sections 609.75 to 609.762.

Sec. 24. Minnesota Statutes 1994, section 617.80, subdivision 8, is amended to read:

Subd. 8. [INTERESTED PARTY.] "Interested party," for purposes of sections 617.80 to 617.87, means any known lessee or tenant of a building or affected portion of a building and; any known agent of an owner, lessee, or tenant; or any other person who maintains or permits a nuisance and is known to the city attorney, county attorney, or attorney general.

Sec. 25. Minnesota Statutes 1994, section 617.80, is amended by adding a subdivision to read:

Subd. 9. [PROSECUTING ATTORNEY.] "Prosecuting attorney" means the attorney general, county attorney, or attorney serving the jurisdiction where the nuisance is located.

Sec. 26. Minnesota Statutes 1994, section 617.81, subdivision 1, is amended to read:

Subdivision 1. [INJUNCTION.] In order to obtain a temporary injunction under section 617.82 or a permanent injunction or order of abatement under section 617.83 617.815, the provisions of sections 617.80 to 617.87 must be followed.

Sec. 27. Minnesota Statutes 1994, section 617.81, subdivision 2, is amended to read:

Subd. 2. [ACTS CONSTITUTING A NUISANCE.] (a) For purposes of sections 617.80 to 617.87, a public nuisance exists upon proof of three or more misdemeanor convictions or two or more convictions, of which at least one is a gross misdemeanor or felony, two or more separate behavioral incidents of any one or more of the following kinds of conduct within the previous two years 12 months for:

(1) acts of prostitution or prostitution-related offenses activity committed within the building;

(2) acts of gambling or gambling-related offenses activity committed within the building;

(3) keeping or permitting a disorderly house within the building;

(4) unlawful sale or, possession, storage, delivery, giving, manufacture, cultivation, or use of controlled substances committed within the building;

(5) unlicensed sales of alcoholic beverages committed within the building in violation of section 340A.401;

(6) unlawful sales or gifts of alcoholic beverages by an unlicensed person committed within the building in violation of section 340A.503, subdivision 2, clause (1); or

(7) unlawful use or possession of a firearm in violation of section 609.66, subdivision 1a, 609.67, or 624.713, committed within the building.

(b) A second or subsequent conviction under paragraph (a) may be used to prove the existence of a nuisance if the conduct on which the second or subsequent conviction is based occurred within two years following the first conviction, regardless of the date of the conviction for the second or subsequent offense.

Sec. 28. Minnesota Statutes 1994, section 617.81, is amended by adding a subdivision to read:

Subd. 4. [NOTICE.] (a) When a prosecuting attorney has reason to believe that a nuisance is maintained or permitted in the jurisdiction the prosecuting attorney serves, the prosecuting attorney shall by personal service or first class mail provide the written notice described in paragraph (b) to the owner and all interested parties known to the prosecuting attorney.

(b) The written notice must:

(1) state that a nuisance as defined in subdivision 2 is maintained or permitted in the building and must specify the kind or kinds of nuisance being maintained or permitted;

(2) summarize the evidence that a nuisance is maintained or permitted in the building, including the dates on which nuisance-related activities are alleged to have occurred;

(3) inform the recipient of the date, time, and place of a meeting that has been set to arrange to take action to abate the notice, and request the recipient's attendance at the meeting; and

(4) inform the recipient that failure to appear at the meeting may result in the filing of a complaint for relief in district court that could, among other remedies, result in enjoining the use of the building for any purpose for one year or longer or, in the case of a tenant, could result in cancellation of the lease.

Sec. 29. [617.815] [MEETING; COMPLAINT; RELIEF.]

Subdivision 1. [MEETING; RECOMMENDATIONS.] The prosecuting attorney shall meet with all recipients of the notice sent under section 617.81, subdivision 4. The meeting must be held not sooner than seven days after personal service of the notice or 14 days after service has been mailed. Not later than ten days after the meeting, the prosecuting attorney shall give each recipient of the notice reasonable recommendations to abate the nuisance. Reasonable recommendations include:

(1) abating the nuisance;

(2) activity requiring a tenant who is responsible for maintaining or permitting a nuisance to cease the nuisance; or

(3) any action listed under subdivision 3, clause (6).

The recommendations shall be provided by personal service or first class mail.

Subd. 2. [COMPLAINT.] The prosecuting attorney may file a complaint in district court against a recipient of the notice under section 617.81, subdivision 3, in any of the following circumstances:

(1) the recipient failed without good cause to appear at the meeting held under subdivision 1;

(2) the recipient appeared at the meeting held under subdivision 1, but did not agree to follow reasonable recommendations by the prosecuting attorney designed to abate the nuisance;

(3) the recipient agreed to follow the recommendations to abate the nuisance but subsequently failed to act on the agreement; or

(4) the recipient otherwise has failed to make a good faith effort to abate the nuisance. Compliance with the recommendations of the prosecuting attorney constitutes a good faith effort to abate the nuisance.

Before filing a complaint under this subdivision, the prosecuting attorney shall notify the persons who received notice under section 617.81, subdivision 3, that a specified recipient has failed to satisfactorily comply with recommendations developed under subdivision 1 and that the prosecuting attorney intends to file an action in district court to abate the nuisance. The notice required under this subdivision must be provided by personal service or first class mail.

Subd. 3. [RELIEF.] The court shall order appropriate relief under this section or other applicable law upon proof that a nuisance as defined in section 617.81, subdivision 2, is maintained or permitted. When a complaint is filed under this section, the prosecuting attorney may seek any one or more of the following forms of relief:

(1) an order of abatement directing the closing of a building or any portion of a building where a nuisance has been maintained or permitted, unless released sooner under section 617.87 for the applicable time period under section 617.83;

(2) a permanent injunction enjoining any named defendant from maintaining or permitting a nuisance in this state and describing the conduct prohibited;

(3) an order directing the removal and sale under section 617.84 of movable property used in conducting or maintaining a nuisance;

(4) an order directing the owner to file a motion to cancel the lease under section 617.85 or to assign to the prosecuting attorney the owner's right to cancel the lease under that section;

(5) an order directing the owner to provide relocation assistance to displaced tenants if the tenants did not maintain or permit the nuisance; or

(6) an order directing the owner to more effectively manage the building, including but not limited to any of the following actions:

(i) making capital improvements to the property of a nature designed to reduce the likelihood of nuisance activity;

(ii) improving exterior or interior lighting;

(iii) installing surveillance cameras;

(iv) employing security guards or a building manager and providing appropriate training to employees;

(v) posting signs warning against illegal activity;

(vi) participating in neighborhood or local merchants' organizations;

(vii) modifying lease provisions or screening prospective tenants; or

(viii) attending a training course in property management.

Subd. 4. [RELOCATION ASSISTANCE.] The unit of government on whose behalf an action is brought under this section may provide reasonable nonfinancial relocation assistance to a tenant who did not maintain or permit a nuisance and who is displaced as a result of a court order under this section.

Sec. 30. Minnesota Statutes 1994, section 617.82, is amended to read:

617.82 [TEMPORARY ORDER.]

Whenever a city attorney, county attorney, or the attorney general prosecuting attorney has cause to believe that a nuisance described in section 617.81, subdivision 2, exists within the jurisdiction the attorney serves, that the prosecuting attorney may by verified petition seek a temporary injunction in district court in the county in which the alleged public nuisance exists. No temporary injunction may be issued without a prior show cause notice of hearing to the respondents named in the petition and an opportunity for the respondents to be heard. Upon proof of a nuisance described in section 617.81, subdivision 2, the court shall issue a temporary injunction. Any temporary injunction issued must describe the conduct to be enjoined.

Sec. 31. Minnesota Statutes 1994, section 617.83, is amended to read:

617.83 [INJUNCTION; ORDER OF ABATEMENT.]

Subdivision 1. [FIRST NUISANCE.] Upon proof of a nuisance described in section 617.81, subdivision 2, the court shall issue a permanent injunction and enter an order of abatement. The permanent injunction must describe the conduct permanently enjoined and must be directed at the building and at the owner's conduct anywhere in this state. The order of abatement must direct the closing of the building or a portion of it for one year, except as otherwise provided in subdivision 2 or section 617.84 or 617.85, unless sooner released pursuant to section 617.87.

Subd. 2. [SECOND OR SUBSEQUENT NUISANCE.] Upon proof of a second or subsequent nuisance described in section 617.81, subdivision 2, maintained or conducted by the same owner within five years, whether in the same building where an earlier nuisance existed or in another building in this state, the court shall issue an order of abatement directing the closing of the building or a portion of it for two years or more, except as otherwise provided by section 617.84 or 617.85, and unless earlier released under section 617.87.

Subd. 3. [NOTICE; APPEAL.] Before an abatement order is enforced against a building or portion of it, the owner must be served with the abatement order and a notice of the right to file a motion under section 617.85 in the same manner that a summons is served under the rules of civil procedure. A copy of the abatement order shall also be posted in a conspicuous place on the building or affected portion.

Sec. 32. Minnesota Statutes 1994, section 617.84, is amended to read:

617.84 [MOVABLE PROPERTY.]

The order of abatement may must direct the removal of movable property, including any displays, used in conducting or maintaining the nuisance and direct the sale of property belonging to a respondent who was notified or appeared. The sale shall be conducted pursuant to the provisions of chapter 550 on the sale of property on execution. A person appointed by the court as receiver of the building may use a building or portion of it which is the subject of an abatement order in a manner approved by the court. Costs of the sale on execution, moving and storage fees, and any receivership must be paid out of the receipts from the sale of the movable property or any rents collected during the receivership. The balance from the sale of movable property must be paid to the owner of the property used to fund community crime prevention programs in the jurisdiction whose prosecuting attorney brought the action under section 617.815. The balance from any rents collected during any receivership shall be paid to the treasury of the unit of government which brought the abatement action.

Sec. 33. Minnesota Statutes 1994, section 617.85, is amended to read:

617.85 [NUISANCE; MOTION TO CANCEL LEASE.]

Where an abatement of a nuisance is sought and the circumstances that are the basis for the requested abatement involved the acts of a commercial or residential tenant or lessee of part or all of a building, the owner of the building that is subject to the abatement proceeding may file before the court that has jurisdiction over the abatement proceeding a motion to cancel the lease or otherwise secure restitution of the premises from the tenant or lessee who has maintained or conducted the nuisance. Upon recommendation of the prosecuting attorney, the owner of a building may file in the district court where the building is located, a motion to cancel a lease or otherwise secure restitution of premises from a commercial or residential tenant or lessee of all or part of a building if the tenant or lessee:

(1) has maintained or conducted a nuisance; or

(2) has failed without good cause to appear at a meeting held under section 617.815, subdivision 1.

The owner may assign to the prosecuting attorney the right to file this motion. In addition to the grounds provided in chapter 566, the maintaining or conducting of a nuisance as defined in section 617.81, subdivision 2, by a tenant or lessee, is an additional ground authorized by law for seeking the cancellation of a lease or the restitution of the premises. It is no defense to a motion under this section by the owner or the prosecuting attorney that the lease or other agreement controlling the tenancy or leasehold does not provide for eviction or cancellation of the lease upon the ground provided in this section.

Upon a finding by the court that the tenant or lessee has maintained or conducted a nuisance in any portion of the building under the control of the tenant or lessee, the court shall order cancellation of the lease or tenancy and grant restitution of the premises to the owner. The court must not order abatement of the premises if the court:

(a) upon the motion of the building owner or the prosecuting attorney cancels a lease or tenancy and grants restitution of that portion of the premises to the owner; and

(b) further finds that the acts constituting the nuisance as defined in section 617.81, subdivision 2, were committed in a portion of the building under the control of the tenant or lessee whose lease or tenancy has been canceled pursuant to this section.

Sec. 34. Minnesota Statutes 1994, section 617.87, is amended to read:

617.87 [RELEASE OF PROPERTY.]

If, after an order of abatement has been entered, the owner appears and pays the costs of the action and files a bond in an amount determined by the court, but not to exceed $50,000, conditioned that the owner will immediately abate the nuisance for a period of one year, the court may, if satisfied of the owner's good faith, order the release of the building or portion of it which is subject to the order of abatement. If the premises are released, for each day during the term of the bond that the owner knowingly permits any part of the premises to be used for any activity which was the basis of the abatement order, the owner shall forfeit $1,000 under the bond. Forfeiture under the bond does not relieve the owner from prosecution for contempt. Release of the property pursuant to this section does not release it from an injunction issued under section 617.83 617.815 or 617.83 or any other judgment, penalty, lien, or liability to which it may be subject by law.

Sec. 35. Minnesota Statutes 1994, section 626.13, is amended to read:

626.13 [SERVICE; PERSONS MAKING.]

A search warrant may in all cases be served anywhere within the issuing judge's county by any of the officers mentioned in its directions, but by no other person, except in aid of the officer on the officer's requiring it, the officer being present and acting in its execution. If the warrant is to be served by an agent of the bureau of criminal apprehension, an agent of the division of gambling enforcement, a state patrol trooper, or a conservation officer, the agent, state patrol trooper, or conservation officer shall notify the chief of police of an organized full-time police department of the municipality or, if there is no such local chief of police, the sheriff or a deputy sheriff of the county in which service is to be made prior to execution.

Sec. 36. [REPEALER.]

Minnesota Statutes 1994, section 617.81, subdivisions 2a and 3, are repealed.

Sec. 37. [EFFECTIVE DATES.]

Sections 1 to 15 and 17 to 36 are effective August 1, 1995, and apply to crimes committed on or after that date.

Section 16 is effective the day following final enactment and applies to crimes committed on or after that date."

Delete the title and insert:

"A bill for an act relating to crime; clarifying language relating to controlled substance and certain other crimes; making it manslaughter in the first degree to cause the death of a child by malicious punishment under certain circumstances; making it manslaughter in the second degree to cause the death of a child by endangerment under certain circumstances; providing that a motor vehicle is subject to forfeiture if it was used to flee a peace officer in violation of law; imposing a fine for the crime of terroristic threats; providing procedures for prosecuting attorneys to follow when filing complaints against owners whose buildings are alleged nuisances; authorizing the court to issue orders of abatement that close buildings for two years or more when the buildings are declared to be nuisances a second time; providing penalties; amending Minnesota Statutes 1994, sections 152.021, subdivision 3; 152.022, subdivision 3; 152.023, subdivision 3; 152.024, subdivision 3; 152.025, subdivision 3; 401.02, subdivision 4; 609.10; 609.125; 609.185; 609.20; 609.205; 609.323, subdivisions 2, 3, and by adding a subdivision; 609.498, subdivision 1; 609.52, subdivision 1; 609.5312, by adding a subdivision; 609.582, subdivision 1; 609.713, subdivisions 1 and 2; 617.80, subdivisions 2, 4, 5, 8, and by adding a subdivision; 617.81, subdivisions 1, 2, and by adding a subdivision; 617.82; 617.83; 617.84; 617.85; 617.87; 626.13; proposing coding for new law in Minnesota Statutes, chapter 617; repealing Minnesota Statutes 1994, section 617.81, subdivisions 2a and 3."

With the recommendation that when so amended the bill pass.

The report was adopted.

Simoneau from the Committee on Financial Institutions and Insurance to which was referred:

H. F. No. 1077, A bill for an act relating to health; MinnesotaCare; establishing requirements for integrated service networks; modifying requirements for health plan companies; establishing the standard health coverage; delaying the regulated all-payer option; modifying universal coverage and insurance reform provisions; expanding eligibility for the MinnesotaCare program; establishing prescription drug coverage for low-income Medicare beneficiaries; extending the health care commission and regional coordinating boards; making technical changes; reducing tax deductions for the voluntarily uninsured; appropriating money; amending Minnesota Statutes 1994, sections 60A.02, subdivision 1a; 60B.02; 60B.03, subdivision 2; 60G.01, subdivisions 2, 4, and 5; 62A.10, subdivisions 1 and 2; 62A.65, subdivisions 5 and 8; 62D.02, subdivision 8; 62D.042, subdivision 2; 62D.11, subdivision 1; 62E.141; 62H.04; 62H.08; 62J.017; 62J.04, subdivision 1a; 62J.05, subdivisions 2 and 9; 62J.09, subdivisions 1, 1a, 6, and 8; 62J.152, subdivision 5; 62J.17, subdivision 4a; 62J.48; 62L.02, subdivisions 11, 16, 24, and 26; 62L.03, subdivisions 3, 4, and 5; 62L.09, subdivision 1; 62L.12, subdivision 2; 62M.07; 62M.09, subdivision 5; 62M.10, by adding a subdivision; 62N.02, by adding subdivisions; 62N.04; 62N.10, by adding a subdivision; 62N.11, subdivision 1; 62N.13; 62N.14, subdivision 3; 62P.05, by adding a subdivision; 62Q.01, subdivisions 2, 3, 4, and by adding subdivisions; 62Q.03, subdivisions 1, 6, 7, 8, 9, 10, and by adding subdivisions; 62Q.07, subdivisions 1 and 2; 62Q.09, subdivision 3; 62Q.11; 62Q.165; 62Q.17, subdivisions 2, 6, 8, and by adding a subdivision; 62Q.18; 62Q.19; 62Q.25; 62Q.30; 62Q.41; 72A.20, by adding subdivisions; 72A.201, by adding a subdivision; 136A.1355, subdivisions 3 and 5; 136A.1356, subdivisions 3 and 4; 144.1464, subdivisions 2, 3, and 4; 144.147, subdivision 1; 144.1484, subdivision 1; 144.1486, subdivision 4; 144.1489, subdivision 3; 144.801, by adding a subdivision; 144.804, subdivision 1; 151.48; 256.9353, subdivision 1; 256.9354, subdivisions 1, 4, 5, and by adding a subdivision; 256.9357, subdivisions 1, 2, and 3; 256.9358, by adding a subdivision; 256.9363, by adding a subdivision; 256B.057, subdivision 3; 256B.69, by adding a subdivision; 256D.03, by adding a subdivision; 270.101, subdivision 1; 290.01, subdivision 19a; 295.50, subdivisions 3, 4, and 10a; 295.53, subdivisions 1, 3, and 4; 295.55, subdivision 4; 295.57; and 295.582; Laws 1990, chapter 591, article 4, section 9; Laws 1993, chapter 224, article 4, section 40; Laws 1994, chapter 625, article 5, sections 5, subdivision 1; and 10, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 62L; 62N; 62Q; 137; and 295; repealing Minnesota Statutes 1994, sections 62J.045; 62J.07, subdivision 4; 62J.09, subdivision 1a; 62J.152, subdivision 6; 62J.19; 62J.65; 62L.08,

subdivision 7a; 62P.01; 62P.02; 62P.03; 62P.07; 62P.09; 62P.11; 62P.13; 62P.15; 62P.17; 62P.19; 62P.21; 62P.23; 62P.25; 62P.27; 62P.29; 62P.31; 62P.33; 62Q.03, subdivisions 2, 3, 4, 5, and 11; 62Q.21; and 62Q.27; Laws 1993, chapter 247, article 1, sections 12, 13, 14, 15, 18, and 19; Minnesota Rules, part 4685.1700, subpart 1, item D.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. Minnesota Statutes 1994, section 60B.02, is amended to read:

60B.02 [PERSONS COVERED.]

The proceedings authorized by sections 60B.01 to 60B.61 may be applied to:

(1) All insurers who are doing, or have done, an insurance business in this state, and against whom claims arising from that business may exist now or in the future;

(2) All insurers who purport to do an insurance business in this state;

(3) All insurers who have insureds resident in this state;

(4) All other persons organized or in the process of organizing with the intent to do an insurance business in this state; and

(5) All nonprofit service plan corporations incorporated or operating under the nonprofit health service plan corporation act, any health plan incorporated under chapter 317A, all fraternal benefit societies operating under chapter 64B, except those associations enumerated in section 64B.38, all assessment benefit associations operating under chapter 63, all township mutual or other companies operating under chapter 67A, and all reciprocals or interinsurance exchanges operating under chapter 71A, and all integrated service networks operating under chapter 62N.

Sec. 2. Minnesota Statutes 1994, section 60B.03, subdivision 2, is amended to read:

Subd. 2. [COMMISSIONER.] "Commissioner" means the commissioner of commerce of the state of Minnesota and, in that commissioner's absence or disability, a deputy or other person duly designated to act in that commissioner's place. In the context of rehabilitation or liquidation of a health maintenance organization or integrated service network, "commissioner" means the commissioner of health of the state of Minnesota and, in that commissioner's absence or disability, a deputy or other person duly designated to act in that commissioner's place.

Sec. 3. Minnesota Statutes 1994, section 60G.01, subdivision 2, is amended to read:

Subd. 2. [COMMISSIONER.] "Commissioner" means the commissioner of commerce, except that "commissioner" means the commissioner of health for administrative supervision of health maintenance organizations and integrated service networks.

Sec. 4. Minnesota Statutes 1994, section 60G.01, subdivision 4, is amended to read:

Subd. 4. [DEPARTMENT.] "Department" means the department of commerce, except that "department" means the department of health for administrative supervision of health maintenance organizations and integrated service networks.

Sec. 5. Minnesota Statutes 1994, section 60G.01, subdivision 5, is amended to read:

Subd. 5. [INSURER.] "Insurer" means and includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuities as limited to:

(1) any insurer who is doing an insurer business, or has transacted insurance in this state, and against whom claims arising from that transaction may exist now or in the future;

(2) any fraternal benefit society which is subject to chapter 64B;

(3) nonprofit health service plan corporations subject to chapter 62C;

(4) cooperative life and casualty companies subject to sections 61A.39 to 61A.52; and

(5) health maintenance organizations regulated under chapter 62D; and

(6) integrated service networks regulated under chapter 62N.

Sec. 6. Minnesota Statutes 1994, section 62D.181, subdivision 2, is amended to read:

Subd. 2. [ELIGIBLE INDIVIDUALS.] An individual is eligible for alternative coverage under this section if:

(1) the individual had individual health coverage through a health maintenance organization, integrated service network, or community integrated service network, the coverage is no longer available due to the insolvency of the health maintenance organization, integrated service network, or community integrated service network, and the individual has not obtained alternative coverage; or

(2) the individual had group health coverage through a health maintenance organization, integrated service network, or community integrated service network, the coverage is no longer available due to the insolvency of the health maintenance organization, integrated service network, or community integrated service network, and the individual has not obtained alternative coverage.

Sec. 7. Minnesota Statutes 1994, section 62D.181, subdivision 3, is amended to read:

Subd. 3. [APPLICATION AND ISSUANCE.] If a health maintenance organization, integrated service network, or community integrated service network will be liquidated, individuals eligible for alternative coverage under subdivision 2 may apply to the association to obtain alternative coverage. Upon receiving an application and evidence that the applicant was enrolled in the health maintenance organization, integrated service network, or community integrated service network at the time of an order for liquidation, the association shall issue policies to eligible individuals, without the limitation on preexisting conditions described in section 62E.14, subdivision 3.

Sec. 8. Minnesota Statutes 1994, section 62D.181, subdivision 6, is amended to read:

Subd. 6. [DURATION.] The duration of alternative coverage issued under this section is:

(1) for individuals eligible under subdivision 2, clause (1), 90 days; and

(2) for individuals eligible under subdivision 2, clause (2), 90 days or the length of time remaining in the group contract with the insolvent health maintenance organization, integrated service network, or community integrated service network, whichever is greater.

Sec. 9. Minnesota Statutes 1994, section 62D.181, subdivision 9, is amended to read:

Subd. 9. [COORDINATION OF POLICIES.] If an insolvent health maintenance organization, integrated service network, or community integrated service network has insolvency insurance coverage at the time of an order for liquidation, the association may coordinate the benefits of the policy issued under this section with those of the insolvency insurance policy available to the enrollees. The premium level for the combined association policy and the insolvency insurance policy may not exceed those described in subdivision 5.

Sec. 10. Minnesota Statutes 1994, section 62D.19, is amended to read:

62D.19 [UNREASONABLE EXPENSES.]

No health maintenance organization shall incur or pay for any expense of any nature which is unreasonably high in relation to the value of the service or goods provided. The commissioner of health shall implement and enforce this section by rules adopted under this section.

In an effort to achieve the stated purposes of sections 62D.01 to 62D.30; in order to safeguard the underlying nonprofit status of health maintenance organizations; and to ensure that the payment of health maintenance organization money to major participating entities results in a corresponding benefit to the health maintenance organization and its enrollees, when determining whether an organization has incurred an unreasonable expense in relation to a major participating entity, due consideration shall be given to, in addition to any other appropriate factors, whether the officers and trustees of the health maintenance organization have acted with good faith and in the best interests of the health maintenance organization in entering into, and performing under, a contract under which the health maintenance organization has incurred an expense. The commissioner has standing to sue, on behalf of a health maintenance organization, officers or trustees of the health maintenance organization who have breached their fiduciary duty in entering into and performing such contracts.

Expenses incurred by a health maintenance organization relating to developing and forming community integrated service networks as defined under chapter 62N shall be presumed to be a reasonable expense.

Sec. 11. Minnesota Statutes 1994, section 62N.02, is amended by adding a subdivision to read:

Subd. 4b. [CREDENTIALING.] "Credentialing" means the process of collecting, verifying, and reviewing evidence that relates to a health care professional's qualifications to practice the health care profession as a provider within a specific integrated service network.

Sec. 12. Minnesota Statutes 1994, section 62N.02, is amended by adding a subdivision to read:

Subd. 4c. [CREDENTIALING STANDARDS.] An integrated service network may set credentialing standards for providers. A network may recredential providers on a recurring basis. If a network sets credentialing standards, the network must provide a written description of those standards upon request. An integrated service network may participate in a centralized credentialing program and must provide a written description of that program upon request.

Sec. 13. Minnesota Statutes 1994, section 62N.04, is amended to read:

62N.04 [REGULATION.]

Integrated service networks are under the supervision of the commissioner, who shall enforce this chapter, and the requirements of chapter 62Q as they apply to these networks. The commissioner has, with respect to this chapter and chapter 62Q, all enforcement and rulemaking powers available to the commissioner under section 62D.17.

Sec. 14. [62N.071] [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] The definitions in this section apply to sections 62N.071 to 62N.078. Unless otherwise specified, terms used in those sections have the meanings required to be used in preparation of the National Association of Insurance Commissioners (NAIC) annual statement blanks for health maintenance organizations.

Subd. 2. [ADMITTED ASSETS.] "Admitted assets" means admitted assets as defined under section 62D.044, including the deposit required under section 62N.074.

Subd. 3. [NET WORTH.] "Net worth" means admitted assets minus liabilities.

Subd. 4. [LIABILITIES.] "Liabilities" means a network's debts and other obligations, including estimates of the network's reported and unreported claims incurred for covered services and supplies provided to enrollees by outside providers. Liabilities do not include those obligations that are subordinated in the same manner as preferred ownership claims under section 60B.44, subdivision 10, including promissory notes subordinated to all other liabilities of the integrated service network.

Subd. 5. [UNCOVERED EXPENDITURES.] "Uncovered expenditures" means the charges for health care services and supplies that are covered by an integrated service network for which an enrollee would also be liable if the network becomes insolvent. Uncovered expenditures includes charges for covered health care services and supplies received by enrollees from providers that are not employed by, under contract with, or otherwise affiliated with the network. Uncovered expenditures does not include amounts that enrollees do not have to pay due to the obligations being guaranteed, insured, or assumed by a person other than the network.

Subd. 6. [WORKING CAPITAL.] "Working capital" means current assets minus current liabilities.

Sec. 15. [62N.072] [NET WORTH REQUIREMENT.]

Subdivision 1. [INITIAL REQUIREMENT.] An integrated service network must, at time of licensure, have a minimum net worth of the greater of:

(1) $1,500,000; or

(2) 8-1/3 percent of the sum of all expenses expected to be incurred in the first full year of operation, less 90 percent of the expected reinsurance premiums for that period.

Subd. 2. [ONGOING REQUIREMENT.] After a network's initial year of operation, the network must maintain net worth of no less than $1,000,000.

Sec. 16. [62N.074] [DEPOSIT REQUIREMENT.]

Subdivision 1. [INITIAL DEPOSIT.] An integrated service network shall deposit with the commissioner, at time of licensure, a deposit consisting of cash and direct U.S. Treasury obligations in the total amount of not less than $300,000.

Subd. 2. [CUSTODIAL ACCOUNT.] The deposit must be held in a custodial or other controlled account under a written account agreement acceptable to the commissioner.

Subd. 3. [ONGOING DEPOSIT.] After the initial year of operation, the required amount of the deposit is the greater of

(1) $300,000; or

(2) 33-1/3 percent of the network's uncovered expenditures incurred in the previous calendar year.

Subd. 4. [USE OF DEPOSIT.] (a) In the event of any delinquency proceeding as defined in section 60B.03, the required minimum deposit shall be applied first to pay for or reimburse the commissioner for expenses incurred by the commissioner in performing the commissioner's duties in connection with the insolvency, including any legal, actuarial or accounting fees. The balance of the required minimum deposit, if any, shall be used to reimburse enrollees for uncovered expenditures, on a pro rata basis.

(b) If a deposit exceeds the required minimum deposit, the excess shall be applied first to uncovered expenditures and the balance, if any, to the commissioner's expenses.

(c) The deposit is not subject to garnishment or levy under any circumstances.

Subd. 5. [ACTUAL DEPOSIT REQUIRED.] The deposit must be in the form specified in subdivision 1; a guarantee or letter of credit are not acceptable, in whole or in part, as substitutes.

Sec. 17. [62N.075] [WORKING CAPITAL.]

Subdivision 1. [REQUIREMENT.] An integrated service network must maintain a positive working capital at all times.

Subd. 2. [NOTICE REQUIRED.] If an integrated service network's working capital is no longer positive, or is likely to soon become no longer positive, the network shall immediately notify the commissioner.

Subd. 3. [PLAN OF CORRECTION.] If an integrated service network's working capital is no longer positive, the network shall promptly submit to the commissioner a written proposed plan of correction. The commissioner shall promptly approve, approve as modified, or reject the proposed plan. If a plan of correction has been approved by the commissioner, the network shall comply with it and shall cooperate fully with any activities the commissioner undertakes to monitor the network's compliance.

Subd. 4. [ACTION BY COMMISSIONER.] The commissioner may take any action permitted to the commissioner that the commissioner deems necessary or appropriate to protect the network or its enrollees if:

(1) the network fails to propose an approved plan of correction promptly;

(2) the network fails to comply with an approved plan of correction; or

(3) the commissioner determines that a deficiency in working capital cannot be corrected within a reasonable time.

Subd. 5. [OTHER REMEDIES.] This section does not limit the commissioner's power to use at any time other remedies available to the commissioner.

Sec. 18. [62N.076] [INVESTMENT RESTRICTIONS.]

Subdivision 1. [INVESTMENT POLICY.] An integrated service network shall have a written investment policy to govern investment of the network's assets. The written policy must be reviewed and approved annually by the network's board of directors.

Subd. 2. [APPROVAL; INVESTMENTS.] A network shall not make loans or investments, unless authorized by its board of directors, or ratified by the board no later than the next regular board meeting.

Subd. 3. [PERMITTED INVESTMENT.] An integrated service network shall make investments only in securities or property designated by law as permitted for domestic life insurance companies; this restriction includes compliance with percentage limitations that apply to domestic life insurance companies. A network may, however, invest in real estate for the convenience and accommodation of its operations in excess of the percentage permitted for a domestic life insurance company, but not to exceed 25 percent of its total admitted assets.

Subd. 4. [CONFLICTS OF INTEREST.] An integrated service network shall not make loans to any of its directors or principal officers or make loans to or investments in any organization in which a director or principal officer has an interest.

Subd. 5. [PROOF OF COMPLIANCE.] An integrated service network shall annually file with the commissioner proof of compliance with this section in a form and on a date prescribed by the commissioner.

Sec. 19. [62N.077] [USE OF GUARANTEES.]

Subdivision 1. [GUARANTEE PERMITTED.] An integrated service network may, with the consent of the commissioner, satisfy up to 50 percent of its minimum net worth requirement by means of a guarantee provided by another organization.

Subd. 2. [SECURITY FOR GUARANTEE.] (a) If the guaranteeing organization is regulated for solvency by the commissioner of commerce or health, the guarantee must be treated as a liability for purposes of solvency regulation of the guaranteeing organization. If the guaranteeing organization becomes insolvent, a claim by the network on the guarantee must be at least of equal priority with claims of enrollees or other policy holders of the insolvent guaranteeing organization.

(b) If the guaranteeing organization is not regulated for solvency by the commissioner of commerce or health, the organization must maintain assets acceptable to the commissioner, with a market value at least equal to the amount of the guarantee, in a custodial or other controlled account on terms acceptable to the commissioner of health. This paragraph applies to a political subdivision of the state that serves as a guaranteeing organization.

Sec. 20. [62N.078] [FINANCIAL REPORTING AND EXAMINATION.]

Subdivision 1. [FINANCIAL STATEMENTS.] An integrated service network shall file with the commissioner, annually on April 1, an audited financial statement. The financial statement must include the National Association of Insurance Commissioners (NAIC) annual statement blanks for health maintenance organizations, prepared in accordance with the NAIC annual statement instructions, and using the methods prescribed in the NAIC's accounting practices and procedures manual for health maintenance organizations. The financial statement must also include any other form or information prescribed by the commissioner.

Subd. 2. [QUARTERLY STATEMENTS.] An integrated service network shall file with the commissioner quarterly financial statements for the first three quarters of each year, on a date and form and in a manner prescribed by the commissioner.

Subd. 3. [OTHER INFORMATION.] An integrated service network shall comply promptly and fully with requests by the commissioner for other information that the commissioner deems necessary to monitor or assess the network's financial solvency.

Subd. 4. [FINANCIAL EXAMINATION.] The commissioner shall conduct a complete financial examination of each integrated service network at least once every three years, and more frequently if the commissioner deems it necessary. The examinations must be conducted according to the standards provided in the NAIC examiners handbook.

Sec. 21. Minnesota Statutes 1994, section 62N.10, is amended by adding a subdivision to read:

Subd. 7. [DATA SUBMISSION.] As a condition of licensure, an integrated service network shall comply fully with section 62J.38.

Sec. 22. Minnesota Statutes 1994, section 62N.11, subdivision 1, is amended to read:

Subdivision 1. [APPLICABILITY.] Every integrated service network enrollee residing in this state is entitled to evidence of coverage or contract. The integrated service network or its designated representative shall issue the evidence of coverage or contract. The commissioner shall adopt rules specifying the requirements for contracts and evidence of coverage. "Evidence of coverage" means evidence that an enrollee is covered by a group contract issued to the group. The evidence of coverage must contain a description of provider locations, a list of the types of providers available, and information about the types of allied and midlevel practitioners and pharmacists that are available.

Sec. 23. Minnesota Statutes 1994, section 62N.13, is amended to read:

62N.13 [ENROLLEE COMPLAINT SYSTEM.]

Every integrated service network must establish and maintain an enrollee complaint system, including an impartial arbitration provision as required under section 62Q.105, to provide reasonable procedures for the resolution of written complaints initiated by enrollees concerning the provision of health care services. The integrated service network must inform enrollees that they may choose to use an alternative dispute resolution process. If an enrollee chooses to use an alternative dispute resolution process, the network must participate. The commissioner shall adopt rules specifying requirements relating to enrollee complaints.

Sec. 24. Minnesota Statutes 1994, section 62N.14, subdivision 3, is amended to read:

Subd. 3. [ENROLLEE MEMBERSHIP CARDS.] Integrated service networks shall issue enrollee membership cards to each enrollee of the integrated service network. The enrollee card shall contain, at minimum, the following information:

(1) the telephone number of the integrated service network's office of consumer services;

(2) the address, telephone number, and a brief description of the state's office of consumer information clearinghouse; and

(3) the telephone number of the department of health or local ombudsperson.

The membership cards shall also conform to the requirements set forth in section 62J.60.

Sec. 25. [62N.15] [PROVIDER REQUIREMENTS.]

Subdivision 1. [SERVICES.] An integrated service network may operate as a staff model as defined in section 295.50, subdivision 12b, or may contract with providers or provider organizations for the provision of services.

Subd. 2. [LOCATION.] (a) An integrated service network must ensure that primary care providers are located at adequate locations within the service area of the network. In determining what are adequate locations, the integrated service network may consider the practice and referral patterns in each community served throughout the service area.

(b) Urgent and emergency care providers must be located within a distance of 30 miles or a travel time of 30 minutes from every enrollee.

Subd. 3. [NUMBERS.] An integrated service network must provide a sufficient number of providers to meet the projected needs of its enrollees, including special needs and high-risk enrollees, for all covered health care services.

Subd. 4. [TYPES.] An integrated service network must determine what types of providers are needed to deliver all appropriate and necessary health services to their enrollees. In determining which types of providers are necessary, networks shall encourage the use of allied and midlevel practitioners and pharmacists within their respective scopes of practice.

Subd. 5. [CAPACITY.] An integrated service network shall monitor the capacity of the network to provide services to enrollees and take steps to increase capacity when parts of the network are not able to meet enrollee needs.

Subd. 6. [ACCESS.] (a) An integrated service network shall make available and accessible all covered health care services on a 24-hour per day, seven days per week basis. This requirement may be fulfilled through the use of:

(1) regularly scheduled appointments;

(2) after-hour clinics;

(3) use of a 24-hour answering service;

(4) backup coverage by another participating physician; or

(5) referrals to urgent care centers and to hospital emergency care.

(b) An integrated service network shall arrange for covered health care services, including referrals to specialty physicians, to be accessible to enrollees on a timely basis in accordance with medically appropriate guidelines. An integrated service network shall have appointment scheduling guidelines based on the type of health care service.

Subd. 7. [CONTINUITY.] (a) An integrated service network shall provide continuing care for enrollees in the event of contract termination between the integrated service network and any of its contracted providers or in the event of site closings involving a provider with more than one location of service.

(b) An integrated service network shall provide a written disclosure of the process by which continuity of care will be provided to all enrollees.

Subd. 8. [REVIEW.] The commissioner shall review each network's compliance with subdivisions 1 to 7. If the commissioner determines that a network is not meeting the requirements of this section, the commissioner may order the network to submit a plan of corrective action, and may order the network to comply with the provisions of that plan, as amended by the commissioner.

Sec. 26. [62N.17] [OUT-OF-NETWORK SERVICES.]

(a) An integrated service network shall provide coverage for all emergency services provided outside the network, when the care is immediately necessary or believed to be necessary to preserve life, prevent impairment of bodily functions, or to prevent placing the physical or mental health of the enrollee in jeopardy.

(b) An integrated service network shall include in marketing materials a description of all limitations of coverage for out-of-network services, including when enrollees reside or travel outside the network's service area.

Sec. 27. [62N.18] [INTERNAL IMPROVEMENT.]

Subdivision 1. [INTERNAL QUALITY IMPROVEMENT WORKPLAN.] In order to increase public accountability, and to improve the overall quality of care provided to the public, all integrated service networks shall annually file with the commissioner a quality improvement workplan as a condition of licensure and relicensure. Every integrated service network shall establish and maintain an internal quality improvement workplan based upon enrollee surveys, enrollee complaints, and quality of care indicators. A quality improvement workplan is a documented process for achieving measurable outcome improvement. The quality improvement workplan shall be approved annually by the commissioner and made available to the public through the information clearinghouse. An integrated service network shall state in all marketing materials that its quality improvement workplan is available through the information clearinghouse.

Subd. 2. [ENROLLEE SURVEYS.] Every integrated service network, as part of its quality improvement workplan, shall annually survey enrollees on their perceptions of integrated service network performance and quality of care. Integrated service networks shall make survey results available to enrollees, potential enrollees, and the information clearinghouse.

Subd. 3. [ENROLLEE COMPLAINTS.] As part of the enrollee survey, integrated service networks must:

(1) identify the four most common enrollee complaints related to service delivery and the four most common enrollee complaints related to administration;

(2) identify the specific quality improvement measures that the network plans to undertake to address each of these complaint areas; and

(3) identify the mechanisms that the network will use to communicate and implement the changes needed to address each of the complaints identified in clause (1).

Subd. 4. [QUALITY OF CARE INDICATORS.] The internal quality improvement workplan must address quality of care indicators as evidenced by analysis of data and profiling of services. The commissioner shall identify a minimum of three procedures, three medical conditions, and their respective quality indicators annually that each integrated service network must incorporate as part of its quality improvement workplan. The commissioner shall perform, or contract with a private vendor to perform, validation of the quality indicators of each integrated service network.

Sec. 28. [62N.40] [CHEMICAL DEPENDENCY SERVICES.]

Each community integrated service network and integrated service network regulated under this chapter must ensure that chemically dependent individuals have access to cost-effective treatment options that address the specific needs of individuals. These include, but are not limited to, the need for: treatment that takes into account severity of illness and comorbidities; provision of a continuum of care from primary inpatient to outpatient care, aftercare, and long-term care; the safety of the individual's domestic and community environment; gender appropriate and culturally appropriate programs; and access to appropriate social services.

Sec. 29. [REPEALER.]

Minnesota Statutes 1994, section 62N.34, is repealed.

Section 1. Minnesota Statutes 1994, section 62D.11, subdivision 1, is amended to read:

Subdivision 1. [ENROLLEE COMPLAINT SYSTEM.] Every health maintenance organization shall establish and maintain a complaint system including an impartial arbitration provision, as required under section 62Q.105 to provide reasonable procedures for the resolution of written complaints initiated by enrollees concerning the provision of health care services. "Provision of health services" includes, but is not limited to, questions of the scope of coverage, quality of care, and administrative operations. Arbitration shall be subject to chapter 572, except (a) in the event that an enrollee elects to litigate a complaint prior to submission to arbitration, and (b) no medical malpractice damage claim shall be subject to arbitration unless agreed to by both parties subsequent to the event giving rise to the claim. The health maintenance organization must inform enrollees that they may choose to use an alternative dispute resolution process. If an enrollee chooses to use an alternative dispute resolution process, the health maintenance organization must participate.

Sec. 2. Minnesota Statutes 1994, section 62P.04, subdivision 3, is amended to read:

Subd. 3. [DETERMINATION OF EXPENDITURES.] Health plan companies shall submit to the commissioner of health, by April 1, 1994, for calendar year 1993; April 1, 1995, for calendar year 1994; April 1, 1996, for calendar year 1995; April 1, 1997, for calendar year 1996; and April 1, 1998, for calendar year 1997 all information the commissioner determines to be necessary to implement and enforce this section. The information must be submitted in the form specified by the commissioner. The information must include, but is not limited to, expenditures per member per

month or cost per employee per month, and detailed information on revenues and reserves. The commissioner, to the extent possible, shall coordinate the submittal of the information required under this section with the submittal of the financial data required under chapter 62J, to minimize the administrative burden on health plan companies. The commissioner may adjust final expenditure figures for demographic changes, risk selection, changes in basic benefits, increases in health care costs or utilization experienced by a health plan company not functioning as a managed care organization as defined in section 62Q.01, subdivision 5, increases in health care costs or utilization associated with out-of-network providers and experienced by a health plan company functioning as a managed care organization as defined in section 62Q.01, subdivision 5, and legislative initiatives that materially change health care costs, as long as these adjustments are consistent with the methodology submitted by the health plan company to the commissioner, and approved by the commissioner as actuarially justified. The methodology to be used for adjustments and the election to meet one expenditure limit for affiliated health plan companies must be submitted to the commissioner by September 1, 1994. Community integrated service networks may submit the information with their application for licensure. The commissioner shall also accept changes to methodologies already submitted. The adjustment methodology submitted and approved by the commissioner must apply to the data submitted for calendar years 1994 and 1995. The commissioner may allow changes to accepted adjustment methodologies for data submitted for calendar years 1996 and 1997. Changes to the adjustment methodology must be received by September 1, 1996, and must be approved by the commissioner.

Sec. 3. Minnesota Statutes 1994, section 62Q.01, subdivision 2, is amended to read:

Subd. 2. [COMMISSIONER.] "Commissioner" means the commissioner of health for purposes of regulating health maintenance organizations, community integrated service networks, and integrated service networks, or the commissioner of commerce for purposes of regulating all other health plan companies. For all other purposes, "commissioner" means the commissioner of health.

Sec. 4. Minnesota Statutes 1994, section 62Q.01, is amended by adding a subdivision to read:

Subd. 2a. [ENROLLEE.] "Enrollee" means a natural person covered by a health plan and includes an insured, policyholder, subscriber, contract holder, member, covered person, or certificate holder.

Sec. 5. Minnesota Statutes 1994, section 62Q.01, subdivision 3, is amended to read:

Subd. 3. [HEALTH PLAN.] "Health plan" means a health plan as defined in section 62A.011 or; a policy, contract, or certificate issued by a community integrated service network; or an integrated service network; or an all-payer insurer as defined in section 62P.02.

Sec. 6. Minnesota Statutes 1994, section 62Q.01, is amended by adding a subdivision to read:

Subd. 5. [MANAGED CARE ORGANIZATION.] "Managed care organization" means: (1) a health maintenance organization operating under chapter 62D; (2) a community integrated service network as defined under section 62N.02, subdivision 4a; (3) an integrated service network as defined under section 62N.02, subdivision 8; or (4) an insurance company licensed under chapter 60A, nonprofit health service plan corporation operating under chapter 62C, fraternal benefit society operating under chapter 64B, or any other health plan company, to the extent that it covers health care services delivered to Minnesota residents through a preferred provider organization or a network of selected providers.

Sec. 7. Minnesota Statutes 1994, section 62Q.01, is amended by adding a subdivision to read:

Subd. 6. [MEDICARE-RELATED COVERAGE.] "Medicare-related coverage" means a policy, contract, or certificate issued as a supplement to Medicare, regulated under sections 62A.31 to 62A.44, including Medicare select coverage; policies, contracts, or certificates that supplement Medicare issued by health maintenance organizations; or policies, contracts, or certificates governed by section 1833 (known as "cost" or "HCPP" contracts) or 1876 (known as "TEFRA" or "risk" contracts) of the federal Social Security Act, United States Code, title 42, section 1395, et seq., as amended.

Sec. 8. [62Q.02] [APPLICABILITY OF CHAPTER.]

(a) This chapter applies only to health plans, as defined in section 62Q.01, and not to other types of insurance issued or renewed by health plan companies, unless otherwise specified.

(b) This chapter applies to a health plan company only with respect to health plans, as defined in section 62Q.01, issued or renewed by the health plan company, unless otherwise specified.

(c) If a health plan company issues or renews health plans in other states, this chapter applies only to health plans issued or renewed in this state, or to cover a resident of the state, unless otherwise specified.

Sec. 9. Minnesota Statutes 1994, section 62Q.03, subdivision 1, is amended to read:

Subdivision 1. [PURPOSE.] Risk adjustment is a vital element of the state's strategy for achieving a more equitable, efficient system of health care delivery and financing for all state residents. The purpose of risk adjustment is to reduce the effects of risk selection on health insurance premiums by making monetary transfers from health plan companies that insure lower risk populations to health plan companies that insure higher risk populations. Risk adjustment is needed to: achieve a more equitable, efficient system of health care financing; remove current disincentives in the health care system to insure and serve provide adequate access for high risk and special needs populations; promote fair competition among health plan companies on the basis of their ability to efficiently and effectively provide services rather than on the health risk status of those in a given insurance pool; and help assure maintain the viability of all health plan companies, including community integrated service networks by protecting them from the financial effects of enrolling a disproportionate number of high risk individuals. It is the commitment of the state to develop and implement a risk adjustment system by July 1, 1997, and to continue to improve and refine risk adjustment over time. The process for designing and implementing risk adjustment shall be open, explicit, utilize resources and expertise from both the private and public sectors, and include at least the representation described in subdivision 4. The process shall take into account the formative nature of risk adjustment as an emerging science, and shall develop and implement risk adjustment to allow continual modifications, expansions, and refinements over time. The process shall have at least two stages, as described in subdivisions 2 and 3. The risk adjustment system shall:

(1) possess a reasonable level of accuracy and administrative feasibility, be adaptable to changes as methods improve, incorporate safeguards against fraud and manipulation, and shall neither reward inefficiency nor penalize for verifiable improvements in health status;

(2) require participation by all health plan companies providing coverage in the individual, small group, and Medicare supplement markets;

(3) address unequal distribution of risk between health plan companies, but shall not address the financing of public programs or subsidies for low-income people; and

(4) be developed and implemented by the risk adjustment association with joint oversight by the commissioners of health and commerce.

Sec. 10. Minnesota Statutes 1994, section 62Q.03, is amended by adding a subdivision to read:

Subd. 5a. [PUBLIC PROGRAMS.] The risk adjustment system must be developed for state-run public programs, including medical assistance, general assistance medical care, and MinnesotaCare. The commissioners of health and human services shall convene a work group to discuss and recommend any special features of the public program risk adjustment system. The system must be developed in accordance with the general risk adjustment methodologies described in this section, and may include additional demographic factors in addition to age and sex, different targeted conditions, or different payment amounts for conditions. The risk adjustment system for public programs must attempt to reflect the special needs related to poverty, cultural or language barriers, and other needs of some segments of the public program population. The commissioner of health shall work with the risk adjustment association to ensure coordination between the risk adjustment systems for the public and private sectors. The date for final implementation and the final methods for risk adjustment in public programs shall be determined by the commissioner of human services, and shall be in compliance with state and federal requirements for the Medicaid program.

Sec. 11. Minnesota Statutes 1994, section 62Q.03, is amended by adding a subdivision to read:

Subd. 5b. [MEDICARE SUPPLEMENT MARKET.] A risk adjustment system must be developed for the Medicare supplement market. The Medicare supplement risk adjustment system may involve only a demographic component.

Sec. 12. Minnesota Statutes 1994, section 62Q.03, subdivision 6, is amended to read:

Subd. 6. [CREATION OF RISK ADJUSTMENT ASSOCIATION.] The Minnesota risk adjustment association is created on July 1, 1994, and may operate as a nonprofit unincorporated association. The risk adjustment association is subject to the open meeting law.

Sec. 13. Minnesota Statutes 1994, section 62Q.03, subdivision 7, is amended to read:

Subd. 7. [PURPOSE OF ASSOCIATION.] The association is established to carry out the purposes of subdivision 1, as further elaborated on by the implementation report described in subdivision 5 and by legislation enacted in 1995 or subsequently established to develop and implement a private sector risk adjustment system.

Subject to state oversight set forth in subdivision 10, the association shall:

(1) develop and implement comprehensive risk adjustment systems for individual, small group, and Medicare Supplement markets consistent with the provisions of this chapter;

(2) submit a plan for the development of the risk adjustment system and identify appropriate implementation dates consistent with the rating and underwriting restrictions of each market to the commissioners of health and commerce by November 5, 1995;

(3) develop a combination of a demographic risk adjustment system and payments for targeted conditions;

(4) test an ambulatory care groups (ACGs) and diagnostic cost groups (DCGs) system, and recommend whether such a methodology should be adopted;

(5) fund the development and testing of the risk adjustment system;

(6) recommend market conduct guidelines; and

(7) develop a plan for assessing members for the costs of administering the risk adjustment system.

Sec. 14. Minnesota Statutes 1994, section 62Q.03, subdivision 8, is amended to read:

Subd. 8. [GOVERNANCE.] (a) The association shall be governed by an interim 19-member board as follows: one provider member appointed by the Minnesota Hospital Association; one provider member appointed by the Minnesota Medical Association; one provider member appointed by the governor; three members appointed by the Minnesota Council of HMOs to include an HMO with at least 50 percent of total membership enrolled through a public program; three members appointed by Blue Cross and Blue Shield of Minnesota, to include a member from a Blue Cross and Blue Shield of Minnesota affiliated health plan with fewer than 50,000 enrollees and located outside the Minneapolis-St. Paul metropolitan area; two members appointed by the Insurance Federation of Minnesota; one member appointed by the Minnesota Association of Counties; and three public members appointed by the governor, to include at least one representative of a public program. The commissioners of health, commerce, human services, and employee relations shall be nonvoting ex officio members.

(b) The board may elect officers and establish committees as necessary.

(c) A majority of the members of the board constitutes a quorum for the transaction of business.

(d) Approval by a majority of the board members present is required for any action of the board.

(e) Interim board members shall be appointed by July 1, 1994, and shall serve until a new board is elected according to the plan of operation developed by the association.

(f) A member may designate a representative to act as a member of the interim board in the member's absence.

Sec. 15. Minnesota Statutes 1994, section 62Q.03, is amended by adding a subdivision to read:

Subd. 8a. [PLAN OF OPERATION.] The board shall submit a proposed plan of operation by August 15, 1995, to the commissioners of health and commerce for review. The plan of operation shall be subject to approval by the commissioners of health and commerce, after consultation with the members of the association, representatives of the public, and other affected individuals and organizations. If the commissioners disapprove all or any part of the proposed plan of operation, the directors shall within 15 days submit for review an appropriate revised plan of operation. If a revised plan is not submitted within 15 days, the commissioners shall promulgate a plan of operation. The plan of operation approved or promulgated by the commissioners shall become effective and operational under order of the commissioners.

Amendments to the plan of operation may be made by the commissioners or by the directors of the association, subject to the approval of the commissioners.

Sec. 16. Minnesota Statutes 1994, section 62Q.03, subdivision 9, is amended to read:

Subd. 9. [DATA COLLECTION AND DATA PRIVACY.] The board of the association shall consider antitrust implications and establish procedures to assure that pricing and other competitive information is appropriately shared among competitors in the health care market or members of the board. Any information shared shall be distributed only for the purposes of administering or developing any of the tasks identified in subdivisions 2 and 4. In developing these procedures, the board of the association may consider the identification of a state agency or other appropriate third party to receive information of a confidential or competitive nature. To maintain protection from antitrust law, the association members shall not have access to unaggregated data on individuals or health plan companies. The association shall develop, as a part of the plan of operation, procedures for ensuring that data is collected by a state agency or other appropriate entity. The commissioners of health and commerce must have access to all data collected by the association for the purposes of risk adjustment. Data on individuals obtained by the commissioner for the purposes of risk adjustment development, testing, and operation are designated as private data. Data not on individuals which is obtained by the commissioner for the purposes of development, testing, and operation of risk adjustment are designated as nonpublic data. Nothing in this section is intended to prohibit the preparation of summary data under section 13.05, subdivision 7. The association, state agencies, and any contractors having access to this data shall maintain it in accordance with this classification.

Sec. 17. Minnesota Statutes 1994, section 62Q.03, subdivision 10, is amended to read:

Subd. 10. [SUPERVISION STATE OVERSIGHT OF RISK ADJUSTMENT ACTIVITIES.] The association's activities shall be supervised by the commissioners of health and commerce. The commissioners shall provide specific oversight functions during the development and implementation phases of the risk adjustment system as follows:

(1) the commissioners shall review and approve the association's plan for testing risk adjustment methods, the methods to be used, and any changes to those methods;

(2) the commissioners must have the right to attend and participate in all meetings of the association and its work groups or committees;

(3) the commissioners shall approve any consultants or administrators used by the association;

(4) the commissioners shall review and approve the association's plan of operation; and

(5) the commissioners shall approve the plan for the risk adjustment system described in subdivision 7, clause (2).

Sec. 18. Minnesota Statutes 1994, section 62Q.03, is amended by adding a subdivision to read:

Subd. 12. [PARTICIPATION BY ALL HEALTH PLAN COMPANIES.] Upon its implementation, all health plan companies, as a condition of licensure, must participate in the risk adjustment system to be implemented under this section.

Sec. 19. Minnesota Statutes 1994, section 62Q.07, subdivision 1, is amended to read:

Subdivision 1. [ACTION PLANS REQUIRED.] (a) To increase public awareness and accountability of health plan companies, all health plan companies that issue or renew a health plan, as defined in section 62Q.01, must annually file with the applicable commissioner an action plan that satisfies the requirements of this section beginning July 1, 1994, as a condition of doing business in Minnesota. For purposes of this subdivision, "health plan" includes the coverages described in section 62A.011, subdivision 3, clause (10). Each health plan company must also file its action plan with the information clearinghouse. Action plans are required solely to provide information to consumers, purchasers, and the larger community as a first step toward greater accountability of health plan companies. The sole function of the commissioner in relation to the action plans is to ensure that each health plan company files a complete action plan, that the action plan is truthful and not misleading, and that the action plan is reviewed by appropriate community agencies.

(b) If a commissioner responsible for regulating a health plan company required to file an action plan under this section has reason to believe an action plan is false or misleading, the commissioner may conduct an investigation to determine whether the action plan is truthful and not misleading, and may require the health plan company to submit any information that the commissioner reasonably deems necessary to complete the investigation. If the commissioner determines that an action plan is false or misleading, the commissioner may require the health plan company to file an amended plan or may take any action authorized under chapter 72A.

Sec. 20. Minnesota Statutes 1994, section 62Q.07, subdivision 2, is amended to read:

Subd. 2. [CONTENTS OF ACTION PLANS.] (a) An action plan must include a detailed description of all of the health plan company's methods and procedures, standards, qualifications, criteria, and credentialing requirements for designating the providers who are eligible to participate in the health plan company's provider network, including any limitations on the numbers of providers to be included in the network. This description must be updated by the health plan company and filed with the applicable agency on a quarterly basis.

(b) An action plan must include the number of full-time equivalent physicians, by specialty, nonphysician providers, and allied health providers used to provide services. The action plan must also describe how the health plan company intends to encourage the use of nonphysician providers, midlevel practitioners, and allied health professionals, through at least consumer education, physician education, and referral and advisement systems. The annual action plan must also include data that is broken down by type of provider, reflecting actual utilization of midlevel practitioners and allied professionals by enrollees of the health plan company during the previous year. Until July 1, 1995, a health plan company may use estimates if actual data is not available. For purposes of this paragraph, "provider" has the meaning given in section 62J.03, subdivision 8.

(c) An action plan must include a description of the health plan company's policy on determining the number and the type of providers that are necessary to deliver cost-effective health care to its enrollees. The action plan must also include the health plan company's strategy, including provider recruitment and retention activities, for ensuring that sufficient providers are available to its enrollees.

(d) An action plan must include a description of actions taken or planned by the health plan company to ensure that information from report cards, outcome studies, and complaints is used internally to improve quality of the services provided by the health plan company.

(e) An action plan must include a detailed description of the health plan company's policies and procedures for enrolling and serving high risk and special needs populations. This description must also include the barriers that are present for the high risk and special needs population and how the health plan company is addressing these barriers in order to provide greater access to these populations. "High risk and special needs populations" includes, but is not limited to, recipients of medical assistance, general assistance medical care, and MinnesotaCare; persons with chronic conditions or disabilities; individuals within certain racial, cultural, and ethnic communities; individuals and families with low income; adolescents; the elderly; individuals with limited or no English language proficiency; persons with high-cost preexisting conditions; homeless persons; chemically dependent persons; persons with serious and persistent mental illness and; children with severe emotional disturbance; and persons who are at high risk of requiring treatment. The action plan must also reflect actual utilization of providers by enrollees defined by this section as high risk or special needs populations during the previous year. For purposes of this paragraph, "provider" has the meaning given in section 62J.03, subdivision 8.

(f) An action plan must include a general description of any action the health plan company has taken and those it intends to take to offer health coverage options to rural communities and other communities not currently served by the health plan company.

(g) A health plan company other than a large managed care plan company may satisfy any of the requirements of the action plan in paragraphs (a) to (f) by stating that it has no policies, procedures, practices, or requirements, either written or unwritten, or formal or informal, and has undertaken no activities or plans on the issues required to be addressed in the action plan, provided that the statement is truthful and not misleading. For purposes of this paragraph, "large managed care plan company" means a health maintenance organization, integrated service network, or other health plan company that employs or contracts with health care providers, that has more than 50,000 enrollees in this state. If a health plan company employs or contracts with providers for some of its health plans and does not do so for other health plans that it offers, the health plan company is a large managed care plan company if it has more than 50,000 enrollees in this state in health plans for which it does employ or contract with providers.

Sec. 21. Minnesota Statutes 1994, section 62Q.09, subdivision 3, is amended to read:

Subd. 3. [ENFORCEMENT.] Either The commissioner commissioners of health or and commerce shall each periodically review contracts among health care providing entities and health plan companies to determine compliance with this section, with respect to health plan companies that the commissioners respectively regulate. Any provider may submit a contract to the relevant commissioner for review if the provider believes this section has been violated. Any provision of a contract found by the relevant commissioner to violate this section is null and void, and the relevant commissioner may seek assess civil penalties against the health plan company in an amount not to exceed $25,000 for each such contract, using the enforcement procedures otherwise available to the commissioner involved.

Sec. 22. [62Q.105] [COMPLAINT RESOLUTION.]

Subdivision 1. [ESTABLISHMENT.] Each health plan company shall establish and make available to enrollees, by July 1, 1997, an informal complaint resolution process that meets the requirements of this section. A health plan company must make reasonable efforts to resolve enrollee complaints, and must inform complainants in writing of the company's decision within 30 days of receiving the complaint. The complaint resolution process must maintain the anonymity of the complainant.

Subd. 2. [MEDICALLY URGENT COMPLAINTS.] Health plan companies shall make reasonable efforts to resolve medically urgent enrollee complaints within 72 hours of receiving the complaint.

Subd. 3. [APPEALS PROCESS.] Health plan companies shall establish and make available to enrollees an impartial appeals process, independent of the health plan company. If a decision by a health plan company regarding a complaint is partially or wholly adverse to the complainant, the health plan company shall advise the complainant of the right to appeal through the impartial appeals process or to the commissioner.

Subd. 4. [ALTERNATIVE DISPUTE RESOLUTION.] Health plan companies shall make available to enrollees an alternative dispute resolution process, and shall participate in alternative dispute resolution at the request of an enrollee, as required under section 62Q.11.

Subd. 5. [DISPUTE RESOLUTION BY COMMISSIONER.] A complainant may at any time submit a complaint to the appropriate commissioner, who may either independently investigate the complaint or refer it to the health plan company for further review. After investigating a complaint, or reviewing a company's decision, the appropriate commissioner may order a remedy as authorized under section 62N.04, chapters 45, 60A, or 62D.

Subd. 6. [REQUIREMENTS FOR MANAGED CARE ORGANIZATIONS.] Each managed care organization shall submit all complaints to its quality review board or quality review organization for evaluation and possible action. The complaint resolution process for managed care organizations must clearly indicate the entity responsible for resolving complaints made by enrollees against hospitals, other health care facilities, and health care providers, that are owned by or under contract with the managed care organization.

Subd. 7. [RECORDKEEPING.] Health plan companies shall maintain records of all enrollee complaints and their resolutions. These records must be retained for five years, and must be made available to the appropriate commissioner upon request.

Subd. 8. [REPORTING.] Each health plan company shall submit to the appropriate commissioner, as part of the company's annual filing, data on the number and type of complaints that are not resolved within 30 days. A health plan company shall also make this information available to the public upon request.

Subd. 9. [NOTICE TO ENROLLEES.] Health plan companies shall provide a clear and complete description of their complaint resolution procedures to enrollees as part of their evidence of coverage or contract. The description must specifically inform enrollees:

(1) how to file a complaint with the health plan company;

(2) how to request an impartial appeal;

(3) that they have the right to request the use of alternative methods of dispute resolution; and

(4) that they have the right to litigate.

Sec. 23. Minnesota Statutes 1994, section 62Q.11, is amended to read:

62Q.11 [ALTERNATIVE DISPUTE RESOLUTION.]

Subdivision 1. [ESTABLISHED.] The commissioners of health and commerce shall make alternative dispute resolution processes available to encourage early settlement of disputes in order to avoid the time and cost associated with litigation and other formal adversarial hearings. For purposes of this section, "alternative dispute resolution" means the use of negotiation, mediation, arbitration, mediation-arbitration, neutral fact finding, and minitrials. These processes shall be nonbinding unless otherwise agreed to by all parties to the dispute.

Subd. 2. [REQUIREMENTS.] (a) If an enrollee, health care provider, or applicant for network provider status chooses to use a an alternative dispute resolution process prior to the filing of a formal claim or of a lawsuit, the health plan company must participate.

(b) If an enrollee, health care provider, or applicant for network provider status chooses to use a an alternative dispute resolution process after the filing of a lawsuit, the health plan company must participate in dispute resolution, including, but not limited to, alternative dispute resolution under rule 114 of the Minnesota general rules of practice.

(c) The commissioners of health and commerce shall inform and educate health plan companies' enrollees about alternative dispute resolution and its benefits, and shall establish appropriate cost-sharing requirements for parties taking part in alternative dispute resolution.

(d) A health plan company may encourage but not require an enrollee to submit a complaint to alternative dispute resolution.

Sec. 24. Minnesota Statutes 1994, section 62Q.19, is amended to read:

62Q.19 [ESSENTIAL COMMUNITY PROVIDERS.]

Subdivision 1. [DESIGNATION.] The commissioner shall designate essential community providers. The criteria for essential community provider designation shall be the following:

(1) a demonstrated ability to integrate applicable supportive and stabilizing services with medical care for uninsured persons and high-risk and special needs populations as defined in section 62Q.07, subdivision 2, paragraph (e), underserved, and other special needs populations; and

(2) a commitment to serve low-income and underserved populations by meeting the following requirements:

(i) has nonprofit status in accordance with chapter 317A;

(ii) has tax exempt status in accordance with the Internal Revenue Service Code, section 501(c)(3);

(iii) charges for services on a sliding fee schedule based on current poverty income guidelines; and

(iv) does not restrict access or services because of a client's financial limitation; or

(3) status as a local government unit as defined in section 62D.02, subdivision 11, or community health board as defined in chapter 145A.

Prior to designation, the commissioner shall publish the names of all applicants in the State Register. The public shall have 30 days from the date of publication to submit written comments to the commissioner on the application. No designation shall be made by the commissioner until the 30-day period has expired.

The commissioner may designate an eligible provider as an essential community provider for all the services offered by that provider or for specific services designated by the commissioner.

For the purpose of this subdivision, supportive and stabilizing services include at a minimum, transportation, child care, cultural, and linguistic services where appropriate.

Subd. 2. [APPLICATION.] (a) Any provider may apply to the commissioner for designation as an essential community provider by submitting an application form developed by the commissioner. Applications will be accepted within two years after the effective date of the rules adopted by the commissioner to implement this section.

(b) Each application submitted must be accompanied by an application fee in an amount determined by the commissioner but the fee shall be no more than what is needed to cover the administrative costs of processing the application.

(c) The name, address, contact person, and the date by which the agency's decision is expected to be made shall be classified as public data under section 13.41. All other information contained in the application form shall be classified as private data under section 13.41 until the application has been approved, approved as modified, or denied by the commissioner. Once the decision has been made, all information shall be classified as public data unless the applicant designates and the commissioner determines that the information contains trade secret information.

Subd 2a. [DEFINITION OF HEALTH PLAN COMPANY.] For purposes of this section, "health plan company" means a health plan company as defined in section 62Q.01 with more than 50,000 enrollees.

Subd. 3. [HEALTH PLAN COMPANY AFFILIATION.] A health plan company must offer a provider contract to any designated essential community provider located within the area served by the health plan company. A health plan company shall not restrict enrollee access to the essential community provider for the population that the essential community provider is certified to serve. A health plan company may also make other providers available to this same population for these services. A health plan company may require an essential community provider to meet all data requirements, utilization review, and quality assurance requirements on the same basis as other health plan providers.

Subd. 4. [ESSENTIAL COMMUNITY PROVIDER RESPONSIBILITIES.] Essential community providers must agree to serve enrollees of all health plan companies operating in the area that in which the essential community provider is certified to serve located.

Subd. 5. [CONTRACT PAYMENT RATES.] An essential community provider and a health plan company may negotiate the payment rate for covered services provided by the essential community provider. This rate must be competitive with rates paid to other health plan providers the same rate per unit of service as is paid to other health plan providers for the same or similar services.

Subd. 5a. [COOPERATION.] Each health plan company and essential community provider shall cooperate to facilitate the use of the essential community provider by the high risk and special needs populations. This includes cooperation on the submission and processing of claims, sharing of all pertinent records and data, including performance indicators and specific outcomes data, and the use of all dispute resolution methods as defined in section 62Q.11, subdivision 1.

Subd. 5b. [ENFORCEMENT.] For any violation of this section or any rule applicable to an essential community provider, the commissioner may suspend, modify, or revoke an essential community provider designation. The commissioner may also use the enforcement authority specified in section 62D.17.

Subd. 6. [TERMINATION.] The designation as an essential community provider is terminated terminates five years after it is granted, and. Once the designation terminates, the former essential community provider has no rights or privileges beyond those of any other health care provider. The commissioner shall make a recommendation to the legislature on whether an essential community provider designation should be longer than five years.

Subd. 7. [RECOMMENDATIONS AND RULEMAKING ON ESSENTIAL COMMUNITY PROVIDERS.] (a) As part of the implementation plan due January 1, 1995, the commissioner shall present proposed rules and any necessary recommendations for legislation for defining essential community providers, using the criteria established under subdivision 1, and defining the relationship between essential community providers and health plan companies.

(b) By January 1, 1996, the commissioner shall adopt rules for establishing essential community providers and for governing their relationship with health plan companies. The commissioner shall also identify and address any conflict of interest issues regarding essential community provider designation for local governments.

Sec. 25. [62Q.22] [STANDARD HEALTH COVERAGE.]

Subdivision 1. [APPLICATION.] Effective July 1, 1997, all health plan companies shall offer, sell, issue, or renew the standard health coverage and two or more of the five cost-sharing options established under this section, sections 62Q.23, 62Q.231, and 62Q.24. In addition to other products offered by health plan companies, supplemental coverage options may be offered under section 62Q.25.

Subd. 2. [GENERAL DESCRIPTION.] The standard health coverage must contain all appropriate and necessary health care services. For purposes of this section, "appropriate and necessary care" includes health care services, supplies, and equipment, which are required for prevention, diagnosis, or treatment of an illness, injury, or health condition. Appropriate and necessary care must:

(1) be appropriate in terms of type, level, setting, and duration to the enrollee's mental and physical condition;

(2) be cost effective in the context of either short-term or long-term health outcomes;

(3) be consistent with accepted principles of professional practice and practice parameters of the health care community in Minnesota;

(4) help assess, establish, improve, restore, maintain, or prevent deterioration of the enrollee's physical or mental condition; or

(5) prevent the reasonable likelihood of the onset of a health problem or detect an incipient problem.

Subd. 3. [COVERAGE.] The standard health coverage must include, at a minimum, all comprehensive health maintenance services provided by health maintenance organizations under section 62D.02, subdivision 7, and Minnesota Rules, part 4685.0100, subpart 5, and all services required to be provided by health maintenance organizations in chapters 62A and 62D. The standard health coverage must be further defined by the standard exclusions developed under section 62Q.231, subdivision 1, and the cost-sharing options provided in section 62Q.24.

Subd. 4. [DEFINING STANDARD COVERAGE.] The commissioners of health and commerce may further define the standard coverage required under this section. If the commissioners choose to further define this coverage, the commissioners shall publish the proposed definition of standard coverage in the State Register and allow a public comment period of at least 60 days prior to the publication of the final definition of standard coverage. The Minnesota health care commission shall provide comments to the commissioners of health and commerce on the proposed definition within 60 days of publication. Each regional coordinating board shall convene a public hearing and provide summary comments to the commissioners within 60 days of publication. The commissioners of health and commerce shall publish the final definition of standard coverage in the state register by January 31, 1996. The definition of standard coverage shall become effective July 1, 1997, and shall apply to all policies and contracts issued or renewed after that date unless the legislature affirmatively acts to prevent the definition of standard coverage from taking effect. Development of this definition of standard coverage is not subject to chapter 14 or to administrative appeal.

Subd. 5. [CHEMICAL DEPENDENCY.] All health plan companies shall use the assessment criteria in Minnesota Rules, parts 9530.6600 to 9530.6660, when assessing and placing enrollees for chemical dependency treatment.

Subd. 6. [COST-SHIFTING BETWEEN ACUTE AND LONG-TERM CARE.] The Minnesota health care commission shall examine the relationship between the acute and long-term care systems in order to address fragmentation and cost-shifting between these systems. The commission shall:

(1) analyze reductions in acute and primary care costs that can be achieved through coverage of services that traditionally have been covered only under the long-term care system, and collect data on the impact of these services in preventing complications that would otherwise result in greater use of traditional hospital or clinic services; and

(2) estimate cost savings that would result from the decreased use of state programs if persons with special health care needs had access to a seamless continuum of care, including but not limited to savings from: decreased dependency on medical assistance, food stamps, and subsidized housing; prevention of institutionalization; and reductions in physical or mental health problems that would otherwise lead to increased use of special education, social services, and the criminal justice system.

The commission shall present recommendations to the legislature by January 1, 1996.

Sec. 26. [62Q.231] [STANDARD EXCLUSIONS.]

Subdivision 1. [DEVELOPMENT.] The commissioners of health, human services, commerce, and employee relations shall jointly develop the standard exclusions to be used by all health plan companies. The commissioners may convene technical experts to advise them in developing the standard exclusions.

Subd. 2. [PUBLICATION.] The commissioner of health shall publish the proposed standard exclusions in the State Register and allow a public comment period of at least 60 days prior to publication of the final standard exclusions. The Minnesota health care commission shall provide comments to the commissioners of health, human services, commerce, and employee relations on the proposed standard exclusions within 60 days of publication. Each regional coordinating board shall convene a public hearing and provide summary comments to the commissioners of health, human services, commerce, and employee relations on the proposed standard exclusions within 60 days of publication. The commissioners of health, human services, commerce, and employee relations shall review all comments received. The commissioner of health shall publish the final standard exclusions in the State Register by January 31, 1996. The standard exclusions shall become effective on July 1, 1997, and shall apply to all policies and contracts issued or renewed on or after that date unless the legislature affirmatively acts to prevent the standard exclusions from taking effect.

Subd. 3. [EXEMPTION.] Development of the standard exclusions is not subject to chapter 14 or to administrative appeal.

Sec. 27. [62Q.24] [COST-SHARING OPTIONS.]

Subdivision 1. [GENERAL.] (a) Health plan companies shall offer the standard health coverage under two or more of the five cost-sharing options allowed by this section.

(b) All out-of-area emergency and urgent care services are subject to the same cost-sharing options as in-network emergency and urgent care services. Urgent care cost-sharing must apply to out-of-network emergency room services that could have been delivered at an urgent care facility had one been available through the health plan company. Cost-sharing for emergency room services must not apply when those services result in a hospital admission.

(c) No coverage for organ transplants shall be provided if received out-of-network, and the amounts paid do not count toward the deductible and out-of-pocket limits.

(d) No cost-sharing shall be applied to child health supervision services, child primary care services delivered in outpatient settings, and prenatal care services. For purposes of this section, "child health supervision services" means pediatric preventive services, appropriate immunizations, developmental assessments, and laboratory services appropriate to the age of the child from birth to age 18 as defined by the standards of child health care issued by the American Academy of Pediatrics. "Prenatal care services" means the comprehensive package of medical and psychological support provided throughout the pregnancy, including risk assessment, serial surveillance, prenatal education, and use of specialized skills and technology, when needed, as defined by Standards for Obstetric-Gynecologic Services issued by the American College of Obstetricians and Gynecologists.

(e) Notwithstanding any other law to the contrary, cost-sharing requirements and benefit or service limitations for outpatient mental health and outpatient chemical dependency services, except for persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to 9530.6660, must not place a greater financial burden on the insured or enrollee, or be more restrictive than those requirements and limitations for outpatient medical services.

(f) Notwithstanding any other law to the contrary, cost-sharing requirements and benefit or service limitations for inpatient hospital mental health and inpatient hospital and residential chemical dependency services, except for persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to 9530.6660, must not place a greater financial burden on the insured or enrollee, or be more restrictive than those requirements and limitations for inpatient hospital medical services.

Subd. 2. [COINSURANCE COST-SHARING; OPTION ONE.] Cost-sharing option one limits the calendar year deductible amount per person to $2,000, including both in- and out-of-network services, except as otherwise provided in subdivision 1, with the health plan company paying 80 percent and the enrollee paying 20 percent coinsurance, unless otherwise provided in this subdivision. The out-of-pocket limit is $5,000 per person per calendar year not to exceed a total of $10,000 per family per calendar year, including both in- and out-of-network services, except as otherwise provided in subdivision 1. Services are subject to the following copayment and coinsurance requirements:

(1) there is a $10 copayment for:

(i) age and risk appropriate routine examinations over age 18;

(ii) health education and counseling;

(iii) vision and hearing exams; and

(iv) mental health and chemical dependency assessment or diagnosis; and

(2) out-of-network services are subject to 40 percent coinsurance or twice the applicable in-network copayment, whichever is greater.

Subd. 3. [COINSURANCE COST-SHARING; OPTION TWO.] Cost-sharing option two is the same as coinsurance cost-sharing option one, except that there is no cost sharing for age and risk appropriate routine examinations over the age 18, adult screening, and postnatal care.

Subd. 4. [COINSURANCE COST-SHARING; OPTION THREE.] Coinsurance cost-sharing option three limits the calendar year deductible amount per person to $1,000, including both in- and out-of-network services, with health

plan companies paying 80 percent and the enrollee paying 20 percent coinsurance, unless otherwise provided in this subdivision. The out-of-pocket limit is $3,000 per person per calendar year, not to exceed a total of $5,000 per family per calendar year, including both in- and out-of-network services. Services are subject to the following coinsurance requirements:

(1) no cost sharing for the services listed in subdivision 3; and

(2) out-of-nework services are subject to 40 percent coinsurance or twice the applicable in-network copayment, whichever is greater.

Subd. 5. [COPAYMENT COST-SHARING; OPTION FOUR.] Cost-sharing option four limits the calendar year deductible amount per person to $500 for out-of-network services only, and otherwise provides 100 percent coverage, unless otherwise provided in this subdivision. The out-of-pocket limit is $750 per person per calendar year, not to exceed a total of $2,250 per family per calendar year, including both in- and out-of-network services. Services are subject to the following copayment and coinsurance requirements:

(1) a $5 per day copayment for day treatment and partial hospitalization for chemical dependency and mental health services;

(2) a $10 copayment for health professional office visits and physician's office surgery;

(3) a $12 copayment for pharmaceuticals and disposable medical supplies. Health plan companies may lower the copayment for generic brand pharmaceuticals;

(4) a $20 copayment for urgent care visits;

(5) a $30 per week copayment for nutritional products for metabolic disorders or for nutritional supplementation because solid food or nutrients thereof cannot be properly absorbed by the body;

(6) a $75 copayment for emergency room care where there is no hospital admission;

(7) a $100 copayment per admission for medical services, inpatient hospital services, inpatient chemical dependency care (hospital and residential), and inpatient mental health care (hospital and residential);

(8) out-of-network services are subject to 20 percent coinsurance or twice the applicable in-network copayment, whichever is greater; and

(9) no cost sharing for services listed in subdivision 3.

Subd. 6. [COPAYMENT COST-SHARING; OPTION FIVE.] Cost-sharing option five shall limit the calendar year deductible amount to $300 per person for out-of-network services only, and otherwise provide 100 percent coverage, unless otherwise provided in this subdivision. The out-of-pocket limit is $500 per person per calendar year, not to exceed a total of $1,500 per family per calendar year, including both in-network and out-of-network services. Services are subject to the following copayment and coinsurance requirements:

(1) an $8 copayment for pharmaceuticals and disposable medical supplies. Health plan companies may reduce the copayment for generic brand pharmaceuticals;

(2) a $15 copayment for urgent care visits;

(3) a $30 per week copayment for nutritional products for metabolic disorders or for nutritional supplementation because solid food or nutrients thereof cannot be properly absorbed by the body;

(4) a $35 copayment for emergency room care where there is no hospital admission;

(5) out-of-network services are subject to 20 percent coinsurance or twice the applicable in-network copayment, whichever is greater; and

(6) no cost sharing for services listed in subdivision 3.

Subd. 7. [LIMITATION ON COPAYMENTS.] Where a copayment is assessed for an office visit in cost-sharing options four and five, any additional services pertaining to and provided at the same office visit are not subject to additional copayments.

Sec. 28. Minnesota Statutes 1994, section 62Q.25, is amended to read:

62Q.25 [SUPPLEMENTAL COVERAGE.]

Health plan companies may choose to offer separate supplemental coverage for services not covered under the universal benefits set standard health coverage, including separate coverage for dental services. Health plan companies may offer any Medicare supplement, Medicare select, or other Medicare-related product otherwise permitted for any type of health plan company in this state. Each Medicare-related product may be offered only in full compliance with the requirements in chapters 62A, 62D, and 62E that apply to that category of product. Health plan companies offering supplemental coverage shall distinguish the cost of the standard health coverage from the cost of each supplemental coverage policy offered when either soliciting enrollment of or seeking payment from enrollees.

Sec. 29. [62Q.26] [POINT-OF-SERVICE OPTION.]

Subdivision 1. [RATE APPROVAL.] The premium rates for each point-of-service product must be submitted for approval to the commissioner of health or the commissioner of commerce, as applicable. The applicable commissioner shall approve premium rates that are actuarially justified. Cost sharing requirements must meet the out-of-network service requirements that are required under the applicable cost sharing option.

Subd. 2. [POINT-OF-SERVICE OPTION FOR DENTAL PLANS.] (a) This subdivision applies to health plan companies, as defined in section 62Q.01, offering separate coverage for dental benefits that requires enrollees to receive their dental care services from a provider in a particular network, as part of a health plan as defined in section 62A.011 or as part of health coverage described in section 62A.011, subdivision 3, clause 6.

(b) Each health plan company described in paragraph (a) shall offer enrollees a point-of-service option for dental coverage. The point-of-service option must allow enrollees to receive dental care treatment from providers outside of the plan's network. A health plan company offering dental benefits may charge an additional premium or apply different cost-sharing requirements to enrollees who choose the point-of-service option. Cost-sharing requirements cannot exceed the cost-sharing requirements of enrollees who receive their dental care from within the plan's network by more than ten percent. Premium rates and cost-sharing requirements for point-of-service options for dental care must be submitted for approval to the commissioner of health or the commissioner of commerce, as applicable.

Subd. 3. [EXEMPTION.] This section applies only to health plan companies with more than 50,000 enrollees.

Sec. 30. [SINGLE ENTRY POINT FOR COMPLAINTS.]

The commissioner of health shall study the feasibility of establishing a single entry point within the health department for consumer complaints about the quality and cost of health care services, whether these services are delivered by individual providers, health care facilities, or health plan companies. The commissioner shall present recommendations to the legislature by February 1, 1996.

Sec. 31. [CHEMICAL DEPENDENCY STANDARDS AND INCENTIVES.]

Subdivision 1. [STANDARDS.] As part of the department of human service's household survey of chemical dependency needs in Minnesota, the commissioner of human services shall develop utilization standards pertaining to the number of chemical dependency treatment inpatient and outpatient referrals per 1,000 enrollees and lengths of stay that are needed for the state to address chemical dependency treatment needs.

Subd. 2. [INCENTIVES SYSTEM.] The commissioners of human services and health shall develop recommendations for a financial or other incentive system to provide an incentive for health plan companies to meet the standards developed in subdivision 1. The commissioners shall recommend the standards and incentives system to the legislature by January 15, 1997.

Sec. 32. [REPEALER; HMO ARBITRATION RULES.]

Minnesota Rules, part 4685.1700, subpart 1, item D, is repealed.

Sec. 33. [REPEALER.]

Minnesota Statutes 1994, sections 62Q.03, subdivisions 2, 3, 4, 5, and 11; 62Q.21; and 62Q.27, are repealed.

Sec. 34. [EFFECTIVE DATE.]

Sections 1 and 30 are effective January 1, 1996.

Section 1. Minnesota Statutes 1994, section 62J.017, is amended to read:

62J.017 [IMPLEMENTATION TIMETABLE.]

The state seeks to complete the restructuring of the health care delivery and financing system by July 1, 1997. The restructured system will have two options: (1) integrated service networks, which will be accountable for meeting state cost containment, quality, and access standards; or (2) a uniform set of price and utilization controls for all health care services for Minnesota residents not provided through an integrated service network. Both systems will operate under the state's growth limits and will be structured to promote competition in the health care marketplace. Beginning July 1, 1994, measures will be taken to increase the public accountability of existing health plan companies, to promote the development of small, community-based integrated service networks, and to reduce administrative costs by standardizing third-party billing forms and procedures and utilization review requirements. Voluntary formation of other integrated service networks will begin after rules have been adopted, but not before July 1, 1996. Statutes and rules for the entire restructured health care financing and delivery system must be enacted or adopted by January 1, 1996, and a phase-in of the all-payer reimbursement system must begin on that date. By July 1, 1997, all health coverage must be regulated under integrated service network or community integrated service network law pursuant to chapter 62N or all-payer law pursuant to chapter 62P.

Sec. 2. Minnesota Statutes 1994, section 62J.04, subdivision 1a, is amended to read:

Subd. 1a. [ADJUSTED GROWTH LIMITS AND ENFORCEMENT.] (a) The commissioner shall publish the final adjusted growth limit in the State Register by January 31 of the year that the expenditure limit is to be in effect. The adjusted limit must reflect the actual regional consumer price index for urban consumers for the previous calendar year, and may deviate from the previously published projected growth limits to reflect differences between the actual regional consumer price index for urban consumers and the projected Consumer Price Index for urban consumers. The commissioner shall report to the legislature by February 15 of each year on the implementation of growth limits. This annual report shall describe the differences between the projected increase in health care expenditures, the actual expenditures based on data collected, and the impact and validity of growth limits within the overall health care reform strategy.

(b) The commissioner shall enforce limits on growth in spending and revenues for integrated service networks and for the regulated all-payer option health plan companies and revenues for providers. If the commissioner determines that artificial inflation or padding of costs or prices has occurred in anticipation of the implementation of growth limits, the commissioner may adjust the base year spending totals or growth limits or take other action to reverse the effect of the artificial inflation or padding.

(c) The commissioner shall impose and enforce overall limits on growth in revenues and spending for integrated service networks health plan companies, with adjustments for changes in enrollment, benefits, severity, and risks. If an integrated service network a health plan company exceeds the growth limits, the commissioner may reduce future limits on growth in aggregate premium revenues for that integrated service network by up to the amount overspent. If the integrated service network system exceeds a systemwide spending limit, the commissioner may reduce future limits on growth in premium revenues for the integrated service network system by up to the amount overspent impose financial penalties up to the amount exceeding the applicable growth limit.

(d) The commissioner shall set prices, utilization controls, and other requirements for the regulated all-payer option to ensure that the overall costs of this system, after adjusting for changes in population, severity, and risk, do not exceed the growth limits. If growth limits for a calendar year are exceeded, the commissioner may reduce reimbursement rates or otherwise recoup amounts exceeding the limit for all or part of the next calendar year. To the extent possible, the commissioner may reduce reimbursement rates or otherwise recoup amounts over the limit from individual providers who exceed the growth limits.

(e) The commissioner, in consultation with the Minnesota health care commission, shall research and make recommendations to the legislature regarding the implementation of growth limits for integrated service networks and the regulated all-payer option. The commissioner must consider both spending and revenue approaches and will report on the implementation of the interim limits as defined in sections 62P.04 and 62P.05. The commissioner must examine and make recommendations on the use of annual update factors based on volume performance standards

as a mechanism for achieving controls on spending in the all-payer option. The commissioner must make recommendations regarding the enforcement mechanism and must consider mechanisms to adjust future growth limits as well as mechanisms to establish financial penalties for noncompliance. The commissioner must also address the feasibility of systemwide limits imposed on all integrated service networks.

(f) The commissioner shall report to the legislative commission on health care access by December 1, 1994, on trends in aggregate spending and premium revenue for health plan companies. The commissioner shall use data submitted under section 62P.04 and other available data to complete this report.

Sec. 3. Minnesota Statutes 1994, section 62J.09, subdivision 1a, is amended to read:

Subd. 1a. [DUTIES RELATED TO COST CONTAINMENT.] (a) [ ALLOCATION OF REGIONAL SPENDING LIMITS.] Regional coordinating boards may advise the commissioner regarding allocation of annual regional limits on the rate of growth for providers in the regulated all-payer option in order to:

(1) achieve communitywide and regional public health goals consistent with those established by the commissioner; and

(2) promote access to and equitable reimbursement of preventive and primary care providers.

(b) [TECHNICAL ASSISTANCE.] Regional coordinating boards, in cooperation with the commissioner, shall provide technical assistance to parties interested in establishing or operating a community integrated service network or integrated service network within the region. This assistance must complement assistance provided by the commissioner under section 62N.23.

Sec. 4. Minnesota Statutes 1994, section 62J.152, subdivision 5, is amended to read:

Subd. 5. [USE OF TECHNOLOGY EVALUATION.] (a) The final report on the technology evaluation and the commission's comments and recommendations may be used:

(1) by the commissioner in retrospective and prospective review of major expenditures;

(2) by integrated service networks and other group purchasers and by employers, in making coverage, contracting, purchasing, and reimbursement decisions;

(3) by government programs and regulators of the regulated all-payer option, in making coverage, contracting, purchasing, and reimbursement decisions;

(4) by the commissioner and other organizations in the development of practice parameters;

(5) (4) by health care providers in making decisions about adding or replacing technology and the appropriate use of technology;

(6) (5) by consumers in making decisions about treatment;

(7) (6) by medical device manufacturers in developing and marketing new technologies; and

(8) (7) as otherwise needed by health care providers, health care plans, consumers, and purchasers.

(b) At the request of the commissioner, the health care commission, in consultation with the health technology advisory committee, shall submit specific recommendations relating to technologies that have been evaluated under this section for purposes of retrospective and prospective review of major expenditures and coverage, contracting, purchasing, and reimbursement decisions affecting state programs and the all-payer option.

Sec. 5. Minnesota Statutes 1994, section 62Q.01, subdivision 3, is amended to read:

Subd. 3. [HEALTH PLAN.] "Health plan" means a health plan as defined in section 62A.011 or a policy, contract, or certificate issued by a community integrated service network; an integrated service network; or an all-payer insurer as defined in section 62P.02 a health carrier as defined under section 62A.011, subdivision 2.

Sec. 6. Minnesota Statutes 1994, section 62Q.01, subdivision 4, is amended to read:

Subd. 4. [HEALTH PLAN COMPANY.] "Health plan company" means:

(1) a health carrier as defined under section 62A.011, subdivision 2;

(2) an integrated service network as defined under section 62N.02, subdivision 8; or

(3) an all-payer insurer as defined under section 62P.02; or

(4) a community integrated service network as defined under section 62N.02, subdivision 4a.

Sec. 7. Minnesota Statutes 1994, section 62Q.30, is amended to read:

62Q.30 [EXPEDITED FACT FINDING AND DISPUTE RESOLUTION PROCESS.]

The commissioner shall establish an expedited fact finding and dispute resolution process to assist enrollees of integrated service networks and all-payer insurers health plan companies with contested treatment, coverage, and service issues to be in effect July 1, 1997. The commissioner may order an integrated service network or an all-payer insurer a health plan company to provide or pay for a service that is within the universal standard benefits set health coverage. If the disputed issue relates to whether a service is appropriate and necessary, the commissioner shall issue an order only after consulting with appropriate experts knowledgeable, trained, and practicing in the area in dispute, reviewing pertinent literature, and considering the availability of satisfactory alternatives. The commissioner shall take steps including but not limited to fining, suspending, or revoking the license of an integrated service network or an all-payer insurer a health plan company that is the subject of repeated orders by the commissioner that suggests a pattern of inappropriate underutilization.

Sec. 8. Minnesota Statutes 1994, section 62Q.41, is amended to read:

62Q.41 [ANNUAL IMPLEMENTATION REPORT.]

(a) The commissioner of health, in consultation with the Minnesota health care commission, shall develop an annual implementation report to be submitted to the legislature each year beginning January 1, 1995, describing the progress and status of rule development and implementation of the integrated service network system and the regulated all-payer option, and providing recommendations for legislative changes that the commissioner determines may be needed.

(b) As part of the report required in paragraph (a) due for 1996, the commissioner, in consultation with the health care commission, shall make recommendations on the design and development of an appropriate framework to apply regulations uniformly among all health plan companies and to ensure adequate oversight and consumer protection in the absence of a regulated all-payer system.

Sec. 9. Laws 1994, chapter 625, article 5, section 5, subdivision 1, is amended to read:

Sec. 5. [RECODIFICATION AND HEALTH PLAN COMPANY REGULATORY REFORM.]

Subdivision 1. [PROPOSED LEGISLATION.] The commissioners of health and commerce, in consultation with the Minnesota health care commission and the legislative commission on health care access, shall draft proposed legislation to recodify, simplify, and standardize all statutes, rules, regulatory requirements, and procedures relating to health plan companies. The recodification and regulatory reform must become effective simultaneously with the full implementation of the integrated service network system and the regulated all-payer option on July 1, 1997. The commissioners of health and commerce shall submit to the legislature by January 1, 1996, a report on the recodification and regulatory reform with proposed legislation.

Sec. 10. [INSTRUCTION TO REVISOR; RECODIFICATION OF INTERIM LIMITS.]

The revisor of statutes shall recode Minnesota Statutes, section 62P.04, as amended, as section 62J.041, and shall recode section 62P.05, as amended, as section 62J.042.

Sec. 11. [REPEALER.]

Minnesota Statutes 1994, sections 62J.152, subdivision 6; 62P.01; 62P.02; 62P.03; 62P.07; 62P.09; 62P.11; 62P.13; 62P.15; 62P.17; 62P.19; 62P.21; 62P.23; 62P.25; 62P.27; 62P.29; 62P.31; and 62P.33, are repealed.

Section 1. Minnesota Statutes 1994, section 62Q.165, is amended to read:

62Q.165 [UNIVERSAL COVERAGE.]

Subdivision 1. [COMMITMENT TO UNIVERSAL COVERAGE.] It is the commitment of the state to achieve universal health coverage for all Minnesotans by July 1, 1997. In order to achieve this commitment, the following goals must be met:

(1) every Minnesotan shall have health coverage and shall contribute to the costs of coverage based on ability to pay;

(2) no Minnesotan shall be denied coverage or forced to pay more because of health status;

(3) quality health care services must be accessible to all Minnesotans;

(4) all health care purchasers must be placed on an equal footing in the health care marketplace; and

(5) a comprehensive and affordable health plan must be available to all Minnesotans.

Universal coverage is achieved when every Minnesotan has access to the full range of health care services, including preventive and primary care, and pays into the system according to that person's ability. For purposes of proceeding with further insurance reforms under section 62Q.18, universal coverage is achieved when fewer than four percent of the state's population does not have health coverage.

Subd. 2. [REPORT ON HEALTH CARE ACCESS.] (a) The health care commission shall annually report to the legislature regarding the extent to which the state is making progress toward the goal of universal coverage described in this section. As part of this report, the commission shall monitor the number of uninsured in the state. The annual report must be submitted no later than January 15 of each year in compliance with section 3.195.

(b) The annual report required under paragraph (a), due January 15, 1996, shall advise the legislature regarding possible additional steps in insurance reform that would be helpful in progressing toward universal coverage. The commission shall consider further initiatives involving group purchasing pools, narrowing premium variations, guaranteed issue and portability requirements, preexisting condition limitations, and other provisions that provide greater opportunities to obtain affordable health coverage. The commission shall consider the small employer reforms contained in the model laws recommended by the National Association of Insurance Commissioners and shall recommend whether these reforms should be adopted.

(c) The annual report due required under paragraph (a), required on January 15, 1996, shall advise the legislature regarding possible changes in the individual insurance market. The report shall consider initiatives regarding purchasing pools, including specific design details of a state-run or state-initiated purchasing pool for individuals, specific legislative reforms needed to encourage the formation of purchasing pools, and point-by-point consideration of the obstacles to enactment of these purchasing pools, including adverse selection. The report shall consider the creation of a standard and objective definition of eligibility for the comprehensive health association, and whether the enactment of such a definition could be coupled with guaranteed issuance for the remainder of the individual market. The report should include all other considerations of the commission as to the optimal reforms of the individual market.

(d) The annual report required under paragraph (a), due January 15, 1998, must include an evaluation of the reduction and elimination of the standard deduction required under section 62Q.166 and an assessment of any additional steps that may be necessary to achieve universal coverage as defined in this section.

(e) The health care commission shall also monitor federal efforts to remove barriers to expanding access at the state level, and shall recommend to the legislature and the governor, as part of the annual report required under paragraph (a), any steps toward achieving universal coverage that become feasible with the removal of these barriers.

(f) To the extent possible, the health care commission shall utilize existing information, including information collected by other state or federal agencies and organizations, to complete the studies and reports in this subdivision. State agencies and organizations shall provide information, technical and analytic support, and other assistance to the commission as possible, to ensure the timely and efficient completion of the studies and reports in this subdivision. Staff from the appropriate state agencies shall participate with the commission executive director no later than June 15 each year in initial planning and coordination for the annual reports and studies of this subdivision. Following this initial planning, the executive director shall report to the legislative oversight commission on health care access by July 1 each year on the initial study plan, and on any commission tasks or studies which may not be completed as scheduled due to such constraints as lack of sufficient available information or resources.

(g) The health care commission shall also monitor federal efforts to remove barriers to expanding access at the state level, and shall recommend to the legislature and the governor, as part of the annual report required under paragraph (a), any steps toward achieving universal coverage that become feasible with the removal of these barriers.

Sec. 2. [62Q.166] [PENALTY FOR CERTAIN UNINSURED PERSONS.]

Subdivision 1. [DEFINITIONS.] (a) For the purposes of this section, the following terms have the meanings given.

(b) "Commissioner" means the commissioner of revenue.

(c) "Gross annual income" has the meaning given in subtitle A, subchapter B, of the Internal Revenue Code of 1986, as amended through December 31, 1994.

(d) "Uninsured" means the failure to have in effect for a minimum of one day in any month qualifying coverage as defined in section 62L.02, subdivision 24. Coverage through a health plan company must be at least a qualified plan as defined in section 62E.02, subdivision 4.

(e) "Household unit" means a Minnesota resident subject to taxation under chapter 290 and all dependents claimed on the resident's federal income tax return for the reporting year. For purposes of this paragraph, married spouses and any dependents they claim are a household unit if they file a joint federal tax return or file separate returns but reside together.

(f) "Reporting year" means the 12-month period for which income is reported for purposes of chapter 290.

(g) "Filing year" means the 12-month period following the reporting year.

Subd. 2. [ESTABLISHMENT OF PENALTY.] (a) Effective for reporting years beginning after December 31, 1996, a penalty shall be imposed on all household units with gross annual income for the reporting year greater than 400 percent of the federal poverty guideline for a family of that size, for each month in which one or more members of the household unit are uninsured while residing in Minnesota. The penalty is the loss of all or part of a household unit's standard or itemized deductions under sections 63(c) and 63(d) of the Internal Revenue Code allowed in calculating state personal income tax liability under chapter 290. The maximum penalty under this section is $2,000 for a household unit comprised of one individual and $5,000 for all other household units.

(b) The penalty for each month in which any member of the household unit is uninsured shall be equal to the household unit's total standard or itemized deductions allowed under sections 63(c) and 63(d) of the Internal Revenue Code divided by the product of 12 times the number of persons in the household unit. The total penalty shall be equal to the monthly penalty multiplied by the total number of months each member of the household unit is uninsured.

(c) The federal poverty guideline used to establish gross annual income under paragraph (a) shall be the guideline applicable to a family of the household's size in effect on January 1 of the reporting year.

(d) Proof of health insurance coverage shall occur upon filing of the Minnesota income tax return. The commissioner shall incorporate a section into the tax form that asks for the name of each household unit member, health plan company or other source of coverage, enrollee identification number, and number of months each member of the household unit was uninsured while residing in Minnesota.

Subd. 3. [HOUSEHOLD UNIT DUTIES.] (a) Each household unit shall report to the commissioner no later than April 15 of the filing year the information required in subdivision 2, paragraph (d), as part of filing the Minnesota income tax return.

(b) If the number of total months in which household unit members were uninsured is greater than zero, the household unit shall also:

(1) report gross household unit income for the reporting year;

(2) calculate the amount of the monthly penalty;

(3) multiply the total number of months each household unit member was uninsured during the reporting year while residing in Minnesota by the amount of the monthly penalty to determine the annual household unit penalty; and

(4) add the amount of the total penalty for the household unit to federal taxable income for purposes of calculating state personal income tax liability under chapter 290.

Subd. 4. [ENFORCEMENT; PENALTIES.] For the purpose of enforcing this section, the commissioner has all powers granted under chapter 289A for administration and collection of income taxes. The penalties for failure to pay income taxes under chapter 289A shall apply to failure to pay a penalty payment under this section.

Subd. 5. [USE OF INCREASED TAX REVENUE.] State revenue attributable to the penalties assessed under this section shall be deposited in the health care access fund. Up to five percent of the revenue attributable to the penalty may be used by the commissioner of revenue to administer this section.

Sec. 3. Minnesota Statutes 1994, section 62Q.18, is amended to read:

62Q.18 [UNIVERSAL PORTABILITY OF COVERAGE; INSURANCE REFORMS.]

Subdivision 1. [DEFINITION DEFINITIONS.] For purposes of this section,

(1) "continuous coverage" has the meaning given in section 62L.02;

(2) "guaranteed issue" means:

(i) for individual health plans, that a health plan company shall not decline an application by an individual for any individual health plan offered by that health plan company, including coverage for a dependent of the individual to whom the health plan has been or would be issued; and

(ii) for group health plans, that a health plan company shall not decline an application by a group for any group health plan offered by that health plan company and shall not decline to cover under the group health plan any person eligible for coverage under the group's eligibility requirements, including persons who become eligible after initial issuance of the group health plan; and

(3) "qualifying coverage" has the meaning given in section 62L.02; and

(4) "underwriting restrictions" has the meaning given in section 62L.03, subdivision 4.

Subd. 2. [INDIVIDUAL MANDATE.] Effective July 1, 1997, each Minnesota resident shall obtain and maintain qualifying coverage.

Subd. 3. [GUARANTEED ISSUE.] (a) Effective July 1, 1997, each health plan company shall offer, sell, issue, or renew each of its individual health plan forms on a guaranteed issue basis to any Minnesota resident.

(b) Effective July 1, 1997, each health plan company shall offer, sell, issue, or renew each of its group health plan forms to any employer that has its principal place of business in this state on a guaranteed issue basis, provided that the guaranteed issue requirement does not apply to employees, dependents, or other persons to be covered, who are not residents of this state.

Subd. 4. [UNDERWRITING RESTRICTIONS LIMITED.] Effective July 1, 1997, no health plan company shall offer, sell, issue, or renew a health plan that has underwriting restrictions that apply to a Minnesota resident, except as expressly permitted under this section.

Subd. 5. [PREEXISTING CONDITION LIMITATIONS.] Effective July 1, 1997, no health plan company shall offer, sell, issue, or renew a health plan that contains a preexisting condition limitation or exclusion or exclusionary rider that applies to a Minnesota resident, except a limitation which is no longer than 12 months and applies only to a person who has not maintained continuous coverage. An unexpired preexisting condition limitation from previous qualifying coverage may be carried over to new coverage under a health plan, if the unexpired condition is one permitted under this section. A Minnesota resident who has not maintained continuous coverage may be subjected to a new 12-month preexisting condition limitation after each break in continuous coverage.

Subd. 6. [LIMITS ON PREMIUM RATE VARIATIONS.] (a) Effective July 1, 1995, the premium rate variations permitted under sections 62A.65 and 62L.08 become:

(1) for factors other than age and geography, 12.5 percent of the index rate; and

(2) for age, 25 percent of the index rate.

(b) Effective July 1, 1996, the premium variations permitted under sections 62A.65 and 62L.08 become:

(1) for factors other than age and geography, 7.5 percent of the index rate; and

(2) for age, 15 percent of the index rate.

(c) Effective July 1, 1997, no health plan company shall offer, sell, issue, or renew a health plan, that is subject to section 62A.65 or 62L.08, for which the premium rate varies between covered persons on the basis of any factor other than:

(1) for individual health plans, differences in benefits or benefit design, and for group health plans, actuarially valid differences in benefits or benefit design;

(2) the number of persons to be covered by the health plan;

(3) actuarially valid differences in expected costs between adults and children;

(4) healthy lifestyle discounts authorized by statute; and

(5) for individual health plans, geographic variations permitted under section 62A.65, and for group health plans, geographic variations permitted under section 62L.08.

(d) All premium rate variations permitted under paragraph (c) are subject to the approval of the commissioner .

(e) Notwithstanding paragraphs (a), (b), and (c), no health plan company shall renew any individual or group health plan, except in compliance with this paragraph. No premium rate for any policy holder or contract holder shall increase or decrease upon renewal, as a result of this subdivision, by more than 15 percent per year. The increase or decrease described in this paragraph is in addition to any premium increase or decrease caused by legally permissible factors other than this subdivision. If a premium increase or decrease is constrained by this paragraph, the health plan company may implement the remaining portion of the increase or decrease at the time of subsequent annual renewals, but never to exceed 15 percent per year for paragraphs (a), (b), and (c) combined.

Subd. 7. [PORTABILITY OF COVERAGE REQUIREMENT.] (a) Effective July 1, 1997, no health plan company shall offer, sell, issue, or renew any group or individual health plan that does not provide for guaranteed issue, with full credit for previous qualifying coverage against any preexisting condition limitation that would otherwise apply under subdivision 5. No health plan shall be subject to any other type of underwriting restriction.

(b) Effective July 1, 1995, no health plan company shall offer, sell, issue, or renew any group or individual health plan that does not, with respect to individuals who maintain continuous coverage and whose immediately preceding qualifying coverage is a health plan issued by medical assistance under chapter 256B, general assistance medical care under chapter 256D, or the MinnesotaCare program established under section 256.9352,

(1) make coverage available on a guaranteed issue basis; and

(2) give full credit for previous continuous coverage against any applicable preexisting condition limitation or exclusion.

(c) Paragraph (b) applies to individuals whose immediately preceding qualifying coverage is medical assistance under chapter 256B, general assistance medical care under chapter 256D, or the MinnesotaCare program established under section 256.9352, only if the individual has disenrolled from the public program or will disenroll upon issuance of the new coverage. Paragraph (b) does not apply if the public program uses or will use public funds to pay the premiums for an individual who remains or will remain enrolled in the public program. No public funds may be used to purchase private coverage available under this paragraph. This paragraph does not prohibit public payment of premiums to continue private sector coverage originally obtained prior to enrollment in the public program, where otherwise permitted by state or federal law. Portability coverage under this paragraph is subject to the provisions of section 62A.65, subdivision 5, clause (b).

(d) Effective July 1, 1994, no health plan company shall offer, sell, issue, or renew any group health plan that does not, with respect to individuals who maintain continuous coverage and who qualify under the group's eligibility requirements:

(1) make coverage available on a guaranteed issue basis; and

(2) give full credit for previous continuous coverage against any applicable preexisting condition limitation or preexisting condition exclusion.

To the extent that this paragraph subdivision conflicts with chapter 62L, with respect to small employers as defined in section 62L.02, chapter 62L governs, regardless of whether the group sponsor is a small employer as defined in section 62L.02, except that for group health plans issued to groups that are not small employers, this subdivision's requirement that the individual have maintained continuous coverage applies. An individual who has maintained continuous coverage, but would be considered a late entrant under chapter 62L, may be treated as a late entrant in the same manner under this subdivision as permitted under chapter 62L.

Subd. 8. [COMPREHENSIVE HEALTH ASSOCIATION.] Effective July 1, 1997, the comprehensive health association created in section 62E.10 shall not accept new applicants for enrollment, except for Medicare-related coverage described in section 62E.12 and for coverage described in section 62E.18.

Subd. 9. [CONTINGENCY; FUTURE LEGISLATION.] This section, except for subdivision 7, paragraphs (b), (c), and (d), is not intended to be implemented prior to legislation enacted to achieve the objectives of section 62Q.165 and Laws 1994, chapter 625, article 6, sections 5, 6, and 7. Subdivision 6 is not effective until an effective date is specified in 1995 legislation.

Sec. 4. Minnesota Statutes 1994, section 290.01, subdivision 19a, is amended to read:

Subd. 19a. [ADDITIONS TO FEDERAL TAXABLE INCOME.] For individuals, estates, and trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political or governmental subdivision, municipality, or governmental agency or instrumentality of any state other than Minnesota exempt from federal income taxes under the Internal Revenue Code or any other federal statute, and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code, except the portion of the exempt-interest dividends derived from interest income on obligations of the state of Minnesota or its political or governmental subdivisions, municipalities, governmental agencies or instrumentalities, but only if the portion of the exempt-interest dividends from such Minnesota sources paid to all shareholders represents 95 percent or more of the exempt-interest dividends that are paid by the regulated investment company as defined in section 851(a) of the Internal Revenue Code, or the fund of the regulated investment company as defined in section 851(h) of the Internal Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal government described in section 7871(c) of the Internal Revenue Code shall be treated as interest income on obligations of the state in which the tribe is located;

(2) the amount of income taxes paid or accrued within the taxable year under this chapter and income taxes paid to any other state or to any province or territory of Canada, to the extent allowed as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not be more than the amount by which the itemized deductions as allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the disallowance of itemized deductions under section 68 of the Internal Revenue Code of 1986, income tax is the last itemized deduction disallowed;

(3) the capital gain amount of a lump sum distribution to which the special tax under section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law Number 99-514, applies; and

(4) the amount of income taxes paid or accrued within the taxable year under this chapter and income taxes paid to any other state or any province or territory of Canada, to the extent allowed as a deduction in determining federal adjusted gross income. For the purpose of this paragraph, income taxes do not include the taxes imposed by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; and

(5) the amount of any penalty assessed under section 62Q.166.

Sec. 5. [REPEALER; ADDITIONAL LIMITS ON PREMIUM RATE VARIATIONS.]

Minnesota Statutes 1994, section 62Q.18, subdivision 6, is repealed.

Section 1. Minnesota Statutes 1994, section 256.9353, subdivision 1, is amended to read:

Subdivision 1. [COVERED HEALTH SERVICES.] "Covered health services" means the health services reimbursed under chapter 256B, with the exception of inpatient hospital services, special education services, private duty nursing services, adult dental care services other than preventive services, orthodontic services, medical transportation services, personal care assistant and case management services, hospice care services, nursing home or intermediate care facilities services, inpatient mental health services, and chemical dependency services. Outpatient mental health services covered under the MinnesotaCare program are limited to diagnostic assessments, psychological testing, explanation of findings, medication management by a physician, day treatment, partial hospitalization, and individual, family, and group psychotherapy. Abortion services are covered under MinnesotaCare only if the condition in section 256B.0625, subdivision 16, paragraph (a), is met. Covered health services shall be expanded as provided in this section.

Sec. 2. Minnesota Statutes 1994, section 256.9354, subdivision 1, is amended to read:

Subdivision 1. [CHILDREN; EXPANSION AND CONTINUATION OF ELIGIBILITY.] (a) [CHILDREN.] Prior to October 1, 1992, "eligible persons" means children who are one year of age or older but less than 18 years of age who have gross family incomes that are equal to or less than 150 185 percent of the federal poverty guidelines and who are not eligible for medical assistance without a spenddown under chapter 256B and who are not otherwise insured for the covered services. The period of eligibility extends from the first day of the month in which the child's first birthday occurs to the last day of the month in which the child becomes 18 years old.

(b) [EXPANSION OF ELIGIBILITY.] Eligibility for MinnesotaCare shall be expanded as provided in subdivisions 2 to 5, except children who meet the criteria in this subdivision shall continue to be enrolled pursuant to this subdivision. The enrollment requirements in this paragraph apply to enrollment under subdivisions 1 to 5. Parents who enroll in the MinnesotaCare program must also enroll their children and dependent siblings, if the children and their dependent siblings are eligible. Children and dependent siblings may be enrolled separately without enrollment by parents. However, if one parent in the household enrolls, both parents must enroll, unless other insurance is available. If one child from a family is enrolled, all children must be enrolled, unless other insurance is available. If one spouse in a household enrolls, the other spouse in the household must also enroll, unless other insurance is available. Families cannot choose to enroll only certain uninsured members. For purposes of this section, a "dependent sibling" means an unmarried child who is a full-time student under the age of 25 years who is financially dependent upon a parent. Proof of school enrollment will be required.

(c) [CONTINUATION OF ELIGIBILITY.] Individuals who initially enroll in the MinnesotaCare program under the eligibility criteria in subdivisions 2 to 5 remain eligible for the MinnesotaCare program, regardless of age, place of residence, or the presence or absence of children in the same household, as long as all other eligibility criteria are met and residence in Minnesota and continuous enrollment in the MinnesotaCare program or medical assistance are maintained. In order for either parent or either spouse in a household to remain enrolled, both must remain enrolled, unless other insurance is available.

Sec. 3. Minnesota Statutes 1994, section 256.9354, subdivision 4, is amended to read:

Subd. 4. [FAMILIES WITH CHILDREN; ELIGIBILITY BASED ON PERCENTAGE OF INCOME PAID FOR HEALTH COVERAGE.] Beginning January 1, 1993, "eligible persons" means children, parents, and dependent siblings residing in the same household who are not eligible for medical assistance without a spenddown under chapter 256B. Children who meet the criteria in subdivision subdivisions 1 or 4a shall continue to be enrolled pursuant to subdivision 1 those subdivisions. Persons who are eligible under this subdivision or subdivision 2, 3, or 5 must pay a premium as determined under sections 256.9357 and 256.9358, and children eligible under subdivision 1 must pay the premium required under section 256.9356, subdivision 1. Individuals and families whose income is greater than the limits established under section 256.9358 may not enroll in MinnesotaCare.

Sec. 4. Minnesota Statutes 1994, section 256.9354, is amended by adding a subdivision to read:

Subd. 4a. [CHILDREN WITH LOWER INCOMES.] Beginning July 1, 1993, the definition of "eligible persons" is expanded to include children who are one year of age or older but less than 18 years of age who have gross family incomes that are equal to or less than 150 percent of the federal poverty guidelines and who are not eligible for medical assistance without a spenddown under chapter 256B and who are not otherwise insured for the covered services. The period of eligibility extends from the first day of the month in which the child's first birthday occurs to the last day of the month in which the child becomes 18 years old. The commissioner shall exclude all earned income of dependent children who:

(1) are full-time or part-time students;

(2) are employed for less than 37.5 hours per week; and

(3) earn less than $10,000 a year in total from all sources of employment, when calculating gross family incomes for applicants who would otherwise be eligible under this subdivision.

Sec. 5. Minnesota Statutes 1994, section 256.9354, subdivision 5, is amended to read:

Subd. 5. [ADDITION OF SINGLE ADULTS AND HOUSEHOLDS WITH NO CHILDREN.] (a) Beginning October 1, 1994, the definition of "eligible persons" shall is expanded to include all individuals and households with no children who have gross family incomes that are equal to or less than 125 percent of the federal poverty guidelines and who are not eligible for medical assistance without a spenddown under chapter 256B.

(b) Beginning October 1, 1995, "eligible persons" means all individuals and families who are not eligible for medical assistance without a spenddown under chapter 256B. If the federal Health Care Financing Administration approves the section 1115 MinnesotaCare health care reform waiver request submitted by the commissioner, and federal financial participation is made available for MinnesotaCare enrollees in families with children, beginning July 1, 1995, or on the day federal financial participation for MinnesotaCare enrollees in families with children is made available, whichever is later, the definition of "eligible persons" is expanded to include all individuals and households with no children who have gross family incomes that are equal or less than 150 percent of the federal poverty guidelines and who are not eligible for medical assistance without a spenddown under chapter 256B. If the MinnesotaCare health care reform waiver request is not approved, or is approved in part without federal financial participation being made available for all MinnesotaCare enrollees in families with children, eligibility for individuals and households shall be determined as provided in paragraph (a).

(c) All eligible persons under paragraphs (a) and (b) are eligible for coverage through the MinnesotaCare program but must pay a premium as determined under sections 256.9357 and 256.9358. Individuals and families whose income is greater than the limits established under section 256.9358 may not enroll in the MinnesotaCare program.

Sec. 6. Minnesota Statutes 1994, section 256.9357, subdivision 1, is amended to read:

Subdivision 1. [GENERAL REQUIREMENTS.] Families and individuals are eligible for subsidized premium payments based on a sliding scale under section 256.9358 only if the family or individual meets the requirements in subdivisions 2 and 3. Families and individuals who enroll on or after October 1, 1992, are eligible for subsidized premium payments based on a sliding scale under section 256.9358 only if the family or individual meets the requirements in subdivisions 2 and 3. Children already enrolled in the children's health plan as of September 30, 1992, eligible under section 256.9354, subdivision 1, paragraph (a), children who enroll in the MinnesotaCare program after September 30, 1992, pursuant to Laws 1992, chapter 549, article 4, section 17, and children who enroll under section 256.9354, subdivision 4a, are eligible for subsidized premium payments without meeting these requirements, as long as they maintain continuous coverage in the MinnesotaCare plan or medical assistance.

Families and individuals who initially enrolled in MinnesotaCare under section 256.9354, and whose income increases above the limits established in section 256.9358, may continue enrollment and pay the full cost of coverage.

Sec. 7. Minnesota Statutes 1994, section 256.9357, subdivision 2, is amended to read:

Subd. 2. [MUST NOT HAVE ACCESS TO EMPLOYER-SUBSIDIZED COVERAGE.] (a) To be eligible for subsidized premium payments based on a sliding scale, a family or individual must not have access to subsidized health coverage through an employer, and must not have had access to subsidized health coverage through an employer for the 18 months prior to application for subsidized coverage under the MinnesotaCare program. The requirement that the family or individual must not have had access to employer-subsidized coverage during the previous 18 months does not apply if: (1) employer-subsidized coverage was lost due to the death of an employee or divorce; (2) employer-subsidized coverage was lost because an individual became ineligible for coverage as a child or dependent; or (3) employer-subsidized coverage was lost for reasons that would not disqualify the individual for unemployment benefits under section 268.09 and the family or individual has not had access to employer-subsidized coverage since the layoff loss of coverage. If employer-subsidized coverage was lost for reasons that disqualify an individual for unemployment benefits under section 268.09, children of that individual are exempt from the requirement of no access to employer subsidized coverage for the 18 months prior to application, as long as the children have not had access to employer subsidized coverage since the disqualifying event. The requirement that the family or individual must not have had access to employer-subsidized coverage during the previous 18 months does apply if employer-subsidized coverage is lost due to an employer terminating health care coverage as an employee benefit.

(b) For purposes of this requirement, subsidized health coverage means health coverage for which the employer pays at least 50 percent of the cost of coverage for the employee, excluding dependent coverage, or a higher percentage as specified by the commissioner. Children are eligible for employer-subsidized coverage through either parent, including the noncustodial parent. The commissioner must treat employer contributions to Internal Revenue Code Section 125 plans as qualified employer subsidies toward the cost of health coverage for employees for purposes of this subdivision.

Sec. 8. Minnesota Statutes 1994, section 256.9357, subdivision 3, is amended to read:

Subd. 3. [PERIOD UNINSURED.] To be eligible for subsidized premium payments based on a sliding scale, families and individuals initially enrolled in the MinnesotaCare program under section 256.9354, subdivisions 4 and 5, must have had no health coverage for at least four months prior to application. The commissioner may change this eligibility criterion for sliding scale premiums without complying with rulemaking requirements in order to remain within the limits of available appropriations. The requirement of at least four months of no health coverage prior to application for the MinnesotaCare program does not apply to:

(1) families, children, and individuals who want to apply for the MinnesotaCare program upon termination from the medical assistance program, general assistance medical care program, or coverage under a regional demonstration project for the uninsured funded under section 256B.73, the Hennepin county assured care program, or the Group Health, Inc., community health plan. This subdivision does not apply to;

(2) families and individuals initially enrolled under sections section 256.9354, subdivisions 1, paragraph (a), and 2, or to;

(3) children enrolled pursuant to Laws 1992, chapter 549, article 4, section 17.; or

(4) individuals currently serving or who have served in the military reserves, and dependents of these individuals, if these individuals: (i) reapply for MinnesotaCare coverage after a period of active military service during which they had been covered by the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); (ii) were covered under MinnesotaCare immediately prior to obtaining coverage under CHAMPUS; and (iii) have maintained continuous coverage.

Sec. 9. Minnesota Statutes 1994, section 256.9358, is amended by adding a subdivision to read:

Subd. 7. [MINIMUM PREMIUM PAYMENT.] Beginning with premium payments due on or after July 1, 1995, the commissioner shall require all MinnesotaCare enrollees to pay a minimum premium of $4 per month.

Sec. 10. Minnesota Statutes 1994, section 256.9363, is amended by adding a subdivision to read:

Subd. 3a. [EXEMPTION FROM ENROLLMENT IN MANAGED CARE.] (a) For purposes of this subdivision, "health care facility" means an Indian health service hospital and health care facility, and satellite clinic, that is located on the Red Lake Band of Chippewa Indian Reservation and serves American Indian people.

(b) Persons enrolled in the MinnesotaCare, medical assistance, or general assistance medical care program living on the Red Lake Chippewa Indian Reservation, and using a health care facility as defined in paragraph (a), shall be exempt from enrollment in managed care plans. The commissioner shall continue to reimburse the health care facility under the MinnesotaCare program on a cost-basis.

Sec. 11. Minnesota Statutes 1994, section 256B.057, subdivision 3, is amended to read:

Subd. 3. [QUALIFIED MEDICARE BENEFICIARIES.] A person who is entitled to Part A Medicare benefits, whose income is equal to or less than 85 150 percent of the federal poverty guidelines, and whose assets are no more than twice the asset limit used to determine eligibility for the supplemental security income program, is eligible for medical assistance reimbursement of Part A and Part B premiums, Part A and Part B coinsurance and deductibles, and cost-effective premiums for enrollment with a health maintenance organization or a competitive medical plan under section 1876 of the Social Security Act, and prescription drugs. The income limit shall be increased to 90 percent of the federal poverty guidelines on January 1, 1990; and to 100 percent on January 1, 1991. Reimbursement of the Medicare coinsurance and deductibles, when added to the amount paid by Medicare, must not exceed the total rate the provider would have received for the same service or services if the person were a medical assistance recipient with Medicare coverage. Increases in benefits under Title II of the Social Security Act shall not be counted as income for purposes of this subdivision until the first day of the second full month following publication of the change in the federal poverty guidelines. The coverage of drugs shall be in accordance with section 256B.0625, subdivision 13, except that a copayment of $3 shall be required for each prescription filled. Medical assistance payment for prescription drugs for persons eligible under this subdivision shall be reduced by $3 to account for the copayment.

Sec. 12. Minnesota Statutes 1994, section 256B.69, is amended by adding a subdivision to read:

Subd. 4a. [EXEMPTION FROM PARTICIPATION.] (a) For purposes of this subdivision, "health care facility" means an Indian health service hospital and health care facility, and satellite clinic, that is located on the Red Lake Band of Chippewa Indian Reservation and serves American Indian people.

(b) Persons living on the Red Lake Chippewa Indian Reservation and using a health care facility as defined in paragraph (a) shall be exempt from participating in the prepaid medical assistance demonstration project. The commissioner shall continue to reimburse the health care facility under medical assistance on a cost-basis.

Sec. 13. Minnesota Statutes 1994, section 256D.03, is amended by adding a subdivision to read:

Subd. 4a. [EXEMPTION FROM ENROLLMENT.] (a) For purposes of this subdivision, "health care facility" means an Indian health service hospital and health care facility, and satellite clinic, that is located on the Red Lake Band of Chippewa Indian Reservation and primarily serves American Indian people.

(b) Persons living on the Red Lake Chippewa Indian Reservation and using a health care facility as defined in paragraph (a) shall be exempt from enrollment in a prepaid health plan under general assistance medical care. The commissioner shall continue to reimburse the health care facility under general assistance medical care on a cost-basis.

Sec. 14. [EFFECTIVE DATE.]

The amendments to section 11 (section 256B.057, subdivision 3) shall be effective only if federal approval is obtained and a notice of approval is published in the State Register. The effective date shall be July 1, 1996, or the first of the month occurring 90 days after the receipt of written federal approval, whichever is later.

Section 1. Minnesota Statutes 1994, section 60A.02, is amended by adding a subdivision to read:

Subd. 29. [MULTIPLE EMPLOYER TRUST.] "Multiple employer trust" means a trust organized for the benefit of two or more employers for the purpose of providing health insurance coverage to employees and dependents.

Sec. 2. [60A.235] [STANDARDS FOR DETERMINING WHETHER CONTRACTS ARE HEALTH PLAN CONTRACTS OR STOP LOSS CONTRACTS.]

Subdivision 1. [FINDINGS AND PURPOSE.] The purpose of this section is to establish a standard for the determination of whether an insurance policy or other evidence or coverage should be treated as a policy of accident and sickness insurance or a stop loss policy for the purpose of the regulation of the business of insurance. The laws regulating the business of insurance in Minnesota impose distinctly different requirements upon accident and sickness insurance policies and stop loss policies. In particular, the regulation of accident and sickness insurance in Minnesota

includes measures designed to reform the health insurance market, to minimize or prohibit selective rating or rejection of employee groups or individual group members based upon health conditions, and to provide access to affordable health insurance coverage regardless of pre-existing health conditions. The health care reform provisions enacted in Minnesota will only be effective if they are applied to all insurers and health carriers who in substance, regardless of purported form, engage in the business of issuing health insurance coverage to employees of an employee group. This section applies to insurance companies and health carriers and the policies or other evidence of coverage that they issue. This section does not apply to employers or the benefit plans they establish for their employees.

Subd. 2. [DEFINITIONS.] (a) For purposes of this section, the terms defined in this subdivision have the meanings given.

(b) "Attachment point" means the claims amount beyond which the insurance company or health carrier incurs a liability for payment.

(c) "Direct coverage" means coverage under which an insurance company or health carrier assumes a direct obligation to an individual, under the policy or evidence of coverage, with respect to health care expenses incurred by such individual or a member of such individual's family.

(d) "Expected claims" means the amount of claims which, in the absence of a stop loss policy or other insurance or evidence of coverage, are projected to be incurred under an employer-sponsored plan covering health care expenses.

(e) "Expected plan claims" means the expected claims less the projected claims in excess of the specific attachment point, adjusted to be consisted with the employer's aggregate contract period.

(f) "Health plan" means a health plan as defined in section 62A.011 and includes group coverage regardless of the size of the group.

(g) "Health carrier" means a health carrier as defined in section 62A.011.

Subd. 3. [HEALTH PLAN POLICIES ISSUED AS STOP LOSS COVERAGE.] (a) An insurance company or health carrier issuing or renewing an insurance policy or other evidence of coverage, which provides coverage to an employer for health care expenses incurred under an employer-sponsored plan provided to the employer's employees, retired employees, or their dependents, shall issue the policy or evidence of coverage as a health plan if the policy or evidence of coverage:

(1) has a specific attachment point for claims incurred per individual which is lower than $10,000; or

(2) has an aggregate attachment point which is lower than the sum of:

(i) 150 percent of the first $50,000 of expected plan claims;

(ii) 120 percent of the next $450,000 of expected plan claims; and

(iii) 110 percent of the remaining expected plan claims.

(b) Where the insurance policy or evidence of coverage applies to a contract period of more than one year, the dollar amounts set forth in paragraph (a), clauses (1) and (2), shall be multiplied by the length of the contract period expressed in years.

(c) The commissioner may adjust the constant dollar amounts provided in paragraph (a), clauses (1) and (2), on January 1 of any year, based upon changes in the medical component of the Consumer Price Index (CPI). Adjustments must be in increments of $100 and must not be made unless at least that amount of adjustment is required. The commissioner shall publish any change in these dollar amounts at least three months prior to their effective date.

(d) A policy or evidence of coverage issued by an insurance company or health carrier which provides direct coverage of health care expenses of an individual, including a policy or evidence of coverage administered on a group basis, is a health plan regardless of whether the policy or evidence of coverage is denominated as stop loss coverage.

Subd. 4. [COMPLIANCE.] (a) An insurance company or health carrier that is required to issue a policy or evidence of coverage as a health plan under this section shall, even if the policy or evidence of coverage is denominated as stop loss coverage, comply with all the laws of this state that apply to the health plan, including, but not limited to chapters 62A, 62C, 62D, 62E, 62L, and 62Q.

(b) With respect to an employer who had been issued a policy or evidence of coverage denominated as stop loss coverage prior to the effective date of this section, compliance with this section is required as of the first renewal date occurring on or after the effective date of this section.

Sec. 3. [60A.236] [STOP LOSS REGULATION.]

A contract providing stop loss coverage, issued or renewed to a small employer, as defined in section 62L.02, subdivision 26, or to a plan sponsored by a small employer, shall include a claim settlement period no less favorable to the small employer or plan than coverage of all claims incurred during the contract period regardless of when the claims are paid.

Sec. 4. Minnesota Statutes 1994, section 62A.10, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENTS.] Group accident and health insurance is hereby declared to be that form of accident and health insurance covering not less than two employees nor less than ten members, and which may include the employee's or member's dependents, consisting of husband, wife, children, and actual dependents residing in the household, written under a master policy issued to any governmental corporation, unit, agency, or department thereof, or to any corporation, copartnership, individual, employer, or to a purchasing pool as described in section 62Q.17, to any association as defined by section 60A.02, subdivision 1a, or to a multiple employer trust, or to the trustee of a fund, established or adopted by two or more employers or maintained for the benefit of members of an association, where officers, members, employees, or classes or divisions thereof, may be insured for their individual benefit.

Any insurer authorized to write accident and health insurance in this state shall have power to issue group accident and health policies.

Sec. 5. Minnesota Statutes 1994, section 62A.10, subdivision 2, is amended to read:

Subd. 2. [POLICY FORMS.] No policy or certificate of group accident and health insurance may be issued or delivered in this state unless the same has been approved by the commissioner in accordance with section 62A.02, subdivisions 1 to 6. These forms shall contain the standard provisions relating and applicable to health and accident insurance and shall conform with the other requirements of law relating to the contents and terms of policies of accident and sickness insurance in so far as they may be applicable to group accident and health insurance, and also the following provisions:

(1) [ENTIRE CONTRACT.] A provision that the policy and the application of the employer, trustee, or executive officer or trustee of any association, and the individual applications, if any, of the employees or members insured, shall constitute the entire contract between the parties, and that all statements made by the employer, trustee, or any executive officer or trustee in behalf of the group to be insured, shall, in the absence of fraud, be deemed representations and not warranties, and that no such statement shall be used in defense to a claim under the policy, unless it is contained in the written application;

(2) [MASTER POLICY-CERTIFICATES.] A provision that the insurer will issue a master policy to the employer, trustee, or to the executive officer or trustee of the association; and the insurer shall also issue to the employer, trustee, or to the executive officer or trustee of the association, for delivery to the employee or member who is insured under the policy, an individual certificate setting forth a statement as to the insurance protection to which the employee or member is entitled and to whom payable, together with a statement as to when and where the master policy, or a copy thereof, may be seen for inspection by the individual insured; this individual certificate may contain the names of, and insure the dependents of, the employee or member, as provided for herein;

(3) [NEW INSUREDS.] A provision that to the group or class thereof originally insured may be added, from time to time, all new employees of the employer or members of the association eligible to and applying for insurance in that group or class and covered or to be covered by the master policy.

Sec. 6. Minnesota Statutes 1994, section 62A.65, subdivision 5, is amended to read:

Subd. 5. [PORTABILITY OF COVERAGE.] (a) No individual health plan may be offered, sold, issued, or with respect to children age 18 or under renewed, to a Minnesota resident that contains a preexisting condition limitation or, preexisting condition exclusion, or exclusionary rider, unless the limitation or exclusion is permitted under this subdivision, provided that, except for children age 18 or under, underwriting restrictions may be retained on individual contracts that are issued without evidence of insurability as a replacement for prior individual coverage that was sold before May 17, 1993. The individual may be subjected to an 18-month preexisting condition limitation, unless the individual has maintained continuous coverage as defined in section 62L.02. The individual must not be subjected to an exclusionary rider. An individual who has maintained continuous coverage may be subjected to a one-time preexisting condition limitation of up to 12 months, with credit for time covered under qualifying coverage as defined in section 62L.02, at the time that the individual first is covered under an individual health plan by any health carrier. Credit must be given for all qualifying coverage with respect to all preexisting conditions, regardless of whether the conditions were preexisting with respect to any previous qualifying coverage. The individual must not be subjected to an exclusionary rider. Thereafter, the individual must not be subject to any preexisting condition limitation or, preexisting condition exclusion, or exclusionary rider under an individual health plan by any health carrier, except an unexpired portion of a limitation under prior coverage, so long as the individual maintains continuous coverage as defined in section 62L.02.

(b) A health carrier must offer an individual health plan to any individual previously covered under a group health plan issued by that health carrier, regardless of the size of the group, so long as the individual maintained continuous coverage as defined in section 62L.02. The offer must not be subject to underwriting, except as permitted under this paragraph. A health plan issued under this paragraph must be a qualified plan as defined in section 62E.02 and must not contain any preexisting condition limitation or, preexisting condition exclusion, or exclusionary rider, except for any unexpired limitation or exclusion under the previous coverage. The individual health plan must cover pregnancy on the same basis as any other covered illness under the individual health plan. The initial premium rate for the individual health plan must comply with subdivision 3. The premium rate upon renewal must comply with subdivision 2. In no event shall the premium rate exceed 90 percent of the premium charged for comparable individual coverage by the Minnesota comprehensive health association, and the premium rate must be less than that amount if necessary to otherwise comply with this section. An individual health plan offered under this paragraph to a person satisfies the health carrier's obligation to offer conversion coverage under section 62E.16, with respect to that person. Coverage issued under this paragraph must provide that it cannot be canceled or nonrenewed as a result of the health carrier's subsequent decision to leave the individual, small employer, or other group market. Section 72A.20, subdivision 28, applies to this paragraph.

Sec. 7. Minnesota Statutes 1994, section 62A.65, subdivision 8, is amended to read:

Subd. 8. [CESSATION OF INDIVIDUAL BUSINESS.] Notwithstanding the provisions of subdivisions 1 to 7, a health carrier may elect to cease doing business in the individual health plan market in this state if it complies with the requirements of this subdivision. For purposes of this section, "cease doing business" means to discontinue issuing new individual health plans and to refuse to renew all of the health carrier's existing individual health plans issued in this state whose terms permit refusal to renew under the circumstances specified in this subdivision. This subdivision does not permit cancellation of an individual health plan, unless the terms of the health plan permit cancellation under the circumstances specified in this subdivision. A health carrier electing to cease doing business in the individual health plan market in this state shall notify the commissioner 180 days prior to the effective date of the cessation. The cessation of business does not include the failure of a health carrier to offer or issue new business in the individual health plan market or continue an existing product line in that market, provided that a health carrier does not terminate, cancel, or fail to renew its current individual health plan business or other product lines. A health carrier electing to cease doing business in the individual health plan market shall provide 120 days' written notice to each policyholder covered by a an individual health plan issued by the health carrier. A health carrier that ceases to write new business in the individual health plan market shall continue to be governed by this section with respect to continuing individual health plan business conducted by the health carrier. A health carrier that ceases to do business in the individual health plan market after July 1, 1994, is prohibited from writing new business in the individual health plan market in this state for a period of five years from the date of notice to the commissioner. This subdivision applies to any health maintenance organization that ceases to do business in the individual health plan market in one service area with respect to that service area only. Nothing in this subdivision prohibits an affiliated health maintenance organization from continuing to do business in the individual health plan market in that same service area. The right to cancel or refuse to renew an individual health plan under this subdivision does not apply to individual health plans originally issued prior to July 1, 1993, on a guaranteed renewable basis that does not permit refusal to renew under the circumstances specified in this subdivision.

Sec. 8. Minnesota Statutes 1994, section 62D.02, subdivision 8, is amended to read:

Subd. 8. "Health maintenance contract" means any contract whereby a health maintenance organization agrees to provide comprehensive health maintenance services to enrollees, provided that the contract may contain reasonable enrollee copayment provisions. Copayment and deductible provisions in group contracts shall not discriminate on the basis of age, sex, race, length of enrollment in the plan, or economic status; and during every open enrollment period in which all offered health benefit plans, including those subject to the jurisdiction of the commissioners of commerce or health, fully participate without any underwriting restrictions, copayment and deductible provisions shall not discriminate on the basis of preexisting health status. In no event shall the sum of the annual copayment copayments and deductible exceed the maximum out-of-pocket expenses allowable for a number three qualified insurance policy plan under section 62E.06, nor shall that sum exceed $5,000 per family. The annual deductible must not exceed $1,000 per person. The annual deductible must not apply to preventive health services as described in Minnesota Rules, part 4685.0801, subpart 8. Where sections 62D.01 to 62D.30 permit a health maintenance organization to contain reasonable copayment provisions for preexisting health status, these provisions may vary with respect to length of enrollment in the plan. Any contract may provide for health care services in addition to those set forth in subdivision 7.

Sec. 9. Minnesota Statutes 1994, section 62D.042, subdivision 2, is amended to read:

Subd. 2. [BEGINNING ORGANIZATIONS.] (a) Beginning organizations shall maintain net worth of at least 8-1/3 percent of the sum of all expenses expected to be incurred in the 12 months following the date the certificate of authority is granted, or $1,500,000, whichever is greater.

(b) After the first full calendar year of operation, organizations shall maintain net worth of at least 8-1/3 percent and at most 16-2/3 percent of the sum of all expenses incurred during the most recent calendar year, but in no case shall net worth fall below $1,000,000.

(c) Notwithstanding paragraphs (a) and (b), any health maintenance organization owned by a political subdivision of this state, which has a higher than average percentage of enrollees who are enrolled in medical assistance or general assistance medical care, may exceed the maximum net worth limits provided in paragraphs (a) and (b), with the advance approval of the commissioner.

Sec. 10. Minnesota Statutes 1994, section 62E.141, is amended to read:

62E.141 [INCLUSION IN EMPLOYER-SPONSORED PLAN.]

No employee, or dependent of an employee, of an employer that offers a health plan, under which the employee or dependent is eligible for coverage, is eligible to enroll, or continue to be enrolled, in the comprehensive health association, except for enrollment or continued enrollment necessary to cover conditions that are subject to an unexpired preexisting condition limitation or, preexisting condition exclusion, or exclusionary rider under the employer's health plan. This section does not apply to persons enrolled in the comprehensive health association as of June 30, 1993. With respect to persons eligible to enroll in the health plan of an employer that has more than 29 current employees, as defined in section 62L.02, this section does not apply to persons enrolled in the comprehensive health association as of December 31, 1994.

Sec. 11. Minnesota Statutes 1994, section 62H.04, is amended to read:

62H.04 [COMPLIANCE WITH OTHER LAWS.]

A joint self-insurance plan is subject to the requirements of chapters 62A, and 62E, and 62L, and sections 72A.17 to 72A.32 unless otherwise specifically exempt. A joint self-insurance plan must not offer less than a number two qualified plan or its actuarial equivalent.

Sec. 12. Minnesota Statutes 1994, section 62H.08, is amended to read:

62H.08 [EXEMPTION.]

A homogenous joint employer plan providing group health benefits, which was in existence prior to March 1, 1983, and which is associated with, or organized or sponsored by, an association exempt from taxation under United States Code, title 26, section 501(c)(6), and controlled by a board of trustees a majority of whom are members of the association, is exempt from the requirements of sections 62H.01 to 62H.08 and 471.617, subdivisions 1 to 3, and the insurance laws of this state, except that the association must comply with the provisions of chapter 62L with respect to any members that are small employers.

Sec. 13. Minnesota Statutes 1994, section 62L.02, subdivision 11, is amended to read:

Subd. 11. [DEPENDENT.] "Dependent" means an eligible employee's spouse, unmarried child who is under the age of 19 years, unmarried child under the age of 25 years who is a full-time student as defined in section 62A.301, dependent child of any age who is handicapped and who meets the eligibility criteria in section 62A.14, subdivision 2, or any other person whom state or federal law requires to be treated as a dependent for purposes of health plans. For the purpose of this definition, a child may include includes a child for whom the employee or the employee's spouse has been appointed legal guardian.

Sec. 14. Minnesota Statutes 1994, section 62L.02, subdivision 16, is amended to read:

Subd. 16. [HEALTH CARRIER.] "Health carrier" means an insurance company licensed under chapter 60A to offer, sell, or issue a policy of accident and sickness insurance as defined in section 62A.01; a health service plan corporation licensed under chapter 62C; a health maintenance organization licensed under chapter 62D; a fraternal benefit society operating under chapter 64B; a joint self-insurance employee health plan operating under chapter 62H; and a multiple employer welfare arrangement, as defined in United States Code, title 29, section 1002(40), as amended. For purposes of sections 62L.01 to 62L.12, but not for purposes of sections 62L.13 to 62L.22, "health carrier" includes; or a community integrated service network or integrated service network licensed under chapter 62N. Any use of this definition in another chapter by reference does not include a community integrated service network or integrated service network, unless otherwise specified. For the purpose of this chapter, companies that are affiliated companies or that are eligible to file a consolidated tax return must be treated as one health carrier, except that any insurance company or health service plan corporation that is an affiliate of a health maintenance organization located in Minnesota, or any health maintenance organization located in Minnesota that is an affiliate of an insurance company or health service plan corporation, or any health maintenance organization that is an affiliate of another health maintenance organization in Minnesota, may treat the health maintenance organization as a separate health carrier.

Sec. 15. Minnesota Statutes 1994, section 62L.02, subdivision 24, is amended to read:

Subd. 24. [QUALIFYING COVERAGE.] "Qualifying coverage" means health benefits or health coverage provided under:

(1) a health plan, as defined in this section;

(2) Medicare;

(3) medical assistance under chapter 256B;

(4) general assistance medical care under chapter 256D;

(5) MCHA;

(6) a self-insured health plan;

(7) the MinnesotaCare program established under section 256.9352, when the plan includes inpatient hospital services as provided in section 256.9353;

(8) a plan provided under section 43A.316, 43A.317, or 471.617; or

(9) the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); or

(10) a plan similar to any of the above plans provided in this state or in another state as determined by the commissioner.

Sec. 16. Minnesota Statutes 1994, section 62L.02, subdivision 26, is amended to read:

Subd. 26. [SMALL EMPLOYER.] (a) "Small employer" means a person, firm, corporation, partnership, association, or other entity actively engaged in business, including a political subdivision of the state, that, on at least 50 percent of its working days during the preceding 12 months, employed no fewer than two nor more than 29, or after June 30, 1995, more than 49, current employees, the majority of whom were employed in this state. If an employer has only two eligible employees and one is the spouse, child, sibling, parent, or grandparent of the other, the employer

must be a Minnesota domiciled employer and have paid social security or self-employment tax on behalf of both eligible employees. If an employer has only one eligible employee who has not waived coverage, the sale of a health plan to or for that eligible employee is not a sale to a small employer and is not subject to this chapter and may be treated as the sale of an individual health plan. A small employer plan may be offered through a domiciled association to self-employed individuals and small employers who are members of the association, even if the self-employed individual or small employer has fewer than two current employees. Entities that are eligible to file a combined tax return for purposes of state tax laws are considered a single employer for purposes of determining the number of current employees. Small employer status must be determined on an annual basis as of the renewal date of the health benefit plan. The provisions of this chapter continue to apply to an employer who no longer meets the requirements of this definition until the annual renewal date of the employer's health benefit plan.

(b) Where an association, described as defined in section 62A.10, subdivision 1 62L.045, comprised of employers contracts with a health carrier to provide coverage to its members who are small employers, the association shall be considered to be a and health benefit plans it provides to small employer employers, are subject to section 62L.045, with respect to those small employers in the association that employ no fewer than two nor more than 29, or after June 30, 1995, more than 49, current employees, even though the association also provides coverage to its members that do not qualify as small employers. An association in existence prior to July 1, 1993, is exempt from this chapter with respect to small employers that are members as of that date. However, in providing coverage to new employers after July 1, 1993, the existing association must comply with all requirements of this chapter. Existing associations must register with the commissioner of commerce prior to July 1, 1993. With respect to small employers having not fewer than 30 nor more than 49 current employees, the July 1, 1993, date in this paragraph becomes July 1, 1995, and the reference to "after" that date becomes "on or after."

(c) If an employer has employees covered under a trust specified in a collective bargaining agreement under the federal Labor-Management Relations Act of 1947, United States Code, title 29, section 141, et seq., as amended, or employees whose health coverage is determined by a collective bargaining agreement and, as a result of the collective bargaining agreement, is purchased separately from the health plan provided to other employees, those employees are excluded in determining whether the employer qualifies as a small employer. Those employees are considered to be a separate small employer if they constitute a group that would qualify as a small employer in the absence of the employees who are not subject to the collective bargaining agreement.

Sec. 17. Minnesota Statutes 1994, section 62L.03, subdivision 3, is amended to read:

Subd. 3. [MINIMUM PARTICIPATION AND CONTRIBUTION.] (a) A small employer that has at least 75 percent of its eligible employees who have not waived coverage participating in a health benefit plan and that contributes at least 50 percent toward the cost of coverage of each eligible employees employee must be guaranteed coverage on a guaranteed issue basis from any health carrier participating in the small employer market. The participation level of eligible employees must be determined at the initial offering of coverage and at the renewal date of coverage. A health carrier must not increase the participation requirements applicable to a small employer at any time after the small employer has been accepted for coverage. For the purposes of this subdivision, waiver of coverage includes only waivers due to: (1) coverage under another group health plan; (2) coverage under Medicare Parts A and B; or (3) coverage under MCHA permitted under section 62E.141; or (4) coverage under medical assistance under chapter 256B or general assistance medical care under chapter 256D.

(b) If a small employer does not satisfy the contribution or participation requirements under this subdivision, a health carrier may voluntarily issue or renew individual health plans, or a health benefit plan which must fully comply with this chapter. A health carrier that provides a health benefit plan to a small employer that does not meet the contribution or participation requirements of this subdivision must maintain this information in its files for audit by the commissioner. A health carrier may not offer an individual health plan, purchased through an arrangement between the employer and the health carrier, to any employee unless the health carrier also offers the individual health plan, on a guaranteed issue basis, to all other employees of the same employer.

(c) Nothing in this section obligates a health carrier to issue coverage to a small employer that currently offers coverage through a health benefit plan from another health carrier, unless the new coverage will replace the existing coverage and not serve as one of two or more health benefit plans offered by the employer.

Sec. 18. Minnesota Statutes 1994, section 62L.03, subdivision 4, is amended to read:

Subd. 4. [UNDERWRITING RESTRICTIONS.] Health carriers may apply underwriting restrictions to coverage for health benefit plans for small employers, including any preexisting condition limitations, only as expressly permitted under this chapter. For purposes of this section, "underwriting restrictions" means any refusal of the health carrier to issue or renew coverage, any premium rate higher than the lowest rate charged by the health carrier for the same

coverage, any preexisting condition limitation or, preexisting condition exclusion, or any exclusionary rider. Health carriers may collect information relating to the case characteristics and demographic composition of small employers, as well as health status and health history information about employees, and dependents of employees, of small employers. Except as otherwise authorized for late entrants, preexisting conditions may be excluded by a health carrier for a period not to exceed 12 months from the effective date of coverage of an eligible employee or dependent, but exclusionary riders must not be used. When calculating a preexisting condition limitation, a health carrier shall credit the time period an eligible employee or dependent was previously covered by qualifying prior coverage, provided that the individual maintains continuous coverage. Late entrants may be subject to a preexisting condition limitation not to exceed 18 months from the effective date of coverage of the late entrant, but must not be subject to any exclusionary rider or preexisting condition exclusion. The credit must be given for all qualifying coverage with respect to all preexisting conditions, regardless of whether the conditions were preexisting with respect to any previous qualifying coverage. Section 60A.082, relating to replacement of group coverage, and the rules adopted under that section apply to this chapter, and this chapter's requirements are in addition to the requirements of that section and the rules adopted under it. A health carrier shall, at the time of first issuance or renewal of a health benefit plan on or after July 1, 1993, credit against any preexisting condition limitation or exclusion permitted under this section, the time period prior to July 1, 1993, during which an eligible employee or dependent was covered by qualifying coverage, if the person has maintained continuous coverage.

Sec. 19. Minnesota Statutes 1994, section 62L.03, subdivision 5, is amended to read:

Subd. 5. [CANCELLATIONS AND FAILURES TO RENEW.] (a) No health carrier shall cancel, decline to issue, or fail to renew a health benefit plan as a result of the claim experience or health status of the persons covered or to be covered by the health benefit plan.

(b) A health carrier may cancel or fail to renew a health benefit plan:

(1) for nonpayment of the required premium;

(2) for fraud or misrepresentation by the small employer, or, with respect to coverage of an individual eligible employee or dependent, fraud or misrepresentation by the eligible employee or dependent, with respect to eligibility for coverage or any other material fact;

(3) if eligible employee participation during the preceding calendar year declines to less than 75 percent, subject to the waiver of coverage provision in subdivision 3;

(4) if the employer fails to comply with the minimum contribution percentage required under subdivision 3; or

(4) for any other reasons or grounds expressly permitted by the respective licensing laws and regulations governing a health carrier, including, but not limited to, service area restrictions imposed on health maintenance organizations under section 62D.03, subdivision 4, paragraph (m), to the extent that these grounds are not expressly inconsistent with this chapter.

(c) A health carrier may fail to renew a health benefit plan:

(1) if eligible employee participation during the preceding calendar year declines to less than 75 percent, subject to the waiver of coverage provision in subdivision 3;

(5) (2) if the health carrier ceases to do business in the small employer market under section 62L.09; or

(6) (3) if a failure to renew is based upon the health carrier's decision to discontinue the health benefit plan form previously issued to the small employer, but only if the health carrier permits each small employer covered under the prior form to switch to its choice of any other health benefit plan offered by the health carrier, without any underwriting restrictions that would not have been permitted for renewal purposes; or

(7) for any other reasons or grounds expressly permitted by the respective licensing laws and regulations governing a health carrier, including, but not limited to, service area restrictions imposed on health maintenance organizations under section 62D.03, subdivision 4, paragraph (m), to the extent that these grounds are not expressly inconsistent with this chapter.

(b) (d) A health carrier need not renew a health benefit plan, and shall not renew a small employer plan, if an employer ceases to qualify as a small employer as defined in section 62L.02. If a health benefit plan, other than a small employer plan, provides terms of renewal that do not exclude an employer that is no longer a small employer, the health benefit plan may be renewed according to its own terms. If a health carrier issues or renews a health plan to an employer that is no longer a small employer, without interruption of coverage, the health plan is subject to section 60A.082.

Sec. 20. [62L.045] [ASSOCIATIONS.]

Subdivision 1. [DEFINITIONS.] For purposes of this section, the following terms have the meanings given:

(a) "Association" means:

(1) an association as defined in section 60A.02;

(2) a multiple employer trust as defined in section 60A.02, subdivision 29;

(3) a group or organization of political subdivisions;

(4) an educational cooperative service unit created under section 123.58; or

(5) a joint self-insurance pool authorized under section 471.617, subdivision 2.

(b) "Qualified association" means an association, as defined in this subdivision, that:

(1) is registered with the commissioner;

(2) provides health plan coverage through a health carrier that participates in the small employer market in this state, other than through associations;

(3) has and adheres to membership and participation criteria and health plan eligibility criteria that are not designed to disproportionately include or attract small employers that are likely to have low costs of health coverage or to disproportionately exclude or repel small employers that are likely to have high costs of health coverage; and

(4) permits any small employer that meets its membership, participation, and eligibility criteria to become a member and to obtain health plan coverage through the association.

Subd. 2. [QUALIFIED ASSOCIATIONS.] (a) A qualified association, as defined in this section, and health benefit plans offered by it, to it, or through it, to a small employer in this state must comply with the requirements of this chapter regarding guaranteed issue, guaranteed renewal, preexisting condition limitations, credit against preexisting condition limitations for continuous coverage, treatment of MCHA enrollees, and the definition of dependent, and with section 62A.65, subdivision 5, paragraph (b). They must also comply with all other requirements of this chapter not specifically exempted in paragraph (b) or (c).

(b) A qualified association and a health carrier offering, selling, issuing, or renewing a health benefit plan to, or to cover, a small employer in this state through the qualified association, may, but are not, in connection with that health benefit plan, required to:

(1) offer the two small employer plans described in section 62L.05;

(2) offer to small employers that are not members of the association, health benefit plans offered to, by, or through the qualified association; or

(3) participate in the reinsurance association.

(c) A qualified association, and a health carrier offering, selling, issuing, and renewing a health benefit plan to, or to cover, a small employer in this state must comply with section 62L.08, with the following modifications:

A separate index rate may be applied by a health carrier to each qualified association, provided that:

(1) the premium rate applied to participating small employer members of the qualified association is no more than 25 percent above and no more than 25 percent below the index rate applied to the qualified association, irrespective of when members applied for health coverage; and

(2) the index rate applied by a health carrier to a qualified association is no more than 20 percent above and no more than 20 percent below the index rate applied by the health carrier to any other qualified association or to any small employer.

Subd. 3. [OTHER ASSOCIATIONS.] Associations as defined in this section that are not qualified associations; health benefit plans offered, sold, issued, or renewed through them; and the health carriers doing so, must fully comply with this chapter, with respect to small employers that are members of the association.

Subd. 4. [PRINCIPLES; ASSOCIATION COVERAGE.] (a) This subdivision applies to associations as defined in this section, whether qualified associations or not, and is intended to clarify subdivisions 1 to 3.

(b) This section applies only to associations that provide coverage to small employers.

(c) The requirements of guaranteed issue and guaranteed renewal apply to coverage issued to cover small employers and persons covered through them, within the context of an arrangement between an association and a health carrier. A health carrier is not required under this chapter to comply with guaranteed issue and guaranteed renewal with respect to its relationship with the association itself. An arrangement between the health carrier and the association, once entered into, must comply with guaranteed issue and guaranteed renewal with respect to members of the association that are small employers and persons covered through them.

(d) When an arrangement between a health carrier and an association has validly terminated, the health carrier has no continuing obligation to small employers and persons covered through them, except as otherwise provided in:

(1) section 62A.65, subdivision 5, paragraph (b);

(2) any other continuation or conversion rights applicable under state or federal law; and

(3) section 60A.082, relating to group replacement coverage, and rules adopted under that section.

(e) When an association's arrangement with a health carrier has terminated and the association has entered into a new arrangement with that health carrier or a different health carrier, the new arrangement is subject to section 60A.082 and rules adopted under it, with respect to members of the association that are small employers and persons covered through them.

(f) An association that offers its members more than one health plan may have uniform rules restricting movement between the health plans, if the rules do not discriminate against small employers.

(g) This chapter does not require or prohibit separation of an association's members into one group consisting only of small employers and another group or other groups consisting of all other members. The association must comply with this section with respect to the small employer group.

(h) For purposes of this section, "member" of an association includes an employer participant in a multiple employer trust or other type of association.

(i) For purposes of this section, coverage issued to, or to cover, a small employer includes a certificate of coverage issued directly to the employer's employees and dependents, rather than to the small employer.

Sec. 21. Minnesota Statutes 1994, section 62L.09, subdivision 1, is amended to read:

Subdivision 1. [NOTICE TO COMMISSIONER.] A health carrier electing to cease doing business in the small employer market shall notify the commissioner 180 days prior to the effective date of the cessation. The health carrier shall simultaneously provide a copy of the notice to each small employer covered by a health benefit plan issued by the health carrier. For purposes of this section, "cease doing business" means to discontinue issuing new health benefit plans to small employers and to refuse to renew all of the health carrier's existing health benefit plans issued to small employers, the terms of which permit refusal to renew under the circumstances specified in this subdivision. This section does not permit cancellation of a health benefit plan, unless permitted under its terms.

Upon making the notification, the health carrier shall not offer or issue new business in the small employer market. The health carrier shall renew its current small employer business due for renewal within 120 days after the date of the notification but shall not renew any small employer business more than 120 days after the date of the notification. The renewal period for business renewed during that 120-day period shall end on the effective date of the cessation.

A health carrier that elects to cease doing business in the small employer market shall continue to be governed by this chapter with respect to any continuing small employer business conducted by the health carrier.

Sec. 22. Minnesota Statutes 1994, section 62L.12, subdivision 2, is amended to read:

Subd. 2. [EXCEPTIONS.] (a) A health carrier may sell, issue, or renew individual conversion policies to eligible employees and dependents otherwise eligible for conversion coverage under section 62D.104 as a result of leaving a health maintenance organization's service area.

(b) A health carrier may sell, issue, or renew individual conversion policies to eligible employees and dependents otherwise eligible for conversion coverage as a result of the expiration of any continuation of group coverage required under sections 62A.146, 62A.17, 62A.21, 62C.142, 62D.101, and 62D.105.

(c) A health carrier may sell, issue, or renew conversion policies under section 62E.16 to eligible employees and dependents.

(d) A health carrier may sell, issue, or renew individual continuation policies to eligible employees and dependents as required.

(e) A health carrier may sell, issue, or renew individual health plans if the coverage is appropriate due to an unexpired preexisting condition limitation or exclusion applicable to the person under the employer's group health plan or due to the person's need for health care services not covered under the employer's group health plan.

(f) A health carrier may sell, issue, or renew an individual health plan, if the individual has elected to buy the individual health plan not as part of a general plan to substitute individual health plans for a group health plan nor as a result of any violation of subdivision 3 or 4.

(g) Nothing in this subdivision relieves a health carrier of any obligation to provide continuation or conversion coverage otherwise required under federal or state law.

(h) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage issued as a supplement to Medicare under sections 62A.31 to 62A.44, or policies or contracts that supplement Medicare issued by health maintenance organizations, or those contracts governed by section 1833 or 1876 of the federal Social Security Act, United States Code, title 42, section 1395 et. seq., as amended.

(i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual health plans necessary to comply with a court order.

Sec. 23. Minnesota Statutes 1994, section 62L.17, is amended by adding a subdivision to read:

Subd. 2a. [PARTICIPATION OF NEW SMALL EMPLOYER HEALTH CARRIERS.] A health carrier that enters the small employer market subsequent to February 1993, may elect to not participate in the reinsurance association by filing an application within 60 days of entry into the small employer market or the effective date of this section, whichever is later. The commissioner shall make a determination and notify the health carrier no later than 60 days after receipt of the application. In determining whether to approve the application, the commissioner shall consider the standards defined in subdivision 2, except that the commissioner may also consider whether the health carrier has a guaranteeing organization as defined in section 62D.043, subdivision 1, or as permitted under chapter 62N.

Sec. 24. Minnesota Statutes 1994, section 62L.18, subdivision 2, is amended to read:

Subd. 2. [ELIGIBILITY FOR REINSURANCE.] (a) A health carrier may not reinsure existing small employer business through the association. A health carrier may reinsure an employee or dependent who previously had coverage from MCHA who is now eligible for coverage through the small employer group at the time of enrollment as defined in section 62L.03, subdivision 6. A health carrier may not reinsure individuals who have existing individual health care coverage with that health carrier upon replacement of the individual coverage with group coverage as provided in section 62L.04, subdivision 1.

(b) A health carrier may cede to the association the risk of any newly eligible employees or continue to reinsure small employer business for employers who, at the time of renewal of coverage by the same health carrier prior to July 1, 1995, have more than 29 current employees but fewer than 49 current employees. This paragraph is effective retroactively for coverage renewed on or after July 1, 1994.

Sec. 25. Minnesota Statutes 1994, section 62Q.17, subdivision 2, is amended to read:

Subd. 2. [COMMON FACTORS.] All participants in a purchasing pool must live within a common geographic region, be employed in a similar occupation, or share some other common factor as approved by the commissioner of commerce. The membership criteria must not be designed to include disproportionately employers, groups, or individuals likely to have low costs of health coverage, or to exclude disproportionately employers, groups, or individuals likely to have high costs of health coverage.

Sec. 26. Minnesota Statutes 1994, section 62Q.17, subdivision 8, is amended to read:

Subd. 8. [REPORTS.] Prior to the initial effective date of coverage, and annually on July 1 thereafter, each pool shall file a report with the information clearinghouse and the commissioner of commerce. The information clearinghouse must use the report to promote the purchasing pools. The annual report must contain the following information:

(1) the number of lives in the pool;

(2) the geographic area the pool intends to cover;

(3) the number of health plans offered;

(4) a description of the benefits under each plan;

(5) a description of the premium structure, including any copayments or deductibles, of each plan offered;

(6) evidence of compliance with chapter 62L;

(7) a sample of marketing information, including a phone number where the pool may be contacted; and

(8) a list of all administrative fees charged.

Sec. 27. Minnesota Statutes 1994, section 62Q.17, is amended by adding a subdivision to read:

Subd. 9. [ENFORCEMENT.] Purchasing pools must register prior to offering coverage, and annually on July 1 thereafter, with the commissioner of commerce on a form prescribed by the commissioner. The commissioner of commerce shall enforce this section and all other state laws with respect to purchasing pools, and has for that purpose all general rulemaking and enforcement powers otherwise available to the commissioner of commerce. The commissioner may charge an annual registration fee sufficient to meet the costs of the commissioner's duties under this section.

Sec. 28. Minnesota Statutes 1994, section 72A.201, is amended by adding a subdivision to read:

Subd. 13. [IMPROPER CLAIM OF DISCOUNT.] (a) No insurer, integrated service network, or community integrated service network shall intentionally provide a health care provider with an explanation of benefits or similar document claiming a right to a discounted fee, price, or other charge, when the insurer, integrated service network, or community integrated service network does not have an agreement with the provider for the discount with respect to the patient involved.

(b) The insurer, integrated service network, or community integrated service network may, notwithstanding paragraph (a), claim the right to a discount based upon a discount agreement between the health care provider and another entity, but only if:

(1) that agreement expressly permitted the entity to assign its right to receive the discount;

(2) an assignment to the insurer, integrated service network, or community integrated service network of the right to receive the discount complies with any relevant requirements for assignments contained in the discount agreement; and

(3) the insurer, integrated service network, or community integrated service network has complied with any relevant requirements contained in the assignment.

When an explanation of benefits or similar document claims a discount permitted under this paragraph, it shall prominently state that the discount claimed is based upon an assignment and shall state the name of the entity from whom the assignment was received.

(c) No insurer, integrated service network, or community integrated service network that has entered into an agreement with a health care provider that involves discounted fees, prices, or other charges shall disclose the discounts to another entity, with the knowledge or expectation that the disclosure will result in claims for discounts prohibited under paragraphs (a) and (b).

Sec. 29. [REPEALER; POLITICAL SUBDIVISION ASSOCIATIONS.]

Minnesota Statutes 1994, section 62L.08, subdivision 7a, is repealed effective January 1, 1996.

Sec. 30. [EFFECTIVE DATES.]

Sections 1, 4, 5, 11, 12, 16, and 20 are effective January 1, 1996. Sections 2 (Standards for Determining), 3 (Stop Loss Regulation), and 18 are effective the day following final enactment.

Section 1. Minnesota Statutes 1994, section 62J.05, subdivision 2, is amended to read:

Subd. 2. [MEMBERSHIP.] (a) [NUMBER.] The Minnesota health care commission consists of 27 30 members, as specified in this subdivision. A member may designate a representative to act as a member of the commission in the member's absence. The governor and legislature shall coordinate appointments under this subdivision to ensure gender balance and ensure that geographic areas of the state are represented in proportion to their population.

(b) [HEALTH PLAN COMPANIES.] The commission includes four members representing health plan companies, including one member appointed by the Minnesota Council of Health Maintenance Organizations, one member appointed by the Insurance Federation of Minnesota, one member appointed by Blue Cross and Blue Shield of Minnesota, and one member appointed by the governor.

(c) [HEALTH CARE PROVIDERS.] The commission includes six members representing health care providers, including one member appointed by the Minnesota Hospital Association, one member appointed by the Minnesota Medical Association, one member appointed by the Minnesota Nurses' Association, one rural physician appointed by the governor, and two members appointed by the governor to represent providers other than hospitals, physicians, and nurses.

(d) [EMPLOYERS.] The commission includes four members representing employers, including (1) two members appointed by the Minnesota Chamber of Commerce, including one self-insured employer and one small employer; and (2) two members appointed by the governor.

(e) [CONSUMERS.] The commission includes seven consumer members, including three members appointed by the governor, one of whom must represent persons over age 65; one member appointed by the consortium of citizens with disabilities to represent consumers with physical disabilities or chronic illness; one member appointed by the mental health association of Minnesota, in consultation with the Minnesota chapter of the society of Americans for recovery, to represent consumers with mental illness or chemical dependency; one appointed under the rules of the senate; and one appointed under the rules of the house of representatives.

(f) [EMPLOYEE UNIONS.] The commission includes three representatives of labor unions, including two appointed by the AFL-CIO Minnesota and one appointed by the governor to represent other unions.

(g) [STATE AGENCIES.] The commission includes the commissioners of commerce, employee relations, and human services.

(h) [REGIONAL COORDINATING BOARDS.] The commission includes one member who is the chair of a regional coordinating board, elected by a majority vote of the chairs of the regional coordinating boards.

(i) [COUNTIES.] The commission includes one county commissioner appointed by the association of Minnesota counties, and one administrator of a county or multicounty community health board appointed by the metro intercounty association. The appointing authorities shall coordinate their appointments so that one county representative resides in a rural area of the state and the other in a metropolitan area of the state.

(h) (j) [CHAIR.] The governor shall designate the chair of the commission from among the governor's appointees.

Sec. 2. Minnesota Statutes 1994, section 62J.05, subdivision 9, is amended to read:

Subd. 9. [REPEALER.] This section is repealed effective July 1, 1996 2000.

Sec. 3. Minnesota Statutes 1994, section 62J.09, subdivision 1, is amended to read:

Subdivision 1. [GENERAL DUTIES.] The regional coordinating boards are locally controlled boards consisting of providers, health plan companies, employers, consumers, and elected officials. Regional coordinating boards may:

(1) recommend that the commissioner approve voluntary agreements between providers in the region that will improve quality, access, or affordability of health care but might constitute a violation of antitrust laws if undertaken without government direction;

(2) make recommendations to the commissioner regarding major capital expenditures or the introduction of expensive new technologies and medical practices that are being proposed or considered by providers;

(3) undertake voluntary activities to educate consumers, providers, and purchasers or to promote voluntary, cooperative community cost containment, access, or quality of care projects about community plans and projects promoting health care cost containment, consumer accountability, access, and quality and efforts to achieve public health goals;

(4) (2) make recommendations to the commissioner regarding ways of improving affordability, accessibility, and quality of health care in the region and throughout the state.;

(3) provide technical assistance to parties interested in establishing or operating a community integrated service network or integrated service network within the region. This assistance must complement assistance provided by the commissioner under section 62N.23;

(4) advise the commissioner on public health goals, taking into consideration the relevant portions of the community health service plans, plans required by the Minnesota comprehensive adult mental health act, the Minnesota comprehensive children's mental health act, and the community social service act plans developed by county boards or community health boards in the region under chapters 145A, 245, and 256E;

(5) prepare an annual regional education plan that is consistent with and supportive of public health goals identified by community health boards in the region; and

(6) serve as advisory bodies to identify potential applicants for federal Health Professional Shortage Area and federal Medically Underserved Area designation as requested by the commissioner.

Sec. 4. Minnesota Statutes 1994, section 62J.09, subdivision 6, is amended to read:

Subd. 6. [TECHNICAL ASSISTANCE.] The commissioner shall provide technical assistance to regional coordinating boards. Technical assistance includes providing each regional board with timely information concerning action plans, enrollment data, and health care expenditures affecting the regional board's region.

Sec. 5. Minnesota Statutes 1994, section 62J.09, subdivision 8, is amended to read:

Subd. 8. [REPEALER.] This section is repealed effective July 1, 1996 2000.

Sec. 6. Minnesota Statutes 1994, section 62J.17, subdivision 4a, is amended to read:

Subd. 4a. [EXPENDITURE REPORTING.] (a) [GENERAL REQUIREMENT.] A provider making a major spending commitment after April 1, 1992, shall submit notification of the expenditure to the commissioner and provide the commissioner with any relevant background information.

(b) [REPORT.] Notification must include a report, submitted within 60 days after the date of the major spending commitment, using terms conforming to the definitions in section 62J.03 and this section. Each report is subject to retrospective review and must contain:

(1) a detailed description of the major spending commitment, including the specific dollar amount of each expenditure, and its purpose;

(2) the date of the major spending commitment;

(3) a statement of the expected impact that the major spending commitment will have on charges by the provider to patients and third party payers;

(4) a statement of the expected impact on the clinical effectiveness or quality of care received by the patients that the provider expects to serve;

(5) a statement of the extent to which equivalent services or technology are already available to the provider's actual and potential patient population;

(6) a statement of the distance from which the nearest equivalent services or technology are already available to the provider's actual and potential population;

(7) a statement describing the pursuit of any lawful collaborative arrangements; and

(8) a statement of assurance that the provider will not use, purchase, or perform health care technologies and procedures that are not clinically effective and cost-effective, unless the technology is used for experimental or research purposes to determine whether a technology or procedure is clinically effective and cost-effective.

The provider may submit any additional information that it deems relevant.

(c) [ADDITIONAL INFORMATION.] The commissioner may request additional information from a provider for the purpose of review of a report submitted by that provider, and may consider relevant information from other sources. A provider shall provide any information requested by the commissioner within the time period stated in the request, or within 30 days after the date of the request if the request does not state a time.

(d) [FAILURE TO COMPLY.] If the provider fails to submit a complete and timely expenditure report, including any additional information requested by the commissioner, the commissioner may make the provider's subsequent major spending commitments subject to the procedures of prospective review and approval under subdivision 6a.

Sec. 7. Minnesota Statutes 1994, section 62J.48, is amended to read:

62J.48 [CRITERIA FOR REIMBURSEMENT.]

All ambulance services licensed under section 144.802 are eligible for reimbursement under the integrated service network system and the regulated all-payer option by health plan companies. The commissioner shall require community integrated service networks, integrated service networks, and all-payer insurers health plan companies to adopt the following reimbursement policies.

(1) All scheduled or prearranged air and ground ambulance transports must be reimbursed if requested by an attending physician or nurse, and, if the person is an enrollee in an integrated service network or, community integrated service network, or health maintenance organization if approved by a designated representative of an integrated service network or a community service network the managed care plan who is immediately available on a 24-hour basis. The designated representative must be a registered nurse or a physician assistant with at least three years of critical care or trauma experience, or a licensed physician.

(2) Reimbursement must be provided for all emergency ambulance calls in which a patient is transported or medical treatment rendered.

(3) Special transportation services must not be billed or reimbursed if the patient needs medical attention immediately before transportation.

Sec. 8. Minnesota Statutes 1994, section 62M.07, is amended to read:

62M.07 [PRIOR AUTHORIZATION OF SERVICES.]

(a) Utilization review organizations conducting prior authorization of services must have written standards that meet at a minimum the following requirements:

(1) written procedures and criteria used to determine whether care is appropriate, reasonable, or medically necessary;

(2) a system for providing prompt notification of its determinations to enrollees and providers and for notifying the provider, enrollee, or enrollee's designee of appeal procedures under clause (4);

(3) compliance with section 72A.201, subdivision 4a, regarding time frames for approving and disapproving prior authorization requests;

(4) written procedures for appeals of denials of prior authorization which specify the responsibilities of the enrollee and provider, and which meet the requirements of section 72A.285, regarding release of summary review findings; and

(5) procedures to ensure confidentiality of patient-specific information, consistent with applicable law.

(b) No utilization review organization, health plan company, or claims administrator may conduct or require prior authorization of emergency confinement or emergency treatment. The enrollee or the enrollee's authorized representative may be required to notify the health plan company, claims administrator, or utilization review organization as soon after the beginning of the emergency confinement or emergency treatment as reasonably possible.

Sec. 9. Minnesota Statutes 1994, section 62M.09, subdivision 5, is amended to read:

Subd. 5. [WRITTEN CLINICAL CRITERIA.] A utilization review organization's decisions must be supported by written clinical criteria and review procedures, based on accepted medical practice. Clinical criteria and review procedures must be established with appropriate involvement from actively practicing physicians or providers. A utilization review organization must use written clinical criteria, as required, for determining the appropriateness of the certification request. The utilization review organization must have a procedure for ensuring, at a minimum, the periodic annual evaluation and updating of the written criteria based on sound clinical principles.

Sec. 10. Minnesota Statutes 1994, section 62M.10, is amended by adding a subdivision to read:

Subd. 7. [AVAILABILITY OF CRITERIA.] Upon request, a utilization review organization shall provide to an enrollee or to an attending physician or provider the criteria used for a specific procedure to determine the necessity, appropriateness, and efficacy of that procedure and identify the database, professional treatment guideline, or other basis for the criteria.

Sec. 11. Minnesota Statutes 1994, section 62P.05, is amended by adding a subdivision to read:

Subd. 5. [SMALL RURAL HOSPITALS.] Each small rural hospital shall file information with the commissioner of health and calculate its growth in revenues pursuant to the requirements of this chapter. Small rural hospitals that do not file as part of a hospital system are exempt from the repayment provisions of subdivision 4. However, the commissioner retains the authority to initiate an investigation and order repayment pursuant to this section, if the commissioner believes that there is an unreasonable rate of growth in revenues and if the hospital fails to demonstrate good cause for exceeding the statutory growth limits. For purposes of this subdivision, "small rural hospital" is defined as a licensed hospital with less than 50 beds.

Sec. 12. Minnesota Statutes 1994, section 72A.20, is amended by adding a subdivision to read:

Subd. 32. [UNFAIR HEALTH RISK AVOIDANCE.] No insurer or health plan company may design a network of providers, policies on access to providers, or marketing strategy in such a way as to discourage enrollment by individuals or groups whose health care needs are perceived as likely to be more expensive than the average. This subdivision does not prohibit underwriting and rating practices that comply with Minnesota law.

Sec. 13. Minnesota Statutes 1994, section 72A.20, is amended by adding a subdivision to read:

Subd. 33. [PROHIBITION OF INAPPROPRIATE INCENTIVES.] No insurer or health plan company may give any financial incentive to a health care provider based solely on the number of services denied or referrals not authorized by the provider. This subdivision does not prohibit capitation or other compensation methods that serve to hold health care providers financially accountable for the cost of caring for a patient population.

Sec. 14. Minnesota Statutes 1994, section 136A.1355, subdivision 3, is amended to read:

Subd. 3. [LOAN FORGIVENESS.] For the period July 1, 1993 through June 30, 1995 fiscal years beginning on and after July 1, 1995, the higher education coordinating board may accept up to four applicants who are fourth year medical students, three applicants who are pediatric residents, and four applicants who are family practice residents, and one applicant who is an internal medicine resident, per fiscal year for participation in the loan forgiveness program. If the higher education coordinating board does not receive enough applicants per fiscal year to fill the number of residents in the specific areas of practice, the resident applicants may be from any area of practice. The eight resident applicants can may be in any year of training; however, priority must be given to the following categories of residents in descending order: third year residents, second year residents, and first year residents. Applicants are responsible for securing their own loans. Applicants chosen to participate in the loan forgiveness program may designate for each year of medical school, up to a maximum of four years, an agreed amount, not to exceed $10,000, as a qualified loan. For each year that a participant serves as a physician in a designated rural area, up to a maximum of four years, the higher education coordinating board shall annually pay an amount equal to one year of qualified loans. Participants who move their practice from one designated rural area to another remain eligible for loan repayment. In addition, if a resident participating in the loan forgiveness program serves at least four weeks during a year of residency substituting for a rural physician to temporarily relieve the rural physician of rural practice commitments to enable the rural physician to take a vacation, engage in activities outside the practice area, or otherwise be relieved of rural practice commitments, the participating resident may designate up to an additional $2,000, above the $10,000 maximum, for each year of residency during which the resident substitutes for a rural physician for four or more weeks.

Sec. 15. Minnesota Statutes 1994, section 136A.1355, subdivision 5, is amended to read:

Subd. 5. [LOAN FORGIVENESS; UNDERSERVED URBAN COMMUNITIES.] For the period July 1, 1993 to June 30, 1995 fiscal years beginning on and after July 1, 1995, the higher education coordinating board may accept up to four applicants who are either fourth year medical students, or residents in family practice, pediatrics, or internal medicine per fiscal year for participation in the urban primary care physician loan forgiveness program. The resident applicants may be in any year of residency training; however, priority will be given to the following categories of residents in descending order: third year residents, second year residents, and first year residents. If the higher education coordinating board does not receive enough qualified applicants per fiscal year to fill the number of slots for urban underserved communities, the slots may be allocated to students or residents who have applied for the rural physician loan forgiveness program in subdivision 1. Applicants are responsible for securing their own loans. For purposes of this provision, "qualifying educational loans" are government and commercial loans for actual costs paid for tuition, reasonable education expenses, and reasonable living expenses related to the graduate or undergraduate education of a health care professional. Applicants chosen to participate in the loan forgiveness program may designate for each year of medical school, up to a maximum of four years, an agreed amount, not to exceed $10,000, as a qualified loan. For each year that a participant serves as a physician in a designated underserved urban area, up to a maximum of four years, the higher education coordinating board shall annually pay an amount equal to one year of qualified loans. Participants who move their practice from one designated underserved urban community to another remain eligible for loan repayment.

Sec. 16. Minnesota Statutes 1994, section 136A.1356, subdivision 3, is amended to read:

Subd. 3. [ELIGIBILITY.] To be eligible to participate in the program, a prospective midlevel practitioner must submit a letter of interest to the higher education coordinating board prior to or while attending a program of study designed to prepare the individual for service as a midlevel practitioner. Before completing the first year of this program, A midlevel practitioner student who is accepted into this program must sign a contract to agree to serve at least two of the first four years following graduation from the program in a designated rural area.

Sec. 17. Minnesota Statutes 1994, section 136A.1356, subdivision 4, is amended to read:

Subd. 4. [LOAN FORGIVENESS.] The higher education coordinating board may accept up to eight applicants per year for participation in the loan forgiveness program. Applicants are responsible for securing their own loans. Applicants chosen to participate in the loan forgiveness program may designate for each year of midlevel practitioner study, up to a maximum of two years, an agreed amount, not to exceed $7,000, as a qualified loan. For purposes of this provision, "qualifying educational loans" are government and commercial loans for actual costs paid for tuition, reasonable education expenses, and reasonable living expenses related to the graduate or undergraduate education of a health care professional. For each year that a participant serves as a midlevel practitioner in a designated rural area, up to a maximum of four years, the higher education coordinating board shall annually repay an amount equal to one-half a qualified loan. Participants who move their practice from one designated rural area to another remain eligible for loan repayment.

Sec. 18. [137.43] [GRANTS FOR AREA HEALTH EDUCATION CENTER PROGRAMS.]

Subdivision 1. [GRANT APPLICATION.] The board of regents of the University of Minnesota, through the academic health center and the University of Minnesota-Duluth School of Medicine, is requested to apply for a federal area health education center program grant. If awarded a grant, the University of Minnesota-Duluth School of Medicine, in cooperation with public or private, nonprofit area health education centers, is requested to plan, develop, and operate area health education center programs. The University of Minnesota-Duluth School of Medicine is requested to develop cooperative arrangements with two area health education centers in year two of the grant, and develop cooperative arrangements with an additional two centers in year three of the grant.

Subd. 2. [PROGRAM REQUIREMENTS.] Each program must:

(1) provide preceptorship educational experiences for health science students;

(2) maintain community-based primary care residency programs or be affiliated with such programs;

(3) maintain continuing education programs for health professionals or coordinate its activities with such programs;

(4) maintain learning resources and dissemination systems;

(5) have agreements with community-based organizations for educating and training health professionals;

(6) train health professionals, including nurses and allied health professionals; and

(7) carry out recruitment and health career awareness programs among minority and other students in medically underserved areas of the state.

Sec. 19. [137.44] [SUBSTITUTE PHYSICIAN DEMONSTRATION PROJECT.]

Subdivision 1. [ESTABLISHMENT.] The board of regents, through the University of Minnesota academic health center, is requested to establish and administer a substitute physician (locum tenens and emergency room coverage) demonstration project at up to four rural demonstration sites within the state. The academic health center is requested to coordinate the administration of the project with the commissioner of health and the office of rural health and primary health care.

Subd. 2. [PROJECT ACTIVITIES.] The project must:

(1) encourage physicians to serve as substitute physicians for the demonstration sites;

(2) provide a central register of physicians interested in serving as substitute physicians at the demonstration sites;

(3) provide a referral service for requests from demonstration sites for substitute physicians; and

(4) provide substitute physician services at rates that reflect the administrative savings resulting from centralized referral and credentialing.

Subd. 3. [CREDENTIALING; PROFESSIONAL EDUCATION.] The academic health center is requested to credential persons desiring to serve as substitute physicians. The academic health center may employ substitute physicians serving in the demonstration project as temporary clinical faculty, and may provide substitute physicians with additional opportunities for professional education and interaction.

Subd. 4. [DEMONSTRATION SITES.] The academic health center is requested to designate up to four rural communities as demonstration sites for the project. The academic health center is requested to choose sites based on a community's need for substitute physician services and the willingness of the community to work cooperatively with the academic health center and participate in the demonstration project evaluation.

Subd. 5. [EVALUATION.] The commissioner of health, through the office of rural health and primary care, shall evaluate the demonstration project and present an evaluation report to the legislature by January 15, 1996. The commissioner may contract with a nonprofit rural health policy organization to evaluate the demonstration project. The evaluation must identify any modifications necessary to improve the effectiveness of the project. The evaluation must also include a recommendation on whether the demonstration project should be extended to other areas of the state.

Sec. 20. Minnesota Statutes 1994, section 144.1464, subdivision 2, is amended to read:

Subd. 2. [CRITERIA.] (a) The commissioner, through the organization under contract, shall award grants to hospitals and clinics that agree to:

(1) provide secondary and post-secondary summer health care interns with formal exposure to the health care profession;

(2) provide an orientation for the secondary and post-secondary summer health care interns;

(3) pay one-half the costs of employing the secondary and post-secondary summer health care intern, based on an overall hourly wage that is at least the minimum wage but does not exceed $6 an hour; and

(4) interview and hire secondary and post-secondary pupils for a minimum of six weeks and a maximum of 12 weeks; and

(5) employ at least one secondary student for each post-secondary student employed, to the extent that there are sufficient qualifying secondary student applicants.

(b) In order to be eligible to be hired as a secondary summer health intern by a hospital or clinic, a pupil must:

(1) intend to complete high school graduation requirements and be between the junior and senior year of high school;

(2) be from a school district in proximity to the facility; and

(3) provide the facility with a letter of recommendation from a health occupations or science educator.

(c) In order to be eligible to be hired as a post-secondary summer health care intern by a hospital or clinic, a pupil must:

(1) intend to complete a two-year or four-year degree program and be planning on enrolling in or be enrolled in that degree program;

(2) be enrolled in a Minnesota educational institution or be a resident of the state of Minnesota; priority must be given to applicants from a school district or attend an educational institution in proximity to the facility; and

(3) provide the facility with a letter of recommendation from a health occupations or science educator.

(d) Hospitals and clinics awarded grants may employ pupils as secondary and post-secondary summer health care interns beginning on or after June 15, 1993, if they agree to pay the intern, during the period before disbursement of state grant money, with money designated as the facility's 50 percent contribution towards internship costs.

Sec. 21. Minnesota Statutes 1994, section 144.1464, subdivision 3, is amended to read:

Subd. 3. [GRANTS.] The commissioner, through the organization under contract, shall award separate grants to hospitals and clinics meeting the requirements of subdivision 2. The grants must be used to pay one-half of the costs of employing secondary and post-secondary pupils in a hospital or clinic during the course of the program. No more than 50 percent of the participants may be post-secondary students, unless the program does not receive enough qualified secondary applicants per fiscal year. No more than five pupils may be selected from any secondary or post-secondary institution to participate in the program and no more than one-half of the number of pupils selected may be from the seven-county metropolitan area.

Sec. 22. Minnesota Statutes 1994, section 144.1464, subdivision 4, is amended to read:

Subd. 4. [CONTRACT.] The commissioner shall contract with a statewide, nonprofit organization representing facilities at which secondary and post-secondary summer health care interns will serve, to administer the grant program established by this section. Grant funds that are not used in one fiscal year may be carried over to the next fiscal year. The organization awarded the grant shall provide the commissioner with any information needed by the commissioner to evaluate the program, in the form and at the times specified by the commissioner.

Sec. 23. Minnesota Statutes 1994, section 144.147, subdivision 1, is amended to read:

Subdivision 1. [DEFINITION.] "Eligible rural hospital" means any nonfederal, general acute care hospital that:

(1) is either located in a rural area, as defined in the federal Medicare regulations, Code of Federal Regulations, title 42, section 405.1041, or located in a community with a population of less than 5,000, according to United States Census Bureau statistics, outside the seven-county metropolitan area;

(2) has 100 or fewer beds;

(3) is not for profit; and

(4) has not been awarded a grant under the federal rural health transition grant program, which would be received concurrently with any portion of the grant period for this program.

Sec. 24. Minnesota Statutes 1994, section 144.1484, subdivision 1, is amended to read:

Subdivision 1. [SOLE COMMUNITY HOSPITAL FINANCIAL ASSISTANCE GRANTS.] The commissioner of health shall award financial assistance grants to rural hospitals in isolated areas of the state. To qualify for a grant, a hospital must: (1) be eligible to be classified as a sole community hospital according to the criteria in Code of Federal Regulations, title 42, section 412.92 or be located in a community with a population of less than 5,000 and located more than 25 miles from a like hospital currently providing acute short-term services; (2) have experienced net income losses in the two most recent consecutive hospital fiscal years for which audited financial information is available; (3) consist of 40 or fewer licensed beds; and (4) demonstrate to the commissioner that it has obtained local support for the hospital and that any state support awarded under this program will not be used to supplant local support for the hospital. The commissioner shall review audited financial statements of the hospital to assess the extent of local support. Evidence of local support may include bonds issued by a local government entity such as a city, county, or hospital district for the purpose of financing hospital projects; and loans, grants, or donations to the hospital from local government entities, private organizations, or individuals. The commissioner shall determine the amount of the award to be given to each eligible hospital based on the hospital's financial need operating loss margin (total operating losses as a percentage of total operating revenue) for the two most recent consecutive fiscal years for which audited financial information is available and the total amount of funding available. One hundred percent of the available funds will be disbursed proportionately based on the operating loss margins of the eligible hospitals.

Sec. 25. Minnesota Statutes 1994, section 144.1486, subdivision 4, is amended to read:

Subd. 4. [ELIGIBILITY REQUIREMENTS.] In order to qualify for community health center program funding, a project must:

(1) be located in a rural shortage area that is a medically underserved, federal health professional shortage, or governor designated shortage area. "Rural" means an area of the state outside the ten-county seven-county Twin Cities metropolitan area and outside of the Duluth, St. Cloud, East Grand Forks, Moorhead, Rochester, and LaCrosse census defined urbanized areas;

(2) represent or propose the formation of a nonprofit corporation with local resident governance, or be a governmental entity. Applicants in the process of forming a nonprofit corporation may have a nonprofit coapplicant serve as financial agent through the remainder of the formation period. With the exception of governmental entities, all applicants must submit application for nonprofit incorporation and 501(c)(3) tax-exempt status within six months of accepting community health center grant funds;

(3) result in a locally owned and operated community health center that provides primary and preventive health care services, and incorporates quality assurance, regular reviews of clinical performance, and peer review;

(4) seek to employ midlevel professionals, where appropriate;

(5) demonstrate community and popular support and provide a 20 percent local match of state funding; and

(6) propose to serve an area that is not currently served or was not served prior to establishment of a state-funded community health center by a federally certified medical organization.

Sec. 26. Minnesota Statutes 1994, section 144.1489, subdivision 3, is amended to read:

Subd. 3. [LENGTH OF SERVICE.] Participants must agree to provide obligated service for a minimum of two years. A participant may extend a contract to provide obligated service for a third and fourth year, subject to board approval and the availability of federal and state funding.

Sec. 27. Minnesota Statutes 1994, section 144.801, is amended by adding a subdivision to read:

Subd. 11. [FIRST RESPONDER.] "First responder" means an individual who is certified by the commissioner to perform, at a minimum, basic emergency skills before the arrival of a licensed ambulance service, and is:

(1) a member of an organized service recognized by a local political subdivision whose primary responsibility is to respond to medical emergencies to provide initial medical care before the arrival of a licensed ambulance service; or

(2) a member of an organized industrial medical first response team.

Sec. 28. Minnesota Statutes 1994, section 144.804, subdivision 1, is amended to read:

Subdivision 1. [DRIVERS AND ATTENDANTS.] No publicly or privately owned basic ambulance service shall be operated in the state unless its drivers and attendants possess a current emergency care course certificate authorized by rules adopted by the commissioner of health according to chapter 14. Until August 1, 1994 1997, a licensee may substitute a person currently certified by the American Red Cross in advanced first aid and emergency care or a person who has successfully completed the United States Department of Transportation first responder curriculum, and who has also been trained to use basic life support equipment as required by rules adopted by the commissioner under section 144.804, subdivision 3, for one of the persons on a basic ambulance, provided that person will function as the driver while transporting a patient. The commissioner may grant a variance to allow a licensed ambulance service to use attendants certified by the American Red Cross in advanced first aid and emergency care and, until August 1, 1997, to use attendants who have successfully completed the United States Department of Transportation first responder curriculum, and who have been trained to use basic life support equipment as required by rules adopted by the commissioner under subdivision 3, in order to ensure 24-hour emergency ambulance coverage. The commissioner shall study the roles and responsibilities of first responder units and report the findings by January 1, 1991. This study shall address at a minimum:

(1) education and training;

(2) appropriate equipment and its use;

(3) medical direction and supervision; and

(4) supervisory and regulatory requirements.

Sec. 29. Laws 1990, chapter 591, article 4, section 9, is amended to read:

Sec. 9. [SUNSET.]

Sections 1 to 4 and 6 are repealed on June 30, 1995.

Sec. 30. Laws 1993, chapter 224, article 4, section 40, is amended to read:

Sec. 40. [INTEGRATED CHILDREN'S DATABASE.]

Subdivision 1. [PLAN.] The departments of education, administration, health and human services, and the office of strategic and long-range planning shall jointly develop a plan for an integrated statewide children's service database. The plan must contain common essential data elements that include all children from birth through kindergarten enrollment by July 1, 1995. The essential data elements shall be the basis for a statewide children's service database. Initial service areas shall include but are not limited to: early childhood and family education, ECFE tribal schools, children with special health care needs, learning readiness, way to grow, early childhood special education part H, even start, school health, home visitor, lead poisoning screening, child care resources and referral, child care service development, child trust fund, migrant child care, dependent child care, headstart and community resource program.

In developing a plan for a statewide integrated children's database the joint planning team must:

(1) conduct a high-level needs analysis of service delivery and reporting and decision making areas;

(2) catalogue current information systems;

(3) establish outcomes for developing systems;

(4) analyze the needs of individuals and organizations that will use the system; and

(5) identify barriers to sharing information and recommend changes to the Data Practices Act to remove those barriers.

Subd. 2. [DATA STORAGE.] The departments of education, administration, corrections, health and human services, and the office of strategic and long-range planning must provide to the legislature by January 30, 1995, a plan for storing essential data elements for family service centers to use. This plan will include reporting of data to the state as a by-product of both family service and school district internal operations.

Subd. 3. [AGENCY SYSTEM INTEGRATION.] Any state agency or department with programs serving children that is designing or redesigning its information system must ensure that the resulting information system can be fully integrated into the statewide children's service database by June 30, 1995. Agencies or departments must submit plans to design or redesign information systems for review by the information policy office to ensure that agency or department information can be fully integrated into the statewide children's service database.

Sec. 31. Laws 1994, chapter 624, article 5, section 7, is amended to read:

Sec. 7. [24-HOUR COVERAGE.]

As part of the implementation report submitted on January 1, 1996, as required under Minnesota Statutes, section 62Q.41, the The commissioners of commerce, health, and labor and industry shall develop a 24-hour coverage plan, on a pilot project basis, incorporating and coordinating the health component medical benefits of workers' compensation with health care coverage benefits to be offered by an integrated service network, health maintenance organization, or an insurer or self-insured employer under chapters 79, 79A, 176, 181, 62A, 62C, 62D, 62H, and 62N. The commissioners shall also make provide the plan and recommendations of any legislative changes that may be needed to implement this plan to the legislature by January 1, 1996.

Sec. 32. Laws 1994, chapter 625, article 5, section 10, subdivision 2, is amended to read:

Subd. 2. [SCOPE OF STUDY.] The commissioner of health shall continue the study developed as part of Minnesota Statutes, section 62J.045, on the impact of state health care reform on the financing of medical education and research activities in the state. The study shall address issues related to the institutions engaged in these activities, including hospitals, medical centers, and health plan companies, and will report on the need for alternative funding mechanisms for medical education and research activities. The commissioner shall monitor ongoing public and private sector activities related to the study of the financing of medical education and research activities and include a description of these activities in the final report as applicable. The commissioner shall submit a report on the study findings, including recommendations on mechanisms to finance medical education and research activities, to the legislature by February 15, 1995 1996.

Sec. 33. [MALPRACTICE REFORM STUDY.]

The attorney general shall study issues related to medical malpractice reform, and shall present to the legislature, by December 15, 1995, recommendations and draft legislation for medical malpractice reforms that will reduce health care costs in Minnesota. In developing these recommendations, the attorney general shall consider medical malpractice laws in other states, with particular attention to medical malpractice laws in California.

Sec. 34. [RESOURCE BASED RELATIVE VALUE SCALE.]

The commissioner of human services shall develop an implementation plan to reimburse physicians and other MinnesotaCare program providers using a resource based relative value scale. The resource based relative value scale may incorporate elements of the Medicare resource based relative value scale, but must use a Minnesota-specific multiplier. The commissioner shall present the implementation plan to the legislature by December 15, 1995.

Sec. 35. [COMPREHENSIVE AND COORDINATED CARE FOR CHILDREN WITH SPECIAL HEALTH CARE NEEDS.]

The commissioners of health, human services, and education shall develop a strategy to provide comprehensive and coordinated care for children with special health care needs. The initiatives to be considered shall include, but are not limited to, recommendations made by the commissioners of health and human services in their February 15, 1995, report to the legislature on the distribution and scope of specialized health care for children. The commissioners shall submit recommendations for a strategy to the legislature by January 15, 1996.

Sec. 36. [HEALTH COVERAGE DEMONSTRATION PROJECT.]

Subdivision 1. [ESTABLISHMENT.] The commissioner of health shall award a grant to regional coordinating board five to develop a pilot project to provide health coverage counseling, information, and advocacy services to individuals obtaining health care services within the geographic area served by the regional coordinating board. The board may contract with a nonprofit organization to develop and administer the pilot project. The pilot project must:

(1) provide individuals with assistance in interpreting the terms of their certificate, contract, or policy of health coverage, including but not limited to, terms relating to covered services, limitations on services, limitations on access to providers, and enrollee complaint and appeal procedures;

(2) maintain a current listing of health care providers serving health plan company enrollees within regional coordinating board five, and assist individuals in determining whether services provided by a specific provider are covered under the health plan; and

(3) assist and serve as advocates for enrollees in the complaint and appeals process.

The commissioner of health and the commissioner of commerce shall require all health plan companies serving enrollees within regional coordinating board five to regularly provide the regional coordinating board, or the entity under contract with the board, with current listings of providers and current certificates, contracts, or policies of coverage.

Subd. 2. [EVALUATION.] The commissioner of health, through the office of rural health and in consultation with the commissioner of commerce, shall evaluate the effectiveness of the pilot project. The commissioner of health shall recommend to the legislature by January 15, 1997, whether the pilot project should be extended beyond the sunset date, and whether the services provided by the pilot project should be made available to enrollees living within the areas served by other regional coordinating boards.

Subd. 3. [SUNSET.] This section expires July 1, 1997.

Sec. 37. [APPROPRIATION.]

Subdivision 1. [AREA HEALTH EDUCATION CENTER GRANT.] $....... is appropriated from the health care access fund to the board of regents of the University of Minnesota for the biennium ending June 30, 1997, to be used as the state match for federal funding received through the area health education center grant applied for under section 137.43. This appropriation is available to the board only if the University of Minnesota-Duluth School of Medicine receives a federal area health education center grant.

Subd. 2. [RURAL PHYSICIAN ASSOCIATE PROGRAM.] $....... is appropriated from the health care access fund to the board of regents of the University of Minnesota for the biennium ending June 30, 1997, to expand the rural physician associate program administered by the University of Minnesota academic health center from 40 to 60 students over a two-year period.

Subd. 3. [PHYSICIAN SUBSTITUTE DEMONSTRATION PROJECT.] (a) $....... is appropriated from the health care access fund to the board of regents of the University of Minnesota for the biennium ending June 30, 1997, for costs incurred by the academic health center in credentialing physician substitutes and employing physician substitutes as temporary clinical faculty under section 137.44.

(b) $....... is appropriated from the health care access fund to the commissioner of health for the biennium ending June 30, 1997, to evaluate the physician substitute demonstration project established under section 137.44.

Sec. 38. [APPROPRIATION; RESOURCE LINE.]

$....... is appropriated from the health care access fund to the commissioner of health for the fiscal year beginning July 1, 1996, to operate a 1-800 resource phone line for information on programs and services for children with special health care needs, and to conduct outreach and communications activities related to this resource phone line.

Sec. 39. [APPROPRIATION.]

$....... is appropriated from the health care access fund to the commissioner of health for the biennium ending June 30, 1997, to implement section 35 (health coverage demonstration project).

Sec. 40. [REVISOR INSTRUCTION.]

(a) The revisor of statutes is instructed to change the term "children's health plan" and similar terms to "MinnesotaCare program" and similar terms, wherever in Minnesota Statutes and Minnesota Rules the term "children's health plan" and similar terms appear, including the revisor's heading that immediately precedes Minnesota Statutes 1994, section 256.9351, except that the revisor shall retain the reference to "children's health plan" in Minnesota Statutes, section 256.9357, subdivision 1.

(b) The revisor of statutes is instructed to change the title of Minnesota Statutes, chapter 62Q, to "REQUIREMENTS FOR HEALTH PLAN COMPANIES."

Sec. 41. [REPEALER.]

Minnesota Statutes 1994, sections 62J.045; 62J.07, subdivision 4; 62J.09, subdivision 1a; 62J.19; and 62J.65, are repealed.

Laws 1993, chapter 247, article 1, sections 12, 13, 14, 15, 18, and 19, are repealed.

Sec. 42. [EFFECTIVE DATE.]

Sections 22 to 26 and 29 are effective the day following final enactment.

151.48 [OUT-OF-STATE WHOLESALE DRUG DISTRIBUTOR LICENSING REQUIREMENTS.]

(a) It is unlawful for an out-of-state wholesale drug distributor to conduct business in the state without first obtaining a license from the board and paying the required fee.

(b) Application for an out-of-state wholesale drug distributor license under this section shall be made on a form furnished by the board.

(c) The issuance of a license under sections 151.42 to 151.51 shall not change or affect tax liability imposed by the department of revenue on any out-of-state wholesale drug distributor.

(d) No person acting as principal or agent for any out-of-state wholesale drug distributor may sell or distribute drugs in the state unless the distributor has obtained a license.

(e) (d) The board may adopt regulations that permit out-of-state wholesale drug distributors to obtain a license on the basis of reciprocity to the extent that an out-of-state wholesale drug distributor:

(1) possesses a valid license granted by another state under legal standards comparable to those that must be met by a wholesale drug distributor of this state as prerequisites for obtaining a license under the laws of this state; and

(2) can show that the other state would extend reciprocal treatment under its own laws to a wholesale drug distributor of this state.

Sec. 2. Minnesota Statutes 1994, section 270.101, subdivision 1, is amended to read:

Subdivision 1. [LIABILITY IMPOSED.] A person who, either singly or jointly with others, has the control of, supervision of, or responsibility for filing returns or reports, paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a person who is liable under any other law, is liable for the payment of taxes, penalties, and interest arising under chapters 295, 296, 297, 297A, and 297C, or sections 290.92 and 297E.02.

Sec. 3. Minnesota Statutes 1994, section 295.50, subdivision 3, is amended to read:

Subd. 3. [GROSS REVENUES.] "Gross revenues" are total amounts received in money or otherwise by:

(1) a resident hospital for patient services;

(2) a resident surgical center for patient services;

(3) a nonresident hospital for patient services provided to patients domiciled in Minnesota;

(4) a nonresident surgical center for patient services provided to patients domiciled in Minnesota;

(5) a resident health care provider, other than a staff model health carrier, for patient services;

(6) a nonresident health care provider for patient services provided to an individual domiciled in Minnesota or patient services provided in Minnesota;

(7) a wholesale drug distributor for sale or distribution of legend drugs that are delivered: (i) to a Minnesota resident by a wholesale drug distributor who is a nonresident pharmacy directly, by common carrier, or by mail; or (ii) in Minnesota by the wholesale drug distributor, by common carrier, or by mail, unless the legend drugs are delivered to another wholesale drug distributor who sells legend drugs exclusively at wholesale. Legend drugs do not include nutritional products as defined in Minnesota Rules, part 9505.0325;

(8) a staff model health plan company as gross premiums for enrollees, copayments, deductibles, coinsurance, and fees for patient services covered under its contracts with groups and enrollees;

(9) a resident pharmacy for medical supplies, appliances, and equipment; and

(10) a nonresident pharmacy for medical supplies, appliances, and equipment provided to consumers domiciled in Minnesota or delivered into Minnesota.

Sec. 4. Minnesota Statutes 1994, section 295.50, subdivision 4, is amended to read:

Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care provider" means:

(1) a person furnishing any or all of the following goods or services directly to a patient or consumer: medical, surgical, optical, visual, dental, hearing, nursing services, drugs, medical supplies, medical appliances, laboratory, diagnostic or therapeutic services, or any goods and services not listed above that qualifies for reimbursement under the medical assistance program provided under chapter 256B. For purposes of this clause, "directly to a patient or consumer" includes goods and services provided in connection with independent medical examinations under section 65B.56 or other examinations for purposes of litigation or insurance claims;

(2) a staff model health plan company; or

(3) a licensed ambulance service.

(b) Health care provider does not include hospitals, nursing homes licensed under chapter 144A, pharmacies, and surgical centers.

Sec. 5. Minnesota Statutes 1994, section 295.50, subdivision 10a, is amended to read:

Subd. 10a. [PHARMACY.] "Pharmacy" means a pharmacy, as defined in section 151.01 required to be licensed under chapter 151, or a pharmacy required to be licensed by any other jurisdiction.

Sec. 6. Minnesota Statutes 1994, section 295.53, subdivision 1, is amended to read:

Subdivision 1. [EXEMPTIONS.] The following payments are excluded from the gross revenues subject to the hospital, surgical center, pharmacy, wholesale drug distributor, or health care provider taxes under sections 295.50 to 295.57:

(1) payments received for services provided under the Medicare program, including payments received from the government, and organizations governed by sections 1833 and 1876 of title XVIII of the federal Social Security Act, United States Code, title 42, section 1395, and enrollee deductibles, coinsurance, and copayments, whether paid by the individual Medicare enrollee or by insurer or other third party Medicare supplemental coverage as defined in section 62A.011, subdivision 3, clause (10). Payments for services not covered by Medicare are taxable;

(2) medical assistance payments including payments received directly from the government or from a prepaid plan;

(3) payments received for home health care services;

(4) payments received from hospitals or surgical centers for goods and services on which liability for tax is imposed under section 295.52 or the source of funds for the payment is exempt under clause (1), (2), (7), (8), or (10);

(5) payments received from health care providers for goods and services on which liability for tax is imposed under sections 295.52 to 295.57 or the source of funds for the payment is exempt under clause (1), (2), (7), (8), or (10);

(6) amounts paid for legend drugs, other than nutritional products, to a wholesale drug distributor reduced by reimbursements received for legend drugs under clauses (1), (2), (7), and (8);

(7) payments received under the general assistance medical care program including payments received directly from the government or from a prepaid plan;

(8) payments received for providing services under the MinnesotaCare program including payments received directly from the government or from a prepaid plan and enrollee deductibles, coinsurance, and copayments;. For purposes of this clause, coinsurance means the portion of payment that the enrollee is required to pay for the covered service;

(9) payments received by a resident health care provider or the wholly owned subsidiary of a resident health care provider for care provided outside Minnesota to a patient who is not domiciled in Minnesota;

(10) payments received from the chemical dependency fund under chapter 254B;

(11) payments received in the nature of charitable donations that are not designated for providing patient services to a specific individual or group;

(12) payments received for providing patient services if the services are incidental to conducting medical research incurred through a formal program of health care research conducted in conformity with federal regulations governing research on human subjects. Payments received from patients or from other persons paying on behalf of the patients are subject to tax;

(13) payments received from any governmental agency for services benefiting the public, not including payments made by the government in its capacity as an employer or insurer;

(14) payments received for services provided by community residential mental health facilities licensed under Minnesota Rules, parts 9520.0500 to 9520.0690, community support programs and family community support programs approved under Minnesota Rules, parts 9535.1700 to 9535.1760, and community mental health centers as defined in section 245.62, subdivision 2;

(15) government payments received by a regional treatment center;

(16) payments received for hospice care services;

(17) payments received by a resident health care provider or the wholly owned subsidiary of a resident health care provider for medical supplies, appliances and equipment delivered outside of Minnesota;

(18) payments received for services provided by community supervised living facilities for persons with mental retardation or related conditions licensed under Minnesota Rules, parts 4665.0100 to 4665.9900;

(19) payments received by a post-secondary educational institution from student tuition, student activity fees, health care service fees, government appropriations, donations, or grants. Fee for service payments and payments for extended coverage are taxable; and

(20) payments received for services provided by: residential care homes licensed under chapter 144B; board and lodging establishments providing only custodial services, that are licensed under chapter 157 and registered under section 157.031 to provide supportive services or health supervision services; and assisted living programs, congregate housing programs, and other senior housing options; and

(21) payments received by wholesale drug distributors for prescription drugs sold directly to veterinarians or veterinary bulk purchasing organizations.

Sec. 7. Minnesota Statutes 1994, section 295.53, subdivision 3, is amended to read:

Subd. 3. [RESTRICTION ON ITEMIZATION SEPARATE STATEMENT OF TAX.] A hospital, surgical center, pharmacy, or health care provider must not separately state the tax obligation under section 295.52 on bills provided to individual patients in a deceptive or misleading manner. It must not separately state tax obligations on bills provided to patients, consumers, or other payers when the amount received for the services or goods is not subject to tax.

Pharmacies that separately state the tax obligations on bills provided to consumers or to other payers who purchase legend drugs may state the tax obligation as two percent of the wholesale price of the legend drugs. Pharmacies must not state the tax obligation as two percent of the retail price.

Whenever the commissioner determines that a person has engaged in any act or practice constituting a violation of this subdivision, the commissioner may bring an action in the name of the state in the district court of the appropriate county to enjoin the act or practice and to enforce compliance with this subdivision, or the commissioner may refer the matter to the attorney general or the county attorney of the appropriate county. Upon a proper showing, a permanent or temporary injunction, restraining order, or other appropriate relief must be granted.

Sec. 8. Minnesota Statutes 1994, section 295.53, subdivision 4, is amended to read:

Subd. 4. [DEDUCTION FOR RESEARCH.] (a) In addition to the exemptions allowed under subdivision 1, a hospital or health care provider which is exempt under section 501(c)(3) of the Internal Revenue Code of 1986 or is owned and operated under authority of a governmental unit, may deduct from its gross revenues subject to the hospital or health care provider taxes under sections 295.50 to 295.57 revenues equal to expenditures for allowable research programs.

(b) For purposes of this subdivision, expenditures for allowable research programs are the direct and general program costs for activities which are part of a formal program of medical and health care research approved by the governing body of the hospital or health care provider which also includes active solicitation of research funds from government and private sources. Any Allowable research on humans or animals must:

(1) have as its purpose the development of new knowledge in basic or applied science relating to the diagnosis and treatment of conditions affecting the human body;

(2) be subject to review by appropriate regulatory committees by individuals with expertise in the subject matter of the proposed study but who have no financial interest in the proposed study and are not involved in the conduct of the proposed study; and

(3) be subject to review and supervision by an institutional review board operating in conformity with federal regulations such as an institutional review board if the research involves human subjects or an institutional animal care and use committee operating in conformity with federal regulations if the research involves animal subjects.

Research expenses are not exempt if the study is a routine evaluation of health care methods or products used in a particular setting conducted for the purpose of making a management decision. Costs of clinical research activities paid directly for the benefit of an individual patient are excluded from this exemption. Basic research in fields including biochemistry, molecular biology, and physiology are also included if such programs are subject to a peer review process.

(c) No deduction shall be allowed under this subdivision for any revenue received by the hospital or health care provider in the form of a grant, gift, or otherwise, whether from a government or nongovernment source, on which the tax liability under section 295.52 is not imposed or for which the tax liability under section 295.52 has been received from a third party as provided for in section 295.582.

(d) Effective beginning with calendar year 1995, the taxpayer shall not take the deduction under this section into account in determining estimated tax payments or the payment made with the annual return under section 295.55. The total deduction allowable to all taxpayers under this section for calendar years beginning after December 31, 1994, may not exceed $65,000,000. To implement this limit, each qualifying hospital and qualifying health care provider shall submit to the commissioner by March 15 its total expenditures qualifying for the deduction under this section for the previous calendar year. The commissioner shall sum the total expenditures of all taxpayers qualifying under this section for the calendar year. If the resulting amount exceeds $65,000,000, the commissioner shall allocate a part of the $65,000,000 deduction limit to each qualifying hospital and health care provider in proportion to its share of the total deductions. The commissioner shall pay a refund to each qualifying hospital or provider equal to its share of the deduction limit multiplied by two percent. The commissioner shall pay the refund no later than May 15 of the calendar year.

Sec. 9. Minnesota Statutes 1994, section 295.55, subdivision 4, is amended to read:

Subd. 4. [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer with an aggregate tax liability of $30,000 or more during a calendar quarter ending the last day of March, June, September, or December of the first year the taxpayer is subject to the tax must remit all liabilities by means of a funds transfer as defined in section 336.4A-104, paragraph (a), for the remainder of the year. A taxpayer with an aggregate tax liability of $120,000 or more during a calendar fiscal year ending June 30, must remit all liabilities by means of a funds transfer as defined in section 336.4A-104, paragraph (a), in the subsequent calendar year. The funds transfer payment date, as defined in section 336.4A-401, is on or before the date the tax is due. If the date the tax is due is not a funds-transfer business day, as defined in section 336.4A-105, paragraph (a), clause (4), the payment date is on or before the first funds-transfer business day after the date the tax is due.

Sec. 10. [295.56] [TRANSFER OF ACCOUNTS RECEIVABLE.]

When a hospital or health care provider transfers, assigns, or sells accounts receivable to another person who is subject to tax under this chapter, liability for the tax on the accounts receivable is imposed on the transferee, assignee, or buyer of the accounts receivable. No liability for these accounts receivable is imposed on the transferor, assignor, or seller of the accounts receivable.

Sec. 11. Minnesota Statutes 1994, section 295.57, is amended to read:

295.57 [COLLECTION AND ENFORCEMENT; REFUNDS; RULEMAKING; APPLICATION OF OTHER CHAPTERS; ACCESS TO RECORDS.]

Subdivision 1. [APPLICATION OF OTHER CHAPTERS.] Unless specifically provided otherwise by sections 295.50 to 295.58, the enforcement, interest, and penalty provisions under chapter 294, appeal provisions in sections 289A.43 and 289A.65, criminal penalties in section 289A.63, and refunds provisions in section 289A.50, and collection and rulemaking provisions under chapter 270, apply to a liability for the taxes imposed under sections 295.50 to 295.58.

Subd. 2. [ACCESS TO RECORDS.] For purposes of administering the taxes imposed by sections 295.50 to 295.59, the commissioner may access patients' records that contain billing or other financial information without prior consent from the patients. The data collected is classified as private or nonpublic data.

Sec. 12. Minnesota Statutes 1994, section 295.582, is amended to read:

295.582 [AUTHORITY.]

(a) A hospital, surgical center, pharmacy, or health care provider that is subject to a tax under section 295.52, or a pharmacy that has paid additional expense transferred under this section by a wholesale drug distributor, may transfer additional expense generated by section 295.52 obligations on to all third-party contracts for the purchase of health care services on behalf of a patient or consumer. The expense must not exceed two percent of the gross

revenues received under the third-party contract, plus two percent of copayments and deductibles paid by the individual patient or consumer. The expense must not be generated on revenues derived from payments that are excluded from the tax under section 295.53. All third-party purchasers of health care services including, but not limited to, third-party purchasers regulated under chapter 60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or under section 471.61 or 471.617, must pay the transferred expense in addition to any payments due under existing contracts with the hospital, surgical center, pharmacy, or health care provider, to the extent allowed under federal law. A third-party purchaser of health care services includes, but is not limited to, a health carrier, integrated service network, or community integrated service network that pays for health care services on behalf of patients or that reimburses, indemnifies, compensates, or otherwise insures patients for health care services. A third-party purchaser shall comply with this section regardless of whether the third-party purchaser is a for-profit, not-for-profit, or nonprofit entity. A wholesale drug distributor may transfer additional expense generated by section 295.52 obligations to entities that purchase from the wholesaler, and the entities must pay the additional expense. Nothing in this section limits the ability of a hospital, surgical center, pharmacy, wholesale drug distributor, or health care provider to recover all or part of the section 295.52 obligation by other methods, including increasing fees or charges.

(b) Each third-party purchaser regulated under any chapter cited in paragraph (a) shall include with its annual renewal for certification of authority or licensure documentation indicating compliance with paragraph (a) this section. If the commissioner responsible for regulating the third-party purchaser finds at any time that the third-party purchaser has not complied with paragraph (a) this section, the commissioner may by order fine or censure the third-party purchaser or revoke or suspend the certificate of authority or license of the third-party purchaser to do business in this state. The third-party purchaser may appeal the commissioner's order through a contested case hearing in accordance with chapter 14.

(c) A hospital, surgical center, pharmacy, or health care provider that chooses to transfer the additional expense of section 295.52 obligations to third-party purchasers under paragraph (a) shall itemize the obligation on invoices, billings, or other documentation which are submitted to third-party purchasers for payment of health care services. Effective July 1, 1995, all third-party purchasers required to pay the transferred expense under paragraph (a) must pay itemized obligations.

(d) All contracts between third-party purchasers and providers of dental services licensed or registered under chapter 150A must require the dental provider to itemize the tax obligation on invoices, billings, and other documentation, and may not prohibit itemization or give the provider the option of not itemizing the tax obligation. Providers of dental services are prohibited from entering into a contract or agreement not to itemize the tax obligation, and violation of this requirement is grounds for disciplinary action under chapter 150A.

Sec. 13. [MINNESOTACARE TAX STUDY.]

The commissioner of health, in cooperation with the commissioner of revenue and the commissioner of commerce, shall study the effects of the MinnesotaCare taxes levied under Minnesota Statutes, section 295.52. The commissioner shall examine the extent to which:

(1) the MinnesotaCare taxes are passed on to third-party purchasers;

(2) third-party purchasers pay the transferred expenses and comply with the requirements of Minnesota Statutes, section 295.582;

(3) the MinnesotaCare taxes are passed on to individual consumers in the form of higher fees or charges; and

(4) entities subject to the MinnesotaCare tax absorb all or part of the tax burden through more efficient operation.

The commissioner of health shall present findings and recommendations to the legislature by December 15, 1995.

Sec. 14. [EFFECTIVE DATE.]

Sections 1 and 5 are effective the day following final enactment.

Sections 2, 6, and 9 are effective for tax periods beginning on or after January 1, 1996.

Section 3 is effective for services provided on or after July 1, 1995.

Section 4 is effective January 1, 1995.

Section 7 is effective for statements of the tax made on or after July 1, 1995.

Section 8 is effective for research deductions incurred on or after July 1, 1995.

Section 10 is effective for transfers of accounts receivable on or after July 1, 1995.

Section 11 is effective for audits conducted on or after the day following final enactment."

Delete the title and insert:

"A bill for an act relating to health; MinnesotaCare; establishing requirements for integrated service networks; modifying requirements for health plan companies; establishing the standard health coverage; delaying the regulated all-payer option; modifying universal coverage and insurance reform provisions; expanding eligibility for the MinnesotaCare program; establishing prescription drug coverage for low-income Medicare beneficiaries; extending the health care commission and regional coordinating boards; making technical changes; reducing tax deductions for the voluntarily uninsured; appropriating money; amending Minnesota Statutes 1994, sections 60A.02, by adding a subdivision; 60B.02; 60B.03, subdivision 2; 60G.01, subdivisions 2, 4, and 5; 62A.10, subdivisions 1 and 2; 62A.65, subdivisions 5 and 8; 62D.02, subdivision 8; 62D.042, subdivision 2; 62D.11, subdivision 1; 62D.181, subdivisions 2, 3, 6, and 9; 62D.19; 62E.141; 62H.04; 62H.08; 62J.017; 62J.04, subdivision 1a; 62J.05, subdivisions 2 and 9; 62J.09, subdivisions 1, 1a, 6, and 8; 62J.152, subdivision 5; 62J.17, subdivision 4a; 62J.48; 62L.02, subdivisions 11, 16, 24, and 26; 62L.03, subdivisions 3, 4, and 5; 62L.09, subdivision 1; 62L.12, subdivision 2; 62L.17, by adding a subdivision; 62L.18, subdivision 2; 62M.07; 62M.09, subdivision 5; 62M.10, by adding a subdivision; 62N.02, by adding subdivisions; 62N.04; 62N.10, by adding a subdivision; 62N.11, subdivision 1; 62N.13; 62N.14, subdivision 3; 62P.04, subdivision 3; 62P.05, by adding a subdivision; 62Q.01, subdivisions 2, 3, 4, and by adding subdivisions; 62Q.03, subdivisions 1, 6, 7, 8, 9, 10, and by adding subdivisions; 62Q.07, subdivisions 1 and 2; 62Q.09, subdivision 3; 62Q.11; 62Q.165; 62Q.17, subdivisions 2, 8, and by adding a subdivision; 62Q.18; 62Q.19; 62Q.25; 62Q.30; 62Q.41; 72A.20, by adding subdivisions; 72A.201, by adding a subdivision; 136A.1355, subdivisions 3 and 5; 136A.1356, subdivisions 3 and 4; 144.1464, subdivisions 2, 3, and 4; 144.147, subdivision 1; 144.1484, subdivision 1; 144.1486, subdivision 4; 144.1489, subdivision 3; 144.801, by adding a subdivision; 144.804, subdivision 1; 151.48; 256.9353, subdivision 1; 256.9354, subdivisions 1, 4, 5, and by adding a subdivision; 256.9357, subdivisions 1, 2, and 3; 256.9358, by adding a subdivision; 256.9363, by adding a subdivision; 256B.057, subdivision 3; 256B.69, by adding a subdivision; 256D.03, by adding a subdivision; 270.101, subdivision 1; 290.01, subdivision 19a; 295.50, subdivisions 3, 4, and 10a; 295.53, subdivisions 1, 3, and 4; 295.55, subdivision 4; 295.57; and 295.582; Laws 1990, chapter 591, article 4, section 9; Laws 1993, chapter 224, article 4, section 40; Laws 1994, chapter 624, article 5, section 7; chapter 625, article 5, sections 5, subdivision 1; and 10, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 60A; 62L; 62N; 62Q; 137; and 295; repealing Minnesota Statutes 1994, sections 62J.045; 62J.07, subdivision 4; 62J.09, subdivision 1a; 62J.152, subdivision 6; 62J.19; 62J.65; 62L.08, subdivision 7a; 62N.34; 62P.01; 62P.02; 62P.03; 62P.07; 62P.09; 62P.11; 62P.13; 62P.15; 62P.17; 62P.19; 62P.21; 62P.23; 62P.25; 62P.27; 62P.29; 62P.31; 62P.33; 62Q.03, subdivisions 2, 3, 4, 5, and 11; 62Q.18, subdivision 6; 62Q.21; and 62Q.27; Laws 1993, chapter 247, article 1, sections 12, 13, 14, 15, 18, and 19; Minnesota Rules, part 4685.1700, subpart 1, item D."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Taxes.

The report was adopted.

Munger from the Committee on Environment and Natural Resources to which was referred:

H. F. No. 1111, A bill for an act relating to state lands; authorizing public sale of certain tax-forfeited land that borders public water in Isanti county.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Munger from the Committee on Environment and Natural Resources to which was referred:

H. F. No. 1280, A bill for an act relating to game and fish; penalties, all-terrain vehicle weight; reciprocal agreements; one-day fishing licenses; migratory game birds; fish house identification; amphibian and reptile rules; amending Minnesota Statutes 1994, sections 84.796; 84.92, subdivision 8; 97A.045, by adding a subdivision; 97A.401,

subdivision 3; 97A.475, subdivisions 6 and 7; 97B.731, subdivision 1; 97C.355, subdivision 2; 97C.505, subdivision 4;

and 97C.601, subdivision 6; proposing coding for new law in Minnesota Statutes, chapter 97C; repealing Minnesota Statutes 1994, sections 97C.605, subdivisions 3 and 4; 97C.611; and 97C.621.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. [18.316] [DEFINITIONS.]

Subdivision 1. [ECOLOGICALLY HARMFUL EXOTIC SPECIES.] "Ecologically harmful exotic species" has the meaning given in section 84.967.

Subd. 2. [UNDESIRABLE EXOTIC SPECIES.] "Undesirable exotic species" means ecologically harmful exotic species that have been determined by the commissioner of natural resources to pose a substantial threat to native species in this state.

Subd. 3. [WATERCRAFT.] "Watercraft" means any contrivance used or designed for navigation on water and includes seaplanes.

Subd. 4. [WATER MILFOIL.] "Water milfoil" means Eurasian, Northern, whorled, or any other species in the genus Myriophyllum.

Subd. 5. [WATERS OF THE STATE.] "Waters of the state" has the meaning given in section 103G.005, subdivision 17.

Subd. 6. [ZEBRA MUSSELS.] "Zebra mussels" means a species of the genus Dreissena.

Sec. 2. Minnesota Statutes 1994, section 18.317, is amended to read:

18.317 [UNDESIRABLE EXOTIC AQUATIC PLANTS OR WILD ANIMALS SPECIES.]

Subdivision 1. [TRANSPORTATION PROHIBITED.] Except as provided in subdivision 2, a person may not transport Eurasian or Northern water milfoil, myriophyllum spicatum or exalbescens, zebra mussels, or undesirable exotic aquatic plants or wild animals identified by the commissioner of natural resources species on a road or highway, as defined in section 160.02, subdivision 7, or on forest roads.

Subd. 1a. [PLACEMENT PROHIBITED.] A person may not intentionally place undesirable exotic aquatic plants or wild animals, as defined in section 84.967 species, identified by the commissioner of natural resources, in public waters within the state.

Subd. 2. [EXCEPTION.] (a) Except as otherwise prohibited by law, a person may transport Eurasian or Northern water milfoil, myriophyllum spicatum or exalbescens, or other undesirable exotic aquatic plants or wild animals identified by the commissioner of natural resources species for disposal as part of a harvest or control activity conducted under a permit or as specified by the commissioner.

Subd. 3. [LAUNCHING OF WATERCRAFT WITH EURASIAN OR NORTHERN WATER MILFOIL OR OTHER HARMFUL AND UNDESIRABLE SPECIES PROHIBITED.] (a) A person may not place a trailer or launch a watercraft into waters of the state if the trailer or watercraft has attached to it Eurasian or Northern water milfoil, zebra mussels, or other undesirable exotic aquatic plants or wild animals identified by the commissioner of natural resources species. A conservation officer or other licensed peace officer may order the removal of Eurasian or Northern water milfoil, zebra mussels, or other undesirable exotic aquatic plants or wild animals identified by the commissioner of natural resources species from a trailer or watercraft before being placed or launched into waters of the state.

(b) For purposes of this section, the meaning of watercraft includes a float plane and "waters of the state" has the meaning given in section 103G.005, subdivision 17.

(c) A commercial harvester shall clean aquatic plant harvesting equipment of all aquatic vegetation at a suitable location before launching the equipment in another body of water.

Subd. 3a. [INSPECTION OF WATERCRAFT AND EQUIPMENT.] Watercraft and associated equipment, including weed harvesters, that are removed from any waters of the state that the commissioner of natural resources identifies as being contaminated with Eurasian water milfoil, zebra mussels, or other undesirable exotic aquatic plants or wild animals identified by the commissioner of natural resources species, shall be randomly inspected between May 1 and October 15 for a minimum of 10,000 hours by personnel authorized by the commissioner of natural resources. Beginning in calendar year 1994, a minimum of 20,000 hours of random inspections must be conducted per year.

Subd. 4. [ENFORCEMENT.] This section may be enforced by conservation officers under sections 97A.205, 97A.211, and 97A.221, subdivision 1, paragraph (a), clause (1), and by other licensed peace officers.

Subd. 5. [PENALTY.] A person who violates subdivision 1, 1a, 3, or 3a is guilty of a misdemeanor. A person who refuses to obey the order of a peace officer or conservation officer to remove Eurasian or Northern water milfoil, zebra mussels, or other undesirable exotic aquatic plants or wild animals species from a trailer or watercraft is guilty of a misdemeanor.

Sec. 3. Minnesota Statutes 1994, section 84.796, is amended to read:

84.796 [PENALTIES.]

Subdivision 1. [STATUTES.] A person who violates a provision of section 84.788, 84.789, 84.792, 84.793, or 84.795 is guilty of a misdemeanor.

Subd. 2. [RULES.] A person who violates a provision of a rule promulgated pursuant to section 84.79 is guilty of a petty misdemeanor.

Sec. 4. Minnesota Statutes 1994, section 84.81, is amended by adding a subdivision to read:

Subd. 12. [COLLECTOR SNOWMOBILE.] "Collector snowmobile" means a snowmobile that is 25 years old or older, originally produced as a separate identifiable make by a manufacturer, and that is owned and operated solely as a collector's item.

Sec. 5. Minnesota Statutes 1994, section 84.82, is amended by adding a subdivision to read:

Subd. 7a. [COLLECTOR SNOWMOBILES.] The commissioner of natural resources may issue special permits to a person or organization to operate or transport a collector snowmobile without registration in parades or organized group outings, such as races, rallies, other promotional events, and, for up to ten days each year, for personal transportation. The commissioner may impose reasonable restrictions on a special permittee and may revoke, amend, suspend, or modify a permit for cause.

Sec. 6. Minnesota Statutes 1994, section 84.92, subdivision 8, is amended to read:

Subd. 8. [ALL-TERRAIN VEHICLE.] "All-terrain vehicle" or "vehicle" means a motorized flotation-tired vehicle of not less than three low pressure tires, but not more than six tires, that is limited in engine displacement of less than 800 cubic centimeters and total dry weight less than 600 800 pounds.

Sec. 7. Minnesota Statutes 1994, section 84.968, subdivision 1, is amended to read:

Subdivision 1. [MANAGEMENT PLAN.] (a) By January 1, 1993, a long-term statewide ecologically harmful exotic species management plan must be prepared by the commissioner of natural resources and address the following:

(1) coordinated detection and prevention of accidental introductions;

(2) coordinated dissemination of information about ecologically harmful exotic species among resource management agencies and organizations;

(3) a coordinated public awareness campaign regarding ecologically harmful exotic animals and aquatic plants;

(4) a process, where none exists, for the commissioner to designate identify and classify list appropriate ecologically harmful exotic species into the following categories:

(i) as undesirable wild animals that must not be sold, propagated, possessed, or transported; and

(ii) undesirable aquatic exotic plants exotic species that must not be sold, propagated, possessed, or transported except under permit;

(5) coordination of control and eradication of ecologically harmful exotic species on public lands and public waters; and

(6) development of a list of exotic wild animal species intended for nonagricultural purposes, or propagation for release by state agencies or the private sector.

(b) The plan prepared under paragraph (a) must include containment strategies that include:

(1) participation by lake associations, local citizen groups, and local units of government in the development and implementation of lake management plans;

(2) a reasonable and workable inspection requirement for boats and equipment participating in organized events on waters of the state;

(3) allowing access points infested with ecologically harmful exotic species to be closed, for not more than a total of seven days during an open water season, for control or eradication purposes, and requiring posting of signs stating the reason for closing the access;

(4) provisions for reasonable weed-free maintenance of public accesses to infested waters; and

(5) notice to travelers of the penalties for violation of laws relating to ecologically harmful exotic species.

Sec. 8. Minnesota Statutes 1994, section 84.9691, is amended to read:

84.9691 [RULEMAKING AND PERMITS.]

(a) The commissioner of natural resources may adopt emergency and permanent rules restricting the introduction, propagation, use, possession, and spread of ecologically harmful exotic species in the state, as outlined in section 84.967. The emergency rulemaking authority granted in this paragraph expires July 1, 1994.

(b) The commissioner shall adopt rules to identify bodies of water with limited infestation of Eurasian water milfoil. The areas that are infested, and where control is planned, shall be marked and prohibited for use.

(c) A violation of a rule adopted under this section is a misdemeanor.

(d) The commissioner may issue permits regulating the propagation, possession, taking, or transportation of undesirable exotic species for disposal, research, education, or control purposes. The commissioner may place conditions on the permit and may deny, modify, suspend, or revoke a permit.

Sec. 9. Minnesota Statutes 1994, section 84.9692, subdivision 1, is amended to read:

Subdivision 1. [AUTHORITY TO ISSUE.] After appropriate training, conservation officers, peace officers, and other staff designated by the commissioner may issue warnings or citations to persons who:

(1) unlawfully transport ecologically harmful water milfoil or undesirable exotic species on a public road;

(2) place a trailer or launch a watercraft with ecologically harmful undesirable exotic species attached into waters of the state;

(3) operate a watercraft in a marked Eurasian water milfoil limited infestation area; or

(4) damage, remove, or sink a buoy marking a Eurasian water milfoil infestation area.

Sec. 10. Minnesota Statutes 1994, section 84.9692, is amended by adding a subdivision to read:

Subd. 1a. [DEFINITIONS.] For purposes of this section, "undesirable exotic species," "water milfoil," "watercraft," "waters of the state," and "zebra mussels" have the meanings given them in section 18.317.

Sec. 11. Minnesota Statutes 1994, section 84.9692, subdivision 2, is amended to read:

Subd. 2. [PENALTY AMOUNT.] A citation issued under this section may impose up to the following penalty amounts:

(1) $50 for transporting visible Eurasian water milfoil on a public road in each of the following locations:;

(i) the exterior of the watercraft below the gunwales including the propulsion system;

(ii) any surface of a watercraft trailer;

(iii) any surface of a watercraft interior of the gunwales;

(iv) any water container including live wells, minnow buckets, or coolers which hold water; or

(v) any other area where visible Eurasian water milfoil is found not previously described in items (i) to (iv);

(2) $150 $100 for transporting visible zebra mussels on a public road;

(3) $300 for transporting, live ruffe, or live rusty crayfish on a public road;

(4) (3) for attempting to launch place or launching into noninfested waters placing a watercraft, trailer, or plant harvesting equipment with visible Eurasian water milfoil or adult zebra mussels attached into waters of the state not identified by the commissioner as infested with zebra mussels, $500 for a first offense and $1,000 for a second or subsequent offense;

(4) $100 for attempting to place or placing a watercraft, trailer, or plant harvesting equipment with visible zebra mussels attached into waters of the state identified by the commissioner as infested with zebra mussels;

(5) $100 for operating a watercraft in a marked Eurasian water milfoil limited infestation area other than as provided by law;

(6) $150 $100 for intentionally damaging, moving, removing, or sinking a milfoil buoy; or

(7) $150 $200 for launching or attempting to launch into infested waters place or placing a watercraft, trailer, or plant harvesting equipment with visible Eurasian water milfoil or visible zebra mussels attached into waters of the state.

Sec. 12. Minnesota Statutes 1994, section 86B.401, subdivision 11, is amended to read:

Subd. 11. [SUSPENSION FOR NOT REMOVING WATER MILFOIL OR OTHER UNDESIRABLE EXOTIC SPECIES.] (a) The commissioner, after notice and an opportunity for hearing, may suspend for a period of not more than one year the license of a watercraft if the owner or person in control of the watercraft or its trailer refuses to comply with an inspection order of a conservation officer or other licensed peace officer or an order to remove Eurasian or Northern water milfoil, myriophyllum spicatum or exalbescens, zebra mussels, or other undesirable exotic aquatic plant and wild animal species identified by the commissioner from the watercraft or its trailer as provided in section 18.317, subdivision 3.

(b) For purposes of this subdivision, "undesirable exotic species," "water milfoil," and "zebra mussels" have the meanings given them in section 18.317.

Sec. 13. Minnesota Statutes 1994, section 97A.045, is amended by adding a subdivision to read:

Subd. 10. [RECIPROCAL AGREEMENTS ON VIOLATIONS.] The commissioner, with the approval of the attorney general, may enter into reciprocal agreements with game and fish authorities in other states and the United States government to provide for:

(1) revocation of the appropriate Minnesota game and fish licenses of Minnesota residents for violations of game and fish laws committed in signatory jurisdictions which result in license revocation in that jurisdiction;

(2) reporting convictions and license revocations of residents of signatory states for violations of game and fish laws of Minnesota to game and fish authorities in the nonresidents state of residence; and

(3) release upon signature without posting of bail for residents of signatory states accused of game and fish law violations in this state, providing for recovery, in the resident jurisdiction, of fines levied if the citation is not answered in this state.

As used in this subdivision, "conviction" includes a plea of guilty or a forfeiture of bail.

Sec. 14. Minnesota Statutes 1994, section 97A.401, subdivision 3, is amended to read:

Subd. 3. [TAKING, POSSESSING, AND TRANSPORTING WILD ANIMALS FOR CERTAIN PURPOSES.] (a) Except as provided in paragraph (b), special permits may be issued without a fee to take, possess, and transport wild animals as pets and for scientific, educational, rehabilitative, and exhibition purposes. The commissioner shall prescribe the conditions for taking, possessing, transporting, and disposing of the wild animals.

(b) A special permit may not be issued to take or possess wild or native deer for exhibition or propagation.

(c) The commissioner shall establish criteria for issuing special permits for persons to possess wild and native deer as pets.

Sec. 15. Minnesota Statutes 1994, section 97B.005, subdivision 3, is amended to read:

Subd. 3. [PERMITS FOR ORGANIZATIONS AND INDIVIDUALS TO USE GAME BIRDS AND FIREARMS.] The commissioner may issue special permits, without a fee, to organizations and individuals to use firearms and live ammunition on domesticated birds or banded game birds from game farms for holding field trials and training hunting dogs, except that a fee shall be charged based upon the estimated costs of conducting a dog trial on units of the outdoor recreation system as described by section 86A.05, subdivision 8.

Sec. 16. Minnesota Statutes 1994, section 97B.055, subdivision 3, is amended to read:

Subd. 3. [HUNTING FROM VEHICLE BY DISABLED HUNTERS.] The commissioner may issue a special permit, without a fee, to discharge a firearm or bow and arrow from a stationary motor vehicle to a licensed hunter that is temporarily or permanently physically unable to walk without crutches, braces, or other mechanical support, or who has a physical disability which substantially limits the person's ability to walk disabled. The physical disability and the substantial inability to walk must be established by medical evidence verified in writing by a licensed physician. A person with a temporary disability may be issued an annual permit and a person with a permanent disability may be issued a permanent permit. A person issued a special permit under this subdivision and hunting deer may take a deer of either sex.

Sec. 17. Minnesota Statutes 1994, section 97B.075, is amended to read:

97B.075 [HUNTING RESTRICTED BETWEEN EVENING AND MORNING.]

A person may not take protected wild animals, except raccoon and fox, with a firearm between the evening and morning times established by commissioner's rule, or by archery from one-half hour after sunset until one-half hour before sunrise except big game may be taken from one-half hour before sunrise until one-half hour after sunset.

Sec. 18. Minnesota Statutes 1994, section 97B.731, subdivision 1, is amended to read:

Subdivision 1. [MIGRATORY GAME BIRDS.] (a) Migratory game birds may be taken and possessed. A person may not take, buy, sell, possess, transport, or ship migratory game birds in violation of federal law.

(b) The commissioner shall prescribe seasons and limits for migratory birds in accordance with federal law.

Sec. 19. Minnesota Statutes 1994, section 97B.931, is amended to read:

97B.931 [TENDING TRAPS RESTRICTED.]

Subdivision 1. [RESTRICTIONS.] A person may not tend a trap set for wild animals between 10:00 p.m. and 5:00 a.m. Between 5:00 a.m. and 10:00 p.m. a person on foot may use a portable artificial light to tend traps. While using a light in the field, the person may not possess or use a firearm other than a handgun of .22 caliber.

Subd. 2. [BODY-GRIPPING TRAPS.] A body-gripping, conibear-type trap need not be tended more frequently than once every third calendar day.

Sec. 20. Minnesota Statutes 1994, section 97C.355, subdivision 2, is amended to read:

Subd. 2. [LICENSE REQUIRED.] A person may not take fish from a dark house or fish house unless the house is licensed and has a metal durable license tag attached to the exterior as prescribed by the commissioner, except as provided in this subdivision. The commissioner must issue a metal durable tag that is at least two inches in diameter with a 3/16 inch hole in the center with a dark house or fish house license. The metal durable tag must be stamped marked with a number to correspond with the license and the year of issue. A dark house or fish house license is not required of a resident on boundary waters where the adjacent state does not charge a fee for the same activity.

Sec. 21. Minnesota Statutes 1994, section 97C.505, subdivision 4, is amended to read:

Subd. 4. [HOURS OF TAKING.] A person may not take minnows from one hour after sunset to one hour before sunrise without a permit from the commissioner.

Sec. 22. Laws 1994, chapter 623, article 1, section 45, is amended to read:

Sec. 45. [ENFORCEMENT OF LAWS RELATED TO BUYING AND SELLING FISH; REPORT.]

By January 15, 1995 1996, the commissioner of natural resources shall report to the environment and natural resources committees of the legislature with recommendations for legislation to improve enforcement of Minnesota Statutes, section 97C.391, including record keeping requirements, enhanced remedies, and inspection authorities."

Delete the title and insert:

"A bill for an act relating to game and fish; amending Minnesota Statutes 1994, sections 18.317; 84.796; 84.81, by adding a subdivision; 84.82, by adding a subdivision; 84.92, subdivision 8; 84.968, subdivision 1; 84.9691; 84.9692, subdivisions 1, 2, and by adding a subdivision; 86B.401, subdivision 11; 97A.045, by adding a subdivision; 97A.401, subdivision 3; 97B.005, subdivision 3; 97B.055, subdivision 3; 97B.075; 97B.731, subdivision 1; 97B.931; 97C.355, subdivision 2; and 97C.505, subdivision 4; Laws 1994, chapter 623, article 1, section 45; proposing coding for new law in Minnesota Statutes, chapter 18."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Environment and Natural Resources Finance.

The report was adopted.

Skoglund from the Committee on Judiciary to which was referred:

H. F. No. 1309, A bill for an act relating to courts; civil actions; modifying the requirements for an application to proceed in forma pauperis; allowing the court to dismiss an action for false allegations of poverty or if it is frivolous or malicious; providing for a hearing; providing for the payment of fees and costs by inmates; providing for the disposition of damages recovered by an inmate; requiring disciplinary rules on false claims or evidence by an inmate; amending Minnesota Statutes 1994, sections 243.23, subdivision 3; and 563.01, subdivision 3, and by adding subdivisions; proposing coding for new law in Minnesota Statutes, chapters 243; 244; and 563.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. Minnesota Statutes 1994, section 243.23, subdivision 3, is amended to read:

Subd. 3. [EXCEPTIONS.] Notwithstanding sections 241.26, subdivision 5, and 243.24, subdivision 1, the commissioner may promulgate rules for the disbursement of shall make deductions from funds earned under

subdivision 1, or other funds in an inmate account, and section 243.88, subdivision 2. The commissioner shall first make deductions for the following expenses in the following order of priority:

(1) federal and state taxes;

(2) repayment of advances;

(3) gate money as provided in section 243.24; and, where applicable, mandatory savings as provided by United States Code, title 18, section 1761, as amended. The commissioner's rules may then provide for disbursements to be made in the following order of priority:

(1) for the

(4) support of families and dependent relatives of the respective inmates;

(2) for the (5) payment of court-ordered restitution;

(3) for (6) payment of fees and costs in a civil action commenced by an inmate;

(7) payment of fines, surcharges, or other fees assessed or ordered by a court;

(4) for (8) contribution to any programs established by law to aid victims of crime provided that the contribution shall not be more than 20 percent of an inmate's gross wages;

(5) for the (9) payment of restitution to the commissioner ordered by prison disciplinary hearing officers for damage to property caused by an inmate's conduct; and

(6) (10) for the discharge of any legal obligations arising out of litigation under this subdivision.

The commissioner may authorize the payment of court-ordered restitution from an inmate's wages when the restitution was ordered by the court as a sanction for the conviction of an offense which is not the offense of commitment, including offenses which occurred prior to the offense for which the inmate was committed to the commissioner. An inmate of an adult correctional facility under the control of the commissioner is subject to actions for the enforcement of support obligations and reimbursement of any public assistance rendered the dependent family and relatives. The commissioner may conditionally release an inmate who is a party to an action under this subdivision and provide for the inmate's detention in a local detention facility convenient to the place of the hearing when the inmate is not engaged in preparation and defense.

Sec. 2. [243.241] [CIVIL ACTION MONEY DAMAGES.]

Money damages recovered in a civil action by an inmate confined in a state correctional facility or released from a state correctional facility under section 244.065 or 244.07 shall be deposited in the inmate account fund and disbursed according to the priorities in section 243.23, subdivision 3.

Sec. 3. [244.035] [SANCTIONS RELATED TO LITIGATION.]

The commissioner shall develop disciplinary sanctions to provide infraction penalties for an inmate who the court finds has submitted a frivolous or malicious claim or who has testified falsely or has submitted false evidence to a court. Infraction penalties may include loss of privileges, isolation or punitive segregation, loss of good time, or adding discipline confinement time.

Sec. 4. Minnesota Statutes 1994, section 563.01, subdivision 3, is amended to read:

Subd. 3. Any court of the state of Minnesota or any political subdivision thereof may authorize the commencement or defense of any civil action, or appeal therein, without prepayment of fees, costs and security for costs by a natural person who makes affidavit stating (a) the nature of the action, defense or appeal, (b) a belief that affiant is entitled to redress, and (c) that affiant is financially unable to pay the fees, costs and security for costs.

Upon a finding by the court that the action is not of a frivolous nature, the court shall allow the person to proceed in forma pauperis if the affidavit is substantially in the language required by this subdivision and is not found by the court to be untrue. Persons meeting the requirements of this subdivision include, but are not limited to, a person who is receiving public assistance, who is represented by an attorney on behalf of a civil legal services program or a volunteer attorney program based on indigency, or who has an annual income not greater than 125 percent of the poverty line established under United States Code, title 42, section 9902(2), except as otherwise provided by section 563.02.

Sec. 5. [563.02] [INMATE LIABILITY FOR FEES AND COSTS.]

Subdivision 1. [DEFINITION.] For purposes of this section, "inmate" means a person who is not represented by counsel, who has been convicted of a felony, who is committed to the custody of the commissioner of corrections, and is:

(1) confined in a state correctional facility; or

(2) released from a state correctional facility under section 244.065 or 244.07.

Subd. 2. [INMATE REQUEST TO PROCEED IN FORMA PAUPERIS.] (a) An inmate who wishes to commence a civil action by proceeding in forma pauperis must meet the following requirements, in addition to the requirements of section 563.01, subdivision 3:

(1) exhaust the inmate complaint procedure developed under the commissioner of corrections policy and procedure before commencing a civil action against the department, and state in the application to proceed in forma pauperis that the inmate has done so; and

(2) include the following information in an affidavit submitted under section 563.01:

(i) a statement that the inmate's claim is not substantially similar to a previous claim brought by the inmate against the same party, arising from the same operative facts, and in which there was an action that operated as an adjudication on the merits;

(ii) complete information on the inmate's identity, the nature and amount of the inmate's income, spouse's income, if available to the inmate, real property owned by the inmate, and the inmate's bank accounts, debts, monthly expenses, and number of dependents; and

(iii) the most recent monthly statement provided by the commissioner of corrections showing the balance in the inmate's inmate account.

The inmate shall also attach a written authorization for the court to obtain at any time during pendency of the present action, without further authorization from the inmate, a current statement of the inmate's inmate account balance, if needed to determine eligibility to proceed with bringing a civil action in forma pauperis. An inmate who has no funds in an inmate account satisfies the requirement of section 563.01, subdivision 3, clause (c).

(b) An inmate who seeks to proceed as a plaintiff in forma pauperis must file with the court the complaint in the action and the affidavit under this section before serving the complaint on an opposing party.

(c) An inmate who has funds in an inmate account may only proceed as a plaintiff in a civil action by paying the lesser of:

(1) the applicable court filing fee; or

(2) 50 percent of the balance shown in the inmate's account according to the statement filed with the court under this subdivision, consistent with the requirements of section 243.23, subdivision 3.

If an inmate elects to proceed under this paragraph, the court shall notify the commissioner of corrections to withdraw from the inmate's inmate account the amount required under this section and forward the amount to the court administrator in the county where the action was commenced. The court shall also notify the commissioner of corrections of the amount of the filing fee remaining unpaid. The commissioner shall continue making withdrawals from the inmate's account and forwarding the amounts withdrawn to the court administrator, at intervals as the applicable funds in the inmate's account equal at least $10, until the entire filing fee and any costs have been paid in full.

Subd. 3. [DISMISSAL OF ACTION.] (a) The court may, as provided by this subdivision, dismiss, in whole or in part, an action in which an affidavit has been filed under section 563.01 by an inmate seeking to proceed as a plaintiff. The action shall be dismissed without prejudice on a finding that the allegation of financial inability to pay fees, costs, and security for costs is false. The action shall be dismissed with prejudice if it is frivolous or malicious. In determining whether an action is frivolous or malicious, the court may consider whether:

(1) the claim has no arguable basis in law or fact; or

(2) the claim is substantially similar to a previous claim that was brought against the same party, arises from the same operative facts, and in which there was an action that operated as an adjudication on the merits. An order dismissing the action or specific claims asserted in the action may be entered before or after service of process, and with or without holding a hearing.

If the court dismisses a specific claim in the action, it shall designate any issue and defendant on which the action is to proceed without the payment of fees and costs. An order under this subdivision is not subject to interlocutory appeal.

(b) To determine whether the allegation of financial inability to pay fees, costs, and security for costs is false or whether the claim is frivolous or malicious, the court may:

(1) request the commissioner of corrections to file a report under oath responding to the issues described in paragraph (a), clause (1) or (2);

(2) order the commissioner of corrections to furnish information on the balance in the inmate's inmate account, if authorized by the inmate under subdivision 2; or

(3) hold a hearing at the correctional facility where the inmate is confined on the issue of whether the allegation of financial inability to pay is false, or whether the claim is frivolous or malicious.

Subd. 4. [DEFENSE WITHOUT FEES OR COSTS.] A natural person who is named as a defendant in a civil action brought by an inmate may appear and defend the action, including any appeal in the action, without prepayment of the filing fee. If the action is dismissed under rule 12 or 56 of the rules of civil procedure, the inmate is liable for the person's fees and costs, including reasonable attorney fees. In all other instances, the defendant shall pay the defendant's fees and costs at the conclusion of the action or when ordered by the court.

Sec. 6. [EFFECTIVE DATE; APPLICATION.]

Section 2 is effective August 1, 1995, and applies to causes of action arising on or after that date.

Section 5 is effective August 1, 1995, and applies to actions filed on or after that date.

Section 1. Minnesota Statutes 1994, section 3.736, subdivision 4, is amended to read:

Subd. 4. [LIMITS.] The total liability of the state and its employees acting within the scope of their employment on any tort claim shall not exceed:

(a) $200,000 $250,000 when the claim is one for death by wrongful act or omission and $200,000 $250,000 to any claimant in any other case;

(b) $600,000 $750,000 for any number of claims arising out of a single occurrence, for claims arising on or after January 1, 1996, and before January 1, 2000; or

(c) $1,000,000 for any number of claims arising out of a single occurrence, for claims arising on and after January 1, 2000.

If the amount awarded to or settled upon multiple claimants exceeds $600,000 the applicable limit under clause (b) or (c), any party may apply to the district court to apportion to each claimant a proper share of the $600,000 amount available under the applicable limit under clause (b) or (c). The share apportioned to each claimant shall be in the proportion that the ratio of the award or settlement bears to the aggregate awards and settlements for all claims arising out of the occurrence.

The limitation imposed by this subdivision on individual claimants includes damages claimed for loss of services or loss of support arising out of the same tort.

Sec. 2. Minnesota Statutes 1994, section 115B.03, is amended by adding a subdivision to read:

Subd. 8. [TRUSTEE LIABILITY.] A trustee who is not otherwise a responsible party for a release or threatened release of a hazardous substance from a facility is not a responsible person under this section solely because the facility is among the trust assets or solely because the trustee has the capacity to direct the operation of the facility.

Sec. 3. Minnesota Statutes 1994, section 306.243, subdivision 3, is amended to read:

Subd. 3. [DELEGATION OF DUTIES.] The management and supervision of the maintenance and care of the abandoned cemeteries, and abandoned or neglected private cemeteries, or the removal of bodies as provided in this section must be delegated by the county board to the county highway department or to some existing cemetery association, veterans organization or Boy Scouts of America Area Council, or other charitable institution. That organization is responsible to the county board for its acts. If the county board delegates work described in this subdivision to an organization described in this section, other than the county highway department, then persons who do the work under the auspices of the organization are not, solely on that basis, employees of the county.

Sec. 4. Minnesota Statutes 1994, section 306.246, is amended to read:

306.246 [CEMETERY MAINTENANCE FUNDS.]

A county, city, or town may disburse funds for the general maintenance of abandoned or neglected cemeteries. If a county, city, or town contracts with or permits a charitable organization to maintain those cemeteries, the persons who do the work under the auspices of the organization are not, solely on that basis, employees of the county, city, or town.

Sec. 5. Minnesota Statutes 1994, section 466.04, subdivision 1, is amended to read:

Subdivision 1. [LIMITS; PUNITIVE DAMAGES.] (a) Liability of any municipality on any claim within the scope of sections 466.01 to 466.15 shall not exceed:

(1) $200,000 $250,000 when the claim is one for death by wrongful act or omission and $200,000 $250,000 to any claimant in any other case;

(2) $600,000 $750,000 for any number of claims arising out of a single occurrence, for claims arising on or after January 1, 1996, and before January 1, 2000; or

(3) $1,000,000 for any number of claims arising out of a single occurrence, for claims arising on or after January 1, 2000; or

(4) twice the limits provided in clauses (1) and (2) to (3) when the claim arises out of the release or threatened release of a hazardous substance, whether the claim is brought under sections 115B.01 to 115B.15 or under any other law.

(b) No award for damages on any such claim shall include punitive damages.

Sec. 6. Minnesota Statutes 1994, section 466.04, subdivision 3, is amended to read:

Subd. 3. [DISPOSITION OF MULTIPLE CLAIMS.] Where the amount awarded to or settled upon multiple claimants exceeds $600,000 the applicable limit under subdivision 1, clauses (2) to (4), any party may apply to any district court to apportion to each claimant a proper share of the total amount limited by subdivision 1. The share apportioned each claimant shall be in the proportion that the ratio of the award or settlement made to each bears to the aggregate awards and settlements for all claims arising out of the occurrence.

Sec. 7. [473.89] [ENFORCEMENT.]

Subdivision 1. [CITIZEN ACTIONS.] Any person residing in the state may maintain a civil action in the district court in the name of the state of Minnesota against the council to seek an order requiring the council to (1) implement its adopted policies, or (2) require a local government to adopt and implement a local comprehensive plan that is consistent with the provisions of sections 462.355, subdivision 4, 473.175, and 473.851 to 473.871, and that promotes the adopted policies of the council in the metropolitan development guide. A person may bring an action under this subdivision in the district court in which the local government unit is located. If the person prevails, the court shall award the person costs and reasonable attorney's fees.

Subd. 2. [COUNCIL AUTHORITY.] If a local government unit fails to adopt a local comprehensive plan consistent with the provisions of sections 462.355, subdivision 4, 473.175, and 473.851 to 473.871, or if the council determines that a local government has failed to adopt and implement the official controls necessary to implement the approved local comprehensive plan and the council's adopted policies and plans in the metropolitan development guide, the council may maintain a civil action to seek enforcement of the provisions of sections 462.355, subdivision 4, 473.175, and 473.851 to 473.871, in the district court where the local government unit is located. The court shall award costs and reasonable attorney's fees to the prevailing party.

Sec. 8. Minnesota Statutes 1994, section 541.07, is amended to read:

541.07 [TWO- OR THREE-YEAR LIMITATIONS.]

Except where the Uniform Commercial Code, this section, section 148A.06, or section 541.073 otherwise prescribes, the following actions shall be commenced within two years:

(1) for libel, slander, assault, battery, false imprisonment, or other tort, resulting in personal injury, and all actions against physicians, surgeons, dentists, occupational therapists, other health care professionals as defined in section 145.61, and veterinarians as defined in chapter 156, hospitals, sanitariums, for malpractice, error, mistake or failure to cure, whether based on contract or tort; provided a counterclaim may be pleaded as a defense to any action for services brought by a physician, surgeon, dentist, or other health care professional or veterinarian, hospital or sanitarium, after the limitations herein described notwithstanding it is barred by the provisions of this chapter, if it was the property of the party pleading it at the time it became barred and was not barred at the time the claim sued on originated, but no judgment thereof except for costs can be rendered in favor of the party so pleading it;

(2) upon a statute for a penalty or forfeiture, except as provided in sections 541.074 and 541.075;

(3) for damages caused by a dam, other than a dam used for commercial purposes; but as against one holding under the preemption or homestead laws, the limitations shall not begin to run until a patent has been issued for the land so damaged;

(4) against a master for breach of an indenture of apprenticeship; the limitation runs from the expiration of the term of service;

(5) for the recovery of wages or overtime or damages, fees or penalties accruing under any federal or state law respecting the payment of wages or overtime or damages, fees or penalties except, that if the employer fails to submit payroll records by a specified date upon request of the department of labor and industry or if the nonpayment is willful and not the result of mistake or inadvertence, the limitation is three years. (The term "wages" means all remuneration for services or employment, including commissions and bonuses and the cash value of all remuneration in any medium other than cash, where the relationship of master and servant exists and the term "damages" means single, double, or treble damages, accorded by any statutory cause of action whatsoever and whether or not the relationship of master and servant exists);

(6) for damages caused by the establishment of a street or highway grade or a change in the originally established grade;

(7) against the person who applies the pesticide for injury or damage to property resulting from the application, but not the manufacture or sale, of a pesticide.

Sec. 9. Minnesota Statutes 1994, section 549.20, is amended by adding a subdivision to read:

Subd. 6. [LIMITATION ON PUNITIVE DAMAGES.] (a) In general, punitive damages otherwise permitted by applicable law shall not be awarded against the manufacturer or seller of a product or device that caused the harm claimed by the plaintiff if:

(1) the product or device was subject to approval under United States Code, title 21, section 355, or premarket approval under United States Code, title 21, section 360e, by the Food and Drug Administration with respect to the safety of formulation or performance of the aspect of the product or device that caused the harm, or by the adequacy of the packaging or labeling of the product or device; and

(2) the product or device was approved by the Food and Drug Administration.

(b) Paragraph (a) does not apply in a case in which it is determined on the basis of clear and convincing evidence that the defendant:

(1) withheld from or misrepresented to the Food and Drug Administration information concerning the product or device that is required to be submitted under the federal Food, Drug and Cosmetic Act that is material and relevant to the harm suffered by the claimant;

(2) made an illegal payment to an official of the Food and Drug Administration for the purpose of securing approval of the product or device; or

(3) failed to use reasonable care to comply with Food and Drug Administration regulations concerning the manufacture of, or the investigation and correction of defects in design or manufacture of, a medical device, and the failure to comply has caused the harm suffered by the plaintiff.

Sec. 10. Minnesota Statutes 1994, section 604.01, subdivision 1, is amended to read:

Subdivision 1. [SCOPE OF APPLICATION.] Contributory fault does not bar recovery in an action by any person or the person's legal representative to recover damages for fault resulting in death, in injury to person or property, or in economic loss, if the contributory fault was not greater than the fault of the person against whom recovery is sought, but any damages allowed must be diminished in proportion to the amount of fault attributable to the person recovering. The court may, and when requested by any party shall, direct the jury to find separate special verdicts determining the amount of damages and the percentage of fault attributable to each party and the court shall then reduce the amount of damages in proportion to the amount of fault attributable to the person recovering.

In actions involving this chapter, the court shall inform the jury of the effect of its answers to the comparative fault question and shall permit counsel to comment thereon, unless the court is of the opinion that doubtful or unresolved questions of law or complex issues of law or fact are involved which may render the instruction or comment erroneous, misleading, or confusing to the jury.

Sec. 11. [611A.08] [BARRING PERPETRATORS OF CRIMES FROM RECOVERING FOR INJURIES SUSTAINED DURING CRIMINAL CONDUCT.]

Subdivision 1. [DEFINITION.] As used in this section, "perpetrator" means a person who has been convicted of committing a violent crime.

Subd. 2. [INJURY.] A perpetrator assumes the risk of and does not have the right to recover damages for any loss or injury caused by a crime victim if the victim makes a prima facie showing that the loss or injury resulted from or arose out of a course of criminal conduct involving a violent crime engaged in by the perpetrator or an accomplice, as defined in section 609.05, unless the perpetrator establishes by competent evidence that:

(1) neither the perpetrator nor any accomplice was engaged in the course of conduct involving a violent crime; or

(2) the victim did not use reasonable force as authorized in sections 609.06 and 609.065.

Subd. 3. [DEATH.] The personal representative or administrator of the estate of a perpetrator or the trustee appointed under section 573.02, subdivision 3, does not have the right to recover damages for any loss, injury, or death caused by a crime victim, and the perpetrator assumes the risk of the loss, injury, or death if the victim makes a prima facie showing that the loss, injury, or death resulted from or arose out of a course of criminal conduct involving a violent crime engaged in by the perpetrator or an accomplice, unless the personal representative or administrator of the estate of the perpetrator establishes by competent evidence that:

(1) neither the perpetrator nor any accomplice was engaged in the course of conduct involving a violent crime; or

(2) the victim did not use reasonable force as authorized in sections 609.06 and 609.065.

Subd. 4. [SUMMARY DISPOSITION.] In any civil action in which the defendant alleges that the loss, injury, or death for which recovery of damages is sought resulted from or arose out of a course of criminal conduct involving a violent crime against the defendant engaged in by the plaintiff or the plaintiff's decedent, upon the defendant making a prima facie showing of these facts on motion for summary disposition, summary disposition must be granted to the defendant unless the plaintiff presents evidence that, in the opinion of the court, would be sufficient for a jury to find that the conditions in subdivision 1 or 2 have been established by competent evidence. Notwithstanding other proof which the defendant may adduce, a certified copy of a court's judgment of guilt relating to the offense involving the plaintiff or the plaintiff's decedent constitutes a prima facie showing for purposes of this section.

Subd. 5. [ATTORNEY'S FEES TO VICTIM.] If the perpetrator does not prevail in a civil action that is subject to this section, the court may award reasonable expenses, including attorney's fees and disbursements, to the victim.

Subd. 6. [STAY OF CIVIL ACTION.] Except to the extent needed to preserve evidence, any civil action in which the defense set forth in subdivision 1 or 2 is raised shall be stayed by the court on the motion of the defendant during the pendency of any criminal action against the plaintiff based on the alleged violent crime.

Subd. 7. [VIOLENT CRIME; DEFINITION.] For purposes of this section, "violent crime" means an offense named in sections 609.185; 609.19; 609.195; 609.20; 609.205; 609.221; 609.222; 609.223; 609.2231; 609.24; 609.245; 609.25; 609.255; 609.342; 609.343; 609.344; 609.345; 609.561; 609.562; 609.563; and 609.582, or an attempt to commit any of these offenses.

Sec. 12. [611A.78] [CIVIL DAMAGES FOR BIAS OFFENSES.]

Subdivision 1. [DEFINITION.] For purposes of this section, "bias offense" means conduct that would constitute a crime and was committed because of the victim's or another's actual or perceived race, color, religion, sex, sexual orientation, disability as defined in section 363.01, age, or national origin.

Subd. 2. [CAUSE OF ACTION; DAMAGES AND FEES; INJUNCTION.] A person who is damaged by a bias offense has a civil cause of action against the person who committed the offense. The plaintiff is entitled to recover:

(1) the greater of $500 or actual general and special damages, including damages for emotional distress;

(2) punitive damages; and

(3) reasonable costs and attorney's fees.

A plaintiff also may obtain an injunction or other appropriate relief.

Subd. 3. [RELATION TO CRIMINAL PROCEEDING; BURDEN OF PROOF.] A person may bring an action under this section regardless of the existence or outcome of criminal proceedings involving the bias offense that is the basis for the action. The burden of proof in an action under this section is preponderance of the evidence.

Subd. 4. [PARENTAL LIABILITY.] Section 540.18 applies to actions under this section, except that:

(1) the parent or guardian is liable for all types of damages awarded under this section in an amount not exceeding $5,000; and

(2) the parent or guardian is not liable if the parent or guardian made reasonable efforts to exercise control over the minor's behavior.

Subd. 5. [OTHER RIGHTS PRESERVED.] The remedies under this section do not affect any rights or remedies of the plaintiff under other law.

Sec. 13. [EFFECTIVE DATE; APPLICATION.]

Sections 3 and 4 are effective the day following final enactment.

Section 8 is effective August 1, 1995, and applies to causes of action arising on or after that date.

Section 12 is effective August 1, 1995, and applies to offenses committed on or after that date.

Sections 1, 5, and 6 are effective January 1, 1996, and apply to claims for acts or omissions occurring on or after that date.

Section 7 applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington."

Delete the title and insert:

"A bill for an act relating to courts; civil actions; regulating certain civil actions brought by inmates; increasing the liability limits for tort claims against state and local government; providing for trustee liability for a hazardous waste release; providing that maintenance of abandoned or neglected cemeteries by a charitable organization does not create an employment relationship with local government units; including occupational therapists in the health care

professionals statute of limitations; providing for jury instruction and comment by counsel on the issue of comparative fault; providing for damages and injunctive relief for victims of bias offenses; amending Minnesota Statutes 1994, sections 3.736, subdivision 4; 115B.03, by adding a subdivision; 243.23, subdivision 3; 306.243, subdivision 3; 306.246; 466.04, subdivisions 1 and 3; 541.07; 549.20, by adding a subdivision; 563.01, subdivision 3; and 604.01, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 243; 244; 473; 563; and 611A."

With the recommendation that when so amended the bill pass.

The report was adopted.

Skoglund from the Committee on Judiciary to which was referred:

H. F. No. 1338, A bill for an act relating to partnerships; modifying name requirements; eliminating a filing requirement; clarifying when debts arise or accrue; amending Minnesota Statutes 1994, sections 319A.02, subdivision 7; 319A.07; 319A.08; 322B.12, subdivision 1; and 323.14, by adding a subdivision.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1994, section 319A.02, subdivision 7, is amended to read:

Subd. 7. "Corporation" as used in this chapter includes a limited liability company organized under chapter 322B and a limited liability partnership. With respect to a limited liability company, references in this chapter to articles of incorporation, bylaws, directors, officers, shareholders and shares of stock shall refer to articles of organization, operating agreement, governors, managers, members and membership interests, respectively. With respect to a limited liability partnership and except as otherwise provided in section 319A.08, references in this chapter to articles of incorporation and bylaws refer to partnership agreement; references to directors, officers, and shareholders refer to partners; and references to shares of stock refer to partnership interests.

Sec. 2. Minnesota Statutes 1994, section 319A.07, is amended to read:

319A.07 [CORPORATE NAME.]

The corporate name of any corporation organized under sections 319A.01 to 319A.22 shall not be used to imply superiority and, in the case of a corporation, other than a limited liability company, shall end with the word "Chartered," or the word "Limited," or the abbreviation "Ltd.," or the words "Professional Association," or the abbreviation "P.A." The name of any limited liability company organized under sections 319A.01 to 319A.22 and chapter 322B shall end with the words "Professional Limited Liability Company," or the abbreviation "P.L.C.," or the words "Limited Liability Company," or the abbreviation "LLC." The name of any limited liability partnership organized under sections 319A.01 to 319A.22 and chapter 323 must shall end with the words "Professional Limited Liability Partnership," or the abbreviation "P.L.L.P.," or the words "Limited Liability Partnership," or the abbreviation "LLP."

Sec. 3. Minnesota Statutes 1994, section 319A.08, is amended to read:

319A.08 [PROFESSIONAL REGULATION.]

No professional corporation or foreign professional corporation shall begin to render professional service in the state of Minnesota until it has filed with each board having jurisdiction of professional service of a type which the corporation is authorized to render a copy of its articles of incorporation, except that a limited liability company shall instead file a copy of its articles of organization and a limited liability partnership shall instead file a copy of its registration with the secretary of state pursuant to section 323.44. Except as provided in this section, nothing in sections 319A.01 to 319A.22 shall restrict or limit in any manner the authority or duty of a board with respect to persons rendering professional service within the jurisdiction of the board, even if the person is a shareholder, director, officer, employee or agent of a professional corporation or foreign professional corporation and renders professional service through such corporation.

Sec. 4. Minnesota Statutes 1994, section 322A.02, is amended to read:

322A.02 [NAME.]

(a) The name of each limited partnership as set forth in its certificate of limited partnership:

(1) shall contain without abbreviation the words "limited partnership" or the abbreviation "LP";

(2) may not contain the name of a limited partner unless (i) it is also the name of a general partner or the corporate name of a corporate general partner, or (ii) the business of the limited partnership had been carried on under that name before the admission of that limited partner;

(3) must be distinguishable from the name of a domestic corporation or limited partnership, whether profit or nonprofit, or a foreign corporation or limited partnership authorized or registered to do business in this state, whether profit or nonprofit, a limited liability company, whether domestic or foreign, or a name the right to which is reserved or provided for in the manner provided for in sections 302A.117, 322A.03, 322B.125, or 333.001 to 333.54, unless there is filed with the certificate a written consent, court decree of prior right, or affidavit of nonuse, of the kind required by section 302A.115, subdivision 1, paragraph (d); and

(4) may not contain the following words: corporation, incorporated.

The secretary of state shall determine whether a name is "distinguishable" from another name for purposes of this section and section 322A.03. This section does not abrogate or limit the law of unfair competition or unfair practices, nor sections 333.001 to 333.54, nor the laws of the United States with respect to the right to acquire and protect copyrights, trademarks, service names, service marks, or any other rights to the exclusive use of names or symbols, nor derogate the common law or principles of equity.

(b) A person doing business in this state may contest the subsequent registration of a name with the office of the secretary of state as provided in section 5.22.

Sec. 5. Minnesota Statutes 1994, section 322A.72, is amended to read:

322A.72 [NAME.]

(a) A foreign limited partnership may register with the secretary of state under any name (whether or not it is the name under which it is registered in its state of organization) that includes without abbreviation the words "limited partnership" or the abbreviation "LP" and that could be registered by a domestic limited partnership.

(b) A person doing business in this state may contest the subsequent registration of a name with the office of the secretary of state as provided in section 5.22.

Sec. 6. Minnesota Statutes 1994, section 322B.12, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENTS AND PROHIBITIONS.] The limited liability company name must:

(1) be in the English language or in any other language expressed in English letters or characters;

(2) contain the words "limited liability company," or must contain the abbreviation "LLC" or, in the case of an organization formed pursuant to section 319A.03, must contain the words "professional limited liability company," or the abbreviation "PLC" meet the requirements of section 319A.07 applicable to a limited liability company;

(3) not contain the word corporation or incorporated and must not contain the abbreviation of either or both of these words;

(4) not contain a word or phrase that indicates or implies that it is organized for a purpose other than a legal business purpose; and

(5) be distinguishable upon the records in the office of the secretary of state from the name of a domestic limited liability company, corporation, or limited partnership, whether profit or nonprofit, or a foreign limited liability company, corporation, or limited partnership authorized or registered to do business in this state, whether profit or

nonprofit, or a name the right to which is, at the time of organization, reserved or provided for in sections 302A.117, 317A.117, 322A.03, 322B.125, or 333.001 to 333.54, unless there is filed with the articles of organization one of the following:

(i) the written consent of the domestic limited liability company, corporation, or limited partnership or foreign limited liability company, corporation, or limited partnership authorized or registered to do business in this state or the holder of a reserved name or a name filed by or registered with the secretary of state under sections 333.001 to 333.54 having a name that is not distinguishable;

(ii) a certified copy of a final decree of a court in this state establishing the prior right of the applicant to the use of the name in this state; or

(iii) the applicant's affidavit that the limited liability company, corporation, or limited partnership with the name that is not distinguishable has been organized, incorporated, or on file in this state for at least three years prior to the affidavit, if it is a domestic limited liability company, corporation, or limited partnership, or has been authorized or registered to do business in this state for at least three years prior to the affidavit, if it is a foreign limited liability company, corporation, or limited partnership, or that the holder of a name filed or registered with the secretary of state under sections 333.001 to 333.54 filed or registered that name at least three years prior to the affidavit, and has not during the three-year period filed any document with the secretary of state; that the applicant has mailed written notice to the limited liability company, corporation, or limited partnership or the holder of a name filed or registered with the secretary of state under sections 333.001 to 333.54 by certified mail, return receipt requested, properly addressed to the registered office of the limited liability company or corporation or in care of the agent of the limited partnership, or the address of the holder of a name filed or registered with the secretary of state under sections 333.001 to 333.54, shown in the records of the secretary of state, that the applicant intends to use a name that is not distinguishable and the notice has been returned to the applicant as undeliverable to the addressee limited liability company, corporation, or limited partnership or holder of a name filed or registered with the secretary of state under sections 333.001 to 333.54; that the applicant, after diligent inquiry, has been unable to find any telephone listing for the limited liability company, corporation, or limited partnership with the name that is not distinguishable in the county in which is located the registered office of the limited liability company or corporation shown in the records of the secretary of state or has been unable to find any telephone listing for the holder of a name filed or registered with the secretary of state under sections 333.001 to 333.54 in the county in which is located the address of the holder shown in the records of the secretary of state; and that the applicant has no knowledge that the limited liability company, corporation, or limited partnership or holder of a name filed or registered with the secretary of state under sections 333.001 to 333.54 is currently engaged in business in this state.

Sec. 7. Minnesota Statutes 1994, section 323.14, is amended by adding a subdivision to read:

Subd. 6. [WHEN DEBTS AND OBLIGATIONS ARISE AND ACCRUE.] For the purposes of this section and section 323.16:

(a) All partnership debts and obligations under or relating to a note, contract, or other agreement arise and accrue when the note, contract, or other agreement is entered into.

(b) An amendment, modification, extension, or renewal of a note, contract, or other agreement does not affect the time at which a partnership debt or obligation under or relating to that note, contract, or other agreement arises and accrues, even as to a claim that relates to the subject matter of the amendment, modification, extension, or renewal.

This subdivision does not affect any law, rule, or period pertaining to any statute of limitations or statute of repose.

Sec. 8. Minnesota Statutes 1994, section 323.44, is amended by adding a subdivision to read:

Subd. 8. [LEGAL STATUS.] For purposes of holding title to or conveying an interest in real or personal property and for all other purposes except as otherwise provided in this chapter, a partnership formed under this chapter remains the same entity:

(1) whether the partnership obtains the status of a limited liability partnership under subdivision 1, paragraph (a);

(2) whether the status of the partnership as a limited liability partnership terminates by reason of expiration of registration under subdivision 1, paragraph (b), or by reason of voluntary withdrawal of status under subdivision 6;

(3) during dissolution of the partnership; and

(4) regardless of whether the words "a limited liability partnership," "a professional limited liability partnership," "a general partnership," or the designation "L.L.P.," "LLP," "P.L.L.P.," or "PLLP" are used in an instrument conveying an interest in real or personal property to or from the partnership or in any other writing.

Sec. 9. Minnesota Statutes 1994, section 323.45, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENTS; PROHIBITIONS.] The name of a limited liability partnership must meet all of the requirements of section 302A.115, subdivision 1, except that the acceptable words required by section 302A.115, subdivision 2, are "limited liability partnership" "Limited Liability Partnership" or the abbreviation "L.L.P." "LLP."

Sec. 10. [EFFECTIVE DATE; APPLICATION.]

Section 7 is effective the day following final enactment and applies retroactively to all notes, contracts, other agreements, amendments, modifications, extensions, and renewals entered into before, on, or after the effective date."

Delete the title and insert:

"A bill for an act relating to limited liability organizations; modifying name requirements; eliminating a filing requirement; clarifying when debts arise or accrue for limited liability partnerships; amending Minnesota Statutes 1994, sections 319A.02, subdivision 7; 319A.07; 319A.08; 322A.02; 322A.72; 322B.12, subdivision 1; 323.14, by adding a subdivision; 323.44, by adding a subdivision; and 323.45, subdivision 1."

With the recommendation that when so amended the bill pass and be placed on the Consent Calendar.

The report was adopted.

Munger from the Committee on Environment and Natural Resources to which was referred:

H. F. No. 1423, A bill for an act relating to the environment; creating the drycleaner environmental response act; requiring rulemaking; providing penalties; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 115B.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. [115B.47] [CITATION.]

Sections 115B.47 to 115B.51 may be cited as the drycleaner environmental response and reimbursement law.

Sec. 2. [115B.48] [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] The definitions in section 115B.02 and this section apply to sections 115B.47 to 115B.51.

Subd. 2. [DRYCLEANER ENVIRONMENTAL RESPONSE AND REIMBURSEMENT ACCOUNT; ACCOUNT.] "Drycleaner environmental response and reimbursement account" or "account" means the drycleaner environmental response and reimbursement account established in section 115B.49.

Subd. 3. [DRYCLEANING FACILITY.] "Drycleaning facility" means a facility located in this state that is or has been used for a drycleaning operation, other than:

(1) a coin-operated drycleaning operation;

(2) a facility located on a United States military base;

(3) a uniform service or linen supply facility;

(4) a prison or other penal institution;

(5) a facility on the national priorities list established under the federal Superfund Act; or

(6) a facility at which a response action has been taken or started under section 115B.17 before July 1, 1995.

Subd. 4. [DRYCLEANING OPERATION.] "Drycleaning operation" means commercial cleaning of apparel and household fabrics for the general public, using one or more drycleaning solvents.

Subd. 5. [DRYCLEANING SOLVENT.] "Drycleaning solvent" means a chlorine- or hydrocarbon-based formulation or product that is used as a primary cleaning agent in drycleaning operations.

Subd. 6. [ENVIRONMENTAL RESPONSE COSTS.] "Environmental response costs" means those costs described in section 115B.17, subdivision 6.

Sec. 3. [115B.49] [DRYCLEANER ENVIRONMENTAL RESPONSE AND REIMBURSEMENT ACCOUNT.]

Subdivision 1. [ESTABLISHMENT.] The drycleaner environmental response and reimbursement account is established as an account in the state treasury.

Subd. 2. [REVENUE SOURCES.] Revenue from the following sources must be deposited in the state treasury and credited to the account:

(1) the proceeds of the fees imposed by subdivision 4;

(2) interest attributable to investment of money in the account;

(3) penalties collected under subdivision 4, paragraphs (e) and (f); and

(4) money received by the commissioner for deposit in the account in the form of gifts, grants, and appropriations.

Subd. 3. [EXPENDITURES.] (a) Money in the account may only be used:

(1) for environmental response costs incurred by the commissioner under section 115B.50, subdivision 1;

(2) for reimbursement of amounts spent by the commissioner from the environmental response, compensation, and compliance account for expenses described in clause (1); and

(3) for reimbursements under section 115B.50, subdivision 2.

(b) Money in the account is appropriated to the commissioner for the purposes of this subdivision.

Subd. 4. [REGISTRATION; FEES.] (a) The owner or operator of a drycleaning facility shall register on or before July 1 of each year with the commissioner of revenue in a manner prescribed by the commissioner of revenue and pay a registration fee for the facility. The amount of the fee is:

(1) $500, for facilities with up to four employees;

(2) $1,000, for facilities with five to ten employees; and

(3) $1,500, for facilities with more than ten employees.

(b) A person who sells drycleaning solvents for use by drycleaning facilities in the state shall collect and remit to the commissioner of revenue, on or before the 20th day of the month following the month in which the sales of drycleaning solvents are made, a fee of:

(1) $3.50 for each gallon sold of perchloroethylene; and

(2) 70 cents for each gallon sold of hydrocarbon-based drycleaning solvent.

(c) The commissioner of revenue shall provide each person who pays a registration fee under paragraph (a) with a receipt. The receipt or a copy of the receipt must be produced for inspection at the request of any authorized representative of the commissioner of revenue.

(d) The commissioner shall, after a public hearing but notwithstanding section 16A.1285, subdivision 4, annually adjust the fees in this subdivision as necessary to maintain an unencumbered balance in the account of at least $1,000,000. Any adjustment under this paragraph must be prorated among all the fees in this subdivision. Fees adjusted under this paragraph may not exceed 200 percent of the fees in this subdivision.

(e) An owner of a drycleaning facility who fails to pay a fee under paragraph (a) when due is subject to a penalty of $50 per facility for each day the fee is not paid.

(f) To enforce this subdivision, the commissioner of revenue may examine documents, assess and collect fees, impose sales and use tax penalties on the monthly fee under paragraph (b), and administer appeals, in the manner provided in chapters 270 and 289A. Disclosure of data collected by the commissioner under this subdivision is governed by chapter 270B.

Sec. 4. [115B.50] [RESPONSE ACTIONS.]

Subdivision 1. [RESPONSE ACTIONS BY COMMISSIONER.] (a) In accordance with the priority list established under section 115B.17, subdivision 13, the commissioner shall take all response actions at or related to a drycleaning facility that the commissioner determines are reasonable and necessary to protect the public health or welfare or the environment under the standards required in sections 115B.01 to 115B.24. The commissioner shall review and approve any investigation and response action plan submitted by an owner or operator of a drycleaning facility who is taking response actions under subdivision 2 and shall oversee the implementation of the approved plans. In carrying out the duties under this subdivision, the commissioner may take emergency removal actions as provided in section 115B.17, subdivision 1, paragraph (b), and may exercise the authority provided in section 115B.17, subdivisions 2 to 5, 15, and 16.

(b) The commissioner may not seek recovery against the owner or operator of a drycleaning facility of any environmental response costs in excess of $10,000 incurred by the commissioner at the facility, except:

(1) to the extent of insurance coverage, in excess of $10,000, held by the owner or operator; or

(2) as provided in section 115B.51.

If the commissioner seeks recovery of environmental response costs against an owner or operator pursuant to this paragraph, the owner or operator shall act as directed by the commissioner to assert any rights of the owner or operator to any insurance coverage applicable to those costs and, if coverage is denied, to assign those rights to the commissioner.

(c) Before taking a response action under this subdivision, the commissioner shall notify the owner or operator of the facility. Except for emergency removal actions under section 115B.17, subdivision 1, paragraph (b), the commissioner shall not take response actions under this subdivision at a drycleaning facility where an owner or operator of the facility is taking response actions under subdivision 2 in accordance with an investigation or response action plan approved by the commissioner.

Subd. 2. [RESPONSE ACTIONS BY OWNERS OR OPERATORS; REIMBURSEMENT.] At the request of the owner or operator of a drycleaning facility who takes response actions at the facility in accordance with a response action plan approved by the commissioner, the commissioner shall reimburse the owner or operator for all but $10,000 of the environmental response costs incurred by the owner or operator if the commissioner determines that the costs are reasonable and were actually incurred. If a request for reimbursement is denied, the owner or operator may appeal the decision as a contested case under chapter 14.

If the commissioner reimburses an owner or operator for environmental response costs under this subdivision for which the owner or operator has insurance coverage, the commissioner is subrogated to the rights of the owner or operator with respect to that insurance coverage to the extent of the reimbursement. Acceptance of reimbursement under this subdivision constitutes an assignment by the owner or operator to the commissioner of any rights of the owner or operator with respect to any insurance coverage applicable to the costs that are reimbursed.

Subd. 3. [LIMITATION ON AMOUNT THAT MAY BE SPENT.] The commissioner may not, in a single fiscal year, make expenditures from the account related to a single drycleaning facility that exceed 20 percent of the projected balance in the account for the fiscal year.

Sec. 5. [115B.51] [ILLEGAL ACTIONS.]

The commissioner may recover under section 115B.17, subdivision 6, that portion of the environmental response costs at a drycleaning facility that is attributable to a person who otherwise would be responsible for the release or threatened release under section 115B.03, and whose actions related to the release or threatened release were in violation of federal or state hazardous waste management laws in effect at the time of those actions.

Sec. 6. [EFFECTIVE DATE.]

Section 3, subdivision 4, paragraph (d), is effective for annual fees due by July 1, 1997, and for monthly fees due by July 20, 1997."

Delete the title and insert:

"A bill for an act relating to the environment; establishing a program for funding response actions to address environmental contamination from drycleaning facilities; proposing coding for new law in Minnesota Statutes, chapter 115B."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Environment and Natural Resources Finance.

The report was adopted.

Sarna from the Committee on Commerce, Tourism and Consumer Affairs to which was referred:

H. F. No. 1467, A bill for an act relating to construction; changing and clarifying law relating to the building code and zoning law; amending Minnesota Statutes 1994, sections 16B.59; 16B.60, subdivisions 1 and 4; 16B.61, subdivisions 1, 2, and 5; 16B.63, subdivision 3, and by adding a subdivision; 16B.65, subdivisions 1, 3, 4, and 7; 16B.67; 16B.70; 366.10; 366.12; 366.16; 394.33, subdivision 2; 394.361, subdivision 3; 462.358, subdivisions 2a and 9; and 462.359, subdivision 4.

Reported the same back with the following amendments:

Page 2, after line 34, insert:

"Sec. 5. Minnesota Statutes 1994, section 16B.61, subdivision 1a, is amended to read:

Subd. 1a. [ADMINISTRATION BY COMMISSIONER.] The commissioner shall administer and enforce the state building code as a municipality with respect to public buildings and state licensed facilities in the state. The commissioner shall establish appropriate permit, plan review, and inspection fees for public buildings and state licensed facilities. Fees and surcharges for public buildings and state licensed facilities must be remitted to the commissioner, who shall deposit them in the state treasury for credit to the special revenue fund.

Municipalities other than the state having a contractual agreement with the commissioner for code administration and enforcement service for public buildings and state licensed facilities shall charge their customary fees, including surcharge, to be paid directly to the contractual jurisdiction by the applicant seeking authorization to construct a public building or a state licensed facility. The commissioner shall contract with a municipality other than the state for plan review, code administration, and code enforcement service for public buildings and state licensed facilities in the contractual jurisdiction if the building officials of the municipality meet the requirements of section 16B.65 and wish to provide those services and if the commissioner determines that the municipality has enough adequately trained and qualified building inspectors to provide those services for the construction project.

The commissioner shall administer and enforce the provisions of the code relating to elevators statewide, except as provided for under section 183.357, subdivision 3."

Page 5, line 32, delete everything after "if"

Page 5, line 33, delete everything before "binding" and insert "adopted under chapter 14, are"

Page 7, lines 15 and 16, reinstate the stricken language

Page 10, line 4, strike the second "the"

Page 10, line 5, strike "general" and insert "a special revenue"

Page 15, after line 2, insert:

Section 1. Minnesota Statutes 1994, section 16B.75, is amended to read:

16B.75 [INTERSTATE COMPACT ON INDUSTRIALIZED/MODULAR BUILDINGS.]

The state of Minnesota ratifies and approves the following compact:

(1) The compacting states find that:

(a) Industrialized/modular buildings are constructed in factories in the various states and are a growing segment of the nation's affordable housing and commercial building stock.

(b) The regulation of industrialized/modular buildings varies from state to state and locality to locality, which creates confusion and burdens state and local building officials and the industrialized/modular building industry.

(c) Regulation by multiple jurisdictions imposes additional costs, which are ultimately borne by the owners and users of industrialized/modular buildings, restricts market access and discourages the development and incorporation of new technologies.

(2) It is the policy of each of the compacting states to:

(a) Provide the states which regulate the design and construction of industrialized/modular buildings with a program to coordinate and uniformly adopt and administer the states' rules and regulations for such buildings, all in a manner to assure interstate reciprocity.

(b) Provide to the United States Congress assurances that would preclude the need for a voluntary preemptive federal regulatory system for modular housing, as outlined in Section 572 of the Housing and Community Development Act of 1987, including development of model standards for modular housing construction, such that design and performance will insure quality, durability and safety; will be in accordance with life-cycle cost-effective energy conservation standards; all to promote the lowest total construction and operating costs over the life of such housing.

As used in this compact, unless the context clearly requires otherwise:

(1) "Commission" means the interstate industrialized/modular buildings commission.

(2) "Industrialized/modular building" means any building which is of closed construction, i.e. constructed in such a manner that concealed parts or processes of manufacture cannot be inspected at the site, without disassembly, damage or destruction, and which is made or assembled in manufacturing facilities, off the building site, for

installation, or assembly and installation, on the building site. "Industrialized/modular building" includes, but is not limited to, modular housing which is factory-built single-family and multifamily housing (including closed wall panelized housing) and other modular, nonresidential buildings. "Industrialized/modular building" does not include any structure subject to the requirements of the National Manufactured Home Construction and Safety Standards Act of 1974.

(3) "Interim reciprocal agreement" means a formal reciprocity agreement between a noncompacting state wherein the noncompacting state agrees that labels evidencing compliance with the model rules and regulations for industrialized/modular buildings, as authorized in Article VIII, section (9), shall be accepted by the state and its subdivisions to permit installation and use of industrialized/modular buildings. Further, the noncompacting state agrees that by legislation or regulation, and appropriate enforcement by uniform administrative procedures, the noncompacting state requires all industrialized/modular building manufacturers within that state to comply with the model rules and regulations for industrialized/modular buildings.

(4) "State" means a state of the United States, territory or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.

(5) "Uniform administrative procedures" means the procedures adopted by the commission (after consideration of any recommendations from the rules development committee) which state and local officials, and other parties, in one state, will utilize to assure state and local officials, and other parties, in other states, of the substantial compliance of industrialized/modular building construction with the construction standard of requirements of such other states; to assess the adequacy of building systems; and to verify and assure the competency and performance of evaluation and inspection agencies.

(6) "Model rules and regulations for industrialized/modular buildings" means the construction standards adopted by the commission (after consideration of any recommendations from the rules development committee) which govern the design, manufacture, handling, storage, delivery and installation of industrialized/modular buildings and building components. The construction standards and any amendments thereof shall conform insofar as practicable to model building codes and referenced standards generally accepted and in use throughout the United States.

The compacting states hereby create the Interstate Industrialized/Modular Buildings Commission, hereinafter called commission. Said commission shall be a body corporate of each compacting state and an agency thereof. The commission shall have all the powers and duties set forth herein and such additional powers as may be conferred upon it by subsequent action of the respective legislatures of the compacting states.

The commission shall be selected as follows. As each state becomes a compacting state, one resident shall be appointed as commissioner. The commissioner shall be selected by the governor of the compacting state, being designated from the state agency charged with regulating industrialized/modular buildings or, if such state agency does not exist, being designated from among those building officials with the most appropriate responsibilities in the state. The commissioner may designate another official as an alternate to act on behalf of the commissioner at commission meetings which the commissioner is unable to attend.

Each state commissioner shall be appointed, suspended, or removed and shall serve subject to and in accordance with the laws of the state which said commissioner represents; and each vacancy occurring shall be filled in accordance with the laws of the state wherein the vacancy exists.

When For every three state commissioners that have been appointed in the manner described, those state commissioners shall select one additional commissioner who shall be a representative of manufacturers of industrial- residential- or commercial-use industrialized/modular buildings. When For every six state commissioners that have been appointed in the manner described, the state commissioners shall select a second one additional commissioner

who shall be a representative of consumers of industrialized/modular buildings. With each addition of three state commissioners, the state commissioners shall appoint one additional representative commissioner, alternating between a representative of manufacturers of industrialized/modular buildings and consumers of industrialized/modular buildings. The ratio between state commissioners and representative commissioners shall be three to one. In the event states withdraw from the compact or, for any other reason, the number of state commissioners is reduced, the state commissioners shall remove the last added representative commissioner as necessary to maintain a the ratio of state commissioners to representative commissioners of three to one described herein.

Upon a majority vote of the state commissioners, the state commissioners may remove, fill a vacancy created by, or replace any representative commissioner, provided that any replacement is made from the same representative group and a three to one ratio the ratio described herein is maintained. Unless provided otherwise, the representative commissioners have the same authority and responsibility as the state commissioners.

In addition, the commission may have as a member one commissioner representing the United States government if federal law authorizes such representation. Such commissioner shall not vote on matters before the commission. Such commission commissioner shall be appointed by the President of the United States, or in such other manner as may be provided by Congress.

Each commissioner (except the commissioner representing the United States government) shall be entitled to one vote on the commission. A majority of the commissioners shall constitute a quorum for the transaction of business. Any business transacted at any meeting of the commission must be by affirmative vote of a majority of the quorum present and voting.

The commission shall elect annually, from among its members, a chairman, a vice chairman and a treasurer. The commission shall also select a secretariat, which shall provide an individual who shall serve as secretary of the commission. The commission shall fix and determine the duties and compensation of the secretariat. The commissioners shall serve without compensation, but shall be reimbursed for their actual and necessary expenses from the funds of the commission.

The commission shall adopt a seal.

The commission shall adopt bylaws, rules, and regulations for the conduct of its business, and shall have the power to amend and rescind these bylaws, rules, and regulations.

The commission shall establish and maintain an office at the same location as the office maintained by the secretariat for the transaction of its business and may meet at any time, but in any event must meet at least once a year. The chairman may call additional meetings and upon the request of a majority of the commissioners of three or more of the compacting states shall call an additional meeting.

The commission annually shall make the governor and legislature of each compacting state a report covering its activities for the preceding year. Any donation or grant accepted by the commission or services borrowed shall be reported in the annual report of the commission and shall include the nature, amount and conditions, if any, of the donation, gift, grant or services borrowed and the identity of the donor or lender. The commission may make additional reports as it may deem desirable.

The commission will establish such committees as it deems necessary, including, but not limited to, the following:

(1) An executive committee which functions when the full commission is not meeting, as provided in the bylaws of the commission. The executive committee will ensure that proper procedures are followed in implementing the commission's programs and in carrying out the activities of the compact. The executive committee shall be elected

by vote of the commission. It shall be comprised of at least three and no more than nine commissioners, selected from those commissioners who are representatives of the governor of their respective state the state commissioners and one member of the industry commissioners and one member of the consumer commissioners.

(2) A rules development committee appointed by the commission. The committee shall be consensus-based and consist of not less than seven nor more than 21 members. Committee members will include state building regulatory officials; manufacturers of industrialized/modular buildings; private, third-party inspection agencies; and consumers. This committee may recommend procedures which state and local officials, and other parties, in one state, may utilize to assure state and local officials, and other parties, in other states, of the substantial compliance of industrialized/modular building construction with the construction standard requirements of such other states; to assess the adequacy of building systems; and to verify and assure the competency and performance of evaluation and inspection agencies. This committee may also recommend construction standards for the design, manufacture, handling, storage, delivery and installation of industrialized/modular buildings and building components. The committee will submit its recommendations to the commission, for the commission's consideration in adopting and amending the uniform administrative procedures and the model rules and regulations for industrialized/modular buildings. The committee may also review the regulatory programs of the compacting states to determine whether those programs are consistent with the uniform administrative procedures or the model rules and regulations for industrialized/modular buildings and may make recommendations concerning the states' programs to the commission. In carrying out its functions, the rules committee may conduct public hearings and otherwise solicit public input and comment.

(3) Any other advisory, coordinating or technical committees, membership on which may include private persons, public officials, associations or organizations. Such committees may consider any matter of concern to the commission.

(4) Such additional committees as the commission's bylaws may provide.

In addition to the powers conferred elsewhere in this compact, the commission shall have power to:

(1) Collect, analyze and disseminate information relating to industrialized/modular buildings.

(2) Undertake studies of existing laws, codes, rules and regulations, and administrative practices of the states relating to industrialized/modular buildings.

(3) Assist and support committees and organizations which promulgate, maintain and update model codes or recommendations for uniform administrative procedures or model rules and regulations for industrialized/modular buildings.

(4) Adopt and amend uniform administrative procedures and model rules and regulations for industrialized/modular buildings.

(5) Make recommendations to compacting states for the purpose of bringing such states' laws, codes, rules and regulations and administrative practices into conformance with the uniform administrative procedures or the model rules and regulations for industrialized/modular buildings, provided that such recommendations shall be made to the appropriate state agency with due consideration for the desirability of uniformity while also giving appropriate consideration to special circumstances which may justify variations necessary to meet unique local conditions.

(6) Assist and support the compacting states with monitoring of plan review programs and inspection programs, which will assure that the compacting states have the benefit of uniform industrialized/modular building plan review and inspection programs.

(7) Assist and support organizations which train state and local government and other program personnel in the use of uniform industrialized/modular building plan review and inspection programs.

(8) Encourage and promote coordination of state regulatory action relating to manufacturers, public or private inspection programs.

(9) Create and sell labels to be affixed to industrialized/modular building units, constructed in or regulated by compacting states, where such labels will evidence compliance with the model rules and regulations for industrialized/modular buildings, enforced in accordance with the uniform administrative procedures. The commission may use receipts from the sale of labels to help defray the operating expenses of the commission.

(10) Assist and support compacting states' investigations into and resolutions of consumer complaints which relate to industrialized/modular buildings constructed in one compacting state and sited in another compacting state.

(11) Borrow, accept or contract for the services of personnel from any state or the United States or any subdivision or agency thereof, from any interstate agency, or from any institution, association, person, firm or corporation.

(12) Accept for any of its purposes and functions under this compact any and all donations, and grants of money, equipment, supplies, materials and services (conditional or otherwise) from any state or the United States or any subdivision or agency thereof, from any interstate agency, or from any institution, person, firm or corporation, and may receive, utilize and dispose of the same.

(13) Establish and maintain such facilities as may be necessary for the transacting of its business. The commission may acquire, hold, and convey real and personal property and any interest therein.

(14) Enter into contracts and agreements, including but not limited to, interim reciprocal agreements with noncompacting states.

The commission shall submit to the governor or designated officer or officers of each compacting state a budget of its estimated expenditures for such period as may be required by the laws of that state for presentation to the legislature thereof.

Each of the commission's budgets of estimated expenditures shall contain specific recommendations of the amounts to be appropriated by each of the compacting states. The total amount of appropriations requested under any such budget shall be apportioned among the compacting states as follows: one-half in equal shares; one-fourth among the compacting states in accordance with the ratio of their populations to the total population of the compacting states, based on the last decimal federal census; and one-fourth among the compacting states in accordance with the ratio of industrialized/modular building units manufactured in each state to the total of all units manufactured in all of the compacting states.

The commission shall not pledge the credit of any compacting state. The commission may meet any of its obligations in whole or in part with funds available to it by donations, grants, or sale of labels: provided that the commission takes specific action setting aside such funds prior to incurring any obligation to be met in whole or in part in such manner. Except where the commission makes use of funds available to it by donations, grants or sale of labels, the commission shall not incur any obligation prior to the allotment of funds by the compacting states adequate to meet the same.

The commission shall keep accurate accounts of all receipts and disbursements. The receipts and disbursements of the commission shall be subject to the audit and accounting procedures established under its bylaws. All receipts and disbursements of funds handled by the commission shall be audited yearly by a certified or licensed public accountant and the report of the audit shall be included in and become part of the annual report of the commission.

The accounts of the commission shall be open at any reasonable time for inspection by duly constituted officers of the compacting states and any person authorized by the commission.

Nothing contained in this article shall be construed to prevent commission compliance relating to audit or inspection of accounts by or on behalf of any government contributing to the support of the commission.

This compact shall enter into force when enacted into law by any three states. Thereafter, this compact shall become effective as to any other state upon its enactment thereof. The commission shall arrange for notification of all compacting states whenever there is a new enactment of the compact.

Any compacting state may withdraw from this compact by enacting a statute repealing the same. No withdrawal shall affect any liability already incurred by or chargeable to a compacting state prior to the time of such withdrawal.

Nothing in this compact shall be construed to:

(1) Withdraw or limit the jurisdiction of any state or local court or administrative officer or body with respect to any person, corporation or other entity or subject matter, except to the extent that such jurisdiction pursuant to this compact, is expressly conferred upon another agency or body.

(2) Supersede or limit the jurisdiction of any court of the United States.

This compact shall be liberally construed so as to effectuate the purposes thereof. The provisions of this compact shall be severable and if any phrase, clause, sentence or provision of this compact is declared to be contrary to the constitution of any state or of the United States or the applicability thereof to any government, agency, person or circumstances is held invalid, the validity of the remainder of this compact and the applicability thereof to any government, agency, person or circumstance shall not be affected thereby. If this compact shall be held contrary to the constitution of any state participating therein, the compact shall remain in full force and effect as to the remaining party states and in full force and effect as to the state affected as to all severable matters."

Amend the title as follows:

Page 1, line 3, after the semicolon, insert "amending the interstate compact on industrialized/modular buildings;"

Page 1, line 5, after "1," insert "1a,"

Page 1, line 7, after the third semicolon, insert "16B.75;"

Renumber the sections in sequence and correct internal references

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Governmental Operations.

The report was adopted.

Skoglund from the Committee on Judiciary to which was referred:

H. F. No. 1473, A bill for an act relating to privacy; providing for the classification of and access to government data; clarifying data provisions; providing for survival of actions under the data practices act; conforming provisions dealing with financial assistance data; providing for an information policy training program; appropriating money;

amending Minnesota Statutes 1994, sections 13.03, by adding a subdivision; 13.06, subdivision 6; 13.08, subdivision 1; 13.10, subdivision 5; 13.32, subdivision 2; 13.43, subdivisions 2 and 5; 13.46, subdivision 2; 13.50, subdivision 2; 13.531; 13.551; 13.62; 13.643; 13.671; 13.76, subdivision 1; 13.761; 13.77; 13.78; 13.79; 13.82, subdivisions 5 and 10; 13.83, subdivision 2; 13.89, subdivision 1; 13.90; 13.99, subdivisions 1, 12, 20, 21a, 42a, 54, 55, 64, 78, 79, 112, and by adding subdivisions; 17.117, subdivision 12; 41.63; 41B.211; 116O.03, subdivision 7; 116S.02, subdivision 8; and 446A.11, subdivision 11; proposing coding for new law in Minnesota Statutes, chapter 13; repealing Minnesota Statutes 1994, sections 13.69, subdivision 2; and 13.71, subdivisions 9, 10, 11, 12, 13, 14, 15, 16, and 17.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

Section 1. Minnesota Statutes 1994, section 13.03, subdivision 6, is amended to read:

Subd. 6. [DISCOVERABILITY OF NOT PUBLIC DATA.] If a state agency, political subdivision, or statewide system opposes discovery of government data or release of data pursuant to court order on the grounds that the data are classified as not public, the party that seeks access to the data may bring before the appropriate presiding judicial officer, arbitrator, or administrative law judge an action to compel discovery or an action in the nature of an action to compel discovery.

The presiding officer shall first decide whether the data are discoverable or releasable pursuant to the rules of evidence and of criminal, civil, or administrative procedure appropriate to the action.

If the data are discoverable the presiding officer shall decide whether the benefit to the party seeking access to the data outweighs any harm to the confidentiality interests of the agency maintaining the data, or of any person who has provided the data or who is the subject of the data, or to the privacy interest of an individual identified in the data. In making the decision, the presiding officer shall consider whether notice to the subject of the data is warranted and, if warranted, what type of notice must be given. The presiding officer may fashion and issue any protective orders necessary to assure proper handling of the data by the parties. If the data are a videotape of a child victim of physical or sexual abuse, the presiding officer shall also consider the provisions of section 611A.90.

Sec. 2. Minnesota Statutes 1994, section 13.04, subdivision 3, is amended to read:

Subd. 3. [ACCESS TO DATA BY INDIVIDUAL.] Upon request to a responsible authority, an individual shall be informed whether the individual is the subject of stored data on individuals, and whether it is classified as public, private or confidential. Upon further request, an individual who is the subject of stored private or public data on individuals shall be shown the data without any charge and, if desired, shall be informed of the content and meaning of that data. After an individual has been shown the private data and informed of its meaning, the data need not be disclosed to that individual for six months thereafter unless a dispute or action pursuant to this section is pending or additional data on the individual has been collected or created. The responsible authority shall provide copies of the private or public data upon request by the individual subject of the data, except as provided in section 134.495. The responsible authority may require the requesting person to pay the actual costs of making, certifying, and compiling the copies.

The responsible authority shall comply immediately, if possible, with any request made pursuant to this subdivision, or within five days of the date of the request, excluding Saturdays, Sundays and legal holidays, if immediate compliance is not possible. If unable to comply with the request within that time, the responsible authority shall so inform the individual, and may have an additional five days within which to comply with the request, excluding Saturdays, Sundays and legal holidays.

Sec. 3. Minnesota Statutes 1994, section 13.06, subdivision 6, is amended to read:

Subd. 6. [EXPIRATION OF TEMPORARY CLASSIFICATION.] A temporary classification granted under this section shall expire ten days after the end of the second complete annual regular legislative session that follows the commissioner's granting of the temporary classification.

Sec. 4. Minnesota Statutes 1994, section 13.10, subdivision 5, is amended to read:

Subd. 5. [ADOPTION RECORDS.] Notwithstanding any provision of this chapter, adoption records shall be treated as provided in sections 259.21 259.53, 259.61, 259.79, and 259.83 to 259.89.

Sec. 5. Minnesota Statutes 1994, section 13.32, subdivision 2, is amended to read:

Subd. 2. [STUDENT HEALTH AND CENSUS DATA.] (a) Health data concerning students, including but not limited to, data concerning immunizations, notations of special physical or mental problems and records of school nurses; and pupil census data, including but not limited to, emergency information, family information and data concerning parents shall be considered are educational data. Access by parents to student health data shall be pursuant to section 13.02, subdivision 8.

(b) Pupil census data, including emergency information, family information, and data concerning parents are educational data.

Sec. 6. [13.3495] [COPIES OF VIDEOTAPES OF CHILD ABUSE VICTIMS.]

An individual subject of data may not obtain a copy of a videotape made as part of an investigation or evaluation of a child victim or alleged victim of physical or sexual abuse. The definitions of physical abuse and sexual abuse in section 626.556, subdivision 2, apply to this section, except that abuse is not limited to acts by a person responsible for the child's care or in a significant relationship with the child or position of authority.

This section does not limit other rights of access to data by an individual under section 13.04, subdivision 3, other than the right to obtain a copy of the videotape.

Sec. 7. [13.385] [HUNTINGTON'S DISEASE DATA.]

All data created, collected, received, or maintained by the commissioner of health on individuals relating to genetic counseling services for Huntington's Disease provided by the department of health is private data on individuals. The data shall be permanently transferred from the department to the Hennepin county medical center, and once transferred, shall continue to be classified as private data on individuals.

Sec. 8. Minnesota Statutes 1994, section 13.43, subdivision 2, is amended to read:

Subd. 2. [PUBLIC DATA.] (a) Except for employees described in subdivision 5, the following personnel data on current and former employees, volunteers, and independent contractors of a state agency, statewide system, or political subdivision and members of advisory boards or commissions is public: name; actual gross salary; salary range; contract fees; actual gross pension; the value and nature of employer paid fringe benefits; the basis for and the amount of any added remuneration, including expense reimbursement, in addition to salary; job title; job description; education and training background; previous work experience; date of first and last employment; the existence and status of any complaints or charges against the employee, whether or not regardless of whether the complaint or charge resulted in a disciplinary action; the final disposition of any disciplinary action together with the specific reasons for the action and data documenting the basis of the action, excluding data that would identify confidential sources who are employees of the public body; the terms of any agreement settling any dispute arising out of the employment relationship; work location; a work telephone number; badge number; honors and awards received; payroll time sheets or other comparable data that are only used to account for employee's work time for payroll purposes, except to the extent that release of time sheet data would reveal the employee's reasons for the use of sick or other medical leave or other not public data; and city and county of residence.

(b) For purposes of this subdivision, a final disposition occurs when the state agency, statewide system, or political subdivision makes its final decision about the disciplinary action, regardless of the possibility of any later proceedings or court proceedings. In the case of arbitration proceedings arising under collective bargaining agreements, a final disposition occurs at the conclusion of the arbitration proceedings, or upon the failure of the employee to elect arbitration within the time provided by the collective bargaining agreement. Final disposition includes a resignation by an individual when the resignation occurs after the final decision of the state agency, statewide system, political subdivision, or arbitrator.

(c) The state agency, statewide system, or political subdivision may display a photograph of a current or former employee to a prospective witness as part of the state agency's, statewide system's, or political subdivision's investigation of any complaint or charge against the employee.

(d) A complainant has access to a statement provided by the complainant to a state agency, statewide system, or political subdivision in connection with a complaint or charge against an employee.

Sec. 9. Minnesota Statutes 1994, section 13.43, subdivision 5, is amended to read:

Subd. 5. [UNDERCOVER LAW ENFORCEMENT OFFICER.] All personnel data maintained by any state agency, statewide system or political subdivision relating to an individual employed as or an applicant for employment as an undercover law enforcement officer is are private data on individuals. When the individual is no longer assigned to an undercover position, the data become public unless the law enforcement agency determines that revealing the data would threaten the personal safety of the officer or jeopardize an ongoing active investigation.

Sec. 10. Minnesota Statutes 1994, section 13.43, is amended by adding a subdivision to read:

Subd. 9. [PEER COUNSELING DEBRIEFING DATA.] Information or opinion acquired by a peer group member in a public safety peer counseling debriefing is private data on the person being debriefed.

For purposes of this subdivision, "public safety peer counseling debriefing" means a group process oriented debriefing session held for peace officers, firefighters, medical emergency persons, dispatchers, or other persons involved with public safety emergency services, that is established by any agency providing public safety emergency services and is designed to help a person who has suffered an occupation-related traumatic event begin the process of healing and effectively dealing with posttraumatic stress.

Sec. 11. Minnesota Statutes 1994, section 13.46, subdivision 2, is amended to read:

Subd. 2. [GENERAL.] (a) Unless the data is summary data or a statute specifically provides a different classification, data on individuals collected, maintained, used, or disseminated by the welfare system is private data on individuals, and shall not be disclosed except:

(1) pursuant to section 13.05;

(2) pursuant to court order;

(3) pursuant to a statute specifically authorizing access to the private data;

(4) to an agent of the welfare system, including a law enforcement person, attorney, or investigator acting for it in the investigation or prosecution of a criminal or civil proceeding relating to the administration of a program;

(5) to personnel of the welfare system who require the data to determine eligibility, amount of assistance, and the need to provide services of additional programs to the individual;

(6) to administer federal funds or programs;

(7) between personnel of the welfare system working in the same program;

(8) the amounts of cash public assistance and relief paid to welfare recipients in this state, including their names and social security numbers, upon request by the department of revenue to administer the property tax refund law, supplemental housing allowance, and the income tax;

(9) to the Minnesota department of economic security for the purpose of monitoring the eligibility of the data subject for reemployment insurance, for any employment or training program administered, supervised, or certified by that agency, or for the purpose of administering any rehabilitation program, whether alone or in conjunction with the welfare system, and to verify receipt of energy assistance for the telephone assistance plan;

(10) to appropriate parties in connection with an emergency if knowledge of the information is necessary to protect the health or safety of the individual or other individuals or persons;

(11) data maintained by residential facilities programs as defined in section 245A.02 may be disclosed to the protection and advocacy system established in this state pursuant to Part C of Public Law Number 98-527 to protect the legal and human rights of persons with mental retardation or other related conditions who live in residential facilities for these persons if the protection and advocacy system receives a complaint by or on behalf of that person and the person does not have a legal guardian or the state or a designee of the state is the legal guardian of the person;

(12) to the county medical examiner or the county coroner for identifying or locating relatives or friends of a deceased person;

(13) data on a child support obligor who makes payments to the public agency may be disclosed to the higher education coordinating board to the extent necessary to determine eligibility under section 136A.121, subdivision 2, clause (5);

(14) participant social security numbers and names collected by the telephone assistance program may be disclosed to the department of revenue to conduct an electronic data match with the property tax refund database to determine eligibility under section 237.70, subdivision 4a;

(15) the current address of a recipient of aid to families with dependent children may be disclosed to law enforcement officers who provide the name and social security number of the recipient and satisfactorily demonstrate that: (i) the recipient is a fugitive felon, including the grounds for this determination; (ii) the location or apprehension of the felon is within the law enforcement officer's official duties; and (iii) the request is made in writing and in the proper exercise of those duties;

(16) the current address of a recipient of general assistance, work readiness, or general assistance medical care may be disclosed to probation officers and corrections agents who are supervising the recipient, and to law enforcement officers who are investigating the recipient in connection with a felony level offense;

(17) information obtained from food stamp applicant or recipient households may be disclosed to local, state, or federal law enforcement officials, upon their written request, for the purpose of investigating an alleged violation of the food stamp act, in accordance with Code of Federal Regulations, title 7, section 272.1(c); or

(18) data on a child support obligor who is in arrears may be disclosed for purposes of publishing the data pursuant to section 518.575; or

(19) data on child support payments made by a child support obligor may be disclosed to the obligee.

(b) Information on persons who have been treated for drug or alcohol abuse may only be disclosed in accordance with the requirements of Code of Federal Regulations, title 42, sections 2.1 to 2.67.

(c) Data provided to law enforcement agencies under paragraph (a), clause (15), (16), or (17), or paragraph (b), are investigative data and are confidential or protected nonpublic while the investigation is active. The data are private after the investigation becomes inactive under section 13.82, subdivision 5, paragraph (a) or (b).

(d) Mental health data shall be treated as provided in subdivisions 7, 8, and 9, but is not subject to the access provisions of subdivision 10, paragraph (b).

Sec. 12. Minnesota Statutes 1994, section 13.49, is amended to read:

13.49 [SOCIAL SECURITY NUMBERS.]

Subdivision 1. [GENERAL.] The social security numbers of individuals collected or maintained by a state agency, statewide system, or political subdivision are private data on individuals, except to the extent that access to the social security number is specifically authorized by law.

Subd. 2. [COUNTY RECORDER OR REGISTRAR OF TITLES.] Subdivision 1 does not apply to social security numbers that appear in documents or records filed or recorded with the county recorder or registrar of titles, other than documents filed under section 600.23.

Sec. 13. Minnesota Statutes 1994, section 13.50, subdivision 2, is amended to read:

Subd. 2. [PUBLIC DATA.] The data made confidential or protected nonpublic by the provisions of subdivision 1 shall become public upon the occurrence of any of the following:

(a) The negotiating parties exchange appraisals;

(b) The data are submitted to a court appointed condemnation commissioner;

(c) The data are presented in court in condemnation proceedings; or

(d) The negotiating parties enter into an agreement for the purchase and sale of the property.

Sec. 14. Minnesota Statutes 1994, section 13.551, is amended to read:

13.551 [CLASSIFICATION OF SAINT PAUL PORT AUTHORITY DATA.]

Subdivision 1. [SAINT PAUL PORT AUTHORITY.] The following data not on individuals collected and maintained by the Saint Paul port authority are classified as protected nonpublic, until 30 days before the date of a hearing on a proposed sale pursuant to section 469.065: financial studies and reports that are part of appraisers' estimates of value of or concerning projects as defined in chapter 474, prepared by personnel of the port authority or independent accountants, consultants, and appraisers for the purpose of marketing by sale or lease a project which the port authority has acquired or repossessed as the result of the default under and the termination of a revenue agreement as defined in chapter 474.

Subd. 2. [RED WING PORT AUTHORITY.] Data maintained by the Red Wing port authority that pertain to negotiations with property owners regarding the purchase of property are nonpublic data not on individuals. With the exception of the authority's evaluation of properties not purchased, all other negotiation data become public at the time of the closing of the property sale.

Sec. 15. [13.646] [LEGISLATIVE AND BUDGET PROPOSAL DATA.]

Subdivision 1. [DEFINITION.] As used in this section, "state administration" means the governor's office, the department of finance, and any state agency that is under the direct control of the governor.

Subd. 2. [CLASSIFICATIONS.] Prior to its release to the public by the state administration, data relating to anticipated legislative or budget proposals, including preliminary drafts, that are created, collected, or maintained by the state administration are protected nonpublic data. This data becomes public data on the first day of the fiscal year following the fiscal year in which the budget was created. The state administration may disclose any of the data within the state administration and to the public at any time if disclosure would aid the administration in considering and preparing its proposals.

Sec. 16. Minnesota Statutes 1994, section 13.69, subdivision 1, is amended to read:

Subdivision 1. [CLASSIFICATIONS.] (a) The following government data of the department of public safety are private data:

(1) medical data on driving instructors, licensed drivers, and applicants for disability parking certificates and special license plates issued to physically handicapped persons; and

(2) data on holders of a disability certificate under section 169.345 collected or maintained for purposes of that section, except that data under this clause may be released to law enforcement agencies; and

(3) social security numbers in driver's license and motor vehicle registration records, except that social security numbers must be provided to the department of revenue for purposes of tax administration.

(b) The following government data of the department of public safety are confidential data: data concerning an individual's driving ability when that data is received from a member of the individual's family.

Sec. 17. Minnesota Statutes 1994, section 13.79, is amended to read:

13.79 [DEPARTMENT OF LABOR AND INDUSTRY DATA.]

Data that identify complaining employees and that appear on complaint forms received by the department of labor and industry concerning alleged violations of the fair labor standards act or, section 181.75 or 181.9641 are classified as private data.

Sec. 18. Minnesota Statutes 1994, section 13.793, is amended to read:

13.793 [NATURAL RESOURCES MINERAL DATA.]

Subdivision 1. [NONPUBLIC DATA.] Except as provided in subdivision 2, the following data received and maintained by the commissioner of natural resources are nonpublic data:

(1) a letter or other documentation from a person that is supplied to the commissioner before a public lease sale of metallic or other minerals for the purpose of making suggestions or recommendations about which state lands may be offered for public lease sale; or

(2) a written report or other documentation of private analyses of a state-owned or controlled drill core that is public data and is under the custody of the commissioner; or

(3) exploration data received by the commissioner under the terms of a state mineral lease.

Subd. 2. [DATA BECOME PUBLIC.] (a) Data under subdivision 1, clause (1), become public data three years after the date the lease sale was held or, if not held, within three years after the date the lease sale was scheduled to be held. Except as provided in paragraph (b), data under subdivision 1, clause (2), become public data one year after receipt by the commissioner. Except as provided in paragraph (c) or as otherwise provided for by law, data under subdivision 1, clause (3), become public data upon termination of the state mineral lease under which the data were gathered.

(b) If data under subdivision 1, clause (2), relate to private land that is under mineral lease to the person submitting the data, and the mineral lease is in force at the time the data are submitted, the data become public data only after the mineral lease is no longer in force. The person submitting the data that relate to private land that is under mineral lease shall provide to the commissioner at the time the data are submitted and annually thereafter, in a format designated by the commissioner, satisfactory evidence that the mineral lease is in effect. If, in a given year, satisfactory evidence that the mineral lease is still in effect is not provided to the commissioner before the anniversary date of receipt of the data by the commissioner, the data immediately become public data.

(c) If data under subdivision 1, clause (3), are nonpublic data under the provisions of section 103I.605, subdivision 4, clause (c), the data become public data pursuant to the provisions of section 103I.605, subdivision 4, clauses (c) and (d).

Sec. 19. Minnesota Statutes 1994, section 13.82, subdivision 3a, is amended to read:

Subd. 3a. [AUDIO RECORDING OF 911 CALL.] The audio recording of a call placed to a 911 system for the purpose of requesting service from a law enforcement, fire, or medical agency is private data on individuals with respect to the individual making the call, except that a written transcript of the audio recording is public, unless it reveals the identity of an individual otherwise protected under subdivision 10. A transcript shall be prepared upon request. The person requesting the transcript shall pay the actual cost of transcribing the call, in addition to any other applicable costs provided under section 13.03, subdivision 3. The audio recording may be disseminated to law enforcement agencies for investigative purposes. The audio recording may be used for public safety dispatcher and emergency medical services training purposes.

Sec. 20. Minnesota Statutes 1994, section 13.82, subdivision 5, is amended to read:

Subd. 5. [CRIMINAL INVESTIGATIVE DATA COLLECTION.] Except for the data defined in subdivisions 2, 3, and 4, investigative data collected or created by a law enforcement agency in order to prepare a case against a person, whether known or unknown, for the commission of a crime or civil wrong other offense for which the agency has primary investigative responsibility is confidential or protected nonpublic while the investigation is active. Inactive investigative data is public unless the release of the data would jeopardize another ongoing investigation or would reveal the identity of individuals protected under subdivision 10. Photographs which are part of inactive investigative files and which are clearly offensive to common sensibilities are classified as private or nonpublic data, provided that the existence of the photographs shall be disclosed to any person requesting access to the inactive investigative file. An investigation becomes inactive upon the occurrence of any of the following events:

(a) a decision by the agency or appropriate prosecutorial authority not to pursue the case;

(b) expiration of the time to bring a charge or file a complaint under the applicable statute of limitations, or 30 years after the commission of the offense, whichever comes earliest; or

(c) exhaustion of or expiration of all rights of appeal by a person convicted on the basis of the investigative data.

Any investigative data presented as evidence in court shall be public. Data determined to be inactive under clause (a) may become active if the agency or appropriate prosecutorial authority decides to renew the investigation.

During the time when an investigation is active, any person may bring an action in the district court located in the county where the data is being maintained to authorize disclosure of investigative data. The court may order that all or part of the data relating to a particular investigation be released to the public or to the person bringing the action. In making the determination as to whether investigative data shall be disclosed, the court shall consider whether the benefit to the person bringing the action or to the public outweighs any harm to the public, to the agency or to any person identified in the data. The data in dispute shall be examined by the court in camera.

Sec. 21. Minnesota Statutes 1994, section 13.82, is amended by adding a subdivision to read:

Subd. 5c. [NAME CHANGE DATA.] Data on court records relating to name changes under section 259.10, subdivision 2, which is held by a law enforcement agency is confidential data on an individual while an investigation is active and is private data on an individual when the investigation becomes inactive.

Sec. 22. Minnesota Statutes 1994, section 13.82, subdivision 6, is amended to read:

Subd. 6. [ACCESS TO DATA FOR CRIME VICTIMS.] On receipt of a written request, the prosecuting authority shall release investigative data collected by a law enforcement agency to the victim of a criminal act or alleged criminal act or to the victim's legal representative unless the release to the individual subject of the data would be prohibited under section 13.3495, or the prosecuting authority reasonably believes:

(a) that the release of that data will interfere with the investigation; or

(b) that the request is prompted by a desire on the part of the requester to engage in unlawful activities.

Sec. 23. Minnesota Statutes 1994, section 13.82, subdivision 10, is amended to read:

Subd. 10. [PROTECTION OF IDENTITIES.] A law enforcement agency or a law enforcement dispatching agency working under direction of a law enforcement agency may shall withhold public access to data on individuals to protect the identity of individuals in the following circumstances:

(a) when access to the data would reveal the identity of an undercover law enforcement officer, as provided in section 13.43, subdivision 5;

(b) when access to the data would reveal the identity of a victim or alleged victim of criminal sexual conduct or of a violation of section 617.246, subdivision 2;

(c) when access to the data would reveal the identity of a paid or unpaid informant being used by the agency if the agency reasonably determines that revealing the identity of the informant would threaten the personal safety of the informant;

(d) when access to the data would reveal the identity of a victim of or witness to a crime if the victim or witness specifically requests not to be identified publicly, and unless the agency reasonably determines that revealing the identity of the victim or witness would not threaten the personal safety or property of the individual;

(e) when access to the data would reveal the identity of a deceased person whose body was unlawfully removed from a cemetery in which it was interred;

(f) when access to the data would reveal the identity of a person who placed a call to a 911 system or the identity or telephone number of a service subscriber whose phone is used to place a call to the 911 system and: (1) the agency determines that revealing the identity may threaten the personal safety or property of any person; or (2) the object of the call is to receive help in a mental health emergency. For the purposes of this paragraph, a voice recording of a call placed to the 911 system is deemed to reveal the identity of the caller; or

(g) when access to the data would reveal the identity of a juvenile witness and the agency reasonably determines that the subject matter of the investigation justifies protecting the identity of the witness.

Data concerning individuals whose identities are protected by this subdivision are private data about those individuals. Law enforcement agencies shall establish procedures to acquire the data and make the decisions necessary to protect the identity of individuals described in clauses (c), (d), (f), and (g).

Sec. 24. Minnesota Statutes 1994, section 13.82, is amended by adding a subdivision to read:

Subd. 17. [BOOKING PHOTOGRAPHS.] (a) For purposes of this subdivision, "booking photograph" means a photograph or image, electronically produced, taken by law enforcement for identification purposes in connection with the arrest of a person.

(b) Except as otherwise provided in this subdivision, a booking photograph is public data. A law enforcement agency may temporarily withhold access to a booking photograph if the agency determines that access will adversely affect an active investigation.

Sec. 25. Minnesota Statutes 1994, section 13.83, subdivision 2, is amended to read:

Subd. 2. [PUBLIC DATA.] Unless specifically classified otherwise by state statute or federal law, the following data created or collected by a medical examiner or coroner on a deceased individual is public: name of the deceased; date of birth; date of death; address; sex; race; citizenship; height; weight; hair color; eye color; build; complexion; age, if known, or approximate age; identifying marks, scars and amputations; a description of the decedent's clothing; marital status; location of death including name of hospital where applicable; name of spouse; whether or not the decedent ever served in the armed forces of the United States; social security number; occupation; business; father's name (also birth name, if different); mother's name (also birth name, if different); birthplace; birthplace of parents; cause of death; causes of cause of death; whether an autopsy was performed and if so, whether it was conclusive; date and place of injury, if applicable, including work place; how injury occurred; whether death was caused by accident, suicide, homicide, or was of undetermined cause; certification of attendance by physician; physician's name and address; certification by coroner or medical examiner; name and signature of coroner or medical examiner; type of disposition of body; burial place name and location, if applicable; date of burial, cremation or removal; funeral home name and address; and name of local register or funeral director.

Sec. 26. Minnesota Statutes 1994, section 13.89, subdivision 1, is amended to read:

Subdivision 1. [MENTAL RETARDATION.] Data on clients and residents of facilities or programs licensed pursuant to sections 144.50 to 144.58, 245A.01 to 245A.16, and 252.28, subdivision 2, may be disseminated to the protection and advocacy system established in this state pursuant to Part C of Public Law Number 98-527 to protect the legal and human rights of persons with mental retardation or other related conditions who live in residential facilities or programs for these persons if:

(1) the protection and advocacy system receives a complaint by or on behalf of that person; and

(2) the person does not have a legal guardian or the state or a designee of the state is the legal guardian of the person.

Sec. 27. Minnesota Statutes 1994, section 13.90, is amended to read:

13.90 [GOVERNMENT DATA PRACTICES JUDICIARY EXEMPT.]

Subdivision 1. [DEFINITION.] For purposes of this section, "judiciary" means any office, officer, department, division, board, commission, committee, or agency of the courts of this state, whether or not of record, including but not limited to the board of law examiners, the lawyer's professional responsibility board, the board of judicial standards, the lawyer's trust account board, the state law library, the state court administrator's office, the district court administrator's office, and the office of the court administrator.

Subd. 2. [APPLICATION EXEMPTION.] The judiciary shall be governed by this chapter until August 1, 1987, or until the implementation of rules adopted by the supreme court regarding access to data, whichever comes first. Any data made a part of a criminal or civil case shall not be governed by this chapter at any time. The judiciary is not governed by this chapter. Access to data of the judiciary is governed by rules adopted by the supreme court.

Sec. 28. Minnesota Statutes 1994, section 13.99, subdivision 60, is amended to read:

Subd. 60. [OCCUPATIONAL SAFETY AND HEALTH.] Certain data gathered or prepared by the commissioner of labor and industry as part of occupational safety and health inspections are classified under sections 182.659, subdivision subdivisions 8 and 9, and 182.668, subdivision 2.

Sec. 29. Minnesota Statutes 1994, section 13.99, is amended by adding a subdivision to read:

Subd. 109a. [CHILD ABUSE VIDEO TAPES.] Access to child abuse video tapes prepared as part of an investigation or evaluation is governed by sections 13.3495 and 611A.90.

Sec. 30. Minnesota Statutes 1994, section 144.0721, subdivision 2, is amended to read:

Subd. 2. [ACCESS TO DATA.] With the exception of summary data, data on individuals that is collected, maintained, used, or disseminated by the commissioner of health under subdivision 1 is private data on individuals and shall not be disclosed to others except:

(1) under section 13.05;

(2) under a valid court order;

(3) to the nursing home or boarding care home in which the individual resided at the time the assessment was completed; or

(4) to the commissioner of human services; or

(5) to a county for the purpose of assisting the individual to be discharged from a nursing home or boarding care home and returned to the community.

Sec. 31. Minnesota Statutes 1994, section 144.225, is amended by adding a subdivision to read:

Subd. 2a. [HEALTH DATA ASSOCIATED WITH BIRTH REGISTRATION.] Information from which an identification of risk for disease, disability, or developmental delay in a mother or child can be made, that is collected in conjunction with birth registration or fetal death reporting, is private data as defined in section 13.02, subdivision 12. The commissioner may disclose to a local board of health, as defined in section 145A.02, subdivision 2, health data associated with birth registration which identifies a mother or child at high risk for serious disease, disability, or developmental delay in order to assure access to appropriate health, social or educational services.

Sec. 32. Minnesota Statutes 1994, section 144.335, subdivision 2, is amended to read:

Subd. 2. [PATIENT ACCESS.] (a) Upon request, a provider shall supply to a patient complete and current information possessed by that provider concerning any diagnosis, treatment and prognosis of the patient in terms and language the patient can reasonably be expected to understand.

(b) Except as provided in paragraph (e), upon a patient's written request, a provider, at a reasonable cost to the patient, shall promptly furnish to the patient (1) copies of the patient's health record, including but not limited to laboratory reports, X-rays, prescriptions, and other technical information used in assessing the patient's health condition, or (2) the pertinent portion of the record relating to a condition specified by the patient. With the consent of the patient, the provider may instead furnish only a summary of the record. The provider may exclude from the health record written speculations about the patient's health condition, except that all information necessary for the patient's informed consent must be provided.

(c) If a provider, as defined in subdivision 1, clause (b)(1), reasonably determines that the information is detrimental to the physical or mental health of the patient, or is likely to cause the patient to inflict self harm, or to harm another, the provider may withhold the information from the patient and may supply the information to an appropriate third party or to another provider, as defined in subdivision 1, clause (b)(1). The other provider or third party may release the information to the patient.

(d) A provider as defined in subdivision 1, clause (b)(3), shall release information upon written request unless, prior to the request, a provider as defined in subdivision 1, clause (b)(1), has designated and described a specific basis for withholding the information as authorized by paragraph (c).

(e) A provider may condition the release of a copy of a videotape of a child victim of physical or sexual abuse on the execution of a stipulation and order, as provided in section 611A.90.

Sec. 33. Minnesota Statutes 1994, section 144.3351, is amended to read:

144.3351 [IMMUNIZATION DATA.]

Providers as defined in section 144.335, subdivision 1, group purchasers as defined in section 62J.03, subdivision 6, elementary or secondary schools or child care facilities as defined in section 123.70, subdivision 9, public or private post-secondary educational institutions as defined in section 135A.14, subdivision 1, paragraph (b), a board of health as defined in section 145A.02, subdivision 2, community action agencies as defined in section 268.53, subdivision 1, and the commissioner of health may exchange immunization data with one another, without the patient's consent, on the date and type of immunizations administered to a patient, regardless of the date of immunization, if the person requesting access provides services on behalf of the patient. For purposes of this section immunization data includes:

(i) patient's name, address, date of birth, gender, parent or guardian's name, unique patient identification numbers as defined in section 62J.54, subdivision 4; and

(ii) date vaccine was received, vaccine type, lot number, and manufacturer of all immunizations received by the patient, and whether there is a contradiction or an adverse reaction indication, regardless of the date of the immunization.

Sec. 34. Minnesota Statutes 1994, section 144.651, subdivision 21, is amended to read:

Subd. 21. [COMMUNICATION PRIVACY.] Patients and residents may associate and communicate privately with persons of their choice and enter and, except as provided by the Minnesota Commitment Act, leave the facility as they choose. Patients and residents shall have access, at their expense, to writing instruments, stationery, and postage. Personal mail shall be sent without interference and received unopened unless medically or programmatically contraindicated and documented by the physician in the medical record. There shall be access to a telephone where patients and residents can make and receive calls as well as speak privately. Facilities which are unable to provide a private area shall make reasonable arrangements to accommodate the privacy of patients' or residents' calls. Upon admission to a facility, a patient or resident, or the patient's or resident's legal guardian or conservator, shall be given the opportunity to authorize disclosure of the patient's or resident's presence in the facility, to callers or visitors who may seek to communicate with the patient or resident. This disclosure option must be made available in all cases where federal law prohibits unauthorized disclosure of patient or resident identifying information to callers and visitors, the patient or resident, or the legal guardian or conservator of the patient or resident, shall be given the opportunity to authorize disclosure of the patient's or resident's presence in the facility to callers and visitors who may seek to communicate with the patient or resident. To the extent possible, the legal guardian or conservator of a patient or resident shall consider the opinions of the patient or resident regarding the disclosure of the patient's or resident's presence in the facility. This right is limited where medically inadvisable, as documented by the attending physician in a patient's or resident's care record. Where programmatically limited by a facility abuse prevention plan pursuant to section 626.557, subdivision 14, clause 2, this right shall also be limited accordingly.

Sec. 35. Minnesota Statutes 1994, section 144.651, subdivision 26, is amended to read:

Subd. 26. [RIGHT TO ASSOCIATE.] Residents may meet with visitors and participate in activities of commercial, religious, political, as defined in section 203B.11 and community groups without interference at their discretion if the activities do not infringe on the right to privacy of other residents or are not programmatically contraindicated. This includes the right to join with other individuals within and outside the facility to work for improvements in long-term care. Upon admission to a facility, a patient or resident, or the patient's or resident's legal guardian or conservator, shall be given the opportunity to authorize disclosure of the patient's or resident's presence in the facility, to callers or visitors who may seek to communicate with the patient or resident. This disclosure option must be made available in all cases where federal law prohibits unauthorized disclosure of patient or resident identifying information to callers and visitors, the patient or resident, or the legal guardian or conservator of the patient or resident, shall be given the opportunity to authorize disclosure of the patient's or resident's presence in the facility to callers and visitors who may seek to communicate with the patient or resident. To the extent possible, the legal guardian or conservator of a patient or resident shall consider the opinions of the patient or resident regarding the disclosure of the patient's or resident's presence in the facility.

Sec. 36. Minnesota Statutes 1994, section 171.07, subdivision 1a, is amended to read:

Subd. 1a. [FILING PHOTOGRAPHS OR IMAGES; DATA CLASSIFICATION.] The department shall file, or contract to file, all photographs or electronically produced images obtained in the process of issuing driver licenses or Minnesota identification cards. The photographs or electronically produced images shall be private data pursuant to section 13.02, subdivision 12. Notwithstanding section 13.04, subdivision 3, the department shall not be required to provide copies of photographs or electronically produced images to data subjects. The use of the files is restricted:

(1) to the issuance and control of driver licenses;

(2) for law enforcement purposes in the investigation and prosecution of felonies and violations of section 169.09; 169.121; 169.123; 169.129; 171.22; 171.24; 171.30; 609.41; 609.487, subdivision 3; 609.631, subdivision 4, clause (3); 609.821, subdivision 3, clauses (1), item (iv), and (3); or 617.23, gross misdemeanors, and misdemeanors; and

(3) for child support enforcement purposes under section 256.978.

Sec. 37. Minnesota Statutes 1994, section 171.12, subdivision 3, is amended to read:

Subd. 3. [APPLICATIONS AND RECORDS, WHEN DESTROYED.] The department may cause applications for drivers' licenses and instruction permits, and related records, to be destroyed immediately after the period for which issued, except that:

(1) the driver's record pertaining to revocations, suspensions, cancellations, disqualifications, convictions, and accidents shall be cumulative and kept for a period of at least five years; and

(2) the driver's record pertaining to the alcohol-related offenses and licensing actions listed in section 169.121, subdivision 3, and to violations of sections 169.1211 and 171.24, subdivision 5, shall be cumulative and kept for a period of at least 15 years.

Sec. 38. Minnesota Statutes 1994, section 182.659, subdivision 8, is amended to read:

Subd. 8. Neither the commissioner nor any employee of the department, including those employees of the department of health providing services to the department of labor and industry, pursuant to section 182.67, subdivision 1, is subject to subpoena for purposes of inquiry into any occupational safety and health inspection except in enforcement proceedings brought under this chapter. All written information, documentation and reports gathered or prepared by the department pursuant to an occupational safety and health inspection are public information once the departmental inspection file is closed.

Sec. 39. Minnesota Statutes 1994, section 182.659, is amended by adding a subdivision to read:

Subd. 9. Notwithstanding section 13.39, and except as provided by section 13.30, access to investigative data collected, created, received, and maintained pursuant to the enforcement of this chapter is governed by this subdivision.

(a) Investigative data on an individual which is part of an active investigation or is being maintained in anticipation of a civil or administrative action is classified as confidential data on individuals under section 13.02, subdivision 3.

(b) Investigative data not on an individual which is part of an active investigation or is being maintained in anticipation of a civil or administrative action is classified as protected nonpublic data under section 13.02, subdivision 13.

(c) The names and addresses of employers investigated, citations and notifications of penalty issued as a result of investigations, and employers' notices of contest are classified as public data.

(d) Investigative data which is part of an inactive investigation is public data except as provided in paragraph (e). An investigation becomes inactive upon the occurrence of any of the following events:

(1) no citation and notification of penalty is issued as a result of the investigation within six months after the closing conference;

(2) a citation and notification of penalty issued as a result of the investigation is rescinded by the commissioner; or

(3) a citation and notification of penalty issued as a result of the investigation has been dismissed or become a final order of the commissioner and all rights of appeal by any party have either been exhausted or have expired.

(e) The following investigative data which is part of an inactive investigation is not public:

(1) investigative data that identifies individuals who provide the commissioner in confidence data about violations of this chapter or any standard, rule, or order promulgated under the authority of the commissioner;

(2) investigative data protected under subdivision 4; and

(3) investigative data protected under section 182.663, subdivision 4.

This data continues to be classified as confidential data on individuals under section 13.02, subdivision 3, or protected nonpublic data under section 13.02, subdivision 13.

(f) The commissioner may make accessible to any person, agency, or the public, any data classified as confidential or protected nonpublic data pursuant to this subdivision, if the commissioner determines that the access will aid the law enforcement process or promote public health and safety.

(g) Investigative data provided by an employee to the commissioner pursuant to an investigation conducted by the commissioner under section 182.669, which is part of an active or inactive investigation, is accessible to the employee in accordance with section 13.04, subdivision 3. The employee may consent to the release of the data to the employee's attorney or other legal representative.

Sec. 40. Minnesota Statutes 1994, section 253B.03, subdivision 3, is amended to read:

Subd. 3. [VISITORS AND PHONE CALLS.] Subject to the general rules of the treatment facility, a patient has the right to receive visitors and make phone calls. The head of the treatment facility may restrict visits and phone calls on determining that the medical welfare of the patient requires it. Any limitation imposed on the exercise of the patient's visitation and phone call rights and the reason for it shall be made a part of the clinical record of the patient. Upon admission to a facility, a patient or resident, or the patient's or resident's legal guardian or conservator, shall be given the opportunity to authorize disclosure of the patient's or resident's presence in the facility, to callers or visitors who may seek to communicate with the patient or resident. This disclosure option must be made available in all cases where federal law prohibits unauthorized disclosure of patient or resident identifying information to callers and visitors, the patient or resident, or the legal guardian or conservator of the patient or resident, shall be given the opportunity to authorize disclosure of the patient's or resident's presence in the facility to callers and visitors who may seek to communicate with the patient or resident. To the extent possible, the legal guardian or conservator of a patient or resident shall consider the opinions of the patient or resident regarding the disclosure of the patient's or resident's presence in the facility.

Sec. 41. Minnesota Statutes 1994, section 253B.03, subdivision 4, is amended to read:

Subd. 4. [SPECIAL VISITATION; RELIGION.] A patient has the right to meet with or call a personal physician, spiritual advisor, and counsel at all reasonable times. Upon admission to a facility, a patient or resident, or the patient's or resident's legal guardian or conservator, shall be given the opportunity to authorize disclosure of the patient's or resident's presence in the facility, to callers or visitors who may seek to communicate with the patient or resident. This disclosure option must be made available in all cases where federal law prohibits unauthorized disclosure of patient or resident identifying information to callers and visitors, the patient or resident, or the legal guardian or conservator of the patient or resident, shall be given the opportunity to authorize disclosure of the patient's or resident's presence in the facility to callers and visitors who may seek to communicate with the patient or resident. To the extent possible, the legal guardian or conservator of a patient or resident shall consider the opinions of the patient or resident regarding the disclosure of the patient's or resident's presence in the facility. The patient has the right to continue the practice of religion.

Sec. 42. Minnesota Statutes 1994, section 259.10, is amended to read:

259.10 [PROCEDURE GENERAL REQUIREMENTS.]

Subdivision 1. [PROCEDURE.] A person who shall have resided in this state for six months may apply to the district court in the county where the person resides to change the person's name, the names of minor children, if any, and the name of a spouse, if the spouse joins in the application, in the manner herein specified. The person shall state in the application the name and age of the spouse and each of the children, if any, and shall describe all lands in the state in or upon which the person, the children and the spouse if their names are also to be changed by the application, claim any interest or lien, and shall appear personally before the court and prove identity by at least two witnesses. If the person be a minor, the application shall be made by the person's guardian or next of kin. The court shall accept the certificate of dissolution prepared pursuant to section 518.148 as conclusive evidence of the facts recited in the certificate and may not require the person to provide the court a copy of the judgment and decree of dissolution. Every person who, with intent to defraud, shall make a false statement in any such application shall be guilty of a misdemeanor provided, however, that no minor child's name may be changed without both parents having notice of the pending of the application for change of name, whenever practicable, as determined by the court.

Subd. 2. [WITNESS AND VICTIM PROTECTION NAME CHANGES; PRIVATE DATA.] If the court finds that a name change for an individual was made in connection with the individual's participation in a witness and victim protection program, court records of the name change shall not be disclosed to the public; except that they may be released, upon request, to a law enforcement agency conducting a lawful investigation. The existence of an application for a name change described in this subdivision may not be disclosed except to a law enforcement agency conducting a lawful investigation.

Sec. 43. Minnesota Statutes 1994, section 268.0122, is amended by adding a subdivision to read:

Subd. 6. [CLASSIFICATION OF DATA ON INDIVIDUALS.] Data collected on individuals pursuant to a program operated by the commissioner are private data on individuals as defined in section 13.02, subdivision 12, unless more restrictively classified by law. Notwithstanding this classification, the commissioner may disclose any data collected for purposes of meeting the data subject's needs or to assist in evaluating the effectiveness of a program. Nothing in this subdivision limits the sharing or exchanging of data authorized by state or federal law.

Sec. 44. Minnesota Statutes 1994, section 268.0124, is amended to read:

268.0124 [PLAIN LANGUAGE IN WRITTEN MATERIALS.]

(a) To the extent reasonable and consistent with the goals of providing easily understandable and readable materials and complying with federal and state laws governing the programs, all written materials relating to services and determinations of eligibility for or amounts of benefits that will be given to applicants for or recipients of assistance under a program administered or supervised by the commissioner of economic security must be understandable to a person who reads at the seventh-grade level, using the Flesch scale analysis readability score as determined under section 72C.09 of average intelligence and education.

(b) All written materials relating to determinations of eligibility for or amounts of benefits that will be given to applicants for or recipients of assistance under programs administered or supervised by the commissioner of economic security must be developed to satisfy the plain language requirements of the plain language contract act under sections 325G.29 to 325G.36. Materials may be submitted to the attorney general for review and certification. Notwithstanding section 325G.35, subdivision 1, the attorney general shall review submitted materials to determine whether they comply with the requirements of section 325G.31. The remedies available pursuant to sections 8.31 and 325G.33 to 325G.36 do not apply to these materials. Failure to comply with this section does not provide a basis for suspending the implementation or operation of other laws governing programs administered by the commissioner.

(c) The requirements of this section apply to all materials modified or developed by the commissioner on or after July 1, 1988. The requirements of this section do not apply to materials that must be submitted to a federal agency for approval, to the extent that application of the requirements prevents federal approval.

(d) Nothing in this section may be construed to prohibit a lawsuit brought to require the commissioner to comply with this section or to affect individual appeal rights granted pursuant to section 268.10.

(e) The commissioner shall report annually to the chairs of the health and human services divisions of the senate finance committee and the house of representatives appropriations committee on the number and outcome of cases that raise the issue of the commissioner's compliance with this section.

Sec. 45. Minnesota Statutes 1994, section 270B.02, subdivision 3, is amended to read:

Subd. 3. [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED NONPUBLIC DATA.] (a) Except as provided in paragraph (b), names the name or existence of informers an informer, informer letters, and other unsolicited data, in whatever form, given to the department of revenue by a person, other than the data subject, who informs that a specific taxpayer is not or may not be in compliance with tax laws, or nontax laws administered by the department of revenue, are confidential data on individuals or protected nonpublic data as defined in section 13.02, subdivisions 3 and 13.

(b) Data under paragraph (a) may be disclosed with the consent of the informer or upon a written finding by a court that the information provided by the informer was false and that there is evidence that the information was provided in bad faith. This subdivision does not alter disclosure responsibilities or obligations under the rules of criminal procedure.

Sec. 46. [270B.085] [DISCLOSURES IN COLLECTION ACTIONS.]

Subdivision 1. [SEIZURE INFORMATION.] Following the execution of a writ of entry under section 270.70, the commissioner may disclose information identifying the individual or business subject to the writ, the basis for the writ, and the results of the execution, including lists of property seized.

Subd. 2. [LIEN PAYOFF INFORMATION.] The commissioner may disclose the outstanding obligation secured by a lien filed under section 270.69, subdivision 2.

Sec. 47. Minnesota Statutes 1994, section 270B.14, subdivision 1, is amended to read:

Subdivision 1. [DISCLOSURE TO COMMISSIONER OF HUMAN SERVICES.] (a) On the request of the commissioner of human services, the commissioner shall disclose return information regarding taxes imposed by chapter 290, and claims for refunds under chapter 290A, to the extent provided in paragraph (b) and for the purposes set forth in paragraph (c).

(b) Data that may be disclosed are limited to data relating to the identity, whereabouts, employment, income, and property of a person owing or alleged to be owing an obligation of child support.

(c) The commissioner of human services may request data only for the purposes of carrying out the child support enforcement program and to assist in the location of parents who have, or appear to have, deserted their children. Data received may be used only as set forth in section 256.978.

(d) The commissioner shall provide the records and information necessary to administer the supplemental housing allowance to the commissioner of human services.

(e) At the request of the commissioner of human services, the commissioner of revenue shall electronically match the social security numbers and names of participants in the telephone assistance plan operated under sections 237.69 to 237.711, with those of property tax refund filers, and determine whether each participant's household income is within the eligibility standards for the telephone assistance plan.

(f) The commissioner may provide records and information collected under sections 295.50 to 295.59 to the commissioner of human services for purposes of the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Public Law Number 102-234. Upon the written agreement by the United States Department of Health and Human Services to maintain the confidentiality of the data, the commissioner may provide records and information collected under sections 295.50 to 295.59 to the Health Care Financing Administration section of the United States Department of Health and Human Services for purposes of meeting federal reporting requirements.

(g) The commissioner may provide records and information to the commissioner of human services as necessary to administer the early refund of refundable tax credits.

Sec. 48. [270B.161] [DATA AND INFORMATION ON MINE VALUE OF ORE.]

Notwithstanding the remaining provisions of this chapter, or any other provision of law, all data collected from taxpayers and maintained by the commissioner for the purpose of determining the mine value of ore under section 298.01 is nonpublic data as defined in section 13.02, subdivision 9.

Sec. 49. Minnesota Statutes 1994, section 299C.11, is amended to read:

299C.11 [IDENTIFICATION DATA FURNISHED TO BUREAU.]

The sheriff of each county and the chief of police of each city of the first, second, and third classes shall furnish the bureau, upon such form as the superintendent shall prescribe, with such finger and thumb prints, photographs, distinctive physical mark identification data, and other identification data as may be requested or required by the superintendent of the bureau, which may be taken under the provisions of section 299C.10, of persons who shall be convicted of a felony, gross misdemeanor, or who shall be found to have been convicted of a felony or gross misdemeanor, within ten years next preceding their arrest. Upon the determination of all pending criminal actions or proceedings in favor of the arrested person, the arrested person shall, upon demand, have all such finger and thumb prints, photographs, distinctive physical mark identification data, and other identification data, and all copies and duplicates thereof, returned, provided it is not established that the arrested person has been convicted of any felony, either within or without the state, within the period of ten years immediately preceding such determination.

For purposes of this section, "determination of all pending criminal actions or proceedings in favor of the arrested person" does not include:

(1) the sealing of a criminal record pursuant to section 152.18, subdivision 1, 242.31, or 609.168; or

(2) the arrested person's successful completion of a diversion program.

Sec. 50. Minnesota Statutes 1994, section 336.9-407, is amended to read:

336.9-407 [INFORMATION FROM FILING OFFICER.]

(1) If the person filing any financing statement, termination statement, statement of assignment, or statement of release, furnishes the filing officer a copy thereof, the filing officer shall upon request note upon the copy the file number and date and hour of the filing of the original and deliver or send the copy to such person.

(2) Upon request of any person, the filing officer shall conduct a search of the statewide computerized uniform commercial code database for any active financing statements naming a particular debtor. The filing officer shall report the findings as of the date and hour of the search by issuing:

(a) a certificate listing the file number, date, and hour of each filing and the names and addresses of each secured party;

(b) photocopies of those original documents on file and located in the office of the filing officer; or

(c) upon request, both the certificate and the photocopies referred to in (b).

The uniform fee for conducting the search and for preparing a certificate shall be $15 if the request is in the standard form prescribed by the secretary of state. This uniform fee shall include up to ten photocopies of original documents. If the request for information is made on a form other than the standard form prescribed by the secretary of state, the fee shall be $20 and shall include up to ten photocopies of original documents.

Another fee, at the same rate, shall also be charged for conducting a search and preparing a certificate showing federal and state tax liens on file with the filing officer naming a particular debtor.

There shall be an additional fee of $1 per page for a photocopy of each financing statement or tax lien prepared in excess of the first ten.

Notwithstanding the fees set in this section, a natural person who is the subject of data must, upon the person's request, be shown the data without charge, and upon request be provided with photocopies of the data upon payment of no more than the actual cost of making the copies.

Notwithstanding section 13.49, a filing officer may include social security number information in a report of the findings following a search of the statewide computerized uniform commercial code database or the state and federal tax liens on file with the filing officer. A filing officer may also include social security number information on a photocopy of an original document on file whether provided in response to a request for information or in response to a request made pursuant to section 13.03.

Sec. 51. Minnesota Statutes 1994, section 336.9-411, is amended to read:

336.9-411 [COMPUTERIZED FILING SYSTEM.]

(a) The secretary of state shall develop and implement a statewide computerized filing system to accumulate and disseminate information relative to lien statements, financing statements, state and federal tax lien notices, and other uniform commercial code documents. The computerized filing system must allow information to be entered and retrieved from the computerized filing system by county recorders, the department of revenue, the department of economic security, and the Internal Revenue Service.

(b) County recorders shall enter information relative to lien statements, financing statements, state and federal tax lien notices, and other uniform commercial code documents filed in their offices into a central database maintained by the secretary of state. The information must be entered under the rules of the secretary of state. This requirement does not apply to tax lien notices filed under sections 268.161, subdivision 1, paragraph (b), clause (2); 270.69, subdivision 2, paragraph (b), clause (2); and 272.488, subdivision 1, but does apply to entry of the date and time of receipt and county recorder's file number of those notices.

(c) The secretary of state may allow private parties to have electronic-view-only access to the computerized filing system and to other computerized records maintained by the secretary of state on a fee basis, except that visual access to electronic display terminals at the public counters at the secretary of state's office will be without charge and available during public counter hours. If the computerized filing system allows a form of electronic access to information regarding the obligations of debtors, the access must be available 24 hours a day, every day of the year.

Notwithstanding section 13.49, private parties who have electronic-view-only access to computerized records may view the social security number information about a debtor that is of record.

(d) The secretary of state shall adopt rules to implement the computerized filing system. The secretary of state may adopt permanent and emergency rules. The rules must:

(1) allow filings to be made at the offices of all county recorders and the secretary of state's office as required by section 336.9-401;

(2) establish a central database for all information relating to liens and security interests that are filed at the offices of county recorders and the secretary of state;

(3) provide procedures for entering data into a central database;

(4) allow the offices of all county recorders and the secretary of state's office to add, modify, and delete information in the central database as required by the uniform commercial code;

(5) allow the offices of all county recorders and the secretary of state's office to have access to the central database for review and search capabilities;

(6) allow the offices of all county recorders to have electronic-view-only access to the computerized business information records on file with the secretary of state;

(7) require the secretary of state to maintain the central database;

(8) provide security and protection of all information in the central database and monitor the central database to ensure that unauthorized entry is not allowed;

(9) require standardized information for entry into the central database;

(10) prescribe an identification procedure for debtors and secured parties that will enhance lien and financing statement searches; and

(11) prescribe a procedure for phasing-in or converting from the existing filing system to a computerized filing system.

(e) The secretary of state, county recorders, and their employees and agents shall not be liable for any loss or damages arising from errors in or omissions from information entered into the computerized filing system as a result of the electronic transmission of tax lien notices under sections 268.161, subdivision 1, paragraph (b), clause (2); 270.69, subdivision 2, paragraph (b), clause (2); 272.483; and 272.488, subdivision subdivisions 1 and 3.

Sec. 52. Minnesota Statutes 1994, section 363.061, subdivision 2, is amended to read:

Subd. 2. [ACCESS TO OPEN FILES.] (a) Human rights investigative data on an individual, with the exception of the name and address of the charging party and respondent, factual basis of the allegations, and the statute under which the action is brought, contained in an open case file is classified as confidential. The name and address of the charging party and respondent, factual basis of the allegations, and the statute under which the action is brought are classified as private data until seven working days after the commissioner has served a copy of the charge on the respondent, at which time the data become public data, unless the commissioner determines that release of the data would be detrimental to the investigative and enforcement process.

(b) Human rights investigative data not on an individual contained in an open case file is classified as protected nonpublic data.

(c) Notwithstanding this subdivision, the commissioner may make human rights investigative data contained in an open case file accessible to a person, government agency, or the public if access will aid the investigative and enforcement process.

Sec. 53. Minnesota Statutes 1994, section 595.02, subdivision 1, is amended to read:

Subdivision 1. [COMPETENCY OF WITNESSES.] Every person of sufficient understanding, including a party, may testify in any action or proceeding, civil or criminal, in court or before any person who has authority to receive evidence, except as provided in this subdivision:

(a) A husband cannot be examined for or against his wife without her consent, nor a wife for or against her husband without his consent, nor can either, during the marriage or afterwards, without the consent of the other, be examined as to any communication made by one to the other during the marriage. This exception does not apply to a civil action or proceeding by one against the other, nor to a criminal action or proceeding for a crime committed by one against the other or against a child of either or against a child under the care of either spouse, nor to a criminal action or proceeding in which one is charged with homicide or an attempt to commit homicide and the date of the marriage of the defendant is subsequent to the date of the offense, nor to an action or proceeding for nonsupport, neglect, dependency, or termination of parental rights.

(b) An attorney cannot, without the consent of the attorney's client, be examined as to any communication made by the client to the attorney or the attorney's advice given thereon in the course of professional duty; nor can any employee of the attorney be examined as to the communication or advice, without the client's consent.

(c) A member of the clergy or other minister of any religion shall not, without the consent of the party making the confession, be allowed to disclose a confession made to the member of the clergy or other minister in a professional character, in the course of discipline enjoined by the rules or practice of the religious body to which the member of the clergy or other minister belongs; nor shall a member of the clergy or other minister of any religion be examined as to any communication made to the member of the clergy or other minister by any person seeking religious or spiritual advice, aid, or comfort or advice given thereon in the course of the member of the clergy's or other minister's professional character, without the consent of the person.

(d) A licensed physician or surgeon, dentist, or chiropractor shall not, without the consent of the patient, be allowed to disclose any information or any opinion based thereon which the professional acquired in attending the patient in a professional capacity, and which was necessary to enable the professional to act in that capacity; after the decease of the patient, in an action to recover insurance benefits, where the insurance has been in existence two years or more, the beneficiaries shall be deemed to be the personal representatives of the deceased person for the purpose of waiving this privilege, and no oral or written waiver of the privilege shall have any binding force or effect except when made upon the trial or examination where the evidence is offered or received.

(e) A public officer shall not be allowed to disclose communications made to the officer in official confidence when the public interest would suffer by the disclosure.

(f) Persons of unsound mind and persons intoxicated at the time of their production for examination are not competent witnesses if they lack capacity to remember or to relate truthfully facts respecting which they are examined.

(g) A registered nurse, psychologist, consulting psychologist, or licensed social worker engaged in a psychological or social assessment or treatment of an individual at the individual's request shall not, without the consent of the professional's client, be allowed to disclose any information or opinion based thereon which the professional has acquired in attending the client in a professional capacity, and which was necessary to enable the professional to act in that capacity. Nothing in this clause exempts licensed social workers from compliance with the provisions of sections 626.556 and 626.557.

(h) An interpreter for a person handicapped in communication shall not, without the consent of the person, be allowed to disclose any communication if the communication would, if the interpreter were not present, be privileged. For purposes of this section, a "person handicapped in communication" means a person who, because of a hearing, speech or other communication disorder, or because of the inability to speak or comprehend the English language, is unable to understand the proceedings in which the person is required to participate. The presence of an interpreter as an aid to communication does not destroy an otherwise existing privilege.

(i) Licensed chemical dependency counselors shall not disclose information or an opinion based on the information which they acquire from persons consulting them in their professional capacities, and which was necessary to enable them to act in that capacity, except that they may do so:

(1) when informed consent has been obtained in writing, except in those circumstances in which not to do so would violate the law or would result in clear and imminent danger to the client or others;

(2) when the communications reveal the contemplation or ongoing commission of a crime; or

(3) when the consulting person waives the privilege by bringing suit or filing charges against the licensed professional whom that person consulted.

(j) A parent or the parent's minor child may not be examined as to any communication made in confidence by the minor to the minor's parent. A communication is confidential if made out of the presence of persons not members of the child's immediate family living in the same household. This exception may be waived by express consent to disclosure by a parent entitled to claim the privilege or by the child who made the communication or by failure of the child or parent to object when the contents of a communication are demanded. This exception does not apply to a civil action or proceeding by one spouse against the other or by a parent or child against the other, nor to a proceeding to commit either the child or parent to whom the communication was made or to place the person or property or either under the control of another because of an alleged mental or physical condition, nor to a criminal

action or proceeding in which the parent is charged with a crime committed against the person or property of the communicating child, the parent's spouse, or a child of either the parent or the parent's spouse, or in which a child is charged with a crime or act of delinquency committed against the person or property of a parent or a child of a parent, nor to an action or proceeding for termination of parental rights, nor any other action or proceeding on a petition alleging child abuse, child neglect, abandonment or nonsupport by a parent.

(k) Sexual assault counselors may not be compelled to testify about any opinion or information received from or about the victim without the consent of the victim. However, a counselor may be compelled to identify or disclose information in investigations or proceedings related to neglect or termination of parental rights if the court determines good cause exists. In determining whether to compel disclosure, the court shall weigh the public interest and need for disclosure against the effect on the victim, the treatment relationship, and the treatment services if disclosure occurs. Nothing in this clause exempts sexual assault counselors from compliance with the provisions of sections 626.556 and 626.557.

"Sexual assault counselor" for the purpose of this section means a person who has undergone at least 40 hours of crisis counseling training and works under the direction of a supervisor in a crisis center, whose primary purpose is to render advice, counseling, or assistance to victims of sexual assault.

(l) A person cannot be examined as to any communication or document, including worknotes, made or used in the course of or because of mediation pursuant to an agreement to mediate. This does not apply to the parties in the dispute in an application to a court by a party to have a mediated settlement agreement set aside or reformed. A communication or document otherwise not privileged does not become privileged because of this paragraph. This paragraph is not intended to limit the privilege accorded to communication during mediation by the common law.

(m) A child under ten years of age is a competent witness unless the court finds that the child lacks the capacity to remember or to relate truthfully facts respecting which the child is examined. A child describing any act or event may use language appropriate for a child of that age.

(n) A communication assistant for a telecommunications relay system for communication-impaired persons shall not, without the consent of the person making the communication, be allowed to disclose communications made to the communication assistant for the purpose of relaying.

(o) A peace officer, firefighter, medical emergency person, dispatcher, or other persons involved with public safety emergency services, engaged in a public safety peer counseling debriefing of a person who was involved in a critical incident, shall not, without the permission of the person being debriefed, be allowed to disclose any information or opinion which the peer group member has acquired during the debriefing. However, this does not prohibit a peer counselor from disclosing information the peer counselor reasonably believes indicates that the person may be a danger to self or others, if the information is used only for the purpose of eliminating the danger to the person or others. Any information or opinion disclosed in violation of this paragraph is not admissible as evidence in any civil proceeding, criminal prosecution, or personnel or occupational licensing matter involving the person being debriefed.

For purposes of this paragraph, "public safety peer counseling debriefing" means a group process oriented debriefing session held for peace officers, firefighters, medical emergency persons, dispatchers, or other persons involved with public safety emergency services, that is established by any agency providing public safety emergency services and is designed to help a person who has suffered an occupation-related traumatic event begin the process of healing and effectively dealing with posttraumatic stress.

Sec. 54. [611A.90] [RELEASE OF VIDEOTAPES OF CHILD ABUSE VICTIMS.]

Subdivision 1. [DEFINITION.] For purposes of this section, "physical abuse" and "sexual abuse" have the meanings given in section 626.556, subdivision 2, except that abuse is not limited to acts by a person responsible for the child's care or in a significant relationship with the child or position of authority.

Subd. 2. [STIPULATION AND ORDER MAY BE REQUIRED.] A person who makes or requested the making of a videotape of a child victim or alleged victim of physical or sexual abuse as part of an investigation or evaluation of the abuse may condition the release of a copy of the videotape on the execution of a stipulation and court order. The stipulation and order may govern the purposes for which the videotape may be used, release to other persons, retention and return of copies, and other requirements reasonably necessary for protection of the privacy and best interests of the child.

Sec. 55. [REPEALER.]

(a) Minnesota Statutes 1994, sections 13.38, subdivision 4; 13.69, subdivision 2; and 13.71, subdivisions 9, 10, 11, 12, 13, 14, 15, 16, and 17, are repealed.

(b) Laws 1990, chapter 566, section 9, as amended by Laws 1992, chapter 569, section 36; and Laws 1994, chapter 618, article 1, section 47, is repealed.

Sec. 56. [REPORT; APPROPRIATION.]

(a) The government information access council shall report recommendations regarding state and local government intellectual property to the legislature by January 15, 1996.

(b) The government information access council shall complete an inventory of state intellectual property and a report on the inventory to the legislature by January 15, 1996. Money appropriated for fiscal years 1994 and 1995 for the operations of the governmental information access council shall not cancel, and must be carried forward to fiscal year 1996 and shall be expended for the purposes of this paragraph. The carryforward balance is appropriated for these purposes.

Sec. 57. [EFFECTIVE DATE.]

Article 1, sections 45, 46, 47, 50, 51, and 55, paragraph (b), are effective the day following final enactment.

Article 1, section 48, is effective for data collected by the commissioner of revenue after December 31, 1993.

Section 1. [13.311] [FINANCIAL ASSISTANCE DATA.]

Subdivision 1. [DEFINITIONS.] (a) As used in this section, the following terms have the meanings given them.

(b) "Applicant" means a person who has submitted or is in the process of submitting an application in regard to a financial assistance program and any person who submits data in connection with or in support of an application for financial assistance.

(c) "Business plan" means any collection of financial or other information submitted by the applicant describing the manner in which it intends to conduct any aspect of its future business operations.

(d) "Financial assistance data" means government data on applicants for assistance or recipients of assistance under a financial assistance program administered by a state agency, statewide system, or political subdivision. Financial assistance data does not include:

(1) benefit data under section 13.31;

(2) welfare data under section 13.46;

(3) employment and training data under section 13.47;

(4) award data under section 13.48; and

(5) data arising out of counseling, advocacy services, or other forms of nonfinancial assistance.

(e) "Financial assistance program" means a program that provides grants, loans, loan guarantees, loan restructuring, interest subsidies, insurance, or similar forms of financial assistance for business or economic development activities.

(f) "Financial statement" means any statement of the past or present financial condition or performance of the applicant for financial assistance.

Subd. 2. [DATA ON APPLICANTS.] The following data submitted by or on behalf of applicants or prepared by a state agency, political subdivision, or statewide system in response to an application are private data or nonpublic data: the identity of the applicant and all financial or other information about the applicant, including credit reports, financial statements, net worth calculations, income tax returns, business plans, income and expense projections, customer lists, and market and feasibility studies not paid for with public funds.

Subd. 3. [DATA ON RECIPIENTS.] The following data classified as not public data under subdivision 2 become public data on individuals or public data not on individuals if the applicant receives funds from the financial assistance program: the identity of the applicant, the address of its principal place of business, the names of the principal officers and agents of the applicant if it is other than an individual, the terms and conditions of the financial assistance, and all documents evidencing or securing the repayment of the financial assistance provided. Data submitted by or on behalf of a recipient of financial assistance for the purpose of enabling the state agency, political subdivision, or statewide system to monitor the financial condition of the recipient of financial assistance are classified as private data and nonpublic data to the same extent as provided in subdivision 2.

Sec. 2. Minnesota Statutes 1994, section 13.531, is amended to read:

13.531 [FARM ASSISTANCE DATA.]

Subject to section 13.311, the following data collected and maintained by counties that provide assistance to individual farmers who are experiencing economic or emotional distress are classified as private data: financial history, including listings of assets and debts, and personal and emotional status information.

Sec. 3. Minnesota Statutes 1994, section 13.62, is amended to read:

13.62 [ECONOMIC ASSISTANCE DATA.]

The following Data collected by cities in their administration of the city economic development assistance program are classified as nonpublic data:

(1) application data, except company names, addresses, and other data that identify the applicant, until the application is approved by the city;

(2) application data, except company names, addresses, and other data that identify the applicant, that pertain to companies whose applications have been disapproved;

(3) attachments to applications including but, not limited to, business and personal financial records, until the application is approved;

(4) income tax returns, either personal or corporate, that are filed by applicants; and

(5) are governed by section 13.311. In addition, correspondence between the program administrators and the an applicant are private data on individuals or nonpublic data until the application has been approved or disapproved.

Sec. 4. Minnesota Statutes 1994, section 13.643, is amended to read:

13.643 [DEPARTMENT OF AGRICULTURE DATA.]

Subdivision 1. [LOAN AND GRANT APPLICANT DATA.] The following Data on applicants, collected by the department of agriculture in its sustainable agriculture revolving loan and grant programs under sections 17.115 and 17.116, are private or nonpublic: nonfarm income; credit history; insurance coverage; machinery and equipment list; financial information; and credit information requests governed by section 13.311.

Subd. 2. [FARM ADVOCATE DATA.] Subject to section 13.311, the following data supplied by farmer clients to Minnesota farm advocates and to the department of agriculture are private data on individuals: financial history, including listings of assets and debts, and personal and emotional status information.

Sec. 5. Minnesota Statutes 1994, section 13.671, is amended to read:

13.671 [IRON RANGE RESOURCES AND REHABILITATION BOARD DATA.]

Subdivision 1. [NONPUBLIC DATA.] The following Data that are submitted to the commissioner of the iron range resources and rehabilitation board by or to the board on businesses that are requesting financial assistance are nonpublic data: the identity of the business and financial information about the business including, but not limited to, credit reports, financial statements, net worth calculations, business plans, income and expense projections, customer lists, and market and feasibility studies not paid for with public funds governed by section 13.311.

Subd. 2. [PUBLIC DATA.] Data submitted to the commissioner under subdivision 1 become public data upon submission of the request for financial assistance to the iron range resources and rehabilitation board except that the following data remain nonpublic: business plans, income and expense projections, customer lists, and market and feasibility studies not paid for with public funds.

Sec. 6. Minnesota Statutes 1994, section 13.761, is amended to read:

13.761 [INDIAN AFFAIRS COUNCIL DATA.]

All financial information on individuals and business entities including, but not limited to, credit reports, financial statements, and net worth calculations, that are contained in applications Data received by the Indian affairs council in its administration of the Indian business development loan program are classified as private data with regard to data on individuals and as nonpublic data with regard to data not on individuals governed by section 13.311.

Sec. 7. Minnesota Statutes 1994, section 13.77, is amended to read:

13.77 [AGRICULTURAL RESOURCE LOAN BOARD DATA.]

Subdivision 1. [NONPUBLIC DATA.] Financial information concerning business persons Data received or prepared by the agriculture resource loan guaranty agricultural and economic development board in connection with applications for loan guarantees pursuant to Laws 1984, chapter 502, article 10, sections 1 to 12, including, but not limited to, credit reports, financial statements, and net worth calculations, is classified as nonpublic data under chapter 41A are governed by section 13.311.

Subd. 2. [PRIVATE DATA.] Financial information concerning individuals received or prepared by the agriculture resource loan guaranty board in connection with applications for loan guarantees pursuant to Laws 1984, chapter 502, article 10, sections 1 to 12, including, but not limited to, credit reports, financial statements, and net worth calculations is classified as private data.

Sec. 8. Minnesota Statutes 1994, section 13.78, is amended to read:

13.78 [MINNESOTA EXPORT AUTHORITY DATA.]

Financial information concerning business persons Data received or prepared by the export authority in connection with applications for financial assistance pursuant to section 116J.9673, including, but not limited to, credit reports, financial statements, net worth calculations, income and expense projections, and are governed by section 13.311. In addition, proposed terms of trade and foreign risk coverage, is classified as are nonpublic data if it is data not on an individual and as or private data if it is data on an individual individuals.

Sec. 9. Minnesota Statutes 1994, section 17.117, subdivision 12, is amended to read:

Subd. 12. [DATA PRIVACY.] The following Data on applicants or borrowers collected by the commissioner under this section are private for data on individuals as provided in section 13.02, subdivision 12, or nonpublic for data not on individuals as provided in section 13.02, subdivision 9: financial information, including, but not limited to, credit reports, financial statements, tax returns and net worth calculations received or prepared by the commissioner governed by section 13.311.

Sec. 10. Minnesota Statutes 1994, section 41.63, is amended to read:

41.63 [DATA PRIVACY.]

Personal financial information, credit reports, financial statements, tax refund calculations, and net worth statements, Data received or prepared by the commissioner regarding any family farm security loans, are private data on individuals under chapter 13 governed by section 13.311.

Sec. 11. Minnesota Statutes 1994, section 41B.211, is amended to read:

41B.211 [DATA PRIVACY.]

Financial information, including credit reports, financial statements, and net worth calculations, Data received or prepared by the authority regarding any authority loan and the name of each individual who is the recipient of a loan are private data on individuals, under chapter 13, except that are governed by section 13.311. Information obtained under the agricultural development bond program in sections 41C.01 to 41C.13 may be released as required by federal tax law.

Sec. 12. Minnesota Statutes 1994, section 116O.03, subdivision 7, is amended to read:

Subd. 7. [APPLICATION AND INVESTIGATIVE DATA.] The following Data is classified as private data with regard to data on individuals under section 13.02, subdivision 12, or as nonpublic data with regard to data not on individuals under section 13.02, subdivision 9, whichever is applicable:

(1) financial data, statistics, and information furnished in connection with assistance or proposed assistance under section 116O.06, including credit reports, financial statements, statements of net worth, income tax returns, either personal or corporate, and any other business and personal financial records; or

(2) are governed by section 13.311, except that security information, trade secret information, or labor relations information, as defined in are governed by section 13.37, subdivision 1, disclosed to members of the corporation board or employees of the corporation under section 116O.06.

Sec. 13. Minnesota Statutes 1994, section 116S.02, subdivision 8, is amended to read:

Subd. 8. [APPLICATION AND INVESTIGATIVE DATA.] Financial data, statistics, and information Data furnished to the corporation in connection with assistance or proposed assistance, including credit reports, financial statements, statements of net worth, income tax returns, either personal or corporate, and any other business and personal financial records are private data with regard to data on individuals under section 13.02, subdivision 12, or as nonpublic data with regard to data not on individuals under section 13.02, subdivision 9 are governed by section 13.311.

Sec. 14. Minnesota Statutes 1994, section 446A.11, subdivision 11, is amended to read:

Subd. 11. [FINANCIAL INFORMATION.] Financial information, including credit reports, financial statements and net worth calculations, Data received or prepared by the authority regarding an authority loan, financial assistance, or insurance is private data with regard to data on individuals as defined in section 13.02, subdivision 12 and nonpublic data with regard to data not on individuals as defined in section 13.02, subdivision 9 are governed by section 13.311.

Section 1. [13.073] [PUBLIC INFORMATION POLICY TRAINING PROGRAM.]

Subdivision 1. [ESTABLISHMENT.] The commissioner shall establish a program for training state and local government officials and employees on public information policy, including government data practices laws and official records and records management statutes. The program must provide for the development of broad-based expertise within state and local government entities. The program components must include basic training, specific training for specialized service sectors, and policy analysis and support.

Subd. 2. [GENERAL PROVISIONS.] The commissioner shall publicize the development and implementation of the training program under this section and shall seek input from state and local government entities. The commissioner shall prepare a training guide that includes an overview of the training program and its components.

Subd. 3. [BASIC TRAINING.] The basic training component must be designed to meet the basic information policy needs of all government employees and public officials with a focus on key data practices laws and procedures that apply to all government entities. The commissioner shall design the basic training component in a manner that minimizes duplication of the effort and cost for government entities to provide basic training. The commissioner shall develop general programs and materials for basic training such as video presentations, data practices booklets, and training guides. The commissioner shall assist state and local government agencies in developing training expertise within their own agencies and shall offer assistance for periodic training sessions for this purpose.

Subd. 4. [SECTOR-SPECIFIC TRAINING.] (a) The sector-specific training component must be designed to provide for the development of specific expertise needed to deal with information policy issues within a particular service area. Service areas may include government entities such as state agencies, counties, cities, or school districts, or functional areas such as education, human services, child protection, or law enforcement. This component must focus on training individuals who implement or administer data practices and other information policy laws within their government entity.

(b) The commissioner shall provide technical assistance and support and help coordinate efforts to develop sector-specific training within different sectors. Elements of sector-specific training must include:

(1) designation, training, and coordination of data practices specialists with responsibility for clarification and resolution of sector-specific information policy issues;

(2) development of telephone hot lines within different sectors for handling information policy inquiries;

(3) development of forums under which individuals with ongoing information policy administrative responsibilities may meet to discuss issues arising within their sectors;

(4) availability of expertise for coaching and consultation on specific issues; and

(5) preparation of publications, including reference guides to materials and resource persons.

Subd. 5. [POLICY ANALYSIS AND SUPPORT.] The policy analysis and support component must be designed to address information policy issues at the policy level and to provide ongoing consultation and support regarding major areas of concern with a goal of developing a coherent and coordinated approach to information policy within the state. The commissioner shall assist in the development and implementation of information policy and provide a clearinghouse for ideas, information, and resources. The commissioner shall review public information policy and identify how that policy can be updated, simplified, and made consistent.

Subd. 6. [GRANTS.] The commissioner may make grants to statewide systems, political subdivisions, or associations of political subdivisions for purposes of supplementing and encouraging local government efforts under this section.

Sec. 2. [REPORT.]

By January 1, 1997, the commissioner of administration shall report to the legislature on the implementation of the training program under section 1. The report must include an analysis of the effectiveness of the program in improving information policy practices, recommendations for any changes in the program, and recommendations for amendments to public information policies that will update and simplify those policies.

Sec. 3. [APPROPRIATION.]

$....... is appropriated from the general fund to the commissioner of administration for purposes of developing the training program under section 1 and making grants under section 1, subdivision 6.

Section 1. Minnesota Statutes 1994, section 148B.68, subdivision 1, is amended to read:

Subdivision 1. [PROHIBITED CONDUCT.] The commissioner may impose disciplinary action as described in section 148B.69 against any unlicensed mental health practitioner. The following conduct is prohibited and is grounds for disciplinary action:

(a) Conviction of a crime, including a finding or verdict of guilt, an admission of guilt, or a no contest plea, in any court in Minnesota or any other jurisdiction in the United States, reasonably related to the provision of mental health services. Conviction, as used in this subdivision, includes a conviction of an offense which, if committed in this state, would be deemed a felony or gross misdemeanor without regard to its designation elsewhere, or a criminal proceeding where a finding or verdict of guilty is made or returned but the adjudication of guilt is either withheld or not entered.

(b) Conviction of crimes against persons. For purposes of this chapter, a crime against a person means violations of the following: sections 609.185; 609.19; 609.195; 609.20; 609.205; 609.21; 609.215; 609.221; 609.222; 609.223; 609.224; 609.2241; 609.23; 609.231; 609.235; 609.24; 609.245; 609.25; 609.255; 609.26, subdivision 1, clause (1) or (2); 609.265; 609.342; 609.343; 609.344; 609.345; 609.365; 609.498, subdivision 1; 609.50, clause (1); 609.561; 609.562; and 609.595.

(c) Failure to comply with the self-reporting requirements of section 148B.63, subdivision 6.

(d) Engaging in sexual contact with a client or former client as defined in section 148A.01, or engaging in contact that may be reasonably interpreted by a client as sexual, or engaging in any verbal behavior that is seductive or sexually demeaning to the patient, or engaging in sexual exploitation of a client or former client.

(e) Advertising that is false, fraudulent, deceptive, or misleading.

(f) Conduct likely to deceive, defraud, or harm the public; or demonstrating a willful or careless disregard for the health, welfare, or safety of a client; or any other practice that may create unnecessary danger to any client's life, health, or safety, in any of which cases, proof of actual injury need not be established.

(g) Adjudication as mentally incompetent, or as a person who is dangerous to self, or adjudication pursuant to chapter 253B, as chemically dependent, mentally ill, mentally retarded, mentally ill and dangerous to the public, or as a sexual psychopathic personality or sexually dangerous person.

(h) Inability to provide mental health services with reasonable safety to clients.

(i) The habitual overindulgence in the use of or the dependence on intoxicating liquors.

(j) Improper or unauthorized personal or other use of any legend drugs as defined in chapter 151, any chemicals as defined in chapter 151, or any controlled substance as defined in chapter 152.

(k) Revealing a communication from, or relating to, a client except when otherwise required or permitted by law.

(l) Failure to comply with a client's request made under section 144.335, or to furnish a client record or report required by law.

(m) Splitting fees or promising to pay a portion of a fee to any other professional other than for services rendered by the other professional to the client.

(n) Engaging in abusive or fraudulent billing practices, including violations of the federal Medicare and Medicaid laws or state medical assistance laws.

(o) Failure to make reports as required by section 148B.63, or cooperate with an investigation of the office.

(p) Obtaining money, property, or services from a client, other than reasonable fees for services provided to the client, through the use of undue influence, harassment, duress, deception, or fraud.

(q) Undertaking or continuing a professional relationship with a client in which the objectivity of the professional would be impaired.

(r) Failure to provide the client with a copy of the client bill of rights or violation of any provision of the client bill of rights.

(s) Violating any order issued by the commissioner.

(t) Failure to comply with sections 148B.60 to 148B.71, and the rules adopted under those sections.

(u) Failure to comply with any additional disciplinary grounds established by the commissioner by rule.

Sec. 2. Minnesota Statutes 1994, section 253B.02, subdivision 4a, is amended to read:

Subd. 4a. [CRIME AGAINST THE PERSON.] "Crime against the person" means a violation of or attempt to violate any of the following provisions: sections 609.185; 609.19; 609.195; 609.20; 609.205; 609.21; 609.215; 609.221; 609.222; 609.223; 609.224; 609.2241; 609.23; 609.231; 609.235; 609.24; 609.245; 609.25; 609.255; 609.265; 609.27, subdivision 1, clause (1) or (2); 609.28 if violence or threats of violence were used; 609.322, subdivision 1, clause (2); 609.342; 609.343; 609.344; 609.345; 609.365; 609.498, subdivision 1; 609.50, clause (1); 609.561; 609.562; and 609.595.

Sec. 3. Minnesota Statutes 1994, section 260.015, subdivision 28, is amended to read:

Subd. 28. [CHILD ABUSE.] "Child abuse" means an act that involves a minor victim and that constitutes a violation of section 609.221, 609.222, 609.223, 609.224, 609.2241, 609.322, 609.323, 609.324, 609.342, 609.343, 609.344, 609.345, 609.377, 609.378, or 617.246.

Sec. 4. Minnesota Statutes 1994, section 260.161, subdivision 1b, is amended to read:

Subd. 1b. [DISPOSITION ORDER; COPY TO SCHOOL.] (a) If a juvenile is enrolled in school, the juvenile's probation officer shall transmit a copy of the court's disposition order to the principal or chief administrative officer of the juvenile's school if the juvenile has been adjudicated delinquent for committing an act on the school's property or an act:

(1) that would be a violation of section 609.185 (first-degree murder); 609.19 (second-degree murder); 609.195 (third-degree murder); 609.20 (first-degree manslaughter); 609.205 (second-degree manslaughter); 609.21 (criminal vehicular homicide and injury); 609.221 (first-degree assault); 609.222 (second-degree assault); 609.223 (third-degree assault); 609.2231 (fourth-degree assault); 609.224 (fifth-degree assault); 609.2241 (domestic assault); 609.24 (simple robbery); 609.245 (aggravated robbery); 609.25 (kidnapping); 609.255 (false imprisonment); 609.342 (first-degree criminal sexual conduct); 609.343 (second-degree criminal sexual conduct); 609.344 (third-degree criminal sexual conduct); 609.345 (fourth-degree criminal sexual conduct); 609.3451 (fifth-degree criminal sexual conduct); 609.498 (tampering with a witness); 609.561 (first-degree arson); 609.582, subdivision 1 or 2 (burglary); 609.713 (terroristic threats); or 609.749 (harassment and stalking), if committed by an adult;

(2) that would be a violation of section 152.021 (first-degree controlled substance crime); 152.022 (second-degree controlled substance crime); 152.023 (third-degree controlled substance crime); 152.024 (fourth-degree controlled substance crime); 152.025 (fifth-degree controlled substance crime); 152.0261 (importing a controlled substance); or 152.027 (other controlled substance offenses), if committed by an adult; or

(3) that involved the possession or use of a dangerous weapon as defined in section 609.02, subdivision 6.

When a disposition order is transmitted under this paragraph, the probation officer shall notify the juvenile's parent or legal guardian that the disposition order has been shared with the juvenile's school.

(b) The disposition order must be accompanied by a notice to the school that the school may obtain additional information from the juvenile's probation officer with the consent of the juvenile or the juvenile's parents, as applicable. The disposition order must be maintained in the student's permanent education record but may not be released outside of the school district or educational entity, other than to another school district or educational entity to which the juvenile is transferring. Notwithstanding section 138.17, the disposition order must be destroyed when the juvenile graduates from the school or at the end of the academic year when the juvenile reaches age 23, whichever date is earlier.

(c) The juvenile's probation officer shall maintain a record of disposition orders released under this subdivision and the basis for the release.

(d) The criminal and juvenile justice information policy group, in consultation with representatives of probation officers and educators, shall prepare standard forms for use by juvenile probation officers in forwarding information to schools under this subdivision and in maintaining a record of the information that is released.

(e) As used in this subdivision, "school" means a public or private elementary, middle, or secondary school.

Sec. 5. Minnesota Statutes 1994, section 299C.61, subdivision 4, is amended to read:

Subd. 4. [CHILD ABUSE CRIME.] "Child abuse crime" means:

(1) an act committed against a minor victim that constitutes a violation of section 609.185, clause (5); 609.221; 609.222; 609.223; 609.224; 609.2241; 609.322; 609.323; 609.324; 609.342; 609.343; 609.344; 609.345; 609.352; 609.377; or 609.378; or

(2) a violation of section 152.021, subdivision 1, clause (4); 152.022, subdivision 1, clause (5) or (6); 152.023, subdivision 1, clause (3) or (4); 152.023, subdivision 2, clause (4) or (6); or 152.024, subdivision 1, clause (2), (3), or (4).

Sec. 6. Minnesota Statutes 1994, section 518B.01, subdivision 14, is amended to read:

Subd. 14. [VIOLATION OF AN ORDER FOR PROTECTION.] (a) Whenever an order for protection is granted pursuant to this section, and the respondent or person to be restrained knows of the order, violation of the order for protection is a misdemeanor. Upon conviction, the defendant must be sentenced to a minimum of three days

imprisonment and must be ordered to participate in counseling or other appropriate programs selected by the court. If the court stays imposition or execution of the jail sentence and the defendant refuses or fails to comply with the court's treatment order, the court must impose and execute the stayed jail sentence. A person is guilty of a gross misdemeanor who violates this paragraph during the time period between a previous conviction under this paragraph; sections 609.221 to 609.224; 609.2241; 609.713, subdivision 1 or 3; 609.748, subdivision 6; 609.749; or a similar law of another state and the end of the five years following discharge from sentence for that conviction. Upon conviction, the defendant must be sentenced to a minimum of ten days imprisonment and must be ordered to participate in counseling or other appropriate programs selected by the court. Notwithstanding section 609.135, the court must impose and execute the minimum sentence provided in this paragraph for gross misdemeanor convictions.

(b) A peace officer shall arrest without a warrant and take into custody a person whom the peace officer has probable cause to believe has violated an order granted pursuant to this section restraining the person or excluding the person from the residence or the petitioner's place of employment, even if the violation of the order did not take place in the presence of the peace officer, if the existence of the order can be verified by the officer. The person shall be held in custody for at least 36 hours, excluding the day of arrest, Sundays, and holidays, unless the person is released earlier by a judge or judicial officer. A peace officer acting in good faith and exercising due care in making an arrest pursuant to this paragraph is immune from civil liability that might result from the officer's actions.

(c) A violation of an order for protection shall also constitute contempt of court and be subject to the penalties therefor.

(d) If the court finds that the respondent has violated an order for protection and that there is reason to believe that the respondent will commit a further violation of the provisions of the order restraining the respondent from committing acts of domestic abuse or excluding the respondent from the petitioner's residence, the court may require the respondent to acknowledge an obligation to comply with the order on the record. The court may require a bond sufficient to deter the respondent from committing further violations of the order for protection, considering the financial resources of the respondent, and not to exceed $10,000. If the respondent refuses to comply with an order to acknowledge the obligation or post a bond under this paragraph, the court shall commit the respondent to the county jail during the term of the order for protection or until the respondent complies with the order under this paragraph. The warrant must state the cause of commitment, with the sum and time for which any bond is required. If an order is issued under this paragraph, the court may order the costs of the contempt action, or any part of them, to be paid by the respondent. An order under this paragraph is appealable.

(e) Upon the filing of an affidavit by the petitioner, any peace officer, or an interested party designated by the court, alleging that the respondent has violated any order for protection granted pursuant to this section, the court may issue an order to the respondent, requiring the respondent to appear and show cause within 14 days why the respondent should not be found in contempt of court and punished therefor. The hearing may be held by the court in any county in which the petitioner or respondent temporarily or permanently resides at the time of the alleged violation. The court also shall refer the violation of the order for protection to the appropriate prosecuting authority for possible prosecution under paragraph (a).

(f) If it is alleged that the respondent has violated an order for protection issued under subdivision 6 and the court finds that the order has expired between the time of the alleged violation and the court's hearing on the violation, the court may grant a new order for protection under subdivision 6 based solely on the respondent's alleged violation of the prior order, to be effective until the hearing on the alleged violation of the prior order. If the court finds that the respondent has violated the prior order, the relief granted in the new order for protection shall be extended for a fixed period, not to exceed one year.

(g) The admittance into petitioner's dwelling of an abusing party excluded from the dwelling under an order for protection is not a violation by the petitioner of the order for protection.

A peace officer is not liable under section 609.43, clause (1), for a failure to perform a duty required by paragraph (b).

Sec. 7. Minnesota Statutes 1994, section 609.101, subdivision 2, is amended to read:

Subd. 2. [MINIMUM FINES.] Notwithstanding any other law:

(1) when a court sentences a person convicted of violating section 609.221, 609.267, or 609.342, it must impose a fine of not less than $500 nor more than the maximum fine authorized by law;

(2) when a court sentences a person convicted of violating section 609.222, 609.223, 609.2671, 609.343, 609.344, or 609.345, it must impose a fine of not less than $300 nor more than the maximum fine authorized by law; and

(3) when a court sentences a person convicted of violating section 609.2231, 609.224, 609.2241, or 609.2672, it must impose a fine of not less than $100 nor more than the maximum fine authorized by law.

The court shall collect the portion of the fine mandated by this subdivision and forward 70 percent of it to a local victim assistance program that provides services locally in the county in which the crime was committed. The court shall forward the remaining 30 percent to the commissioner of finance to be credited to the general fund. If more than one victim assistance program serves the county in which the crime was committed, the court may designate on a case-by-case basis which program will receive the fine proceeds, giving consideration to the nature of the crime committed, the types of victims served by the program, and the funding needs of the program. If no victim assistance program serves that county, the court shall forward 100 percent of the fine proceeds to the commissioner of finance to be credited to the general fund. Fine proceeds received by a local victim assistance program must be used to provide direct services to crime victims.

The minimum fine required by this subdivision is in addition to the surcharge or assessment required by subdivision 1 and is in addition to any sentence of imprisonment or restitution imposed or ordered by the court.

As used in this subdivision, "victim assistance program" means victim witness programs within county attorney offices or any of the following programs: crime victim crisis centers, victim-witness programs, battered women shelters and nonshelter programs, and sexual assault programs.

Sec. 8. Minnesota Statutes 1994, section 609.131, subdivision 2, is amended to read:

Subd. 2. [CERTAIN VIOLATIONS EXCEPTED.] Subdivision 1 does not apply to a misdemeanor violation of section 169.121; 609.224; 609.2241; 609.226; 609.324, subdivision 3; 609.52; or 617.23, or an ordinance that conforms in substantial part to any of those sections. A violation described in this subdivision must be treated as a misdemeanor unless the defendant consents to the certification of the violation as a petty misdemeanor.

Sec. 9. Minnesota Statutes 1994, section 609.135, subdivision 2, is amended to read:

Subd. 2. (a) If the conviction is for a felony the stay shall be for not more than four years or the maximum period for which the sentence of imprisonment might have been imposed, whichever is longer.

(b) If the conviction is for a gross misdemeanor violation of section 169.121 or 169.129, the stay shall be for not more than four years. The court shall provide for unsupervised probation for the last one year of the stay unless the court finds that the defendant needs supervised probation for all or part of the last one year.

(c) If the conviction is for a gross misdemeanor not specified in paragraph (b), the stay shall be for not more than two years.

(d) If the conviction is for any misdemeanor under section 169.121; 609.746, subdivision 1; 609.79; or 617.23; or for a misdemeanor under section 609.2241 or 609.224, subdivision 1, in which the victim of the crime was a family or household member as defined in section 518B.01, the stay shall be for not more than two years. The court shall provide for unsupervised probation for the second year of the stay unless the court finds that the defendant needs supervised probation for all or part of the second year.

(e) If the conviction is for a misdemeanor not specified in paragraph (d), the stay shall be for not more than one year.

(f) The defendant shall be discharged six months after the term of the stay expires, unless the stay has been revoked or extended under paragraph (g), or the defendant has already been discharged.

(g) Notwithstanding the maximum periods specified for stays of sentences under paragraphs (a) to (f), a court may extend a defendant's term of probation for up to one year if it finds, at a hearing conducted under subdivision 1a, that:

(1) the defendant has not paid court-ordered restitution or a fine in accordance with the payment schedule or structure; and

(2) the defendant is likely to not pay the restitution or fine the defendant owes before the term of probation expires. This one-year extension of probation for failure to pay restitution or a fine may be extended by the court for up to one additional year if the court finds, at another hearing conducted under subdivision 1a, that the defendant still has not paid the court-ordered restitution or fine that the defendant owes.

Sec. 10. Minnesota Statutes 1994, section 609.135, subdivision 5a, is amended to read:

Subd. 5a. [DOMESTIC ABUSE VICTIMS; ELECTRONIC MONITORING.] (a) Until the commissioner of corrections has adopted standards governing electronic monitoring devices used to protect victims of domestic abuse, the court, as a condition of a stay of imposition or execution of a sentence, may not order an offender convicted of a crime described in paragraph (b) to use an electronic monitoring device to protect a victim's safety.

(b) This subdivision applies to the following crimes, if committed by the defendant against a family or household member as defined in section 518B.01, subdivision 2:

(1) violations of orders for protection issued under chapter 518B;

(2) assault in the first, second, third, or fifth degree under section 609.221, 609.222, 609.223, or 609.224; or domestic assault under section 609.2241;

(3) criminal damage to property under section 609.595;

(4) disorderly conduct under section 609.72;

(5) harassing telephone calls under section 609.79;

(6) burglary under section 609.582;

(7) trespass under section 609.605;

(8) criminal sexual conduct in the first, second, third, fourth, or fifth degree under section 609.342, 609.343, 609.344, 609.345, or 609.3451; and

(9) terroristic threats under section 609.713.

(c) Notwithstanding paragraph (a), the judges in the tenth judicial district may order, as a condition of a stay of imposition or execution of a sentence, a defendant convicted of a crime described in paragraph (b), to use an electronic monitoring device to protect the victim's safety. The judges shall make data on the use of electronic monitoring devices to protect a victim's safety in the tenth judicial district available to the commissioner of corrections to evaluate and to aid in development of standards for the use of devices to protect victims of domestic abuse.

Sec. 11. Minnesota Statutes 1994, section 609.1352, subdivision 3, is amended to read:

Subd. 3. [DANGER TO PUBLIC SAFETY.] The court shall base its finding that the offender is a danger to public safety on either of the following factors:

(1) the crime involved an aggravating factor that would justify a durational departure from the presumptive sentence under the sentencing guidelines; or

(2) the offender previously committed or attempted to commit a predatory crime or a violation of section 609.224 or 609.2241, including an offense committed as a juvenile that would have been a predatory crime or a violation of section 609.224 or 609.2241 if committed by an adult.

Sec. 12. Minnesota Statutes 1994, section 609.185, is amended to read:

609.185 [MURDER IN THE FIRST DEGREE.]

Whoever does any of the following is guilty of murder in the first degree and shall be sentenced to imprisonment for life:

(1) causes the death of a human being with premeditation and with intent to effect the death of the person or of another;

(2) causes the death of a human being while committing or attempting to commit criminal sexual conduct in the first or second degree with force or violence, either upon or affecting the person or another;

(3) causes the death of a human being with intent to effect the death of the person or another, while committing or attempting to commit burglary, aggravated robbery, kidnapping, arson in the first or second degree, tampering with a witness in the first degree, escape from custody, or any felony violation of chapter 152 involving the unlawful sale of a controlled substance;

(4) causes the death of a peace officer or a guard employed at a Minnesota state or local correctional facility, with intent to effect the death of that person or another, while the peace officer or guard is engaged in the performance of official duties;

(5) causes the death of a minor under circumstances other than those described in clause (1) or (2) while committing child abuse, when the perpetrator has engaged in a past pattern of child abuse upon the child and the death occurs under circumstances manifesting an extreme indifference to human life; or

(6) causes the death of a human being under circumstances other than those described in clause (1), (2), or (5) while committing domestic abuse, when the perpetrator has engaged in a past pattern of domestic abuse upon the victim and the death occurs under circumstances manifesting an extreme indifference to human life.

For purposes of clause (5), "child abuse" means an act committed against a minor victim that constitutes a violation of the following laws of this state or any similar laws of the United States or any other state: section 609.221; 609.222; 609.223; 609.224; 609.2241; 609.342; 609.343; 609.344; 609.345; 609.377; 609.378; or 609.713.

For purposes of clause (6), "domestic abuse" means an act that:

(1) constitutes a violation of section 609.221, 609.222, 609.223, 609.224, 609.2241, 609.342, 609.343, 609.344, 609.345, 609.713, or any similar laws of the United States or any other state; and

(2) is committed against the victim who is a family or household member as defined in section 518B.01, subdivision 2, paragraph (b).

Sec. 13. Minnesota Statutes 1994, section 609.224, subdivision 2, is amended to read:

Subd. 2. [GROSS MISDEMEANOR.] (a) Whoever violates the provisions of subdivision 1 against the same victim during the time period between a previous conviction under this section, sections 609.221 to 609.2231, 609.342 to 609.345, or 609.713, or any similar law of another state, and the end of the five years following discharge from sentence for that conviction, is guilty of a gross misdemeanor and may be sentenced to imprisonment for not more than one year or to payment of a fine of not more than $3,000, or both. Whoever violates the provisions of subdivision 1 against a family or household member as defined in section 518B.01, subdivision 2, during the time period between a previous conviction under this section or sections 609.221 to 609.2231, 609.342 to 609.345, or 609.713 against a family or household member, and the end of the five years following discharge from sentence for that conviction is guilty of a gross misdemeanor and may be sentenced to imprisonment for not more than one year or to payment of a fine of not more than $3,000, or both.

(b) Whoever violates the provisions of subdivision 1 within two years of a previous conviction under this section or sections 609.221 to 609.2231 or 609.713 is guilty of a gross misdemeanor and may be sentenced to imprisonment for not more than one year or to payment of a fine of not more than $3,000, or both.

Sec. 14. Minnesota Statutes 1994, section 609.224, subdivision 3, is amended to read:

Subd. 3. [DOMESTIC ASSAULTS; FIREARMS.] (a) When a person is convicted of a violation of this section or section 609.221, 609.222, or 609.223, the court shall determine and make written findings on the record as to whether:

(1) the assault was committed against a family or household member, as defined in section 518B.01, subdivision 2;

(2) the defendant owns or possesses a firearm; and

(3) (2) the firearm was used in any way during the commission of the assault.

(b) If the court determines that the assault was of a family or household member, and that the offender owns or possesses a firearm and used it in any way during the commission of the assault, it shall order that the firearm be summarily forfeited under section 609.5316, subdivision 3.

(c) When a person is convicted of assaulting a family or household member and is determined by the court to have used a firearm in any way during commission of the assault the court may order that the person is prohibited from possessing any type of firearm for any period longer than three years or for the remainder of the person's life. A person who violates this firearm possession prohibition is guilty of a gross misdemeanor. At the time of the conviction, the court shall inform the defendant whether and for how long the defendant is prohibited from possessing a firearm and that it is a gross misdemeanor to violate this prohibition. The failure of the court to provide this information to a defendant does not affect the applicability of the firearm possession prohibition or the gross misdemeanor penalty to that defendant.

(d) Except as otherwise provided in paragraph (c), when a person is convicted of a violation of this section and the court determines that the victim was a family or household member, the court shall inform the defendant that the defendant is prohibited from possessing a pistol for a period of three years from the date of conviction and that it is a gross misdemeanor offense to violate this prohibition. The failure of the court to provide this information to a defendant does not affect the applicability of the pistol possession prohibition or the gross misdemeanor penalty to that defendant.

(e) (b) Except as otherwise provided in paragraph (c) section 609.2241, subdivision 3, paragraph (c), a person is not entitled to possess a pistol if:

(1) the person has been convicted after August 1, 1992, of assault in the fifth degree if the offense was committed within three years of a previous conviction under sections 609.221 to 609.224; or

(2) the person has been convicted after August 1, 1992, of assault in the fifth degree under section 609.224 and the assault victim was a family or household member as defined in section 518B.01, subdivision 2, unless three years have elapsed from the date of conviction and, during that time, the person has not been convicted of any other violation of section 609.224. Property rights may not be abated but access may be restricted by the courts. A person who possesses a pistol in violation of this paragraph is guilty of a gross misdemeanor.

Sec. 15. [609.2241] [DOMESTIC ASSAULT.]

Subdivision 1. [MISDEMEANOR.] Whoever does any of the following against a family or household member as defined in section 518B.01, subdivision 2, commits an assault and is guilty of a misdemeanor:

(1) commits an act with intent to cause fear in another of immediate bodily harm or death; or

(2) intentionally inflicts or attempts to inflict bodily harm upon another.

Subd. 2. [GROSS MISDEMEANOR.] Whoever violates subdivision 1 during the time period between a previous conviction under this section or sections 609.221 to 609.2231, 609.224, 609.342 to 609.345, or 609.713 against a family or household member as defined in section 518B.01, subdivision 2, and the end of the five years following discharge from sentence for that conviction is guilty of a gross misdemeanor and may be sentenced to imprisonment for not more than one year or to payment of a fine of not more than $3,000, or both.

Subd. 3. [DOMESTIC ASSAULTS; FIREARMS.] (a) When a person is convicted of a violation of section 609.221, 609.222, 609.223, 609.224, or 609.2241, the court shall determine and make written findings on the record as to whether:

(1) the assault was committed against a family or household member, as defined in section 518B.01, subdivision 2;

(2) the defendant owns or possesses a firearm; and

(3) the firearm was used in any way during the commission of the assault.

(b) If the court determines that the assault was of a family or household member, and that the offender owns or possesses a firearm and used it in any way during the commission of the assault, it shall order that the firearm be summarily forfeited under section 609.5316, subdivision 3.

(c) When a person is convicted of assaulting a family or household member and is determined by the court to have used a firearm in any way during commission of the assault, the court may order that the person is prohibited from possessing any type of firearm for any period longer than three years or for the remainder of the person's life. A person who violates this paragraph is guilty of a gross misdemeanor. At the time of the conviction, the court shall inform the defendant whether and for how long the defendant is prohibited from possessing a firearm and that it is a gross misdemeanor to violate this paragraph. The failure of the court to provide this information to a defendant does not affect the applicability of the firearm possession prohibition or the gross misdemeanor penalty to that defendant.

(d) Except as otherwise provided in paragraph (c), when a person is convicted of a violation of section 609.224 or 609.2241 and the court determines that the victim was a family or household member, the court shall inform the defendant that the defendant is prohibited from possessing a pistol for three years from the date of conviction and that it is a gross misdemeanor offense to violate this prohibition. The failure of the court to provide this information to a defendant does not affect the applicability of the pistol possession prohibition or the gross misdemeanor penalty to that defendant.

(e) Except as otherwise provided in paragraph (c), a person is not entitled to possess a pistol if the person has been convicted after August 1, 1992, of domestic assault under 609.2241 or assault in the fifth degree under section 609.224 and the assault victim was a family or household member as defined in section 518B.01, subdivision 2, unless three years have elapsed from the date of conviction and, during that time, the person has not been convicted of any other violation of section 609.224 or 609.2241. Property rights may not be abated but access may be restricted by the courts. A person who possesses a pistol in violation of this paragraph is guilty of a gross misdemeanor.

Subd. 4. [FELONY.] Whoever violates the provisions of section 609.224, subdivision 1, or 609.2241, against the same victim during the time period between the first of two or more previous convictions under this section or sections 609.221 to 609.2231, 609.224, 609.342 to 609.345, or 609.713, and the end of the five years following discharge from sentence for that conviction is guilty of a felony and may be sentenced to imprisonment for not more than five years or payment of a fine of not more than $10,000, or both.

Sec. 16. Minnesota Statutes 1994, section 609.268, subdivision 1, is amended to read:

Subdivision 1. [DEATH OF AN UNBORN CHILD.] Whoever, in the commission of a felony or in a violation of section 609.224, 609.2241, 609.23, or 609.231, causes the death of an unborn child is guilty of a felony and may be sentenced to imprisonment for not more than 15 years or to payment of a fine not more than $30,000, or both. As used in this subdivision, "felony" does not include a violation of sections 609.185 to 609.21, 609.221 to 609.2231, or 609.2661 to 609.2665.

Sec. 17. Minnesota Statutes 1994, section 609.748, subdivision 6, is amended to read:

Subd. 6. [VIOLATION OF RESTRAINING ORDER.] (a) When a temporary restraining order or a restraining order is granted under this section and the respondent knows of the order, violation of the order is a misdemeanor. A person is guilty of a gross misdemeanor who knowingly violates the order during the time period between a previous conviction under this subdivision; sections 609.221 to 609.224 609.2241; 518B.01, subdivision 14; 609.713, subdivisions 1 or 3; or 609.749; and the end of the five years following discharge from sentence for that conviction.

(b) A peace officer shall arrest without a warrant and take into custody a person whom the peace officer has probable cause to believe has violated an order issued under subdivision 4 or 5 if the existence of the order can be verified by the officer.

(c) A violation of a temporary restraining order or restraining order shall also constitute contempt of court.

(d) Upon the filing of an affidavit by the petitioner, any peace officer, or an interested party designated by the court, alleging that the respondent has violated an order issued under subdivision 4 or 5, the court may issue an order to the respondent requiring the respondent to appear within 14 days and show cause why the respondent should not be held in contempt of court. The court also shall refer the violation of the order to the appropriate prosecuting authority for possible prosecution under paragraph (a).

Sec. 18. Minnesota Statutes 1994, section 609.749, subdivision 4, is amended to read:

Subd. 4. [SECOND OR SUBSEQUENT VIOLATIONS; FELONY.] A person is guilty of a felony who violates any provision of subdivision 2 during the time period between a previous conviction under this section; sections 609.221 to 609.224 609.2241; 518B.01, subdivision 14; 609.748, subdivision 6; or 609.713, subdivision 1 or 3; and the end of the ten years following discharge from sentence for that conviction.

Sec. 19. Minnesota Statutes 1994, section 609.749, subdivision 5, is amended to read:

Subd. 5. [PATTERN OF HARASSING CONDUCT.] (a) A person who engages in a pattern of harassing conduct with respect to a single victim or one or more members of a single household in a manner that would cause a reasonable person under the circumstances to feel terrorized or to fear bodily harm and that does cause this reaction on the part of the victim, is guilty of a felony and may be sentenced to imprisonment for not more than ten years or to payment of a fine of not more than $20,000, or both.

(b) For purposes of this subdivision, a "pattern of harassing conduct" means two or more acts within a five-year period that violate the provisions of any of the following:

(1) this section;

(2) section 609.713;

(3) section 609.224;

(4) section 609.2241;

(5) section 518B.01, subdivision 14;

(5) (6) section 609.748, subdivision 6;

(6) (7) section 609.605, subdivision 1, paragraph (b), clause (7);

(7) (8) section 609.79; or

(8) (9) section 609.795.

Sec. 20. Minnesota Statutes 1994, section 611A.031, is amended to read:

611A.031 [VICTIM INPUT REGARDING PRETRIAL DIVERSION.]

A prosecutor shall make every reasonable effort to notify and seek input from the victim prior to referring a person into a pretrial diversion program in lieu of prosecution for a violation of sections 609.185, 609.19, 609.195, 609.20, 609.205, 609.221, 609.222, 609.223, 609.224, 609.2241, 609.24, 609.245, 609.25, 609.255, 609.342, 609.343, 609.344, 609.345, 609.365, 609.498, 609.561, 609.582, subdivision 1, 609.687, 609.713, and 609.749.

Sec. 21. Minnesota Statutes 1994, section 624.713, subdivision 1, is amended to read:

Subdivision 1. [INELIGIBLE PERSONS.] The following persons shall not be entitled to possess a pistol or semiautomatic military-style assault weapon or, except for paragraph (a), any other firearm:

(a) a person under the age of 18 years except that a person under 18 may carry or possess a pistol or semiautomatic military-style assault weapon (i) in the actual presence or under the direct supervision of the person's parent or guardian, (ii) for the purpose of military drill under the auspices of a legally recognized military organization and under competent supervision, (iii) for the purpose of instruction, competition, or target practice on a firing range approved by the chief of police or county sheriff in whose jurisdiction the range is located and under direct supervision; or (iv) if the person has successfully completed a course designed to teach marksmanship and safety with a pistol or semiautomatic military-style assault weapon and approved by the commissioner of natural resources;

(b) except as otherwise provided in clause (i), a person who has been convicted of, or adjudicated delinquent or convicted as an extended jurisdiction juvenile for committing, in this state or elsewhere, a crime of violence unless ten years have elapsed since the person has been restored to civil rights or the sentence or disposition has expired, whichever occurs first, and during that time the person has not been convicted of or adjudicated for any other crime of violence. For purposes of this section, crime of violence includes crimes in other states or jurisdictions which would have been crimes of violence as herein defined if they had been committed in this state;

(c) a person who is or has ever been confined in Minnesota or elsewhere as a "mentally ill," "mentally retarded," or "mentally ill and dangerous to the public" person as defined in section 253B.02, to a treatment facility, or who has ever been found incompetent to stand trial or not guilty by reason of mental illness, unless the person possesses a certificate of a medical doctor or psychiatrist licensed in Minnesota, or other satisfactory proof that the person is no longer suffering from this disability;

(d) a person who has been convicted in Minnesota or elsewhere of a misdemeanor or gross misdemeanor violation of chapter 152, or a person who is or has ever been hospitalized or committed for treatment for the habitual use of a controlled substance or marijuana, as defined in sections 152.01 and 152.02, unless the person possesses a certificate of a medical doctor or psychiatrist licensed in Minnesota, or other satisfactory proof, that the person has not abused a controlled substance or marijuana during the previous two years;

(e) a person who has been confined or committed to a treatment facility in Minnesota or elsewhere as "chemically dependent" as defined in section 253B.02, unless the person has completed treatment. Property rights may not be abated but access may be restricted by the courts;

(f) a peace officer who is informally admitted to a treatment facility pursuant to section 253B.04 for chemical dependency, unless the officer possesses a certificate from the head of the treatment facility discharging or provisionally discharging the officer from the treatment facility. Property rights may not be abated but access may be restricted by the courts;

(g) a person, including a person under the jurisdiction of the juvenile court, who has been charged with committing a crime of violence and has been placed in a pretrial diversion program by the court before disposition, until the person has completed the diversion program and the charge of committing the crime of violence has been dismissed;

(h) except as otherwise provided in clause (i), a person who has been convicted in another state of committing an offense similar to the offense described in section 609.224, subdivision 3, against a family or household member or section 609.2241, subdivision 3, unless three years have elapsed since the date of conviction and, during that time, the person has not been convicted of any other violation of section 609.224, subdivision 3, or 609.2241, subdivision 3, or a similar law of another state;

(i) a person who has been convicted in this state or elsewhere of assaulting a family or household member and who was found by the court to have used a firearm in any way during commission of the assault is prohibited from possessing any type of firearm for the period determined by the sentencing court; or

(j) a person who:

(1) has been convicted in any court of a crime punishable by imprisonment for a term exceeding one year;

(2) is a fugitive from justice as a result of having fled from any state to avoid prosecution for a crime or to avoid giving testimony in any criminal proceeding;

(3) is an unlawful user of any controlled substance as defined in chapter 152;

(4) has been judicially committed to a treatment facility in Minnesota or elsewhere as a "mentally ill," "mentally retarded," or "mentally ill and dangerous to the public" person as defined in section 253B.02;

(5) is an alien who is illegally or unlawfully in the United States;

(6) has been discharged from the armed forces of the United States under dishonorable conditions; or

(7) has renounced the person's citizenship having been a citizen of the United States.

A person who issues a certificate pursuant to this subdivision in good faith is not liable for damages resulting or arising from the actions or misconduct with a firearm committed by the individual who is the subject of the certificate.

The prohibition in this subdivision relating to the possession of firearms other than pistols and semiautomatic military-style assault weapons does not apply retroactively to persons who are prohibited from possessing a pistol or semiautomatic military-style assault weapon under this subdivision before August 1, 1994.

Sec. 22. Minnesota Statutes 1994, section 626.563, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] The definitions in this subdivision apply to this section.

(a) "Child abuse" means any act which involves a minor victim and which constitutes a violation of section 609.221, 609.222, 609.223, 609.224, 609.2241, 609.255, 609.342, 609.343, 609.344, 609.345, 609.377, or 609.378.

(b) "Significant relationship" means a relationship as defined by section 609.341, subdivision 15.

(c) "Child" means a person under the age of 18 who is the alleged victim of child abuse perpetrated by an adult who has a significant relationship with the child victim.

Sec. 23. Minnesota Statutes 1994, section 629.471, subdivision 3, is amended to read:

Subd. 3. [SIX TIMES THE FINE.] For offenses under sections 518B.01 and, 609.224, and 609.2241, the maximum cash bail that may be required for a person charged with a misdemeanor or gross misdemeanor violation is six times the highest cash fine that may be imposed for the offense.

Sec. 24. Minnesota Statutes 1994, section 629.74, is amended to read:

629.74 [PRETRIAL BAIL EVALUATION.]

The local corrections department or its designee shall conduct a pretrial bail evaluation of each defendant arrested and detained for committing a crime of violence as defined in section 624.712, subdivision 5, a gross misdemeanor violation of section 609.224 or 609.2241, or a nonfelony violation of section 518B.01, 609.2231, 609.3451, 609.748, or 609.749. In cases where the defendant requests appointed counsel, the evaluation shall include completion of the financial statement required by section 611.17. The local corrections department shall be reimbursed $25 by the department of corrections for each evaluation performed. The conference of chief judges, in consultation with the department of corrections, shall approve the pretrial evaluation form to be used in each county.

Sec. 25. Minnesota Statutes 1994, section 630.36, subdivision 2, is amended to read:

Subd. 2. [CHILD ABUSE DEFINED.] As used in subdivision 1, "child abuse" means any act which involves a minor victim and which constitutes a violation of section 609.221, 609.222, 609.223, 609.2231, 609.2241, 609.255, 609.321, 609.322, 609.323, 609.324, 609.342, 609.343, 609.344, 609.345, 609.377, 609.378, 617.246, or 609.224 if the minor victim is a family or household member of the defendant.

Sec. 26. Minnesota Statutes 1994, section 631.046, subdivision 1, is amended to read:

Subdivision 1. [CHILD ABUSE AND VIOLENT CRIME CASES.] Notwithstanding any other law, a prosecuting witness under 18 years of age in a case involving child abuse as defined in section 630.36, subdivision 2, a crime of violence, as defined in section 624.712, subdivision 5, or an assault under section 609.224 or 609.2241, may choose to have in attendance or be accompanied by a parent, guardian, or other supportive person, whether or not a witness, at the omnibus hearing or at the trial, during testimony of the prosecuting witness. If the person so chosen is also a prosecuting witness, the prosecution shall present on noticed motion, evidence that the person's attendance is both desired by the prosecuting witness for support and will be helpful to the prosecuting witness. Upon that showing the court shall grant the request unless information presented by the defendant or noticed by the court establishes that the support person's attendance during the testimony of the prosecuting witness would pose a substantial risk of influencing or affecting the content of that testimony.

Sec. 27. [EFFECTIVE DATE.]

Article 4, sections 1 to 26, are effective August 1, 1995, and apply to prosecutions commenced on or after that date.

Section 1. Minnesota Statutes 1994, section 13.99, subdivision 1, is amended to read:

Subdivision 1. [PROVISIONS CODED IN OTHER CHAPTERS.] The laws enumerated in this section are codified outside of this chapter and classify government data as other than public or place restrictions on access to government data. Except for records of the judiciary, the definitions and general provisions in sections 13.01 to 13.07 and the remedies and penalties provided in sections 13.08 and 13.09 also apply to data and records listed in this section and to other provisions of statute that provide access to government data and records or rights regarding government data similar to those established by section 13.04.

Sec. 2. Minnesota Statutes 1994, section 13.99, is amended by adding a subdivision to read:

Subd. 5a. [ETHICAL PRACTICES BOARD OPINIONS.] A request for an ethical practices board advisory opinion and the opinion itself are classified under section 10A.02, subdivision 12.

Sec. 3. Minnesota Statutes 1994, section 13.99, is amended by adding a subdivision to read:

Subd. 6d. [AGRICULTURAL COMMODITY HANDLERS.] Access to data filed with the commissioner of agriculture by agricultural commodity handlers is governed by section 17.694, subdivision 1.

Sec. 4. Minnesota Statutes 1994, section 13.99, is amended by adding a subdivision to read:

Subd. 11a. [CERTAIN DATA RECEIVED BY COMMISSIONER OF COMMERCE.] Certain data received because of the participation of the commissioner of commerce in various organizations are classified under section 45.012.

Sec. 5. Minnesota Statutes 1994, section 13.99, is amended by adding a subdivision to read:

Subd. 11b. [BANK INCORPORATORS DATA.] Financial data on individuals submitted by incorporators proposing to organize a bank are classified under section 46.041, subdivision 1.

Sec. 6. Minnesota Statutes 1994, section 13.99, subdivision 12, is amended to read:

Subd. 12. [COMMERCE DEPARTMENT DATA ON FINANCIAL INSTITUTIONS.] The disclosure by the commissioner of commerce of facts and information obtained in the course of examining financial institutions and in relation to complaints filed with the commissioner is governed by section 46.07, subdivision subdivisions 2 and 3.

Sec. 7. Minnesota Statutes 1994, section 13.99, is amended by adding a subdivision to read:

Subd. 12a. [ELECTRONIC FINANCIAL TERMINAL DATA.] Information obtained by the commissioner of commerce in the course of verifying electronic financial terminal equipment is classified under section 47.66.

Sec. 8. Minnesota Statutes 1994, section 13.99, is amended by adding a subdivision to read:

Subd. 14a. [SURPLUS LINES INSURER DATA.] Reports and recommendations on the financial condition of eligible surplus lines insurers submitted to the commissioner of commerce are classified under section 60A.208, subdivision 7.