Hasskamp and Worke were excused.

Kelso was excused until 2:20 p.m.

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

Entenza was excused while in conference.

The following communications were received:

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 Act of the 1995 Session of the State Legislature has been received from the Office of the Governor and is 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 Approved           Date Filed

No.                        No.              Chapter No.                        1995                 1995

965 174 1:15 p.m. May 16 May 16

Sincerely,

Joan Anderson Growe

Secretary of State

May 17, 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. 1479, relating to the environment; establishing an environmental improvement pilot program to promote voluntary compliance with environmental requirements; modifying provisions relating to the voluntary investigation and cleanup program.

H. F. No. 536, relating to commerce; residential building contractors; regulating licensees; providing a clarification.

H. F. No. 1159, relating to real property; authorizing municipalities to establish trust or escrow accounts for proceeds from losses arising from fire or explosion of certain insured real property; authorizing municipalities to utilize escrowed funds to secure, repair, or demolish damaged or destroyed structures.

H. F. No. 1573, relating to financial institutions; regulating savings banks; modifying and clarifying statutory provisions relating to the structure and functions of savings banks; making technical changes.

H. F. No. 833, relating to local government; modifying certain provisions relating to comprehensive municipal planning in the metropolitan area.

H. F. No. 446, relating to occupations and professions; establishing licensure for acupuncture practitioners by the board of medical practice; appropriating money; providing penalties.

H. F. No. 1399, relating to crime; imposing penalties for assaulting a police horse while it is being used for law enforcement purposes.

Warmest regards,

Arne H. Carlson

Governor

May 18, 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. 1377, relating to agriculture; clarifying certain procedures for agricultural chemical response reimbursement.

H. F. No. 1742, relating to health; insurance; providing for certain breast cancer coverage.

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 Approved              Date Filed

No.                        No.              Chapter No.                     1995                    1995

1479 168 1:52 p.m. May 17 May 17

536 169 1:54 p.m. May 17 May 17

1159 170 1:56 p.m. May 17 May 17

1573 171 1:58 p.m. May 17 May 17

1112 175 1:58 p.m. May 17 May 17

833 176 2:00 p.m. May 17 May 17

446 177 2:00 p.m. May 17 May 17

5 * 178 11:48 a.m. May 18 May 18

1399 179 2:02 p.m. May 17 May 17

273 180 11:32 a.m. May 18 May 18

1377 182 11:40 a.m. May 18 May 18

1742 183 11:45 a.m. May 18 May 18

74 185 11:33 a.m. May 18 May 18

1118 186 11:35 a.m. May 18 May 18

342 187 11:37 a.m. May 18 May 18

Sincerely,

Joan Anderson Growe

Secretary of State

[NOTE: * Indicates line-item veto.]

The following House Files were introduced:

Trimble, Munger, Garcia, Lynch and Larsen introduced:

H. F. No. 1939, A bill for an act relating to trade practices; regulating the sale of motor vehicle paint, thinner, and reducer; providing penalties and remedies; proposing coding for new law in Minnesota Statutes, chapter 325E.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources.

Brown; Johnson, V.; Rostberg; Larsen and Bertram introduced:

H. F. No. 1940, A bill for an act relating to annexation; providing for annexation election; modifying procedures for orderly annexation; modifying conditions for annexation by ordinance; providing for joint planning; amending Minnesota Statutes 1994, sections 414.031, by adding a subdivision; 414.0325, subdivision 1; 414.033, subdivisions 2, 2a, and by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 414.

The bill was read for the first time and referred to the Committee on Local Government and Metropolitan Affairs.

Jennings and Davids introduced:

H. F. No. 1941, A bill for an act relating to insurance; health; regulating preferred provider arrangements; authorizing rulemaking; amending Minnesota Statutes 1994, section 72A.20, subdivision 15; proposing coding for new law as Minnesota Statutes, chapter 62K.

The bill was read for the first time and referred to the Committee on Health and Human Services.

Pelowski, Kelley and Trimble introduced:

H. F. No. 1942, A resolution memorializing the President and Congress to remove barriers to competitive interLATA telecommunications services.

The bill was read for the first time and referred to the Committee on Regulated Industries and Energy.

Olson, M.; Pawlenty; Anderson, B.; Krinkie and Knight introduced:

H. F. No. 1943, A bill for an act proposing an amendment to the Minnesota Constitution, article XI, section 1; prohibiting laws appropriating sums greater than a certain amount.

The bill was read for the first time and referred to the Committee on Governmental Operations.

Olson, M.; Anderson, B., and Knight introduced:

H. F. No. 1944, A bill for an act relating to the legislature; requiring rules of procedure to ensure equal representation; proposing an amendment to the Minnesota Constitution, article IV, section 7.

The bill was read for the first time and referred to the Committee on Rules and Legislative Administration.

Olson, M., and Anderson, B., introduced:

H. F. No. 1945, A bill for an act relating to liquor; prohibiting a person from consuming alcohol in a licensed drinking establishment for a period of five years following a DWI violation; providing for an identifying code on the person's driver's license or Minnesota identification card; providing penalties; amending Minnesota Statutes 1994, sections 169.121, subdivision 7; 169.123, subdivision 5a; and 171.29, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 340A.

The bill was read for the first time and referred to the Committee on Judiciary.

Knoblach introduced:

H. F. No. 1946, A bill for an act relating to state government; regulating rulemaking; requiring agencies to publish a notice of solicitation within 60 days of the effective date of new rulemaking grants of authority; amending Minnesota Statutes 1994, section 14.10.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

Knoblach introduced:

H. F. No. 1947, A bill for an act relating to human services; under certain circumstances requiring residency in the state for 60 days before applying for work readiness or general assistance; proposing coding for new law in Minnesota Statutes, section 256D; repealing Minnesota Statutes 1994, section 256D.065.

The bill was read for the first time and referred to the Committee on Health and Human Services.

Perlt, Simoneau, Bradley and Luther introduced:

H. F. No. 1948, A bill for an act relating to real estate; regulating compensation paid by licensees to tenants for referrals; amending Minnesota Statutes 1994, section 82.19, subdivision 3.

The bill was read for the first time and referred to the Committee on Commerce, Tourism and Consumer Affairs.

Goodno introduced:

H. F. No. 1949, A bill for an act relating to utilities; allowing utility to provide electric service to its own property and facilities; amending Minnesota Statutes 1994, section 216B.42, subdivision 2.

The bill was read for the first time and referred to the Committee on Regulated Industries and Energy.

Stanek and Lynch introduced:

H. F. No. 1950, A bill for an act relating to health; requiring hearing loss screening for newborn infants; creating an advisory committee; proposing coding for new law in Minnesota Statutes, chapter 144.

The bill was read for the first time and referred to the Committee on Health and Human Services.

Dempsey introduced:

H. F. No. 1951, A bill for an act relating to capital improvements; authorizing the issuance of bonds to refurbish the Le Duc mansion in Hastings.

The bill was read for the first time and referred to the Committee on Economic Development, Infrastructure and Regulation Finance.

Marko introduced:

H. F. No. 1952, A bill for an act relating to crime; victim reparations; allowing a victim to submit a claim under the revenue recapture act; providing for consumer credit agency reports of restitution orders; amending Minnesota Statutes 1994, sections 270A.03, subdivision 2; and 611A.04, by adding a subdivision.

The bill was read for the first time and referred to the Committee on Judiciary.

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

H. F. No. 96, A bill for an act relating to insurance; health plans; prohibiting provisions that grant the health carrier a subrogation right, except where the covered person has been fully compensated from another source; proposing coding for new law in Minnesota Statutes, chapter 62A.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

H. F. No. 479, A bill for an act relating to parks and recreation; additions to and deletions from state parks; establishing a new state park and deleting two state waysides; amending Minnesota Statutes 1994, section 84.054, by adding a subdivision; repealing Minnesota Statutes 1994, section 85.013, subdivisions 13 and 20.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

H. F. No. 1105, A bill for an act relating to paternity; eliminating a presumption for husbands in certain cases; allowing husbands to join in a recognition of parentage; amending Minnesota Statutes 1994, sections 257.55, subdivision 1; 257.57, subdivision 2; and 257.75, subdivisions 1, 2, 4, and by adding a subdivision.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

H. F. No. 1856, A bill for an act relating to education; appropriating money for education and related purposes to the higher education services office, the state board of technical colleges, state board for community colleges, state university board, board of regents of the University of Minnesota, and Mayo Medical Foundation, with certain conditions; altering requirements for the youth works program; modifying appropriations for instructional services; imposing conditions on participation in post-secondary enrollment options; removing requirements for certain reports; establishing a semester system and common calendar; requiring administrative interaction with students; modifying use of education institution data; extending time for POST board funding change; requiring review of Akita program; requiring efficiency in use of facilities; establishing a model instruction program in translating and interpreting services; requiring distribution of career planning and job placement information; prohibiting student discipline for speech or communication; abolishing the higher education coordinating board and transferring its duties; creating the higher education service office and higher education administrators council; prescribing changes in certain financial assistance programs; repealing the merger of the community colleges, state universities, and technical colleges; abolishing the higher education board; amending Minnesota Statutes 1994, sections 121.707, subdivisions 2 and 3; 121.709; 126.56; 126.663, subdivision 3; 126A.02, subdivision 2; 135A.031, subdivision 2; 135A.12, subdivision 1; 135A.15, subdivision 1; 135A.153, subdivision 1; 136.172; 136A.01; 136A.03; 136A.07; 136A.08; 136A.101, subdivisions 2, 3, 5, 7, 8, and 10; 136A.121, subdivisions 5, 6, and 9; 136A.125, subdivision 6; 136A.1359, subdivisions 1, 2, and 3; 136A.15, subdivisions 3 and 4; 136A.16, subdivision 1; 136A.233, subdivision 2; 136A.26, subdivisions 1 and 2; 136A.42; 136A.62, subdivision 2; 136A.63; 136A.69; 136A.81, subdivision 1; 141.25, subdivision 8; 144.1487, subdivision 1; 144.1488, subdivisions 1 and 4; 144.1489, subdivisions 1, 3, and 4; 144.1490; 144.1491, subdivision 2; 298.2214, subdivision 5; and 363.03, subdivision 5; Laws 1986, chapter 398, article 1, section 18, as amended; and Laws 1993, First Special Session chapter 2, article 1, section 2, subdivision 3, and section 9, subdivision 6; proposing coding for new law in Minnesota Statutes, chapters 135A; 136A; and 136E; repealing Minnesota Statutes 1994, sections 135A.052, subdivisions 2 and 3; 135A.08; 135A.09; 135A.10; 135A.11; 135A.12, subdivision 5; 136A.02; 136A.04; 136A.041; 136A.125, subdivision 5; 136A.1352; 136A.1353; 136A.1354; 136A.16, subdivision 11; 136A.85; 136A.86; 136A.87; 136A.88; 136E.01; 136E.02; 136E.021; 136E.03; 136E.04; 136E.05; 136E.31; 136E.395; 136E.525; 136E.692; 137.31, subdivision 6; 137.35, subdivision 4; 137.38; 144.1488, subdivision 2; and 148.236; Laws 1991, chapter 356, article 9, as amended; and Laws 1994, chapter 532, articles 5, sections 1, 2, and 3; and 7, section 9.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce that the Senate refuses to concur in the House amendments to the following Senate File:

S. F. No. 621, A bill for an act relating to game and fish; establishing hunting heritage week; designating mute swans as unprotected birds; providing procedures for seizure and confiscation of property; clarifying terms of short-term angling licenses; removing certain requirements relating to fish taken in Canada; specifying the areas in

which deer may be taken under a license to take antlered deer in more than one zone; modifying reporting requirements; modifying hours for taking certain animals; modifying provisions relating to trapping; providing for posting of waters to prohibit fishing or motorboat operation; adjusting opening and closing dates of various seasons for taking fish; expanding the requirement to possess a trout and salmon stamp; modifying northern pike length limits; changing the date by which fish houses and dark houses must be removed from the ice in certain areas; authorizing the use of floating turtle traps; removing time limits on sale of fish by commercial licensees; requiring a plan for a firearms safety program; authorizing certain stocking activities; amending Minnesota Statutes 1994, sections 97A.015, subdivisions 28 and 52; 97A.221; 97A.451, subdivision 3; 97A.475, subdivisions 6 and 7; 97A.531, subdivision 1; 97B.061; 97B.075; 97B.301, by adding a subdivision; 97B.931; 97C.025; 97C.305, subdivision 1; 97C.345, subdivisions 1, 2, and 3; 97C.355, subdivision 7; 97C.371, subdivision 4; 97C.395, subdivision 1; 97C.401, subdivision 2; 97C.605, subdivision 3; and 97C.821; proposing coding for new law in Minnesota Statutes, chapter 10; repealing Minnesota Statutes 1994, sections 97A.531, subdivisions 2, 3, 4, 5, and 6; and 97B.301, subdivision 5.

The Senate respectfully requests that a Conference Committee be appointed thereon. The Senate has appointed as such committee:

Messrs. Lessard, Berg and Laidig.

Said Senate File is herewith transmitted to the House with the request that the House appoint a like committee.

Patrick E. Flahaven, Secretary of the Senate

Milbert moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 3 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 621. The motion prevailed.

Mr. Speaker:

I hereby announce that the Senate refuses to concur in the House amendments to the following Senate File:

S. F. No. 1536, A bill for an act relating to the organization and operation of state government; appropriating money for the department of transportation and other agencies with certain conditions.

The Senate respectfully requests that a Conference Committee be appointed thereon. The Senate has appointed as such committee:

Messrs. Langseth and Chmielewski; Ms. Flynn; Mr. Vickerman and Ms. Johnston.

Said Senate File is herewith transmitted to the House with the request that the House appoint a like committee.

Patrick E. Flahaven, Secretary of the Senate

Lieder moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 5 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 1536. The motion prevailed.

Mr. Speaker:

I hereby announce that the Senate refuses to concur in the House amendments to the following Senate File:

S. F. No. 1444, A bill for an act relating to state lands; providing for the sale of certain tax-forfeited lands in St. Louis county; authorizing Crow Wing county to allow the sale of certain nonconforming lots within the Mississippi headwaters corridor; requiring the commissioner of natural resources to convey certain land to the city of Akeley; authorizing the sale of certain trust fund lands.

The Senate respectfully requests that a Conference Committee be appointed thereon. The Senate has appointed as such committee:

Messrs. Solon, Merriam and Finn.

Said Senate File is herewith transmitted to the House with the request that the House appoint a like committee.

Patrick E. Flahaven, Secretary of the Senate

Rukavina moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 3 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 1444. The motion prevailed.

Mr. Speaker:

I hereby announce that the Senate refuses to concur in the House amendments to the following Senate File:

S. F. No. 462, A bill for an act relating to the environment; implementing the transfer of solid waste management duties of the metropolitan council to the office of environmental assistance; providing for the management of waste; providing penalties; amending Minnesota Statutes 1992, section 115A.33, as reenacted; Minnesota Statutes 1994, sections 8.31, subdivision 1; 16B.122, subdivision 3; 115.071, subdivision 1; 115A.055; 115A.07, subdivision 3; 115A.072, subdivisions 1, 3, and 4; 115A.12; 115A.14, subdivision 4; 115A.15, subdivision 9; 115A.191, subdivisions 1 and 2; 115A.32; 115A.411; 115A.42; 115A.45; 115A.46, subdivisions 1 and 5; 115A.55, by adding a subdivision; 115A.5501, subdivisions 2, 3, and 4; 115A.5502; 115A.551, subdivisions 2a, 4, 5, 6, and 7; 115A.554; 115A.557, subdivisions 3 and 4; 115A.558; 115A.63, subdivision 3; 115A.84, subdivision 3; 115A.86, subdivision 2; 115A.919, subdivision 3; 115A.921, subdivision 1; 115A.923, subdivision 1; 115A.9302, subdivisions 1 and 2; 115A.951, subdivision 4; 115A.96, subdivision 2; 115A.965, subdivision 1; 115A.9651, subdivision 3; 115A.97, subdivisions 5 and 6; 115A.981, subdivision 3; 116.07, subdivisions 4a and 4j; 116.072; 116.66, subdivisions 2 and 4; 116.92, subdivision 4; 400.16; 400.161; 473.149, subdivisions 1, 2d, 2e, 3, 4, and 6; 473.151; 473.516, subdivision 2; 473.801, subdivision 1, and by adding subdivisions; 473.8011; 473.803, subdivisions 1, 1c, 2, 2a, 3, 4, and 5; 473.804; 473.811, subdivisions 1, 4a, 5, 5c, 7, and 8; 473.813, subdivision 2; 473.823, subdivisions 3, 5, and 6; 473.843, subdivision 1; 473.844, subdivisions 1a and 4; 473.8441, subdivisions 2, 4, and 5; 473.845, subdivision 4; 473.846; and 473.848, subdivisions 2 and 4; Laws 1994, chapters 585, section 51; and 628, article 3, section 209; proposing coding for new law in Minnesota Statutes, chapters 16B; 115A; 116; 325E; and 480; repealing Minnesota Statutes 1994, sections 115A.81, subdivision 3; 115A.90, subdivision 3; 116.94; 383D.71, subdivision 2; 473.149, subdivisions 2, 2a, 2c, 2f, and 5; 473.181, subdivision 4; and 473.803, subdivisions 1b and 1e.

The Senate respectfully requests that a Conference Committee be appointed thereon. The Senate has appointed as such committee:

Mses. Johnson, J. B.; Wiener and Mr. Stevens.

Said Senate File is herewith transmitted to the House with the request that the House appoint a like committee.

Patrick E. Flahaven, Secretary of the Senate

Wagenius moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 3 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 462. The motion prevailed.

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 106.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to the organization and operation of state government; appropriating money for environmental, natural resource, and agricultural purposes; modifying provisions relating to disposition of certain revenues from state trust lands, sales of software, agricultural and environmental loans, food handlers, ethanol and oxygenated fuels, the citizen's council on Voyageurs National Park, local recreation grants, zoo admission charges, watercraft surcharge, water information, well sealing grants, pollution control agency fees, sale of tax-forfeited lands, and payments in lieu of taxes; establishing the Passing on the Farm Center; establishing special critical habitat license plates; authorizing establishment of a shooting area in Sand Dunes State Forest; prohibiting the adoption or enforcement of water quality standards that are not necessary to comply with federal law; abolishing the harmful substance compensation board and account; extending performance reporting requirements; providing for easements across state trails in certain circumstances; amending Minnesota Statutes 1994, sections 15.91, subdivision 1; 16A.125; 16B.405, subdivision 2; 17.117, subdivisions 2, 4, 6, 7, 8, 9, 10, 11, 14, 16, and by adding subdivisions; 28A.03; 28A.08; 41A.09, by adding subdivisions; 41B.02, subdivision 20; 41B.043, subdivisions 1b, 2, and 3; 41B.045, subdivision 2; 41B.046, subdivision 1, and by adding a subdivision; 84.631; 84.943, subdivision 3; 84B.11, subdivision 1; 85.015, by adding a subdivision; 85.019; 85A.02, subdivision 17; 86.72, subdivision 1; 86B.415, subdivision 7; 92.46, subdivision 1; 93.22; 97A.531, subdivision 1; 103A.43; 103F.725, subdivision 1a; 103H.151, by adding a subdivision; 103I.331, subdivision 4; 115.03, subdivision 5; 115A.03, subdivision 29; 115A.908, subdivision 3; 115B.20, subdivision 1; 115B.25, subdivision 1a; 115B.26, subdivision 2; 115B.41, subdivision 1; 115B.42; 115C.03, subdivision 9; 116.07, subdivision 4d, and by adding a subdivision; 116.12, subdivision 1; 116.96, subdivision 5; 116C.69, subdivision 3; 116P.11; 239.791, subdivision 8; 282.01, subdivisions 2 and 3; 282.011, subdivision 1; 282.02; 282.04, subdivision 1; 296.02, by adding a subdivision; 446A.07, subdivision 8; 446A.071, subdivision 2; 473.845, subdivision 2; 477A.11, subdivision 4; 477A.12; and 477A.14; proposing coding for new law in Minnesota Statutes, chapters 17; 28A; 89; 116; and 168; repealing Minnesota Statutes 1994, sections 28A.08, subdivision 2; 41A.09, subdivisions 2, 3, and 5; 97A.531, subdivisions 2, 3, 4, 5, and 6; 115B.26, subdivision 1; 239.791, subdivisions 4, 5, 6, and 9; 282.018; 296.02, subdivision 7; 325E.0951, subdivision 5; and 446A.071, subdivision 7; Laws 1993, chapter 172, section 10.

May 17, 1995

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 106, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 106 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. [ENVIRONMENT AND NATURAL RESOURCES APPROPRIATIONS.]

The sums shown in the columns marked "APPROPRIATIONS" are appropriated from the general fund, or another fund named, to the agencies and for the purposes specified in this act, to be available for the fiscal years indicated for each purpose. The figures "1995," "1996," and "1997," where used in this act, mean that the appropriation or appropriations listed under them are available for the year ending June 30, 1995, June 30, 1996, or June 30, 1997, respectively.

1995 1996 1997 TOTAL

General $ 140,000 $161,448,000 $157,190,000 $318,778,000

Environmental 20,952,000 21,217,000 42,169,000

Solid Waste 130,000 5,819,000 5,743,000 11,692,000

Petroleum Tank 2,386,000 2,659,000 5,045,000

1995 1996 1997 TOTAL

Metro Landfill

Contingency Trust 134,000 134,000 268,000

Special Revenue 122,000 10,386,000 10,379,000 20,887,000

Natural Resources 18,818,000 19,145,000 37,963,000

Game and Fish 51,477,000 51,339,000 102,816,000

Environmental Trust 2,240,000 15,604,000 -0- 17,844,000

Minnesota Future

Resources 15,083,000 -0- 15,083,000

Oil Overcharge 2,055,000 -0- 2,055,000

Permanent University -0- 500,000 500,000

Highway User Tax

Distribution 50,000 -0- 50,000

Great Lakes Protection 130,000 130,000

TOTAL 2,632,000 304,342,000 268,306,000 575,280,000

APPROPRIATIONS

Available for the Year

Ending June 30

1995 1996 1997

Sec. 2. POLLUTION CONTROL AGENCY

Subdivision 1. Total Appropriation 130,000 39,891,000 38,183,000

Summary by Fund

General 11,572,000 9,441,000

Environmental 19,342,000 19,607,000

Solid Waste

130,000 5,679,000 5,643,000

Metro Landfill

Contingency 134,000 134,000

Special Revenue 778,000 699,000

Petroleum Tank 2,386,000 2,659,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

Subd. 2. Water Pollution Control

11,178,000 9,109,000

Summary by Fund

General 8,104,000 6,123,000

Environmental 3,074,000 2,986,000

$1,946,000 the first year is for grants to local units of government for the clean water partnership program. Any unencumbered balance remaining in the first year does not cancel and is available for the second year of the biennium.

General fund money appropriated for the nonpoint source pollution Minnesota River project must be matched by federal dollars.

Of this amount, $855,000 in each fiscal year is for grants for county administration of the feedlot permit program. This amount is

transferred to the board of water and soil resources for disbursement in accordance with Minnesota Statutes, section 103B.3369, in cooperation with the pollution control agency. Grants must be matched with a combination of local cash and/or in-kind contributions. Counties receiving these grants shall submit an annual report to the pollution control agency regarding activities conducted under the grant, expenditures made, and local match contributions. First priority for funding shall be given to counties that have requested and received delegation from the pollution control agency for processing of animal feedlot permit applications under Minnesota Statutes, section 116.07, subdivision 7. Delegated counties shall be eligible to receive a grant of $5,000 plus either: $15 multiplied by the number of livestock or poultry farms with sales greater than $10,000, as reported in the 1992 Census of Agriculture, published by the United States Bureau of Census; or $25 multiplied by the number of feedlots with greater than ten animal units as determined by a level 2 or level 3 feedlot inventory conducted in accordance with the Feedlot Inventory Guidebook published by the board of water and soil resources, dated June 1991. To receive the additional funding that is based on the county feedlot inventory, the county shall submit a copy of the inventory to the pollution control agency. Any remaining money is for distribution to all counties on a competitive basis through the challenge grant process for the conducting of feedlot inventories, development of delegated county feedlot programs, and for information and education or technical assistance efforts to reduce feedlot-related pollution hazards.

The governor shall appoint an advisory task force to examine the point source permitting program in the water quality division of the agency. The task force must include representatives of industrial and municipal permittees regulated by the agency and environmental interest groups. The task force shall report to the governor and chairs of the senate finance and house of representatives ways and means committees, and chairs of the environmental policy and finance committees and divisions of the senate and house of representatives by November 30, 1995. The report must address the following issues: (1) what constitutes an adequate point source permitting program; (2) what the associated costs are of running an adequate program; (3) how these costs should be allocated and funded; (4) load-based fees; (5) fees for permittees that have violations requiring enforcement actions; (6) how to improve public access to information concerning toxic pollutants in permitted discharges; and (7) a time reporting system to improve tracking of resource usage. The task force expires on December 1, 1995.

The pollution control agency shall, by January 1, 1996, provide the chairs of the house environment and natural resources finance committee and the senate environmental and natural resources finance division with the following information:

(1) a list of all wastewater treatment facility upgrade and construction projects the agency has identified as necessary to meet existing and proposed water quality standards and regulations;

(2) an estimate of the total project costs and an estimate in the increase in sewer service rates resulting from these project costs;

(3) a list of existing and proposed state water quality standards that are not required under federal law;

(4) a list of existing and proposed state water quality standards that are more stringent than is necessary to comply with federal law; and

(5) recommendations from the agency for alternative methods to prioritize the projects listed in clause (1).

The commissioner is required to comply with this mandate only to the extent that funding is available to perform the additional oversight and engineering and fiscal review.

$165,000 in the second year is for the operation of water quality monitoring stations.

Subd. 3. Air Pollution Control

7,082,000 7,217,000

Summary by Fund

Environmental 6,304,000 6,518,000

Special Revenue 778,000 699,000

Up to $100,000 in fiscal year 1996 and $150,000 in fiscal year 1997 may be transferred to the small business environmental loan account established in Minnesota Statutes, section 116.992.

$200,000 each year is for a monitoring program under Minnesota Statutes, section 116.454.

By February 1, 1996, the pollution control agency, in consultation with the public utilities commission, the department of public service, representatives from the electric utility industry, and other interested parties, shall:

(1) conduct an assessment of the effect that the market for the sale of sulphur dioxide emission credits by entities within the state has had on the state's environment; and

(2) make recommendations to the legislature regarding measures the state could take to increase the positive effect of this market on the environment, including whether the legislature should create a sulphur dioxide reduction fund into which the proceeds of the sale of sulphur dioxide emission credits could be placed and used to fund programs for the reduction of sulphur dioxide emissions.

Subd. 4. Groundwater and Solid Waste Management

8,009,000 7,985,000

Summary by Fund

Environmental 3,199,000 3,213,000

Metro Landfill

Contingency 126,000 126,000

Solid Waste 4,684,000 4,646,000

$1,000,000 is transferred from the motor vehicle transfer account in the environmental fund to the environmental response, compensation, and compliance account in the environmental fund and is appropriated as provided in this subdivision.

All money in the environmental response, compensation, and compliance account in the environmental fund not otherwise appropriated is appropriated to the commissioners of the pollution control agency and the department of agriculture for purposes of Minnesota Statutes, section 115B.20, subdivision 2, clauses (1), (2), (3), (4), (11), (12), and (13). At the beginning of each fiscal year, the two commissioners shall jointly submit an annual spending plan to the commissioner of finance that maximizes the utilization of resources and appropriately allocates the money between the two agencies. This appropriation is available until June 30, 1997.

Any unencumbered balance from the metropolitan landfill contingency action trust fund remaining in the first year does not cancel but is available for the second year.

The unencumbered balances of the appropriations made to the commissioner of the pollution control agency in Laws 1993, chapter 172, section 2, from the motor vehicle transfer account in the environmental fund for grants and administrative costs for development of management alternatives for shredder residue from recyclable steel shall not cancel, but is available through June 30, 1997.

$5,517,000 from the balance in the motor vehicle transfer account in the environmental fund, shall be transferred to the general fund by June 30, 1997.

$50,000 is appropriated each year from the solid waste fund for transfer to the commissioner of revenue to enhance compliance and collection of solid waste assessments.

Subd. 5. Hazardous Waste Management

5,800,000 6,069,000

Summary by Fund

General 1,660,000 1,660,000

Environmental 2,202,000 2,206,000

Petroleum Cleanup 1,938,000 2,203,000

$100,000 the first year is transferred from the motor vehicle transfer account to be credited to the used motor oil reimbursement account.

Subd. 6. Policy and Operational Support

7,822,000 7,803,000

Summary by Fund

General 1,808,000 1,658,000

Environmental 4,563,000 4,684,000

Solid Waste 995,000 997,000

Metro Landfill

Contingency 8,000 8,000

Petroleum Tank 448,000 456,000

The following amounts are appropriated for the final phase of an environmental computer compliance management system:

General 400,000 400,000

Environmental 2,055,000 2,055,000

Petroleum Tank 32,000 32,000

Subd. 7. Deficiency Appropriation

$130,000 is appropriated from the landfill cleanup fund to the commissioner of the pollution control agency for fiscal year 1995 for rulemaking under Minnesota Statutes, section 115A.47, and activities related to defense of the statute in federal court.

Sec. 3. OFFICE OF ENVIRONMENTAL ASSISTANCE 20,487,000 20,487,000

Summary by Fund

General 19,146,000 19,146,000

Environmental 1,341,000 1,341,000

$14,008,000 the first year and $14,008,000 the second year are for the SCORE block grants to counties.

Any unencumbered grant and loan balances in the first year do not cancel but are available for grants and loans in the second year.

All money in the metropolitan landfill abatement account in the environmental fund not otherwise appropriated is appropriated to the office of environmental assistance for the purposes of Minnesota Statutes, section 473.844.

Sec. 4. ZOOLOGICAL BOARD

Subdivision 1. Total Appropriation 5,274,000 5,074,000

The amounts that may be spent from this appropriation are specified in the following subdivisions.

Subd. 2. Biological Programs

655,000 655,000

Subd. 3. Operations

4,619,000 4,419,000

$200,000 in the first year is for computer systems.

Sec. 5. NATURAL RESOURCES

Subdivision 1. Total Appropriation 140,000 159,063,000 158,878,000

Summary by Fund

General

140,000 88,698,000 87,824,000

Game and Fish 51,477,000 51,339,000

Natural Resources 18,788,000 19,115,000

Permanent University -0- 500,000

Solid Waste 100,000 100,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

Subd. 2. Mineral Resources Management

4,717,000 4,717,000

Summary by Fund

General 4,717,000 4,217,000

Permanent University -0- 500,000

$311,000 the first year and $311,000 the second year are for iron ore cooperative research, of which $225,000 the first year and $225,000 the second year are available only as matched by $1 of nonstate money for each $1 of state money. Any unencumbered balance remaining in the first year does not cancel but is available for the second year.

$375,000 the first year and $375,000 the second year are for mineral diversification. Any unencumbered balance remaining in the first year does not cancel but is available for the second year.

$45,000 the first year and $45,000 the second year are for minerals cooperative environmental research, of which $30,000 the first year and $30,000 the second year are available only as matched by $1 of nonstate money for each $1 of state money. Any unencumbered balance remaining in the first year does not cancel but is available for the second year.

$500,000 the second year is from the university lands and minerals suspense account in the permanent university fund for activities of the commissioner to protect, improve, administer, manage, and otherwise enhance the mineral value of university lands. This is a one-time appropriation. The board of regents of the University of Minnesota is requested to discuss options with the commissioner of natural resources to determine a method to calculate reasonable costs of the commissioner to maintain the university trust lands.

Subd. 3. Water Resources Management

8,781,000 8,706,000

Summary by Fund

General 8,540,000 8,465,000

Natural Resources 241,000 241,000

$95,000 the first year and $95,000 the second year are for a grant to the Mississippi headwaters board for up to 50 percent of the cost of implementing the comprehensive plan for the upper Mississippi within areas under its jurisdiction.

$17,000 the first year and $17,000 the second year are for payment to the Leech Lake Band of Chippewa Indians to implement its portion of the comprehensive plan for the upper Mississippi.

$50,000 is for development and administration of contracts with water well contractors for exploratory drilling and installation of observation wells to characterize the geologic and hydrologic conditions in the southwest region of the state where water supplies are difficult to locate. This appropriation is available until June 30, 1997, and is contingent on the receipt by the commissioner of $50,000 in nonstate money. Results must be reported to the legislative water commission by February 15, 1996, and February 15, 1997.

$25,000 is appropriated in fiscal year 1996 under Minnesota Statutes, section 103G.701, to the commissioner of natural resources for a grant, requiring no local match, to Morrison county for improving water flow along the easterly shoreline of the Mississippi river near Highway 10 in Morrison county, notwithstanding Minnesota Statutes, section 103G.701, subdivision 4.

Subd. 4. Forest Management

30,121,000 31,148,000

Summary by Fund

General 29,679,000 30,706,000

Natural Resources 442,000 442,000

$2,736,000 the first year and $2,736,000 the second year are for presuppression and suppression costs of emergency fire fighting. If the appropriation for either year is insufficient, the appropriation for the other year is available for it. If these appropriations are insufficient to cover all costs of suppression, the amount necessary to pay for emergency firefighting expenses during the biennium is appropriated from the general fund. If money is spent under the appropriation in the preceding sentence, the commissioner of natural resources shall, by the 15th day of the following month, report on how the money was spent to the chairs of the senate finance committee, the house of representatives ways and means

committee, the finance division of the senate environment and natural resources committee, and the house of representatives environment and natural resources finance committee. The appropriations may not be transferred.

Of this appropriation, $585,000 the first year and $1,430,000 the second year are for implementing the planned timber harvest on state land. In implementing the planned harvest, the department shall follow existing guidelines for protection of forest resource values. By November 1, 1996, and November 1, 1997, the commissioner shall submit to the senate environment and natural resources finance division and the house environment and natural resources finance committee a report that includes: (1) the planned harvest levels for the preceding fiscal year and the fiscal year in which the report is being submitted, and documentation of the methodology used to determine these levels; (2) the volume of, and revenue from, timber sales on state land during the preceding fiscal year; and (3) a description of the resource protection guidelines followed in implementing the planned harvest.

$730,000 the first year and $1,007,000 the second year are for implementation of the generic environmental impact statement on timber harvesting. Of these amounts, $140,000 the first year and $140,000 the second year are for transfer to the forest resources council for the council's activities under Minnesota Statutes, chapter 89A.

$100,000 the first year and $100,000 in the second year is an increase in appropriation to the Minnesota conservation corps.

$75,000 is appropriated in the first year to preserve and enhance oak savannah stands in Ramsey county and the city of St. Paul.

$20,000 in the first year is for construction of a recreational shooting area at Sand Dunes state forest.

Subd. 5. Parks and Recreation Management

140,000 23,850,000 23,879,000

Summary by Fund

General

140,000 23,163,000 23,197,000

Natural Resources 687,000 682,000

$687,000 the first year and $682,000 the second year are from the water recreation account in the natural resources fund for state park development projects. If the appropriation in either year is insufficient, the appropriation for the other year is available for it.

$2,238,000 the first year and $2,238,000 the second year are for payment of a grant to the metropolitan council for metropolitan area regional parks maintenance and operation.

$50,000 in the first year and $50,000 in the second year are for operational costs at Cuyuna Country State Recreation Area.

In operating a work training program for unemployed and underemployed individuals for the 1995 parks season, the commissioner of natural resources shall implement the 1995 tentative agreement with AFSCME, with any modifications mutually agreed to by the commissioner and AFSCME. The commissioner may not operate a work training program for unemployed and underemployed individuals during the 1996 and 1997 park seasons unless the terms and conditions of employment of such individuals have been negotiated and an agreement on these issues has been reached with the exclusive bargaining representatives of employees pursuant to Minnesota Statutes, chapter 179A. Negotiations for the 1996 and 1997 park seasons must begin by November 1 of the preceding year.

The commissioner of natural resources shall develop an implementation plan, including estimated costs and uses, for an electronic permit tracking system that would allow the identification and tracking of state park users. The commissioner shall submit the plan by January 15, 1996, to the chairs of the senate and house of representatives environment and natural resources committees, the finance division of the senate environment and natural resources committee, and the house of representatives environment and natural resources finance committee.

The commissioner shall prepare a five-year plan for using available funds to construct or modify for accessibility to persons with physical disabilities at least one trail in each state park containing trails.

For 1995 - $140,000

$140,000 in fiscal year 1995 is appropriated for replacement of equipment and the contents of the building destroyed by arson fire at William O'Brien State Park.

Subd. 6. Trails and Waterways Management

11,437,000 11,086,000

Summary by Fund

General 1,215,000 1,177,000

Game and Fish 1,334,000 1,021,000

Natural Resources 8,888,000 8,888,000

$2,249,000 the first year and $2,249,000 the second year are from the snowmobile trails and enforcement account in the natural resources fund for snowmobile grants-in-aid.

$250,000 the first year and $250,000 the second year are from the water recreation account in the natural resources fund for a safe harbor program on Lake Superior. Any unencumbered balance at the end of the first year does not cancel and is available for the second year.

The amounts spent by the commissioner of natural resources from the appropriations in Laws 1993, chapter 311, article 1, section 18, paragraph (a), for off-highway motorcycles and article 2, section 19, paragraph (a), for off-road vehicles must be reimbursed to the general fund by June 30, 1996.

Subd. 7. Fish and Wildlife Management

35,555,000 35,490,000

Summary by Fund

General 2,656,000 2,656,000

Game and Fish 30,800,000 30,800,000

Natural Resources 2,099,000 2,034,000

$300,000 each year is for resource population surveys in the 1837 treaty area. Of this amount, $100,000 each year is from the game and fish fund.

$955,000 the first year and $955,000 the second year are from the nongame wildlife management account in the natural resources fund for the purpose of nongame wildlife management. Any unencumbered balance remaining in the first year does not cancel but is available the second year.

$1,313,000 the first year and $1,313,000 the second year are for the reinvest in Minnesota programs of game and fish, critical habitat, and wetlands established under Minnesota Statutes, section 84.95, subdivision 2. Any unencumbered balance for the first year does not cancel but is available for use the second year.

$1,104,000 the first year and $1,104,000 the second year are from the wildlife acquisition account for only the purposes specified in Minnesota Statutes, section 97A.071, subdivision 3.

$1,200,000 the first year and $1,200,000 the second year are from the deer habitat improvement account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 1, paragraph (b).

$138,000 the first year and $138,000 the second year are from the deer and bear management account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 1, paragraph (c).

$130,000 the first year and $130,000 the second year are from the game and fish fund for deer and bear management to include emergency deer feeding. If the appropriation for either year is insufficient, the appropriation for the other year is available.

$661,000 the first year and $661,000 the second year are from the waterfowl habitat improvement account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 2.

$400,000 the first year and $400,000 the second year are from the trout and salmon management account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 3.

$545,000 the first year and $545,000 the second year are from the pheasant habitat improvement account for only the purposes specified in Minnesota Statutes, section 97A.075, subdivision 4.

$284,000 the first year and $284,000 the second year are from the game and fish fund for activities relating to reduction and prevention of property damage by wildlife. $50,000 each year is for emergency damage abatement materials.

Subd. 8. Enforcement

17,586,000 18,490,000

Summary by Fund

General 2,971,000 3,110,000

Game and Fish 11,370,000 11,710,000

Natural Resources 3,145,000 3,570,000

Solid Waste 100,000 100,000

$1,082,000 the first year and $1,082,000 the second year are from the water recreation account in the natural resources fund for grants to counties for boat and water safety.

The commissioner shall maintain historic levels of overtime and retain field-based conservation officer positions except in the event of unanticipated budget shortfalls or unallotments. The commissioner may reduce these items in proportion with other reductions in the division.

$50,000 is appropriated in the second year to add one area-wide conservation officer in the seven-county metropolitan area.

$50,000 the first year and $50,000 the second year are for costs related to the 1837 Treaty with the Chippewa.

$100,000 each year is from the solid waste fund for solid waste enforcement activities under Minnesota Statutes, section 116.073.

Subd. 9. Operations Support

26,643,000 24,989,000

Summary by Fund

General 15,384,000 13,923,000

Game and Fish 7,973,000 7,808,000

Natural Resources 3,286,000 3,258,000

The commissioner of natural resources may contract with and make grants to nonprofit agencies to carry out the purposes, plans, and programs of the office of youth programs, Minnesota conservation corps.

$750,000 in the first year is for transfer to the attorney general's office for treaty litigation expenses related to the Mille Lacs and Fond du Lac cases.

Any telephone services offered through the information center must be provided toll-free for all residents of the state.

$150,000 in the second year is appropriated to the commissioner of natural resources for the southeast asian information and outreach program.

The appropriation of $50,000 from the game and fish fund contained in Laws 1993, chapter 172, section 5, subdivision 8, to consolidate enforcement arrest ledgers, is available until June 30, 1996.

$5,000 the first year is for the hydrologic task force expenses.

$8,000 from the natural resources fund and $55,000 from the game and fish fund in the first year is for design work on a revenue accounting system. The department must meet any requirements contained in the information policy office evaluation of the project before expending any funds from this appropriation.

$250,000 is appropriated in the first year to be transferred to the director of the office of strategic and long-range planning. The money is to be used for a grant to the Northern Counties Land Use Coordinating Board, contingent on the board receiving $125,000 in local matching funds. The grant is to be used for developing a coordinated planning process and comprehensive land use plans pursuant to policy goals in the National Environmental Policy Act, United States Code, title 42, section 4331.

If the Morrison county board determines that Morrison county did not comply with tax-forfeiture laws with respect to property owned in 1977 by Richard T. Peterson, Route No. 6, Little Falls, MN, 56345, in Morrison county, referred to by Laws 1984, chapter 502, article 13, section 15, whose ownership he lost to the state in a disputed tax-forfeiture, then Morrison county is authorized to pay $6,000 to Richard and Nancy Peterson. If the county payment is made, $6,000 is also appropriated from the general fund to the commissioner of natural resources for payment to Richard and Nancy Peterson and shall be paid to him within 60 days of the payment by the county. The sum of $12,000 represents the value of the property at the time of the forfeiture on August 16, 1982, and interest since that date. This paragraph is not a finding or attribution of responsibility on the part of the state, the county, or Richard and Nancy Peterson. Under Minnesota Statutes, section 645.023, subdivision 1, the authority granted to the county by this paragraph takes effect without local approval.

Subd. 10. Integrated Resource Management Pilot Project

373,000 373,000

The commissioner of natural resources shall develop a pilot project for implementation of a sustainable, multiple-use natural resources management system, including budgeting, that is based on appropriate natural resource management boundaries. In developing the project, the commissioner shall include hunting,

fishing, outdoor recreation, agriculture, and other interested groups. The commissioner shall coordinate project activities with activities of the pollution control agency, the board of water and soil resources, the department of agriculture, the department of health, and local governmental units. $173,000 each year is for community environmental assistance. $200,000 each year is for geographic information system implementation.

Six members of the legislature may serve as liaisons between the legislature and the commissioner in the development of the pilot project. The chairs of the senate environment and natural resources committee and the finance division of the committee may jointly appoint three members of the senate to act as liaisons, at least one of whom must be a member of the minority caucus. The chairs of the house environment and natural resources committee and the environment and natural resources finance committee may jointly appoint three members of the house to act as liaisons, at least one of whom must be a member of the minority caucus. Legislative staff may, at the direction of the legislative liaisons, participate in the development of the pilot project.

The commissioner shall submit a preliminary plan by November 15, 1995, and a final plan by February 15, 1996, to the senate environment and natural resources finance division and the house environment and natural resources finance committee. The preliminary and final plans must include any plans of the commissioner to transfer personnel to the regions in which the pilot project is to be implemented.

Of the amounts appropriated in this section, none of the money for fiscal year 1997 for activities in regions 4 and 5 may be spent until the final plan for the pilot project has been approved by the legislature.

Nothing in this subdivision alters any restrictions in law relating to allowed uses of revenues credited to the general, game and fish, and natural resources funds.

Sec. 6. BOARD OF WATER AND SOIL RESOURCES 13,719,000 13,947,000

$5,353,000 the first year and $5,353,000 the second year are for natural resources block grants to local governments. Of this amount, $50,000 in each year is for a grant to the north shore management board and $35,000 in each year is for a grant to the St. Louis River board.

The board shall reduce the amount of the natural resource block grant to a county by an amount equal to any reduction in the county's general services allocation to a soil and water conservation district from the county's 1994 allocation.

Grants must be matched with a combination of local cash or in-kind contributions. The base grant portion related to water planning must be matched by an amount that would be raised by a levy under Minnesota Statutes, section 103B.3369.

$1,826,000 the first year and $2,054,000 the second year are for grants to soil and water conservation districts for general purposes and for implementation of the RIM conservation reserve program. Upon approval of the board, expenditures may be made from these appropriations for supplies and services benefiting soil and water conservation districts.

$2,120,000 the first year and $2,120,000 the second year are for grants to soil and water conservation districts for cost-sharing contracts for erosion control and water quality management. This appropriation is available until expended.

$189,000 the first year and $189,000 the second year are for grants to watershed districts and other local units of government in the southern Minnesota river basin study area 2 for floodplain management.

Any unencumbered balance in the board's program of grants does not cancel at the end of the first year and is available for the second year for the same grant program.

Sec. 7. AGRICULTURE

Subdivision 1. Total Appropriation 24,812,000 23,646,000

Summary by Fund

General 15,135,000 13,897,000

Environmental 269,000 269,000

Special Revenue

122,000 9,408,000 9,480,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

Subd. 2. Protection Service

17,058,000 16,787,000

Summary by Fund

General 7,581,000 7,238,000

Environmental 269,000 269,000

Special Revenue

122,000 9,208,000 9,280,000

$269,000 the first year and $269,000 the second year are from the environmental response, compensation, and compliance account in the environmental fund.

$4,070,000 the first year and $4,070,000 the second year are appropriated from the pesticide regulatory account established under Minnesota Statutes, section 18B.05, for administration and enforcement of Minnesota Statutes, chapter 18B.

$694,000 the first year and $694,000 the second year are appropriated from the fertilizer inspection account established under Minnesota Statutes, section 18C.131, for administration and enforcement of Minnesota Statutes, chapter 18C.

$431,000 the first year and $431,000 the second year are appropriated from the seed potato inspection fund established under Minnesota Statutes, section 21.115, for administration and enforcement of Minnesota Statutes, sections 21.111 to 21.122.

$695,000 the first year and $695,000 the second year are appropriated from the seed inspection fund established under Minnesota Statutes, section 21.92, for administration and enforcement of Minnesota Statutes, sections 21.80 to 21.92.

$691,000 the first year and $691,000 the second year are appropriated from the commercial feed inspection account established under Minnesota Statutes, section 25.39, subdivision 4, for administration and enforcement of Minnesota Statutes, sections 25.35 to 25.44.

$668,000 the first year and $668,000 the second year are appropriated from the fruit and vegetables inspection account established under Minnesota Statutes, section 27.07, subdivision 6, for administration and enforcement of Minnesota Statutes, section 27.07.

$1,644,000 the first year and $1,716,000 the second year are appropriated from the dairy services account established under Minnesota Statutes, section 32.394, subdivision 9, for the purpose of dairy services under Minnesota Statutes, chapter 32.

$315,000 the first year and $315,000 the second year are appropriated from the livestock weighing fund established under Minnesota Statutes, section 17A.11, for the purpose of livestock weighing costs under Minnesota Statutes, chapter 17A.

$100,000 each year is appropriated from the general fund for a contract with the Minnesota institute for sustainable agriculture to gather, evaluate, publish, and disseminate sustainable agriculture information to a broad audience through both printed and electronic means. The Minnesota institute for sustainable agriculture must work in cooperation with the department of agriculture in carrying out this activity. By January 15, 1997, the executive director of the Minnesota institute for sustainable agriculture must provide a progress report to the legislative water commission on its activities funded under this section.

Notwithstanding Minnesota Statutes, section 16A.1285, subdivision 2, the commissioner need not increase fees to recover general fund appropriations made before July 1, 1995, to supplement fee-supported activities or made for fiscal year 1996 for dairy services under Minnesota Statutes, chapter 32, or for grain inspections under Minnesota Statutes, chapter 17B.

$180,000 each year is for the biological control program.

For 1995 - $122,000

There is appropriated $122,000 in fiscal year 1995 from the seed potato inspection fund to reimburse the general fund appropriation to the department of agriculture for costs incurred in building the seed potato facility located in East Grand Forks.

Subd. 3. Promotion and Marketing

1,146,000 1,146,000

Summary by Fund

General 954,000 954,000

Special Revenue 192,000 192,000

Notwithstanding Minnesota Statutes, section 41A.09, subdivision 3, the total payments from the ethanol development account to all producers may not exceed $25,000,000 for the biennium ending June 30, 1997. If the total amount for which all producers are eligible in a quarter exceeds the amount available for payments, the commissioner shall make the payments on a pro rata basis.

$100,000 the first year and $100,000 the second year are for ethanol promotion and public education.

$100,000 the first year and $100,000 the second year must be spent for the WIC coupon program.

$71,000 the first year and $71,000 the second year are for transfer to the Minnesota grown matching account and may be used as grants for Minnesota grown promotion under Minnesota Statutes, section 17.109.

$192,000 the first year and $192,000 the second year are from the commodities research and promotion account in the special revenue fund.

Subd. 4. Administration and Financial Assistance

6,608,000 5,713,000

Summary by Fund

General 6,600,000 5,705,000

Special Revenue 8,000 8,000

$1,200,000 from the balance in the special account created in Minnesota Statutes, section 41.61, shall be transferred to the general fund by June 30, 1997.

$150,000 the first year and $50,000 the second year are for dairy policy studies and federal milk marketing order reform.

$285,000 the first year and $285,000 the second year are for family farm security interest payment adjustments. If the appropriation for either year is insufficient, the appropriation for the other year is available for it. No new loans may be approved in fiscal year 1996 or 1997.

$199,000 the first year and $199,000 the second year are for the family farm advocacy program.

$80,000 the first year and $80,000 the second year are for grants to farmers for demonstration projects involving sustainable agriculture. If a project cost is more than $25,000, the amount above $25,000 must be cost-shared at a state-applicant ratio of one to one. Priorities must be given for projects involving multiple parties. Up to $20,000 each year may be used for dissemination of information about the demonstration grant projects. If the appropriation for either year is insufficient, the appropriation for the other is available.

$70,000 the first year and $70,000 the second year are for the Northern Crops Institute. These appropriations may be spent to purchase equipment and are available until spent.

$150,000 the first year and $150,000 the second year are for grants to agriculture information centers. The grants are only available on a match basis. The funds may be released at the rate of $4 of state money for each $1 of matching nonstate money that is raised. Any appropriated amounts not matched by April 1 of each year are available for other purposes within the department, of which $10,000 each year may be used for farm safety programs and remains available until June 30, 1997.

$53,000 the first year and $53,000 the second year are for payment of claims relating to livestock damaged by threatened or endangered animal species and agricultural crops damaged by elk. If the appropriation for either year is insufficient, the appropriation for the other year is available for it.

$115,000 the first year and $115,000 the second year are for the seaway port authority of Duluth.

$19,000 the first year and $19,000 the second year is for a grant to the Minnesota livestock breeder's association.

$50,000 the first year and $50,000 the second year are for the passing on the farm center under Minnesota Statutes, section 17.985. This appropriation is available only to the extent matched with nonstate money.

$75,000 the first year and $75,000 the second year are for grants to the University of Minnesota for applied research on odor control at feedlots. This appropriation is available only if matched by the same amount in nonstate money. The research must provide: (1) an evaluation of cost-effective covers for manure storage structures; and (2) development of economical means of altering the biological activity in manure storage structures to reduce odor emissions.

$25,000 the first year is for a grant to the University of Minnesota for research into the effects feedlots have on the value of nearby property. The research must take into account the distance the property is from the feedlot, the type of feedlot, and be based on actual sales of property near feedlots.

$150,000 is for a grant to the beaver damage control joint powers board formed by the counties of Beltrami, Clearwater, Marshall, Pennington, Polk, Red Lake, Mahnomen, Norman, Becker, Hubbard, Itasca, Kittson, Koochiching, St. Louis, Roseau, and Lake of the Woods for the purpose of beaver damage control. The grant must be matched by at least $80,000 from the joint powers board. The joint powers board may enter into an agreement with the Red Lake Band of Chippewa Indians for participation by the band in the joint powers board's beaver damage control program. This appropriation is available until June 30, 1997.

Notwithstanding any other law to the contrary, for fiscal year 1995 $800,000 from the general fund may be transferred to the special account created in Minnesota Statutes, section 17B.15, subdivision 1, to provide an operating loan to the grain inspection and weighing account. The commissioner of agriculture shall repay the loan from the special account by June 30, 1997.

$50,000 in the first year shall be used by the commissioner of agriculture as a grant for a pilot project for an anaerobic digestion plant for the management of animal manures and research of other appropriate technologies for management of animal manures.

$350,000 the first year is for transfer to the ethanol development account in the special revenue fund.

$200,000 the first year is for transfer to the value added agriculture product revolving loan account in the special revenue fund.

$20,000 in the first year is to provide staff and research support for the livestock processing markets task force.

Sec. 8. BOARD OF ANIMAL HEALTH 2,165,000 2,217,000

Sec. 9. MINNESOTA-WISCONSIN BOUNDARY AREA

COMMISSION 164,000 168,000

Summary by Fund

General 134,000 138,000

Natural Resources 30,000 30,000

This appropriation is only available to the extent it is matched by an equal amount from the state of Wisconsin.

$60,000 is from the water recreation account in the natural resources fund for the St. Croix management and stewardship program.

Sec. 10. CITIZEN'S COUNCIL ON VOYAGEURS NATIONAL

PARK 59,000 60,000

Sec. 11. SCIENCE MUSEUM OF MINNESOTA 1,108,000 1,108,000

Sec. 12. MINNESOTA ACADEMY OF SCIENCE 36,000 36,000

Sec. 13. MINNESOTA HORTICULTURAL SOCIETY 72,000 72,000

Sec. 14. AGRICULTURAL UTILIZATION RESEARCH

INSTITUTE 4,330,000 4,330,000

Summary by Fund

General 4,130,000 4,130,000

Special Revenue 200,000 200,000

$200,000 each year is for a grant to the natural resources research institute for hybrid tree management research and development of an implementation plan for establishing hybrid tree plantations in the state. This appropriation is available to the extent matched by $2 of nonstate money for each $1 of state money.

Sec. 15. ATTORNEY GENERAL 40,000

This appropriation is from the solid waste fund for the voluntary insurance buy-out program evaluation required by Laws 1994, chapter 639, article 2, section 5.

Sec. 16. PUBLIC SAFETY 50,000

$50,000 is appropriated from the highway user tax distribution fund to the commissioner of public safety for costs of handling and manufacturing special license plates under section 85.

Sec. 17. OFFICE OF STRATEGIC AND LONG-RANGE

PLANNING 100,000 100,000

$100,000 the first year and $100,000 the second year are for the sustainable development initiatives round table.

Sec. 18. TRADE AND ECONOMIC DEVELOPMENT 100,000

This appropriation is from the general fund to the commissioner of trade and economic development for grants to political subdivisions for projects that provide for improved resource management, tourism promotion, and economic development for American resorts on the Minnesota-Ontario border area of Lake of the Woods, Rainy River, and Rainy Lake.

Sec. 19. MINNESOTA RESOURCES

Subdivision 1. Total Appropriation 32,872,000

Summary by Fund

Minnesota Future

Resources Fund 15,083,000

Environment and

Natural Resources

Trust Fund 15,604,000

Of this appropriation $3,144,000 is trust fund acceleration.

Oil Overcharge

Money in the Special

Revenue Fund 2,055,000

Great Lakes Protection

Account 130,000

The amounts in this section are appropriated for the biennium ending June 30, 1997. Unless otherwise provided, the projects in this section must be completed and final products delivered by June 30, 1997.

Subd. 2. Definitions

(a) "Future resources fund" means the Minnesota future resources fund referred to in Minnesota Statutes, section 116P.13.

(b) "Trust fund" means the Minnesota environment and natural resources trust fund referred to in Minnesota Statutes, section 116P.02, subdivision 6.

(c) "Trust fund acceleration" means the money referred to in Minnesota Statutes, section 116P.11, paragraph (b), clause (4).

(d) "Oil overcharge money" means the money referred to in Minnesota Statutes, section 4.071, subdivision 2.

(e) "Great lakes protection account" means the account referred to in Minnesota Statutes, section 116Q.02.

Subd. 3. Legislative Commission on Minnesota Resources 702,000

$308,000 of this appropriation is from the future resources fund and $394,000 is from the trust fund, pursuant to Minnesota Statutes, section 116P.09, subdivision 5.

Subd. 4. Parks and Trails

(a) METROPOLITAN REGIONAL PARK SYSTEM 3,950,000

This appropriation is from the trust fund for payment by the commissioner of natural resources to the metropolitan council for subgrants to rehabilitate, develop, acquire, and retrofit the metropolitan regional park system consistent with the metropolitan council regional recreation open space capital improvement program and subgrants for regional trails, consistent with an updated regional trail plan. $1,666,000 of this appropriation is from the trust fund acceleration.

This appropriation may be used for the purchase of homes only if the purchases are expressly included in the work program approved by the legislative commission on Minnesota resources.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(b) STATE PARK AND RECREATION AREA ACQUISITION,

DEVELOPMENT, BETTERMENT, AND REHABILITATION 3,150,000

This appropriation is from the trust fund to the commissioner of natural resources as follows: (1) for state park and recreation area acquisition $1,070,000, of which up to $670,000 may be used for state trail acquisition of a critical nature; (2) for state park and recreation area development $680,000; and (3) for betterment and rehabilitation of state parks and recreation areas $1,400,000. The use of the Minnesota conservation corps is encouraged in the rehabilitation and development.

$1,384,000 of this appropriation is from the trust fund acceleration. The commissioner must submit grant requests for supplemental funding for federal ISTEA money in eligible categories and report the results to the legislative commission on Minnesota resources.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(c) STATE TRAIL REHABILITATION AND ACQUISITION 250,000

This appropriation is from the trust fund to the commissioner of natural resources for state trail plan priorities. $94,000 of this appropriation is from the trust fund acceleration. The commissioner must submit grant requests for supplemental funding for federal ISTEA money and report the results to the legislative commission on Minnesota resources.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(d) WATER ACCESS 600,000

This appropriation is from the trust fund to the commissioner of natural resources to accelerate public water access acquisition and development statewide. Access includes boating access, fishing piers, and shoreline access. Up to $100,000 of this appropriation may be used for a cooperative project to acquire and develop land, local park facilities, an access trail, and a boat access at the LaRue pit otherwise consistent with the water access program.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(e) LOCAL GRANTS 1,800,000

This appropriation is from the future resources fund to the commissioner of natural resources to provide matching grants, as follows: (1) $500,000 to local units of government for local park and recreation areas; (2) $500,000 to local units of government for natural and scenic areas pursuant to Minnesota Statutes, section 85.019; (3) $400,000 to local units of government for trail linkages between communities, trails, and parks; and (4) $400,000 for a conservation partners program, a statewide pilot to encourage private organizations and local governments to cost share enhancement of fish, wildlife, and native plant habitats; and research and surveys of fish and wildlife, and related education activities. Conservation partners grants may be up to $10,000 each and must be equally matched. In addition to the required work program, grants may not be approved until grant proposals to be funded have been submitted to the legislative commission on Minnesota resources and the commission has either made a recommendation or allowed 60 days to pass without making a recommendation. The above appropriations are available half for the metropolitan area as defined in Minnesota Statutes, section 473.121, subdivision 2, and half for outside of the metropolitan area. For the purpose of this paragraph, match includes nonstate contributions either cash or in-kind.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(f) MINNEAPOLIS PARK AND TRAIL CONNECTIONS 141,000

This appropriation is from the future resources fund to the commissioner of transportation for half of the nonfederal match of ISTEA projects for the Minneapolis park and recreation board to develop park and trail connections including: Minnehaha park to Mendota bridge, Stone Arch bridge to bridge number 9 on West River Parkway, Boom island to St. Anthony Parkway, and West River Parkway to Shingle Creek Parkway. The Minneapolis park and recreation board must apply for and receive approval of the federal money in order to receive this appropriation.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(g) LOCAL SHARE FOR ISTEA FEDERAL PROJECTS 300,000

This appropriation is from oil overcharge money to the commissioner of administration for half of the nonfederal match of ISTEA projects for: (1) Chisago county, $150,000 for a trail between North Branch and Forest Lake township; and (2) the St. Louis and Lake counties regional rail authority, $150,000 for the development of approximately 40 miles of a multipurpose recreational trail system. Chisago county and the St. Louis and Lake counties regional rail authority must apply for and receive approval of the federal money in order to receive these appropriations.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(h) PINE POINT PARK REST STATION 100,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with Washington county to construct a rest station on the Gateway segment of the Willard Munger state trail in compliance with the Americans with Disabilities Act. This appropriation must be matched by at least $30,000 of nonstate money.

(i) INTERACTIVE MULTIMEDIA COMPUTER INFORMATION

SYSTEM 45,000

This appropriation is from the future resources fund to the commissioner of trade and economic development, office of tourism, for an agreement with Explore Lake County, Inc. to develop a pilot multimedia interactive computer information system at the R. J. Houle visitor information center.

(j) UPPER SIOUX AGENCY STATE PARK 200,000

This appropriation to the commissioner of natural resources is from the future resources fund for bathroom and shower facilities at Upper Sioux Agency State Park.

(k) GRAIN BELT MISSISSIPPI RIVERFRONT DEVELOPMENT 500,000

This appropriation is from the future resources fund to the commissioner of natural resources for a contract with the metropolitan council for a subgrant to the Minneapolis park and recreation board, which shall cooperate with the Minneapolis community development agency to create riverfront recreational park and marina facilities through acquisition and development of Mississippi riverfront property. This appropriation is contingent on this facility being designated part of the metropolitan regional park and open space system. This appropriation is also contingent on the Guthrie theater's occupancy of the Grain Belt Brewery.

(l) WILDCAT REGIONAL PARK 40,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with Houston county to construct an off-channel boat ramp on the Mississippi River, and wingwalls to protect the ramp and existing swimming beach.

Subd. 5. Management Approaches

(a) LOCAL RIVER PLANNING - CONTINUATION 140,000

This appropriation is from the future resources fund to the commissioner of natural resources for the third biennium of a three-biennium project to assist counties statewide in developing

comprehensive plans for the management and protection of rivers through grants for up to two-thirds of the cost that address locally identified issues while maintaining consistency with state floodplain and shoreland laws and local water plans. For the purpose of this paragraph, the nonstate portion includes contributions either cash or in-kind. The appropriation in Laws 1993, chapter 172, section 14, subdivision 11, paragraph (b), is available until June 30, 1997.

(b) CANNON RIVER WATERSHED STRATEGIC PLAN:

INTEGRATED MANAGEMENT 325,000

$245,000 of this appropriation is from the trust fund and $80,000 is from the future resources fund to the board of water and soil resources for an agreement with the Cannon River Watershed Partnership to implement activities in the Cannon River watershed through matching grants and technical assistance. This appropriation must be matched by at least $81,000 of nonstate money.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(c) TRI-COUNTY LEECH LAKE WATERSHED PROJECT 300,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with Cass county in cooperation with the Tri-County Leech Lake Watershed project for integrated resource management in the watershed through baseline data, public information and education, and pilot projects.

(d) BLUFFLANDS LANDSCAPE 630,000

$450,000 of this appropriation is from the trust fund and $180,000 is from the future resources fund to the commissioner of natural resources to assist communities in developing a management framework for the scenic and biological resources of the Mississippi valley blufflands landscape and to foster integrated decisions and citizen commitment to long-term resource protection. $304,000 is for a cooperative agreement with Architectural Environments; at least $40,000 of this amount must be used for demonstration and implementation activities. $236,000 is for a cooperative agreement with Historic Bluff Country. $90,000 is for expenses within the department of natural resources. This appropriation must be matched by at least $50,000 of nonstate money.

(e) GLACIAL LAKE AGASSIZ BEACH RIDGES: MINING AND

PROTECTION 85,000

This appropriation is from the future resources fund to the commissioner of natural resources to coordinate a long-term plan for the beach ridges in Clay county that balances protection of native prairies with a sustainable aggregate industry.

(f) ATMOSPHERIC MERCURY EMISSIONS, DEPOSITION, AND

ENVIRONMENTAL COST EVALUATION 575,000

This appropriation is from the future resources fund to the commissioner of the pollution control agency for a mercury emission inventory and quantification of mercury atmospheric deposition. $50,000 is for an evaluation of the external costs of mercury emissions from Minnesota sources.

(g) MERCURY DEPOSITION AND LAKE QUALITY TRENDS 250,000

$120,000 of this appropriation is from the future resources fund and $130,000 is from the Great Lakes protection account to the commissioner of the pollution control agency for an agreement with the University of Minnesota-Duluth to synthesize and interpret a five-year (1990-1994) mercury deposition database and evaluate water quality and fish contamination trends for 80 high-value lakes and compare it with historic data. This is to be done in cooperation with the pollution control agency. Data compatibility requirements in subdivision 14 apply to this appropriation.

(h) FEEDLOT AND MANURE MANAGEMENT PRACTICES

ASSISTANCE 200,000

This appropriation is from the future resources fund to the commissioner of agriculture to accelerate adoption of and changes in feedlot and manure management practices through research, economic analysis, and enhanced program design and delivery. $100,000 of this appropriation is for an agreement with the University of Minnesota for evaluation of manure effluent treatments.

(i) WATER QUALITY IMPACTS OF FEEDLOT POLLUTION

CONTROL SYSTEMS 300,000

This appropriation is from the future resources fund to the commissioner of the pollution control agency to evaluate earthen manure storage basins and vegetated filter strips for effects on ground and surface water quality by monitoring seepage and runoff. This appropriation must be matched by at least $267,000 of nonstate contributions, either cash or in-kind.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(j) SHORELAND SEPTIC INVENTORY AND EDUCATION 145,000

This appropriation is from the future resources fund to the board of water and soil resources in cooperation with the pollution control agency for an agreement with Hubbard county to inventory the Mantrap watershed for failing septic systems and education and enforcement efforts to implement upgrading of the systems. In the work program for this project required under Minnesota Statutes, section 116P.05, subdivision 2, paragraph (c), Hubbard county shall include documentation that the county is actively pursuing adoption of a countywide ordinance to regulate individual sewage treatment systems.

(k) ALTERNATIVE INDIVIDUAL SEWAGE TREATMENT

SYSTEMS DEVELOPMENT AND DEMONSTRATION 425,000

This appropriation is from the future resources fund to the commissioner of the pollution control agency to develop and demonstrate reliable, low cost alternative designs for septic systems in areas with seasonally high water tables, and designs for removal of nitrogen by septic systems.

(l) PATHWAYS TO SUSTAINABLE DEVELOPMENT 200,000

This appropriation is from the trust fund to the director of the office of strategic and long-range planning for the environmental quality board to evaluate government barriers to sustainable development in agriculture, energy, manufacturing, and settlement and to recommend strategies to address priority barriers to sustainable development.

(m) UPPER MISSISSIPPI RIVER PROTECTION PROJECT 200,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with the Mississippi headwaters board in cooperation with the metropolitan council to protect the Mississippi river from water quality impairment. This appropriation must be matched by at least $100,000 of nonstate contributions, either cash or in-kind.

(n) FOREST MANAGEMENT TO MAINTAIN STRUCTURAL AND

SPECIES DIVERSITY 160,000

This appropriation is from the trust fund to the commissioner of natural resources to document forest management practices in a pilot area, assess the long-term effects of current and alternative timber harvest practices on structural aspects of biological diversity (especially old-growth forest characteristics), and prepare forest management guidelines to maintain these features in commercial forests.

(o) ACCELERATED NATIVE GRASS AND FORBS ON ROAD

RIGHTS-OF-WAY 150,000

This appropriation is from the trust fund to the commissioner of natural resources in cooperation with the interagency roadside committee to accelerate native plant establishment and management in roadsides using integrated resource management techniques including educational materials about benefits of low maintenance and biologically diverse roadsides statewide.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(p) ACCELERATED LANDSCAPE MANAGEMENT ACTIVITIES IN

WHITEWATER WATERSHED 60,000

This appropriation is from the future resources fund to the commissioner of natural resources to expand activities in the

Whitewater watershed through shared funding and staffing to assist and coordinate with the Whitewater watershed project on landscape management activities such as sustainable land use, watershed restoration, and improved water quality.

(q) SUSTAINABLE GRASSLAND CONSERVATION AND

UTILIZATION 125,000

This appropriation is from the future resources fund to the commissioner of natural resources to develop integrated grassland projects in northwest Minnesota and to evaluate different management strategies.

(r) DEVELOPING, EVALUATING, AND PROMOTING

SUSTAINABLE FARMING SYSTEMS 225,000

This appropriation is from the future resources fund to the commissioner of agriculture for an agreement with the Whitewater joint powers board to develop and evaluate farming systems for impacts on ecosystems, profitability, and quality of life through on-farm research, experiment station research, watershed demonstration farms, and education. This appropriation must be matched by at least $50,000 of nonstate money.

(s) COOPERATIVES TO PROMOTE SUSTAINABLE

AGRICULTURAL PRACTICES AND RESEARCH 100,000

This appropriation is from the future resources fund to the commissioner of agriculture for an agreement with the sustainable farming association of Minnesota to promote sustainable farming practices by strengthening farmer-based demonstration and education networks of the sustainable farming association and by forming a pilot cooperative of on-farm and southwest experiment station research. This appropriation must be matched by at least $15,000 of nonstate money.

(t) RECYCLED BIOSOLIDS PRODUCT USED TO RECLAIM

DISTURBED AREAS 200,000

This appropriation is from the oil overcharge money to the commissioner of administration for payment to the metropolitan council in cooperation with N-Viro, Minnesota to increase the market for biosolids by demonstrating the use of N-Viro soil for reclamation through a program of research and field and public demonstrations.

Subd. 6. Environmental Education

(a) LEOPOLD EDUCATION PROJECT CURRICULUM 100,000

This appropriation is from the trust fund to the office of environmental assistance for an agreement with Pheasants Forever, Inc. to provide teacher training in the use of the Leopold education project conservation ethics curriculum. This appropriation must be matched by at least $50,000 of nonstate money.

(b) ENVIRONMENTAL EDUCATION TEACHER TRAINING 500,000

This appropriation is from the trust fund to the office of environmental assistance in cooperation with the environmental education advisory board to develop and deliver statewide environmental education training for preservice and in-service teachers.

(c) SHARING ENVIRONMENTAL EDUCATION KNOWLEDGE 200,000

This appropriation is from the trust fund to the office of environmental assistance in cooperation with the environmental education advisory board to plan and develop an information data exchange and service center that coordinates the collection, evaluation, dissemination, and promotion of environmental education resources and programs.

(d) ENVIRONMENTAL VIDEO RESOURCE LIBRARY AND

PUBLIC TELEVISION SERIES 250,000

This appropriation is from the future resources fund to the office of environmental assistance in cooperation with the environmental education advisory board for an agreement with Twin Cities Public Television to create a resource information center for environmental video and to produce and broadcast an environmental television series about Minnesota environmental achievements.

(e) DEVELOPMENT, ASSIMILATION, AND DISTRIBUTION OF

WOLF EDUCATIONAL MATERIALS 100,000

This appropriation is from the future resources fund to the office of environmental assistance for an agreement with the International Wolf Center to collect and develop written, electronic, and photographic audio-visual material about wolf ecology, recovery, and management for electronic distribution. This appropriation must be matched by at least $30,000 of nonstate money.

(f) ENVIRONMENTAL ACTION GRANTS FOR MINNESOTA

SCHOOLS 200,000

This appropriation is from the trust fund to the department of natural resources for an agreement with St. Olaf college for the school nature area project matching grants to schools for school area nature sites. This appropriation must be matched by at least $50,000 of nonstate money.

(g) ELECTRONIC ENVIRONMENTAL EDUCATION NETWORK 250,000

This appropriation is from the future resources fund to the office of environmental assistance for an agreement with the University of Minnesota raptor center to develop a program for student participation in satellite-tracking research, data collection and dissemination using INTERNET, workshops, material development, and off-site classroom experience. This appropriation must be matched by at least $38,000 of nonstate money.

(h) THREE RIVERS INITIATIVE 750,000

This appropriation is from the future resources fund to the Science Museum of Minnesota to develop exhibits and programs focusing on the Mississippi, Minnesota, and St. Croix rivers.

(i) INTERACTIVE COMPUTER EXHIBIT ON MINNESOTA

RENEWABLE ENERGY SOURCES 150,000

This appropriation is from oil overcharge money to the commissioner of administration for an agreement with the Izaak Walton League of America, midwest office in cooperation with the Science Museum of Minnesota to develop and disseminate an interactive multimedia computer exhibit on renewable energy resources.

(j) TREES FOR TEENS: TRAINING, RESOURCES, EDUCATION,

EMPLOYMENT, SERVICE 75,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with Twin Cities Tree Trust to develop a pilot program and curriculum materials for educating high school students about urban forestry and assisting them in carrying out peer education and community service projects. This project must be done in cooperation with the Minnesota releaf program.

(k) REDWOOD FALLS SCHOOL DISTRICT NO. 637

ENVIRONMENTAL EDUCATION PROJECT 250,000

This appropriation is from the future resources fund to the office of environmental assistance for an agreement with the Redwood Falls school district to accelerate development of an outdoor environmental learning center and to integrate environmental education into the K-12 curriculum. Project development will include prairie access improvements including a trail system, establishment of a wetland, and an arboretum.

(l) TOGETHER OUTDOORS MINNESOTA 575,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with Wilderness Inquiry for diversity specialist training, training of outdoor service professionals to provide inclusive programming, and diversity networking, including the development of a directory of recreation facility accessibility. This appropriation must be matched by at least $80,000 of nonstate money.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(m) ENHANCED NATURAL RESOURCE OPPORTUNITIES FOR

ASIAN-PACIFIC MINNESOTANS 150,000

This appropriation is from the future resources fund to the commissioner of natural resources for the second biennium of

funding for community outreach, cultural collaboration, training, and education to increase Asians' participation and understanding of natural resources management. Supplemental funding must be requested and the results reported to the legislative commission on Minnesota resources.

(n) DELIVER ECOLOGICAL INFORMATION AND TECHNICAL

ASSISTANCE TO LOCAL GOVERNMENTS 100,000

This appropriation is from the future resources fund to the commissioner of natural resources to provide interpretation of ecological data collected by the county biological survey.

(o) NONPOINT SOURCE POLLUTION PUBLIC EDUCATION

DEMONSTRATION PROJECT 100,000

This appropriation is from the future resources fund to the commissioner of the pollution control agency for an agreement with the city of St. Paul for a joint project with the city of Minneapolis to conduct surveys and develop and implement nonpoint source pollution public education. This appropriation must be matched by at least $12,000 of nonstate money.

(p) WHITETAIL DEER RESOURCE CENTER 50,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with the Minnesota Deer Hunters Association to develop a facility and operations plan. This appropriation must be matched by $50,000 of nonstate money.

(q) GORDON GULLION CHAIR IN FOREST WILDLIFE

RESEARCH AND EDUCATION 350,000

This appropriation is from the future resources fund to the University of Minnesota to establish an endowed chair in forest wildlife research and education to develop forest and wildlife sustainable management practices. This appropriation must be matched by at least $350,000 of nonstate money. This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(r) NEY ENVIRONMENTAL CENTER 100,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with Le Sueur county to develop an environmental learning center in the Minnesota River Valley near Henderson. The appropriation shall be used to convert existing buildings to classrooms, add restroom facilities and improve access, and remove unneeded structures.

(s) LAWNDALE ENVIRONMENTAL CENTER 400,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with Lawndale Environmental Foundation to develop an environmental learning

center near Herman with emphasis on prairie, wetlands, and agricultural themes. This appropriation must be matched by at least $100,000 of nonstate money.

Subd. 7. Natural Resource Data

(a) ENVIRONMENTAL INDICATORS INITIATIVE 350,000

This appropriation is from the trust fund to the commissioner of natural resources to create the framework for an integrated, statewide network for selecting and monitoring environmental indicators to assess and communicate Minnesota's environmental health status and trends. The work program must be submitted to the environmental quality board for review before approval by the legislative commission on Minnesota resources. Data compatibility requirements in subdivision 14 apply to this appropriation.

(b) ASSESSING WETLAND QUALITY WITH ECOLOGICAL

INDICATORS 275,000

This appropriation is from the trust fund to the board of water and soil resources for an agreement with the University of Minnesota to develop plant and animal indicators of wetland quality, establish a system of reference natural wetlands for comparative monitoring, and develop guidelines for wetland assessment and monitoring to guide replacement wetland monitoring. Data compatibility requirements in subdivision 14 apply to this appropriation.

(c) COUNTY BIOLOGICAL SURVEY - CONTINUATION 900,000

This appropriation is from the trust fund to the commissioner of natural resources for the fifth biennium of a proposed 12-biennium project to accelerate the county biological survey for the systematic collection, interpretation, and distribution of data on the distribution and ecology of rare plants, animals, and natural communities. Data compatibility requirements in subdivision 14 apply to this appropriation.

(d) FOREST BIRD DIVERSITY INITIATIVE - CONTINUATION 400,000

This appropriation is from the trust fund to the commissioner of natural resources for the third biennium of a proposed six-biennium project for a comprehensive monitoring and research program that develops management tools to maintain diversity of forest birds and establishes benchmarks for using birds as ecological indicators of forest health. Data compatibility requirements in subdivision 14 apply to this appropriation. This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(e) BASE MAPS FOR 1990s - FINAL PHASE CONTINUATION 600,000

This appropriation is from the trust fund to the director of the office of strategic and long-range planning to provide the third biennium of a three-biennium state match for a federal program to complete

statewide coverage of orthophoto maps and complete the update mapping for the state's most obsolete topographic maps. Data compatibility requirements in subdivision 14 apply to this appropriation.

(f) COMPLETION OF STATEWIDE LAND USE UPDATE -

CONTINUATION 380,000

This appropriation is from the future resources fund to the director of the office of strategic and long-range planning, in cooperation with the board of water and soil resources, for an agreement with the association of Minnesota counties for the third and final biennium to complete the update of the land use map for Minnesota, complete conversion of the data to computer format, and make the data available to users. Data compatibility requirements in subdivision 14 apply to this appropriation.

(g) FILLMORE COUNTY SOIL SURVEY UPDATE 65,000

This appropriation is from the future resources fund to the board of water and soil resources to provide half of the nonfederal share to begin a three-biennium project to update the Fillmore county soil survey into a digitized and manuscript format. Data compatibility requirements in subdivision 14 apply to this appropriation.

(h) MINNESOTA RIVER TILE SYSTEM RESEARCH -

CONTINUATION 150,000

This appropriation is from the future resources fund to the commissioner of the pollution control agency for the second biennium of a two-biennium project to continue research on the impact of and best management practices for surface tile inlets.

(i) SUGARLOAF SITE ASSESSMENT AND INTERPRETATION 70,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with the Sugarloaf Interpretive Center Association for inventories, native habitat restoration, and the interpretation of the natural and cultural characteristics of Sugarloaf Cove. The data collection must be coordinated with the department of natural resources natural heritage program. Reasonable public use and access must be provided. This appropriation must be matched by $30,000 of nonstate money.

(j) MICROBIAL DETERIORATION OF ASPHALT MATERIALS

AND ITS PREVENTION 60,000

This appropriation is from the oil overcharge money to the commissioner of administration for a transfer to the commissioner of transportation to survey microbial deterioration of asphalt-bituminous materials in cooperation with Bemidji state university or other research institutions.

(k) ANALYSIS OF LANDS ENROLLED IN CONSERVATION

RESERVE PROGRAM 200,000

This appropriation is from the Minnesota future resources fund to the commissioner of agriculture for continuing the analysis of lands enrolled in the conservation reserve program relative to nonpoint source pollution, developing land management options for lands emerging from the program, and developing the capability to target future program funds for the greatest environmental benefit.

Subd. 8. Urban Natural Resources

(a) URBAN WILDLIFE HABITAT PROGRAM 150,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with the St. Paul neighborhood energy consortium to provide workshops and native planting materials to households for landscaping for wildlife, demonstrating plant diversity, and alternative lawn care practices in the urban environment. This project must be done in cooperation with the department of natural resources nongame wildlife and releaf programs. This appropriation must be matched by at least $35,000 of nonstate money.

(b) GARDENING PROGRAM - STATEWIDE 300,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with the sustainable resources center for a joint project with the Minnesota horticultural society - Minnesota Green and Duluth Plant-A-Lot community garden program to provide technical assistance on community plantings, food gardens, trees, native plants, and environmentally sound horticultural and land use practices. This appropriation must be matched by at least $3,000 in nonstate money.

(c) RELEAF: PLANTING FOR ENERGY CONSERVATION IN

COMMUNITIES 400,000

This appropriation is from the oil overcharge money to the commissioner of administration for an agreement with the department of natural resources for the second biennium of a project to achieve the strategic planting of predominately native shade trees and community windbreaks for statewide energy conservation and carbon dioxide abatement through acceleration of the Minnesota releaf program by providing grants administered on a reimbursement basis. The program shall be administered to maximize local contributions on a cash and service basis.

(d) MAPLEWOOD INNOVATIVE STORM WATER

MANAGEMENT PROJECT 100,000

This appropriation is from the future resources fund to the commissioner of the pollution control agency for an agreement with the city of Maplewood to design, construct, and monitor a demonstration stormwater management system. This appropriation must be matched by at least $165,000 of nonstate money.

(e) PHALEN WETLAND RESTORATION 115,000

This appropriation is from the trust fund to the board of water and soil resources for an agreement with the city of St. Paul to restore a wetland at the south end of Lake Phalen. This appropriation must be matched by at least $50,000 in nonstate money.

(f) WETLAND RESTORATION AND ENHANCEMENT TO

CREATE COMMUNITY AMENITY AND FORM 200,000

This appropriation is from the trust fund to the director of the office of strategic and long-range planning for an agreement with the University of Minnesota to provide technical design assistance to help five communities create restored and enhanced wetlands that reinforce community form and emphasize habitat creation, water quality, and recreational amenities.

(g) METROPOLITAN AREA GROUNDWATER MODEL TO

PREDICT CONTAMINANT MOVEMENT 250,000

This appropriation is from the trust fund to the commissioner of the pollution control agency to develop and apply a tool to improve prediction of contaminant movement in groundwater at contamination sites in the metropolitan area using a flexible regional groundwater flow model. Data compatibility requirements in subdivision 14 apply to this appropriation.

(h) ARBORETUM BOUNDARY LAND ACQUISITION 680,000

This appropriation is from the future resources fund to the University of Minnesota for a grant to the University of Minnesota landscape arboretum foundation to expand the boundary of the Minnesota Landscape Arboretum and, if money is available after the intended acquisition, to develop a wetland restoration demonstration. This appropriation must be matched by at least $400,000 nonstate money.

Subd. 9. Fisheries

(a) STATEWIDE EXPERIMENTAL FISHING REGULATIONS 650,000

This appropriation is from the future resources fund to the commissioner of natural resources for baseline data collection to evaluate experimental fishing regulations.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(b) RIM - ACCELERATE FISHERIES ACQUISITION FOR ANGLER

ACCESS 300,000

This appropriation is from the trust fund to the commissioner of natural resources to provide increased angler access by accelerating easement and fee title acquisition of land adjacent to streams and lakes, including access for non-boat owners and urban users.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(c) RIM - ACCELERATE STATEWIDE FISHERIES HABITAT DEVELOPMENT, HATCHERY REHABILITATION, AND STREAM

FLOW PROTECTION 1,000,000

$555,000 of this appropriation is from the trust fund and $445,000 is from the future resources fund to the commissioner of natural resources to implement projects for the acquisition, restoration, improvement, and development of fisheries habitat and hatchery rehabilitation. Up to $215,000 of the trust fund appropriation is available to continue the stream flow protection program for the second biennium of a proposed eight-biennium effort to establish a watershed level stream habitat database and develop the tools to set protected flows for ecosystem diversity. Data compatibility requirements in subdivision 14 apply to this appropriation.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

Subd. 10. Wildlife

(a) RIM - ACCELERATE WILDLIFE LAND ACQUISITION 650,000

$510,000 of this appropriation is from the trust fund and $140,000 is from the future resources fund to the commissioner of natural resources to accelerate acquisition activities in the reinvest in Minnesota program by acquiring land identified in North American waterfowl management plan project areas. This appropriation must first be used for projects qualifying for a match, which may include costs for acquisition, enhancements, and wetland restoration.

(b) RIM - ACCELERATE CRITICAL HABITAT MATCH

PROGRAM 250,000

This appropriation is from the trust fund to the commissioner of natural resources to accelerate the reinvest in Minnesota program to acquire and improve critical habitat for game and nongame fish, wildlife, and native plants under Minnesota Statutes, section 84.943. Projects must occur in both urban and rural areas.

(c) RIM - ACCELERATE WILDLIFE HABITAT STEWARDSHIP 450,000

This appropriation is from the future resources fund to the commissioner of natural resources for improvement of wildlife habitat and natural plant communities statewide, both urban and rural public lands, to protect and enhance wildlife, native plant species, and ecological diversity.

(d) BIOMASS PRODUCTION, MANAGEMENT AND

RESTORATION OF BRUSHLAND HABITATS 200,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with the University of Minnesota-Duluth in cooperation with the natural resources research institute and the Minnesota Sharptailed Grouse Society to assess brushland harvesting, brushland as wildlife habitat, and habitat management strategies.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(e) TURN IN POACHERS YOUTH ACTIVITY BOOK 50,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with TIP, Inc. to print and disseminate an activity book to inform and educate children about poaching and its impact on natural resources, and to promote ethical hunting and fishing. This appropriation must be matched by at least $12,500 of nonstate money.

Subd. 11. Energy

(a) INTER-CITY ELECTRIC VEHICLE TRANSPORTATION

DEMONSTRATION 150,000

This appropriation is from the oil overcharge money to the commissioner of administration for an agreement with Minnesota Power and Light Company to develop and evaluate an electric vehicle infrastructure with charging stations for use between Duluth and St. Paul, including installation of a charging station at the state of Minnesota central motor pool location. This appropriation must be matched by at least $30,000 of nonstate money.

(b) SUSTAINABLE DEVELOPMENT OF WIND ENERGY ON

FAMILY FARMS 200,000

This appropriation is from the oil overcharge money to the commissioner of administration for an agreement with the sustainable resources center to provide technical assistance and technology transfer for the development of wind energy harvesting.

(c) ONE-MEGAWATT HYBRID ELECTRICAL GENERATION

SIMULATION PROJECT 50,000

This appropriation is from the oil overcharge money to the commissioner of administration for an agreement with Dan Mar & Associates in cooperation with the agriculture utilization research institute for a simulation project using biofuel electrical generation to firm up wind power to provide electrical energy on demand.

(d) AVIAN POPULATION ANALYSIS FOR WIND POWER

GENERATION REGIONS 75,000

This appropriation is from the oil overcharge money to the commissioner of administration for an agreement with American Wind Energy Association to identify and assess significant avian activity areas within identified wind farm corridors in Minnesota. This appropriation must be matched by at least $75,000 of nonstate money.

This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(e) ENERGY IMPROVEMENTS IN PUBLIC ICE ARENAS 470,000

This appropriation is from the oil overcharge money to the commissioner of administration for an agreement with the Center for Energy and Environment to assess, install, and evaluate energy and indoor air quality improvements in at least 25 publicly owned ice arenas located throughout Minnesota. Projects receiving funding from this appropriation must be in compliance with the indoor ice facilities prime ice time and gender preference requirements in Minnesota Statutes, section 15.98. This appropriation is for up to 50 percent of the cost of retrofit activities.

Subd. 12. Historic

(a) RESTORE HISTORIC MISSISSIPPI RIVER MILL SITE 120,000

This appropriation is from the future resources fund to the Minnesota historical society for a subgrant to the Minneapolis park and recreation board to implement an agreement with Crown Hydro Company to restore gatehouse foundations, construct catwalks and lighting through the tailrace tunnels, and restore and display the historic turbine of the historic Crown roller mill. This activity must be done in cooperation with the St. Anthony falls heritage board. Reasonable public use and access must be provided. This appropriation must be matched by at least $120,000 of nonstate money. This appropriation is contingent on the receipt of all applicable hydropower and other public agency approvals.

(b) POND-DAKOTA MISSION RESTORATION 270,000

This appropriation is from the future resources fund to the Minnesota historical society for an agreement with the city of Bloomington to continue the restoration of the Pond house and Dakota Indian mission site. This appropriation must be matched by $80,000 of nonstate money.

(c) JOSEPH R. BROWN INTERPRETIVE CENTER RESTORATION

PROJECT 75,000

This appropriation is from the future resources fund to the Minnesota historical society for an agreement with the Sibley county

historical society for building restoration and renovation activities on the 1879 Sibley county courthouse, to be used as the Joseph R. Brown interpretive center. This appropriation must be matched by at least $5,000 of nonstate money.

(d) HERITAGE TRAILS 200,000

This appropriation is from the future resources fund to the Minnesota historical society to plan and construct trails for at least three historic sites and for trail interpretive material and equipment.

(e) RESTORATION OF HISTORIC ELBA FIRE TOWER 73,000

This appropriation is from the future resources fund to the commissioner of natural resources for an agreement with the Elba booster club, in consultation with the Minnesota historical society, for restoration and the development of interpretive materials and to provide access to the Elba fire tower for safe recreational and educational use. This project must be available for reasonable public use and access.

(f) MANAGING MINNESOTA SHIPWRECKS 100,000

This appropriation is from the future resources fund to the Minnesota historical society to survey historic north shore shipping facilities and shipwrecks, survey shipwrecks in Minnesota inland lakes and rivers, organize a conference on underwater cultural resources, and revise the management plan. Supplemental funding must be requested and the results reported to the legislative commission on Minnesota resources.

(g) LAC QUI PARLE MISSION HISTORICAL TRAIL 181,000

This appropriation is from the future resources fund to the Minnesota historical society to construct a mile-long trail for hiking and biking, including an overlook at the site of the historic Lac Qui Parle Mission. The trail must be accessible by persons with disabilities.

Subd. 13. Biological Control

(a) BIOLOGICAL CONTROL OF EURASIAN WATER MILFOIL

AND PURPLE LOOSESTRIFE - CONTINUATION 300,000

$250,000 of this appropriation is from the trust fund and $50,000 is from the future resources fund to the commissioner of natural resources for the second biennium of a five-biennium project to develop biological controls for Eurasian water milfoil and purple loosestrife. This project must be completed and final products delivered by December 31, 1997, and the appropriation is available until that date.

(b) BIOLOGICAL CONTROL OF OVERLAND SPREAD OF OAK

WILT 90,000

This appropriation is from the future resources fund to the commissioner of agriculture in cooperation with the University of Minnesota to improve application methods for enhancing natural biological control of the overland spread of oak wilt.

(c) BENEFICIAL FUNGAL INOCULUM FOR PRAIRIE AND

WETLAND RECLAMATION 100,000

This appropriation is from the trust fund to the commissioner of transportation for an agreement with the University of Minnesota for the characterization and development of inoculum production methods for soil fungi associated with the roots of native and naturalized Minnesota plants in prairies and wetlands to assist in restoration projects.

Subd. 14. Data Compatibility Requirements

During the biennium ending June 30, 1997, the data collected by the projects funded under this section that have common value for natural resource planning and management must conform to information architecture as defined in guidelines and standards adopted by the information policy office. Data review committees may be established to develop or comment on plans for data integration and distribution and shall submit semiannual status reports to the legislative commission on Minnesota resources on their findings. In addition, the data must be provided to and integrated with the Minnesota land management information center's geographic databases with the integration costs borne by the activity receiving funding under this section.

Subd. 15. Project Requirements

It is a condition of acceptance of the appropriations in this section that any agency or entity receiving the appropriation must comply with Minnesota Statutes, chapter 116P.

Subd 16. Match Requirements

Appropriations in this section that must be matched and for which the match has not been committed by January 1, 1996, must be canceled. Unless specifically authorized, in-kind contributions may not be counted as match.

Subd. 17. Payment Conditions and Capital Equipment Expenditures

All agreements, grants, or contracts referred to in this section must be administered on a reimbursement basis. Payment must be made upon receiving documentation that reimbursable amounts have been expended, except that reasonable amounts may be advanced to projects in order to accommodate cash flow needs. The advances must be approved as part of the work program. No expenditures for capital equipment are allowed unless expressly authorized in the project work program.

Subd. 18. Purchase of Recycled and Recyclable Materials

A political subdivision, public or private corporation, or other entity that receives an appropriation in this section must use the appropriation in compliance with Minnesota Statutes, sections 16B.121 to 16B.123, requiring the purchase of recycled, repairable, and durable materials, the purchase of uncoated paper stock, and the use of soy-based ink, the same as if it were a state agency.

Subd. 19. Carryforward

(a) Except as provided in paragraph (b), the availability of the appropriations for the following projects is extended to December 31, 1995; on that date the appropriations cancel and no further payment is authorized: Laws 1993, chapter 172, section 14, subdivisions 3, paragraphs (a), (f), and (i); 6, paragraph (b); 9; 10, paragraphs (a), (c), (g), (p), (q), and (r); and 12, paragraphs (a), (b), (c), (h), (j), and (l).

(b) The availability of the appropriations for the following projects is extended to December 31, 1996; on that date the appropriations cancel and no further payment is authorized: (1) Laws 1993, chapter 172, section 14, subdivisions 3, paragraph (c); 4, paragraph (e); 10, paragraphs (d), (f), and (o); 12, paragraphs (f) and (g); in subdivision 10, paragraph (b), the Bloomington East and West Bush Lake picnic areas; and, in subdivision 10, paragraph (c), Cedar Lake trail development and the Dakota North regional trail in South St. Paul; and (2) Laws 1994, chapter 632, article 2, section 6, local recreation grants and Silver Bay harbor.

Subd. 20. Energy Conservation

A recipient to whom an appropriation is made in this section for a capital improvement project shall ensure that the project complies with the applicable energy conservation standards contained in law, including Minnesota Statutes, sections 216C.19 to 216C.21, and rules adopted thereunder. The recipient may use the energy planning and intervention and energy technologies units of the department of public service to obtain information and technical assistance on energy conservation and alternative energy development relating to the planning and construction of the capital improvement project.

Sec. 20. ADDITIONAL APPROPRIATIONS

The following amounts are appropriated from the Minnesota environment and natural resources trust fund referred to in Minnesota Statutes, section 116P.02, subdivision 6. The appropriations are available until December 31, 1995, and are subject to the provisions of Laws 1993, chapter 172, section 14, subdivisions 14 to 18. If revenues are insufficient to meet these appropriations, the commissioner of finance shall reduce the amounts proportionately.

(a) STATE PARK AND RECREATION AREA ACQUISITION 1,120,000

This appropriation is to the commissioner of natural resources for acquisition of land within the statutory boundaries of state parks and recreation areas.

(b) METROPOLITAN REGIONAL PARKS AND TRAILS

ACQUISITION 1,120,000

This appropriation is to the commissioner of natural resources for payment to the metropolitan council for subgrants to acquire parks and trails consistent with the metropolitan council regional recreation open space capital improvement plan.

This appropriation may be used for the purchase of homes only if the purchases are expressly included in the work program approved by the legislative commission on Minnesota resources.

(c) The projects in this section must be completed and final products delivered by December 31, 1995, and the appropriations are available until that date.

Sec. 21. MINNESOTA FUTURE RESOURCES FUND TRANSFER

As cash flow in the Minnesota future resources fund permits, but no later than June 30, 1997, the commissioner of finance, in consultation with the director of the legislative commission on Minnesota resources, shall transfer $1,460,000 from the unencumbered balance in the fund to the general fund.

Sec. 22. MINNESOTA CONSERVATION FUND TRANSFER

The commissioner of finance shall transfer in the beginning of the biennium, $2,500,000 from the Minnesota conservation fund created by Minnesota Statutes, section 40A.151, to the general fund.

Sec. 23. HARMFUL SUBSTANCE COMPENSATION ACCOUNT TRANSFER

The commissioner of finance shall transfer the remaining balance of the harmful substance compensation account, established in Minnesota Statutes, section 115B.26, subdivision 1, to the general fund.

Sec. 24. Minnesota Statutes 1994, section 15.50, is amended by adding a subdivision to read:

Subd. 10. [NATIVE VEGETATION PLANTING.] As part of its comprehensive plan and adopted zoning rules, the board shall give priority to the planting of native trees and shrubs, or native grasses wherever appropriate, within the capitol area.

Sec. 25. Minnesota Statutes 1994, section 15.91, subdivision 1, is amended to read:

Subdivision 1. [DEFINITION.] For purposes of sections 15.90 to 15.92, "agency" means a department or agency, as designated in section 15.01 and, the pollution control agency, and the agricultural utilization research institute established in section 116O.09.

Sec. 26. Minnesota Statutes 1994, section 16A.125, is amended to read:

16A.125 [STATE FOREST TRUST LANDS.]

Subd. 5. [SUSPENSE ACCOUNT FOREST TRUST LANDS.] The term "state forest trust fund lands" as used in this subdivision, means public land in trust under the constitution set apart as "forest lands under the authority of the commissioner" of natural resources as defined by section 89.001, subdivision 13.

The commissioner of finance and the treasurer shall credit the revenue from the forest trust fund lands to the forest suspense account. The account must specify the trust funds interested in the lands and the respective receipts of the lands.

After a fiscal year, the commissioner of finance shall certify the total costs incurred for forestry during that year under appropriations for the protection, improvement, administration, and management of state forest trust fund lands and construction and improvement of forest roads to enhance the forest value of the lands. The certificate must specify the trust funds interested in the lands. The commissioner of natural resources shall supply the commissioner of finance with the information needed for the certificate.

After a fiscal year, the commissioner and the treasurer shall distribute the receipts credited to the suspense account during that fiscal year as follows:

(a) The amount of the certified costs incurred by the state for forest management during the fiscal year shall be transferred to the general fund.

(b) The balance of the receipts shall then be returned prorated to the trust funds in proportion to their respective interests in the lands which produced the receipts.

Subd. 5a. [APPROPRIATION FROM STATE FOREST DEVELOPMENT ACCOUNT.] Money accruing and credited to the state forest development account is appropriated to the division of forestry in the department of natural resources to apply state forest resource management policy and plans to forest trust fund lands. The appropriation is supervised and controlled by the commissioner of natural resources.

The appropriation shall be spent according to law and remains available until spent. The appropriation is not available for spending until any estimates required by law are approved by the commissioner of finance. An obligation to spend money may not be made unless there is an available balance not otherwise encumbered in the appropriation.

Subd. 6. [DEFINITION; ACCOUNTING AND DISTRIBUTION.] The term "state trust fund lands," as used in this section, means any state school lands or other public lands subject to trust provisions under the state constitution.

Beginning July 1, 1955, the commissioner of finance and the state treasurer shall keep a separate account of all receipts derived from the royalties on, or the sale or lease of, any minerals from such trust fund lands to be known as the state lands and minerals suspense account, specifying the trust funds interested in such lands and the receipts therefrom, respectively.

As soon as practicable after the close of each fiscal year after July 1, 1955, the commissioner of finance, upon the information supplied by the commissioner of natural resources, which the commissioner of natural resources is herewith directed to furnish, shall determine and certify to the commissioner of finance and the state treasurer the total costs incurred by the state during such year under appropriations heretofore made for the administration and management of such trust fund lands by the division of lands and forestry, or any other agency so administering and managing, specifying the trust funds interested in such lands, respectively.

As soon as practicable after the end of each fiscal year beginning with the year ending June 30, 1956, the commissioner of finance and the state treasurer shall distribute the receipts credited to the state lands and minerals suspense account during such fiscal year as follows:

All of the costs incurred by the state for the purposes aforesaid during such fiscal year and certified as hereinbefore provided, shall be transferred to the general fund as reimbursement for appropriations heretofore made for the purposes aforesaid. The balances of said receipts shall be transferred to the state trust funds concerned in accordance with their respective interests in the minerals from which the receipts were derived.

Subd. 6a. [UNIVERSITY LANDS.] (a) As used in this section, "university lands" means lands granted by the federal government for the support of the University of Minnesota, as described in Laws 1851, chapter 3, section 2.

(b) All revenue from minerals on university lands must be credited to the university lands and minerals suspense account. Money in the account must be transferred to the permanent university fund, except for amounts appropriated to cover reasonable costs incurred by the commissioner of natural resources to protect, improve, administer, manage, and otherwise enhance the mineral value of university lands.

Sec. 27. Minnesota Statutes 1994, section 16B.405, subdivision 2, is amended to read:

Subd. 2. [SOFTWARE SALE FUND.] (a) Except as provided in paragraph (b), proceeds of the sale or licensing of software products or services by the commissioner must be credited to the intertechnologies revolving fund. If a state agency other than the department of administration has contributed to the development of software sold or licensed under this section, the commissioner may reimburse the agency by discounting computer services provided to that agency.

(b) Proceeds of the sale or licensing of software products or services developed by the pollution control agency, or custom developed by a vendor for the agency, must be credited to the environmental fund.

Sec. 28. Minnesota Statutes 1994, section 17.117, subdivision 2, is amended to read:

Subd. 2. [AUTHORITY.] The commissioner shall establish, adopt rules for, and implement a program to work with make loans to local units of government, federal authorities, lending institutions, and other appropriate organizations to who will in turn provide loans to landowners and businesses for facilities, fixtures, equipment, or other sustainable practices that prevent or mitigate sources of nonpoint source water pollution. The commissioner shall establish pilot projects to develop procedures for implementing the program. The commissioner shall develop administrative guidelines to implement the pilot projects specifying criteria, standards, and procedures for making loans.

Sec. 29. Minnesota Statutes 1994, section 17.117, subdivision 4, is amended to read:

Subd. 4. [DEFINITIONS.] For the purposes of this section, the terms defined in this subdivision have the meanings given them.

(a) "Applicant" means a county or a local government unit designated by a county under subdivision 8, paragraph (a).

(b) "Authority" means the Minnesota public facilities authority as established in section 446A.03.

(c) "Best management practices" has the meaning given in sections 103F.711, subdivision 3, and 103H.151, subdivision 2.

(d) "Chair" means the chair of the board of water and soil resources or the designee of the chair.

(e) "Borrower" means an individual farmer, an agriculture supply business, or rural landowner applying for a low-interest loan.

(f) "Commissioner" means the commissioner of agriculture or the designee of the commissioner.

(g) "Comprehensive water management plan" means a state approved and locally adopted plan authorized under section 103B.231, 103B.255, 103B.311, 103C.331, 103D.401, or 103D.405.

(h) "County Local allocation request" means a loan allocation request from an applicant to implement agriculturally related best management practices defined in paragraph (c).

(i) "Lender agreement" means an a loan agreement entered into between the commissioner and, a local lender, and the applicant, if different from the local lender. The agreement will contain terms and conditions of the loan that will include but need not be limited to general loan provisions, loan management requirements, application of payments, loan term limits, allowable expenses, and fee limitations.

(j) "Local government unit" means a county, soil and water conservation district, or an organization formed for the joint exercise of powers under section 471.59.

(k) "Local lender" means a local government unit as defined in paragraph (j), a state or federally chartered bank, a savings and loan association, a state or federal credit union, a nonprofit economic development organization approved by the commissioner, or Farm Credit Services.

(l) "Nonpoint source" has the meaning given in section 103F.711, subdivision 6.

Sec. 30. Minnesota Statutes 1994, section 17.117, subdivision 6, is amended to read:

Subd. 6. [APPLICATION.] (a) The commissioner must prescribe forms and establish an application process for applicants to apply for a county local allocation request. The application must include but need not be limited to (1) the geographic area served; (2) the type and estimated cost of activities or projects for which they are seeking a loan allocation; (3) a ranking of proposed activities or projects; and (4) the designation of the local lender and lending practices the applicant local lender intends to use to issue the loans to the borrowers, if a local lender other than the applicant is to be used.

(b) In an area of the state where a county allocation request has not been requested or has been rejected, application forms must be available for a borrower to apply directly to the commissioner for a loan under this program.

(c) If a county local allocation request is rejected, the applicant must be notified in writing as to the reasons for the rejection and given 30 days to submit a revised application. The revised application shall be reviewed according to the same procedure used to review the initial application.

Sec. 31. Minnesota Statutes 1994, section 17.117, subdivision 7, is amended to read:

Subd. 7. [PAYMENTS.] (a) Payments made from the water pollution control revolving fund must be made in accordance with applicable state and federal laws and rules governing the payments.

(b) Payments from the commissioner to the local lender must be disbursed on a cost-incurred basis. Local lenders shall submit payment requests at least quarterly but not more than monthly. Payment requests must be reviewed and approved by the commissioner. The payment request form must itemize all costs by major elements and show eligible and ineligible costs.

(c) The commissioner may initiate recision of an allocation granted in a lender agreement as provided in subdivision 11, paragraph (d), if the local lender fails to enter into loans with borrowers equaling the total allocation granted within one year from the date of the lender agreement or fails to have the total amount of allocated funds drawn down through payment requests within two years. An additional year to draw down the undisbursed portion of an allocation may be granted by the commissioner under extenuating circumstances.

Sec. 32. Minnesota Statutes 1994, section 17.117, subdivision 8, is amended to read:

Subd. 8. [APPLICANT; BORROWERS.] (a) A county may submit a county local allocation request as defined in subdivision 4, paragraph (h). A county or a group of counties may designate another local government unit as defined in subdivision 4, paragraph (j), to submit a county local allocation request.

(b) If a county does not submit a county local allocation request, and does not designate another local government unit, a soil and water conservation district may submit a county local allocation request. In all instances, there may be only one request from a county. The applicant must coordinate and submit requests on behalf of other units of government within the geographic jurisdiction of the applicant.

(c) Borrowers may apply directly to the commissioner if the commissioner does not receive or approve a county allocation request from the county, designated local government unit, or soil and water conservation district in which the proposed activities would be carried out.

Sec. 33. Minnesota Statutes 1994, section 17.117, subdivision 9, is amended to read:

Subd. 9. [REVIEW AND RANKING OF ALLOCATION REQUESTS.] (a) The commissioner shall chair the subcommittee established in section 103F.761, subdivision 2, paragraph (b), for purposes of reviewing and ranking county local allocation requests. The rankings must be in order of priority and shall provide financial assistance within the limits of the funds available. In carrying out the review and ranking, the subcommittee must consist of, at a minimum, the chair, representatives of the pollution control agency, United States Department of Agricultural Stabilization and Conservation Service, United States Department of Agriculture Soil Conservation Service, Association of Minnesota Counties, and other agencies or associations as the commissioner, the chair, and agency determine are appropriate. The review and ranking shall take into consideration other related state or federal programs.

(b) The subcommittee shall use the criteria listed below in carrying out the review and ranking:

(1) whether the proposed activities are identified in a comprehensive water management plan as priorities;

(2) whether the applicant intends to establish a revolving loan program under subdivision 10, paragraph (b);

(3) the potential that the proposed activities have for improving or protecting surface and groundwater quality;

(4) the extent that the proposed activities support areawide or multijurisdictional approaches to protecting water quality based on defined watershed;

(5) whether the activities are needed for compliance with existing water related laws or rules;

(6) whether the proposed activities demonstrate participation, coordination, and cooperation between local units of government and other public agencies;

(7) whether there is coordination with other public and private funding sources and programs; and

(8) whether there are off-site public benefits such as preventing downstream degradation and siltation; and

(9) the proposed interest rate.

Sec. 34. Minnesota Statutes 1994, section 17.117, is amended by adding a subdivision to read:

Subd. 9a. [AUTHORITY OF APPLICANTS.] Applicants may enter into a lender agreement designating a local lender. Applicants designating themselves as the local lender may enter into contracts for loan review, processing, and servicing.

Sec. 35. Minnesota Statutes 1994, section 17.117, subdivision 10, is amended to read:

Subd. 10. [AUTHORITY OF APPLICANTS LOCAL LENDERS.] (a) Applicants Local lenders may enter into lender agreements with borrowers to finance projects under this section the commissioner.

(b) Applicants Local lenders may establish revolving loan programs enter into loan agreements with borrowers to finance projects under this section.

(c) In approving county allocation requests, the commissioner shall allow applicants to provide loans under revolving loan programs established under paragraph (b), until 50 percent of the amount appropriated and available under subdivision 3 has been allocated to applicants establishing these programs. In approving any additional county allocation requests, the commissioner may allow applicants to provide loans under these programs Local lenders may establish revolving loan programs to finance projects under this section.

(d) Local lenders, including applicants designating themselves as the local lender, may enter into participation agreements with other lenders. Local lenders may also enter into contracts with other lenders for the limited purposes of loan review, processing and servicing, or to enter into loan agreements with borrowers to finance projects under this section. Other lenders entering into contracts with local lenders under this section must meet the definition of local lender in subdivision 4, must comply with all provisions of the lender agreement and this section, and must guarantee repayment of the loan funds to the local lender. In no case may there be more than one local lender per county or more than one revolving fund per county.

Sec. 36. Minnesota Statutes 1994, section 17.117, subdivision 11, is amended to read:

Subd. 11. [BORROWER ELIGIBILITY; TERMS; REPAYMENT; RECISION.] (a) Local lenders shall use the following criteria in addition to other criteria they deem necessary in determining the eligibility of borrowers for loans:

(1) whether the activity is certified by a local unit of government as meeting priority needs identified in a comprehensive water management plan and is in compliance with accepted standards, specifications, or criteria;

(2) whether the activity is certified as eligible under Environmental Protection Agency or other applicable guidelines; and

(3) whether the repayment is assured from the borrower.

(b) Local lenders shall set the terms and conditions of loans to borrowers, except that no loan to an individual borrower may exceed $50,000. In all instances, local lenders must provide for sufficient collateral or protection for the loan principal. They are responsible for collecting repayments by borrowers. For direct loans, the borrower must provide sufficient collateral and repay the loan according to a mutually prearranged schedule with the commissioner.

(c) A The local lender is responsible for repaying the principal of a loan to the commissioner. The terms of repayment will be identified in the lender agreement. If defaults occur, it is the responsibility of the local lender to obtain repayment from the borrower. Default on the part of individual borrowers shall have no effect on the local lender's responsibility to repay its loan from the commissioner whether or not the local lender fully recovers defaulted amounts from individual borrowers. For revolving loan programs established under subdivision 10, paragraph (b) (c), the lender agreement must provide that:

(1) repayment of principal to the commissioner must begin no later than ten years after the date of the applicant receives the allocation lender agreement and must be repaid in full no later than 20 years after the date of the lender agreement; and

(2) after the initial ten-year period, the local lender shall not write any additional loans, and any existing principal balance held by the local lender shall be immediately repaid to the commissioner;

(3) after the initial ten-year period, all principal received by the local lender from borrowers shall be repaid to the commissioner as it is received; and

(4) the applicant shall report to the commissioner annually regarding the past and intended uses of the money in the revolving loan program.

(d) Continued availability of the allocation granted in the lender agreement is contingent upon commissioner approval of the annual report. The commissioner shall review the annual report to ensure the past and future uses of the funds are consistent with the comprehensive water management plan and the lender agreement. If the commissioner concludes the past or intended uses of the money are not consistent with the comprehensive water management plan or the lender agreement, the commissioner shall rescind the allocation granted under the lender agreement. Such recision shall result in termination of available allocation, the immediate repayment of any unencumbered funds held by the local lender in a revolving loan fund, and the repayment of the principal portion of loan repayments to the commissioner as they are received. The lender agreement shall reflect the commissioner's rights under this paragraph.

(e) A local lender shall receive certification from local government unit staff that a project has been satisfactorily completed prior to releasing the final loan disbursement.

Sec. 37. Minnesota Statutes 1994, section 17.117, subdivision 14, is amended to read:

Subd. 14. [FEES; LOAN SERVICES AND INTEREST.] (a) Origination fees charged directly to borrowers by local lenders upon executing a loan shall not exceed one-half of one percent of the loan amount. Servicing fees Interest assessed to loan repayments by the local lender must not exceed two three percent interest on outstanding principal amounts if the local lender is a local government unit, or three percent interest on outstanding principal amounts if the local lender is a state or federally chartered bank, savings and loan association, a state or federal credit union, or an entity of Farm Credit Services.

(b) The local lender shall create a principal account to which the principal portions of individual borrower loan repayments will be credited.

(c) Any interest earned on outstanding loan balances not separated as repayments are received and before the principal amounts are deposited in the principal account shall be added to the principal portion of the loan to the local lender and must be paid to the commissioner when the principal is due under the lender agreement.

(d) Any interest earned on the principal account must be added to the principal portion of the loan to the local lender and must be paid to the commissioner when the principal is due under the lender agreement.

Sec. 38. Minnesota Statutes 1994, section 17.117, subdivision 16, is amended to read:

Subd. 16. [ASSESSMENT AGAINST REAL PROPERTY LIENS AGAINST PROPERTY.] A county may assess and charge against real property amounts loaned and servicing fees for projects funded under this section. The auditor of the county where the project is located shall extend the amounts assessed and charged on the tax roll of the county against the real property on which the project is located. (a) Unless a county determines otherwise, at the time of the disbursement of funds on a loan to a borrower under this section, the principal balance due plus accrued interest on the principal balance as provided by this section becomes a lien in favor of the county making the loan upon the real property on which the project is located. The lien must be first and prior to all other liens against the property, including state tax liens, whether filed before or after the placing of a lien under this subdivision, except liens for special assessments by the county under applicable special assessments laws, which liens shall be of equal rank with the lien created under this subdivision. A lien in favor of the county shall be first and prior as provided in this subdivision only if the county making the loan gives written notice of the intent to make the loan under this subdivision to all other persons having a recorded interest in the real property subject to the lien, no less than 30 days prior to the disbursement of the funds, and receives an agreement to subordinate superior lien positions held by all other lenders having a recorded interest in the real property subject to the lien. This lien and subordination agreement must be recorded against the real estate in the county recorder's office or filed with the registrar of titles for the county or counties in which the property is located. The county may bill amounts due on the loan on the tax statement for the property. Enforcement of the lien created by this subdivision shall, at the county's option, be in the manner set forth in chapter 580 or 581. When the amount due plus interest has been paid, the county shall file a satisfaction of the lien created under this subdivision.

(b) A county may also secure amounts due on a loan under this section by taking a purchase money security interest in equipment in accordance with chapter 336, article 9, and may enforce the purchase money security interest in accordance with chapters 336, article 9, and 565.

Sec. 39. Minnesota Statutes 1994, section 17.117, is amended by adding a subdivision to read:

Subd. 17. [REFERENDUM EXEMPTION.] For the purpose of obtaining a loan from the commissioner, a local government unit may provide to the commissioner its general obligation note. All obligations incurred by a local government unit in obtaining a loan from the commissioner must be in accordance with chapter 475, except that so long as the obligations are issued to evidence a loan from the commissioner to the local government unit, an election is not required to authorize the obligations issued, and the amount of the obligations shall not be included in determining the net indebtedness of the local government unit under the provisions of any law or chapter limiting the indebtedness.

Sec. 40. [17.231] [NATIVE GRASSES AND WILDFLOWER SEED PRODUCTION INCENTIVE LOAN PROGRAM.]

Subdivision 1. [ESTABLISHMENT.] (a) The commissioner shall prepare a plan to establish a seed production loan program to provide loans that enable people to begin or expand efforts to develop and produce new, local-origin, native grass, and native wildflower seed species.

(b) In the plan, the commissioner shall use the ecological regions identified by the commissioner of natural resources covering the entire state. In the plan, the commissioner shall design the loan program to produce at least ten local variety native grass species and 40 local variety native wildflower species for each region. In the plan, the commissioner shall look at the possibility of producing 100 acres of native grass seed production and ten acres of native wildflower seed production in each region.

Sec. 41. [17.985] [PASSING ON THE FARM CENTER.]

Subdivision 1. [PURPOSE; OBJECTIVES.] The Passing on the Farm Center is established as a part of Southwest Technical College in Granite Falls to assist individuals beginning farming and family farming operations. The center shall also assist in facilitating the transition of farming operations from established farmers to beginning farmers by creating and maintaining an information base inventorying land and facilities available for acquisition and bringing them together to increase the number of family farming operations in this state. The objectives of the center include, but are not limited to, the following:

(1) using the services of a certified public accountant, real estate agents, and attorneys to provide education in estate planning and farm transfer programs for interested retiring farmers;

(2) assessing needs of beginning farmers and retiring farmers in order to identify program and service opportunities including developing statewide apprenticeship programs between beginning and retiring farmers; and

(3) developing, coordinating, and delivering statewide through Southwest Technical College in Granite Falls and other entities, as appropriate, targeted education to beginning farmers and retiring farm families.

Subd. 2. [PROGRAMS AND SERVICES.] Programs and services provided by the center must include, but are not limited to, the development of skills and knowledge in farm estate planning and other topics related to intergenerational farm transfer. The center shall develop and distribute a detailed questionnaire for interested retired farmers and landowners and beginning farmers for the purpose of connecting them with each other and to develop computerized lists. The center shall coordinate to the extent practicable with agricultural information centers.

Subd. 3. [ANNUAL REPORT.] The center shall submit a report annually to the legislature on or before February 1. The report shall include, but is not limited to, recommendations for methods by which more individuals may be encouraged to enter agriculture.

Sec. 42. Minnesota Statutes 1994, section 28A.03, is amended to read:

28A.03 [DEFINITIONS.]

As used in sections 28A.01 to 28A.16 the terms defined in this section shall have the following meanings:

(a) "Commissioner" means the commissioner of agriculture of the state of Minnesota.

(b) "Person" means any individual, firm, corporation, company, association, cooperative or partnership and includes any trustee, receiver, assignee or other similar representative thereof.

(c) "Place of business" means every location where food or food items are manufactured, processed, sold, stored or handled, including buildings, locations, permanent or portable structures, carnivals, circuses, fairs, or any other permanent or temporary location.

Any vehicle or similar mobile unit from which food is sold shall be considered a place of business for purposes of this section if the food therefrom has been manufactured, packaged or dispensed from bulk, or processed in any manner thereon.

(d) "Food" includes every article used for, entering into the consumption of, or used or intended for use in the preparation of food, drink, confectionery, or condiment for humans, whether simple, mixed or compound.

(1) "Perishable food" is food which includes, but is not limited to fresh fruits, fresh vegetables, and other products which need protection from extremes of temperatures in order to avoid decomposition by microbial growth or otherwise.

(2) "Readily perishable food" is food or a food ingredient consisting in whole or in part of milk, milk products, eggs, meat, fish, poultry or other food or food ingredient which is capable of supporting rapid and progressive growth of infectious or toxigenic microorganisms.

(3) "Frozen food" is food which is processed and preserved by freezing in accordance with good commercial practices and which is intended to be sold in the frozen state.

(4) For the purposes of this definition, packaged food in hermetically sealed containers processed by heat to prevent spoilage; packaged pickles; jellies, jams and condiments in sealed containers; bakery products such as bread, rolls, buns, donuts, fruit-filled pies and pastries; dehydrated packaged food; and dry or packaged food so low in moisture content as to preclude development of microorganisms are not "perishable food," "readily perishable food," or "frozen food" within the meaning of definitions (1), (2) and (3) herein when they are stored and handled in accordance with good commercial practices.

(e) "Sell and sale" includes the keeping, offering, or exposing for sale, use, transporting, transferring, negotiating, soliciting, or exchange of food, the having in possession with intent to sell, use, transport, negotiate, solicit, or exchange the same and the storing, or carrying thereof in aid of traffic therein whether done or permitted in person or through others.

(f) "Principal mode of business" means that type of business described under either (a), (b), (c) or (d) in section 28A.05 within which category the greatest amount of the applicant's food business lies.

(g) "Custom processor" means a person who slaughters animals or processes noninspected meat for the owner of the animals, and returns the meat products derived from the slaughter or processing to the owner. "Custom processor" does not include a person who slaughters animals or poultry or processes meat for the owner of the animals or poultry on the farm or premises of the owner of the animals, meat, or poultry. For the purpose of this clause, "animals" or "meat" do not include poultry or game animals or meat derived therefrom.

(h) "Major violation" includes conditions that cause food products to become adulterated, as defined in section 31.121, or fraudulently misbranded, as defined in section 31.123.

Sec. 43. Minnesota Statutes 1994, section 28A.08, is amended to read:

28A.08 [LICENSE FEES; PENALTIES.]

Subdivision 1. [GENERAL.] License fees, penalties for late renewal of licenses, and penalties for not obtaining a license before conducting business in food handling that are set in this section apply to the sections named except as provided under section 28A.09. Except as specified herein, bonds and assessments based on number of units operated or volume handled or processed which are provided for in said laws shall not be affected, nor shall any penalties for late payment of said assessments, nor shall inspection fees, be affected by this chapter. The penalties may be waived by the commissioner.

Subd. 2. [FEES FOR FISCAL YEAR 1996.]

Penalties

Type of food handler License Late No

Fee Renewal License

Effective

July 1, 1995

1. Retail food handler

(a) Having gross sales of only prepackaged nonperishable food of less than $15,000 for the immediately previous license or fiscal

year and filing a statement with the commissioner $ 40 42 $ 15 $ 25

(b) Having under $15,000 gross sales including food preparation or having $15,000 to $50,000 gross sales for the immediately

previous license or fiscal year $ 55 58 $ 15 $ 25

(c) Having $50,000 to $250,000 gross sales for the immediately

previous license or fiscal year $105 111 $ 35 $ 75

(d) Having $250,000 to $1,000,000 gross sales for the immediately

previous license or fiscal year $180 191 $ 50 $100

(e) Having $1,000,000 to $5,000,000 gross sales for the immediately

previous license or fiscal year $500 530 $100 $175

(f) Having $5,000,000 to $10,000,000 gross sales for the

immediately previous license or fiscal year $700 742 $150 $300

(g) Having over $10,000,000 gross sales for the immediately

previous license or fiscal year $800 848 $200 $350

2. Wholesale food handler

(a) Having gross sales or service of less than $25,000 for the

immediately previous license or fiscal year $ 50 $ 15 $ 15

(b) Having gross sales or service of less than $25,000 to $250,000 gross sales or service for the immediately previous license or

fiscal year $200 212 $ 50 $100

(b) (c) Having $250,000 to $1,000,000 gross sales or service from a mobile unit without a separate food storage facility for the

immediately previous license or fiscal year $318 $ 75 $150

(d) Having $250,000 to $1,000,000 gross sales or service not covered under paragraph (c) for the immediately previous

license or fiscal year $400 424 $100 $200

(c) (e) Having $1,000,000 to $5,000,000 gross sales or service for

the immediately previous license or fiscal year $500 530 $125 $250

(d) (f) Having over $5,000,000 gross sales for the immediately

previous license or fiscal year $575 610 $150 $300

3. Food broker$100 106 $ 30 $ 50

4. Wholesale food processor or manufacturer

(a) Having gross sales of less than $250,000 for the immediately

previous license or fiscal year $275 292 $ 75 $150

(b) Having $250,000 to $1,000,000 gross sales for the immediately

previous license or fiscal year $400 424 $100 $200

(c) Having $1,000,000 to $5,000,000 gross sales for the

immediately previous license or fiscal year $500 530 $125 $250

(d) Having over $5,000,000 gross sales for the immediately

previous license or fiscal year $575 610 $150 $300

5. Wholesale food processor of meat or poultry products under supervision of the U. S. Department of Agriculture

(a) Having gross sales of less than $250,000 for the immediately

previous license or fiscal year $150 159 $ 50 $ 75

(b) Having $250,000 to $1,000,000 gross sales for the immediately

previous license or fiscal year $225 239 $ 75 $125

(c) Having $1,000,000 to $5,000,000 gross sales for the

immediately previous license or fiscal year $275 292 $ 75 $150

(d) Having over $5,000,000 gross sales for the immediately

previous license or fiscal year $325 345 $100 $175

6. Wholesale food manufacturer having the permission of the

commissioner to use the name Minnesota farmstead cheese $ 30 $ 10 $ 15

7. Nonresident frozen dairy manufacturer $200 $ 50 $ 75

8. Wholesale food manufacturer processing less than 70,000 pounds per year of cultured dairy food as defined in section 32.486,

subdivision 1, paragraph (b) $ 30 $ 10 $ 15

9. A milk marketing organization without facilities for processing or manufacturing that purchases milk from milk producers for delivery to a licensed wholesale food processor or

manufacturer $ 50 $ 15 $ 25

Subd. 3. [FEES EFFECTIVE JULY 1, 1996.]

Penalties

Type of food handler License Late No

Fee Renewal License

Effective

July 1, 1996

1. Retail food handler

(a) Having gross sales of only prepackaged nonperishable food of less than $15,000 for the immediately previous license or fiscal

year and filing a statement with the commissioner $ 45 $ 15 $ 25

(b) Having under $15,000 gross sales including food preparation or having $15,000 to $50,000 gross sales for the immediately

previous license or fiscal year $ 61 $ 15 $ 25

(c) Having $50,000 to $250,000 gross sales for the immediately

previous license or fiscal year $118 $ 35 $ 75

(d) Having $250,000 to $1,000,000 gross sales for the immediately

previous license or fiscal year $202 $ 50 $100

(e) Having $1,000,000 to $5,000,000 gross sales for the

immediately previous license or fiscal year $562 $100 $175

(f) Having $5,000,000 to $10,000,000 gross sales for the

immediately previous license or fiscal year $787 $150 $300

(g) Having over $10,000,000 gross sales for the immediately

previous license or fiscal year $899 $200 $350

2. Wholesale food handler

(a) Having gross sales or service of less than $25,000 for the

immediately previous license or fiscal year $ 50 $ 15 $ 15

(b) Having $25,000 to $250,000 gross sales or service for the

immediately previous license or fiscal year $225 $ 50 $100

(c) Having $250,000 to $1,000,000 gross sales or service from a mobile unit without a separate food facility for the immediately

previous license or fiscal year $337 $ 75 $150

(d) Having $250,000 to $1,000,000 gross sales or service not covered under paragraph (c) for the immediately previous license or fiscal

year $449 $100 $200

(e) Having $1,000,000 to $5,000,000 gross sales or service for the

immediately previous license or fiscal year $562 $125 $250

(f) Having over $5,000,000 gross sales for the immediately

previous license or fiscal year $647 $150 $300

3. Food broker $112 $ 30 $ 50

4. Wholesale food processor or manufacturer

(a) Having gross sales of less than $250,000 for the immediately

previous license or fiscal year $310 $ 75 $150

(b) Having $250,000 to $1,000,000 gross sales for the immediately

previous license or fiscal year $449 $100 $200

(c) Having $1,000,000 to $5,000,000 gross sales for the

immediately previous license or fiscal year $562 $125 $250

(d) Having over $5,000,000 gross sales for the immediately

previous license or fiscal year $647 $150 $300

5. Wholesale food processor of meat or poultry products under supervision of the U. S. Department of Agriculture

(a) Having gross sales of less than $250,000 for the immediately

previous license or fiscal year $169 $ 50 $ 75

(b) Having $250,000 to $1,000,000 gross sales for the immediately

previous license or fiscal year $253 $ 75 $125

(c) Having $1,000,000 to $5,000,000 gross sales for the

immediately previous license or fiscal year $310 $ 75 $150

(d) Having over $5,000,000 gross sales for the immediately

previous license or fiscal year $366 $100 $175

6. Wholesale food manufacturer having the permission of the

commissioner to use the name Minnesota farmstead cheese $ 30 $ 10 $ 15

7. Nonresident frozen dairy manufacturer $200 $ 50 $ 75

8. Wholesale food manufacturer processing less than 70,000 pounds per year of cultured dairy food as defined in section 32.486,

subdivision 1, paragraph (b) $ 30 $ 10 $ 15

9. A milk marketing organization without facilities for processing or manufacturing that purchases milk from milk producers for delivery to a licensed wholesale food processor or

manufacturer $ 50 $ 15 $ 25

Sec. 44. [28A.085] [REINSPECTION FEES.]

Subdivision 1. [VIOLATIONS; PROHIBITED ACTS.] The commissioner may charge a reinspection fee for each reinspection of a food handler that:

(1) is found with a major violation of requirements in chapter 28, 29, 30, 31, 31A, 32, 33, or 34, or rules adopted under one of those chapters;

(2) is found with a violation of section 31.02, 31.161, or 31.165, and requires a follow-up inspection after an administrative meeting held pursuant to section 31.14; or

(3) fails to correct equipment and facility deficiencies as required in rules adopted under chapter 28, 29, 30, 31, 31A, 32, or 34. The first reinspection of a firm with gross food sales under $1,000,000 must be assessed at $25. The fee for a firm with gross food sales over $1,000,000 is $50. The fee for a subsequent reinspection of a firm for the same violation is 50 percent of their current license fee. The establishment must be issued written notice of violations with a reasonable date for compliance listed on the notice. An initial inspection relating to a complaint is not a reinspection.

Subd. 2. [MARKET WITHDRAWAL; FOOD SAFETY EMERGENCY.] A food handler that requires a reinspection due to adulteration or misbranded foods that result in a food being recalled from commerce may be assessed for reasonable and direct reinspection costs incurred by the commissioner, including personnel, travel, laboratory analysis, and attorney general costs. Reinspection related to floods, earthquakes, storms, accidental fires, and power outages are excluded. The commissioner, upon request of the food handler, shall provide, within a reasonable time, an estimate of the anticipated cost for resolving the food safety emergency.

Subd. 3. [MANNER AND TIMING OF PAYMENT.] Unless an appeal is filed under subdivision 5, a food handler must pay all fees and assessments in the manner and timing requested by the commissioner. If a timely appeal is requested, the fees and assessments are stayed until a decision on the appeal is issued by the hearing officer. A license may not be renewed until all fees and penalties under this chapter are paid.

Subd. 4. [DEPOSIT; APPROPRIATION.] All reinspection fees and assessments collected must be deposited in the state treasury and are credited to an account in the special revenue fund. Money in the account, including interest accrued, is appropriated to the commissioner to pay the expenses relating to reinspections conducted under the chapters listed in subdivision 1.

Subd. 5. [APPEALS.] Food handlers may appeal reinspection fees and assessments to the department hearing officer within 30 days of receipt of the notice of fee assessment. The appeal must be submitted to the commissioner in writing.

Sec. 45. Minnesota Statutes 1994, section 41A.09, is amended by adding a subdivision to read:

Subd. 1a. [ETHANOL PRODUCTION GOAL.] It is a goal of the state that ethanol production plants in the state attain a total annual production level of 220,000,000 gallons.

Sec. 46. Minnesota Statutes 1994, section 41A.09, is amended by adding a subdivision to read:

Subd. 2a. [DEFINITIONS.] For the purposes of this section the terms defined in this subdivision have the meanings given them.

(a) "Ethanol" means fermentation ethyl alcohol derived from agricultural products, including potatoes, cereal, grains, cheese whey, and sugar beets; forest products; or other renewable resources, including residue and waste generated from the production, processing, and marketing of agricultural products, forest products, and other renewable resources, that:

(1) meets all of the specifications in ASTM specification D 4806-88; and

(2) is denatured with unleaded gasoline or rubber hydrocarbon solvent as defined in Code of Federal Regulations, title 27, parts 211 and 212, as adopted by the Bureau of Alcohol, Tobacco and Firearms of the United States Treasury Department.

(b) "Wet alcohol" means agriculturally derived fermentation ethyl alcohol having a purity of at least 50 percent but less than 99 percent.

(c) "Anhydrous alcohol" means fermentation ethyl alcohol derived from agricultural products as described in paragraph (a), but that does not meet ASTM specifications or is not denatured and is shipped in bond for further processing.

(d) "Ethanol plant" means a plant at which ethanol, anhydrous alcohol, or wet alcohol is produced.

Sec. 47. Minnesota Statutes 1994, section 41A.09, is amended by adding a subdivision to read:

Subd. 3a. [PAYMENTS.] (a) The commissioner of agriculture shall make cash payments to producers of ethanol, anhydrous alcohol, and wet alcohol located in the state. These payments shall apply only to ethanol, anhydrous alcohol, and wet alcohol fermented in the state and produced at plants that have begun production by June 30, 2000. For the purpose of this subdivision, an entity that holds a controlling interest in more than one ethanol plant is considered a single producer. The amount of the payment for each producer's annual production is:

(1) except as provided in paragraph (b), for each gallon of ethanol or anhydrous alcohol produced on or before June 30, 2000, or ten years after the start of production, whichever is later, 20 cents per gallon; and

(2) for each gallon produced of wet alcohol on or before June 30, 2000, or ten years after the start of production, whichever is later, a payment in cents per gallon calculated by the formula "alcohol purity in percent divided by five," and rounded to the nearest cent per gallon, but not less than 11 cents per gallon.

The producer payments for anhydrous alcohol and wet alcohol under this section may be paid to either the original producer of anhydrous alcohol or wet alcohol or the secondary processor, at the option of the original producer, but not to both.

(b) If the level of production at an ethanol plant increases due to an increase in the production capacity of the plant and the increased production begins by June 30, 2000, the payment under paragraph (a), clause (1), applies to the additional increment of production until ten years after the increased production began.

(c) The commissioner shall make payments to producers of ethanol or wet alcohol in the amount of 1.5 cents for each kilowatt hour of electricity generated using closed-loop biomass in a cogeneration facility at an ethanol plant located in the state. Payments under this paragraph shall be made only for electricity generated at cogeneration facilities that begin operation by June 30, 2000. The payments apply to electricity generated on or before the date ten years after the producer first qualifies for payment under this paragraph. Total payments under this paragraph in any fiscal year may not exceed $750,000. For the purposes of this paragraph:

(1) "closed-loop biomass" means any organic material from a plant that is planted for the purpose of being used to generate electricity or for multiple purposes that include being used to generate electricity; and

(2) "cogeneration" means the combined generation of:

(i) electrical or mechanical power; and

(ii) steam or forms of useful energy, such as heat, that are used for industrial, commercial, heating, or cooling purposes.

(d) The total payments under paragraphs (a) and (b) to all producers may not exceed $30,000,000 in a fiscal year. Total payments under paragraphs (a) and (b) to a producer in a fiscal year may not exceed $3,000,000.

(e) By the last day of October, January, April, and July, each producer shall file a claim for payment for ethanol, anhydrous alcohol, and wet alcohol production during the preceding three calendar months. A producer with more than one plant shall file a separate claim for each plant. A producer shall file a separate claim for the original production capacity of each plant and for each additional increment of production that qualifies under paragraph (b). A producer that files a claim under this subdivision shall include a statement of the producer's total ethanol, anhydrous alcohol, and wet alcohol production in Minnesota during the quarter covered by the claim, including anhydrous alcohol and wet alcohol produced or received from an outside source. A producer shall file a separate claim for any amount claimed under paragraph (c). For each claim and statement of total ethanol, anhydrous alcohol, and wet alcohol production filed under this subdivision, the volume of ethanol, anhydrous alcohol, and wet alcohol production or amounts of electricity generated using closed-loop biomass must be examined by an independent certified public accountant in accordance with standards established by the American Institute of Certified Public Accountants.

(f) Payments shall be made November 15, February 15, May 15, and August 15. A separate payment shall be made for each claim filed. The total quarterly payment to a producer under this paragraph, excluding amounts paid under paragraph (c), may not exceed $750,000. If the total amount for which all producers are eligible in a quarter under paragraphs (a) and (b) exceeds $7,500,000, the commissioner shall make payments in the order in which the portion of production capacity covered by each claim went into production. If the total amount of ethanol or wet alcohol production reported for a quarter under paragraph (e) equals or exceeds 55,000,000 gallons:

(1) payments under this subdivision do not apply to the amount produced in excess of 55,000,000 gallons;

(2) the commissioner shall make payments to producers in the order in which the portion of production capacity covered by each claim began production; and

(3) only those producers that receive payments for the quarter, or received payments under paragraph (a) or (b) in an earlier quarter, will be eligible for future ethanol or wet alcohol production payments under this subdivision.

(g) If the total amount for which all producers are eligible in a quarter under paragraph (c) exceeds the amount available for payments, the commissioner shall make payments in the order in which the plants covered by the claims began generating electricity using closed-loop biomass.

Sec. 48. Minnesota Statutes 1994, section 41A.09, is amended by adding a subdivision to read:

Subd. 5a. [EXPIRATION.] This section expires June 30, 2010, and the unobligated balance of each appropriation under this section on that date reverts to the general fund.

Sec. 49. Minnesota Statutes 1994, section 41B.02, subdivision 20, is amended to read:

Subd. 20. [ETHANOL PRODUCTION FACILITY.] "Ethanol production facility" means a facility that ferments, distills, dewaters, or otherwise produces ethanol as defined in section 41A.09, subdivision 2 2a, paragraph (a).

Sec. 50. Minnesota Statutes 1994, section 41B.03, subdivision 6, is amended to read:

Subd. 6. [APPLICATION FEE.] The authority may impose a reasonable nonrefundable application fee for each application submitted for a beginning farmer loan or a seller-sponsored loan. The application fee is initially $50. The authority may review the fee annually and make adjustments as necessary. The fee must be deposited in the state treasury and credited to an account in the special revenue fund. Money in the account is appropriated to the commissioner for administrative expenses of the beginning farmer and seller-sponsored loan programs.

Sec. 51. Minnesota Statutes 1994, section 41B.04, subdivision 17, is amended to read:

Subd. 17. [APPLICATION AND ORIGINATION FEE.] The authority may impose a reasonable nonrefundable application fee for each application and an origination fee for each loan issued under the loan restructuring program. The origination fee is 1.5 percent of the authority's participation interest in the loan and the application fee is $50. The authority may review the fees annually and make adjustments as necessary. The fees must be deposited in the state treasury and credited to an account in the special revenue fund. Money in the account is appropriated to the commissioner for administrative expenses of the loan restructuring program.

Sec. 52. Minnesota Statutes 1994, section 41B.043, subdivision 1b, is amended to read:

Subd. 1b. [LOAN PARTICIPATION.] The authority may participate in an agricultural improvement loan with an eligible lender to a farmer who meets the requirements of section 41B.03, subdivision 1, clauses (1) and (2), and who are actively engaged in farming. Participation is limited to 45 percent of the principal amount of the loan or $50,000 $100,000, whichever is less. The interest rates and repayment terms of the authority's participation interest may be different than the interest rates and repayment terms of the lender's retained portion of the loan.

Sec. 53. Minnesota Statutes 1994, section 41B.043, subdivision 2, is amended to read:

Subd. 2. [SPECIFICATIONS.] No direct loan may exceed $35,000 or $50,000 $100,000 for a loan participation or be made to refinance an existing debt. Each direct loan and participation must be secured by a mortgage on real property and such other security as the authority may require.

Sec. 54. Minnesota Statutes 1994, section 41B.043, subdivision 3, is amended to read:

Subd. 3. [APPLICATION AND ORIGINATION FEE.] The authority may impose a reasonable nonrefundable application fee for each application for a direct loan or participation and an origination fee for each direct loan issued under the agricultural improvement loan program. The origination fee initially shall be set at 1.5 percent and the application fee at $50. The authority may review the fees annually and make adjustments as necessary. The fees must be deposited in the state treasury and credited to an account in the special revenue fund. Money in this account is appropriated to the commissioner for administrative expenses of the agricultural improvement loan program.

Sec. 55. Minnesota Statutes 1994, section 41B.045, subdivision 2, is amended to read:

Subd. 2. [LOAN PARTICIPATION.] The authority may participate in a livestock expansion loan with an eligible lender to a livestock farmer who meets the requirements of section 41B.03, subdivision 1, clauses (1) and (2), and who are actively engaged in a livestock operation. Participation is limited to 45 percent of the principal amount of the loan or $100,000 $250,000, whichever is less. The interest rates and repayment terms of the authority's participation interest may be different from the interest rates and repayment terms of the lender's retained portion of the loan. Loans under this program must not be included in the lifetime limitation calculated under section 41B.03, subdivision 1.

Sec. 56. Minnesota Statutes 1994, section 41B.046, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For purposes of this section:

(1) "Agricultural commodity" has the meaning given in section 17.90.

(1) (2) "Agricultural product processing facility" means land, buildings, structures, fixtures, and improvements located or to be located in Minnesota and used or operated primarily for the processing or production of marketable products from agriculture crops agricultural commodities, including waste and residues from agriculture crops agricultural commodities, but, except as provided in subdivision 4a, not including livestock or livestock products, poultry or poultry products, or wood or wood products.

(2) (3) "Value-added agricultural product" means a product derived from an agricultural crops commodity, including waste and residues from agricultural crops commodities, but, except as provided in subdivision 4a, not including livestock or livestock products, poultry or poultry products, or wood or wood products, which are processed by an agricultural product processing facility.

Sec. 57. Minnesota Statutes 1994, section 41B.046, is amended by adding a subdivision to read:

Subd. 4a. [CERTAIN LIVESTOCK PROCESSING FACILITIES ELIGIBLE.] An applicant may be eligible for a loan under this section if:

(1) the facility is owned and operated by a cooperative organized under chapter 308A. For purposes of this subdivision, "owned and operated" includes a contractual arrangement with another entity to provide management and operations services for a facility owned by the cooperative; and

(2) its agricultural product processing facility is located in Minnesota and operated primarily for the processing of livestock.

Sec. 58. Minnesota Statutes 1994, section 84.631, is amended to read:

84.631 [ROAD EASEMENTS ACROSS STATE LANDS.]

Except as provided in section 85.015, subdivision 1b, the commissioner, on behalf of the state, may convey a road easement across state land under the commissioner's jurisdiction other than school trust land, to a private person requesting an easement for access to property owned by the person only if the following requirements are met: (1) there are no reasonable alternatives to obtain access to the property; and (2) the exercise of the easement will not cause significant adverse environmental or natural resource management impacts. The commissioner shall:

(1) require the applicant to pay the market value of the easement;

(2) provide that the easement reverts to the state in the event of nonuse; and

(3) impose other terms and conditions of use as necessary and appropriate under the circumstances.

Sec. 59. Minnesota Statutes 1994, section 84.788, subdivision 3, is amended to read:

Subd. 3. [APPLICATION; ISSUANCE; REPORTS.] Application for registration or continued registration must be made to the commissioner or an authorized deputy registrar of motor vehicles on a form prescribed by the commissioner. The form must state the name and address of every owner of the off-highway motorcycle and must be signed by at least one owner. Upon receipt of the application and the appropriate fee, the commissioner shall assign a registration number that must be affixed to the motorcycle in a manner prescribed by the commissioner. The commissioner shall develop a registration system to register vehicles under this section. A deputy registrar of motor vehicles acting under section 168.33, is also a deputy registrar of off-highway motorcycles. The commissioner of natural resources in agreement with the commissioner of public safety may prescribe the accounting and procedural requirements necessary to ensure efficient handling of registrations and registration fees. Deputy registrars shall strictly comply with the accounting and procedural requirements. A fee of 50 cents $2 in addition to other fees prescribed by law is charged for each off-highway motorcycle registered by:

(1) a deputy registrar and must be deposited in the treasury of the jurisdiction where the deputy is appointed, or kept if the deputy is not a public official; or

(2) the commissioner and must be deposited in the state treasury and credited to the off-highway motorcycle account.

Sec. 60. Minnesota Statutes 1994, section 84.798, subdivision 3, is amended to read:

Subd. 3. [APPLICATION; ISSUANCE.] Application for registration or continued registration must be made to the commissioner, or an authorized deputy registrar of motor vehicles on a form prescribed by the commissioner. The form must state the name and address of every owner of the off-road vehicle and must be signed by at least one owner. Upon receipt of the application and the appropriate fee, the commissioner shall register the off-road vehicle and assign a registration number that must be affixed to the vehicle in accordance with subdivision 4. A deputy registrar of motor vehicles acting under section 168.33 is also a deputy registrar of off-road vehicles. The commissioner of natural resources in cooperation with the commissioner of public safety may prescribe the accounting and procedural requirements necessary to ensure efficient handling of registrations and registration fees. Deputy registrars shall strictly comply with the accounting and procedural requirements. A fee of 50 cents $2 in addition to other fees prescribed by law must be charged for each off-road vehicle registered by:

(1) a deputy registrar, and must be deposited in the treasury of the jurisdiction where the deputy is appointed, or retained if the deputy is not a public official; or

(2) the commissioner and must be deposited in the state treasury and credited to the off-road vehicle account.

Sec. 61. Minnesota Statutes 1994, section 84.82, subdivision 2, is amended to read:

Subd. 2. [APPLICATION, ISSUANCE, REPORTS, ADDITIONAL FEE.] (a) Application for registration or reregistration shall be made to the commissioner of natural resources, or the commissioner of public safety or an authorized deputy registrar of motor vehicles in such form as the commissioner of public safety shall prescribe, and shall state the name and address of every owner of the snowmobile and be signed by at least one owner.

(b) A person who purchases a snowmobile from a retail dealer shall make application for registration to the dealer at the point of sale. The dealer shall issue a temporary registration permit to each purchaser who applies to the dealer for registration. The temporary registration is valid for 60 days from the date of issue. Each retail dealer shall submit completed registration and fees to the deputy registrar at least once a week. Upon receipt of the application and the appropriate fee as hereinafter provided, such snowmobile shall be registered and a registration number assigned which shall be affixed to the snowmobile in such manner as the commissioner of natural resources shall prescribe.

(c) Each deputy registrar of motor vehicles acting pursuant to section 168.33, shall also be a deputy registrar of snowmobiles. The commissioner of natural resources in agreement with the commissioner of public safety may prescribe the accounting and procedural requirements necessary to assure efficient handling of registrations and registration fees. Deputy registrars shall strictly comply with these accounting and procedural requirements.

(d) A fee of 50 cents $2 in addition to that otherwise prescribed by law shall be charged for:

(1) each snowmobile registered by the registrar or a deputy registrar. and the additional fee shall be disposed of in the manner provided in section 168.33, subdivision 2; or

(2) each snowmobile registered by the commissioner and the additional fee shall be deposited in the state treasury and credited to the snowmobile trails and enforcement account in the natural resources fund.

Sec. 62. Minnesota Statutes 1994, section 84.922, subdivision 2, is amended to read:

Subd. 2. [APPLICATION, ISSUANCE, REPORTS.] (a) Application for registration or continued registration shall be made to the commissioner of natural resources, the commissioner of public safety or an authorized deputy registrar of motor vehicles on a form prescribed by the commissioner. The form must state the name and address of every owner of the vehicle and be signed by at least one owner.

(b) Upon receipt of the application and the appropriate fee the commissioner shall register the vehicle and assign a registration number that must be affixed to the vehicle in a manner prescribed by the commissioner. The commissioner shall use the snowmobile registration system to register vehicles under this section.

(c) Each deputy registrar of motor vehicles acting under section 168.33, is also a deputy registrar of all-terrain vehicles. The commissioner of natural resources in agreement with the commissioner of public safety may prescribe the accounting and procedural requirements necessary to assure efficient handling of registrations and registration fees. Deputy registrars shall strictly comply with the accounting and procedural requirements.

(d) A fee of 50 cents $2 in addition to other fees prescribed by law shall be charged for each vehicle registered by:

(1) a deputy registrar, and shall be deposited in the treasury of the jurisdiction where the deputy is appointed, or retained if the deputy is not a public official; or

(2) the commissioner, and shall be deposited to the state treasury and credited to the all-terrain vehicle account in the natural resources fund.

Sec. 63. Minnesota Statutes 1994, section 84.943, subdivision 3, is amended to read:

Subd. 3. [APPROPRIATIONS MUST BE MATCHED BY PRIVATE FUNDS.] Appropriations transferred to the critical habitat private sector matching account and money credited to the account under section 168.1296, subdivision 5, may be expended only to the extent that they are matched equally with contributions to the account from private sources or by funds contributed to the nongame wildlife management account. The private contributions may be made in cash or in contributions of land or interests in land that are designated by the commissioner of natural resources as program acquisitions. Appropriations transferred to the account that are not matched within three years from the date of the appropriation shall cancel to the source of the appropriation. For the purposes of this section, the private contributions of land or interests in land shall be valued in accordance with their appraised value.

Sec. 64. [84.964] [INTERAGENCY NATIVE VEGETATION TASK FORCE.]

(a) An interagency task force on native plant conservation is established composed of the commissioners or their designees of the departments of agriculture, natural resources, transportation, and the pollution control agency and the executive director or designee of the board of water and soil resources. The commissioner of natural resources or the commissioner's designee shall chair the task force.

(b) The purpose of the task force is to identify priority conservation needs for native plants and their habitats in the ecological regions of the state, and to coordinate implementation of interagency programs to address those needs. The task force shall also ensure, to the greatest extent practicable, that native plant species and communities are maintained, enhanced, restored, or established on public lands, and are promoted on private lands.

Sec. 65. Minnesota Statutes 1994, section 84B.11, subdivision 1, is amended to read:

Subdivision 1. (a) The governor shall appoint, except for the legislative members, a citizen's council on Voyageurs National Park, consisting of 17 members as follows:

Four residents of Koochiching county;

Four residents of St. Louis county;

Five residents of the state at large from outside Koochiching and St. Louis counties;

Two members of the state senate to be appointed by the committee on committees;

Two members of the state house of representatives to be appointed by the speaker of the house.

(b) The governor shall designate one of the appointees to serve as chair and the committee may elect such other officers as it deems necessary. Members shall be appointed so as to represent differing viewpoints and interest groups on the facilities included in and around the park. Legislator Legislative members shall serve for the term of the legislative office to which they were elected. The terms, compensation and removal of nonlegislator nonlegislative members of the council shall be as provided in section 15.059. Notwithstanding section 15.059, subdivision 5, the council shall continue to exist.

(c) The executive committee of the council consists of the legislative members and the chair. The executive committee shall act on matters of personnel, out-of-state trips by members of the council, and nonroutine monetary issues.

Sec. 66. Minnesota Statutes 1994, section 85.015, is amended by adding a subdivision to read:

Subd. 1b. [EASEMENTS FOR INGRESS AND EGRESS.] Notwithstanding section 16A.695, when a trail is established under this section, a private property owner who has a preexisting right of ingress and egress over the trail right-of-way is granted, without charge, a permanent easement for ingress and egress purposes only. The easement is limited to the preexisting crossing and reverts to the state upon abandonment. Nothing in this subdivision is intended to diminish or alter any written or recorded easement that existed before the state acquired the land for the trail.

Sec. 67. Minnesota Statutes 1994, section 85.015, subdivision 11, is amended to read:

Subd. 11. [WILLARD MUNGER TRAIL, RAMSEY, ANOKA, WASHINGTON, CHISAGO, PINE, AND CARLTON COUNTIES.] (a) The trail shall originate in the vicinity of Arden Hills, Ramsey county, and thence extend northeasterly, traversing Anoka and Washington counties to the vicinity of Taylors Falls in Chisago county; thence northwesterly and northerly to St. Croix state park in Pine county; thence northerly to Jay Cooke state park in Carlton county, and there terminate.

(b) The trail shall be developed primarily for riding and hiking.

(c) Additional trails shall be established that extend the Willard Munger trail to include Proctor and Hermantown in St. Louis county.

Sec. 68. Minnesota Statutes 1994, section 85.019, is amended to read:

85.019 [GRANTS-IN-AID FOR RECREATIONAL BETTERMENT LOCAL RECREATION GRANTS.]

Subdivision 1. [DEFINITIONS DEFINITION.] (a) For purposes of this section, the terms in this subdivision have the meanings given, except as otherwise expressly provided or indicated by the context.

(b) "Athletic courts" means special surface area and supporting equipment or structures, such as nets, hoops, and walls, that can be used for active games that have definite boundaries and are played on a marked surface, limited to basketball, volleyball, handball, and tennis.

(c) "Metropolitan council" and "metropolitan area" have the meanings given in section 473.121.

(d) "unit of government" means a county, city and statutory or home rule charter city, or town, school district, public post-secondary educational institution, special park district, or an elected park and recreation board having control over parks, parkways, playgrounds, and trees in a city of the first class.

Subd. 2. [GRANTS FOR PARKS AND TRAILS OUTDOOR RECREATION AREAS.] The commissioner shall administer a program to provide grants to units of government located within standard metropolitan statistical areas, as designated by the United States Office of Management and Budget, but outside of the metropolitan area defined in section 473.121. The grants shall be for up to 50 percent of the costs or $50,000, whichever is less, of acquisition and betterment by units of government of public land and improvements needed for parks, trails, conservatories, zoos, and other special use facilities having recreational significance for the entire population of the particular standard metropolitan statistical area. Appropriations made for this purpose shall be expended with the approval of the governor after consultation with the legislative advisory commission. The legislative commission on Minnesota resources shall make recommendations to the legislative advisory commission regarding the expenditures. The local contribution required shall be not less than ten percent. The program shall be administered so as to ensure the maximum possible use of available federal money outdoor recreation areas and facilities.

Subd. 3. [GRANTS FOR TRAILS IN LOCAL PARKS.] The commissioner shall administer a program to provide grants to units of government for the betterment of public land and improvements needed for recreational trails in parks owned and operated by units of government. A grant shall not exceed 40 percent of the costs of the betterment of the trail. To be eligible for a grant, a unit of government must provide at least ten percent of the cost of the betterment of the trail.

Subd. 4. [GRANTS FOR LOCAL OUTDOOR ATHLETIC COURTS.] The commissioner shall administer a program to provide grants to units of government for the betterment of public land and improvements needed for local athletic courts. A grant may not exceed 50 percent of the costs of the betterment of the athletic court. To be eligible for a grant, a unit of government must provide at least 50 percent of the costs of the betterment of the athletic court. In making grants the commissioner shall consider, among other factors, evidence of cooperation between units of government, local need and available financial resources, and court locations that encourage maximum use, patronage, and availability.

Subd. 4a. [GRANTS FOR NATURAL AND SCENIC AREAS.] The commissioner shall administer a program to provide grants to units of government and school districts for the acquisition and betterment of natural and scenic areas such as blufflands, prairies, shorelands, wetlands, and wooded areas. A grant may not exceed 50 percent or $50,000, whichever is less, of the costs of acquisition and betterment of land acquired under this subdivision.

Subd. 5. [POWERS; RULES.] The commissioner has all powers necessary and convenient to establish programs for recreational betterment grants-in-aid for parks, trails, and athletic courts under implement this section, including the authority to adopt rules for the program under chapter 14.

Sec. 69. Minnesota Statutes 1994, section 85.32, subdivision 1, is amended to read:

Subdivision 1. [AREAS MARKED.] The commissioner of natural resources is authorized in cooperation with local units of government and private individuals and groups when feasible to mark canoe and boating routes on the Little Fork, Big Fork, Minnesota, St. Croix, Snake, Mississippi, Red Lake, Cannon, Straight, Des Moines, Crow Wing, St. Louis, Pine, Rum, Kettle, Cloquet, Root, Zumbro, Pomme de Terre, and Crow rivers which have historic and scenic values and to mark appropriately points of interest, portages, camp sites, and all dams, rapids, waterfalls, whirlpools, and other serious hazards which are dangerous to canoe and watercraft travelers.

Sec. 70. Minnesota Statutes 1994, section 85A.02, subdivision 17, is amended to read:

Subd. 17. [ADDITIONAL POWERS.] The board may establish a schedule of charges for admission to or the use of the Minnesota zoological garden or any related facility. The board shall have a policy admitting elementary school children at no charge when they are part of an organized school activity. The Minnesota zoological garden must be open to the public without admission charges at least two days each month will offer free admission throughout the year to economically disadvantaged Minnesota citizens equal to ten percent of the average annual attendance. However, the zoo may charge at any time for parking, special services, and for admission to special facilities for the education, entertainment, or convenience of visitors. The board may provide for the purchase, reproduction, and sale of gifts, souvenirs, publications, informational materials, food and beverages, and grant concessions for the sale of these items.

Sec. 71. [MINNESOTA ZOO FREE ADMISSION PLAN.]

By July 1, 1995, the board shall develop a plan to implement the offer of free admission to economically disadvantaged Minnesota citizens, and provide a copy of the plan to the chairs of the senate environment and natural resources finance division and the house environment and natural resources finance committee.

Sec. 72. Minnesota Statutes 1994, section 86.72, subdivision 1, is amended to read:

Subdivision 1. Except as otherwise specifically provided, federal reimbursements and match money received for the purposes described in this chapter, regardless of the source of state match, credit or value used to earn the reimbursement or match, other than the federal match for state money appropriated to the local recreation and natural areas grant-in-aid account, and other than the federal great river road money, shall in the first instance be credited to a federal receipt account by the state agency receiving the reimbursement or match. Any state department or agency, including the Minnesota historical society and the University of Minnesota, that receives reimbursements or matching money as described above shall transfer those amounts to the natural resources federal reimbursement account. Amounts sufficient to pay the costs incurred by the department of natural resources in administering federal reimbursements are appropriated annually to the commissioner from the federal receipt account.

Sec. 73. Minnesota Statutes 1994, section 86B.415, subdivision 7, is amended to read:

Subd. 7. [WATERCRAFT SURCHARGE.] A $5 surcharge is placed on each watercraft licensed under subdivisions 1 to 5 for control, public awareness, law enforcement, monitoring, and research of nuisance aquatic exotic species such as zebra mussel, purple loosestrife, and Eurasian water milfoil in public waters and public wetlands. The surcharge is $5 until December 31, 1996, and $3 thereafter.

Sec. 74. Minnesota Statutes 1994, section 86B.415, subdivision 8, is amended to read:

Subd. 8. [REGISTRAR'S FEE.] (a) In addition to the license fee, a fee of 50 cents $2 shall be charged for a watercraft license:

(1) issued through the registrar or a deputy registrar of motor vehicles.

(b) and the additional fee shall be disposed of in the manner provided in section 168.33, subdivision 2; or

(2) issued through the commissioner and the additional fee shall be deposited in the state treasury and credited to the water recreation account.

Sec. 75. Minnesota Statutes 1994, section 86B.870, subdivision 1, is amended to read:

Subdivision 1. [FEES.] (a) The fee to be paid to the commissioner:

(1) for issuing an original certificate of title, including the concurrent notation of an assignment of the security interest and its subsequent release or satisfaction, is $15;

(2) for each security interest when first noted upon a certificate of title, including the concurrent notation of an assignment of the security interest and its subsequent release or satisfaction, is $10;

(3) for transferring the interest of an owner and issuing a new certificate of title, is $10;

(4) for each assignment of a security interest when first noted on a certificate of title, unless noted concurrently with the security interest, is $1; and

(5) for issuing a duplicate certificate of title, is $4.

(b) In addition to other statutory fees and taxes, a filing fee of $3.25 $3.50 is imposed on every application. The filing fee must be shown as a separate item on title renewal notices sent by the commissioner.

Sec. 76. Minnesota Statutes 1994, section 89.001, subdivision 8, is amended to read:

Subd. 8. "Forest resources" means those natural assets of forest lands, including timber and other forest crops,; biological diversity; recreation,; fish and wildlife habitat,; wilderness,; rare and distinctive flora and fauna,; air,; water,; soil,; and educational, aesthetic, and historic values.

Sec. 77. [89.021] [Subd. 45.] [SHOOTING AREA WITHIN SAND DUNES STATE FOREST.] The commissioner of natural resources shall design and establish a noncompetitive recreational shooting area within Sand Dunes state forest. The area shall be suitable for sighting in legal handguns, rifles, and shotguns.

Discharge of firearms for purposes other than lawful hunting is prohibited on state lands in the Sand Dunes State Forest, except in the area developed as a shooting area. Discharge of firearms for the purpose of lawful hunting is permitted during the open seasons for taking of wild animals unless restricted by rule.

Sec. 78. [89A.01] [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] Unless the language or context clearly indicates that a different meaning is intended, the following terms, for the purpose of this chapter, have the meanings given.

Subd. 2. [ADVISORY COMMITTEE.] "Advisory committee" means the forest resources research advisory committee established under section 89A.08.

Subd. 3. [BIOLOGICAL DIVERSITY.] "Biological diversity" means the variety and abundance of species, their genetic composition, and the communities and landscapes in which they occur, including the ecological structures, functions, and processes occurring at all of these levels.

Subd. 4. [COMMISSIONER.] "Commissioner" means the commissioner of natural resources or agent of the commissioner.

Subd. 5. [COUNCIL.] "Council" means the Minnesota forest resources council established by section 89A.03.

Subd. 6. [DEPARTMENT.] "Department" means the department of natural resources.

Subd. 7. [FOREST RESOURCES.] "Forest resources" has the meaning given in section 89.001, subdivision 8.

Subd. 8. [GUIDELINES.] "Guidelines" means the comprehensive timber harvesting and forest management guidelines developed under section 89A.05.

Subd. 9. [LANDSCAPE.] "Landscape" means a heterogenous land area composed of interacting sustainable forest resources that are defined by natural features and socially defined attributes.

Subd. 10. [LANDSCAPE-LEVEL.] "Landscape-level" means typically long-term or broad-based efforts that may require extensive analysis or planning over large areas that may involve or require coordination across land ownerships.

Subd. 11. [REGIONAL COMMITTEE.] "Regional committee" means a regional forest resources committee established under section 89A.06.

Subd. 12. [SITE-LEVEL.] "Site-level" means efforts affecting operational procedures used in the planning and implementation of timber harvesting and forest management activities on an individual site or local scale.

Subd. 13. [SUSTAINABLE.] "Sustainable" means meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Sec. 79. [89A.02] [POLICY.]

It is the policy of the state to:

(1) pursue the sustainable management, use, and protection of the state's forest resources to achieve the state's economic, environmental, and social goals;

(2) encourage cooperation and collaboration between public and private sectors in the management of the state's forest resources;

(3) recognize and consider forest resource issues, concerns, and impacts at the site and landscape levels; and

(4) recognize the broad array of perspectives regarding the management, use, and protection of the state's forest resources, and establish processes and mechanisms that seek and incorporate these perspectives in the planning and management of the state's forest resources.

Nothing in this chapter abolishes, repeals, or negates any existing authorities, policies, programs, or activities of the commissioner or other statutory authorities related to managing and protecting state's forest resources.

Sec. 80. [89A.03] [MINNESOTA FOREST RESOURCES COUNCIL.]

Subdivision 1. [MEMBERSHIP.] The Minnesota forest resources council has 13 members appointed by the governor. Council membership must include one representative from each of the following:

(1) an organization representing environmental interests within the state;

(2) an organization representing the interests of management of game species;

(3) a conservation organization;

(4) an association representing forest products industry within the state;

(5) a commercial logging contractor active in a forest product association;

(6) a statewide association representing the resort and tourism industry;

(7) a faculty or researcher of a Minnesota research or higher educational institution;

(8) an owner of nonindustrial, private forest land of 40 acres or more;

(9) an agricultural woodlot owner;

(10) the department;

(11) a county land commissioner who is a member of the Minnesota association of county land commissioners;

(12) the United States Forest Service unit with land management responsibility in Minnesota; and

(13) a labor organization with membership having an interest in forest resource issues.

Subd. 2. [PURPOSE.] The council shall develop recommendations to the governor and to federal, state, county, and local governments with respect to forest resource policies and practices that result in the sustainable management, use, and protection of the state's forest resources. The policies and practices must:

(1) acknowledge the interactions of complex sustainable forest resources, multiple ownership patterns, and local to international economic forces;

(2) give equal consideration to the long-term economic, ecological, and social needs and limits of the state's forest resources;

(3) foster the productivity of the state's forests to provide a diversity of sustainable benefits at site levels and landscape levels;

(4) enhance the ability of the state's forest resources to provide future benefits and services;

(5) foster no net loss of forest land in Minnesota:

(6) encourage appropriate mixes of forest cover types and age classes within landscapes to promote biological diversity and viable forest-dependent fish and wildlife habitats;

(7) encourage collaboration and coordination with multiple constituencies in planning and managing the state's forest resources; and

(8) address the environmental impacts and their mitigations as recommended in the generic environmental impact statement on timber harvesting.

Subd. 3. [COUNCIL MEETINGS.] The council shall establish procedures for conducting its meetings in accordance with section 471.705 that include provisions for seeking and incorporating public input.

Subd. 4. [COUNCIL OFFICERS AND STAFF.] The council shall elect a chair from among its members. The council may employ an executive director and administrative assistant. Technical expertise that will enable the council to carry out its functions must be provided to the council by those interests represented on the council.

Subd. 5. [MEMBERSHIP REGULATION.] Terms, compensation, nomination, appointment, and removal of council members are governed by section 15.059. Section 15.059, subdivision 5, does not govern the expiration date of the council.

Subd. 6. [REPORT.] By January 1, 1997, the council shall prepare a report to the governor and legislature on the status of the state's forest resources, and strategic directions to provide for their management, use, and protection. Information generated by the reporting requirements in this chapter must be incorporated in the council's report. To the extent possible, the council's report must also identify the activities and accomplishments of various programs that directly affect the state's forest resources.

Subd. 7. [REVIEW OF FOREST RESOURCES PLAN AND ASSESSMENT.] The council shall undertake a review of the forest resource management plan and forest assessment requirements contained in section 89.011, and report to the commissioner no later than July 1, 1996, on the appropriateness and effectiveness of these requirements, including recommendations for enhancing existing forest resource planning processes. The council shall review draft statewide and district forest resource planning documents, and incorporate the findings, including any recommendation, of such reviews in its biennial report specified in subdivision 6.

Sec. 81. [89A.04] [PARTNERSHIP.]

It is the policy of the state to encourage forest landowners, forest managers, and loggers to establish a partnership in which the implementation of council recommendations can occur in a timely and coordinated manner across ownerships. The partnership shall serve as a forum for discussing operational implementation issues and problem solving related to forest resources management and planning concerns, and be responsive to the recommendations of the council. This partnership shall also actively foster collaboration and coordination among forest managers and landowners in addressing landscape-level operations and concerns. In fulfilling its responsibilities as identified in this chapter, the council shall seek input from and consult with the partnership.

Sec. 82. [89A.05] [TIMBER HARVESTING AND FOREST MANAGEMENT GUIDELINES.]

Subdivision 1. [DEVELOPMENT.] The council shall coordinate the development of comprehensive timber harvesting and forest management guidelines. The guidelines must address the water, air, soil, biotic, recreational, and aesthetic resources found in forest ecosystems by focusing on those impacts commonly associated with applying site-level forestry practices. The guidelines must reflect a range of practical and sound practices based on the best available scientific information, and be integrated to minimize conflicting recommendations while being easy to understand and implement. Best management practices previously developed for forest management must be incorporated into the guidelines. The council shall periodically review and, when deemed necessary, update the guidelines.

Subd. 2. [ECONOMIC CONSIDERATIONS.] Before the implementation of timber harvesting and forest management guidelines, new site-level practices and landscape-level programs, the council shall analyze the costs of new site-level practices and landscape-level programs. When the analysis concludes that new landscape-level programs and site-level practices will result in adverse economic effects, including decreased timber supply and negative effects on tourism, opportunities to offset those effects must be explored. The council shall also:

(1) identify and quantify forest and timberland acreages that will no longer be available for harvest; and

(2) encourage public resource agencies to provide sustainable, predictable supplies of high-quality forest resource benefits, including timber supplies that are consistent with their multiple mandates and diverse management objectives. These benefits should be provided by public resource agencies in proportion to their forest land's capability to do so.

Subd. 3. [APPLICATION.] The timber harvesting and forest management guidelines are voluntary. Prior to their actual use, the council shall develop guideline implementation goals for each major forest land ownership category. If the information developed as a result of the monitoring programs established in section 89A.07 indicates the implementation goals for the guidelines are not being met and the council determines significant adverse impacts are occurring, the council shall recommend to the governor additional measures to address those impacts. The council shall incorporate the recommendations as part of the council's biennial report required by section 89A.03, subdivision 6.

Sec. 83. [89A.06] [LANDSCAPE-LEVEL FOREST RESOURCE PLANNING AND COORDINATION.]

Subdivision 1. [FRAMEWORK.] The council shall establish a framework that will enable long-range strategic planning and landscape coordination to occur, to the extent possible, across all forested regions of the state and across all ownerships. The framework must include:

(1) identification of the landscapes within which long-range strategic planning of forest resources can occur, provided that the landscapes must be delineated based on broadly defined ecological units and existing classification systems, yet recognize existing political and administrative boundaries and planning processes;

(2) a statement of principles and goals for landscape-based forest resource planning; and

(3) identification of a general process by which landscape-based forest resource planning can occur, provided that the process must give considerable latitude to design planning processes that fit the unique needs and resources of each landscape; reflect a balanced consideration of the economic, social, and environmental conditions and needs of each landscape; and interface and establish formats that are compatible with other landscape-based forest resource plans.

Subd. 2. [REGIONAL FOREST RESOURCE COMMITTEES.] To foster landscape-based forest resource planning, the council shall establish regional forest resource committees. The regional committees must:

(1) include representative interests in a particular region that are committed to and involved in landscape planning and coordination activities;

(2) serve as a forum for landowners, managers, and representative interests to discuss landscape forest resource issues;

(3) identify and implement an open and public process whereby landscape-based strategic planning of forest resources can occur;

(4) identify sustainable forest resource goals for the landscape and strategies to achieve those goals; and

(5) provide a regional perspective to the council with respect to council activities.

Subd. 3. [REGIONAL COMMITTEE OFFICERS AND STAFF.] Each regional committee shall elect a chair from among its members. The council shall ensure regional committees have sufficient staff resources to carry out their mission as defined in this section.

Subd. 4. [REPORT.] Each regional committee shall report to the council its work activities and accomplishments.

Sec. 84. [89A.07] [MONITORING.]

Subdivision 1. [FOREST RESOURCE MONITORING.] The commissioner shall establish a program for monitoring broad trends and conditions in the state's forest resources at statewide, landscape, and site levels. The council shall provide oversight and program direction for the development and implementation of the monitoring program. To the extent possible, the information generated under the monitoring program must be reported in formats consistent with the landscape regions used to accomplish the planning and coordination activities specified in section 89A.06. To the extent possible, the program must incorporate data generated by existing resource monitoring programs. The commissioner shall report to the council information on current conditions and recent trends in the state's forest resources.

Subd. 2. [PRACTICES AND COMPLIANCE MONITORING.] The commissioner shall establish a program for monitoring silvicultural practices and application of the timber harvesting and forest management guidelines at statewide, landscape, and site levels. The council shall provide oversight and program direction for the development and implementation of the monitoring program. To the extent possible, the information generated by the monitoring program must be reported in formats consistent with the landscape regions used to accomplish the planning and coordination activities specified in section 89A.06. The commissioner shall report to the council on the nature and extent of silvicultural practices used, and compliance with the timber harvesting and forest management guidelines.

Subd. 3. [EFFECTIVENESS MONITORING.] The commissioner, in cooperation with other research and land management organizations, shall evaluate the effectiveness of practices to mitigate impacts of timber harvesting and forest management activities on the state's forest resources. The council shall provide oversight and program direction for the development and implementation of this monitoring program.

Subd. 4. [OTHER STUDIES AND PROGRAMS.] The council shall monitor the implementation of other programs, formal studies, and initiatives affecting Minnesota's forest resources.

Subd. 5. [CITIZEN CONCERNS.] The council shall facilitate the establishment of a process to accept comments from the public on negligent timber harvesting or forest management practices. Comments must also be directed to the organization administering the certification program.

Sec. 85. [89A.08] [RESEARCH ADVISORY COMMITTEE.]

Subdivision 1. [ESTABLISHMENT.] The council shall appoint a forest resources research advisory committee. The committee must consist of representatives of:

(1) the college of natural resources, University of Minnesota;

(2) the natural resources research institute, University of Minnesota;

(3) the department;

(4) the north central forest experiment station, United States Forest Service; and

(5) other organizations as deemed appropriate by the council.

Subd. 2. [PURPOSE.] The purpose of the advisory committee is to foster the identification and undertaking of priority forest resources research activities by encouraging:

(1) collaboration between organizations with responsibilities for conducting forest resources research;

(2) linkages between researchers in different disciplines in conducting forest resources research; and

(3) interaction and communication between researchers and practitioners in the development and use of forest resources research.

Subd. 3. [RESEARCH ASSESSMENT.] The advisory committee shall periodically undertake an assessment of strategic directions in forest resources research. The assessment must be based on input provided by administrators, researchers, practitioners, and the general public, and include:

(1) an assessment of the current status of forestry resources research in the state;

(2) an identification of important forest resource issues in need of research;

(3) an identification of priority forest research activities whose results will enable a better understanding of site-level and landscape-level impacts resulting from timber harvesting and forest management activities; and

(4) an assessment of the progress toward addressing the priority forest resources research needs identified.

The forest resources research assessment must be made widely available to the research community, forest managers and users, and the public.

Subd. 4. [RESEARCH DELIVERY.] Based on the priority forest resources research activities identified in subdivision 3, the advisory committee shall promote these research needs and the dissemination of findings to the research community, forest managers and users, and the public.

Subd. 5. [RESEARCH AND PRACTITIONER LINKAGES.] The advisory committee shall periodically facilitate forums to increase communications between the individuals and organizations conducting forest resources research and the users of the research.

Subd. 6. [REPORT.] The advisory committee shall report to the council its accomplishments in fulfilling the responsibilities identified in this section.

Sec. 86. [89A.09] [INTERAGENCY INFORMATION COOPERATIVE.]

Subdivision 1. [ESTABLISHMENT.] The commissioner shall coordinate the establishment of an interagency information cooperative. Members of the cooperative must include:

(1) the department;

(2) the land management information center;

(3) the Minnesota association of county land commissioners;

(4) the United States Forest Service; and

(5) other organizations as deemed appropriate by the commissioner.

Subd. 2. [PURPOSE.] The purposes of the cooperative are to:

(1) coordinate the development and use of forest resources data in the state;

(2) promote the development of statewide guidelines and common language to enhance the ability of public and private organizations and institutions to share forest resources data;

(3) promote the development of information systems that support access to important forest resources data;

(4) promote improvement in the accuracy, reliability, and statistical soundness of fundamental forest resources data;

(5) promote linkages and integration of forest resources data to other natural resource information;

(6) promote access and use of forest resources data and information systems in decision-making by a variety of public and private organizations;

(7) promote expanding the capacity and reliability of forest growth, succession, and other types of ecological models; and

(8) conduct a needs assessment for improving the quality and quantity of information systems.

Subd. 3. [REPORT.] The information cooperative shall report to the council its accomplishments in fulfilling the responsibilities identified in this section.

Sec. 87. [89A.10] [CONTINUING EDUCATION; CERTIFICATION.]

It is the policy of the state to encourage timber harvesters and forest resource professionals to establish voluntary certification and continuing education programs within their respective professions. The council shall, where appropriate, facilitate the development of these programs.

Sec. 88. [DATES FOR INITIAL APPOINTMENTS AND REPORT.]

The governor shall make the appointments to the forest resources council established by Minnesota Statutes, section 89A.03, by October 1, 1995.

Sec. 89. Minnesota Statutes 1994, section 92.46, subdivision 1, is amended to read:

Subdivision 1. [PUBLIC CAMPGROUNDS.] (a) The director may designate suitable portions of the state lands withdrawn from sale and not reserved, as provided in section 92.45, as permanent state public campgrounds. The director may have the land surveyed and platted into lots of convenient size, and lease them for cottage and camp purposes under terms and conditions the director prescribes, subject to the provisions of this section.

(b) A lease may not be for a term more than 20 years. The lease may allow renewal, from time to time, for additional terms of no longer than 20 years each. The lease may be canceled by the commissioner 90 days after giving the person leasing the land written notice of violation of lease conditions. The lease rate shall be based on the appraised value of leased land as determined by the commissioner of natural resources and shall be adjusted by the commissioner at the fifth, tenth, and 15th anniversary of the lease, if the appraised value has increased or decreased. For leases that are renewed in 1991 and following years, the lease rate shall be five percent of the appraised value of the leased land. The appraised value shall be the value of the leased land without any private improvements and must be comparable to similar land without any improvements within the same county. The minimum appraised value that the commissioner assigns to the leased land must be substantially equal to the county assessor's estimated market value of similar land adjusted by the assessment/sales ratio as determined by the department of revenue.

(c) By July 1, 1986, the commissioner of natural resources shall adopt rules under chapter 14 to establish procedures for leasing land under this section. The rules shall be subject to review and approval by the commissioners of revenue and administration prior to the initial publication pursuant to chapter 14 and prior to their final adoption. The rules must address at least the following:

(1) method of appraising the property; and

(2) an appeal procedure for both the appraised values and lease rates.

(d) All money received from these leases must be credited to the fund to which the proceeds of the land belong.

Notwithstanding section 16A.125 or any other law to the contrary, 50 percent of the money received from the lease of permanent school fund lands leased pursuant to this subdivision shall be deposited into the permanent school trust fund. However, in fiscal years 1994 and 1995, this money must be credited to the lakeshore leasing and sales account in the permanent school fund and, subject to appropriation, may be used is appropriated for use to survey, appraise, and pay associated selling and leasing costs of lots as required in this section and section 92.67, subdivision 3. The money may not be used to pay the cost of surveying lots not scheduled for sale. Any money designated for deposit in the permanent school fund that is not needed to survey, appraise, and pay associated selling and leasing costs of lots, as required in this section and section 92.67, shall be deposited in the permanent school fund. The commissioner shall add to the appraised value of any lot offered for sale the costs of surveying, appraising, and selling the lot, and shall first deposit into the permanent school fund an amount equal to the costs of surveying, appraising, and selling any lot paid out of the permanent school fund. Any remaining money shall be deposited into any other contributing funds in proportion to the contribution from each fund. In no case may the commissioner add to the appraised value of any lot offered for sale an amount more than $700 for the costs of surveying and appraising the lot.

Sec. 90. Minnesota Statutes 1994, section 97C.305, subdivision 1, is amended to read:

Subdivision 1. [REQUIREMENT.] Except as provided in subdivision 2, a person over age 16 and under age 65 required to possess an angling license must have a trout and salmon stamp in possession to:

(1) take fish by angling in:

(1) (i) a stream designated by the commissioner as a trout stream;

(2) (ii) a lake designated by the commissioner as a trout lake; or

(3) (iii) Lake Superior; or

(2) possess trout or salmon taken in the state by angling.

Sec. 91. Minnesota Statutes 1994, section 103A.43, is amended to read:

103A.43 [WATER ASSESSMENTS AND REPORTS.]

(a) The environmental quality board shall evaluate and report to the legislative water commission and the legislative commission on Minnesota resources on statewide water research needs and recommended priorities for addressing these needs. Local water research needs may also be included.

(b) The environmental quality board shall work with the pollution control agency and the department of agriculture to coordinate a biennial assessment and analysis of water quality, groundwater degradation trends, and efforts to reduce, prevent, minimize, and eliminate degradation of water. The assessment and analysis must include an analysis of relevant monitoring data.

(c) The environmental quality board shall work with the department of natural resources to coordinate an assessment and analysis of the quantity of surface and ground water in the state and the availability of water to meet the state's needs.

(d) The environmental quality board shall coordinate and submit a report on water policy including the analyses in paragraphs (a) to (c) to the legislative water commission and the legislative commission on Minnesota resources by September 15 of each even-numbered year. The report may include the groundwater policy report in section 103A.204.

Sec. 92. Minnesota Statutes 1994, section 103D.335, subdivision 19, is amended to read:

Subd. 19. [OPEN SPACE AND GREENBELTS.] The managers may prepare an open space and greenbelt map of the lands of the watershed district that should be preserved and included in the open space and greenbelt land areas of the watershed district. The map must be made available to the counties and local municipalities for inclusion in

floodplain and shoreland ordinances. The managers may control the use and development of land in the floodplain and the greenbelt and open space areas of the watershed district. The managers may adopt, amend, or repeal rules to control encroachments, the changing of land contours, the placement of fill and structures, and the placement of encumbrances or obstructions, and may require a landowner to remove fill, structures, encumbrances, or other obstructions and restore the previously existing land contours and vegetation. The managers may by rule provide a procedure for the watershed district to do the work required and assess its cost against the affected property as a special assessment. The rules apply only in the absence of county or municipal ordinances regulating the items set forth in this subdivision. The rules must be adopted in accordance with section 103D.341. Except as provided in section 103D.345, subdivision 3, rules adopted under this subdivision apply to the state.

Sec. 93. Minnesota Statutes 1994, section 103F.725, subdivision 1a, is amended to read:

Subd. 1a. [FINANCIAL ASSISTANCE; LOANS.] (a) Up to $10,000,000 $12,000,000 of the balance in the water pollution control revolving fund in section 446A.07, as determined by the public facilities authority shall be appropriated to the commissioner for the establishment of a clean water partnership loan program.

(b) The agency may award loans for up to 100 percent of the costs associated with activities identified by the agency as best management practices pursuant to section 319 and section 320 of the federal Water Quality Act of 1987, as amended, including associated administrative costs.

(c) Loans may be used to finance clean water partnership grant project eligible costs not funded by grant assistance.

(d) The interest rate, at or below market rate, and the term, not to exceed 20 years, shall be determined by the agency in consultation with the public facilities authority.

(e) The repayment must be deposited in the water pollution control revolving fund under section 446A.07.

(f) The local unit of government receiving the loan is responsible for repayment of the loan.

(g) For the purpose of obtaining a loan from the agency, a local government unit may provide to the agency its general obligation note. All obligations incurred by a local government unit in obtaining a loan from the agency must be in accordance with chapter 475, except that so long as the obligations are issued to evidence a loan from the agency to the local government unit, an election is not required to authorize the obligations issued, and the amount of the obligations shall not be included in determining the net indebtedness of the local government unit under the provisions of any law or chapter limiting the indebtedness.

Sec. 94. Minnesota Statutes 1994, section 103H.151, is amended by adding a subdivision to read:

Subd. 4. [EVALUATION.] The commissioners of agriculture and the pollution control agency shall, through field audits and other appropriate means, monitor the use and effectiveness of best management practices developed and promoted under this section. The information collected must be submitted to the environmental quality board, which must include the information in the report required in section 103A.43, paragraph (d).

Sec. 95. Minnesota Statutes 1994, section 103I.331, subdivision 4, is amended to read:

Subd. 4. [LANDOWNER WELL SEALING CONTRACTS.] (a) A county, or contracted local unit of government, may contract with landowners to share the cost of sealing priority wells in accordance with criteria established by the board of water and soil resources.

(b) The county must use the funds allocated from the board of water and soil resources to pay up to 75 percent, but not more than $2,000 of the cost of sealing priority wells. The board, with the assistance of the department of health, may review and approve a request above $2,000 for sealing a priority well.

(c) A well sealing contract must provide that:

(1) sealing is done in accordance with this chapter and rules of the commissioner of health relating to sealing of unused wells;

(2) payment is made to the landowner, after the well is sealed by a contractor licensed under this chapter; and

(3) the contractor must file a sealed well report and a copy of the well record with the commissioner of health.

Sec. 96. Minnesota Statutes 1994, section 115A.03, subdivision 29, is amended to read:

Subd. 29. [SEWAGE SLUDGE.] "Sewage sludge" means the solids and associated liquids in municipal wastewater which are encountered and concentrated by a municipal wastewater treatment plant solid, semisolid, or liquid residue generated during the treatment of domestic sewage in a treatment works. It includes, but is not limited to, scum or solids removed in primary, secondary, or advanced wastewater treatment processes and a material derived from sewage sludge. Sewage sludge does not include ash generated during the firing of sewage sludge in a sewage sludge incinerator residues and or grit, scum, or and screenings removed from other solids during treatment generated during preliminary treatment of domestic sewage in a treatment works. Sewage sludge that is acceptable and beneficial for recycling on land as a soil conditioner and nutrient source is also known as biosolids.

Sec. 97. Minnesota Statutes 1994, section 115A.908, subdivision 3, is amended to read:

Subd. 3. [REPEALER.] This section is repealed on December 31, 1996 July 1, 1997.

Sec. 98. Minnesota Statutes 1994, section 115B.20, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] (a) The environmental response, compensation, and compliance account is in the environmental fund in the state treasury and may be spent only for the purposes provided in subdivision 2.

(b) The commissioner of finance shall administer a response account for the agency and the commissioner of agriculture to take removal, response, and other actions authorized under subdivision 2, clauses (1) to (4) and (11) to (13). The commissioner of finance shall transfer money from the response account to the agency and the commissioner of agriculture to take actions required under subdivision 2, clauses (1) to (4) and (11) to (13).

(c) The commissioner of finance shall administer the account in a manner that allows the commissioner of agriculture and the agency to utilize the money in the account to implement their removal and remedial action duties as effectively as possible.

(d) Amounts appropriated to the commissioner of finance under this subdivision shall not be included in the department of finance budget but shall be included in the pollution control agency and department of agriculture budgets.

(e) All money recovered by the state under section 115B.04 or any other law for injury to, destruction of, or loss of natural resources resulting from the release of a hazardous substance, or a pollutant or contaminant, must be credited to the environmental response, compensation, and compliance account in the environmental fund and is appropriated to the commissioner of natural resources for purposes of subdivision 2, clause (6), consistent with any applicable term of judgments, consent decrees, consent orders, or other administrative actions requiring payments to the state for such purposes. Before making an expenditure of money appropriated under this paragraph, the commissioner of natural resources shall provide written notice of the proposed expenditure to the chairs of the senate committee on finance, the house of representatives committee on ways and means, the finance division of the senate committee on environment and natural resources, and the house of representatives committee on environment and natural resources finance.

Sec. 99. Minnesota Statutes 1994, section 115B.25, subdivision 1a, is amended to read:

Subd. 1a. [ACCOUNT.] Except when another account is specified, "account" means the harmful substance compensation environmental response, compensation, and compliance account established in section 115B.26 115B.20.

Sec. 100. Minnesota Statutes 1994, section 115B.26, subdivision 2, is amended to read:

Subd. 2. [APPROPRIATION.] The amount necessary to pay for staff assistance, administrative services, and office space under section 115B.28, subdivision 4, and to pay claims of compensation granted by the board agency under sections 115B.25 to 115B.37 is appropriated to the board agency from the account.

Sec. 101. Minnesota Statutes 1994, section 115B.41, subdivision 1, is amended to read:

Subdivision 1. [ALLOCATION AND RECOVERY OF COSTS.] (a) A person who is subject to the requirements in section 115B.40, subdivision 4 or 5, paragraph (b), is responsible for all environmental response costs incurred by the commissioner at or related to the facility until the date of notice of compliance under section 115B.40, subdivision 7.

The commissioner may use any funds available for closure, postclosure care, and response action established by the owner or operator. If those funds are insufficient or if the owner or operator fails to assign rights to them to the commissioner, the commissioner may seek recovery of environmental response costs against the owner or operator in the county of Ramsey or in the county where the facility is located or where the owner or operator resides.

(b) In an action brought under this subdivision in which the commissioner prevails, the court shall award the commissioner reasonable attorney fees and other litigation expenses incurred by the commissioner to bring the action. All costs, fees, and expenses recovered under this subdivision must be deposited in the environmental fund and credited to the landfill cleanup account solid waste fund established in section 115B.42.

Sec. 102. Minnesota Statutes 1994, section 115B.42, is amended to read:

115B.42 [LANDFILL CLEANUP ACCOUNT SOLID WASTE FUND.]

Subdivision 1. [ESTABLISHMENT; APPROPRIATION; SEPARATE ACCOUNTING.] (a) The landfill cleanup account solid waste fund is established in the environmental fund in the state treasury. The account fund consists of money credited to the account fund and interest earned on the money in the account fund. Except as provided in section 115B.42, subdivision 2, clause (9) (7), money in the account fund is annually appropriated to the commissioner for the purposes listed in subdivision 2.

(b) The commissioner of finance shall separately account for revenue deposited in the account fund from financial assurance funds or other mechanisms, the metropolitan landfill contingency action trust fund, and all other sources of revenue.

Subd. 2. [EXPENDITURES.] (a) Money in the account fund may be spent by the commissioner to:

(1) inspect permitted mixed municipal solid waste disposal facilities to:

(i) evaluate the adequacy of final cover, slopes, vegetation, and erosion control;

(ii) determine the presence and concentration of hazardous substances, pollutants or contaminants, and decomposition gases; and

(iii) determine the boundaries of fill areas;

(2) monitor and take, or reimburse others for, environmental response actions, including emergency response actions, at qualified facilities;

(3) acquire and dispose of property under section 115B.412, subdivision 3;

(4) recover costs under sections 115B.39 and 115B.46;

(5) administer, including providing staff and administrative support for, sections 115B.39 to 115B.46;

(6) enforce sections 115B.39 to 115B.46;

(7) subject to appropriation, administer the agency's groundwater and solid waste management programs;

(8) reimburse persons under section 115B.43; and

(9) reimburse mediation expenses up to a total of $250,000 annually or defense costs up to a total of $250,000 annually for third-party claims for response costs under state or federal law as provided in section 115B.414.

Sec. 103. Minnesota Statutes 1994, section 115C.03, subdivision 9, is amended to read:

Subd. 9. [REQUESTS FOR REVIEW, INVESTIGATION, AND OVERSIGHT.] (a) The commissioner may, upon request:

(1) assist in determining whether a release has occurred; and

(2) assist in or supervise the development and implementation of reasonable and necessary corrective actions.

(b) Assistance may include review of agency records and files and review and approval of a requester's investigation plans and reports and corrective action plans and implementation.

(c) Assistance may include the issuance of a written determination that an owner or prospective buyer of real property will not be a responsible person under section 115C.021, if the commissioner finds the release came from a tank not located on the property. The commissioner may also issue a written confirmation that the real property was the site of a release and that the tank from which the release occurred has been removed or that the agency has issued a site closure letter and has not revoked that status. The issuance of the written determination or confirmation applies to tanks not on the property or removed only and does not affect liability for releases from tanks that are on the property at the time of purchase. The written determination or confirmation extends to the successors and assigns of the person to whom it originally applied, if the successors and assigns are not otherwise responsible for the release.

(d) The person requesting assistance under this subdivision shall pay the agency for the agency's cost, as determined by the commissioner, of providing assistance. Money received by the agency for assistance under this subdivision must be deposited in the state treasury and credited to the an account in the special revenue fund. Money in this account is annually appropriated to the commissioner for purposes of administering the subdivision.

Sec. 104. Minnesota Statutes 1994, section 116.07, subdivision 4d, is amended to read:

Subd. 4d. [PERMIT FEES.] (a) The agency may collect permit fees in amounts not greater than those necessary to cover the reasonable costs of reviewing and acting upon applications for agency permits and implementing and enforcing the conditions of the permits pursuant to agency rules. Permit fees shall not include the costs of litigation. The agency shall adopt rules under section 16A.128 16A.1285 establishing the amounts and methods of collection of any a system for charging permit fees collected under this subdivision. The fee schedule must reflect reasonable and routine permitting, implementation, and enforcement costs. The agency may impose an additional enforcement fee to be collected for a period of up to two years to cover the reasonable costs of implementing and enforcing the conditions of a permit under the rules of the agency. Any money collected under this paragraph shall be deposited in the special revenue account.

(b) Notwithstanding paragraph (a), and section 16A.128, subdivision 1 16A.1285, subdivision 2, the agency shall collect an annual fee from the owner or operator of all stationary sources, emission facilities, emissions units, air contaminant treatment facilities, treatment facilities, potential air contaminant storage facilities, or storage facilities subject to the requirement to obtain a permit under Title subchapter V of the federal Clean Air Act Amendments of 1990, Public Law Number 101-549, Statutes at Large, volume 104, pages 2399, United States Code, title 42, section 7401 et seq., or section 116.081. The annual fee shall be used to pay for all direct and indirect reasonable costs, including attorney general costs, required to develop and administer the permit program requirements of Title subchapter V of the federal Clean Air Act Amendments of 1990, Public Law Number 101-549, Statutes at Large, volume 104, pages 2399, United States Code, title 42, section 7401 et seq., and sections of this chapter and the rules adopted under this chapter related to air contamination and noise. Those costs include the reasonable costs of reviewing and acting upon an application for a permit; implementing and enforcing statutes, rules, and the terms and conditions of a permit; emissions, ambient, and deposition monitoring; preparing generally applicable regulations; responding to federal guidance; modeling, analyses, and demonstrations; preparing inventories and tracking emissions; providing information to the public about these activities; and, after June 30, 1992, the costs of acid deposition monitoring currently assessed under section 116C.69, subdivision 3.

(c) The agency shall adopt fee rules in accordance with the procedures in section 16A.128, subdivisions 1a and 2a 16A.1285, subdivision 5, that will result in the collection, in the aggregate, from the sources listed in paragraph (b), of the following amounts:

(1) in fiscal years 1992 and 1993, the amount appropriated by the legislature from the air quality account in the environmental fund for the agency's air quality program;

(2) for fiscal year 1994 and thereafter, an amount not less than $25 per ton of each volatile organic compound; pollutant regulated under United States Code, title 42, section 7411 or 7412 (section 111 or 112 of the federal Clean Air Act); and each pollutant, except carbon monoxide, for which a national primary ambient air quality standard has been promulgated; and

(3) for fiscal year 1994 and thereafter, (2) the agency fee rules may also result in the collection, in the aggregate, from the sources listed in paragraph (b), of an amount not less than $25 per ton of each pollutant not listed in clause (2) (1) that is regulated under Minnesota Rules, this chapter 7005, or for which a state primary ambient air quality standard has been adopted or air quality rules adopted under this chapter.

The agency must not include in the calculation of the aggregate amount to be collected under the fee rules any amount in excess of 4,000 tons per year of each air pollutant from a source.

(d) To cover the reasonable costs described in paragraph (b), the agency shall provide in the rules promulgated under paragraph (c) for an increase in the fee collected in each year beginning after fiscal year 1993 by the percentage, if any, by which the Consumer Price Index for the most recent calendar year ending before the beginning of the year the fee is collected exceeds the Consumer Price Index for the calendar year 1989. For purposes of this paragraph the Consumer Price Index for any calendar year is the average of the Consumer Price Index for all-urban consumers published by the United States Department of Labor, as of the close of the 12-month period ending on August 31 of each calendar year. The revision of the Consumer Price Index that is most consistent with the Consumer Price Index for calendar year 1989 shall be used.

(e) Any money collected under paragraphs (b) to (d) must be deposited in an air quality account in the environmental fund and must be used solely for the activities listed in paragraph (b).

(f) Persons who wish to construct or expand an air emission facility may offer to reimburse the agency for the costs of staff overtime or consultant services needed to expedite permit review. The reimbursement shall be in addition to fees imposed by paragraphs (a) to (d). When the agency determines that it needs additional resources to review the permit application in an expedited manner, and that expediting the review would not disrupt air permitting program priorities, the agency may accept the reimbursement. Reimbursements accepted by the agency are appropriated to the agency for the purpose of reviewing the permit application. Reimbursement by a permit applicant shall precede and not be contingent upon issuance of a permit and shall not affect the agency's decision on whether to issue or deny a permit, what conditions are included in a permit, or the application of state and federal statutes and rules governing permit determinations.

Sec. 105. Minnesota Statutes 1994, section 116.12, subdivision 1, is amended to read:

Subdivision 1. [FEE SCHEDULES.] The agency shall establish the fees provided in subdivisions 2 and 3 in the manner provided in section 16A.128 16A.1285 to cover the amount expenditures of amounts appropriated from the environmental fund to the agency for permitting, monitoring, inspection, and enforcement expenses of the hazardous waste activities of the agency.

The legislature may appropriate additional amounts from the general fund that need not be covered by fees, in order to assure adequate funding for the regulatory and enforcement functions of the agency related to hazardous waste. All fees collected by the agency under this section shall be deposited in the environmental fund.

Sec. 106. [116.125] [NOTIFICATION OF FEE INCREASES.]

Before the pollution control agency adopts a fee increase to cover an unanticipated shortfall in revenues, the commissioner shall give written notice of the proposed increase to the chairs of the senate committee on finance, the house of representatives committee on ways and means, the senate and house of representatives environment and natural resources committees, the finance division of the senate committee on environment and natural resources, and the house of representatives committee on environment and natural resources finance.

Sec. 107. Minnesota Statutes 1994, section 116.96, subdivision 5, is amended to read:

Subd. 5. [REGULATED POLLUTANT.] "Regulated pollutant" means:

(1) a volatile organic compound that participates in atmospheric photochemical reactions;

(2) a pollutant for which a national ambient air quality standard has been promulgated;

(3) a pollutant that is addressed by a standard promulgated under section 7411 or 7412 of the Clean Air Act; or

(4) any pollutant that is regulated under Minnesota Rules, this chapter 7005, or for which a state ambient air quality standard has been adopted or air quality rules adopted under this chapter.

Sec. 108. [116.991] [SMALL BUSINESS ENVIRONMENTAL LOAN PROGRAM.]

Subdivision 1. [DEFINITIONS.] (a) The definitions in this subdivision apply to this section.

(b) "Clean Air Act" means the federal Clean Air Act, United States Code, title 42, section 7401 et seq.

(c) "Commissioner" means the commissioner of the pollution control agency.

Subd. 2. [ESTABLISHMENT.] A small business environmental revolving loan program is established to provide loans to small businesses for purposes of complying with the Clean Air Act.

Subd. 3. [ELIGIBLE BORROWER.] To be eligible for a loan under this section, a borrower must:

(1) need to make a process change or equipment purchase to comply with the Clean Air Act;

(2) have less than 50 full-time employees;

(3) have an after-tax profit of less than $500,000; and

(4) have a net worth of less than $1,000,000.

Subd. 4. [LOAN APPLICATION PROCEDURE.] An eligible borrower may apply for a loan after the commissioner determines the business is subject to Clean Air Act requirements and approves the process change or equipment needed to achieve compliance. The commissioner shall consider the order in which applications are received in awarding loans and may give priority to applicants that are subject to standards adopted under United States Code, title 42, section 7412. The commissioner shall decide whether to award a loan to an eligible borrower based on:

(1) the applicant's financial need;

(2) the applicant's ability to repay the loan; and

(3) the expected environmental benefit.

Subd. 5. [LIMITATION ON LOAN OBLIGATION.] A loan made under this section is limited to the money available in the small business environmental loan account.

Subd. 6. [LOAN CONDITIONS.] A loan made under this section must:

(1) have an interest rate that is the lesser of four percent or 50 percent of prime rate;

(2) have a term of payment of not more than seven years; and

(3) be in an amount not less than $1,000 or more than $50,000.

Sec. 109. [116.992] [SMALL BUSINESS ENVIRONMENTAL LOAN ACCOUNT.]

The small business environmental loan account is established in the environmental fund. Repayments of loans made under section 116.991 must be credited to this account.

Sec. 110. Minnesota Statutes 1994, section 116C.69, subdivision 3, is amended to read:

Subd. 3. [FUNDING; ASSESSMENT.] The board shall finance its base line studies, general environmental studies, development of criteria, inventory preparation, monitoring of conditions placed on site certificates and construction permits, and all other work, other than specific site and route designation, from an assessment made quarterly, at least 30 days before the start of each quarter, by the board against all utilities with annual retail kilowatt-hour sales greater than 4,000,000 kilowatt-hours in the previous calendar year.

Until June 30, 1992, the assessment shall also include an amount sufficient to cover 60 percent of the costs to the pollution control agency of achieving, maintaining, and monitoring compliance with the acid deposition control standard adopted under sections 116.42 to 116.45, reprinting informational booklets on acid rain, and costs for additional research on the impacts of acid deposition on sensitive areas published under section 116.44, subdivision 1. The commissioner of the pollution control agency must prepare a work plan and budget and submit them annually by June 30 to the pollution control agency board. The agency board must take public testimony on the budget and work plan. After the agency board approves the work plan and budget they must be submitted annually to the legislative water commission for review and recommendation before an assessment is levied. Each share shall be determined as follows: (1) the ratio that the annual retail kilowatt-hour sales in the state of each utility bears to the annual total retail kilowatt-hour sales in the state of all these utilities, multiplied by 0.667, plus (2) the ratio that the annual gross revenue from retail kilowatt-hour sales in the state of each utility bears to the annual total gross revenues from retail kilowatt-hour sales in the state of all these utilities, multiplied by 0.333, as determined by the board. The assessment shall be credited to the special revenue fund and shall be paid to the state treasury within 30 days after receipt of the bill, which shall constitute notice of said assessment and demand of payment thereof. The total amount which may be assessed to the several utilities under authority of this subdivision shall not exceed the sum of the annual budget of the board for carrying out the purposes of this subdivision plus 60 percent of the annual budget of the pollution control agency for achieving, maintaining, and monitoring compliance with the acid deposition control standard adopted under sections 116.42 to 116.45, for reprinting informational booklets on acid rain, and for costs for additional research on the impacts of acid deposition on sensitive areas published under section 116.44, subdivision 1. The assessment for the second quarter of each fiscal year shall be adjusted to compensate for the amount by which actual expenditures by the board and the pollution control agency for the preceding fiscal year were more or less than the estimated expenditures previously assessed.

Sec. 111. Minnesota Statutes 1994, section 116P.11, is amended to read:

116P.11 [AVAILABILITY OF FUNDS FOR DISBURSEMENT.]

(a) The amount biennially available from the trust fund for the budget plan developed by the commission consists of the earnings generated from the trust fund. Earnings generated from the trust fund shall equal the amount of interest on debt securities and dividends on equity securities. Gains and losses arising from the sale of securities shall be apportioned as follows:

(1) if the sale of securities results in a net gain during a fiscal year, the gain shall be apportioned in equal installments over the next ten fiscal years to offset net losses in those years. If any portion of an installment is not needed to recover subsequent losses identified in paragraph (b), it shall be added to the principal of the fund; and

(2) if the sale of securities results in a net loss during a fiscal year, the net loss shall be recovered from the gains in paragraph (a) apportioned to that fiscal year. If such gains are insufficient, any remaining net loss shall be recovered from interest and dividend income in equal installments over the following ten fiscal years.

(b) For funding projects until fiscal year 1997, the following additional amounts are available from the trust fund for the budget plans developed by the commission:

(1) for the 1991-1993 biennium, up to 25 percent of the revenue deposited in the trust fund in fiscal years 1990 and 1991;

(2) for the 1993-1995 biennium, up to 20 percent of the revenue deposited in the trust fund in fiscal year 1992 and up to 15 percent of the revenue deposited in the fund in fiscal year 1993;

(3) for the 1993-1995 biennium, up to 25 percent of the revenue deposited in the trust fund in fiscal years 1994 and 1995, to be expended only for capital investments in parks and trails; and

(4) for the 1995-1997 biennium, up to ten 25 percent of the revenue deposited in the fund in fiscal year 1996, to be expended only for capital investments in parks and trails.

(c) Any appropriated funds not encumbered in the biennium in which they are appropriated cancel and must be credited to the principal of the trust fund.

Sec. 112. [168.1296] [SPECIAL CRITICAL HABITAT LICENSE PLATES.]

Subdivision 1. [GENERAL REQUIREMENTS AND PROCEDURES.] The registrar shall issue special critical habitat license plates to an applicant who:

(1) is an owner or joint owner of a passenger automobile, pickup truck, or van;

(2) pays a fee determined by the registrar to cover the costs of handling and manufacturing the plates;

(3) pays the registration tax required under section 168.013;

(4) pays the fees required under this chapter;

(5) contributes at least $30 annually to the Minnesota critical habitat private sector matching account established in section 84.943; and

(6) complies with laws and rules governing registration and licensing of vehicles and drivers.

Subd. 2. [DESIGN.] After consultation with interested groups, the commissioner of natural resources and the registrar shall jointly select a suitable symbol for use by the registrar to design the special plates.

Subd. 3. [NO REFUND.] Contributions under this section must not be refunded.

Subd. 4. [PLATE TRANSFERS.] Notwithstanding section 168.12, subdivision 1, on payment of a transfer fee of $5, plates issued under this section may be transferred to another passenger automobile, pickup truck, or van owned or jointly owned by the person to whom the special plates were issued.

Subd. 5. [CONTRIBUTION AND FEES CREDITED.] Contributions under subdivision 1, clause (5), must be paid to the registrar and credited to the Minnesota critical habitat private sector matching account established in section 84.943. The fees collected under this section must be deposited in the highway user tax distribution fund.

Subd. 6. [RECORD.] The registrar shall maintain a record of the number of special plates issued under this section.

Sec. 113. [177.435] [FACILITY CONSTRUCTION; PREVAILING WAGE.]

Construction of value-added agricultural product processing facility financed in whole or in part with a loan or grant provided under section 41A.035, 41B.044, or 41B.046 is a "project" as that term is defined in section 177.42, subdivision 2. Contracts for the construction or expansion of a value-added agricultural product processing facility that is a project under this section must comply with section 177.43 if the loan or grant agreement was entered into on or after December 31, 1995.

Sec. 114. Minnesota Statutes 1994, section 239.011, subdivision 2, is amended to read:

Subd. 2. [DUTIES AND POWERS.] To carry out the responsibilities in section 239.01 and subdivision 1, the director:

(1) shall take charge of, keep, and maintain in good order the standard of weights and measures of the state and keep a seal so formed as to impress, when appropriate, the letters "MINN" and the date of sealing upon the weights and measures that are sealed;

(2) has general supervision of the weights, measures, and weighing and measuring devices offered for sale, sold, or in use in the state;

(3) shall maintain traceability of the state standards to the national standards of the National Institute of Standards and Technology;

(4) shall enforce this chapter;

(5) shall grant variances from department rules, within the limits set by rule, when appropriate to maintain good commercial practices or when enforcement of the rules would cause undue hardship;

(6) shall conduct investigations to ensure compliance with this chapter;

(7) may delegate to division personnel the responsibilities, duties, and powers contained in this section;

(8) shall test annually, and approve when found to be correct, the standards of weights and measures used by the division, by a town, statutory or home rule charter city, or county within the state, or by a person using standards to repair, adjust, or calibrate commercial weights and measures;

(9) shall inspect and test weights and measures kept, offered, or exposed for sale;

(10) shall inspect and test, to ascertain if they are correct, weights and measures commercially used to:

(i) determine the weight, measure, or count of commodities or things sold, offered, or exposed for sale, on the basis of weight, measure, or count; and

(ii) compute the basic charge or payment for services rendered on the basis of weight, measure, or count;

(11) shall approve for use and mark weights and measures that are found to be correct;

(12) shall reject, and mark as rejected, weights and measures that are found to be incorrect and may seize them if those weights and measures:

(i) are not corrected within the time specified by the director;

(ii) are used or disposed of in a manner not specifically authorized by the director; or

(iii) are found to be both incorrect and not capable of being made correct, in which case the director shall condemn those weights and measures;

(13) shall weigh, measure, or inspect packaged commodities kept, offered, or exposed for sale, sold, or in the process of delivery, to determine whether they contain the amount represented and whether they are kept, offered, or exposed for sale in accordance with this chapter and department rules. In carrying out this section, the director must employ recognized sampling procedures, such as those contained in National Institute of Standards and Technology Handbook 133, "Checking the Net Contents of Packaged Goods";

(14) shall prescribe the appropriate term or unit of weight or measure to be used for a specific commodity when an existing term or declaration of quantity does not facilitate value comparisons by consumers, or creates an opportunity for consumer confusion;

(15) shall allow reasonable variations from the stated quantity of contents, including variations caused by loss or gain of moisture during the course of good distribution practice or by unavoidable deviations in good manufacturing practice, only after the commodity has entered commerce within the state;

(16) shall inspect and test petroleum products in accordance with this chapter and chapter 296;

(17) shall distribute and post notices for used motor oil and used motor oil filters and lead acid battery recycling in accordance with sections 239.54, 325E.11, and 325E.115;

(18) shall collect inspection fees in accordance with sections 239.10 and 239.101; and

(19) shall provide metrological services and support to businesses and individuals in the United States who wish to market products and services in the member nations of the European Economic Community, and other nations outside of the United States by:

(i) meeting, to the extent practicable, the measurement quality assurance standards described in the International Standards Organization ISO 9000, Guide 25;

(ii) maintaining, to the extent practicable, certification of the metrology laboratory by a governing body appointed by the European Economic Community; and

(iii) providing calibration and consultation services to metrology laboratories in government and private industry in the United States.

Sec. 115. Minnesota Statutes 1994, section 239.54, is amended to read:

239.54 [INSPECTION OF MOTOR OIL AND AUTOMOTIVE BATTERY RETAILERS.]

The division shall produce, print, and distribute the notices required by sections 325E.11 and 325E.115 and shall inspect all places where motor oil is and motor oil filters are offered for sale by persons subject to section 325E.11 and where lead acid batteries are offered for sale at retail subject to section 325E.115 at least once every two years to determine compliance with those sections. In performing its duties under this section the division may inspect any place, building, or premises governed by sections 325E.11 and 325E.115. Authorized employees of the division may issue warnings and citations to persons who fail to comply with the requirements of those sections.

Sec. 116. Minnesota Statutes 1994, section 239.791, subdivision 8, is amended to read:

Subd. 8. [DISCLOSURE.] A person responsible for the product who delivers, distributes, sells, or offers to sell gasoline in a carbon monoxide control area, during a carbon monoxide control period refinery or terminal, shall provide, at the time of delivery gasoline is sold or transferred from the refinery or terminal, a bill of lading or shipping manifest to the person who receives the gasoline. For oxygenated gasoline, the bill of lading or shipping manifest must include the identity and the volume percentage or gallons of oxygenate included in the gasoline, and it must state: "This fuel contains an oxygenate. Do not blend this fuel with ethanol or with any other oxygenate." For nonoxygenated gasoline sold or transferred before October 1, 1997, the bill or manifest must state: "This fuel must not be sold at retail or used in a carbon monoxide control area." For nonoxygenated gasoline sold or transferred after September 30, 1997, the bill or manifest must state: "This fuel is not oxygenated. It must not be sold at retail in Minnesota." This subdivision does not apply to sales or transfers of gasoline when the gasoline is dispensed into the supply tanks of motor vehicles between refineries, between terminals, or between a refinery and a terminal.

Sec. 117. Minnesota Statutes 1994, section 296.02, is amended by adding a subdivision to read:

Subd. 7a. [TAX CREDIT FOR AGRICULTURAL ALCOHOL GASOLINE.] Until October 1, 1997, a distributor shall be allowed a credit on each gallon of denatured ethanol commercially blended with gasoline or blended in a tank truck with gasoline on which the tax imposed by subdivision 1 is due and payable. Denatured ethanol is defined in section 296.01, subdivision 13. The amount of the credit for every gallon of denatured ethanol blended with gasoline to produce agricultural alcohol gasoline is:

(1) until October 1, 1995, 15 cents;

(2) until October 1, 1996, eight cents; and

(3) until October 1, 1997, five cents.

The credit allowed a distributor must not exceed the total tax liability under subdivision 1. The tax credit received by a distributor on denatured ethanol blended with motor fuels shall be passed on to the retailer.

Sec. 118. Minnesota Statutes 1994, section 325E.10, subdivision 1, is amended to read:

Subdivision 1. For the purposes of sections 325E.11 to 325E.113 and this section, the terms defined in this section have the meanings given them.

Sec. 119. Minnesota Statutes 1994, section 325E.11, is amended to read:

325E.11 [COLLECTION FACILITIES; NOTICE.]

(a) Any person selling at retail or offering motor oil or motor oil filters for retail sale in this state shall:

(1) post a notice indicating the nearest location, or a location within ten miles of the point of sale, where used motor oil and used motor oil filters may be returned at no cost for recycling or reuse; or

(2) provide a collection tank at the point of sale for the deposit and collection of used motor oil and if the person is subject to section 325E.112, post a notice of the availability of the tank informing customers purchasing motor oil or motor oil filters of the location of the used motor oil and used motor oil filter collection site established by the retailer in accordance with section 325E.112 where used motor oil and used motor oil filters may be returned at no cost.

(b) A notice under paragraph (a) shall be posted on or adjacent to the motor oil display itself and motor oil filter displays, be at least 8-1/2 inches by 11 inches in size, contain the universal recycling symbol with the following language:

(1) "It is illegal to put used oil and used motor oil filters in the garbage.";

(2) "Recycle your used oil and used motor oil filters."; and

(3)(i) "There is a free collection tank site here for your used oil and used motor oil filters."; or

(ii) "The nearest There is a free collection tank site for used oil is and used motor oil filters located at (name of business and street address)."

(c) The division of weights and measures under the department of public service shall enforce compliance of with this section as provided in section 239.54. The pollution control agency shall enforce compliance with this section under sections 115.071 and 116.072 in coordination with the division of weights and measures.

Sec. 120. [325E.112] [USED MOTOR OIL AND USED MOTOR OIL FILTER COLLECTION.]

Subdivision 1. [COLLECTION.] (a) Retailers that sell at an individual location more than 1,000 motor oil filters per calendar year at retail for off-site installation must provide for collection of used motor oil and used motor oil filters from the public. Retailers who do not collect the used motor oil and used motor oil filters at their individual locations may meet the requirement by entering into a written agreement with another party whose location is:

(1) within two miles of the retailer's location if the retailer is located:

(i) within the Interstate Highway 494/694 beltway;

(ii) in a home rule charter or statutory city or a town contiguous to the Interstate Highway 494/694 beltway; or

(iii) in a home rule charter or statutory city of over 30,000 population within the metropolitan area as defined in section 473.121; or

(2) within five miles of the retailer's location if the retailer is not in an area described in clause (1).

(b) The written agreement must specify that the other party will accept from the public up to ten gallons of used motor oil and ten used motor oil filters per person per month during normal hours of operation unless: (1) the used motor oil is known to be contaminated with antifreeze, other hazardous waste, or other materials which may increase the cost of used motor oil management and disposal; (2) the storage equipment for that particular waste is temporarily filled to capacity; or (3) the used motor oil or used motor oil filters are from a business.

(c) Persons accepting used motor oil from the public in accordance with this subdivision shall presume that the used motor oil is not contaminated with hazardous waste, provided the person offering the used motor oil is acting in good faith and the person accepting the used motor oil does not have evidence to the contrary. Persons collecting used motor oil from the public must take precautions to prevent contamination of used motor oil storage equipment. Precautions may include, but are not limited to, keeping a log of persons dropping off used motor oil, securing access to used motor oil storage equipment, or posting signage at the site indicating the proper use of the equipment.

(d) Persons accepting used motor oil and used motor oil filters under paragraph (a), including persons accepting the oil and filters on behalf of the retailer, may not charge a fee when accepting ten gallons or less of used motor oil or ten or fewer used motor oil filters per person per month.

(e) Persons that receive contaminated used motor oil may manage the used motor oil as household hazardous waste through publicly administered household hazardous waste collection programs, with approval from the household hazardous waste program. Used motor oil contaminated with hazardous waste from the public that cannot be managed through a household hazardous waste collection program must be managed as a hazardous waste in accordance with rules adopted by the pollution control agency.

Subd. 2. [REIMBURSEMENT PROGRAM.] A contaminated used motor oil reimbursement program is established to provide partial reimbursement of the costs of disposing of contaminated used motor oil. In order to receive reimbursement, persons who accept used motor oil from the public or parties that they have contracted with to accept used motor oil must provide to the commissioner of the pollution control agency proof of contamination, information on methods the person used to prevent the contamination of used motor oil at the site, a copy of the billing for disposal costs incurred because of the contamination and proof of payment, and a copy of the hazardous waste manifest or shipping paper used to transport the waste. The commissioner shall reimburse a recipient of contaminated used motor oil 90 percent of the costs of properly disposing of the contaminated used motor oil. The commissioner may not reimburse persons who intentionally place contaminants or do not take precautions to prevent contaminants from being placed in used motor oil. Reimbursements made under this subdivision are limited to the money available in the contaminated used motor oil reimbursement account.

Subd. 3. [EDUCATION PROGRAM.] When the commissioner estimates that all funds available under section 325E.113 will not be expended for reimbursements, the commissioner may use the estimated unexpended funds to cover the costs of educating the public and businesses on the provisions of this section and on proper management of used motor oil, used motor oil filters, and other automotive wastes.

Subd. 4. [LIABILITY EXEMPTION.] Persons who accept used motor oil and used motor oil filters from the public are exempt from liability under chapter 115B for the used motor oil, contaminated used motor oil, and used motor oil filters accepted under the provisions of subdivision 1, after the used motor oil, contaminated used motor oil, and used motor oil filters are sent off-site in compliance with rules adopted by the pollution control agency.

Subd. 5. [ENFORCEMENT.] The commissioner of the pollution control agency shall enforce compliance with this section under sections 115.071 and 116.072.

Sec. 121. [325E.113] [CONTAMINATED USED MOTOR OIL REIMBURSEMENT ACCOUNT.]

The contaminated used motor oil reimbursement account is established in the environmental fund. Money in the account is appropriated to the commissioner of the pollution control agency for the commissioner's activities under section 325E.112.

Sec. 122. Minnesota Statutes 1994, section 446A.07, subdivision 8, is amended to read:

Subd. 8. [OTHER USES OF REVOLVING FUND.] The water pollution control revolving fund may be used as provided in title VI of the Federal Water Pollution Control Act, including the following uses:

(1) to buy or refinance the debt obligation of governmental units for treatment works where debt was incurred and construction begun after March 7, 1985, at or below market rates;

(2) to guarantee or purchase insurance for local obligations to improve credit market access or reduce interest rates;

(3) to provide a source of revenue or security for the payment of principal and interest on revenue or general obligation bonds issued by the authority if the bond proceeds are deposited in the fund;

(4) to provide loan guarantees, loans, or set-aside for similar revolving funds established by a governmental unit other than state agencies, or state agencies under sections 17.117, 103F.725, subdivision 1a, 116J.403, and 116J.617, and 462A.05; provided that no more than $2,000,000 of the balance in the fund may be used for the small cities block grant program under section 116J.403 and the tourism loan program under section 116J.617, taken together, and no more than $2,000,000 of the balance in the fund may be used for home improvement loan programs under section 462A.05;

(5) to earn interest on fund accounts; and

(6) to pay the reasonable costs incurred by the authority and the agency of administering the fund and conducting activities required under the federal Water Pollution Control Act, including water quality management planning under section 205(j) of the act and water quality standards continuing planning under section 303(e) of the act.

Amounts spent under clause (6) may not exceed the amount allowed under the Federal Water Pollution Control Act.

Sec. 123. Minnesota Statutes 1994, section 446A.071, subdivision 2, is amended to read:

Subd. 2. [SUPPLEMENTAL ASSISTANCE.] The authority may provide supplemental assistance under this section in the form of loans; write-down of principal, interest, or both; or direct grants, as determined by authority rules. The amount and form of the supplemental assistance must be based on the authority's determination of the financial capability of the municipality, the municipality's eligibility to qualify for other grant programs, and the source of funds. In determining the financial capability of the municipality, the authority may not find the municipality to be ineligible based on the level of the municipality's annual sewer service charge if this charge exceeds 1.1 percent of the municipality's annual median household income.

Sec. 124. Minnesota Statutes 1994, section 473.845, subdivision 2, is amended to read:

Subd. 2. [WATER SUPPLY MONITORING AND HEALTH ASSESSMENTS.] Up to ten percent of the Money in the fund may be appropriated to the commissioner of health for water supply monitoring and health assessments. The commissioner shall monitor the quality of water in public water supply wells and may monitor private water supply wells in the metropolitan area that may be affected by their location in relation to a facility for mixed municipal solid waste. Testing under this subdivision must be for substances not funded under the Federal Safe Drinking Water Act. The health assessments must be conducted in areas that may be affected by contaminants from mixed municipal solid waste facilities.

Sec. 125. Minnesota Statutes 1994, section 477A.12, is amended to read:

477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE; CERTIFICATION OF ACREAGE.]

(a) There is annually appropriated to the commissioner of natural resources from the general fund for payment to counties within the state an amount equal to:

(1) for acquired natural resources land, $3 multiplied by the total number of acres of acquired natural resources land or, beginning July 1, 1996, at the county's option three-fourths of one percent of the appraised value of all acquired natural resources land in the county, whichever is greater;

(2) 75 cents multiplied by the number of acres of county-administered other natural resources land,; and

(3) 37.5 cents multiplied by the number of acres of commissioner-administered other natural resources land located in each county as of July 1 of each year.

(b) Lands for which payments in lieu are made pursuant to section 97A.061, subdivision 3, and Laws 1973, chapter 567, shall not be eligible for payments under this section. Each county auditor shall certify to the department of natural resources during July of each year the number of acres of county-administered other natural resources land within the county. The department of natural resources may, in addition to the certification of acreage, require descriptive lists of land so certified. The commissioner of natural resources shall determine and certify the number of acres of acquired natural resources land and commissioner-administered natural resources land within each county.

(c) For the purposes of this section, the appraised value of acquired natural resources land is the purchase price for the first five years after acquisition. The appraised value of acquired natural resources land received as a donation is the value determined for the commissioner of natural resources by a licensed appraiser, or the county assessor's estimated market value if no appraisal is done. The appraised value must be determined by the county assessor every five years after the land is acquired.

Sec. 126. Minnesota Statutes 1994, section 477A.14, is amended to read:

477A.14 [USE OF FUNDS.]

Forty percent of the total payment to the county shall be deposited in the county general revenue fund to be used to provide property tax levy reduction. The remainder shall be distributed by the county in the following priority:

(a) 42.5 37.5 cents for each acre of county-administered other natural resources land shall be deposited in a resource development fund to be created within the county treasury for use in resource development, forest management, game and fish habitat improvement, and recreational development and maintenance of county-administered other natural resources land. Any county receiving less than $5,000 annually for the resource development fund may elect to deposit that amount in the county general revenue fund;

(b) From the funds remaining, Within 30 days of receipt of the payment to the county, the county treasurer shall pay each organized township 30 cents per acre of acquired natural resources land and 8.5 7.5 cents per acre of other natural resources land located within its boundaries. Payments for natural resources lands not located in an organized township shall be deposited in the county general revenue fund. Payments to counties and townships pursuant to this paragraph shall be used to provide property tax levy reduction. Provided that, if the total payment to the county pursuant to section 477A.12 is not sufficient to fully fund the distribution provided for in this clause, the amount available shall be distributed to each township and the county general revenue fund on a pro rata basis; and

(c) Any remaining funds shall be deposited in the county general revenue fund. Provided that, if the distribution to the county general revenue fund exceeds $35,000, the excess shall be used to provide property tax levy reduction.

Sec. 127. [DEMONSTRATION PROGRAM RESTRICTIONS.]

(a) During fiscal years 1996 and 1997, loan participants under Minnesota Statutes, section 41B.045, must comply with the restrictions in this section.

(b) To the extent that herd health will not be jeopardized, farms receiving assistance from the authority must be available for tours within the first two years after completion of the expansion.

(c) All livestock expansion loans must be for expansions that include some of the most up-to-date, efficient systems available. Projects must be reviewed by a University of Minnesota extension livestock specialist prior to approval by the authority.

Sec. 128. [HARMFUL SUBSTANCE COMPENSATION BOARD ABOLISHED.]

The harmful substance compensation board is abolished. All responsibilities of the board are transferred to the pollution control agency. Minnesota Statutes, section 15.039, subdivisions 6 and 7, do not apply to this transfer.

Sec. 129. [REFUNDS.]

The commissioner of natural resources shall refund any payments made after August 1, 1991, under Minnesota Statutes, section 84.631, for easements along state trails by private property owners who had preexisting rights of ingress and egress.

Sec. 130. [REVISOR INSTRUCTION.]

In the next and subsequent editions of Minnesota Statutes, the revisor of statutes shall:

(1) change the term "landfill cleanup account" to "solid waste fund" in sections 115B.40, subdivision 4; 115B.41, subdivisions 2 and 3; 115B.44, subdivision 2; 115B.45; and 116.07, subdivision 10; and

(2) change the terms "petroleum tank release cleanup account in the environmental fund" or "petroleum tank release cleanup account" and "account" where it refers to the petroleum tank cleanup account, to "petroleum tank fund" and "fund," respectively, in Minnesota Statutes, sections 115C.02, subdivision 1a; 115C.03, subdivision 9; 115C.04, subdivision 3; 115C.08; 115C.09, subdivisions 3 and 8; 115C.10; and 115C.11, subdivision 2.

Sec. 131. Laws 1992, chapter 558, section 17, is amended to read:

Sec. 17. SCIENCE MUSEUM OF MINNESOTA 200,000

This appropriation is to the Science Museum of Minnesota for planning and working drawings for capital remodeling and additions predesign for the construction of a new Science Museum in the city of St. Paul. This appropriation is from the general fund.

The planning and working drawings shall include the use of the site in the city of St. Paul on which the Public Health Building is currently located.

Sec. 132. [LIVESTOCK PROCESSING MARKETS TASK FORCE.]

Subdivision 1. [PURPOSE.] Recent changes in the Minnesota agricultural livestock industry, particularly in swine production, have resulted in fewer producers who deliver to processors greatly increased numbers of animals. In many cases these producers are organized as authorized farm corporations, as provided by recent amendments to Minnesota's corporate farming law. There is growing concern as to whether smaller producers who choose not to join large production corporations will find markets for their livestock eliminated or greatly diminished. With reduced markets and lessened competition, the smaller producers are left at a critical economic disadvantage. The study, legislative report, and legislative recommendations authorized by this section will identify ways to assure that competitive markets remain for small and medium-sized producers.

Subd. 2. [CREATION; MEMBERSHIP.] (a) There is hereby created a livestock processing markets task force with ten members appointed as follows:

(1) the chair of the agriculture and rural development committee of the senate shall appoint one citizen member with education and experience in the area of agricultural economics and four members of the senate, at least one of whom must be a member of the minority caucus; and

(2) the chair of the agriculture committee of the house of representatives shall appoint one citizen member who is the operator of a production agriculture farm in the state and four members of the house of representatives, at least one of whom must be a member of the minority caucus.

(b) The chairs must make their respective appointments not later than June 15, 1995.

(c) Citizen members of the task force may be reimbursed for expenses as provided in Minnesota Statutes, section 15.059, subdivision 6.

(d) The first meeting of the task force must be called and convened by the chairs of the agriculture policy committees of the senate and the house of representatives. Task force members must then elect a permanent chair from among the task force members.

Subd. 3. [CHARGE.] The task force must examine current and projected impacts of consolidation within the livestock production industry and its effect on the availability of competitive markets for small and medium-sized producers who choose not to become part of corporate enterprises.

Subd. 4. [RESOURCES; STAFF SUPPORT; CONTRACT SERVICES.] The commissioner of agriculture shall provide necessary resources and staff support for the meetings, hearings, activities, and report of the task force. To the extent the task force determines it appropriate to contract with nonstate providers for research or analytical services, the commissioner shall serve as the fiscal agent for the task force.

Subd. 5. [PUBLIC HEARINGS.] The task force shall hold at least four public hearings on the issue of access to markets by small and medium-sized producers of livestock. At least three of the hearings must be held in greater Minnesota.

Subd. 6. [REPORT.] Not later than March 15, 1996, the task force shall report to the legislature on the findings of its study. The report must include recommendations for improvements in Minnesota Statutes that are in the best interests of both large and small livestock producers in the state.

Subd. 7. [EXPIRATION.] The livestock processing markets task force expires 45 days after its report and recommendations are delivered to the legislature or on June 1, 1996, whichever date is earlier.

Sec. 133. [HYDROLOGIC TASK FORCE.]

Subdivision 1. [CREATION.] A task force is created to analyze means of funding interstate flood control modeling, planning, design, and implementation activities for the Red River of the North watershed in Minnesota and North Dakota.

Subd. 2. [COMPOSITION.] The task force shall consist of state legislators whose districts are wholly or partially within the drainage area of the Red River of the North.

Subd. 3. [FUNCTION.] The task force shall establish contact with a similar group of state legislators from the state of North Dakota whose districts are wholly or partially within the drainage area of the Red River of the North in North Dakota. This interstate group of state legislators shall investigate mechanisms to raise funds locally, organizations to collect funds and manage and implement joint programs and projects, and means of determining appropriate interstate cost-sharing for programs and projects. The task force shall develop a report and present it to the appropriate legislative committees prior to the 1997 legislative session.

Sec. 134. [USED MOTOR OIL AND OIL FILTERS; STUDY.]

The office of environmental assistance, with the cooperation of affected retailers, shall conduct a study of the impacts of Minnesota Statutes, section 325E.112, including:

(1) the impacts on retailers subject to the requirements of Minnesota Statutes, section 325E.112;

(2) the likelihood that an increase in the amount of used motor oil and used oil filters collected will result and the expected magnitude of that increase;

(3) the geographical distribution of any expected increase in the collection of used oil and used oil filters; and

(4) whether the costs of the collection requirement is commensurate with the expected increase in collection.

The office shall submit its findings and recommendations to the chairs of the house and senate environment and natural resource committees by January 1, 1996.

Sec. 135. [LICENSE WITHOUT TAG FOR RESIDENTS UNDER AGE 16.]

For the 1995 and 1996 hunting seasons, the commissioner of natural resources may, for a fee of $5, issue to a resident under the age of 16 a license, without a tag, to take deer with firearms. A person holding a license issued under this section may hunt under the license only if accompanied by a licensed hunter at least 18 years of age who possesses a valid tag. A deer taken by a person holding a license issued under this section must be promptly tagged by a licensed hunter accompanying the person and possessing a valid tag. Minnesota Statutes, section 97B.301, subdivision 6, does not apply to a person holding a license issued under this section.

Sec. 136. [MUZZLE-LOADING FIREARM DEER SEASON.]

For the 1996 and 1997 hunting seasons, a licensed firearms hunter who fails to tag a deer during the regular firearms season may tag a deer during the muzzle-loading firearms season by buying another firearms license and hunting by muzzle-loader. A license to hunt in the muzzle-loading season under this section must be purchased at least five days before the opening day of the muzzle-loading season, except in zone 3B where the license must be purchased before the opening day of the muzzle-loading season.

Sec. 137. [PUBLIC INPUT; REPORT.]

The commissioner of natural resources shall seek public input and comment on sections 135 and 136. By March 1, 1996, the commissioner shall report to the environment and natural resources committees of the legislature with a summary of the public comments received and any recommendations for legislation.

Sec. 138. [CONSOLIDATION OF FUNCTIONS.]

The commissioners of the pollution control agency and natural resources shall develop recommendations for consolidation of the administrative, regional, and support functions of their respective agencies wherever feasible and expected to result in long-term overall cost reductions. By February 1, 1996, the commissioners shall jointly report the recommendations to the chairs of the senate environment and natural resources finance division and the house environment and natural resources finance committee.

Sec. 139. [PERMIT APPLICATION FEES FOR TOWNS.]

Notwithstanding Minnesota Statutes, section 116.07, subdivision 4d, until July 1, 1997, the pollution control agency may not charge a town a stormwater permit application fee of more than $160 in connection with the construction, reconstruction, or alteration of a town road, bridge, or culvert.

Sec. 140. [WASTEWATER INFRASTRUCTURE FUNDING PROGRAM; REPORT.]

By November 1, 1995, the public facilities authority shall report to the legislative water commission with recommendations for statutory changes that would allow the wastewater infrastructure funding program established in Minnesota Statutes, section 446A.071, to be implemented without the need for rules. The report must include a description of capital expenditures expected to be needed for wastewater treatment projects during fiscal years 1997 and 1998.

Sec. 141. [REPEALER.]

(a) Minnesota Statutes 1994, sections 97B.301, subdivision 5; 115B.26, subdivision 1; 239.791, subdivisions 4, 5, 6, and 9; 325E.0951, subdivision 5; and Laws 1993, chapter 172, section 10, are repealed.

(b) Sections 78 to 87 are repealed.

(c) Minnesota Statutes 1994, sections 28A.08, subdivision 2; and 446A.071, subdivision 7, are repealed.

(d) Minnesota Statutes 1994, sections 41A.09, subdivisions 2, 3, and 5; 97A.531, subdivisions 2, 3, 4, 5, and 6; and 296.02, subdivision 7, are repealed.

Sec. 142. [EFFECTIVE DATES.]

Sections 2, 5, 7, 20, 42, 44 to 49, 56, 57, 101, 102, 117, and 141, paragraph (d), are effective the day following final enactment.

Sections 114, 115, 118, and 121 are effective January 1, 1996.

Sections 119, 120, and 141, paragraph (c), are effective July 1, 1996.

Section 141, paragraph (b), is effective June 30, 1999."

Delete the title and insert:

"A bill for an act relating to the organization and operation of state government; appropriating money for environmental, natural resource, and agricultural purposes; adding provisions relating to native vegetation; modifying provisions relating to disposition of certain revenues from state trust lands, sales of software, agricultural and environmental loans and grants, food handlers, ethanol and oxygenated fuels, registration fees for recreational vehicles and boats, the citizen's council on Voyageurs National Park, local recreation grants, state trails and canal and boating routes, zoo admission charges, watercraft surcharge, trout and salmon stamp, deer hunting licenses, water information, watershed district rules, sewage sludge, expenditure of money in the environmental trust fund, well sealing grants, pollution control agency fees, used motor oil and filters, and payments in lieu of taxes; establishing the Passing on the Farm Center; adding provisions relating to forest resource management; establishing special critical habitat license plates; authorizing establishment of a shooting area in Sand Dunes State Forest; abolishing the harmful substance compensation board and account; extending performance reporting requirements; providing for easements across state trails in certain circumstances; establishing a council and task forces; repealing requirements relating to fish taken in Canada; amending Minnesota Statutes 1994, sections 15.50, by adding a subdivision; 15.91, subdivision 1; 16A.125; 16B.405, subdivision 2; 17.117, subdivisions 2, 4, 6, 7, 8, 9, 10, 11, 14, 16, and by adding subdivisions; 28A.03; 28A.08; 41A.09, by adding subdivisions; 41B.02, subdivision 20; 41B.03, subdivision 6; 41B.04, subdivision 17; 41B.043, subdivisions 1b, 2, and 3; 41B.045, subdivision 2; 41B.046, subdivision 1, and by adding a subdivision; 84.631; 84.788, subdivision 3; 84.798, subdivision 3; 84.82, subdivision 2; 84.922, subdivision 2; 84.943, subdivision 3; 84B.11, subdivision 1; 85.015, subdivision 11, and by adding a subdivision; 85.019; 85.32, subdivision 1; 85A.02, subdivision 17; 86.72, subdivision 1; 86B.415, subdivisions 7 and 8; 86B.870, subdivision 1; 89.001, subdivision 8; 92.46, subdivision 1; 97C.305, subdivision 1; 103A.43; 103D.335, subdivision 19; 103F.725, subdivision 1a; 103H.151, by adding a subdivision; 103I.331, subdivision 4; 115A.03, subdivision 29; 115A.908, subdivision 3; 115B.20, subdivision 1; 115B.25, subdivision 1a; 115B.26, subdivision 2; 115B.41, subdivision 1; 115B.42; 115C.03, subdivision 9; 116.07, subdivision 4d; 116.12, subdivision 1; 116.96, subdivision 5; 116C.69, subdivision 3; 116P.11; 239.011, subdivision 2; 239.54; 239.791, subdivision 8; 296.02, by adding a subdivision; 325E.10, subdivision 1; 325E.11; 446A.07, subdivision 8; 446A.071, subdivision 2; 473.845, subdivision 2; 477A.12; and 477A.14; Laws 1992, chapter 558, section 17; proposing coding for new law in Minnesota Statutes, chapters 17; 28A; 84; 89; 116; 168; 177; and 325E; proposing coding for new law as Minnesota Statutes, chapter 89A; repealing Minnesota Statutes 1994, sections 28A.08, subdivision 2; 41A.09, subdivisions 2, 3, and 5; 97A.531, subdivisions 2, 3, 4, 5, and 6; 97B.301, subdivision 5; 115B.26, subdivision 1; 239.791, subdivisions 4, 5, 6, and 9; 296.02, subdivision 7; 325E.0951, subdivision 5; and 446A.071, subdivision 7; Laws 1993, chapter 172, section 10."

We request adoption of this report and repassage of the bill.

Senate Conferees: Steven Morse, Bob Lessard, Harold R. "Skip" Finn and Gen Olson.

House Conferees: Chuck Brown, John J. Sarna, Steve Trimble, Peg Larsen and Virgil J. Johnson.

Brown moved that the report of the Conference Committee on S. F. No. 106 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 106, A bill for an act relating to the organization and operation of state government; appropriating money for environmental, natural resource, and agricultural purposes; modifying provisions relating to disposition of certain revenues from state trust lands, sales of software, agricultural and environmental loans, food handlers, ethanol and oxygenated fuels, the citizen's council on Voyageurs National Park, local recreation grants, zoo admission charges, watercraft surcharge, water information, well sealing grants, pollution control agency fees, sale of tax-forfeited lands, and payments in lieu of taxes; establishing the Passing on the Farm Center; establishing special critical habitat license plates; authorizing establishment of a shooting area in Sand Dunes State Forest; prohibiting the adoption or enforcement of water quality standards that are not necessary to comply with federal law; abolishing the harmful substance compensation board and account; extending performance reporting requirements; providing for easements across state trails in certain circumstances; amending Minnesota Statutes 1994, sections 15.91, subdivision 1; 16A.125; 16B.405, subdivision 2; 17.117, subdivisions 2, 4, 6, 7, 8, 9, 10, 11, 14, 16, and by adding subdivisions; 28A.03; 28A.08; 41A.09, by adding subdivisions; 41B.02, subdivision 20; 41B.043, subdivisions 1b, 2, and 3; 41B.045, subdivision 2; 41B.046, subdivision 1, and by adding a subdivision; 84.631; 84.943, subdivision 3; 84B.11, subdivision 1; 85.015, by adding a subdivision; 85.019; 85A.02, subdivision 17; 86.72, subdivision 1; 86B.415, subdivision 7; 92.46, subdivision 1; 93.22; 97A.531, subdivision 1; 103A.43; 103F.725, subdivision 1a; 103H.151, by adding a subdivision; 103I.331, subdivision 4; 115.03, subdivision 5; 115A.03, subdivision 29; 115A.908, subdivision 3; 115B.20, subdivision 1; 115B.25, subdivision 1a; 115B.26, subdivision 2; 115B.41, subdivision 1; 115B.42; 115C.03, subdivision 9; 116.07, subdivision 4d, and by adding a subdivision; 116.12, subdivision 1; 116.96, subdivision 5; 116C.69, subdivision 3; 116P.11; 239.791, subdivision 8; 282.01, subdivisions 2 and 3; 282.011, subdivision 1; 282.02; 282.04, subdivision 1; 296.02, by adding a subdivision; 446A.07, subdivision 8; 446A.071, subdivision 2; 473.845, subdivision 2; 477A.11, subdivision 4; 477A.12; and 477A.14; proposing coding for new law in Minnesota Statutes, chapters 17; 28A; 89; 116; and 168; repealing Minnesota Statutes 1994, sections 28A.08, subdivision 2; 41A.09, subdivisions 2, 3, and 5; 97A.531, subdivisions 2, 3, 4, 5, and 6; 115B.26, subdivision 1; 239.791, subdivisions 4, 5, 6, and 9; 282.018; 296.02, subdivision 7; 325E.0951, subdivision 5; and 446A.071, subdivision 7; Laws 1993, chapter 172, section 10.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 128 yeas and 1 nay as follows:

Those who voted in the affirmative were:

Abrams                Finseth               Krinkie               Onnen                 Smith
Anderson, B.          Frerichs              Larsen                Opatz                 Solberg
Anderson, R.          Garcia                Leighton              Orenstein             Stanek
Bakk                  Girard                Leppik                Orfield               Sviggum
Bertram               Goodno                Lieder                Osskopp               Swenson, D.
Bettermann            Greenfield            Lindner               Osthoff               Swenson, H.
Bishop                Greiling              Long                  Ostrom                Sykora
Boudreau              Haas                  Lourey                Otremba               Tomassoni
Bradley               Hackbarth             Luther                Ozment                Tompkins
Broecker              Harder                Lynch                 Paulsen               Trimble
Brown                 Hausman               Macklin               Pawlenty              Tuma
Carlson               Holsten               Mahon                 Pellow                Tunheim
Carruthers            Hugoson               Mares                 Pelowski              Van Dellen
Clark                 Jaros                 Mariani               Perlt                 Van Engen
Commers               Jefferson             Marko                 Peterson              Vickerman
Cooper                Johnson, A.           McCollum              Pugh                  Wagenius
Daggett               Johnson, R.           McElroy               Rest                  Warkentin
Dauner                Johnson, V.           McGuire               Rhodes                Weaver
Davids                Kahn                  Milbert               Rice                  Wejcman
Dawkins               Kalis                 Molnau                Rostberg              Wenzel
Dehler                Kelley                Mulder                Rukavina              Winter
Delmont               Kinkel                Munger                Sarna                 Wolf
Dempsey               Knight                Murphy                Schumacher            Workman
Dorn                  Knoblach              Ness                  Seagren               Sp.Anderson,I
Erhardt               Koppendrayer          Olson, E.             Simoneau              
Farrell               Kraus                 Olson, M.             Skoglund              

Huntley                                     

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 255.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to elevators; regulating persons who may do elevator work; appropriating money; amending Minnesota Statutes 1994, sections 183.355, subdivision 3; 183.357, subdivisions 1, 2, and 4; and 183.358; proposing coding for new law in Minnesota Statutes, chapter 183.

May 17, 1995

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 255, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 255 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. [183.3521] [ELEVATOR MECHANICS; REGISTRATION.]

The wiring, installation, alteration, modernization, removal, and repair of the mechanical and electrical apparatus of an elevator that is used to move persons must be performed by a person registered by the commissioner as an elevator mechanic or by a person acting under the direct on-site supervision of a registered elevator mechanic. A registered mechanic may supervise not more than five persons performing work otherwise required to be performed by a registered mechanic.

To be registered by the commissioner, a person must have successfully completed the national elevator industry education program or a program found by the commissioner to be equivalent and must possess an elevator constructor or master elevator constructor license issued by the state board of electricity. Nothing in this section will supersede or replace sections 326.241 to 326.248.

Sec. 2. Minnesota Statutes 1994, section 183.355, subdivision 3, is amended to read:

Subd. 3. [MINIMUM REQUIREMENTS.] No person, firm, or corporation may construct, install, remove, or repair an elevator that does not meet the minimum requirements of this chapter, adopted sections 183.351 to 183.358, rules, or national codes adopted by rule.

Sec. 3. Minnesota Statutes 1994, section 183.357, subdivision 1, is amended to read:

Subdivision 1. [PERMITS.] No person, firm, or corporation may construct, perform alterations, remove, or install an elevator without first filing an application for obtaining a permit with the department of labor and industry or a municipality authorized by subdivision 3 to inspect elevators. Projects under actual construction before July 1, 1989, are not required to obtain a permit from the department. Upon successfully completing inspection and the payment of the appropriate fee, the owner must be granted an operating permit for the elevator.

Sec. 4. Minnesota Statutes 1994, section 183.357, subdivision 2, is amended to read:

Subd. 2. [CONTRACTOR LICENSES.] The commissioner may shall by rule establish criteria for the qualifications of elevator contractors and issue licenses based upon proof of the applicant's qualifications.

Sec. 5. Minnesota Statutes 1994, section 183.357, subdivision 4, is amended to read:

Subd. 4. [DEPOSIT OF FEES.] Fees received under this section must be deposited in the state treasury and credited to the special revenue fund and are appropriated to the commissioner for the purposes of sections 183.351 to 183.358.

Sec. 6. Minnesota Statutes 1994, section 183.358, is amended to read:

183.358 [RULES.]

The commissioner may shall adopt rules for the following purposes:

(1) to set a fee under section 16A.128 16A.1285 for processing a construction or installation permit or elevator contractor license application;

(2) to set a fee under section 16A.128 16A.1285 to cover the cost of elevator inspections;

(3) to establish minimum qualifications for elevator inspectors that must include possession of a current journeyman elevator electrician's license issued by the state board of electricity and proof of successful completion of the national elevator construction mechanic examination industry education program or equivalent experience;

(4) to establish criteria for the qualifications of elevator contractors;

(5) to establish elevator standards under sections 16B.61, subdivisions 1 and 2, and 16B.64; and

(6) to establish procedures for appeals of decisions of the commissioner under chapter 14 and procedures allowing the commissioner, before issuing a decision, to seek advice from the elevator trade, building owners or managers, and others knowledgeable in the installation, construction, and repair of elevators.

Sec. 7. [183.3581] [APPLICATION.]

Nothing in sections 1 to 3 shall be construed to require registration or licensure of a person, or issuance of a permit, to demolish an elevator or to do minor repair work as that term is defined in Minnesota Rules, part 3800.3500, subpart 10.

For the purpose of this section "demolish" means the removal of an elevator from a building after the elevator car and counter balances have been landed by an elevator contractor using the personnel specified under section 1.

Sec. 8. [EFFECTIVE DATE.]

Section 1 is effective July 1, 1995. Section 5 is effective July 1, 1997. Section 6 is effective the day following final enactment."

We request adoption of this report and repassage of the bill.

Senate Conferees: Paula E. Hanson, Steve L. Murphy and Steve Dille.

House Conferees: Phil Carruthers, Bob Johnson and Jim Rostberg.

Carruthers moved that the report of the Conference Committee on S. F. No. 255 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 255, A bill for an act relating to elevators; regulating persons who may do elevator work; appropriating money; amending Minnesota Statutes 1994, sections 183.355, subdivision 3; 183.357, subdivisions 1, 2, and 4; and 183.358; proposing coding for new law in Minnesota Statutes, chapter 183.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 93 yeas and 34 nays as follows:

Those who voted in the affirmative were:

Anderson, R.          Greenfield            Leighton              Olson, E.             Sarna
Bakk                  Greiling              Leppik                Opatz                 Schumacher
Bertram               Haas                  Lieder                Orenstein             Simoneau
Bishop                Hackbarth             Long                  Orfield               Skoglund
Brown                 Harder                Lourey                Osthoff               Smith
Carlson               Hausman               Luther                Ostrom                Solberg
Carruthers            Hugoson               Lynch                 Otremba               Stanek
Clark                 Huntley               Macklin               Ozment                Swenson, D.
Cooper                Jaros                 Mahon                 Pawlenty              Tomassoni
Dauner                Jefferson             Mares                 Pellow                Trimble
Davids                Johnson, A.           Mariani               Pelowski              Tunheim
Dawkins               Johnson, R.           Marko                 Perlt                 Van Engen
Delmont               Johnson, V.           McCollum              Peterson              Vickerman
Dempsey               Kahn                  McElroy               Pugh                  Warkentin
Dorn                  Kalis                 McGuire               Rest                  Wenzel
Erhardt               Kelley                Milbert               Rhodes                Winter
Farrell               Kinkel                Munger                Rice                  Sp.Anderson,I
Finseth               Kraus                 Murphy                Rostberg              
Garcia                Larsen                Ness                  Rukavina              

Abrams                Daggett               Knoblach              Onnen                 Tompkins
Anderson, B.          Dehler                Koppendrayer          Osskopp               Tuma
Bettermann            Frerichs              Krinkie               Paulsen               Van Dellen
Boudreau              Girard                Lindner               Seagren               Weaver
Bradley               Goodno                Molnau                Sviggum               Wolf
Broecker              Holsten               Mulder                Swenson, H.           Workman 
Commers               Knight                Olson, M.             Sykora                

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 257.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to soil and water conservation district boards; providing that the office of soil and water conservation district supervisor is compatible with certain city and town offices; amending Minnesota Statutes 1994, sections 103C.315, by adding a subdivision; and 204B.06, subdivision 1.

May 17, 1995

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 257, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendment and that S. F. No. 257 be further amended as follows:

Page 1, line 26, after the period, insert "This subdivision does not apply to an office located in whole or in part in Anoka, Hennepin, Ramsey, or Washington county."

Page 2, line 10, after "supervisor" insert "in a district not located in whole or in part in Anoka, Hennepin, Ramsey, or Washington county,"

We request adoption of this report and repassage of the bill.

Senate Conferees: Steven Morse, Gary W. Laidig and Dallas C. Sams.

House Conferees: Gene Pelowski, Jr., Betty McCollum and Virgil J. Johnson.

Pelowski moved that the report of the Conference Committee on S. F. No. 257 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 257, A bill for an act relating to soil and water conservation district boards; providing that the office of soil and water conservation district supervisor is compatible with certain city and town offices; amending Minnesota Statutes 1994, sections 103C.315, by adding a subdivision; and 204B.06, subdivision 1.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 126 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams                Finseth               Larsen                Opatz                 Stanek
Anderson, B.          Frerichs              Leighton              Orenstein             Sviggum
Anderson, R.          Garcia                Leppik                Orfield               Swenson, D.
Bakk                  Girard                Lieder                Osskopp               Swenson, H.
Bertram               Goodno                Lindner               Osthoff               Sykora
Bettermann            Greenfield            Long                  Ostrom                Tomassoni
Bishop                Greiling              Lourey                Otremba               Tompkins
Boudreau              Haas                  Luther                Ozment                Trimble
Bradley               Harder                Lynch                 Paulsen               Tuma
Broecker              Hausman               Macklin               Pawlenty              Tunheim
Brown                 Holsten               Mahon                 Pellow                Van Dellen
Carlson               Hugoson               Mares                 Pelowski              Van Engen
Carruthers            Huntley               Mariani               Perlt                 Vickerman
Clark                 Jaros                 Marko                 Peterson              Wagenius
Commers               Jefferson             McCollum              Pugh                  Warkentin
Cooper                Johnson, A.           McElroy               Rest                  Weaver
Daggett               Johnson, R.           McGuire               Rhodes                Wejcman
Dauner                Johnson, V.           Milbert               Rostberg              Wenzel
Davids                Kahn                  Molnau                Rukavina              Winter
Dawkins               Kalis                 Mulder                Sarna                 Wolf
Dehler                Kelley                Munger                Schumacher            Workman
Delmont               Kinkel                Murphy                Seagren               Sp.Anderson,I
Dempsey               Knight                Ness                  Simoneau              
Dorn                  Knoblach              Olson, E.             Skoglund              
Erhardt               Koppendrayer          Olson, M.             Smith                 
Farrell               Kraus                 Onnen                 Solberg               

The following Conference Committee Report was received:

A bill for an act relating to traffic regulations; increasing maximum length of certain combinations of vehicles from 65 to 70 feet; amending Minnesota Statutes 1994, section 169.81, subdivision 3.

May 17, 1995

The Honorable Irv Anderson

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 1207, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 1207 be further amended as follows:

Page 1, line 13, delete "70" and insert "75"

Page 3, after line 28, insert:

"Sec. 2. Minnesota Statutes 1994, section 169.81, subdivision 3c, is amended to read:

Subd. 3c. [RECREATIONAL VEHICLE COMBINATIONS.] Notwithstanding subdivision 3, a recreational vehicle combination may be operated without a permit if:

(1) the combination does not consist of more than three vehicles, and the towing rating of the pickup truck is equal to or greater than the total weight of all vehicles being towed;

(2) the combination does not exceed 60 feet in length;

(3) the camper-semitrailer in the combination does not exceed 26 28 feet in length until August 1, 1997, and 26 feet thereafter;

(4) the operator of the combination is at least 18 years of age;

(5) the trailer carrying a watercraft meets all requirements of law;

(6) the trailers in the combination are connected to the pickup truck and each other in conformity with section 169.82; and

(7) the combination is not operated within the seven-county metropolitan area, as defined in section 473.121, subdivision 2, during the hours of 6:00 a.m. to 9:00 a.m. and 4:00 p.m. to 7:00 p.m. on Mondays through Fridays.

Sec. 3. [EFFECTIVE DATE.]

Section 2 is effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to traffic regulations; increasing maximum length allowed for operation of certain combinations of vehicles; amending Minnesota Statutes 1994, section 169.81, subdivisions 3 and 3c."

We request adoption of this report and repassage of the bill.

House Conferees: Ted Winter, Leslie Schumacher and Roxann Daggett.

Senate Conferees: Steve L. Murphy, Jim Vickerman and Arlene J. Lesewski.

Winter moved that the report of the Conference Committee on H. F. No. 1207 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 1207, A bill for an act relating to traffic regulations; increasing maximum length of certain combinations of vehicles from 65 to 70 feet; amending Minnesota Statutes 1994, section 169.81, subdivision 3.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 108 yeas and 21 nays as follows:

Those who voted in the affirmative were:

Anderson, B.          Erhardt               Kraus                 Onnen                 Smith
Anderson, R.          Finseth               Krinkie               Opatz                 Solberg
Bakk                  Frerichs              Larsen                Orenstein             Sviggum
Bertram               Girard                Leighton              Orfield               Swenson, D.
Bettermann            Greenfield            Lieder                Osskopp               Swenson, H.
Bishop                Greiling              Lindner               Osthoff               Sykora
Boudreau              Haas                  Lourey                Ostrom                Tomassoni
Bradley               Hackbarth             Luther                Ozment                Tuma
Broecker              Harder                Macklin               Paulsen               Tunheim
Brown                 Holsten               Mahon                 Pawlenty              Van Dellen
Carlson               Hugoson               Mares                 Pellow                Van Engen
Carruthers            Huntley               McCollum              Pelowski              Vickerman
Commers               Jaros                 McElroy               Peterson              Warkentin
Cooper                Jefferson             McGuire               Pugh                  Weaver
Daggett               Johnson, A.           Milbert               Rest                  Wejcman
Dauner                Johnson, R.           Molnau                Rhodes                Wenzel
Davids                Johnson, V.           Mulder                Rice                  Winter
Dehler                Kelley                Munger                Rostberg              Wolf
Delmont               Kinkel                Murphy                Rukavina              Workman
Dempsey               Knight                Ness                  Sarna                 Sp.Anderson,I
Dorn                  Knoblach              Olson, E.             Schumacher            
Entenza               Koppendrayer          Olson, M.             Simoneau              

Abrams                Goodno                Long                  Seagren               Wagenius 
Clark                 Hausman               Mariani               Skoglund              
Dawkins               Kahn                  Marko                 Stanek                
Farrell               Kalis                 Otremba               Tompkins              
Garcia                Leppik                Perlt                 Trimble               

The following message was received from the Senate:

Mr. Speaker:

I hereby announce the adoption by the Senate of the following Senate Concurrent Resolution, herewith transmitted:

Senate Concurrent Resolution No. 5, A senate concurrent resolution expressing support for the recommendations of the Rainy Lake/Namakan Reservoir Water Level International Steering Committee.

Patrick E. Flahaven, Secretary of the Senate

Bakk moved that the rules be so far suspended that Senate Concurrent Resolution No. 5 be now considered and be placed upon its adoption.

A roll call was requested and properly seconded.

The question was taken on the Bakk motion and the roll was called. There were 66 yeas and 60 nays as follows:

Those who voted in the affirmative were:

Anderson, R.          Greenfield            Lieder                Opatz                 Skoglund
Bakk                  Greiling              Long                  Orenstein             Solberg
Bertram               Hausman               Lourey                Otremba               Tomassoni
Brown                 Huntley               Luther                Ozment                Trimble
Carlson               Jaros                 Mahon                 Pelowski              Tunheim
Carruthers            Jefferson             Mariani               Perlt                 Wagenius
Clark                 Johnson, A.           Marko                 Peterson              Wejcman
Cooper                Johnson, R.           McCollum              Pugh                  Wenzel
Dauner                Johnson, V.           McGuire               Rest                  Winter
Dawkins               Kahn                  Milbert               Rice                  Sp.Anderson,I
Delmont               Kalis                 Munger                Rukavina              
Dorn                  Kelley                Murphy                Sarna                 
Farrell               Kinkel                Ness                  Schumacher            
Garcia                Leighton              Olson, E.             Simoneau              

Abrams                Erhardt               Koppendrayer          Onnen                 Swenson, D.
Anderson, B.          Finseth               Kraus                 Osskopp               Swenson, H.
Bettermann            Frerichs              Krinkie               Osthoff               Sykora
Bishop                Girard                Larsen                Paulsen               Tompkins
Boudreau              Goodno                Leppik                Pawlenty              Tuma
Bradley               Haas                  Lindner               Pellow                Van Dellen
Broecker              Hackbarth             Lynch                 Rhodes                Van Engen
Commers               Harder                Macklin               Rostberg              Vickerman
Daggett               Holsten               Mares                 Seagren               Warkentin
Davids                Hugoson               McElroy               Smith                 Weaver
Dehler                Knight                Molnau                Stanek                Wolf
Dempsey               Knoblach              Mulder                Sviggum               Workman 

Senate Concurrent Resolution No. 5 was referred to the Committee on Rules and Legislative Administration.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 462:

Wagenius, Ozment and Orfield.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 621:

Milbert, Bakk and Johnson, V.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 1536:

Lieder, Rice, Marko, Garcia and Frerichs.

Carruthers moved that the House recess subject to the call of the Chair. The motion prevailed.

The House reconvened and was called to order by the Speaker.

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 1670.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to the organization and operation of state government; appropriating money for community development and certain agencies of state government, with certain conditions; establishing and modifying certain programs; providing for regulation of certain activities and practices; providing for accounts, assessments, and fees; requiring studies and reports; amending Minnesota Statutes 1994, sections 116J.873, subdivision 3, and by adding subdivisions; 116M.16, subdivision 2; 116M.18, subdivisions 4, 5, and by adding a subdivision; 116N.03, subdivision 2; 116N.08, subdivisions 5, 6, and by adding a subdivision; 124.85, by adding a subdivision; 175.171; 268A.01, subdivisions 4, 5, 6, 9, and 10; 268A.03; 268A.06, subdivision 1; 268A.07; 268A.08, subdivisions 1 and 2; 268A.13; 462A.201, subdivision 2; 462A.204, subdivision 1; and 462A.21, subdivisions 3b, 8b, 21, and by adding a subdivision; Laws 1994, chapter 643, section 19, subdivision 9; proposing coding for new law in Minnesota Statutes, chapters 178; 268A; and 462A; repealing Minnesota Statutes 1994, sections 116J.874, subdivision 6; 268A.01, subdivisions 7, 11, and 12; and 268A.09.

May 17, 1995

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 1670, report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 1670 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. [ECONOMIC DEVELOPMENT; APPROPRIATIONS.]

The sums shown in the columns marked "APPROPRIATIONS" are appropriated from the general fund, or another named fund, to the agencies and for the purposes specified in this act, to be available for the fiscal years indicated for each purpose. The figures "1996" and "1997," where used in this act, mean that the appropriation or appropriations listed under them are available for the year ending June 30, 1996, or June 30, 1997, respectively. The term "first year" means the fiscal year ending June 30, 1996, and "second year" means the fiscal year ending June 30, 1997.

1995 1996 1997 TOTAL

General $408,000 $194,091,000 $160,733,000 $355,232,000

Petroleum Tank

Cleanup 838,000 842,000 1,680,000

Trunk Highway 670,000 670,000 1,340,000

Special

Compensation 407,000 20,641,000 18,179,000 39,227,000

Special Revenue 336,000 341,000 677,000

TOTAL $815,000 $216,576,000 $180,765,000 $398,156,000

APPROPRIATIONS

Available for the Year

Ending June 30

1995 1996 1997

Sec. 2. TRADE AND ECONOMIC DEVELOPMENT

Subdivision 1. Total Appropriation $ $ 36,579,000 $ 21,648,000

General 35,909,000 20,978,000

Trunk Highway 670,000 670,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

Subd. 2. Business and Community Development

23,961,000 9,351,000

$100,000 the first year and $100,000 the second year are for the affirmative enterprise program. The appropriation is available until spent.

$6,017,000 the first year is for economic recovery grants, of which $500,000 may be used for the purposes of the capital access program, and is available until spent.

$379,000 the first year and $379,000 the second year are for the small cities federal match.

$200,000 the first year and $200,000 the second year are for grants to Advantage Minnesota, Inc. The funds are available only if matched on at least a dollar-for-dollar basis from other sources. The commissioner may release the funds only upon:

(1) certification that matching funds from each participating organization are available; and

(2) review and approval by the commissioner of the proposed operations plan of Advantage Minnesota, Inc. for the biennium.

$450,000 the first year and $450,000 the second year are for the state's match for the federal small business development centers. If funding in one year is insufficient, the other year's appropriation is available.

$1,987,000 the first year and $1,962,000 the second year are for the job skills partnership program.

$300,000 is to the job skills partnership board for the purpose of funding the development and implementation of a program by the city of St. Paul which connects the economic development activities of the St. Paul port authority with the city of St. Paul's employment and job development programs. This employment connection program shall be administered by the port authority consistent with, and subject to, the program requirements of the Minnesota job skills partnership program. The appropriation is available until spent.

$100,000 the first year and $100,000 the second year are to the job skills partnership board for a grant to the city of Minneapolis' employment connection program with the Minneapolis Community Development Agency.

$7,800,000 is for grants under Minnesota Statutes, sections 116J.551 to 116J.558. This appropriation is available until spent.

$100,000 is for a grant to the Phoenix Group, Inc. The grant must be used to make grants and loans and provide technical and other assistance to community residents in neighborhoods with high levels of poverty for the purpose of creating business opportunities to promote self-sufficiency. The appropriation is available for the biennium ending June 30, 1997.

$200,000 the first year is for a grant to Hennepin county for the multijurisdictional reinvestment program established in Minnesota Statutes, section 383B.79. Hennepin county, working in conjunction with the metropolitan council, shall report to the senate committee on jobs, energy, and community development and the house committee on economic development, infrastructure, and regulation finance by February 15, 1996, with its recommendations, funding needs, and potential funding sources to carry out the multijurisdictional reinvestment program. This appropriation does not lapse, and is available until spent.

$450,000 the first year and $515,000 the second year are from fees collected under Minnesota Statutes, section 446A.04, subdivision 5, and credited to the general fund to administer the programs of the public facilities authority.

$250,000 is for the state's share for a matching defense conversion grant to Hennepin and Ramsey counties from the United States department of commerce economic development administration. The state and local government contribution must be matched at least three to one by the federal government. This appropriation is available until spent.

Subd. 3. Minnesota Trade Office

2,304,000 2,318,000

$150,000 the first year and $150,000 the second year are for state participation in the federal City-State Leveraged Financing Program.

Subd. 4. Tourism

8,172,000 8,147,000

General 7,502,000 7,477,000

Trunk Highway 670,000 670,000

$100,000 is for the costs of activities by the commissioner of trade and economic development to resolve a dispute concerning fishing restrictions in Ontario waters that unduly restrict the rights of Minnesota residents to take fish by angling in border waters. The commissioner may use this appropriation for (1) a grant to the attorney general to study a legal challenge in the courts of Ontario or any other available forum to actions of that province relating to fishing rights of Minnesotans in border waters, (2) efforts to mediate the dispute, (3) seeking recourse through the mechanisms of international trade agreements, or (4) other actions the commissioner deems necessary to achieve a resolution. This appropriation is available until spent.

$100,000 the first year and $175,000 the second year are for expanded group tour marketing and to host the National Tour Association Convention in Minnesota in 1996.

To develop maximum private sector involvement in tourism, $2,500,000 the first year and $2,500,000 the second year of the amounts appropriated for marketing activities are contingent upon receipt of an equal contribution of nonstate sources that have been certified by the commissioner. Up to one-half of the match may be given in in-kind contributions. This appropriation may not be spent until the money is matched. Of this appropriation, $400,000 the first year and $400,000 the second year are for international marketing and tourism promotion to maximize international tourism to Minnesota and to promote Minnesota goods and services in the international market place. The office of tourism shall consult with the trade office in these promotional efforts. The office shall report on January 1, 1997, to the chairs of the legislative committees with jurisdiction over economic development policy and finance on these promotional efforts.

In order to maximize marketing grant benefits, the commissioner must give priority for joint venture marketing grants to organizations with year-round sustained tourism activities. For programs and projects submitted, the commissioner must give priority to those that encompass two or more areas or that attract nonresident travelers to the state.

Any unexpended money from general fund appropriations made under this subdivision do not cancel, but must be placed in a special advertising account for use by the office of tourism to purchase additional media.

If an appropriation for either year for grants is not sufficient, the appropriation for the other year is available for it.

$229,000 the first year and $229,000 the second year are for the Minnesota film board. This appropriation is available only upon receipt by the board of $1 in matching contributions of money or in-kind from nonstate sources for every $3 provided by this appropriation.

The commissioner may use grant dollars or the value of in-kind services to provide the state contribution for the joint venture grant program.

Subd. 5. Administration

2,142,000 1,832,000

$670,000 the first year and $330,000 the second year are for network management services and support.

Sec. 3. MINNESOTA TECHNOLOGY, INC. 8,034,000 7,834,000

$6,105,000 the first year and $6,105,000 the second year are for transfer from the general fund to the Minnesota Technology, Inc. fund.

$75,000 the first year and $75,000 the second year are for grants to Minnesota Inventors Congress.

$494,000 the first year and $494,000 the second year are for grants to Minnesota Project Innovation.

$1,147,000 the first year and $947,000 the second year are for grants to Natural Resources Research Institute. Of this appropriation the institute shall spend $200,000 the first year as follows:

(1) $100,000 is for a study of water quality impacts and permitting requirements related to peat harvesting operations. The study must include: (i) a review of existing water quality permitting requirements and the ability of peat producers to comply with these requirements; (ii) establishment and monitoring of representative background control and downstream sampling locations at selected peat harvesting operations; (iii) an evaluation of the use of innovative best management practices to minimize downstream water quality impacts; and (iv) development of a model water quality permit for peat harvesting operations in this state. By October 1, 1997, the institute shall report on the results of the study to the chairs of the senate and house environment and natural resources committees. The report must include recommendations, if any, for changes to existing state laws and rules relating to water quality permitting requirements for peat harvesting operations.

(2) $100,000 is for a grant to Rainy River community college for a study of reclamation and restoration options for harvested peatlands. The grant recipient must submit to the chairs of the senate and house environment and natural resources committees a report on the study, including any recommendations for changes to existing laws and rules relating to reclamation and restoration of harvested peatlands.

$88,000 the first year and $88,000 the second year are for grants to Minnesota Council for Quality.

$50,000 the first year and $50,000 the second year are for grants to Minnesota Technology Corridor Corporation.

$75,000 the first year and $75,000 the second year are for grants to Minnesota Cold Weather Research Center.

Sec. 4. WORLD TRADE CENTER CORP. 170,000

Sec. 5. ECONOMIC SECURITY 51,952,000 47,772,000

Subdivision 1. Rehabilitation Services

18,232,000 18,232,000

$100,000 the first year and $100,000 the second year are for centers for independent living.

$70,000 in 1996 and $70,000 in 1997 is for mentally ill employment support services authorized by Minnesota Statutes, section 268A.13.

$50,000 the first year and $50,000 the second year are for purposes of planning, implementing, and managing the statewide reimbursement system authorized by Minnesota Statutes, section 268A.14.

Subd. 2. State Services for the Blind

3,638,000 3,659,000

This appropriation may be supplemented by funds provided by the Friends of the Communication Center, for support of Services for the Blind's Communication Center, which serves all blind and visually handicapped Minnesotans. The commissioner shall report to the legislature on a biennial basis the funds provided by the Friends of the Communication Center.

Subd. 3. Community-Based Services

30,082,000 25,881,000

$935,000 the first year and $935,000 the second year are for operating costs of transitional housing programs under Minnesota Statutes, section 268.38.

$7,000,000 the first year and $7,000,000 the second year are for the Minnesota economic opportunity grant program. Of this appropriation the commissioner may use up to 8.7 percent each year for state operations.

For the biennium ending June 30, 1997, the commissioner shall transfer to the low-income home weatherization program at least five percent of the money received under the low-income home energy assistance block grant in each year of the biennium and shall spend all of the transferred money during the year of the transfer or the year following the transfer. Up to 1.63 percent of the transferred money may be used by the commissioner for administrative purposes.

For the biennium ending June 30, 1997, no more than 1.63 percent of money remaining under the low-income home energy assistance program after transfers to the weatherization program may be used by the commissioner for administrative purposes.

The state appropriation for the temporary emergency food assistance program may be used to meet the federal match requirements.

$100,000 the first year and $100,000 the second year are for youth intervention programs under Minnesota Statutes, section 268.30, subdivisions 1 and 2. Funding may be used to expand existing programs to serve unmet needs and to create new programs in underserved areas. In awarding these new funds, the commissioner may waive or modify the requirement for local match when this requirement deters expansion to underserved communities or populations. This appropriation is available until spent.

Notwithstanding Minnesota Statutes, section 268.022, subdivision 2, the commissioner of finance shall transfer to the general fund from the dedicated fund $3,000,000 in the first year and $3,000,000 in the second year of the money collected through the special assessment established in Minnesota Statutes, section 268.022, subdivision 1.

Of this appropriation, $3,000,000 the first year is for summer youth employment programs.

Of the money appropriated for the summer youth employment programs for the first year, $750,000 is immediately available. Any remaining balance of the immediately available money is available for the year in which it is appropriated. If the appropriation for either year of the biennium is insufficient, money may be transferred from the appropriation for the other year.

$200,000 the first year is for youth employment and for housing for the homeless through the YOUTHBUILD program. A Minnesota YOUTHBUILD program funded under this section as authorized in Minnesota Statutes, sections 268.361 to 268.367 qualifies as an approved training program under Minnesota Rules, part 5200.0930, subpart 1.

Of the appropriation for Head Start, the commissioner may use up to two percent each year for state operations.

$250,000 is for the learn to earn summer youth employment demonstration program established in section 39. This appropriation is available until spent.

Sec. 6. HOUSING FINANCE AGENCY 30,082,000 17,532,000

This appropriation is for transfer to the housing development fund for the programs specified. This transfer is part of the agency's permanent budget base.

Any state appropriations used to meet match requirements under Title II of the National Affordable Housing Act of 1990, Public Law Number 101-625, 104 Stat. 4079, must be repaid, to the extent required by federal law, to the HOME Investment Trust Fund established by the department of housing and urban development pursuant to Title II of the National Affordable Housing Act of 1990 for the state of Minnesota or for the appropriate participating jurisdiction.

State appropriations to the Minnesota housing finance agency may be granted by the agency to cities or nonprofit organizations to the extent necessary to meet match requirements under Title II of the National Affordable Housing Act of 1990, Public Law Number 101-625, 104 Stat. 4079, provided that other program requirements are met.

Spending limit on cost of general administration of agency programs:

1996 1997

10,493,000 9,911,000

$1,200,000 the first year and $1,200,000 the second year are for a rental housing assistance program for persons with a mental illness or families with an adult member with a mental illness under Minnesota Statutes, section 462A.2097.

$6,000,000 is for the affordable rental investment fund program. To the extent practicable, this appropriation shall be used so that an approximately equal number of housing units are financed in the metropolitan area, as defined in Minnesota Statutes, section 473.121, subdivision 2, and in the nonmetropolitan area.

(a) In the area of the state outside the metropolitan area, the agency must work with groups in the funding regions created under Minnesota Statutes, section 116N.08 to assist the agency in identifying the affordable housing needed in each region in connection with economic development and redevelopment efforts and in establishing priorities for uses of the affordable rental investment fund. The groups must include the regional development commissioners, the regional organization selected under section 116N.08, the private industry councils, units of local

government, community action agencies, the Minnesota housing partnership network groups, local lenders, for-profit and nonprofit developers, and realtors. In addition to priorities developed by the group, the agency must give a preference to economically viable projects in which units of local government, area employers, and the private sector contribute financial assistance.

(b) In the metropolitan area, the commissioner shall collaborate with the metropolitan council to identify the priorities for use of the affordable rental investment fund. Funds distributed in the metropolitan area must be used consistent with the objectives of the metropolitan development guide, adopted under Minnesota Statutes, section 473.145. In addition to the priorities identified in conjunction with the metropolitan council, the agency shall give preference to economically viable projects that:

(1) include a contribution of financial resources from units of local government and area employers;

(2) take into account the availability of transportation in the community; and

(3) take into account the job training efforts in the community.

$5,800,000 is for the community rehabilitation program. Of this amount, $250,000 each year is for full cycle home ownership and purchase-rehabilitation lending initiatives. At least 20 percent of this appropriation must be used in areas in a city of the first class located in the metropolitan area, as defined in Minnesota Statutes, section 473.121, subdivision 2, in which at least one census tract meets at least three of the four following criteria:

(1) at least 70 percent of the housing structures were built before 1960;

(2) at least 60 percent of the single-family housing is owner occupied;

(3) the median value, as recorded in the 1990 federal decennial census, of the area's owner-occupied housing is not more than 100 percent of the purchase price limit for existing homes eligible for purchase in the area under the agency's home mortgage loan program; and

(4) between 1980 and 1990, the rate of owner-occupancy of residential properties in the area declined by five percent, or at least 80 percent of the residential properties in the area are rental properties.

The area shall include eight blocks in any direction from the census tract.

In cities of the first class located in the metropolitan area the appropriation may be used only for grants and loans for owner-occupied housing. Priority must be given for property located

in an area that meets all four of the criteria. This appropriation may fund grants in an amount greater or less than $350,000 and a grantee may receive grants to serve one or more census tracts within a city.

In distributing funds available from the 1994 Series E bond sale, the agency, in accordance with the terms of that sale, shall give priority to requests for use of the funds in cities which receive funding from this appropriation to the community rehabilitation program.

$150,000 is for equal grants to the six regional organizations selected under Minnesota Statutes, section 116N.08, for capacity building grants and if the appropriation is not spent under that section it is available for the capacity building grant program under Minnesota Statutes, section 462A.21, subdivision 3b.

$187,000 the first year and $187,000 the second year are for the urban Indian housing program under Minnesota Statutes, section 462A.07, subdivision 15.

$1,683,000 the first year and $1,683,000 the second year are for the tribal Indian housing program under Minnesota Statutes, section 462A.07, subdivision 14.

$186,000 the first year and $186,000 the second year are for the Minnesota rural and urban homesteading program under Minnesota Statutes, section 462A.057.

The agency may use up to $1,000,000 of available resources for the purpose of making loans under the Minnesota rural and urban homesteading program established under Minnesota Statutes, section 462A.057, subdivision 1. The commissioner shall report to the relevant finance divisions in the house of representatives and senate on the outcomes of this program January 15 of each year.

$500,000 is for the purpose of residential lead paint and lead contaminated soil abatement under Minnesota Statutes, section 462A.05, subdivision 15c, paragraph (b).

$4,287,000 the first year and $4,287,000 the second year are for the housing rehabilitation and accessibility program under Minnesota Statutes, section 462A.05, subdivision 14a.

$1,500,000 the first year and $1,500,000 the second year are for the rent assistance for family stabilization program under Minnesota Statutes, section 462A.205.

$100,000 is for the contract for deed guarantee account.

$200,000 the first year and $200,000 the second year are for family homeless prevention and assistance program.

$200,000 the first year and $200,000 the second year are for the emergency mortgage foreclosure prevention and emergency rental assistance program.

$25,000 the first year and $25,000 the second year are for home equity conversion counseling grants under Minnesota Statutes, section 462A.28.

Sec. 7. COMMERCE

Subdivision 1. Total Appropriation 15,087,000 15,162,000

General 13,913,000 13,979,000

Petro Cleanup 838,000 842,000

Special Revenue 336,000 341,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

Subd. 2. Financial Examinations

3,775,000 3,790,000

Subd. 3. Registration and Analysis

3,995,000 4,002,000

Subd. 4. Enforcement and Licensing

3,913,000 3,934,000

General 3,577,000 3,593,000

Special Revenue 336,000 341,000

$336,000 the first year and $341,000 the second year are from the real estate education, research, and recovery account in the special revenue fund for the purpose of Minnesota Statutes, section 82.34, subdivision 6. If the appropriation from the special revenue fund for either year is insufficient, the appropriation for the other year is available for it.

Subd. 5. Petroleum Tank Release Cleanup Board

838,000 842,000

This appropriation is from the petroleum tank release cleanup account in the environmental fund for administration.

Subd. 6. Administrative Services

2,716,000 2,744,000

Subd. 7. General Reduction

(150,000) (150,000)

Sec. 8. BOARD OF ACCOUNTANCY 537,000 558,000

Sec. 9. BOARD OF ARCHITECTURE, ENGINEERING,

LAND SURVEYING, LANDSCAPE ARCHITECTURE,

AND INTERIOR DESIGN 100,000 625,000 635,000

The appropriation for fiscal year 1995 is for legal fees and is available until June 30, 1997.

Sec. 10. BOARD OF BARBER EXAMINERS 128,000 129,000

Sec. 11. BOARD OF BOXING 75,000 75,000

Sec. 12. LABOR AND INDUSTRY

Subdivision 1. Total Appropriation 23,136,000 20,680,000

General 3,866,000 3,883,000

Workers' Compensation

407,000 19,270,000 16,797,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

Subd. 2. Workers' Compensation Regulation and Enforcement

407,000 11,861,000 9,412,000

General 100,000 100,000

Special Compensation

407,000 11,761,000 9,312,000

The appropriation for fiscal year 1995 is from the special compensation fund for litigation expenses.

$2,500,000 the first year is from the worker's compensation special compensation fund for the Daedalus imaging systems project, to be available until June 30, 1997.

$100,000 in the first year and $100,000 in the second year are for grants to the Vinland Center for rehabilitation service.

Notwithstanding Minnesota Statutes, section 79.253, $45,000 the first year and $45,000 the second year are appropriated from the assigned risk safety account in the special compensation fund to the commissioner of labor and industry for the purpose of providing information to employers regarding the prevention of violence in the workplace.

Notwithstanding Minnesota Statutes, section 79.253, $140,000 the first year and $140,000 the second year are appropriated from the assigned risk safety account in the special compensation fund to the commissioner of labor and industry for the purpose of hiring two occupational safety and health inspectors. The inspectors shall perform safety consultations for employers through labor-management committees as defined in Minnesota Statutes, section 179.81, subdivision 2, under an interagency agreement entered into between the commissioners of labor and industry and mediation services.

Subd. 3. Workplace Services

5,353,000 5,339,000

General 2,516,000 2,527,000

Workers' Comp. 2,837,000 2,812,000

Subd. 4. General Support

5,922,000 5,929,000

General 1,250,000 1,256,000

Workers'

Compensation 4,672,000 4,673,000

$204,000 the first year and $204,000 the second year are for labor education and advancement program grants.

Sec. 13. MEDIATION SERVICES

Subdivision 1. Total Appropriation 1,820,000 1,823,000

Subd. 2. Labor Management Cooperation Grants

222,000 222,000

$222,000 the first year and $222,000 the second year are for grants to area labor-management committees. Any unencumbered balance remaining at the end of the first year does not cancel but is available for the second year.

Subd. 3. Office of Dispute Resolution

81,000 81,000

Sec. 14. WORKERS' COMPENSATION COURT OF APPEALS 1,371,000 1,382,000

This appropriation is from the special compensation fund.

Sec. 15. LABOR INTERPRETIVE CENTER 140,000 200,000

Sec. 16. PUBLIC UTILITIES COMMISSION 3,244,000 3,219,000

Sec. 17. DEPARTMENT OF PUBLIC SERVICE

Subdivision 1. Total Appropriation 8,797,000 8,763,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

Subd. 2. Telecommunications

761,000 767,000

Subd. 3. Weights and Measures

2,926,000 2,937,000

Subd. 4. Information and Operations Management

1,461,000 1,472,000

Subd. 5. Energy

3,649,000 3,587,000

$588,000 the first year and $588,000 the second year are for transfer to the energy and conservation account established in Minnesota Statutes, section 216B.241, subdivision 2a, for programs administered by the commissioner of economic security to improve the energy efficiency of residential oil-fired heating plants in low-income households and, when necessary, to provide weatherization services to the homes.

Sec. 18. MINNESOTA HISTORICAL SOCIETY

Subdivision 1. Total Appropriation 18,889,000 18,832,000

The amounts that may be spent from this appropriation for each program are specified in the following subdivisions.

The Minnesota historical society is eligible for a salary supplement in the same manner as state agencies if one is available. Employees of the Minnesota historical society will be paid in accordance with the appropriate pay plan.

Subd. 2. Public Programs and Operations 18,434,000 18,500,000

(a) History Center Operations

9,043,000 9,043,000

(b) History Center Building Services

5,568,000 5,568,000

(c) Historic Site Operations

2,749,000 2,815,000

(d) Statewide Outreach

644,000 644,000

(e) Repair and Replacement

430,000 430,000

Subd. 3. Fiscal Agent 455,000 332,000

(a) State Archaeologist

104,000 104,000

(b) Sibley House Association

88,000 88,000

This appropriation is available for operation and maintenance of the Sibley house and related buildings on the Old Mendota state historic site operated by the Sibley house association.

(c) Minnesota International Center

50,000 50,000

(d) Minnesota Air National Guard Museum

19,000

(e) Institute for Learning and Teaching - Project 120

90,000 90,000

(f) Minnesota Military Museum

29,000

(g) Farmamerica

25,000

Notwithstanding any other law, this appropriation may be used for operations.

(h) Kee theatre

25,000

(i) Federal National Guard Museum

25,000

(j) Balances Forward

Any unencumbered balance remaining in this subdivision the first year does not cancel but is available for the second year of the biennium.

Subd. 4. Preservation grants

Notwithstanding Laws 1994, chapter 643, section 19, subdivision 5, the historical society may award grants from the unexpended balance under that subdivision to public agencies or entities based on historical preservation purposes and needs. The society shall require significant matching money for such projects. A grant awarded under this section for historical preservation is not subject to the requirements of Minnesota Statutes, section 16A.695.

Subd. 5. Carryover

Amounts appropriated under Laws 1993, chapter 369, section 12, subdivisions 2, 3, 4, and 5, do not cancel on June 30, 1995, but are available until June 30, 1997.

Sec. 19. MINNESOTA HUMANITIES COMMISSION 586,000 586,000

Any unencumbered balance remaining in the first year does not cancel but is available for the second year of the biennium.

Sec. 20. BOARD OF THE ARTS

Subdivision 1. Total Appropriation 6,897,000 6,903,000

Any unencumbered balance remaining in this section the first year does not cancel but is available for the second year of the biennium.

Subd. 2. Operations and Services 690,000 693,000

Subd. 3. Grants Program 4,781,000 4,783,000

The board shall spend this appropriation to ensure that at least ten percent of the expenditure is for arts programs intended primarily for children.

Subd. 4. Regional Arts Councils 1,426,000 1,427,000

The board shall distribute this appropriation to the regional arts councils to ensure that ten percent of the total distribution in each region is for arts programs intended primarily for children.

Sec. 21. MINNESOTA MUNICIPAL BOARD 300,000 287,000

Any unencumbered balance remaining in the first year does not cancel but is available for the second year of the biennium.

Sec. 22. UNIFORM LAWS COMMISSION 29,000 29,000

Sec. 23. COUNCIL ON BLACK MINNESOTANS 229,000 232,000

The appropriation for the second year is contingent on submission of the report required in section 35.

Sec. 24. COUNCIL ON AFFAIRS OF SPANISH-SPEAKING

PEOPLE 246,000 248,000

During the biennium ending June 30, 1997, council publications may contain advertising. Receipts from advertising are appropriated to the council for purposes of council publications. For the biennium ending June 30, 1997, the council shall report to the legislature on the revenues and expenditures from advertising by February 15 each year.

The appropriation for the second year is contingent on submission of the report required in section 35.

Sec. 25. COUNCIL ON ASIAN-PACIFIC MINNESOTANS 198,000 200,000

The appropriation for the second year is contingent on submission of the report required in section 35.

Sec. 26. INDIAN AFFAIRS COUNCIL 508,000 463,000

For the biennium ending June 30, 1997, federal money received for the Indian affairs council is appropriated to the council and added to this appropriation.

The appropriation for the second year is contingent on submission of the report required in section 35.

Sec. 27. SECRETARY OF STATE

Subdivision 1. Total Appropriation 6,617,000 5,573,000

The amounts that may be spent from this appropriation for each activity are specified in the following subdivisions.

Subd. 2. Administration

938,000 947,000

Subd. 3. Operations

5,231,000 4,103,000

The legislature estimates that the increase in fees for expedited processing under Minnesota Statutes, section 5.14, provided for by this act, will increase revenue to the general fund by $350,000 the first year and $350,000 the second year.

Subd. 4. Election Administration

448,000 523,000

Sec. 28. BOARD FOR COMMUNITY COLLEGES 300,000

This appropriation is to the state board for community colleges or its successor for the design through development of construction documents, to the extent possible given the amount of the appropriation, for a residential facility at Fond du Lac community college. The facility is intended for Indian students, to help immerse them in Indian culture while attending the college.

The board shall include the facility in its capital budget request for consideration by the 1996 legislature. This appropriation is available until expended.

Sec. 29. ETHICAL PRACTICES BOARD 308,000

This appropriation is for fiscal year 1995. Of this appropriation, $291,000 is for litigation expenses and $17,000 is for severance costs.

Sec. 30. [EFFECTIVE DATE FOR LAWS 1995, CHAPTER 22.]

Laws 1995, chapter 22, is effective March 28, 1995. This section is effective the day following final enactment.

Sec. 31. Laws 1994, chapter 573, section 5, subdivision 2, is amended to read:

Subd. 2. [PUBLIC UTILITIES COMMISSION; RESEARCH PROJECTS.] $150,000, or so much of this amount as may be needed, is appropriated from the general fund to the public utilities commission to complete the work of the team of science advisors as specified in section 1 or initiate research projects in fiscal year 1995 as recommended by the team of science advisors and approved by the commission. Any amount of this appropriation that remains unencumbered after June 30, 1996, reverts to the general fund.

Sec. 32. Laws 1993, chapter 369, section 9, subdivision 2, is amended to read:

Subd. 2. Workers' Compensation Regulation and Enforcement

14,961,000 9,410,000

General 100,000 100,000

Workers' Comp. 14,861,000 9,310,000

$5,000,000 the first year from the special compensation fund is for the Daedalus imaging systems project. This appropriation must not be allotted until the commissioner certifies that all information policy office requirements for this project have been met or will be met. This appropriation is available for either year of the biennium until June 30, 1997.

$100,000 in the first year and $100,000 in the second year are for grants to the Vinland Center for rehabilitation service.

Fee receipts collected as a result of providing direct computer access to public workers' compensation data on file with the commissioner must be credited to the general fund.

Sec. 33. Laws 1993, chapter 369, section 9, subdivision 3, is amended to read:

Subd. 3. Workplace Services

5,455,000 4,744,000

General 2,704,000 2,703,000

Workers' Comp. 2,751,000 2,041,000

This appropriation includes the transfer of the industrial hygiene activity from the department of health. The appropriation for this activity is from the special compensation fund.

$710,000 the first year from the special compensation fund is for litigation of alleged ergonomic violations cases under the occupational safety and health act (OSHA). This appropriation is available for either year of the biennium until June 30, 1997.

Sec. 34. [BASE CUT TRANSFERS.]

For any agency assigned base cuts in this act, the proportion of agency base cuts for pass-through grants compared to total agency base cuts may not exceed the proportion of dollars appropriated for pass-through grants in the agency compared to total dollars appropriated to that agency.

Sec. 35. [COUNCILS TO REPORT.]

(a) The Indian affairs council, the council on affairs of Spanish-speaking people, the council on Black Minnesotans, and the council on Asian-Pacific Minnesotans shall, individually and jointly as provided in paragraph (b), conduct a study of each council's membership and operations. Each council's study must contain recommendations on:

(1) removal of council members by the governor;

(2) statutory requirements and qualifications for council membership;

(3) appointment of the council director, including qualifications;

(4) methods of reducing overall costs of the councils through sharing of staff and administrative expenses;

(5) methods of improving coordination with other state agencies;

(6) methods of reducing burdensome reporting requirements without compromising accountability;

(7) methods of educating council members in management issues for state agencies, including but not limited to statewide budget and accounting practices, management practices, and legal liability; and

(8) a statement of the mission of each council and measurable impact goals for each council.

(b) Each council must make all feasible efforts to coordinate its study with each other council's study, to achieve the maximum possible consistency in recommendations.

(c) Each council must consult with the governor's office in studying paragraph (b), items (1) to (3).

(d) Each council must submit its report to the legislature by February 1, 1996.

Sec. 36. [STUDY TO ASSESS BENEFITS OF CIVIC CENTERS.]

The division of tourism of the department of trade and economic development shall conduct a statewide study assessing the benefits of publicly owned civic and convention centers to the convention and tourism industry in the state. The results of the study shall be reported to the house capital investment committee and the senate finance committee by September 30, 1995. A copy of the study shall be given to the governor and to the commissioner of finance, who shall consider whether to include funding for civic and convention centers in the 1996 capital budget.

Sec. 37. [WORKERS' COMPENSATION DIVISION; SALARIES; MANAGERIAL PLAN.]

Funds appropriated to the department of labor and industry may not be used to pay the salaries for any positions in the managerial plan under Minnesota Statutes, section 43A.18, subdivision 3, in the workers' compensation division unless the positions existed on October 1, 1994, and had been filled on or before that date. This section does not prohibit the addition or modification of duties or responsibilities to existing managerial plan positions.

Sec. 38. [BRANDON FISHERIES ACQUISITION.]

The commissioner of trade and economic development shall study whether it is economically feasible and otherwise appropriate for the state to acquire the Brandon fisheries property near Brandon, Minnesota, for the purpose of a rest stop or tourism information center. The results of the study shall be reported to the relevant finance divisions and committees of the legislature by January 15, 1996.

Sec. 39. [DEMONSTRATION PROGRAM.]

The commissioner of economic security shall fund a demonstration program for summer youth employment which requires that youth who are otherwise eligible for employment under Minnesota Statutes, sections 268.56 and 268.561, participate in a program of remedial education involving reading and writing skills in both a learning and teaching capacity as part of summer youth programs. The commissioner shall evaluate the success of the program and report to the chairs of the jobs, energy, and community development committee of the senate and the economic development, infrastructure, and regulation finance committee of the house of representatives.

Sec. 40. [REGIONAL PROGRAM TO IDENTIFY ENERGY-EFFICIENCY INVESTMENT OPPORTUNITIES FOR BUSINESS.]

Subdivision 1. [PURPOSE.] A grant program for fiscal year 1996 is established to support regional efforts to identify energy-efficiency investments for businesses to provide opportunities for economic growth and job creation.

Subd. 2. [GRANT APPLICATION AND REVIEW PROCESS.] Regional development commissions are eligible to apply to the commissioner of public service for grants under this section. Applications must be submitted to the commissioner in the form and manner determined by the commissioner. The applicant must specify a process for identifying business and industrial sectors most appropriate for making changes in energy use. This regional process may include surveys, interviews, and regional forums to identify opportunities for energy-efficiency improvements and the use of new energy resources by businesses.

The applicant must identify and retain the services of an appropriate nonprofit corporation to provide the technical expertise to assess energy-efficiency opportunities in new, existing, and expanding businesses, to analyze the cost-effectiveness of the opportunities, and to facilitate relationships among utilities, energy service providers, businesses, and public agencies that result in cost-effective investments in energy-efficiency improvements that contribute to economic development. These efforts must be designed to maximize participation in utility conservation and energy efficiency programs and to promote the growth of the energy service industry in the region, which includes engineering firms, distributors, contractors, and other energy service providers.

In each participating region, the regional development commission shall establish a project oversight committee that shall consist of a labor representative, a utility representative, a business representative, and not more than two additional members. This committee shall review and approve the project work plan and proposed activities and energy-efficiency installations undertaken as part of the project.

Subd. 3. [EVALUATION.] Each grant proposal must include a process for evaluating the specific business cost savings resulting from the regional energy-efficiency program activity.

Subd. 4. [REPORT.] The commissioner of public service shall report to the legislature by January 1, 1997, on the business investments in energy-efficiency technology which resulted from the grant program.

Sec. 41. [RADIO TALKING BOOK FOR THE BLIND.]

The commissioner of the department of economic security, the Friends of the Communication Center, the Rehabilitation Advisory Council of the Blind, and consumer organizations of the blind must initiate open public discussions regarding privatization of the Radio Talking Book for the Blind. The discussions must include, but not be limited to, a study of the Radio Talking Book, its statewide coverage, effectiveness of service, staffing, funding, programming, and the relationship between State Services for the Blind, the Friends of the Communication Center, consumer organizations of the blind, and Radio Talking Book consumers.

Sec. 42. [EXTENDED EMPLOYMENT AUDITS.]

The department of economic security, division of vocational rehabilitation, must complete its audit and reconciliation for extended employment programs according to the following schedule:

(1) fiscal year 1991 by April 14, 1995;

(2) fiscal year 1992 by July 28, 1995;

(3) fiscal year 1993 by July 28, 1995; and

(4) fiscal year 1994 by June 1, 1996.

Sec. 43. [LEGISLATIVE AUDITOR; ECONOMIC RECOVERY GRANT PROGRAM.]

The legislative audit commission is requested to direct the legislative auditor to conduct an evaluation of the economic recovery grant program under Minnesota Statutes, section 116J.873. The evaluation must include an audit of loans and grants made under the program and the criteria used in selecting projects for grants and loans. The legislative auditor shall report the results of the evaluation to the legislature by January 15, 1996.

Sec. 44. [LEGISLATIVE AUDITOR; BUSINESS ASSISTANCE PROGRAMS.]

The legislative audit commission is requested to direct the legislative auditor to conduct an evaluation of business assistance programs of state and local governments and report the results of the evaluation to the legislature by January 15, 1996. The evaluation must include tax increment financing assistance. The evaluation must identify the source of public funds for each project, number of jobs proposed or promised at the time of application and the number of jobs created, estimated number of jobs retained, salary and benefit distribution and dispersal by company for the jobs resulting from the public assistance, the number and name of projects approved, and, if possible, the number of jobs displaced by the assistance.

The salary distribution must show the number of employees in salary per hour bands, one dollar in width, beginning with the minimum wage and proceeding to the maximum salary paid.

Sec. 45. [WASTE WOOD COGENERATION FACILITIES; BIOMASS MANDATE.]

Electric energy produced at a St. Paul district heating and cooling system cogeneration facility which utilizes waste wood as a primary fuel source may also count toward satisfaction of up to 25 megawatts of the amount of biomass energy required by Minnesota Statutes, section 216B.2424, clause (2), provided that:

(1) the cogeneration facility utilizes nonhazardous tree trimmings and other nonhazardous waste wood, including, but not limited to, wood that would otherwise be landfilled or burned in a process not designed to reclaim and use the energy contained therein as a primary fuel source; and

(2) the cogenerated thermal load of such facility replaces a thermal load produced by nonrenewable fuels; and

(3) construction of the cogeneration facility begins after August 1, 1995.

All projects seeking to satisfy the biomass mandate of Minnesota Statutes, section 216B.2424, in whole or in part must be selected in a competitive bidding process or such other selection process approved by the public utilities commission.

Sec. 46. [SUSTAINABLE BIOMASS ENERGY PRODUCTION PROJECT; TECHNICAL ASSISTANCE AND SUPPORT.]

The commissioner of the department of agriculture, in collaboration and consultation with the commissioners of the departments of natural resources, trade and economic development, and public service, shall provide technical assistance and support to the Sustainable Biomass Energy Production Project, a joint effort of the University of Minnesota, the Minnesota Valley Alfalfa Producers, and other public and private interests. The support shall include assistance in analysis of environmental and economic benefits of the proposed project, assistance in developing feasibility and market assessments of the alfalfa-derived coproducts that would be produced by the project, and assistance to aid the project in securing a grant from the United States Department of Energy and the United States Department of Agriculture under the Biomass Power for Rural Development Initiative. The assistance provided under this section shall terminate June 30, 1997.

Sec. 47. [COGENERATION; POWER PLANT SITING ACT EXEMPTION.]

(a) A person who proposes to construct a cogeneration facility which utilizes gasified petroleum coke as its primary fuel source which is derived as a by-product of the oil refining process at an oil refining facility owned by the person

proposing the project may identify a single site for the project in its application under Minnesota Statutes, section 116C.57, subdivision 1, instead of the two sites normally required under that subdivision, if the site is in reasonable proximity to the thermal host of the cogeneration plant. For the purposes of this subdivision, the "thermal host" of a cogeneration plant means the facility in which the thermal energy produced by the cogeneration plant is to be utilized. The environmental quality board shall determine whether the cogeneration facility is reasonably proximate to the thermal host with the understanding that the site should be adjacent to or contiguous with the site of the thermal host whenever practicable.

(b) A person who proposes to construct a cogeneration facility as described in paragraph (a) may apply to the environmental quality board to exempt the construction from the requirements of Minnesota Statutes, sections 116C.51 to 116C.69, under the provisions of Minnesota Statutes, section 116C.57, subdivision 5a, notwithstanding the size restrictions found in that subdivision. All other requirements of Minnesota Statutes, section 116C.57, subdivision 5a, apply to an application for an exemption under this subdivision. If the board determines that the proposed site will not have a significant human and environmental impact, the board may exempt the construction of the proposed plant at the proposed site from the requirements of Minnesota Statutes, sections 116C.51 to 116C.69 with any appropriate conditions.

Sec. 48. Minnesota Statutes 1994, section 5.14, is amended to read:

5.14 [TRANSACTION SURCHARGE.]

The secretary of state may impose a surcharge of $10 $20 on each transaction involving over-the-counter expedited service, other than simple copying requests, that takes place at the office of the secretary of state.

Sec. 49. Minnesota Statutes 1994, section 16B.08, subdivision 7, is amended to read:

Subd. 7. [SPECIFIC PURCHASES.] (a) The following may be purchased without regard to the competitive bidding requirements of this chapter:

(1) merchandise for resale at state park refectories or facility operations;

(2) farm and garden products, which may be sold at the prevailing market price on the date of the sale;

(3) meat for other state institutions from the technical college maintained at Pipestone by independent school district No. 583; and

(4) products and services from the Minnesota correctional facilities.

(b) Supplies, materials, equipment, and utility services for use by a community-based residential facility operated by the commissioner of human services may be purchased or rented without regard to the competitive bidding requirements of this chapter.

(c) Supplies, materials, or equipment to be used in the operation of a hospital licensed under sections 144.50 to 144.56 that are purchased under a shared service purchasing arrangement whereby more than one hospital purchases supplies, materials, or equipment with one or more other hospitals, either through one of the hospitals or through another entity, may be purchased without regard to the competitive bidding requirements of this chapter if the following conditions are met:

(1) the hospital's governing authority authorizes the arrangement;

(2) the shared services purchasing program purchases items available from more than one source on the basis of competitive bids or competitive quotations of prices; and

(3) the arrangement authorizes the hospital's governing authority or its representatives to review the purchasing procedures to determine compliance with these requirements.

(d) Supplies, materials, equipment, and utility services to be used or purchased by the iron range resources and rehabilitation board are subject to the competitive bidding requirements of this chapter only as described in section 298.2211, subdivision 3a.

Sec. 50. Minnesota Statutes 1994, section 44A.01, subdivision 2, is amended to read:

Subd. 2. [BOARD MEMBERSHIP.] The corporation is governed by a board of directors consisting of:

(1) four members, representing the international business community, elected to six-year terms by the association of members established under section 44A.023, subdivision 2, clause (5);

(2) four members, representing the international business community, appointed by the governor, to serve at the governor's pleasure;

(3) the mayor of St. Paul or the mayor's designee; and

(4) the commissioners of trade and economic development, agriculture, and commerce; and

(5) three members of the house appointed by the speaker of the house and three members of the senate appointed under the rules of the senate, who serve as nonvoting members. One member from each house must be a member of the minority party of that house. Legislative members are appointed at the beginning of each regular session of the legislature for two-year terms. A legislator who remains a member of the body from which the legislator was appointed may serve until a successor is appointed and qualifies. A vacancy in a legislator member's term is filled for the unexpired portion of the term in the same manner as the original appointment.

Members appointed by the governor must be knowledgeable or experienced in international trade in products or services.

Sec. 51. Minnesota Statutes 1994, section 97A.531, is amended by adding a subdivision to read:

Subd. 7. [POSSESSION OF FISH ON LAKE OF THE WOODS.] While in Minnesota, a person permitted to take and possess fish in Minnesota and licensed by the province of Ontario to take and possess fish may possess the daily limit of fish allowed by the Ontario border water conservation tag, if the fish taken in Ontario were taken on Ontario waters of Lake of the Woods north of Big Island.

Sec. 52. [97A.552] [FISHING REGULATIONS; EXECUTIVE ORDER.]

Subdivision 1. [ORDER AUTHORIZED.] (a) The governor may by executive order:

(1) require that fish that are lawfully taken by angling and possessed in Canada be brought into the state in-the-round;

(2) authorize fish lawfully taken by angling in Canada to be transported within the state or out of the state by a nonresident;

(3) require that a Minnesota resident transporting in Minnesota fish that have been taken by angling in Canada possess a Minnesota angling license; and

(4) require that any advertisement of fishing resorts or facilities in Canada in printed or broadcast form originating or distributed within the state must contain a summary of the requirement of clause (1) and penalty for noncompliance.

(b) An executive order issued under paragraph (a) is effective the day following the filing of a certified copy of it in the office of the secretary of state, and remains in effect until rescinded by order of the governor.

Subd. 2. [PENALTY FOR NONCOMPLIANCE.] A violation of an executive order imposing the requirement in subdivision 1, paragraph (a), clause (1), is a misdemeanor and, in addition to any criminal penalty imposed, fish brought into or transported within the state contrary to that executive order must be confiscated, and a penalty of $10 for each fish must be imposed.

Sec. 53. Minnesota Statutes 1994, section 116J.552, subdivision 2, is amended to read:

Subd. 2. [CLEANUP COSTS.] "Cleanup costs" or "costs" mean means the cost costs of developing and implementing an approved a response action plan, but does not include implementation costs incurred before the award of a grant unless the application for the grant was submitted within 180 days after the response action plan was approved by the commissioner of the pollution control agency.

Sec. 54. Minnesota Statutes 1994, section 116J.555, subdivision 2, is amended to read:

Subd. 2. [APPLICATION CYCLES; REPORTING TO LCWM.] (a) In making grants, the commissioner shall establish regular semiannual application deadlines in which grants will be authorized from all or part of the available appropriations of money in the account.

(b) After each semiannual cycle in which grants are awarded, the commissioner shall report to the legislative commission on waste management the grants awarded and appropriate supporting information describing each grant made. This report must be made within 30 days after the grants are awarded.

(c) The commissioner shall annually report to the legislative commission on the status of the cleanup projects undertaken under grants made under the programs. The commissioner shall include in the annual report information on the cleanup and development activities undertaken for the grants made in that and previous fiscal years. The commissioner shall make this report no later than 120 days after the end of the fiscal year.

Sec. 55. Minnesota Statutes 1994, section 116J.873, subdivision 3, is amended to read:

Subd. 3. [GRANT EVALUATION.] The commissioner shall accept, review, and evaluate applications for grants to local units of government made in accordance with rules adopted for economic development grants in the small cities development program. Projects must be evaluated based on the existence of the following conditions:

(1) whether assistance is necessary to provide equity to business owners who do not have the capacity to invest in a project;

(2) whether there is an inability to secure sufficient financing from other public or private sources at market interest rates or on favorable market terms;

(3) whether assistance is necessary to attract out-of-state businesses or to retain existing business within the state; and

(4) whether there are excessive public infrastructure or improvement costs beyond the means of the affected community and private participants in the project.

A grant or loan cannot be made based solely on a finding that the condition in clause (3) exists. A finding must be made that a condition in clause (1), (2), or (4) also exists.

Applications recommended for funding shall be submitted to the commissioner.

Sec. 56. Minnesota Statutes 1994, section 116J.873, is amended by adding a subdivision to read:

Subd. 5. [SPORTS FACILITY.] An economic recovery grant or loan cannot be used for a project related to a sports facility. For the purpose of this subdivision, "sports facility" means a building that has a professional sports team as a principal tenant.

Sec. 57. Minnesota Statutes 1994, section 116J.982, subdivision 3, is amended to read:

Subd. 3. [CERTIFICATION; CORPORATIONS ELIGIBLE.] (a) The commissioner shall certify a community development corporation under this section if the corporation is a nonprofit corporation incorporated under chapter 317A and meets the other criteria in this subdivision.

(b) The corporation, in its articles of incorporation or bylaws, must designate a low-income area as the specific geographic community within which it will operate. Within cities of the first class, a designated community must be an identifiable neighborhood or a combination of neighborhoods but may not be the entire city. Outside cities of the first class, a designated community may be an identifiable neighborhood or neighborhoods, or home rule charter or statutory cities, townships, unincorporated areas, or combinations of those entities, but may not be an entire economic development region nor cross existing economic development region boundaries except as provided in this section.

(c) The corporation's major purpose, in its articles of incorporation or bylaws, must be economic development, redevelopment, or housing in its designated community.

(d) The corporation must be tax exempt under section 501, paragraph (c), clause (3), of the Internal Revenue Code of 1986, as amended.

(e) The membership and board of directors of the corporation must be representative of the designated community. At least 20 percent of the directors shall have low incomes or shall reside in low-income areas described in subdivision 1, paragraph (e), clause (1), or the low-income subarea described in subdivision 1, paragraph (e), clause (2). At least 60 percent of the directors must be residents of, or be employed in, the designated community. Other directors shall be business, financial, or civic leaders or representatives-at-large of the designated community. At least 40 percent of the directors must reside in the designated community. Notwithstanding the requirements of this paragraph, a corporation which meets board structure requirements for a community housing development corporation under Code of Federal Regulations, title 24, part 92.2, is deemed to meet the board membership requirements of this subdivision.

(f) The corporation shall not discriminate against any persons on the basis of a status protected under chapter 363.

(g) The corporation shall demonstrate that it has or can obtain the technical skills to analyze projects, that it is familiar with available public and private funding sources and economic development, redevelopment, and housing programs, and that it is capable of packaging economic development, redevelopment, and housing projects.

(h) The corporation must have completed two or more economic development, redevelopment, or housing projects within its designated community during the last three years.

Sec. 58. [116J.991] [PUBLIC ASSISTANCE TO BUSINESS; WAGE AND JOB REQUIREMENTS.]

A business that receives state or local government assistance for economic development or job growth purposes must create a net increase in jobs in Minnesota within two years of receiving the assistance.

The government agency providing the assistance must establish wage level and job creation goals to be met by the business receiving the assistance. A business that fails to meet the goals must repay the assistance to the government agency.

Each government agency must report the wage and job goals and the results for each project in achieving those goals to the department of trade and economic development. The department shall compile and publish the results of the reports for the previous calendar year by June 1 of each year. The reports of the agencies to the department and the compilation report of the department shall be made available to the public.

For the purpose of this section, "assistance" means a grant or loan in excess of $25,000 or tax increment financing.

Sec. 59. Minnesota Statutes 1994, section 116M.16, subdivision 2, is amended to read:

Subd. 2. [GIFTS; GRANTS; APPROPRIATION.] The board may apply for, accept, and disburse gifts, grants, loans, or other property from the United States, the state, private foundations, or any other source. It may enter into an agreement required for the gifts, grants, or loans and may hold, use, and dispose of its assets in accordance with the terms of the gift, grant, loan, or agreement. Money received by the board under this subdivision must be deposited in a separate account in the state treasury and invested by the state board of investment. The amount deposited, including investment earnings, is appropriated to the board to carry out its duties.

Sec. 60. Minnesota Statutes 1994, section 116M.18, subdivision 4, is amended to read:

Subd. 4. [BUSINESS LOAN CRITERIA.] (a) The criteria in this subdivision apply to loans made under the urban challenge grant program.

(b) Loans must be made to businesses that are not likely to undertake a project for which loans are sought without assistance from the urban challenge grant program.

(c) A loan must be used for a project designed to benefit persons in low-income areas through the creation of job or business opportunities for them. Among loan applicants, priority must be given on the basis of the number of permanent jobs created or retained by the project and the proportion of nonpublic money leveraged by the loan. Priority must also be given for loans to the lowest income areas.

(d) The minimum loan is $5,000 and the maximum is $150,000.

(e) With the approval of the commissioner, a loan may be used to provide up to 50 percent of the private investment required to qualify for a grant from the economic recovery account.

(f) A loan must be matched by at least an equal amount of new private investment.

(g) (f) A loan may not be used for a retail development project.

(h) (g) The business must agree to work with job referral networks that focus on minority applicants from low-income areas.

Sec. 61. Minnesota Statutes 1994, section 116M.18, is amended by adding a subdivision to read:

Subd. 4a. [MICROENTERPRISE LOAN.] Urban challenge grants may be used to make microenterprise loans to small, beginning businesses, including a sole proprietorship. Microenterprise loans are subject to this section except that:

(1) they may also be made to qualified retail businesses;

(2) they may be made for a minimum of $1,000 and a maximum of $10,000; and

(3) they do not require a match.

Sec. 62. Minnesota Statutes 1994, section 116M.18, subdivision 5, is amended to read:

Subd. 5. [REVOLVING FUND ADMINISTRATION; RULES.] (a) The board shall establish a minimum interest rate for loans to ensure that necessary loan administration costs are covered.

(b) Loan repayment amounts equal to one-half of the principal and interest must be deposited in a revolving fund created by the board for challenge grants. The remaining amount of the loan repayment may be deposited in a revolving loan fund created by the nonprofit corporation originating the loan being repaid for further distribution, consistent with the loan criteria specified in subdivision 4.

(c) Administrative expenses of the board and nonprofit corporations with whom the board enters into agreements under subdivision 2 may be paid out of the interest earned on loans and out of interest earned on money invested by the state board of investment under section 116M.16, subdivision 2.

Sec. 63. Minnesota Statutes 1994, section 116N.03, subdivision 2, is amended to read:

Subd. 2. [GIFTS; GRANTS.] The board may apply for, accept, and disburse gifts, grants, loans, or other property from the United States, the state, private foundations, or any other source. It may enter into an agreement required for the gifts, grants, or loans and may hold, use, and dispose of its assets in accordance with the terms of the gift, grant, loan, or agreement. Money received by the board under this subdivision must be deposited in a separate account in the state treasury and invested by the state board of investment. The amount deposited, including investment earnings, is appropriated to the board to carry out its duties.

Sec. 64. Minnesota Statutes 1994, section 116N.08, subdivision 5, is amended to read:

Subd. 5. [LOAN CRITERIA.] The following criteria apply to loans made under the challenge grant program:

(a) Loans must be made to businesses that are not likely to undertake a project for which loans are sought without assistance from the challenge grant program.

(b) A loan must be used for a project designed principally to benefit low-income persons through the creation of job or business opportunities for them. Among loan applicants, priority must be given on the basis of the number of permanent jobs created or retained by the project and the proportion of nonstate money leveraged by the revolving loan.

(c) The minimum loan is $5,000 and the maximum is $100,000.

(d) With the approval of the commissioner, a loan may be used to provide up to 50 percent of the private investment required to qualify for a grant from the economic recovery account.

(e) A loan may not exceed 50 percent of the total cost of an individual project.

(f) (e) A loan may not be used for a retail development project.

(g) (f) A business applying for a loan, except a microenterprise loan under subdivision 5a, must be sponsored by a resolution of the governing body of the local governmental unit within whose jurisdiction the project is located.

Sec. 65. Minnesota Statutes 1994, section 116N.08, is amended by adding a subdivision to read:

Subd. 5a. [MICROENTERPRISE LOANS.] Challenge grants may be used to make microenterprise loans to small, beginning businesses, including a sole proprietorship. Microenterprise loans are subject to this section except that:

(1) they may also be made to qualified retail businesses;

(2) they may be for a minimum of $1,000 and a maximum of $10,000; and

(3) they do not require a match.

Sec. 66. Minnesota Statutes 1994, section 116N.08, subdivision 6, is amended to read:

Subd. 6. [REVOLVING FUND ADMINISTRATION.] (a) The board shall establish a minimum interest rate for loans to ensure that necessary management costs are covered.

(b) Loan repayment amounts equal to one-half of the principal and interest must be deposited in the rural rehabilitation revolving fund for challenge grants to the region from which the money was originally designated. The remaining amount of the loan repayment may be deposited in the regional revolving loan fund for further distribution by the regional organization, consistent with the loan criteria specified in subdivisions 4 and 5.

(c) The first $1,000,000 of revolving loans for each region must be matched by nonstate sources. The matching requirement does not apply to loans made under subdivision 6, clause (b).

(d) Administrative expenses of each organization may be paid out of the interest earned on loans and on interest earned on money invested by the state board of investment under section 116N.03, subdivision 2.

Sec. 67. Minnesota Statutes 1994, section 124.85, is amended by adding a subdivision to read:

Subd. 2c. [PAYMENT OF REVIEW EXPENSES.] The commissioner of public service may charge a school district requesting services under subdivisions 2a and 2b actual costs incurred by the department while conducting the review, or one-half percent of the total identified project cost, whichever is less. Before conducting the review, the commissioner shall notify a school district requesting review services that expenses will be charged to the school district. The commissioner shall bill the school district upon completion of the contract review. Money collected by the commissioner under this subdivision must be deposited in the general fund. A district may include the cost of a review by the commissioner under subdivision 2a in a contract made pursuant to this section.

Sec. 68. Minnesota Statutes 1994, section 175.171, is amended to read:

175.171 [POWERS AND DUTIES, DEPARTMENT OF LABOR AND INDUSTRY.]

The department of labor and industry shall have the following powers and duties:

(1) to exercise all powers and perform all duties of the department consistent with the provisions of this chapter;

(2) to adopt reasonable and proper rules relative to the exercise of its powers and duties, and proper rules to govern its proceedings and to regulate the mode and manner of all investigations and hearings, which shall not be effective until ten days after their adoption, and a copy of these rules shall be delivered to every citizen making application therefor;

(3) to collect, collate, and publish statistical and other information relating to the work under its jurisdiction, to keep records and to make public reports in its judgment necessary; and on or before October 1 in each even-numbered year the department shall report its doings, conclusions, and recommendations to the governor, which report shall be printed and distributed by November 15 of each even-numbered year to the legislature pursuant to section 3.195, and otherwise as the department may direct;

(4) to establish and maintain branch offices as needed for the conduct of its affairs; and

(5) to provide direct computer access to and electronic data interchange of public and nonpublic workers' compensation data and other data maintained by the department and to charge a reasonable fee for the access and

electronic data interchange, except that in no circumstances may a fee be charged an employee or the employee's attorney seeking access and data interchange to information about the employee's claim or circumstances. Notwithstanding any other law to the contrary, the fee receipts for providing the computer access to and electronic data interchange of data shall be deposited in the special compensation fund. Access to and electronic data interchange of nonpublic data shall be only as authorized by the subject of the data, as authorized in chapter 13, or as otherwise authorized by law.

Sec. 69. Minnesota Statutes 1994, section 176.011, subdivision 7a, is amended to read:

Subd. 7a. (1) [COMPENSATION JUDGE.] "Compensation judge" means a workers' compensation judge at the office of administrative hearings.

(2) [CALENDAR JUDGE.] "Calendar judge" means a workers' compensation judge at the office of administrative hearings.

(3) [SETTLEMENT JUDGE.] "Settlement judge" means a compensation judge at the department of labor and industry. Settlement judges may conduct settlement conferences, issue summary decisions, approve settlements and issue awards thereon, determine petitions for attorney fees and costs, and make other determinations, decisions, orders, and awards as may be delegated to them by the commissioner. Settlement judges must be learned in the law.

Sec. 70. Minnesota Statutes 1994, section 176.231, is amended by adding a subdivision to read:

Subd. 12. [REPORTS; ELECTRONIC MONITORING.] Beginning July 1, 1995, the commissioner shall monitor electronically all reports of injury, all payments for reported injuries, and compliance with all reporting and payment timelines.

Sec. 71. [176.445] [SETTLEMENT JUDGES.]

Notwithstanding section 176.011, subdivision 27, any provision in chapter 175 setting out general power of the commissioner, or any other law to the contrary:

(1) The chief settlement judge at the department is the administrator and supervisor of all dispute resolute functions and personnel, and reports directly to the commissioner.

(2) The commissioner may delegate authority only to settlement judges to make determinations under the procedure in sections 176.106, 176.238, and 176.239 and to approve settlements of claims under section 176.521. A settlement judge must preside at all workers' compensation settlement conferences conducted at the department.

Sec. 72. [178.20] [LABOR EDUCATION ADVANCEMENT GRANT PROGRAM.]

The commissioner shall establish the labor education advancement grant program for the purpose of facilitating the participation of minorities and women in apprenticeable trades and occupations. The commissioner shall award grants to community-based organizations serving the targeted populations on a competitive request-for-proposal basis. Interested organizations shall apply for the grants in a form prescribed by the commissioner. As part of the application process, applicants must provide a statement of need for the grant, a description of the targeted population and apprenticeship opportunities, a description of activities to be funded by the grant, evidence supporting the ability to deliver services, information related to coordinating grant activities with other employment and training programs, identification of matching funds, a budget, and performance objectives. Each submitted application shall be evaluated for completeness and effectiveness of the proposed grant activity.

Sec. 73. Minnesota Statutes 1994, section 207A.01, is amended to read:

207A.01 [PRESIDENTIAL PRIMARY.]

A presidential primary must be held on the first Tuesday in April of each year after 1999 in which a president and vice president of the United States are to be nominated and elected, at which the voters of this state may express their preference among the candidates of the major political party of their choice, for that party's nomination to be president of the United States or may vote for uncommitted delegates to the national party convention. For the purposes of sections 207A.01 to 207A.07, "political party" or "party" means a political party as defined in section 200.02, subdivision 7.

Sec. 74. Minnesota Statutes 1994, section 216B.16, subdivision 2, is amended to read:

Subd. 2. [SUSPENSION OF PROPOSED RATES; HEARING; FINAL DETERMINATION DEFINED.] (a) Whenever there is filed with the commission a schedule modifying or resulting in a change in any rates then in force as provided in subdivision 1, the commission may suspend the operation of the schedule by filing with the schedule of rates and delivering to the affected utility a statement in writing of its reasons for the suspension at any time before the rates become effective. The suspension shall not be for a longer period than ten months beyond the initial filing date except as provided in this subdivision or subdivision 1a. During the suspension the commission shall determine whether all questions of the reasonableness of the rates requested raised by persons deemed interested or by the administrative division of the department of public service can be resolved to the satisfaction of the commission. If the commission finds that all significant issues raised have not been resolved to its satisfaction, or upon petition by ten percent of the affected customers or 250 affected customers, whichever is less, it shall refer the matter to the office of administrative hearings with instructions for a public hearing as a contested case pursuant to chapter 14, except as otherwise provided in this section. The commission may order that the issues presented by the proposed rate changes be bifurcated into two separate hearings as follows: (1) determination of the utility's revenue requirements and (2) determination of the rate design. Upon issuance of both administrative law judge reports, the issues shall again be joined for consideration and final determination by the commission. All prehearing discovery activities of state agency intervenors shall be consolidated and conducted by the department of public service. If the commission does not make a final determination concerning a schedule of rates within ten months after the initial filing date, the schedule shall be deemed to have been approved by the commission; except if:

(1) an extension of the procedural schedule has been granted under subdivision 1a, in which case the schedule of rates is deemed to have been approved by the commission on the last day of the extended period of suspension; or

(2) a settlement has been submitted to and rejected by the commission and the commission does not make a final determination concerning the schedule of rates, the schedule of rates is deemed to have been approved 60 days after the initial or, if applicable, the extended period of suspension.

(b) If the commission finds that it has insufficient time during the suspension period to make a final determination of a case involving changes in general rates because of the need to make a final determinations determination of other another previously filed cases case involving changes in general rates under this section or section 237.075, the commission may extend the suspension period to the extent necessary to allow itself 20 working days to make the final determination after it has made a final determinations determination in the previously filed cases case. An extension of the suspension period under this paragraph does not alter the setting of interim rates under subdivision 3.

(c) For the purposes of this section, "final determination" means the initial decision of the commission and not any order which may be entered by the commission in response to a petition for rehearing or other further relief. The commission may further suspend rates until it determines all those petitions.

Sec. 75. Minnesota Statutes 1994, section 216B.16, is amended by adding a subdivision to read:

Subd. 12a. [EXEMPTION FOR SMALL ELECTRIC UTILITY FRANCHISE.] (a) An electric utility, operating as such in a bordering state and having fewer than 200 customers in Minnesota, is exempt from this section if the utility:

(1) charges Minnesota customers the same rates as those charged to customers in the bordering state;

(2) provides 60-day notice to the commission of rate increases for its Minnesota customers;

(3) provides individual, written notice of rate increases to its Minnesota customers;

(4) provides the commission with schedules of rates and tariffs charged in the bordering state and revenues by class under the former and proposed rates; and

(5) maintains an up-to-date tariff book with the department.

(b) The commission may initiate an investigation under section 216B.17, on its own motion or upon customer complaint with respect to the utility's rates and practices in Minnesota.

Sec. 76. Minnesota Statutes 1994, section 216B.2424, is amended to read:

216B.2424 [BIOMASS POWER MANDATE.]

A public utility, as defined in section 216B.02, subdivision 4, that operates a nuclear-powered electric generating plant within this state must, by December 31, 1998, construct and operate, purchase, or contract to construct and operate (1) by December 31, 1998, 50 megawatts of electric energy installed capacity generated by farm grown closed-loop biomass scheduled to be operational by December 31, 2001; and (2) by December 31, 1998, an additional 75 megawatts of installed capacity so generated scheduled to be operational by December 31, 2002. Of the total 125 megawatts of biomass electric energy installed capacity required under this section, no more than 75 megawatts may be provided by a single project. Of the 75 megawatts of biomass electric energy installed capacity required under clause (2), no more than 25 megawatts of this capacity may be provided by a St. Paul district heating and cooling system cogeneration facility utilizing waste wood as a primary fuel source. The public utility must accept and consider on an equal basis with other proposals a proposal to satisfy the requirements of this section that includes a project that exceeds the megawatt capacity requirements of either clause (1) or (2) and that proposes to sell the excess capacity to the public utility or to other purchasers.

Sec. 77. Minnesota Statutes 1994, section 216B.27, subdivision 4, is amended to read:

Subd. 4. [DEADLINE TO GRANT APPLICATION.] Any application for a rehearing not granted within 20 60 days from the date of filing thereof, shall be deemed denied.

Sec. 78. Minnesota Statutes 1994, section 237.701, subdivision 1, is amended to read:

Subdivision 1. [FUND CREATED; AUTHORIZED EXPENDITURES.] The telephone assistance fund is created as a separate account in the state treasury to consist of amounts received by the department of administration representing the surcharge authorized by section 237.70, subdivision 6, and amounts earned on the fund assets. Money in the fund may be used only for:

(1) reimbursement to telephone companies for expenses and credits allowed in section 237.70, subdivision 7, paragraph (d), clause (5);

(2) reimbursement of the administrative expenses of the department of human services to implement sections 237.69 to 237.71, not to exceed $314,000 annually; and

(3) reimbursement of the administrative expenses of the commission not to exceed $25,000 annually; and

(4) reimbursement of the statewide indirect cost of the commission.

Sec. 79. Minnesota Statutes 1994, section 245A.11, subdivision 2, is amended to read:

Subd. 2. [PERMITTED SINGLE-FAMILY RESIDENTIAL USE.] Residential programs with a licensed capacity of six or fewer persons shall be considered a permitted single-family residential use of property for the purposes of zoning and other land use regulations, except that a residential program whose primary purpose is to treat juveniles who have violated criminal statutes relating to sex offenses or have been adjudicated delinquent on the basis of conduct in violation of criminal statutes relating to sex offenses shall not be considered a permitted use. Programs otherwise allowed under this subdivision shall not be prohibited by operation of restrictive covenants or similar restrictions, regardless of when entered into, which cannot be met because of the nature of the licensed program, including provisions which require the home's occupants be related, and that the home must be occupied by the owner, or similar provisions.

Sec. 80. Minnesota Statutes 1994, section 268A.01, subdivision 4, is amended to read:

Subd. 4. [VOCATIONAL REHABILITATION SERVICES.] "Vocational rehabilitation services" means those services and goods so defined in the federal Rehabilitation Act of 1973, as amended, and section 268A.03, clause (b).

Sec. 81. Minnesota Statutes 1994, section 268A.01, subdivision 5, is amended to read:

Subd. 5. [PERSON WITH A DISABILITY.] "Person with a disability" means a person who because of a substantial physical, mental, or emotional disability or dysfunction requires special services in order to enjoy the benefits of society.

Sec. 82. Minnesota Statutes 1994, section 268A.01, subdivision 6, is amended to read:

Subd. 6. [REHABILITATION FACILITY.] "Rehabilitation facility" means an entity which meets the definition of community rehabilitation facility program in the federal Rehabilitation Act of 1973, as amended;. However, for the purposes of sections 268A.03, paragraph (a), 268A.06, 268A.08, and 268A.09 268A.15, rehabilitation facility means an entity which is operated for the primary purpose of providing remunerative or facilitating employment to those for persons with a severe disability who, as a result of physical or mental disability, are unable to participate in competitive employment. A rehabilitation facility shall supply such employment (1) as a step in the rehabilitation process for those who cannot be readily absorbed in the competitive labor market, or (2) during such time as employment opportunities for them in the competitive labor market do not exist.

Sec. 83. Minnesota Statutes 1994, section 268A.01, subdivision 9, is amended to read:

Subd. 9. [LONG-TERM CENTER-BASED EMPLOYMENT PROGRAM SUBPROGRAM.] "Long-term Center-based employment program subprogram" means a program employment which provides paid work on the premises of a rehabilitation facility and training services or other services necessary for employment on or off the premises and which does not include work activity of the rehabilitation facility.

Sec. 84. Minnesota Statutes 1994, section 268A.01, subdivision 10, is amended to read:

Subd. 10. [EXTENDED EMPLOYMENT PROGRAMS PROGRAM.] "Extended employment programs program" means the following programs which may be offered by a rehabilitation facility: center-based employment and supported employment subprograms.

(1) long-term employment program;

(2) work activity program;

(3) work component program; and

(4) supported employment program.

Sec. 85. Minnesota Statutes 1994, section 268A.03, is amended to read:

268A.03 [POWERS AND DUTIES.]

The commissioner shall:

(a) certify the rehabilitation facilities to offer extended employment programs, grant funds to the extended employment programs, and perform the duties as specified in section 268A.09 268A.15;

(b) provide vocational rehabilitation services to persons with disabilities in accordance with the state plan for vocational rehabilitation. These services include but are not limited to: diagnostic and related services incidental to determination of eligibility for services to be provided, including medical diagnosis and vocational diagnosis; vocational counseling, training and instruction, including personal adjustment training; physical restoration, including corrective surgery, therapeutic treatment, hospitalization and prosthetic and orthotic devices, all of which shall be obtained from appropriate established agencies; transportation; occupational and business licenses or permits, customary tools and equipment; maintenance; books, supplies, and training materials; initial stocks and supplies; placement; on-the-job skill training and time-limited postemployment services leading to supported employment; acquisition of vending stands or other equipment, initial stocks and supplies for small business enterprises; supervision and management of small business enterprises, merchandising programs, or services rendered by severely disabled persons. Persons with a disability are entitled to free choice of vendor for any medical, dental, prosthetic, or orthotic services provided under this paragraph;

(c) expend funds and provide technical assistance for the establishment, improvement, maintenance, or extension of public and other nonprofit rehabilitation facilities or centers;

(d) maintain a contractual or regulatory relationship with the United States as authorized by the Social Security Act, as amended. Under this relationship, the state will undertake to make determinations referred to in those public laws with respect to all individuals in Minnesota, or with respect to a class or classes of individuals in this state that is designated in the agreement at the state's request. It is the purpose of this relationship to permit the citizens of this state to obtain all benefits available under federal law;

(e) provide an in-service training program for division of rehabilitation services employees by paying for its direct costs with state and federal funds;

(f) conduct research and demonstration projects; provide training and instruction, including establishment and maintenance of research fellowships and traineeships, along with all necessary stipends and allowances; disseminate information to persons with a disability and the general public; and provide technical assistance relating to vocational rehabilitation and independent living;

(g) receive and disburse pursuant to law money and gifts available from governmental and private sources including, but not limited to, the federal Department of Education and the Social Security Administration, for the purpose of vocational rehabilitation or independent living;

(h) design all state plans for vocational rehabilitation or independent living services required as a condition to the receipt and disbursement of any money available from the federal government;

(i) cooperate with other public or private agencies or organizations for the purpose of vocational rehabilitation or independent living. Money received from school districts, governmental subdivisions, mental health centers or boards, and private nonprofit organizations is appropriated to the commissioner for conducting joint or cooperative vocational rehabilitation or independent living programs;

(j) enter into contractual arrangements with instrumentalities of federal, state, or local government and with private individuals, organizations, agencies, or facilities with respect to providing vocational rehabilitation or independent living services;

(k) take other actions required by state and federal legislation relating to vocational rehabilitation, independent living, and disability determination programs;

(l) hire staff and arrange services and facilities necessary to perform the duties and powers specified in this section;

(m) adopt, amend, suspend, or repeal rules necessary to implement or make specific programs that the commissioner by sections 268A.01 to 268A.10 268A.15 is empowered to administer; and

(n) contact any person with traumatic brain injury or spinal cord injury reported by the commissioner of health under section 144.664, subdivision 3, and notify the person, or the person's parent or guardian if the person is a minor or is mentally incompetent, of services available to the person, eligibility requirements and application procedures for public programs, and other information the commissioner believes may be helpful to the person to make appropriate use of available rehabilitation services.

Sec. 86. Minnesota Statutes 1994, section 268A.06, subdivision 1, is amended to read:

Subdivision 1. [APPLICATION.] Any city, town, county, nonprofit corporation, state regional center, or any combination thereof, may apply to the commissioner for assistance in establishing or operating a community rehabilitation facility. Application for assistance shall be on forms supplied prescribed by the commissioner. Each applicant shall annually submit to the commissioner its plan and budget for the next fiscal year. No applicant shall be eligible for a grant hereunder unless its plan and budget have been approved by the commissioner.

Sec. 87. Minnesota Statutes 1994, section 268A.07, is amended to read:

268A.07 [REQUIREMENTS FOR CERTIFICATION.]

Subdivision 1. [BENEFITS.] A rehabilitation facility must, as a condition for receiving program certification, provide employees in a long-term center-based employment program the with personnel benefits prescribed in rules adopted by the commissioner of the department of economic security.

Subd. 2. [GRIEVANCE PROCEDURE.] A rehabilitation facility must, as a condition for receiving program certification, provide to employees in a long-term center-based employment program subprograms, a grievance procedure which has as its final step provisions for final and binding arbitration.

Sec. 88. Minnesota Statutes 1994, section 268A.08, subdivision 1, is amended to read:

Subdivision 1. [APPOINTMENT; MEMBERSHIP.] Every city, town, county, nonprofit corporation, or combination thereof establishing a rehabilitation facility shall appoint a rehabilitation facility board of no fewer than nine members before becoming eligible for the assistance provided by sections 268A.06 to 268A.09 268A.15. When any city, town, or county singly establishes such a rehabilitation facility, the board shall be appointed by the chief executive officer of the city or the chair of the governing board of the county or town. When any combination of cities, towns, counties, or nonprofit corporations establishes a rehabilitation facility, the chief executive officers of the cities, nonprofit corporations and the chairs of the governing bodies of the counties or towns shall appoint the board. If a nonprofit corporation singly establishes a rehabilitation facility, the corporation shall appoint the board of directors. Membership on a board shall be representative of the community served and shall include a person with a disability. One-third to one-half of the board shall be representative of industry or business. The remaining members should be representative of lay associations for persons with a disability, labor, the general public, and education, welfare, medical, and health professions. Nothing in sections 268A.06 to 268A.09 268A.15 shall be construed to preclude the appointment of elected or appointed public officials or members of the board of directors of the sponsoring nonprofit corporation to the board, so long as representation described above is preserved. If a state regional center establishes an extended employment program, the chief executive officer of the state regional center shall perform the functions of the rehabilitation facility board as prescribed in subdivision 2. The regional center is not required to establish a separate governing body as a board. The state regional center shall establish an advisory committee following the membership representation requirements of this subdivision. If a county establishes an extended employment program and manages the program with county employees, the governing board shall be the county board of commissioners and other provisions of this chapter pertaining to membership on the governing board do not apply.

Sec. 89. Minnesota Statutes 1994, section 268A.08, subdivision 2, is amended to read:

Subd. 2. [DUTIES.] Subject to the provisions of sections 268A.06 to 268A.09 268A.15 and the rules of the department, each rehabilitation facility board shall:

(a) review and evaluate the need for extended employment programs offered by the rehabilitation facility provided pursuant to sections 268A.06 to 268A.09 268A.15 and report thereon to the commissioner and, when indicated, the public, together with recommendations for additional extended employment programs;

(b) recruit and promote local financial support for the extended employment programs from private sources such as community chests, business, industrial and private foundations, voluntary agencies and other lawful sources and promote public support for municipal and county appropriations;

(c) promote, arrange, and implement working agreements with other educational and social service agencies both public and private and any other allied agencies;

(d) advise the commissioner on the adoption and implementation of policies to stimulate effective community relations;

(e) review the annual plan and budget and make recommendations thereon;

(f) when the an extended employment program offered by the rehabilitation facility is certified, act as the administrator of the rehabilitation facility and its programs subprograms for purposes of this chapter.

Sec. 90. Minnesota Statutes 1994, section 268A.13, is amended to read:

268A.13 [EMPLOYMENT SUPPORT SERVICES FOR PERSONS WITH MENTAL ILLNESS.]

The commissioner of economic security, in cooperation with the commissioner of human services, shall develop a statewide program of grants to provide services for persons with mental illness in supported employment. Projects funded under this section must: (1) assist persons with mental illness in obtaining and retaining employment; (2) emphasize individual community placements for clients; (3) ensure interagency collaboration at the local level between vocational rehabilitation field offices, county service agencies, community support programs operating under the authority of section 245.4712, and community rehabilitation providers, in assisting clients; and (4) involve clients in the planning, development, oversight, and delivery of support services. Project funds may not be used to provide services in segregated settings such as long-term the center-based employment or work activity programs subprograms as defined in section 268A.01.

The commissioner of economic security, in consultation with the commissioner of human services, shall develop a request for proposals which is consistent with the requirements of this section and which specifies the types of services that must be provided by grantees. Projects shall be funded for state fiscal year 1995 and priority for funding shall be given to organizations with experience in developing innovative employment support services for persons with mental illness. Each applicant for funds under this section shall submit an evaluation protocol as part of the grant application.

Sec. 91. [268A.15] [EXTENDED EMPLOYMENT PROGRAM.]

Subdivision 1. [ADMINISTRATION.] The department of economic security shall administer this section through the division of rehabilitation services. The department may employ staff as required to administer this section and may accept and receive funds from nonstate sources for the purpose of implementing this section.

Subd. 2. [PURPOSE.] The purpose of the extended employment program is to provide the ongoing services necessary to maintain and advance the employment of persons with severe disabilities. Employment under this section must encompass the broad range of employment choices available to all persons and promote an individual's self-sufficiency and financial independence.

Subd. 3. [RULE AUTHORITY.] The commissioner shall adopt rules on an individual's eligibility for the extended employment program, the certification of rehabilitation facilities, and the methods, criteria, and units of distribution for the allocation of state grant funds to certified rehabilitation facilities. In determining the allocation, the commissioner must consider the economic conditions of the community and the performance of rehabilitation facilities relative to their impact on the economic status of workers in the extended employment program.

Subd. 4. [EVALUATION.] The commissioner of economic security shall evaluate the extended employment program to determine whether the purpose of extended employment as defined in subdivision 2 is being achieved. The evaluation must include an assessment of whether workers in the extended employment program are satisfied with their employment. A written report of this evaluation must be prepared at least every two years and made available to the public.

Subd. 5. [TECHNICAL ASSISTANCE.] The commissioner of economic security shall provide technical assistance within available resources to rehabilitation facilities.

Subd. 6. [GRANTS.] The commissioner may provide innovation and expansion grants to rehabilitation facilities to encourage the development, demonstration, or dissemination of innovative business practices, training programs, and service delivery methods that:

(1) expand and improve employment opportunities for persons with severe disabilities who are unserved or underserved by the extended employment program; and

(2) increase the ability of persons with severe disabilities to use new and emerging technologies in employment settings, and foster the capacity of rehabilitation facilities and employers to promote the integration of individuals with severe disabilities into the workplace and the mainstream of community life.

The grants must require collaboration at the local level among vocational rehabilitation field offices, county social service and planning agencies, rehabilitation facilities, and employers.

Subd. 7. [WITHDRAWAL OF FUNDS.] The commissioner may withdraw funds from a rehabilitation facility that is not being administered in accordance with its approved plan and budget unless a modified plan and budget is submitted to and approved by the commissioner, and implemented within a reasonable time. The commissioner may withdraw funds from a rehabilitation facility not being administered according to department rules, or not meeting mandatory standards for certification, unless a plan bringing the rehabilitation facility into compliance with the rules and standards is submitted to and approved by the commissioner, and implemented within a reasonable time. Funds withdrawn shall, after reasonable notice and opportunity for hearing, be reallocated by the commissioner to other rehabilitation facilities.

Sec. 92. Minnesota Statutes 1994, section 298.22, subdivision 2, is amended to read:

Subd. 2. There is hereby created the iron range resources and rehabilitation board, consisting of 11 members, five of whom shall be state senators appointed by the subcommittee on committees of the rules committee of the senate,

and five of whom shall be representatives, appointed by the speaker of the house of representatives, their terms of office to commence on May 1, 1943, and continue until January 3rd, 1945, or until their successors are appointed and qualified. Their successors shall be appointed each two years in the same manner as the original members were appointed, in January of every second year, commencing in January, 1945. The 11th member of said board shall be the commissioner of natural resources of the state of Minnesota. Vacancies on the board shall be filled in the same manner as the original members were chosen. At least a majority of the legislative members of the board shall be elected from state senatorial or legislative districts in which over 50 percent of the residents reside within a tax relief area as defined in section 273.134. All expenditures and projects made by the commissioner of iron range resources and rehabilitation shall first be submitted to said iron range resources and rehabilitation board which shall recommend for approval by at least eight board members or disapproval or modification of expenditures and projects for rehabilitation purposes as provided by this section, and the method, manner, and time of payment of all said funds proposed to be disbursed shall be first approved or disapproved by said board. The board shall biennially make its report to the governor and the legislature on or before November 15 of each even numbered year. The expenses of said board shall be paid by the state of Minnesota from the funds raised pursuant to this section.

Sec. 93. Minnesota Statutes 1994, section 298.223, subdivision 2, is amended to read:

Subd. 2. [ADMINISTRATION.] The taconite environmental protection fund shall be administered by the commissioner of the iron range resources and rehabilitation board. The commissioner shall by September 1 of each year prepare submit to the board a list of projects to be funded from the taconite environmental protection fund, with such supporting information including description of the projects, plans, and cost estimates as may be necessary. Upon recommendation approval by at least eight members of the iron range resources and rehabilitation board, this list shall be submitted to the governor by November 1 of each year. By December 1 of each year, the governor shall approve or disapprove, or return for further consideration, each project. Funds for a project may be expended only upon approval of the project by the board and governor. The commissioner may submit supplemental projects to the board and governor for approval at any time.

Sec. 94. [383B.79] [MULTIJURISDICTIONAL PROGRAM.]

Subdivision 1. [PROGRAM CREATED.] A multijurisdictional reinvestment program involving Hennepin county, the cities of Minneapolis, Brooklyn Center, and other interested statutory or home rule charter cities in Hennepin county, the Minneapolis park board, and the suburban Hennepin county park district is created. The multijurisdictional program must include plans for housing rehabilitation and removals, industrial polluted land cleanup, water ponding, environmental cleanup, community corridor connections, corridor planning, creation of green space, and job creation.

Subd. 2. [USE OF APPROPRIATIONS.] Up to one-half of any state appropriation for the program created in subdivision 1 may be used by the county as a grant to the cities of Minneapolis and Brooklyn Center to provide assistance in a capital nature for constructing public infrastructure improvements in order to further economic development.

Subd. 3. [MATCHING.] Government jurisdictions participating in the reinvestment program planning and projects must match any state contribution on at least a dollar-for-dollar basis in the aggregate. Government jurisdictions, however constituted, may use any funds under their control for the match requirement.

Sec. 95. Minnesota Statutes 1994, section 462.357, subdivision 7, is amended to read:

Subd. 7. [PERMITTED SINGLE FAMILY USE.] A state licensed residential facility serving six or fewer persons, a licensed day care facility serving 12 or fewer persons, and a group family day care facility licensed under Minnesota Rules, parts 9502.0315 to 9502.0445 to serve 14 or fewer children shall be considered a permitted single family residential use of property for the purposes of zoning, except that a residential facility whose primary purpose is to treat juveniles who have violated criminal statutes relating to sex offenses or have been adjudicated delinquent on the basis of conduct in violation of criminal statutes relating to sex offenses shall not be considered a permitted use.

Sec. 96. Minnesota Statutes 1994, section 462A.05, subdivision 14, is amended to read:

Subd. 14. [REHABILITATION LOANS.] It may agree to purchase, make, or otherwise participate in the making, and may enter into commitments for the purchase, making, or participation in the making, of eligible loans for rehabilitation to persons and families of low and moderate income, and to owners of existing residential housing for occupancy by such persons and families, for the rehabilitation of existing residential housing owned by them. The

loans may be insured or uninsured and may be made with security, or may be unsecured, as the agency deems advisable. The loans may be in addition to or in combination with long-term eligible mortgage loans under subdivision 3. They may be made in amounts sufficient to refinance existing indebtedness secured by the property, if refinancing is determined by the agency to be necessary to permit the owner to meet the owner's housing cost without expending an unreasonable portion of the owner's income thereon. No loan for rehabilitation shall be made unless the agency determines that the loan will be used primarily to make the housing more desirable to live in, to increase the market value of the housing, for compliance with state, county or municipal building, housing maintenance, fire, health or similar codes and standards applicable to housing, or to accomplish energy conservation related improvements. In unincorporated areas and municipalities not having codes and standards, the agency may, solely for the purpose of administering the provisions of this chapter, establish codes and standards. Except for accessibility improvements under this subdivision 14d and subdivisions 14a and 24, clause (1), no secured loan for rehabilitation of any property shall be made in an amount which, with all other existing indebtedness secured by the property, would exceed its market value, as determined by the agency. No loan under this subdivision shall be denied solely because the loan will not be used for placing the residential housing in full compliance with all state, county, or municipal building, housing maintenance, fire, health, or similar codes and standards applicable to housing. Rehabilitation loans shall be made only when the agency determines that financing is not otherwise available, in whole or in part, from private lenders upon equivalent terms and conditions. Accessibility rehabilitation loans authorized under this subdivision may be made to eligible persons and families without limitations relating to the maximum incomes of the borrowers if:

(1) the borrower or a member of the borrower's family requires a level of care provided in a hospital, skilled nursing facility, or intermediate care facility for persons with mental retardation or related conditions;

(2) home care is appropriate; and

(3) the improvement will enable the borrower or a member of the borrower's family to reside in the housing.

Sec. 97. Minnesota Statutes 1994, section 462A.05, subdivision 15c, is amended to read:

Subd. 15c. [RESIDENTIAL LEAD ABATEMENT.] (a) It may make or purchase loans or grants for the abatement of hazardous levels of lead paint in residential buildings and lead contaminated soil on the property of residential buildings occupied by low- and moderate-income persons. Hazardous levels are as determined by the department of health or the pollution control agency. The agency must establish grant criteria for a residential lead paint and lead contaminated soil abatement program, including the terms of loans and grants under this section, a maximum amount for loans or grants, eligible owners borrowers or grantees, eligible contractors, and eligible buildings. The agency may make grants to cities, local units of government, registered lead abatement contractors, and nonprofit organizations for the purpose of administering a residential lead paint and contaminated lead soil abatement program. No loan or grant may be made for lead paint abatement for a multifamily building which contains substantial housing maintenance code violations unless the violations are being corrected in conjunction with receipt of the loan or grant under this section. The agency must establish standards for the relocation of families where necessary and the payment of relocation expenses. To the extent possible, the agency must coordinate loans and grants under this section with existing housing programs.

The agency, in consultation with the department of health, shall report to the legislature by January 1993 1996 on the costs and benefits of subsidized lead abatement and the extent of the childhood lead exposure problem. The agency shall review the effectiveness of its existing loan and grant programs in providing funds for residential lead abatement and report to the legislature with examples, case studies and recommendations.

(b) The agency may also make grants to eligible organizations, as defined in section 268.92, subdivision 1, for the purposes of section 268.92.

Sec. 98. Minnesota Statutes 1994, section 462A.05, subdivision 30, is amended to read:

Subd. 30. [AGENCY INVESTMENT IN CERTAIN NOTES AND MORTGAGES.] It may invest in, purchase, acquire, and take assignments of existing notes and mortgages not closed for the purpose of sale to the agency, from lenders that are nonprofit or nonprofit entities, as defined in the agency's rules, provided that: (1) the notes and mortgages evidence loans for the construction, rehabilitation, purchase, improvement, or refinancing of residential housing intended for occupancy and occupied by low- and moderate-income persons and families; and (2) the loan sellers utilize the funds derived from the purchases in accordance with the authority contained in section 462A.07, subdivision 12, for the purposes and objectives of sections 462A.02, 462A.03, 462A.05, 462A.07, and 462A.21; and (3)

the purchases are subject to security and limitations on the costs and expenses of the loan sellers incidental to the utilization of the purchase proceeds as the agency may determine. The proceeds of the purchases authorized by this subdivision shall not be subject to the limitations of section 462A.21, subdivisions 4k, 6, 9, and 12. In addition, it may invest in, purchase, acquire, and take assignments of existing federally insured mortgages for multifamily housing, not closed for the purpose of sale to the agency, from any banking institution, savings and loan association, or other lender or financial intermediary approved by the members; provided that the multifamily housing is benefited by contracts for federal housing assistance payments.

Sec. 99. Minnesota Statutes 1994, section 462A.201, subdivision 2, is amended to read:

Subd. 2. [LOW-INCOME HOUSING.] (a) The agency may, in consultation with the advisory committee, use money from the housing trust fund account to provide loans or grants for projects for the development, construction, acquisition, preservation, and rehabilitation of low-income rental and limited equity cooperative housing units and homes for ownership. No more than 20 percent of available funds may be used for home ownership projects.

(b) The A rental or limited equity cooperative housing project must meet one of the following income tests:

(1) at least 75 percent of the rental and cooperative units, and 100 percent of the homes for ownership, must be rented to or cooperatively owned, or owned by persons and families whose income does not exceed 30 percent of the median family income for the metropolitan area as defined in section 473.121, subdivision 2; or

(2) all of the units funded by the housing trust fund account must be used for the benefit of persons and families whose income does not exceed 30 percent of the median family income for the metropolitan area as defined in section 473.121, subdivision 2.

The median family income may be adjusted for families of five or more.

(c) Homes for ownership must be owned or purchased by persons and families whose income does not exceed 50 percent of the metropolitan area median income, adjusted for family size.

(d) In making the grants, the agency shall determine the terms and conditions of repayment and the appropriate security, if any, should repayment be required. To promote the geographic distribution of grants and loans, the agency may designate a portion of the grant or loan awards to be set aside for projects located in specified congressional districts or other geographical regions specified by the agency. The agency may adopt emergency and permanent rules for awarding grants and loans under this subdivision. The emergency rules are effective for 180 days or until the permanent rules are adopted, whichever occurs first.

Sec. 100. Minnesota Statutes 1994, section 462A.202, subdivision 2, is amended to read:

Subd. 2. [TRANSITIONAL HOUSING.] The agency may make loans with or without interest to cities and counties to finance the acquisition, improvement, and rehabilitation of existing housing properties or the acquisition, site improvement, and development of new properties for the purposes of providing transitional housing, upon terms and conditions the agency determines. Preference must be given to cities that propose to acquire properties being sold by the resolution trust corporation or the department of housing and urban development. Loans under this subdivision are subject to the restrictions in subdivision 7.

Sec. 101. Minnesota Statutes 1994, section 462A.202, subdivision 6, is amended to read:

Subd. 6. [NEIGHBORHOOD LAND TRUSTS.] The agency may make loans with or without interest to cities and counties to finance the capital costs of a land trust project undertaken pursuant to sections 462A.30 and 462A.31. Loans under this subdivision are subject to the restrictions in subdivision 7.

Sec. 102. Minnesota Statutes 1994, section 462A.204, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The agency may establish a family homeless prevention and assistance program to assist families who are homeless or are at imminent risk of homelessness. The term "family" may include single individuals. The agency may make grants to develop and implement family homeless prevention and assistance projects under the program. For purposes of this section, "families" means families and persons under the age of 18 22.

Sec. 103. Minnesota Statutes 1994, section 462A.205, subdivision 4, is amended to read:

Subd. 4. [AMOUNT AND PAYMENT OF RENT ASSISTANCE.] (a) This subdivision applies to both the voucher option and the project-based voucher option.

(b) Within the limits of available appropriations, eligible families may receive monthly rent assistance for a 36-month period starting with the month the family first receives rent assistance under this section. The amount of the family's portion of the rental payment is equal to at least 30 percent of gross income.

(c) The rent assistance must be paid by the local housing organization to the property owner.

(d) Subject to the limitations in paragraph (e), the amount of rent assistance is the difference between the rent and the family's portion of the rental payment.

(e) In no case:

(1) may the amount of monthly rent assistance be more than $250 for housing located within the metropolitan area, as defined in section 473.121, subdivision 2, or more than $200 for housing located outside of the metropolitan area;

(2) may the owner receive more rent for assisted units than for comparable unassisted units; nor

(3) may the amount of monthly rent assistance be more than the difference between the family's portion of the rental payment and the fair market rent for the unit as determined by the Department of Housing and Urban Development.

Sec. 104. Minnesota Statutes 1994, section 462A.206, subdivision 2, is amended to read:

Subd. 2. [AUTHORIZATION.] The agency may make grants or loans to cities for the purposes of construction, acquisition, rehabilitation, demolition, permanent financing, refinancing, or gap financing of single or multifamily housing, or full cycle home ownership services, as defined in section 462A.209, subdivision 2. Gap financing is financing for the difference between the cost of the improvement of the blighted property, including acquisition, demolition, rehabilitation, and construction, and the market value of the property upon sale. The agency shall take into account the amount of money that the city leverages from other sources in awarding grants and loans. Cities may use the grants and loans to establish revolving loan funds and to provide grants and loans to eligible mortgagors. The city may determine the terms and conditions of the grants and loans. An agency loan may only be used by a city to make loans.

Sec. 105. Minnesota Statutes 1994, section 462A.206, subdivision 5, is amended to read:

Subd. 5. [OTHER ELIGIBLE ORGANIZATIONS.] A nonprofit organization is eligible to apply directly for grants or loans from the community rehabilitation fund account if the city within which it is located enacts a resolution authorizing the organization to apply on the city's behalf, except that a nonprofit organization providing full cycle home ownership services may apply directly to the agency.

Sec. 106. [462A.209] [HOME OWNERSHIP ASSISTANCE.]

Subdivision 1. [FULL CYCLE HOME OWNERSHIP SERVICES.] The full cycle home ownership services program shall be used to fund nonprofit organizations and political subdivisions providing, building capacity to provide, or supporting full cycle lending for home ownership to low and moderate income home buyers. The purpose of the program is to encourage private investment in affordable housing and collaboration of nonprofit organizations and political subdivisions with each other and private lenders in providing full cycle lending services.

Subd. 2. [DEFINITION.] "Full cycle home ownership services" means supporting eligible home buyers and owners through all phases of purchasing and keeping a home, by providing prepurchase home buyer education, prepurchase counseling and credit repair, prepurchase property inspection and technical and financial assistance to buyers in rehabilitating the home, postpurchase and mortgage default counseling, postpurchase assistance with home maintenance, entry cost assistance, and access to flexible loan products.

Subd. 3. [ELIGIBILITY.] The agency shall establish eligibility criteria for nonprofit organizations and political subdivisions to receive funding under this section. The eligibility criteria must require the nonprofit organization or

political subdivision to provide, to build capacity to provide, or support full cycle home ownership services for eligible home buyers. The agency may fund a nonprofit organization or political subdivision that will provide full cycle home ownership services by coordinating with one or more other organizations that will provide specific components of full cycle home ownership services. The agency may make exceptions to providing all components of full cycle lending if justified by the application. If there are more applicants requesting funding than there are funds available, the agency shall award the funds on a competitive basis and also assure an equitable geographic distribution of the available funds. The eligibility criteria must require the nonprofit organization or political subdivision to have a demonstrated involvement in the local community and to target the housing affordability needs of the local community. Partnerships and collaboration with innovative, grass roots, or community-based initiatives shall be encouraged. The agency shall give priority to nonprofit organizations and political subdivisions that provide matching funds. Applicants for funds under section 462A.057 may also apply funds under this program.

Subd. 4. [ENTRY COST HOME OWNERSHIP OPPORTUNITY PROGRAM.] The agency may establish an entry cost home ownership opportunity program, on terms and conditions it deems advisable, to assist individuals with downpayment and closing costs to finance the purchase of a home.

Sec. 107. [462A.2091] [CONTRACT FOR DEED GUARANTEE ACCOUNT.]

Subdivision 1. [CREATION.] The contract for deed guarantee account is created as a separate account in the housing development fund. Money in the account is appropriated to the agency for the purposes of this section. The account consists of money appropriated to the account and transferred from other sources and all earnings from money in the account.

Subd. 2. [ACCOUNT USES.] Money in the account may be used to create a guarantee fund for the refinancing of contracts for deed.

Subd. 3. [ELIGIBLE PROPERTY.] Contracts for deed eligible for refinancing with guarantee fund assistance must be for the purchase of an owner-occupied single-family or duplex structure. In a city of the first class in the metropolitan area, as defined in section 473.121, subdivision 2, eligible properties must be located in an area in which at least one census tract meets at least three of the following four criteria:

(1) at least 70 percent of the housing structures were built before 1960;

(2) at least 60 percent of the single-family housing is owner-occupied;

(3) the median market value of the area's owner-occupied housing, as recorded in the most recent federal decennial census, is not more than 100 percent of the purchase price limit for existing homes eligible for purchase in the area under the agency's home mortgage loan program; and

(4) between 1980 and 1990, the rate of owner occupancy of residential properties in the area declined by at least five percent, or at least 80 percent of the residential properties in the area are rental properties.

The area must include eight blocks in any direction from the census tract. Priority must be given for property located in an area that meets all four criteria.

Sec. 108. [462A.2097] [RENTAL HOUSING.]

The agency may establish a rental housing assistance program for persons of low income or for persons with a mental illness or families that include an adult family member with a mental illness. Rental assistance may be in the form of direct rental subsidies for housing for persons or families with incomes of up to 50 percent of the area median income as determined by the United States Department of Housing and Urban Development, adjusted for families of five or more. Housing for the mentally ill must be operated in coordination with social service providers who provide services requested by tenants. Direct rental subsidies must be administered by the agency for the benefit of eligible tenants. Financial assistance provided under this section must be in the form of vendor payments whenever possible.

Sec. 109. Minnesota Statutes 1994, section 462A.21, subdivision 3b, is amended to read:

Subd. 3b. [CAPACITY BUILDING GRANTS.] It may make capacity building grants to nonprofit organizations, local government units, Indian tribes, and Indian tribal organizations to expand their capacity to provide affordable housing and housing-related services. The grants may be used to assess housing needs and to develop and implement

strategies to meet those needs, including the creation or preservation of affordable housing, prepurchase and postpurchase counseling and associated administrative costs, and the linking of supportive services to the housing. The agency shall adopt rules specifying the eligible uses of grant money. Funding priority must be given to those applicants that include low-income persons in their membership, have provided housing-related services to low-income people, and demonstrate a local commitment of local resources, which may include in-kind contributions. Grants under this subdivision may be made only with specific appropriations by the legislature.

Sec. 110. Minnesota Statutes 1994, section 462A.21, subdivision 8, is amended to read:

Subd. 8. [HOME OWNERSHIP ASSISTANCE FUND.] It may establish a home ownership assistance fund, on terms and conditions it deems advisable, to assist persons and families of low and moderate income in the purchase of affordable residential housing and may use the funds to provide loans, additional security for eligible loans or to pay costs associated with or provide additional security for bonds issued by the agency.

Sec. 111. Minnesota Statutes 1994, section 462A.21, subdivision 8b, is amended to read:

Subd. 8b. [FAMILY RENTAL HOUSING.] It may establish a family rental housing assistance program to provide loans or direct rental subsidies for housing for families with incomes of up to 60 80 percent of area state median income. Priority must be given to those developments with resident families with the lowest income. The development may be financed by the agency or other public or private lenders. Direct rental subsidies must be administered by the agency for the benefit of eligible families. Financial assistance provided under this subdivision to recipients of aid to families with dependent children must be in the form of vendor payments whenever possible. Loans and direct rental subsidies under this subdivision may be made only with specific appropriations by the legislature. The limitations on eligible mortgagors contained in section 462A.03, subdivision 13, do not apply to loans for the rehabilitation of existing housing under this subdivision.

Sec. 112. Minnesota Statutes 1994, section 462A.21, subdivision 13, is amended to read:

Subd. 13. [ACCESSIBILITY PROGRAMS.] It may spend money for the purpose purposes of section 462A.05, subdivision subdivisions 14, 14a, and 24, and may pay the costs and expenses necessary and incidental to the development and operation of the programs authorized in that subdivision those subdivisions.

Sec. 113. Minnesota Statutes 1994, section 462A.21, subdivision 21, is amended to read:

Subd. 21. [COMMUNITY REHABILITATION PROGRAM.] The agency or its grantees may spend money for the purposes of the community rehabilitation program authorized under section 462A.206 and may pay the costs and expenses necessary and incidental to the development and operation of the program.

Sec. 114. Minnesota Statutes 1994, section 462A.21, is amended by adding a subdivision to read:

Subd. 22. [CONTRACT FOR DEED GUARANTEE PROGRAM.] It may expend money for the purposes of section 462A.2091 and may pay the costs and expenses necessary and incidental to the development and operation of the program authorized by section 462A.2091.

Sec. 115. Minnesota Statutes 1994, section 462A.21, is amended by adding a subdivision to read:

Subd. 23. [RENTAL HOUSING.] The agency may spend money for the purposes of the rental housing program authorized under section 462A.2097, and may pay the costs and expenses necessary and incidental to the development and operation of the program.

Sec. 116. Minnesota Statutes 1994, section 469.0171, is amended to read:

469.0171 [HOUSING PLAN, PROGRAM, AND REVIEW.]

Prior to the issuance of bonds or obligations for a housing development project proposed by an authority under section 469.017, the authority shall:

(1) prepare a plan meeting the requirements of section 462C.03, subdivision 1, paragraphs (a) to (d);

(2) obtain review of the plan in the manner provided in section 462C.04, subdivision 1; and

(3) prepare and submit for review a program as defined in section 462C.02, subdivision 3, in the manner provided in section 462C.04, subdivision 2, and section 462C.05, subdivision 5, for the making or purchasing of loans by cities.

The authority shall prepare and submit the report required under section 462C.04, subdivision 3.

Sec. 117. Minnesota Statutes 1994, section 504.33, subdivision 2, is amended to read:

Subd. 2. [CITY.] "City" means a any statutory or home rule charter city located within the metropolitan area as defined in section 473.121, subdivision 2, and any city of the first class as defined in section 410.01. The term "city" also includes, where applicable, a port authority, economic development authority, a housing and redevelopment authority, or any development agency established under chapter 469 which share common boundaries with the city.

Sec. 118. Minnesota Statutes 1994, section 504.33, subdivision 3, is amended to read:

Subd. 3. [DISPLACE.] "Displace" means to demolish, acquire for or convert to a use other than low-income housing, or to provide or spend money that directly results in the demolition, acquisition, or conversion of housing to a use other than low-income housing.

"Displace" does not include providing or spending money that directly results in: (i) housing improvements made to comply with health, housing, building, fire prevention, housing maintenance, or energy codes or standards of the applicable government unit; (ii) housing improvements to make housing more accessible to a handicapped person; or (iii) the demolition, acquisition, or conversion of housing for the purpose of creating owner-occupied housing that consists of no more than four units per structure.

"Displace" does not include downsizing large apartment complexes by demolishing less than 25 percent of the units in the complex or by eliminating units through reconfiguration and expansion of individual units for the purpose of expanding the size of the remaining low-income units. For the purpose of this section, "large apartment complex" means two or more adjacent buildings containing a total of 100 or more units per complex.

In any city in the metropolitan area, as defined in section 473.121, subdivision 2, which has met its housing affordability goals under the metropolitan council's metropolitan development guide, adopted under section 473.145, "displace" means the demolition, acquisition, or conversion of housing only for purposes other than the construction or rehabilitation of housing.

Sec. 119. Minnesota Statutes 1994, section 504.34, subdivision 1, is amended to read:

Subdivision 1. [ANNUAL REPORT REQUIRED.] A government unit, or in the case of a government unit located in the metropolitan area as defined in section 473.121, the government unit and the metropolitan council, shall prepare a housing impact report either:

(1) for each year in which the government unit displaces ten or more units of low-income housing in a city of the first class as defined in section 410.01; or

(2) when a specific project undertaken by a government unit for longer than one year displaces a total of ten or more units of low-income housing in a city of the first class as defined in section 410.01.

Sec. 120. Minnesota Statutes 1994, section 504.34, subdivision 2, is amended to read:

Subd. 2. [DRAFT ANNUAL HOUSING IMPACT REPORT.] As provided in subdivision 1, a government unit or in the case of a government unit participating with located in the metropolitan area, as defined in section 473.121, subdivision 2, the metropolitan council subject to this section must prepare a draft annual housing impact report for review and comment by interested persons. The draft report must be completed by January 31 of the year immediately following a year in which the government unit has displaced ten or more units of low-income housing in a city. For a housing impact report required under subdivision 1, clause (2), the draft report must be completed by January 31 of the year immediately following the year in which the government unit has displaced a cumulative total of ten units of low-income housing in a city.

Sec. 121. Minnesota Statutes 1994, section 504.35, is amended to read:

504.35 [REPLACEMENT HOUSING REQUIRED.]

A government unit which displaces ten or more units of low-income housing in a city of the first class as defined in section 410.01 and is subject to section 504.34 or in any city located within the metropolitan area as defined in

section 473.121, subdivision 2, must provide the replacement housing within 36 months following the date of the final annual housing impact report, unless there is an adequate supply of available and unoccupied low-income housing units to meet the demand for the replacement housing in the city where housing has been displaced by the government unit.

Sec. 122. [AFFORDABLE NEIGHBORHOOD DESIGN AND DEVELOPMENT INITIATIVE.]

In order to develop and implement methods of reducing the total costs of housing units through the innovative use of technology and planning, the housing finance agency may conduct a competition or secure proposals for innovative plans for the development of housing units affordable to low-income persons. The agency shall seek models for use by local units of government and nonprofit organizations to develop neighborhoods with small, owner-occupied affordable housing. The agency may seek plans that reduce construction costs through technological advancements, uniform housing designs suitable for use throughout the state, central purchasing of material or housing components, or streamlining of regulatory processes for site planning and land development. Designs selected become the property of the state of Minnesota. The agency may award one or more premiums in each competition and may share the costs and fees that may be required for the conduct of competitions.

Sec. 123. [REPLACEMENT HOUSING; METROPOLITAN COUNCIL STUDY.]

The metropolitan council shall study the issue of replacement housing and the need for a metropolitan area replacement housing law. The council shall report the results of the study and its recommendations to the legislature by December 1, 1996.

Sec. 124. Laws 1994, chapter 643, section 19, subdivision 9, is amended to read:

Subd. 9. Museum and Center for American Indian History 1,100,000

This appropriation is for the Minnesota historical society board of trustees of the Minnesota state colleges and universities to plan, design, and construct a museum and center for American Indian history and policy. The facility shall be located at an institution of higher education, selected by the state university board, which serves a region including the three most populous Indian reservations Bemidji State University. This appropriation is not available unless matched by $1,000,000 from nonpublic sources. The board of trustees of the Minnesota state colleges and universities is not required to pay any debt service for this appropriation.

Sec. 125. [APPLICABILITY.]

Sections 119, 120, and 123 apply in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

Sec. 126. [REPEALER.]

(a) Minnesota Statutes 1994, sections 116J.874, subdivision 6; 268A.01, subdivisions 7, 11, and 12; and 268A.09, are repealed.

(b) Minnesota Statutes 1994, sections 298.2211, subdivision 3a, and 462A.21, subdivision 8c, are repealed.

(c) Minnesota Statutes 1994, section 97A.531, subdivisions 2, 3, 4, 5, and 6, are repealed. Any action of the commissioner of natural resources under authority of those subdivisions is void.

(d) Laws 1990, chapter 521, section 4, is repealed.

Sec. 127. [EFFECTIVE DATES.]

Sections 18, subdivision 5; 30 to 47; 49; 57; 69; 71; 76; 79; 95; 96; 98; 100 to 103; 108; 112; 115; 116; 123 to 125; 126, paragraphs (b), (c), and (d); and all provisions of this act making appropriations for fiscal year 1995, are effective the day following final enactment. Section 51 is effective the day following final enactment and is repealed December 31, 1995. Section 52 is effective May 1, 1996. Sections 117 to 121 are effective August 1, 1997. All other provisions of this act are effective July 1, 1995."

Delete the title and insert:

"A bill for an act relating to the organization and operation of state government; appropriating money for economic development and certain agencies of state government, with certain conditions; establishing and modifying certain programs; providing for regulation of certain activities and practices; providing for accounts, assessments, and fees; requiring studies and reports; amending Minnesota Statutes 1994, sections 5.14; 16B.08, subdivision 7; 44A.01, subdivision 2; 97A.531, by adding a subdivision; 116J.552, subdivision 2; 116J.555, subdivision 2; 116J.873, subdivision 3, and by adding a subdivision; 116J.982, subdivision 3; 116M.16, subdivision 2; 116M.18, subdivisions 4, 5, and by adding a subdivision; 116N.03, subdivision 2; 116N.08, subdivisions 5, 6, and by adding a subdivision; 124.85, by adding a subdivision; 175.171; 176.011, subdivision 7a; 176.231, by adding a subdivision; 207A.01; 216B.16, subdivision 2, and by adding a subdivision; 216B.2424; 216B.27, subdivision 4; 237.701, subdivision 1; 245A.11, subdivision 2; 268A.01, subdivisions 4, 5, 6, 9, and 10; 268A.03; 268A.06, subdivision 1; 268A.07; 268A.08, subdivisions 1 and 2; 268A.13; 298.22, subdivision 2; 298.223, subdivision 2; 462.357, subdivision 7; 462A.05, subdivisions 14, 15c, and 30; 462A.201, subdivision 2; 462A.202, subdivisions 2 and 6; 462A.204, subdivision 1; 462A.205, subdivision 4; 462A.206, subdivisions 2 and 5; 462A.21, subdivisions 3b, 8, 8b, 13, 21, and by adding subdivisions; 469.0171; 504.33, subdivisions 2 and 3; 504.34, subdivisions 1 and 2; and 504.35; Laws 1993, chapter 369, section 9, subdivisions 2 and 3; Laws 1994, chapter 573, section 5, subdivision 2; chapter 643, section 19, subdivision 9; proposing coding for new law in Minnesota Statutes, chapters 97A; 116J; 176; 178; 268A; 383B; and 462A; repealing Minnesota Statutes 1994, sections 97A.531, subdivisions 2, 3, 4, 5, and 6; 116J.874, subdivision 6; 268A.01, subdivisions 7, 11, and 12; 268A.09; 298.2211, subdivision 3a; and 462A.21, subdivision 8c; Laws 1990, chapter 521, section 4."

We request adoption of this report and repassage of the bill.

Senate Conferees: Carl W. Kroening, Steven G. Novak, Kevin M. Chandler, Janet B. Johnson and Steve Dille.

House Conferees: James I. Rice, Karen Clark, Mark P. Mahon, Robert Leighton, Jr., and Dennis Ozment.

On the motion of Carruthers and on the demand of 10 members, a call of the House was ordered. The following members answered to their names:

Abrams                Farrell               Knight                Olson, M.             Smith
Anderson, B.          Finseth               Knoblach              Onnen                 Solberg
Anderson, R.          Frerichs              Koppendrayer          Opatz                 Stanek
Bakk                  Garcia                Kraus                 Orenstein             Sviggum
Bertram               Girard                Krinkie               Orfield               Swenson, D.
Bettermann            Goodno                Larsen                Osskopp               Swenson, H.
Bishop                Greenfield            Leighton              Osthoff               Sykora
Boudreau              Greiling              Leppik                Ostrom                Tomassoni
Bradley               Haas                  Lindner               Otremba               Tompkins
Broecker              Hackbarth             Long                  Ozment                Trimble
Brown                 Harder                Lourey                Paulsen               Tuma
Carlson               Hausman               Luther                Pawlenty              Van Dellen
Carruthers            Holsten               Lynch                 Pellow                Van Engen
Clark                 Hugoson               Macklin               Pelowski              Vickerman
Commers               Huntley               Mahon                 Perlt                 Wagenius
Cooper                Jaros                 Mares                 Peterson              Warkentin
Daggett               Jefferson             Mariani               Pugh                  Weaver
Dauner                Jennings              McCollum              Rest                  Wejcman
Davids                Johnson, A.           McElroy               Rhodes                Wenzel
Dawkins               Johnson, R.           McGuire               Rice                  Winter
Dehler                Johnson, V.           Milbert               Rukavina              Wolf
Delmont               Kahn                  Molnau                Sarna                 Workman
Dempsey               Kalis                 Mulder                Schumacher            Sp.Anderson,I
Dorn                  Kelley                Munger                Seagren               
Entenza               Kelso                 Ness                  Simoneau              
Erhardt               Kinkel                Olson, E.             Skoglund              

Rice moved that the report of the Conference Committee on S. F. No. 1670 be adopted and that the bill be repassed as amended by the Conference Committee.

Abrams moved that the House refuse to adopt the Conference Committee Report on S. F. No. 1670, and that the bill be returned to the Conference Committee.

A roll call was requested and properly seconded.

The question was taken on the Abrams motion and the roll was called. There were 52 yeas and 80 nays as follows:

Those who voted in the affirmative were:

Abrams                Finseth               Kraus                 Onnen                 Swenson, H.
Anderson, B.          Girard                Krinkie               Osskopp               Sykora
Bettermann            Goodno                Larsen                Paulsen               Tuma
Bishop                Haas                  Leppik                Pawlenty              Van Dellen
Boudreau              Hackbarth             Lindner               Pellow                Vickerman
Bradley               Harder                Lynch                 Rhodes                Warkentin
Broecker              Holsten               Macklin               Seagren               Weaver
Commers               Hugoson               Mares                 Smith                 Workman 
Daggett               Knight                McElroy               Stanek                
Dempsey               Knoblach              Molnau                Sviggum               
Erhardt               Koppendrayer          Mulder                Swenson, D.           

Anderson, R.          Garcia                Lieder                Orfield               Solberg
Bakk                  Greenfield            Long                  Osthoff               Tomassoni
Bertram               Greiling              Lourey                Ostrom                Tompkins
Brown                 Hausman               Luther                Otremba               Trimble
Carlson               Huntley               Mahon                 Ozment                Tunheim
Carruthers            Jaros                 Mariani               Pelowski              Van Engen
Clark                 Jefferson             Marko                 Perlt                 Wagenius
Cooper                Jennings              McCollum              Peterson              Wejcman
Dauner                Johnson, A.           McGuire               Pugh                  Wenzel
Davids                Johnson, R.           Milbert               Rest                  Winter
Dawkins               Johnson, V.           Munger                Rice                  Wolf
Dehler                Kahn                  Murphy                Rostberg              Sp.Anderson,I
Delmont               Kalis                 Ness                  Rukavina              
Dorn                  Kelley                Olson, E.             Sarna                 
Entenza               Kelso                 Olson, M.             Schumacher            
Farrell               Kinkel                Opatz                 Simoneau              
Frerichs              Leighton              Orenstein             Skoglund              

The question recurred on the Rice motion that the report of the Conference Committee on S. F. No. 1670 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 1670, A bill for an act relating to the organization and operation of state government; appropriating money for community development and certain agencies of state government, with certain conditions; establishing and modifying certain programs; providing for regulation of certain activities and practices; providing for accounts, assessments, and fees; requiring studies and reports; amending Minnesota Statutes 1994, sections 116J.873, subdivision 3, and by adding subdivisions; 116M.16, subdivision 2; 116M.18, subdivisions 4, 5, and by adding a subdivision; 116N.03, subdivision 2; 116N.08, subdivisions 5, 6, and by adding a subdivision; 124.85, by adding a subdivision; 175.171; 268A.01, subdivisions 4, 5, 6, 9, and 10; 268A.03; 268A.06, subdivision 1; 268A.07; 268A.08, subdivisions 1 and 2; 268A.13; 462A.201, subdivision 2; 462A.204, subdivision 1; and 462A.21, subdivisions 3b, 8b, 21, and by adding a subdivision; Laws 1994, chapter 643, section 19, subdivision 9; proposing coding for new law in Minnesota Statutes, chapters 178; 268A; and 462A; repealing Minnesota Statutes 1994, sections 116J.874, subdivision 6; 268A.01, subdivisions 7, 11, and 12; and 268A.09.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called.

Carruthers moved that those not voting be excused from voting. The motion prevailed.

There were 90 yeas and 40 nays as follows:

Those who voted in the affirmative were:

Anderson, R.          Greiling              Long                  Osthoff               Smith
Bakk                  Haas                  Lourey                Ostrom                Solberg
Bertram               Harder                Luther                Otremba               Swenson, D.
Brown                 Hausman               Mahon                 Ozment                Tomassoni
Carlson               Huntley               Mares                 Pawlenty              Tompkins
Carruthers            Jaros                 Mariani               Pelowski              Trimble
Clark                 Jefferson             Marko                 Perlt                 Tunheim
Cooper                Jennings              McCollum              Peterson              Van Engen
Dauner                Johnson, A.           McGuire               Pugh                  Wagenius
Davids                Johnson, R.           Milbert               Rest                  Wejcman
Dawkins               Johnson, V.           Molnau                Rhodes                Wenzel
Delmont               Kahn                  Munger                Rice                  Winter
Dorn                  Kalis                 Murphy                Rostberg              Wolf
Entenza               Kelley                Ness                  Rukavina              Sp.Anderson,I
Farrell               Kelso                 Olson, E.             Sarna                 
Finseth               Kinkel                Olson, M.             Schumacher            
Frerichs              Leighton              Onnen                 Seagren               
Garcia                Leppik                Orenstein             Simoneau              
Greenfield            Lieder                Orfield               Skoglund              

Abrams                Dehler                Knight                Macklin               Swenson, H.
Anderson, B.          Dempsey               Knoblach              McElroy               Sykora
Bettermann            Erhardt               Koppendrayer          Mulder                Tuma
Boudreau              Girard                Kraus                 Osskopp               Van Dellen
Bradley               Goodno                Krinkie               Paulsen               Vickerman
Broecker              Hackbarth             Larsen                Pellow                Warkentin
Commers               Holsten               Lindner               Stanek                Weaver
Daggett               Hugoson               Lynch                 Sviggum               Workman 

Carruthers moved that the call of the House be suspended. The motion prevailed and it was so ordered.

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 1204.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Patrick E. Flahaven, Secretary of the Senate

A bill for an act relating to insurance; no-fault auto; regulating rental vehicle coverages; determining when a vehicle is rented; modifying the right to compensation for loss of use of a damaged rented motor vehicle; providing for limits of liability for motor vehicle lessors; amending Minnesota Statutes 1994, section 65B.49, subdivision 5a.

May 17, 1995

The Honorable Allan H. Spear

President of the Senate

The Honorable Irv Anderson

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 1204, report that we have agreed upon the items in dispute and recommend as follows:

That the Senate concur in the House amendments and that S. F. No. 1204 be further amended as follows:

Page 2, line 16, of the Simoneau delete everything amendment adopted by the house May 12, 1995, before the period, insert "or if the term of the rental agreement is longer than one month" and after the period, insert "A vehicle is not rented for purposes of this subdivision if the rental agreement has a purchase or buyout option or otherwise functions as a substitute for purchase of the vehicle."

We request adoption of this report and repassage of the bill.

Senate Conferees: Don Betzold, Sam G. Solon and Cal Larson.

House Conferees: Wayne Simoneau, Thomas Pugh and Gregory M. Davids.

Simoneau moved that the report of the Conference Committee on S. F. No. 1204 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

S. F. No. 1204, A bill for an act relating to insurance; no-fault auto; regulating rental vehicle coverages; determining when a vehicle is rented; modifying the right to compensation for loss of use of a damaged rented motor vehicle; providing for limits of liability for motor vehicle lessors; amending Minnesota Statutes 1994, section 65B.49, subdivision 5a.

The bill was read for the third time, as amended by Conference, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 128 yeas and 1 nay as follows:

Those who voted in the affirmative were:

Abrams                Finseth               Koppendrayer          Onnen                 Smith
Anderson, B.          Frerichs              Kraus                 Opatz                 Solberg
Anderson, R.          Garcia                Krinkie               Orenstein             Stanek
Bakk                  Girard                Larsen                Orfield               Sviggum
Bertram               Goodno                Leighton              Osskopp               Swenson, D.
Bettermann            Greenfield            Leppik                Osthoff               Swenson, H.
Bishop                Greiling              Lieder                Ostrom                Sykora
Boudreau              Haas                  Lindner               Otremba               Tomassoni
Bradley               Hackbarth             Long                  Ozment                Tompkins
Broecker              Harder                Lourey                Paulsen               Trimble
Brown                 Hausman               Luther                Pawlenty              Tuma
Carlson               Holsten               Lynch                 Pellow                Tunheim
Carruthers            Hugoson               Macklin               Pelowski              Van Dellen
Clark                 Huntley               Mahon                 Perlt                 Van Engen
Commers               Jaros                 Mares                 Peterson              Vickerman
Cooper                Jefferson             Mariani               Pugh                  Wagenius
Daggett               Jennings              Marko                 Rest                  Warkentin
Dauner                Johnson, A.           McCollum              Rhodes                Weaver
Davids                Johnson, R.           McElroy               Rice                  Wejcman
Dehler                Johnson, V.           McGuire               Rostberg              Wenzel
Delmont               Kahn                  Molnau                Rukavina              Winter
Dempsey               Kalis                 Mulder                Sarna                 Wolf
Dorn                  Kelley                Munger                Schumacher            Workman
Entenza               Kelso                 Ness                  Seagren               Sp.Anderson,I
Erhardt               Kinkel                Olson, E.             Simoneau              
Farrell               Knoblach              Olson, M.             Skoglund              

Knight                                      

Mr. Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

H. F. No. 1207, A bill for an act relating to traffic regulations; increasing maximum length of certain combinations of vehicles from 65 to 70 feet; amending Minnesota Statutes 1994, section 169.81, subdivision 3.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said House File is herewith returned to the House.

Patrick E. Flahaven, Secretary of the Senate

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 224:

Wenzel, Osthoff and Ozment.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 557:

Solberg, Rest and Mares.

There being no objection, the order of business reverted to Reports of Standing Committees.

Carruthers from the Committee on Rules and Legislative Administration to which was referred:

S. F. No. 845, A bill for an act relating to health; MinnesotaCare; expanding provisions of health care; establishing requirements for integrated service networks; modifying requirements for health plan companies; repealing the regulated all-payer option; modifying universal coverage and insurance reform provisions; revising the research and data initiatives; expanding eligibility for the MinnesotaCare program; creating the prescription drug purchasing authority; establishing a drug purchasing benefit program for senior citizens; extending the health care commission and regional coordinating boards; making technical changes; providing penalties; appropriating money; amending Minnesota Statutes 1994, sections 13.99, by adding a subdivision; 16A.724; 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.042, subdivision 2; 62D.11, subdivision 1; 62D.181, subdivisions 2, 3, 6, and 9; 62E.05; 62E.141; 62H.04; 62H.08; 62J.017; 62J.04, subdivisions 1a and 3; 62J.05, subdivisions 2 and 9; 62J.06; 62J.09, subdivisions 1, 2, 6, 8, and by adding a subdivision; 62J.152, subdivision 5; 62J.17, subdivisions 4a, 6a, and by adding a subdivision; 62J.212; 62J.2913, subdivision 1; 62J.37; 62J.38; 62J.40; 62J.41, subdivisions 1 and 2; 62J.48; 62J.54; 62J.55; 62J.58; 62L.02, subdivisions 11, 16, and 26; 62L.03, subdivisions 3, 4, and 5; 62L.09, subdivision 1; 62L.12, subdivision 2; 62M.02, subdivision 12; 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; 62N.25, subdivision 2; 62P.05, subdivision 4, and 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.075, subdivision 4; 62Q.09, subdivision 3; 62Q.11, subdivision 2; 62Q.165; 62Q.17, subdivisions 2, 6, 8, and by adding a subdivision; 62Q.18; 62Q.30; 62Q.32; 62Q.33, subdivisions 4 and 5; 62Q.41; 72A.20, by adding subdivisions; 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; 148B.32, subdivision 1; 151.21, subdivisions 2, 3, and by adding a subdivision; 151.48; 214.16, subdivisions 2 and 3; 256.9354, subdivisions 1, 4, 5, and by adding a subdivision; 256.9357, subdivisions 1, 2, and 3; 256.9358, subdivisions 3, 4, and by adding a subdivision; 256.9363, subdivision 5; 256B.037, subdivisions 1, 3, 4, and by adding subdivisions; 256B.04, by adding a subdivision; 256B.055, by adding a subdivision;

256B.057, subdivision 3, and by adding subdivisions; 256B.0625, subdivisions 13 and 30; 256B.69, subdivision 4; 270.101, subdivision 1; 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 1994, chapter 625, article 5, sections 5, subdivision 1; 7; and 10, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 16B; 62J; 62L; 62N; 62Q; 256; 256B; and 295; repealing Minnesota Statutes 1994, sections 62J.045; 62J.07, subdivision 4; 62J.09, subdivision 1a; 62J.152, subdivision 6; 62J.19; 62J.30; 62J.31; 62J.32; 62J.33; 62J.34; 62J.35; 62J.41, subdivisions 3 and 4; 62J.44; 62J.45; 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.21; 62Q.27; and 256.9353, subdivisions 4 and 5; 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 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. 11. 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. 12. 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. 13. [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. 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 would 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. 14. [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 or 8-1/3 percent of the previous years' expenditures, whichever is greater.

Sec. 15. [62N.074] [DEPOSIT REQUIREMENT.]

Subdivision 1. [INITIAL DEPOSIT.] An integrated service network shall deposit, at time of licensure, a deposit consisting of cash and direct United States 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. 16. [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 at any time an integrated service network's net worth, working capital, investments, deposits, or guarantees do not conform with the provisions of this chapter, 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. 17. [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, including leasehold improvements, for the convenience and accommodation of its operations, including the home office, branch offices, medical facilities, and field 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. 18. [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, except if, when calculated in combination with the assets described in section 62D.044, clause (17), the total of those assets and the real estate assets described in this subdivision do not exceed the total combined percent limitations allowable under this section and section 62D.044, clause (17), or except if permitted by the commissioner upon a finding that the percentage of the integrated service network's admitted assets is insufficient to provide convenient accommodation of the network's business 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.

Subd. 3. [GOVERNMENTAL ENTITIES.] When a guaranteeing organization is a governmental entity, sections 62N.074 and 62N.076 do not apply. The commissioner may consider factors which provide evidence that the governmental entity is a financially reliable guaranteeing organization.

Sec. 19. [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. 20. 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. 21. 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. 22. 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. 23. 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. 24. [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, including allied independent health providers as defined in section 62Q.095, subdivision 5, midlevel practitioners as defined in section 136A.1356, subdivision 1, are located at adequate locations within the service area of the network. In determining whether locations are adequate, 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 its enrollees. In determining which types of providers are necessary, networks shall use 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.

(c) Nothing in this act shall be construed to require the creation or maintenance of abortion clinics or other abortion providers within any integrated service network; nor shall anything in this act be construed to authorize any agency to require the creation or maintenance of abortion clinics or abortion providers or to deny certification or any other benefit granted by this act to a health plan company based on the number of or the presence or absence of abortion clinics or other abortion providers in or affiliated with the health plan company.

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 to its enrollees 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. 25. [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 its 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. 26. [62N.18] [QUALITY IMPROVEMENT.]

Subdivision 1. [INTERNAL MEASURES.] Every integrated service network shall establish and maintain an internal quality improvement process. A network shall disclose these processes to enrollees, and to the commissioner upon request.

Subd. 2. [ENROLLEE SURVEYS.] (a) Every integrated service network shall, on at least a biennial basis, survey enrollee satisfaction with network performance and quality of care, and shall make survey results available to enrollees and potential enrollees. Integrated service networks shall also submit survey results to the information clearinghouse.

(b) Every integrated service network shall participate in the consumer survey efforts established under section 62J.451, subdivision 6b, to evaluate enrollee satisfaction, network performance, and quality of care. Participation in the consumer survey efforts of section 62J.451, subdivision 6b, shall satisfy paragraph (a) of this subdivision.

Subd. 3. [QUALITY IMPROVEMENT WORKPLANS.] (a) An integrated service network shall submit annual quality improvement workplans to the commissioner. A workplan 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 measures that the network plans to take to address each of these complaint areas;

(3) provide an assessment of how these complaints affect health care outcomes; and

(4) identify the mechanisms that the network will use to communicate and implement the changes needed to address each of these complaints identified in clause (1).

(b) An integrated service network shall disclose in marketing materials the complaints identified in paragraph (a), and measures that will be taken by the network to address these complaints.

Sec. 27. Minnesota Statutes 1994, section 62N.25, subdivision 2, is amended to read:

Subd. 2. [LICENSURE REQUIREMENTS GENERALLY.] To be licensed and to operate as a community integrated service network, an applicant must satisfy the requirements of chapter 62D, and all other legal requirements that apply to entities licensed under chapter 62D, except as exempted or modified in this section. Community networks must, as a condition of licensure, comply with rules adopted under section 256B.0644 that apply to entities governed by chapter 62D. A community integrated service network that phases in its net worth over a three-year period is not required to respond to requests for proposals under section 256B.0644 during the first 12 months of licensure. These community networks are not prohibited from responding to requests for proposals, however, if they choose to do so during that time period. After the initial 12 months of licensure, these community networks are required to respond to the requests for proposals as required under section 256B.0644.

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, including treatment and rehabilitation programs licensed under Minnesota Rules, parts 9530.4100 to 9530.4410 and 9530.5000 to 9530.6500; 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 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. 3. 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. 4. 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. 5. 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. 6. 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. 7. [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 for Minnesota residents, or to cover a resident of the state, unless otherwise specified.

Sec. 8. 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. 9. Minnesota Statutes 1994, section 62Q.03, is amended by adding a subdivision to read:

Subd. 5a. [PUBLIC PROGRAMS.] (a) A separate risk adjustment system must be developed for state-run public programs, including medical assistance, general assistance medical care, and MinnesotaCare. The system must be developed in accordance with the general risk adjustment methodologies described in this section, must include factors in addition to age and sex adjustment, and may include additional demographic factors, different targeted conditions, and/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 the public program population.

(b) The commissioners of health and human services shall jointly convene a public programs risk adjustment work group responsible for advising the commissioners in the design of the public programs risk adjustment system. 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 commissioner of human services shall seek any needed federal approvals necessary for the inclusion of the medical assistance program in the public program risk adjustment system.

(c) The public programs risk adjustment work group must be representative of the persons served by publicly paid health programs and providers and health plans that meet their needs. To the greatest extent possible, the appointing authorities shall attempt to select representatives that have historically served a significant number of persons in publicly paid health programs or the uninsured. Membership of the work group shall be as follows:

(1) one provider member appointed by the Minnesota Medical Association;

(2) two provider members appointed by the Minnesota Hospital Association, at least one of whom must represent a major disproportionate share hospital;

(3) five members appointed by the Minnesota Council of HMOs, one of whom must represent an HMO with fewer than 50,000 enrollees located outside the metropolitan area and one of whom must represent an HMO with at least 50 percent of total membership enrolled through a public program;

(4) two representatives of counties appointed by the Association of Minnesota Counties;

(5) three representatives of organizations representing the interests of families, children, childless adults, and elderly persons served by the various publicly paid health programs appointed by the governor;

(6) two representatives of persons with mental health, developmental or physical disabilities, chemical dependency, or chronic illness appointed by the governor; and

(7) three public members appointed by the governor, at least one of whom must represent a community health board. The risk adjustment association may appoint a representative, if a representative is not otherwise appointed by an appointing authority.

(d) The commissioners of health and human services, with the advice of the public programs risk adjustment work group, shall develop a work plan and time frame and shall coordinate their efforts with the private sector risk adjustment association's activities and other state initiatives related to public program managed care reimbursement. The commissioners of health and human services shall report to the health care commission and to the appropriate legislative committees on January 15, 1996, and on January 15, 1997, on any policy or legislative changes necessary to implement the public program risk adjustment system.

Sec. 10. Minnesota Statutes 1994, section 62Q.03, is amended by adding a subdivision to read:

Subd. 5b. [MEDICARE SUPPLEMENT MARKET.] A risk adjustment system may be developed for the Medicare supplement market. The Medicare supplement risk adjustment system may include a demographic component and may, but is not required to, include a condition-specific risk adjustment component.

Sec. 11. 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., but is authorized to incorporate under chapter 317A.

The provisions of this chapter govern if the provisions of chapter 317A conflict with this chapter. The association may operate under the approved plan of operation and shall be governed in accordance with this chapter and may operate in accordance with chapter 317A. If the association incorporates as a nonprofit corporation under chapter 317A, the filing of the plan of operation meets the requirements of filing articles of incorporation.

The association, its transactions, and all property owned by it are exempt from taxation under the laws of this state or any of its subdivisions, including, but not limited to, income tax, sales tax, use tax, and property tax. The association may seek exemption from payment of all fees and taxes levied by the federal government. Except as otherwise provided in this chapter, the association is not subject to the provisions of chapters 14, 60A, 62A, and 62P. The association is not a public employer and is not subject to the provisions of chapters 179A and 353. The board of directors and health carriers who are members of the association are exempt from sections 325D.49 to 325D.66 in the performance of their duties as directors and members of the association. The risk adjustment association is subject to the open meeting law.

Sec. 12. 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 which identifies appropriate implementation dates consistent with the rating and underwriting restrictions of each market, recommends whether transfers attributable to risk adjustment should be required between the individual and small group markets, and makes other appropriate recommendations 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. 13. 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. 14. 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 commissioners of health and commerce shall have the authority to approve or reject the plan of operation.

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. 15. 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. 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 an appropriate entity. The commissioners of health and commerce shall have the authority to audit and examine data collected by the association for the purposes of the development and implementation of the risk adjustment system. Data on individuals obtained for the purposes of risk adjustment development, testing, and operation are designated as private data. Data not on individuals which is obtained for the purposes of development, testing, and operation of risk adjustment are designated as nonpublic data. Except for the proposed and approved plan of operation, the risk adjustment methodologies examined, the plan for testing, the plan of the risk adjustment system, minutes of meetings, and other general operating information are classified as public 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. The commissioners of health and human services have the authority to collect data from health plan companies as needed for the purpose of developing a risk adjustment mechanism for public programs.

Sec. 16. 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 approve or reject 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, except for meetings involving privileged communication between the association and its counsel as permitted under section 471.705, subdivision 1d, paragraph (e);

(3) the commissioners shall approve any consultants or administrators used by the association;

(4) the commissioners shall approve or reject the association's plan of operation; and

(5) the commissioners shall approve or reject the plan for the risk adjustment system described in subdivision 7, clause (2).

If the commissioners reject any of the plans identified in clauses (1), (4), and (5) of this subdivision, the directors shall submit for review an appropriate revised plan within 30 days.

Sec. 17. 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. 18. 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. 19. 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. 20. 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. 21. [62Q.105] [HEALTH PLAN COMPANY COMPLAINT PROCEDURE.]

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 treat the complaint and information related to it as required under sections 72A.49 to 72A.505.

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. 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. A health plan company may meet the requirements of subdivision 3 by providing an alternative dispute resolution process. If the health plan company chooses to provide alternative dispute resolution to meet the requirements of subdivision 3, the process shall be provided at no cost to the enrollee.

Subd. 5. [REQUIREMENTS FOR MANAGED CARE ORGANIZATIONS.] Each managed care organization shall submit all health care quality related 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. 6. [RECORD KEEPING.] 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. 7. [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. 8. [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. 22. [62Q.1055] [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.

Sec. 23. [62Q.106] [DISPUTE RESOLUTION BY COMMISSIONER.]

A complainant may at any time submit a complaint to the appropriate commissioner to investigate. After investigating a complaint, or reviewing a company's decision, the appropriate commissioner may order a remedy as authorized under section 62N.04, 62Q.30, chapter 45, 60A, or 62D.

Sec. 24. Minnesota Statutes 1994, section 62Q.11, subdivision 2, is amended to read:

Subd. 2. [REQUIREMENTS.] (a) If an enrollee, health care provider, or applicant for network provider status chooses to use a 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 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 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. 25. [62Q.145] [ABORTION AND SCOPE OF PRACTICE.]

Health plan company policies related to scope of practice for allied independent health providers as defined in section 62Q.095, subdivision 5, midlevel practitioners as defined in section 136A.1356, subdivision 1, and other nonphysician health care professionals must comply with the requirements governing the performance of abortions in section 145.412, subdivision 1.

Sec. 26. 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, an Indian tribal government, an Indian health service unit, 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 must 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. 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 commissioner'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" does not include a health plan company as defined in section 62Q.01 with fewer than 50,000 enrollees, all of whose enrollees are covered under medical assistance, general assistance medical care, or MinnesotaCare.

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 services designated to be provided by 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 or when universal coverage as defined under section 62Q.165 is achieved, whichever is later. 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. The rules shall require health plan companies to comply with all provisions of section 62Q.14 with respect to enrollee use of essential community providers.

Sec. 27. [62Q.43] [GEOGRAPHIC ACCESS.]

Subdivision 1. [CLOSED-PANEL HEALTH PLAN.] For purposes of this section, "closed-panel health plan" means a health plan as defined in section 62Q.01 that requires an enrollee to receive all or a majority of primary care services from a specific clinic or physician designated by the enrollee that is within the health plan company's clinic or physician network.

Subd. 2. [ACCESS REQUIREMENT.] Every closed-panel health plan must allow enrollees who are full-time students under the age of 25 years to change their designated clinic or physician at least once per month, as long as the clinic or physician is part of the health plan company's statewide clinic or physician network. A health plan company shall not charge enrollees who choose this option higher premiums or cost sharing than would otherwise apply to enrollees who do not choose this option. A health plan company may require enrollees to provide 15 days written notice of intent to change their designated clinic or physician.

Sec. 28. [62Q.45] [COVERAGE FOR OUT-OF-AREA PRIMARY CARE.]

Subdivision 1. [STUDY.] The commissioner of health shall develop methods to allow enrollees of managed care organizations to obtain primary care health services outside of the service area of their managed care organization, from health care providers who are employed by or under contract with another managed care organization. The commissioner shall make recommendations on: (1) whether this out-of-area primary care coverage should be available to students and/or other enrollees without additional premium charges or cost sharing; (2) methods to coordinate the services provided by different managed care organizations; (3) methods to manage the quality of care provided by different managed care organizations and monitor health care outcomes; (4) methods to reimburse managed care organizations for care provided to enrollees of other managed care organizations; and (5) other issues relevant to the design and administration of out-of-area primary care coverage. The commissioner shall present recommendations to the legislature by January 15, 1996.

Subd. 2. [DEFINITION.] For purposes of this section, "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. 29. [62Q.47] [MENTAL HEALTH AND CHEMICAL DEPENDENCY SERVICES.]

(a) All health plans, as defined in section 62Q.01, that provide coverage for mental health or chemical dependency services, must comply with the requirements of this section.

(b) 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.

(c) 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.

Sec. 30. Minnesota Statutes 1994, section 145.414, is amended to read:

145.414 [ABORTION NOT MANDATORY.]

(a) No person and no hospital or institution shall be coerced, held liable or discriminated against in any manner because of a refusal to perform, accommodate, assist or submit to an abortion for any reason.

(b) It is the policy of the state of Minnesota that no health plan company as defined under section 62Q.01, subdivision 4, or health care cooperative as defined under section 62R.04, subdivision 2, shall be required to provide or provide coverage for an abortion. No provision of this chapter; of chapter 62A, 62C, 62D, 62H, 62L, 62M, 62N, 62R, 64B, or of any other chapter; of Minnesota Rules; or of this act shall be construed as requiring a health plan company as defined under section 62Q.01, subdivision 4, or a health care cooperative as defined under section 62R.04, subdivision 2, to provide or provide coverage for an abortion.

(c) This section supersedes any provision of this act, or any act enacted prior to enactment of this act, that in any way limits or is inconsistent with this section. No provision of any act enacted subsequent to this act shall be construed as in any way limiting or being inconsistent with this section, unless the act amends this section or expressly provides that it is intended to limit or be inconsistent with this section.

Sec. 31. [SINGLE ENTRY POINT FOR COMPLAINTS.]

The commissioner of health shall establish 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 a work plan to the legislature by February 1, 1996.

Sec. 32. [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 study whether utilization standards pertaining to the number of chemical dependency treatment inpatient and outpatient referrals per 1,000 enrollees and lengths of stay 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 for health plan companies to meet the standards developed in subdivision 1. The commissioners shall report to the health care commission and appropriate legislative committees by January 15, 1997.

Sec. 33. [CONSTRUCTION.]

Nothing in this act shall be construed to change existing law with respect to coverage of abortion.

Sec. 34. [STUDY OF HEALTH CARE DELIVERY.]

The Minnesota health care commission shall study the impact of managed care and other methods of health care delivery on the quality of life and care provided to terminally ill patients. The commission shall also study the impact of managed care and other methods of health care delivery on the quality of life and care provided to persons with chronic illness or disability. The commission shall hold hearings at various sites in Minnesota and take testimony from concerned citizens. The commission shall present a report on these issues to the legislature and the governor by December 15, 1996.

Sec. 35. [REPEALER; HMO ARBITRATION RULES.]

Minnesota Rules, part 4685.1700, subpart 1, item D, is repealed.

Sec. 36. [REPEALER.]

Minnesota Statutes 1994, sections 62Q.03, subdivisions 2, 3, 4, 5, and 11; 62Q.21; and 62Q.27, are repealed.

Sec. 37. [EFFECTIVE DATE.]

Sections 1, 31, and 36 are effective January 1, 1996.

Section 27 is effective July 1, 1995, and applies to closed-panel health plans offered, sold, issued, or renewed on or after that date.

Section 29 is effective August 1, 1995, and applies to health plans offered, issued, or renewed on or after that date.

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 the 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, in consultation with the Minnesota health care commission, shall research and include in the annual report required in paragraph (a) for 1996, recommendations regarding the implementation of growth limits for health plan companies and providers. The commissioner shall:

(1) consider both spending and revenue approaches and report on the implementation of the interim limits as defined in sections 62J.041 and 62J.042;

(2) make recommendations regarding the enforcement mechanism and consider mechanisms to adjust future growth limits as well as mechanisms to establish financial penalties for noncompliance;

(3) address the feasibility of systemwide limits imposed on all integrated service networks; and

(4) make recommendations on the most effective way to implement growth limits on the fee-for-service system in the absence of a regulated all-payer system.

(b) (c) 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) (d) 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 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. 6. 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 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. 7. 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. 8. Laws 1994, chapter 625, article 5, section 5, subdivision 1, is amended to read:

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. 9. [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. 10. [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. [DEFINITION.] 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:

(1) every Minnesotan has access to a full range of quality health care services;

(2) every Minnesotan is able to obtain affordable health coverage which pays for the full range of services, including preventive and primary care; and

(3) every Minnesotan pays into the health care system according to that person's ability.

Subd. 2. [GOAL.] It is the goal of the state to make continuous progress toward reducing the number of Minnesotans who do not have health coverage so that by January 1, 2000, fewer than four percent of the state's population will be without health coverage. The goal will be achieved by improving access to private health coverage through insurance reforms and market reforms, by making health coverage more affordable for low-income Minnesotans through purchasing pools and state subsidies, and by reducing the cost of health coverage through cost containment programs and methods of ensuring that all Minnesotans are paying into the system according to their ability.

Subd. 3. [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 health care commission shall in its annual report make recommendations regarding any steps toward achieving universal coverage that became feasible as a result of changes in federal law that remove barriers to state efforts to expand health care access.

(e) 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.

Sec. 2. Minnesota Statutes 1994, section 62Q.18, is amended to read:

62Q.18 [UNIVERSAL PORTABILITY OF COVERAGE; INSURANCE REFORMS.]

Subdivision 1. [DEFINITION.] 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.] (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. 3. [COORDINATION BETWEEN ACUTE AND LONG-TERM CARE.]

Subdivision 1. [GOAL.] The 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 two systems.

Subd. 2. [PLAN.] The commission shall prepare a plan for a process to bring about greater coordination between acute and long-term care that would maximize quality, overcome cost shifting, and contain overall costs.

(a) The commission's plan shall identify:

(1) concepts, issues, perceived problems, or concerns to be addressed as part of a process to achieve greater coordination and improved outcomes in acute and long-term care;

(2) a suitable process for addressing the issues in clause (1), including adequate involvement of appropriate stakeholder groups, persons receiving long-term care, and the public; and

(3) recommendations for appropriate relationships, division of responsibilities, resources, and a timetable for the process of achieving greater coordination between acute and long-term care.

(b) The commission's plan shall address:

(1) the need for an appropriate framework for measuring and comparing potential costs and benefits of proposals to improve coordination between acute and long-term care;

(2) specific information needs and how the information will be developed or obtained;

(3) the role of the commission and any changes or modifications of the commission in assisting the process described in the plan; and

(4) the degree to which the process of coordinating acute and long-term care might be undertaken sequentially or incrementally, with descriptions of any recommended steps in the process.

(c) In developing the plan, the commission shall take testimony from interested persons, review findings of previous studies and reports, and consult with other state agencies and organizations, including, but not limited to:

(1) adults with disabilities, parents or guardians of children with disabilities, and groups representing children and adults with a variety of disabilities; and

(2) facility based and home and community-based long-term care providers.

(d) The commission's plan shall be reported to the legislature by January 15, 1996.

Sec. 4. [REPEALER; ADDITIONAL INSURANCE REFORMS.]

Minnesota Statutes 1994, section 62Q.18, subdivisions 2, 3, 4, 5, 6, 8, and 9, are repealed.

Section 1. Minnesota Statutes 1994, section 13.99, is amended by adding a subdivision to read:

Subd. 115. [HEALTH DATA INSTITUTE DATA.] Data created, collected, received, maintained, or disseminated by the Minnesota health data institute established under section 62J.451 are classified under section 62J.452; access to and disclosure of such data are governed by section 62J.452.

Sec. 2. Minnesota Statutes 1994, section 62J.04, subdivision 3, is amended to read:

Subd. 3. [COST CONTAINMENT DUTIES.] After obtaining the advice and recommendations of the Minnesota health care commission, the commissioner shall:

(1) establish statewide and regional limits on growth in total health care spending under this section, monitor regional and statewide compliance with the spending limits, and take action to achieve compliance to the extent authorized by the legislature;

(2) divide the state into no fewer than four regions, with one of those regions being the Minneapolis/St. Paul metropolitan statistical area but excluding Chisago, Isanti, Wright, and Sherburne counties, for purposes of fostering the development of regional health planning and coordination of health care delivery among regional health care systems and working to achieve spending limits;

(3) provide technical assistance to regional coordinating boards;

(4) monitor the quality of health care throughout the state, conduct consumer satisfaction surveys, and take action as necessary to ensure an appropriate level of quality;

(5) issue recommendations regarding uniform billing forms, uniform electronic billing procedures and data interchanges, patient identification cards, and other uniform claims and administrative procedures for health care providers and private and public sector payers. In developing the recommendations, the commissioner shall review the work of the work group on electronic data interchange (WEDI) and the American National Standards Institute (ANSI) at the national level, and the work being done at the state and local level. The commissioner may adopt rules requiring the use of the Uniform Bill 82/92 form, the National Council of Prescription Drug Providers (NCPDP) 3.2 electronic version, the Health Care Financing Administration 1500 form, or other standardized forms or procedures;

(6) undertake health planning responsibilities as provided in section 62J.15;

(7) monitor and promote the development and implementation of practice parameters;

(8) authorize, fund, or promote research and experimentation on new technologies and health care procedures;

(9) designate referral centers for specialized and high-cost procedures and treatment and establish minimum standards and requirements for particular procedures or treatment;

(10) (8) within the limits of appropriations for these purposes, administer or contract for statewide consumer education and wellness programs that will improve the health of Minnesotans and increase individual responsibility relating to personal health and the delivery of health care services, undertake prevention programs including initiatives to improve birth outcomes, expand childhood immunization efforts, and provide start-up grants for worksite wellness programs; and

(11) administer the data analysis unit; and

(12) (9) undertake other activities to monitor and oversee the delivery of health care services in Minnesota with the goal of improving affordability, quality, and accessibility of health care for all Minnesotans.

Sec. 3. Minnesota Statutes 1994, section 62J.06, is amended to read:

62J.06 [IMMUNITY FROM LIABILITY.]

No member of the Minnesota health care commission established under section 62J.05, regional coordinating boards established under section 62J.09, or the health planning technology advisory committee established under section

62J.15, data collection advisory committee established under section 62J.30, or practice parameter advisory committee established under section 62J.32 shall be held civilly or criminally liable for an act or omission by that person if the act or omission was in good faith and within the scope of the member's responsibilities under this chapter.

Sec. 4. Minnesota Statutes 1994, section 62J.212, is amended to read:

62J.212 [COLLABORATION ON PUBLIC HEALTH GOALS.]

The commissioner may increase regional spending limits if public health goals for that region are achieved. The commissioner shall establish specific public health goals including, but not limited to, increased delivery of prenatal care, improved birth outcomes, and expanded childhood immunizations. The commissioner shall consider the community public health goals and the input of the statewide advisory committee on community health in establishing the statewide goals.

Sec. 5. [62J.2930] [INFORMATION CLEARINGHOUSE.]

Subdivision 1. [ESTABLISHMENT.] The commissioner of health shall establish an information clearinghouse within the department of health to facilitate the ability of consumers, employers, providers, health plan companies, and others to obtain information on health reform activities in Minnesota. The commissioner shall make available through the clearinghouse updates on federal and state health reform activities, including information developed or collected by the department of health on cost containment or other research initiatives, the development of integrated service networks, and voluntary purchasing pools, action plans submitted by health plan companies, reports or recommendations of the health technology advisory committee and other entities on technology assessments, and reports or recommendations from other formal committees applicable to health reform activities. The clearinghouse shall also refer requestors to sources of further information or assistance. The clearinghouse is subject to chapter 13.

Subd. 2. [INFORMATION ON HEALTH PLAN COMPANIES.] The information clearinghouse shall provide information on all health plan companies operating in a specific geographic area to consumers and purchasers who request it.

Subd. 3. [CONSUMER INFORMATION.] The information clearinghouse or another entity designated by the commissioner shall provide consumer information to health plan company enrollees to:

(1) assist enrollees in understanding their rights;

(2) explain and assist in the use of all available complaint systems, including internal complaint systems within health carriers, community integrated service networks, integrated service networks, and the departments of health and commerce;

(3) provide information on coverage options in each regional coordinating board region of the state;

(4) provide information on the availability of purchasing pools and enrollee subsidies; and

(5) help consumers use the health care system to obtain coverage.

The information clearinghouse or other entity designated by the commissioner for the purposes of this subdivision shall not:

(1) provide legal services to consumers;

(2) represent a consumer or enrollee; or

(3) serve as an advocate for consumers in disputes with health plan companies.

Nothing in this subdivision shall interfere with the ombudsman program established under section 256B.031, subdivision 6, or other existing ombudsman programs.

Subd. 4. [COORDINATION.] To the extent possible, the commissioner shall coordinate the activities of the clearinghouse with the activities of the Minnesota health data institute.

Sec. 6. [62J.301] [RESEARCH AND DATA INITIATIVES.]

Subdivision 1. [DEFINITIONS.] For purposes of sections 62J.2930 to 62J.42, the following definitions apply:

(a) "Health outcomes data" means data used in research designed to identify and analyze the outcomes and costs of alternative interventions for a given clinical condition, in order to determine the most appropriate and cost-effective means to prevent, diagnose, treat, or manage the condition, or in order to develop and test methods for reducing inappropriate or unnecessary variations in the type and frequency of interventions.

(b) "Encounter level data" means data related to the utilization of health care services by, and the provision of health care services to individual patients, enrollees, or insureds, including claims data, abstracts of medical records, and data from patient interviews and patient surveys.

Subd. 2. [STATEMENT OF PURPOSE.] The commissioner of health shall conduct data and research initiatives in order to monitor and improve the efficiency and effectiveness of health care in Minnesota.

Subd. 3. [GENERAL DUTIES.] The commissioner shall:

(1) collect and maintain data which enable population-based monitoring and trending of the access, utilization, quality, and cost of health care services within Minnesota;

(2) collect and maintain data for the purpose of estimating total Minnesota health care expenditures and trends;

(3) collect and maintain data for the purposes of setting limits under section 62J.04, and measuring growth limit compliance;

(4) conduct applied research using existing and new data and promote applications based on existing research;

(5) develop and implement data collection procedures to ensure a high level of cooperation from health care providers and health plan companies, as defined in section 62Q.01, subdivision 4;

(6) work closely with health plan companies and health care providers to promote improvements in health care efficiency and effectiveness; and

(7) participate as a partner or sponsor of private sector initiatives that promote publicly disseminated applied research on health care delivery, outcomes, costs, quality, and management.

Subd. 4. [INFORMATION TO BE COLLECTED.] (a) The data collected may include health outcomes data, patient functional status, and health status. The data collected may include information necessary to measure and make adjustments for differences in the severity of patient condition across different health care providers, and may include data obtained directly from the patient or from patient medical records, as provided in section 62J.321, subdivision 1.

(b) The commissioner may:

(1) collect the encounter level data required for the research and data initiatives of sections 62J.301 to 62J.42, using, to the greatest extent possible, standardized forms and procedures; and

(2) process the data collected to ensure validity, consistency, accuracy, and completeness, and as appropriate, merge data collected from different sources.

(c) For purposes of estimating total health care spending and forecasting rates of growth in health care spending, the commissioner may collect from health care providers data on patient revenues and health care spending during a time period specified by the commissioner. The commissioner may also collect data on health care revenues and spending from group purchasers of health care. Health care providers and group purchasers doing business in the state shall provide the data requested by the commissioner at the times and in the form specified by the commissioner. Professional licensing boards and state agencies responsible for licensing, registering, or regulating providers and group purchasers shall cooperate fully with the commissioner in achieving compliance with the reporting requirements.

Subd. 5. [NONLIMITING.] Nothing in this chapter shall be construed to limit the powers granted to the commissioner of health under chapter 62D, 62N, 144, or 144A.

Sec. 7. [62J.311] [ANALYSIS AND USE OF DATA.]

Subdivision 1. [DATA ANALYSIS.] The commissioner shall analyze the data collected to:

(1) assist the state in developing and refining its health policy in the areas of access, utilization, quality, and cost;

(2) assist the state in promoting efficiency and effectiveness in the financing and delivery of health services;

(3) monitor and track accessibility, utilization, quality, and cost of health care services within the state;

(4) evaluate the impact of health care reform activities;

(5) assist the state in its public health activities; and

(6) evaluate and determine the most appropriate methods for ongoing data collection.

Subd. 2. [CRITERIA FOR DATA AND RESEARCH INITIATIVES.] (a) Data and research initiatives by the commissioner, pursuant to sections 62J.301 to 62J.42, must:

(1) serve the needs of the general public, public sector health care programs, employers and other purchasers of health care, health care providers, including providers serving large numbers of people with low-income, and health plan companies as applicable;

(2) be based on scientifically sound and statistically valid methods;

(3) be statewide in scope, to the extent feasible, in order to benefit health care purchasers and providers in all parts of Minnesota and to ensure broad and representative health care data for research comparisons and applications;

(4) emphasize data that is useful, relevant, and nonredundant of existing data. The initiatives may duplicate existing private data collection activities, if necessary to ensure that the data collected will be in the public domain;

(5) be structured to minimize the administrative burden on health plan companies, health care providers, and the health care delivery system, and minimize any privacy impact on individuals; and

(6) promote continuous improvement in the efficiency and effectiveness of health care delivery.

(b) Data and research initiatives related to public sector health care programs must:

(1) assist the state's current health care financing and delivery programs to deliver and purchase health care in a manner that promotes improvements in health care efficiency and effectiveness;

(2) assist the state in its public health activities, including the analysis of disease prevalence and trends and the development of public health responses;

(3) assist the state in developing and refining its overall health policy, including policy related to health care costs, quality, and access; and

(4) provide data that allows the evaluation of state health care financing and delivery programs.

Sec. 8. [62J.321] [DATA COLLECTION AND PROCESSING PROCEDURES.]

Subdivision 1. [DATA COLLECTION.] (a) The commissioner shall collect data from health care providers, health plan companies, and individuals in the most cost-effective manner, which does not unduly burden them. The commissioner may require health care providers and health plan companies to collect and provide patient health records and claim files, and cooperate in other ways with the data collection process. The commissioner may also require health care providers and health plan companies to provide mailing lists of patients. Patient consent shall not be required for the release of data to the commissioner pursuant to sections 62J.301 to 62J.42 by any group purchaser, health plan company, health care provider; or agent, contractor, or association acting on behalf of a group purchaser or health care provider. Any group purchaser, health plan company, health care provider; or agent, contractor, or association acting on behalf of a group purchaser or health care provider, that releases data to the commissioner in good faith pursuant to sections 62J.301 to 62J.42 shall be immune from civil liability and criminal prosecution.

(b) When a group purchaser, health plan company, or health care provider submits patient identifying data, as defined in section 62J.451, to the commissioner pursuant to sections 62J.301 to 62J.42, and the data is submitted to the commissioner in electronic form, or through other electronic means including, but not limited to, the electronic data interchange system defined in section 62J.451, the group purchaser, health plan company, or health care provider shall submit the patient identifying data in encrypted form, using an encryption method specified by the commissioner. Submission of encrypted data as provided in this paragraph satisfies the requirements of section 144.335, subdivision 3b.

(c) The commissioner shall require all health care providers, group purchasers, and state agencies to use a standard patient identifier and a standard identifier for providers and health plan companies when reporting data under this chapter. The commissioner must encrypt patient identifiers to prevent identification of individual patients and to enable release of otherwise private data to researchers, providers, and group purchasers in a manner consistent with chapter 13 and sections 62J.55 and 144.335. This encryption must ensure that any data released must be in a form that makes it impossible to identify individual patients.

Subd. 2. [FAILURE TO PROVIDE DATA.] The intentional failure to provide the data requested under this chapter is grounds for disciplinary or regulatory action against a regulated provider or group purchaser. The commissioner may assess a fine against a provider or group purchaser who refuses to provide data required by the commissioner. If a provider or group purchaser refuses to provide the data required, the commissioner may obtain a court order requiring the provider or group purchaser to produce documents and allowing the commissioner to inspect the records of the provider or group purchaser for purposes of obtaining the data required.

Subd. 3. [DATA COLLECTION AND REVIEW.] Data collection must continue for a sufficient time to permit: adequate analysis by researchers and appropriate providers, including providers who will be impacted by the data; feedback to providers; monitoring for changes in practice patterns; and the data and research criteria of section 62J.311, subdivision 2, to be fulfilled.

Subd. 4. [USE OF EXISTING DATA.] (a) The commissioner shall negotiate with private sector organizations currently collecting health care data of interest to the commissioner to obtain required data in a cost-effective manner and minimize administrative costs. The commissioner shall attempt to establish links between the health care data collected to fulfill sections 62J.301 to 62J.42 and existing private sector data and shall consider and implement methods to streamline data collection in order to reduce public and private sector administrative costs.

(b) The commissioner shall use existing public sector data, such as those existing for medical assistance and Medicare, to the greatest extent possible. The commissioner shall establish links between existing public sector data and consider and implement methods to streamline public sector data collection in order to reduce public and private sector administrative costs.

Subd. 5. [DATA CLASSIFICATION.] (a) Data collected to fulfill the data and research initiatives authorized by sections 62J.301 to 62J.42 that identify individual patients or providers are private data on individuals. Data not on individuals are nonpublic data. The commissioner shall establish procedures and safeguards to ensure that data released by the commissioner is in a form that does not identify specific patients, providers, employers, individual or group purchasers, or other specific individuals and organizations, except with the permission of the affected individual or organization, or as permitted elsewhere in this chapter.

(b) Raw unaggregated data collected from household and employer surveys used by the commissioner to monitor the number of uninsured individuals, reasons for lack of insurance coverage, and to evaluate the effectiveness of health care reform, are subject to the same data classifications as data collected pursuant to sections 62J.301 to 62J.42.

(c) Notwithstanding sections 13.03, subdivisions 6 to 8; 13.10, subdivisions 1 to 4; and 138.17, data received by the commissioner pursuant to sections 62J.301 to 62J.42, shall retain the classification designated under this section and shall not be disclosed other than pursuant to this section.

(d) Summary data collected to fulfill the data and research initiatives authorized by sections 62J.301 to 62J.42 may be disseminated under section 13.05, subdivision 7. For the purposes of this section, summary data includes nonpublic data not on individuals.

(e) Notwithstanding paragraph (a), the commissioner may publish nonpublic or private data collected pursuant to sections 62J.301 to 62J.42 on health care costs and spending, quality and outcomes, and utilization for health care institutions, individual health care professionals and groups of health care professionals, group purchasers, and

integrated service networks, with a description of the methodology used for analysis. The commissioner may not make public any patient identifying information except as specified in law. The commissioner shall not reveal the name of an institution, group of professionals, individual health care professional, group purchaser, or integrated service network until after the institution, group of professionals, individual health care professional, group purchaser, or integrated service network has had 21 days to review the data and comment. The commissioner shall include comments received in the release of the data.

(f) A provider or group purchaser may contest whether the data meets the criteria of section 62J.311, subdivision 2, paragraph (a), clause (2), in accordance with a contested case proceeding as set forth in sections 14.57 to 14.62, subject to appeal in accordance with sections 14.63 to 14.68. To obtain a contested case hearing, the provider or group purchaser must make a written request to the commissioner before the end of the time period for review and comment. Within ten days of the assignment of an administrative law judge, the provider or group purchaser shall make a clear showing to the administrative law judge of probable success in a hearing on the issue of whether the data are accurate and valid and were collected based on the criteria of section 62J.311, subdivision 2, paragraph (a), clause (2). If the administrative law judge determines that the provider or group purchaser has made such a showing, the data shall remain private or nonpublic during the contested case proceeding and appeal. If the administrative law judge determines that the provider or group purchaser has not made such a showing, the commissioner may publish the data immediately, with comments received in the release of the data. The contested case proceeding and subsequent appeal is not an exclusive remedy and any person may seek a remedy pursuant to section 13.08, subdivisions 1 to 4, or as otherwise authorized by law.

Subd. 6. [RULEMAKING.] The commissioner may adopt rules to implement sections 62J.301 to 62J.452.

Subd. 7. [FEDERAL AND OTHER GRANTS.] The commissioner may seek federal funding, and funding from private and other nonstate sources, for data and research initiatives.

Subd. 8. [CONTRACTS AND GRANTS.] To carry out the duties assigned in sections 62J.301 to 62J.42, the commissioner may contract with or provide grants to private sector entities. Any contract or grant must require the private sector entity to maintain the data which it receives according to the statutory provisions applicable to the data.

Sec. 9. [62J.322] [PROVIDER INFORMATION PILOT STUDY.]

The commissioner shall develop a pilot study to collect comparative data from health care providers on opportunities and barriers to the provision of quality, cost-effective health care. The provider information pilot study shall include providers in community integrated service networks, integrated service networks, health maintenance organizations, preferred provider organizations, indemnity insurance plans, public programs, and other health plan companies. Health plan companies and group purchasers shall provide to the commissioner providers' names, health plan assignment, and other appropriate data necessary for the commissioner to conduct the study. The provider information pilot study shall examine factors that increase and hinder access to the provision of quality, cost-effective health care. The study may examine:

(1) administrative barriers and facilitators;

(2) time spent obtaining permission for appropriate and necessary treatments;

(3) latitude to order appropriate and necessary tests, pharmaceuticals, and referrals to specialty providers;

(4) assistance available for decreasing administrative and other routine paperwork activities;

(5) continuing education opportunities provided;

(6) access to readily available information on diagnoses, diseases, outcomes, and new technologies;

(7) continuous quality improvement activities;

(8) inclusion in administrative decision making;

(9) access to social services and other services that facilitate continuity of care;

(10) economic incentives and disincentives;

(11) peer review procedures; and

(12) the prerogative to address public health needs.

In selecting additional data for collection, the commissioner shall consider the: (i) statistical validity of the data; (ii) public need for the data; (iii) estimated expense of collecting and reporting the data; and (iv) usefulness of the data to identify barriers and opportunities to improve quality care provision within health plan companies.

Sec. 10. Minnesota Statutes 1994, section 62J.37, is amended to read:

62J.37 [COST CONTAINMENT DATA FROM INTEGRATED SERVICE NETWORKS.]

The commissioner shall require integrated service networks operating under section 62N.06, subdivision 1, to submit data on health care spending and revenue for calendar year 1994 1996 by February 15, 1995 April 1, 1997. Each February 15 April 1 thereafter, integrated service networks shall submit to the commissioner data on health care spending and revenue for the preceding calendar year. The data must be provided in the form specified by the commissioner. To the extent that an integrated service network is operated by a group purchaser under section 62N.06, subdivision 2, the integrated service network is exempt from this section and the group purchaser must provide data on the integrated service network under section 62J.38.

Sec. 11. Minnesota Statutes 1994, section 62J.38, is amended to read:

62J.38 [COST CONTAINMENT DATA FROM GROUP PURCHASERS.]

(a) The commissioner shall require group purchasers to submit detailed data on total health care spending for calendar years 1990, 1991, and 1992, and for each calendar year 1993 and successive calendar years. Group purchasers shall submit data for the 1993 calendar year by April 1, 1994, and each April 1 thereafter shall submit data for the preceding calendar year.

(b) The commissioner shall require each group purchaser to submit data on revenue, expenses, and member months, as applicable. Revenue data must distinguish between premium revenue and revenue from other sources and must also include information on the amount of revenue in reserves and changes in reserves. Expenditure data, including raw data from claims, must may be provided separately for the following categories or for other categories required by the commissioner: physician services, dental services, other professional services, inpatient hospital services, outpatient hospital services, emergency and out-of-area care, pharmacy services and prescription drugs other nondurable medical goods, mental health services, and chemical dependency services, other expenditures, subscriber liability, and administrative costs. The commissioner may require each group purchaser to submit any other data, including data in unaggregated form, for the purposes of developing spending estimates, setting spending limits, and monitoring actual spending and costs.

(c) The commissioner may collect information on:

(1) premiums, benefit levels, managed care procedures, and other features of health plan companies;

(2) prices, provider experience, and other information for services less commonly covered by insurance or for which patients commonly face significant out-of-pocket expenses; and

(3) information on health care services not provided through health plan companies, including information on prices, costs, expenditures, and utilization.

(c) State agencies and (d) All other group purchasers shall provide the required data using a uniform format and uniform definitions, as prescribed by the commissioner.

Sec. 12. Minnesota Statutes 1994, section 62J.40, is amended to read:

62J.40 [COST CONTAINMENT DATA FROM STATE AGENCIES AND OTHER GOVERNMENTAL UNITS.]

In addition to providing the data required under section 62J.38, the commissioners of human services, commerce, labor and industry, and employee relations and (a) All other state departments or agencies that administer one or more health care programs shall provide to the commissioner of health any additional data on the health care

programs they administer that is requested by the commissioner of health, including data in unaggregated form, for purposes of developing estimates of spending, setting spending limits, and monitoring actual spending. The data must be provided at the times and in the form specified by the commissioner of health.

(b) For purposes of estimating total health care spending as provided in section 62J.301, subdivision 4, clause (c), all local governmental units shall provide expenditure data to the commissioner. The commissioner shall consult with representatives of the affected local government units in establishing definitions, reporting formats, and reporting time frames. As much as possible, the data shall be collected in a manner that ensures that the data collected is consistent with data collected from the private sector and minimizes the reporting burden to local government.

Sec. 13. Minnesota Statutes 1994, section 62J.41, subdivision 1, is amended to read:

Subdivision 1. [COST CONTAINMENT DATA TO BE COLLECTED FROM PROVIDERS.] The commissioner shall require health care providers to collect and provide both patient specific information and descriptive and financial aggregate data on:

(1) the total number of patients served;

(2) the total number of patients served by state of residence and Minnesota county;

(3) the site or sites where the health care provider provides services;

(4) the number of individuals employed, by type of employee, by the health care provider;

(5) the services and their costs for which no payment was received;

(6) total revenue by type of payer or by groups of payers, including but not limited to, revenue from Medicare, medical assistance, MinnesotaCare, nonprofit health service plan corporations, commercial insurers, integrated service networks, health maintenance organizations, and individual patients;

(7) revenue from research activities;

(8) revenue from educational activities;

(9) revenue from out-of-pocket payments by patients;

(10) revenue from donations; and

(11) any other data required by the commissioner, including data in unaggregated form, for the purposes of developing spending estimates, setting spending limits, monitoring actual spending, and monitoring costs and quality.

The commissioner may, by rule, modify the data submission categories listed above if the commissioner determines that this will reduce the reporting burden on providers without having a significant negative effect on necessary data collection efforts.

Sec. 14. Minnesota Statutes 1994, section 62J.41, subdivision 2, is amended to read:

Subd. 2. [ANNUAL MONITORING AND ESTIMATES.] The commissioner shall require health care providers to submit the required data for the period July 1, 1993 to December 31, 1993, by April 1, 1994. Health care providers shall submit data for the 1994 calendar year by April 1, 1995, and each April 1 thereafter shall submit data for the preceding calendar year. The commissioner of revenue may collect health care service revenue data from health care providers, if the commissioner of revenue and the commissioner agree that this is the most efficient method of collecting the data. The commissioner of revenue shall provide any data collected to the commissioner of health commissioners of health and revenue shall have the authority to share data collected pursuant to this section.

Sec. 15. [62J.451] [MINNESOTA HEALTH DATA INSTITUTE.]

Subdivision 1. [STATEMENT OF PURPOSE.] It is the intention of the legislature to create a partnership between the public and the private sectors for the coordination of efforts related to the collection, analysis, and dissemination of cost, access, quality, utilization, and other performance data, to the extent administratively efficient and effective.

The Minnesota health data institute shall be a partnership between the commissioner of health and a board of directors representing group purchasers, health care providers, and consumers.

Subd. 2. [DEFINITIONS.] For purposes of this section and section 62J.452, the following definitions apply.

(a) "Analysis" means the identification of selected data elements, a description of the methodology used to select or analyze those data elements, and any other commentary, conclusions, or other descriptive material that the health data institute determines is appropriately included, all of which is undertaken by the health data institute for one or more of the purposes or objectives set forth in subdivisions 1 and 3, or by other authorized researchers pursuant to section 62J.452, subdivision 6.

(b) "Board" means the board of directors of the health data institute.

(c) "Contractor" means an agent, association, or other individual or entity that has entered into an agreement with an industry participant, as defined in section 62J.452, subdivision 2, paragraph (i), to act on behalf of that industry participant for purposes of fulfilling the data collection and reporting activities established under this chapter.

(d) "Database" means a compilation of selected data elements by the health data institute for the purpose of conducting an analysis or facilitating an analysis by another party.

(e) "Electronic data interchange system" or "EDI system" means the electronic data system developed, implemented, maintained, or operated by the health data institute, as permitted by subdivisions 3, clause (2), and 5, according to standards adopted by the health data institute.

(f) "Encounter level data" means data related to the utilization of health care services by, and the provision of health care services to, individual patients, enrollees, or insureds, including claims data, abstracts of medical records, and data from patient interviews and patient surveys.

(g) "Group purchaser" has the definition provided in section 62J.03, subdivision 6.

(h) "Health data institute" means the public-private partnership between the commissioner of health and the board of directors established under this section.

(i) "Health plan company" has the definition provided in section 62Q.01, subdivision 4.

(j) "Industry participant" means any group purchaser, employers with employee health benefit plans, regardless of the manner in which benefits are provided or paid for under the plan, provider, or state agency or political subdivision, with the exception of professional licensing boards or law enforcement agencies.

(k) "Industry participant identifying data" means any data that identifies a specific industry participant directly, or which identifies characteristics which reasonably could uniquely identify such specific industry participant circumstantially. For purposes of this definition, an industry participant is not "directly identified" by the use of a unique identification number, provided that the number is coded or encrypted through a reliable system that can reasonably assure that such numbers cannot be traced back by an unauthorized person to determine the identity of an industry participant with a particular number.

(l) "Patient" is an individual as defined in section 13.02, subdivision 8, except that "patient" does not include any industry participant acting as an industry participant rather than as a consumer of health care services or coverage.

(m) "Patient identifying data" means data that identifies a patient directly, or which identifies characteristics which reasonably could uniquely identify such specific patients circumstantially. For purposes of this definition, a patient is not "directly identified" by the use of a unique identification number, provided that the number is coded or encrypted through a reliable system that can reasonably assure that such numbers cannot be traced back by an unauthorized person to determine the identity of a patient with a particular number.

(n) "Performance" means the degree to which a health plan company, provider organization, or other entity delivers quality, cost-effective services compared to other similar entities, or to a given level of care set as a goal to be attained.

(o) "Provider" or "health care provider" has the meaning given in section 62J.03, subdivision 8.

(p) "Roster data" with regard to the enrollee of a health plan company or group purchaser means an enrollee's name, address, telephone number, date of birth, gender, and enrollment status under a group purchaser's health plan. "Roster data" with regard to a patient of a provider means the patient's name, address, telephone number, date of birth, gender, and date or dates treated, including, if applicable, the date of admission and the date of discharge.

Subd. 3. [OBJECTIVES OF THE HEALTH DATA INSTITUTE.] (a) The health data institute shall:

(1) develop a data collection plan that provides coordination for public and private sector data collection efforts related to the performance measurement and improvement of the health care delivery system;

(2) establish an electronic data interchange system that may be used by the public and private sectors to exchange health care data in a cost-efficient manner;

(3) develop a mechanism to collect, analyze, and disseminate information for comparing the cost and quality of health care delivery system components, including health plan companies and provider organizations;

(4) develop policies and procedures to protect the privacy of individual-identifiable data, and to assure appropriate access to and disclosure of information specific to individual health plan companies and provider organizations collected pursuant to this section; and

(5) use and build upon existing data sources and performance measurement efforts, and improve upon these existing data sources and measurement efforts through the integration of data systems and the standardization of concepts, to the greatest extent possible.

(b) In carrying out its responsibilities, the health data institute may contract with private sector organizations currently collecting data on specific health-related areas of interest to the health data institute, in order to achieve maximum efficiency and cost-effectiveness. The health data institute may establish links between the data collected and maintained by the health data institute and private sector data through the health data institute's electronic data interchange system, and may implement methods to streamline data collection in order to reduce public and private sector administrative costs. The health data institute may use or establish links with public sector data, such as that existing for medical assistance and Medicare, to the extent permitted by state and federal law. The health data institute may also recommend methods to streamline public sector data collection in order to reduce public and private sector administrative costs.

(c) Any contract with a private sector entity must require the private sector entity to maintain the data collected according to the applicable data privacy provisions, as provided in section 62J.452.

Subd. 4. [DATA COLLECTION PLAN.] (a) The health data institute shall develop a plan that:

(1) identifies the health care data needs of consumers, group purchasers, providers, and the state regarding the performance of health care delivery system components including health plan companies and provider organizations;

(2) specifies data collection objectives, strategies, priorities, cost estimates, administrative and operational guidelines, and implementation timelines for the health data institute; and

(3) identifies the data needed for the health data institute to carry out the duties assigned in this section. The plan must take into consideration existing data sources and data sources that can easily be made uniform for links to other data sets.

(b) This plan shall be updated on an annual basis.

Subd. 5. [HEALTH CARE ELECTRONIC DATA INTERCHANGE SYSTEM.] (a) The health data institute shall establish an electronic data interchange system that electronically transmits, collects, archives, and provides users of data with the data necessary for their specific interests, in order to promote a high quality, cost-effective, consumer-responsive health care system. This public-private information system shall be developed to make health care claims processing and financial settlement transactions more efficient and to provide an efficient, unobtrusive method for meeting the shared electronic data interchange needs of consumers, group purchasers, providers, and the state.

(b) The health data institute shall operate the Minnesota center for health care electronic data interchange established in section 62J.57, and shall integrate the goals, objectives, and activities of the center with those of the health data institute's electronic data interchange system.

Subd. 6. [PERFORMANCE MEASUREMENT INFORMATION.] (a) The health data institute shall develop and implement a performance measurement plan to analyze and disseminate health care data to address the needs of consumers, group purchasers, providers, and the state for performance measurement at various levels of the health care system in the state. The plan shall include a mechanism to:

(1) provide comparative information to consumers, purchasers, and policymakers for use in performance assessment of health care system components, including health plan companies and provider organizations;

(2) complement and enhance, but not replace, existing internal performance improvement efforts of health care providers and plans; and

(3) reduce unnecessary administrative costs in the health care system by eliminating duplication in the collection of data for both evaluation and improvement efforts.

(b) Performance measurement at the provider organization level may be conducted on a condition-specific basis. Criteria for selecting conditions for measurement may include:

(1) relevance to consumers and purchasers;

(2) prevalence of conditions;

(3) costs related to diagnosis and treatment;

(4) demonstrated efficacy of treatments;

(5) evidence of variability in management;

(6) existence of risk adjustment methodologies to control for patient and other risk factors contributing to variation in cost and quality;

(7) existence of practice guidelines related to the condition; and

(8) relevance of the condition to public health goals.

(c) Performance measurement on a condition-specific basis may consider multiple dimensions of performance, including, but not limited to:

(1) accessibility;

(2) appropriateness;

(3) effectiveness, including clinical outcomes, patient satisfaction, and functional status; and

(4) efficiency.

(d) Collection of data for condition-specific performance measurement may be conducted at the patient level. Encounter-level data collected for this purpose may include unique identifiers for patients, providers, payers, and employers in order to link episodes of care across care settings and over time. The health data institute must encrypt patient identifiers to prevent identification of individual patients and to enable release of otherwise private data to researchers, providers, and group purchasers in a manner consistent with chapter 13 and sections 62J.452 and 144.335.

Subd. 6a. [HEALTH PLAN COMPANY PERFORMANCE MEASUREMENT.] As part of the performance measurement plan specified in subdivision 6, the health data institute shall develop a mechanism to assess the performance of health plan companies, and to disseminate this information through reports and other means to consumers, purchasers, policymakers, and other interested parties, consistent with the data policies specified in section 62J.452.

Subd. 6b. [CONSUMER SURVEYS.] (a) The health data institute shall develop and implement a mechanism for collecting comparative data on consumer perceptions of the health care system, including consumer satisfaction, through adoption of a standard consumer survey. This survey shall include enrollees in community integrated service

networks, integrated service networks, health maintenance organizations, preferred provider organizations, indemnity insurance plans, public programs, and other health plan companies. The health data institute, in consultation with the health care commission, shall determine a mechanism for the inclusion of the uninsured. This consumer survey may be conducted every two years. A focused survey may be conducted on the off years. Health plan companies and group purchasers shall provide to the health data institute roster data as defined in subdivision 2, including the names, addresses, and telephone numbers of enrollees and former enrollees and other data necessary for the completion of this survey. This roster data provided by the health plan companies and group purchasers is classified as provided under section 62J.452. The health data institute may analyze and prepare findings from the raw, unaggregated data, and the findings from this survey may be included in the health plan company performance reports specified in subdivision 6a, and in other reports developed and disseminated by the health data institute and the commissioner. The raw, unaggregated data is classified as provided under section 62J.452, and may be made available by the health data institute to the extent permitted under section 62J.452. The health data institute shall provide raw, unaggregated data to the commissioner. The survey may include information on the following subjects:

(1) enrollees' overall satisfaction with their health care plan;

(2) consumers' perception of access to emergency, urgent, routine, and preventive care, including locations, hours, waiting times, and access to care when needed;

(3) premiums and costs;

(4) technical competence of providers;

(5) communication, courtesy, respect, reassurance, and support;

(6) choice and continuity of providers;

(7) continuity of care;

(8) outcomes of care;

(9) services offered by the plan, including range of services, coverage for preventive and routine services, and coverage for illness and hospitalization;

(10) availability of information; and

(11) paperwork.

(b) The health data institute shall appoint a consumer advisory group which shall consist of 13 individuals, representing enrollees from public and private health plan companies and programs and two uninsured consumers, to advise the health data institute on issues of concern to consumers. The advisory group must have at least one member from each regional coordinating board region of the state. The advisory group expires June 30, 1996.

Subd. 6c. [PROVIDER ORGANIZATION PERFORMANCE MEASUREMENT.] As part of the performance measurement plan specified in subdivision 6, the health data institute shall develop a mechanism to assess the performance of hospitals and other provider organizations, and to disseminate this information to consumers, purchasers, policymakers, and other interested parties, consistent with the data policies specified in section 62J.452. Data to be collected may include structural characteristics including staff-mix and nurse-patient ratios. In selecting additional data for collection, the health data institute may consider:

(1) feasibility and statistical validity of the indicator;

(2) purchaser and public demand for the indicator;

(3) estimated expense of collecting and reporting the indicator; and

(4) usefulness of the indicator for internal improvement purposes.

Subd. 7. [DISSEMINATION OF REPORTS; OTHER INFORMATION.] (a) The health data institute shall establish a mechanism for the dissemination of reports and other information to consumers, group purchasers, health plan companies, providers, and the state. When applicable, the health data institute shall coordinate its dissemination of information responsibilities with those of the commissioner, to the extent administratively efficient and effective.

(b) The health data institute may require those requesting data from its databases to contribute toward the cost of data collection through the payments of fees.

(c) The health data institute shall not allow a group purchaser or health care provider to use or have access to the electronic data interchange system or to access data under section 62J.452, subdivision 6 or 7, unless the group purchaser or health care provider cooperates with the data collection efforts of the health data institute by submitting or making available through the EDI system or other means all data requested by the health data institute. The health data institute shall prohibit group purchasers and health care providers from transferring, providing, or sharing data obtained from the health data institute under section 62J.452, subdivision 6 or 7, with a group purchaser or health care provider that does not cooperate with the data collection efforts of the health data institute.

Subd. 8. [ANNUAL REPORT.] (a) The health data institute shall submit to the chairs of the senate joint crime prevention and judiciary subcommittee on privacy, the house of representatives judiciary committee, the legislative commission on health care access, the commissioner, and the governor a report on the activities of the health data institute by February 1 of each year beginning February 1, 1996. The report shall include:

(1) a description of the data initiatives undertaken by the health data institute, including a statement of the purpose and a summary of the results of the initiative;

(2) a description of the steps taken by the health data institute to comply with the confidentiality requirements of this section and other applicable laws, and of the health data institute's internal policies and operating procedures relating to data privacy and confidentiality; and

(3) a description of the actions taken by the health data institute to ensure that the EDI system being established pursuant to section 62J.451, subdivision 3, clause (2), and subdivision 5, protects the confidentiality requirements of this section and other applicable laws.

(b) If the health data institute amends or adopts an internal policy or operating procedure relating to data privacy and confidentiality, it shall submit copies of such policy or procedure within 30 days of its adoption to the public officials identified in this subdivision.

Subd. 9. [BOARD OF DIRECTORS.] The health data institute is governed by a 20-member board of directors consisting of the following members:

(1) two representatives of hospitals, one appointed by the Minnesota Hospital Association and one appointed by the Metropolitan HealthCare Council, to reflect a mix of urban and rural institutions;

(2) four representatives of health carriers, two appointed by the Minnesota council of health maintenance organizations, one appointed by Blue Cross and Blue Shield of Minnesota, and one appointed by the Insurance Federation of Minnesota;

(3) two consumer members, one appointed by the commissioner, and one appointed by the AFL-CIO as a labor union representative;

(4) five group purchaser representatives appointed by the Minnesota consortium of health care purchasers to reflect a mix of urban and rural, large and small, and self-insured purchasers;

(5) two physicians appointed by the Minnesota Medical Association, to reflect a mix of urban and rural practitioners;

(6) one representative of teaching and research institutions, appointed jointly by the Mayo Foundation and the Minnesota Association of Public Teaching Hospitals;

(7) one nursing representative appointed by the Minnesota Nurses Association; and

(8) three representatives of state agencies, one member representing the department of employee relations, one member representing the department of human services, and one member representing the department of health.

Subd. 10. [TERMS; COMPENSATION; REMOVAL; AND VACANCIES.] The board is governed by section 15.0575.

Subd. 11. [STATUTORY GOVERNANCE.] The health data institute is subject to chapter 13 and section 471.705 but is not otherwise subject to laws governing state agencies except as specifically provided in this chapter.

Subd. 12. [STAFF.] The board may hire an executive director. The executive director and other health data institute staff are not state employees but are covered by section 3.736. The executive director and other health data institute staff may participate in the following plans for employees in the unclassified service until January 1, 1996: the state retirement plan, the state deferred compensation plan, and the health, dental, and life insurance plans. The attorney general shall provide legal services to the board.

Subd. 13. [FEDERAL AND OTHER GRANTS.] The health data institute may seek federal funding, and funding from private and other nonstate sources for the initiative required by the board.

Subd. 14. [CONTRACTS.] To carry out the duties assigned in this section, the health data institute may contract with private sector entities. Any contract must require the private sector entity to maintain the data which it receives according to the statutory provisions applicable to the data and any other applicable provision specified in section 62J.452.

Subd. 15. [NONLIMITING.] Nothing in this section shall be construed to limit the powers granted to the commissioner of health in chapter 62D, 62N, 144, or 144A.

Subd. 16. [CLARIFICATION OF INTENT.] This section is intended to provide the health data institute with primary responsibility for establishing a data collection plan, establishing an electronic data interchange system, measuring performance at the provider organization and health plan company levels, collecting condition-specific data, developing and administering consumer surveys, and performing other duties specifically assigned in this section. The commissioner of health may perform these duties only if the commissioner determines that these duties will not be performed by the health data institute.

Sec. 16. [62J.452] [PROTECTION OF PRIVACY AND CONFIDENTIALITY OF HEALTH CARE DATA.]

Subdivision 1. [STATEMENT OF PURPOSE.] The health data institute shall adopt data collection, analysis, and dissemination policies that reflect the importance of protecting the right of privacy of patients in their health care data in connection with each data initiative that the health data institute intends to undertake.

Subd. 2. [DATA CLASSIFICATIONS.] (a) Data collected, obtained, received, or created by the health data institute shall be private or nonpublic, as applicable, unless given a different classification in this subdivision. Data classified as private or nonpublic under this subdivision may be released or disclosed only as permitted under this subdivision and under the other subdivisions referenced in this subdivision. For purposes of this section, data that identify individual patients or industry participants are private data on individuals or nonpublic data, as appropriate. Data not on individuals are nonpublic data. Notwithstanding sections 13.03, subdivisions 6 to 8; 13.10, subdivisions 1 to 4; and 138.17, data received by the health data institute shall retain the classification designated under this chapter and shall not be disclosed other than pursuant to this chapter. Nothing in this subdivision prevents patients from gaining access to their health record information pursuant to section 144.335.

(b) When industry participants, as defined in section 62J.451, are required by statute to provide, either directly or through a contractor, as defined in section 62J.451, subdivision 2, paragraph (c), patient identifying data to the commissioner pursuant to this chapter or to the health data institute pursuant to section 62J.451, the industry participant or its contractor shall be able to provide the data with or without patient consent, and may not be held liable for doing so.

(c) When an industry participant submits patient identifying data to the health data institute, and the data is submitted to the health data institute in electronic form, or through other electronic means including, but not limited to, the electronic data interchange system defined in section 62J.451, the industry participant shall submit the patient identifying data in encrypted form, using an encryption method supplied or specified by the health data institute. Submission of encrypted data as provided in this paragraph satisfies the requirements of section 144.335, subdivision 3b.

(d) Patient identifying data may be disclosed only as permitted under subdivision 3.

(e) Industry participant identifying data which is not patient identifying data may be disclosed only by being made public in an analysis as permitted under subdivisions 4 and 5 or through access to an approved researcher, industry participant, or contractor as permitted under subdivision 6 or 7.

(f) Data that is not patient identifying data and not industry participant identifying data is public data.

(g) Data that describes the finances, governance, internal operations, policies, or operating procedures of the health data institute, and that does not identify patients or industry participants or identifies them only in connection with their involvement with the health data institute, is public data.

Subd. 3. [PATIENT IDENTIFYING DATA.] (a) The health data institute must not make public any analysis that contains patient identifying data.

(b) The health data institute may disclose patient identifying data only as follows:

(1) to research organizations that meet the requirements set forth in subdivision 6, paragraph (a), but only to the extent that such disclosure is also permitted by section 144.335, subdivision 3a, paragraph (a); or

(2) to a contractor of, or vendor of services to the health data institute for the purposes of conducting a survey or analysis, provided that such contractor or vendor agrees to comply with all data privacy requirements applicable to the health data institute, and to destroy or return to the health data institute all copies of patient identifying data in the possession of such contractor or vendor upon completion of the contract.

Subd. 4. [ANALYSIS TO BE MADE PUBLIC BY THE HEALTH DATA INSTITUTE.] (a) Notwithstanding the classification under subdivision 2 or other provision of state law of data included or used in an analysis, the health data institute may make public data in an analysis pursuant to this subdivision and subdivision 5. Such analysis may include industry participant identifying data but must not include patient identifying data. In making its determination as to whether to make an analysis or the data used in the analysis public, the health data institute shall consider and determine, in accordance with policies and criteria developed by the health data institute, that the data and analysis are sufficiently accurate, complete, reliable, valid, and as appropriate, case-mixed and severity adjusted, and statistically and clinically significant.

(b) Prior to making an analysis public, the health data institute must provide to any industry participant identified in the analysis an opportunity to use the fair hearing procedure established under subdivision 5.

(c) Accompanying an analysis made public by the health data institute, the health data institute shall also make public descriptions of the database used in the analysis, the methods of adjusting for case mix and severity, and assuring accuracy, completeness, reliability, and statistical and clinical significance, as appropriate, and appropriate uses of the analysis and related analytical data, including precautionary statements regarding the limitations of the analysis and related analytical data.

Subd. 5. [FAIR HEARING PROCEDURE PRIOR TO MAKING AN ANALYSIS PUBLIC.] (a) The health data institute may not make public an analysis that identifies an industry participant unless the health data institute first complies with this subdivision. A draft of the portion of the analysis that identifies an industry participant must be furnished upon an industry participant's request to that industry participant prior to making that portion of the analysis public. Such draft analysis is private or nonpublic, as applicable. The industry participants so identified have the right to a hearing, at which the industry participants or their contractors, as defined in section 62J.451, subdivision 2, paragraph (c), may object to or seek modification of the analysis. The cost of the hearing shall be borne by the industry participant requesting the hearing.

(b) The health data institute shall establish the hearing procedure in writing. The hearing procedure shall include the following:

(1) the provision of reasonable notice of the health data institute's intention to make such analysis public;

(2) an opportunity for the identified industry participants to submit written statements to the health data institute board of directors or its designate, to be represented by a contractor, as defined in section 62J.451, subdivision 2, paragraph (c), or other individual or entity acting on behalf of and chosen by the industry participant for this purpose, and to append a statement to such analysis to be included with it when and if the analysis is made public; and

(3) access by the identified industry participants to industry participant identifying data, but only as permitted by subdivision 6 or 7.

(c) The health data institute shall make the hearing procedure available in advance to industry participants which are identified in an analysis. The written hearing procedure is public data. The following data related to a hearing is public:

(1) the parties involved;

(2) the dates of the hearing; and

(3) a general description of the issue and the results of the hearing; all other data relating to the hearing is private or nonpublic.

Subd. 6. [ACCESS BY APPROVED RESEARCHERS TO DATA THAT IDENTIFIES INDUSTRY PARTICIPANTS BUT DOES NOT IDENTIFY PATIENTS.] (a) The health data institute shall provide access to industry participant identifying data, but not patient identifying data, once those data are in analyzable form, upon request to research organizations or individuals that:

(1) have as explicit goals research purposes that promote individual or public health and the release of research results to the public as determined by the health data institute according to standards it adopts for evaluating such goals;

(2) enforce strict and explicit policies which protect the confidentiality and integrity of data as determined by the health data institute according to standards it adopts for evaluating such policies;

(3) agree not to make public, redisclose, or transfer the data to any other individual or organization, except as permitted under paragraph (b);

(4) demonstrate a research purpose for the data that can be accomplished only if the data are provided in a form that identifies specific industry participants as determined by the health data institute according to standards it adopts for evaluating such research purposes; and

(5) agree to disclose analysis in a public forum or publication only pursuant to subdivisions 4 and 5 and other applicable statutes and the health data institute's operating rules governing the making of an analysis public by the health data institute.

(b) Contractors of entities that have access under paragraph (a) may also have access to industry participant identifying data, provided that the contract requires the contractor to comply with the confidentiality requirements set forth in this section and under any other statute applicable to the entity.

Subd. 7. [ACCESS BY INDUSTRY PARTICIPANTS TO DATA THAT IDENTIFIES INDUSTRY PARTICIPANTS BUT DOES NOT IDENTIFY PATIENTS.] (a) The health data institute may provide, to an industry participant, data that identifies that industry participant or other industry participants, to the extent permitted under this subdivision. An employer or an employer purchasing group may receive data relating to care provided to patients for which that employer acts as the payer. A health plan company may receive data relating to care provided to enrollees of that health plan company. A provider may receive data relating to care provided to patients of that provider.

(b) An industry participant may receive data that identifies that industry participant or other industry participants and that relates to care purchased or provided by industry participants other than the industry participant seeking the data. These data must be provided by the health data institute only with appropriate authorization from all industry participants identified.

(c) The health data institute must not provide access to any data under this subdivision that is patient identifying data as defined in section 62J.451, subdivision 2, paragraph (m), even if providing that data would otherwise be allowed under this subdivision.

(d) To receive data under this subdivision, an industry participant must cooperate with the health data institute as provided under section 62J.451, subdivision 7, paragraph (c).

(e) Contractors of entities that have access under paragraph (b) may have access to industry participant identifying data, provided that the contract requires the contractor to comply with the confidentiality requirements set forth in this section and under any other statute applicable to the entity.

Subd. 8. [STATUS OF DATA ON THE ELECTRONIC DATA INTERCHANGE SYSTEM.] (a) Data created or generated by or in the custody of an industry participant, and transferred electronically by that industry participant to another industry participant using the EDI system developed, implemented, maintained, or operated by the health data institute, as permitted by section 62J.451, subdivision 3, clause (2), and subdivision 5, is not subject to this section or to chapter 13 except as provided below.

(b) Data created or generated by or in the custody of an industry participant is subject to the privacy protections applicable to the data, including, but not limited to, chapter 13 with respect to state agencies and political subdivisions, the Minnesota insurance fair information reporting act with respect to industry participants subject to it, and section 144.335, with respect to providers and other industry participants subject to such section.

Subd. 9. [AUTHORIZATION OF STATE AGENCIES AND POLITICAL SUBDIVISIONS TO PROVIDE DATA.] (a) Notwithstanding any limitation in chapter 13 or section 62J.321, subdivision 5, regarding the disclosure of not public data, all state agencies and political subdivisions, including, but not limited to, municipalities, counties, and hospital districts may provide not public data relating to health care costs, quality, or outcomes to the health data institute for the purposes set forth in section 62J.451.

(b) Data provided by the commissioner pursuant to paragraph (a) of this subdivision may not include patient identifying data as defined in section 62J.451, subdivision 2, paragraph (m). For data provided by the commissioner of health pursuant to paragraph (a), the health data institute and anyone receiving the data from the health data institute, is prohibited from unencrypting or attempting to link the data with other patient identifying data sources.

(c) Any data provided to the health data institute pursuant to paragraph (a) shall retain the same classification that it had with the state agency or political subdivision that provided it. The authorization in this subdivision is subject to any federal law restricting or prohibiting such disclosure of the data described above.

(d) Notwithstanding any limitation in chapter 13 or sections 62J.451 and 62J.452 regarding the disclosure of nonpublic and private data, the health data institute may provide nonpublic and private data to any state agency that is a member of the board of the health data institute. Any such data provided to a state agency shall retain nonpublic or private classification, as applicable.

Subd. 10. [CIVIL REMEDIES.] Violation of any of the confidentiality requirements set forth in subdivision 3; 4, paragraph (a); 6; or 7, by the health data institute, its board members, employees and contractors, any industry participant, or by any other person shall be subject to section 13.08, including, but not limited to, the immunities set forth in section 13.08, subdivisions 5 and 6. The health data institute shall not be liable for exercising its discretion in a manner that is not an abuse of discretion with respect to matters under its discretion by this section or section 62J.451. The health data institute shall not be liable for the actions of persons not under the direction and control of the health data institute, where it has performed its responsibilities to protect data privacy by complying with the requirements of this section and other applicable laws with regard to the disclosure of data. The remedies set forth in this section do not preclude any person from pursuing any other remedies authorized by law.

Subd. 11. [PENALTIES.] (a) Any person who willfully violates the confidentiality requirements set forth in subdivision 3; 4, paragraph (a); 6; or 7, shall be guilty of a misdemeanor.

(b) Any person who willfully violates the confidentiality requirements of subdivision 3, 4, 6, 7, 8, or 9, by willfully disclosing patient or industry participant identifying data for compensation or remuneration of any kind or for the purpose of damaging the reputation of any patient or industry participant or any other malicious purpose, shall be guilty of a gross misdemeanor.

Subd. 12. [DISCOVERABILITY OF HEALTH DATA INSTITUTE DATA.] (a) Data created, collected, received, maintained, or disseminated by the health data institute shall not be subject to discovery or introduction into evidence in any civil or criminal action. Data created, collected, received, maintained, or disseminated by the health data institute that is otherwise available from original sources is subject to discovery from those sources and may be introduced into evidence in civil or criminal actions in accordance with and subject to applicable laws and rules of evidence and civil or criminal procedure, as applicable.

(b) Information related to submission of data to the health data institute by industry participants or contractors of industry participants is not discoverable from the health data institute, the industry participants, the contractors, or any other person or entity, in any civil or criminal action. Discovery requests prohibited under this paragraph include, but are not limited to, document requests or interrogatories that ask for "all data provided to the Minnesota health data institute."

Sec. 17. Minnesota Statutes 1994, section 62J.54, is amended to read:

62J.54 [IDENTIFICATION AND IMPLEMENTATION OF UNIQUE IDENTIFIERS.]

Subdivision 1. [UNIQUE IDENTIFICATION NUMBER FOR HEALTH CARE PROVIDER ORGANIZATIONS.] (a) On and after January 1, 1996 1998, all group purchasers and health care providers in Minnesota shall use a unique identification number to identify health care provider organizations, except as provided in paragraph (d).

(b) Following the recommendation of the workgroup for electronic data interchange, the federal tax identification number assigned to each health care provider organization by the Internal Revenue Service of the Department of the Treasury shall be used as the unique identification number for health care provider organizations.

(c) The unique health care provider organization identifier shall be used for purposes of submitting and receiving claims, and in conjunction with other data collection and reporting functions.

(d) The state and federal health care programs administered by the department of human services shall use the unique identification number assigned to health care providers for implementation of the Medicaid Management Information System or the uniform provider identification number (UPIN) assigned by the Health Care Financing Administration.

Subd. 2. [UNIQUE IDENTIFICATION NUMBER FOR INDIVIDUAL HEALTH CARE PROVIDERS.] (a) On and after January 1, 1996 1998, all group purchasers and health care providers in Minnesota shall use a unique identification number to identify an individual health care provider, except as provided in paragraph (d).

(b) The uniform provider identification number (UPIN) assigned by the Health Care Financing Administration shall be used as the unique identification number for individual health care providers. Providers who do not currently have a UPIN number shall request one from the health care financing administration.

(c) The unique individual health care provider identifier shall be used for purposes of submitting and receiving claims, and in conjunction with other data collection and reporting functions.

(d) The state and federal health care programs administered by the department of human services shall use the unique identification number assigned to health care providers for implementation of the Medicaid Management Information System or the uniform provider identification number (UPIN) assigned by the health care financing administration.

Subd. 3. [UNIQUE IDENTIFICATION NUMBER FOR GROUP PURCHASERS.] (a) On and after January 1, 1996 1998, all group purchasers and health care providers in Minnesota shall use a unique identification number to identify group purchasers.

(b) The federal tax identification number assigned to each group purchaser by the Internal Revenue Service of the Department of the Treasury shall be used as the unique identification number for group purchasers. This paragraph applies until the codes described in paragraph (c) are available and feasible to use, as determined by the commissioner.

(c) A two-part code, consisting of 11 characters and modeled after the National Association of Insurance Commissioners company code shall be assigned to each group purchaser and used as the unique identification number for group purchasers. The first six characters, or prefix, shall contain the numeric code, or company code, assigned by the National Association of Insurance Commissioners. The last five characters, or suffix, which is optional, shall contain further codes that will enable group purchasers to further route electronic transaction in their internal systems.

(d) The unique group purchaser identifier shall be used for purposes of submitting and receiving claims, and in conjunction with other data collection and reporting functions.

Subd. 4. [UNIQUE PATIENT IDENTIFICATION NUMBER.] (a) On and after January 1, 1996 1998, all group purchasers and health care providers in Minnesota shall use a unique identification number to identify each patient who receives health care services in Minnesota, except as provided in paragraph (e).

(b) Except as provided in paragraph (d), following the recommendation of the workgroup for electronic data interchange, the social security number of the patient shall be used as the unique patient identification number.

(c) The unique patient identification number shall be used by group purchasers and health care providers for purposes of submitting and receiving claims, and in conjunction with other data collection and reporting functions.

(d) The commissioner shall develop an alternate numbering system for patients who do not have or refuse to provide a social security number. This provision does not require that patients provide their social security numbers and does not require group purchasers or providers to demand that patients provide their social security numbers. Group purchasers and health care providers shall establish procedures to notify patients that they can elect not to have their social security number used as the unique patient identification number.

(e) The state and federal health care programs administered by the department of human services shall use the unique person master index (PMI) identification number assigned to clients participating in programs administered by the department of human services.

Sec. 18. Minnesota Statutes 1994, section 62J.55, is amended to read:

62J.55 [PRIVACY OF UNIQUE IDENTIFIERS.]

(a) When the unique identifiers specified in section 62J.54 are used for data collection purposes, the identifiers must be encrypted, as required in section 62J.30 62J.321, subdivision 6 1. Encryption must follow encryption standards set by the National Bureau of Standards and approved by the American National Standards Institute as ANSIX3. 92-1982/R 1987 to protect the confidentiality of the data. Social security numbers must not be maintained in unencrypted form in the database, and the data must never be released in a form that would allow for the identification of individuals. The encryption algorithm and hardware used must not use clipper chip technology.

(b) Providers and group purchasers shall treat medical records, including the social security number if it is used as a unique patient identifier, in accordance with section 144.335. The social security number may be disclosed by providers and group purchasers to the commissioner as necessary to allow performance of those duties set forth in section 144.05.

Sec. 19. Minnesota Statutes 1994, section 62J.58, is amended to read:

62J.58 [IMPLEMENTATION OF STANDARD TRANSACTION SETS.]

Subdivision 1. [CLAIMS PAYMENT.] (a) By July 1, 1995 Six months from the date the commissioner formally recommends the use of guides to implement core transaction sets pursuant to section 62J.56, subdivision 3, all category I industry participants, except pharmacists, shall be able to submit or accept, as appropriate, the ANSI ASC X12 835 health care claim payment/advice transaction set (draft standard for trial use version 3030) for electronic transfer of payment information.

(b) By July 1, 1996, and all category II industry participants, except pharmacists, shall be able to submit or accept, as appropriate, the ANSI ASC X12 835 health care claim payment/advice transaction set (draft standard for trial use version 3030) for electronic submission of payment information to health care providers.

Subd. 2. [CLAIMS SUBMISSION.] Beginning July 1, 1995 Six months from the date the commissioner formally recommends the use of guides to implement core transaction sets pursuant to section 62J.56, subdivision 3, all category I and category II industry participants, except pharmacists, shall be able to accept or submit, as appropriate, the ANSI ASC X12 837 health care claim transaction set (draft standard for trial use version 3030) for the electronic transfer of health care claim information. Category II industry participants, except pharmacists, shall be able to accept or submit, as appropriate, this transaction set, beginning July 1, 1996.

Subd. 3. [ENROLLMENT INFORMATION.] Beginning January 1, 1996 Six months from the date the commissioner formally recommends the use of guides to implement core transaction sets pursuant to section 62J.56, subdivision 3, all category I and category II industry participants, excluding pharmacists, shall be able to accept or submit, as appropriate, the ANSI ASC X12 834 health care enrollment transaction set (draft standard for trial use version 3030) for the electronic transfer of enrollment and health benefit information. Category II industry participants, except pharmacists, shall be able to accept or submit, as appropriate, this transaction set, beginning January 1, 1997.

Subd. 4. [ELIGIBILITY INFORMATION.] By January 1, 1996 Six months from the date the commissioner formally recommends the use of guides to implement core transaction sets pursuant to section 62J.56, subdivision 3, all category I and category II industry participants, except pharmacists, shall be able to accept or submit, as appropriate,

the ANSI ASC X12 270/271 health care eligibility transaction set (draft standard for trial use version 3030) for the electronic transfer of health benefit eligibility information. Category II industry participants, except pharmacists, shall be able to accept or submit, as appropriate, this transaction set, beginning January 1, 1997.

Subd. 5. [APPLICABILITY.] This section does not require a group purchaser, health care provider, or employer to use electronic data interchange or to have the capability to do so. This section applies only to the extent that a group purchaser, health care provider, or employer chooses to use electronic data interchange.

Sec. 20. Minnesota Statutes 1994, section 214.16, subdivision 2, is amended to read:

Subd. 2. [BOARD COOPERATION REQUIRED.] The board shall assist the commissioner of health and the data analysis unit in data collection activities required under Laws 1992, chapter 549, article 7, and shall assist the commissioner of revenue in activities related to collection of the health care provider tax required under Laws 1992, chapter 549, article 9. Upon the request of the commissioner, the data analysis unit, or the commissioner of revenue, the board shall make available names and addresses of current licensees and provide other information or assistance as needed.

Sec. 21. Minnesota Statutes 1994, section 214.16, subdivision 3, is amended to read:

Subd. 3. [GROUNDS FOR DISCIPLINARY ACTION.] The board shall take disciplinary action, which may include license revocation, against a regulated person for:

(1) intentional failure to provide the commissioner of health or the data analysis unit established under section 62J.30 with the data required under chapter 62J;

(2) intentional failure to provide the commissioner of revenue with data on gross revenue and other information required for the commissioner to implement sections 295.50 to 295.58; and

(3) intentional failure to pay the health care provider tax required under section 295.52.

Sec. 22. [RULES.]

Notwithstanding Minnesota Statutes, section 14.05, subdivision 1, Minnesota Rules, chapters 4650, 4651, and 4652, shall continue in effect under the authority granted in Minnesota Statutes, section 62J.321, subdivision 6.

Sec. 23. [INSTRUCTION TO REVISOR.]

(a) The revisor of statutes is instructed to change the term "data institute" or "institute", where applicable, to "health data institute" in the 1996 edition of Minnesota Statutes and Minnesota Rules.

(b) The revisor of statutes is instructed to change any statutory reference to the information clearinghouse from Minnesota Statutes, section 62J.33 or 62J.33, subdivision 2, to 62J.2930, in the 1996 edition of Minnesota Statutes and Minnesota Rules.

Sec. 24. [REPEALER.]

Minnesota Statutes 1994, sections 62J.30; 62J.31; 62J.32; 62J.33; 62J.34; 62J.35; 62J.41, subdivisions 3 and 4; 62J.44; and 62J.45, are repealed.

Subdivision 1. [APPLICABILITY.] For purposes of section 62J.66 and 62J.68, the following definitions apply.

Subd. 2. [DISCOUNTED PRICE.] The "discounted price" means the lesser of the average wholesale price for a prescription drug minus 20 percent or the usual and customary retail price, including any dispensing fee, minus five percent.

Subd. 3. [ELIGIBLE SENIOR.] "Eligible senior" means a senior citizen eligible for the senior drug discount program under section 62J.68, subdivision 3.

Subd. 4. [SENIOR CITIZEN.] "Senior citizen" means a resident of Minnesota who is age 65 or older.

Subd. 5. [SENIOR DRUG DISCOUNT PROGRAM.] "Senior drug discount program" means the program established in section 62J.68.

Subd. 6. [PARTICIPATING DRUG MANUFACTURER.] "Participating drug manufacturer" means any manufacturer who agrees to voluntarily participate in the senior drug discount program.

Subd. 7. [PARTICIPATING CLAIMS PROCESSING COMPANIES.] "Participating claims processing companies" means entities, including, but not limited to, pharmacy benefit management companies, that are awarded a contract by the department of administration to provide on-line services to process payments to participating pharmacies.

Subd. 8. [AVERAGE MANUFACTURER PRICE.] "Average manufacturer price" has the meaning assigned to the term by the Secretary of Health and Human Services for purposes of the federal drug rebate program established under the Omnibus Budget Reconciliation Act of 1990 and section 1927 of the Social Security Act.

Sec. 2. [62J.68] [SENIOR DRUG DISCOUNT PROGRAM.]

Subdivision 1. [ESTABLISHMENT AND ADMINISTRATION.] (a) The commissioner of administration shall award a contract or contracts to claims processing companies to process payments to participating pharmacies. The contract must include:

(1) provisions for participating manufacturers to provide discount payments, through participating claims processing companies, equal to four percent of the average manufacturer price; and

(2) quality assurance and verification procedures and authority to conduct audits of pharmacy claims as necessary to ensure that pharmacy reimbursement payments are appropriate and justified.

(b) The commissioner of administration may establish an expert panel to assist in the development of the request for proposal for awarding the contract or contracts to process payments for the senior drug discount program.

Subd. 2. [PARTICIPATING MANUFACTURERS.] Participating manufacturers agree to:

(1) pay participating pharmacies through the claims processor an amount equal to four percent of the average manufacturer price;

(2) process discount payments through participating claims processing companies according to the timelines used under the medical assistance program;

(3) pay administrative fees established under subdivision 7.

Subd. 3. [PARTICIPATING PHARMACIES.] Participating pharmacies agree to:

(1) provide eligible seniors the discounted price established by the senior drug discount program;

(2) accept payments from participating claims processing companies equal to four percent of the average manufacturer price; and

(3) not charge eligible seniors a dispensing fee greater than $3.

Subd. 4. [ENROLLMENT.] The commissioner of human services shall determine eligibility as specified in subdivision 5 and enroll senior citizens in the senior drug discount program. The commissioner may use volunteers to assist in eligibility and enrollment duties. The commissioner of human services shall post the eligibility of the enrollees to the Medicaid Management Information System (MMIS) where it can be assessed by participating pharmacies through the department's eligibility verification system and point-of-sale system upon presentation of the enrollee's Minnesota health care programs card.

Subd. 5. [ELIGIBILITY.] (a) Senior citizens are eligible for the program if:

(1) their household income does not exceed 200 percent of the federal poverty guidelines;

(2) they are enrolled in Medicare Part A and Part B;

(3) they do not have coverage for prescription drugs under a health plan, as defined in section 62Q.01, subdivision 3;

(4) they do not have coverage for prescription drugs under a Medicare supplement plan, as defined in sections 62A.31 to 62A.44, or policies, contracts, or certificates that supplement Medicare issued by health maintenance organizations or those policies, contracts, or certificates governed by section 1833 or 1976 of the federal Social Social Security Act, United States Code, title 42, section 1395, et seq., as amended, or coverage for prescription drugs under medical assistance under chapter 256B, general assistance medical care under chapter 256D, MinnesotaCare, or the qualified medical beneficiaries program;

(5) they meet the residency requirements established under section 256.9359; and

(6) they do not have coverage for prescription drugs under medical assistance, general assistance medical care, MinnesotaCare, or the qualified Medicare beneficiary program.

(b) The commissioner of human services shall provide each eligible senior with a Minnesota health care programs card indicating enrollment in the senior drug discount program. Eligible seniors must present this card to the participating pharmacy in order to receive the discounted price.

Subd. 6. [ENROLLMENT FEE.] The commissioner of human services may establish an annual enrollment fee of $5 for purposes of administering the senior drug discount program. The fees shall be deposited in a special revenue account for the purpose of administration of enrollment to the senior drug discount program. This account shall be exempt from paying statewide and agency indirect costs as required under section 16A.127.

Subd. 7. [ADMINISTRATIVE FEE.] The commissioner of administration may authorize a claims processing contractor to charge a fixed claims processing fee not to exceed ten cents for each prescription drug provided to participating seniors under this section. In the event the commissioner authorizes a claims processing fee, one-half of the fee must be paid by the participating manufacturer and one-half by the participating pharmacy.

Subd. 8. [DISEASE MANAGEMENT FOR DRUG THERAPY.] The commissioner of human services may establish a disease management program for drug therapy for eligible senior citizens. The commissioner may seek grants and donations from drug manufacturers, drug wholesalers, and other nonstate entities to establish and administer this disease management program.

Subd. 9. [SENIOR DRUG DISCOUNT PROGRAM EVALUATION.] The commissioners of human services and health, in consultation with the commissioner of administration, shall study the efficiency and effectiveness of the senior drug discount program. The commissioners shall examine methods of encouraging participation by drug manufacturers and pharmacies in the program and any program modifications necessary to effectively serve eligible senior citizens. The commissioners shall present a progress report on the program to the legislature by January 15, 1996, and recommendations for program changes to the legislature by January 15, 1997.

Sec. 3. Minnesota Statutes 1994, section 256.9352, subdivision 3, is amended to read:

Subd. 3. [FINANCIAL MANAGEMENT.] (a) The commissioner shall manage spending for the MinnesotaCare program in a manner that maintains a minimum reserve equal to five percent of the expected cost of state premium subsidies. The commissioner must make a quarterly assessment of the expected expenditures for the covered services for the remainder of the current fiscal year biennium and for the following two fiscal years biennium. The estimated expenditure, including minimum reserve requirements, shall be compared to an estimate of the revenues that will be deposited in the health care access fund. Based on this comparison, and after consulting with the chairs of the house ways and means committee and the senate finance committee, and the legislative commission on health care access, the commissioner shall make adjustments, as necessary, make the adjustments specified in paragraph (b) to ensure that expenditures remain within the limits of available revenues for the remainder of the current biennium and for the following biennium. The commissioner shall not hire additional staff using appropriations from the health care access fund until the commissioner of finance makes a determination that the adjustments implemented under paragraph (b) are sufficient to allow MinnesotaCare expenditures to remain within the limits of available revenues for the remainder of the current biennium and for the following biennium.

(b) The adjustments the commissioner may shall use must be implemented in this order: first, stop enrollment of single adults and households without children; second, upon 45 days' notice, stop coverage of single adults and households without children already enrolled in the MinnesotaCare program; third, upon 90 days' notice, decrease the premium subsidy amounts by ten percent for families with gross annual income above 200 percent of the federal poverty guidelines; fourth, upon 90 days' notice, decrease the premium subsidy amounts by ten percent for families with gross annual income at or below 200 percent; and fifth, require applicants to be uninsured for at least six months prior to eligibility in the MinnesotaCare program. If these measures are insufficient to limit the expenditures to the estimated amount of revenue, the commissioner may shall further limit enrollment or decrease premium subsidies.

The reserve referred to in this subdivision is appropriated to the commissioner but may only be used upon approval of the commissioner of finance, if estimated costs will exceed the forecasted amount of available revenues after all adjustments authorized under this subdivision have been made.

By February 1, 1995, the department of human services and the department of health shall develop a plan to adjust benefit levels, eligibility guidelines, or other steps necessary to ensure that expenditures for the MinnesotaCare program are contained within the two percent taxes imposed under section 295.52 and the gross premiums tax imposed under section 60A.15, subdivision 1, paragraph (e), for fiscal year 1997.

(b) (c) Notwithstanding paragraph (a) paragraphs (a) and (b), the commissioner shall proceed with the enrollment of single adults and households without children in accordance with section 256.9354, subdivision 5, paragraph (a), even if the expenditures do not remain within the limits of available revenues through fiscal year 1997 to allow the departments of human services and health to develop the plan required under paragraph (a) (b).

Sec. 4. 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, nonemergency 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.

No public funds shall be used for coverage of abortion under MinnesotaCare except where the life of the female would be endangered or substantial and irreversible impairment of a major bodily function would result if the fetus were carried to term; or where the pregnancy is the result of rape or incest.

Covered health services shall be expanded as provided in this section.

Sec. 5. Minnesota Statutes 1994, section 256.9353, subdivision 3, is amended to read:

Subd. 3. [INPATIENT HOSPITAL SERVICES.] (a) Beginning July 1, 1993, covered health services shall include inpatient hospital services, including inpatient hospital mental health services and inpatient hospital and residential chemical dependency treatment, subject to those limitations necessary to coordinate the provision of these services with eligibility under the medical assistance spenddown. The inpatient hospital benefit for adult enrollees is subject to an annual benefit limit of $10,000. The commissioner shall provide enrollees with at least 60 days' notice of coverage for inpatient hospital services and any premium increase associated with the inclusion of this benefit.

(b) Enrollees determined by the commissioner to have a basis of eligibility for medical assistance shall apply for and cooperate with the requirements of medical assistance by the last day of the third month following admission to an inpatient hospital. If an enrollee fails to apply for medical assistance within this time period, the enrollee and the enrollee's family shall be disenrolled from the plan within one calendar month and they may not reenroll until 12 calendar months have elapsed. Enrollees and enrollees' families disenrolled for not applying for or not cooperating with medical assistance may not reenroll.

(c) Admissions for inpatient hospital services paid for under section 256.9362, subdivision 3, must be certified as medically necessary in accordance with Minnesota Rules, parts 9505.0500 to 9505.0540, except as provided in clauses (1) and (2):

(1) all admissions must be certified, except those authorized under rules established under section 254A.03, subdivision 3, or approved under Medicare; and

(2) payment under section 256.9362, subdivision 3, shall be reduced by five percent for admissions for which certification is requested more than 30 days after the day of admission. The hospital may not seek payment from the enrollee for the amount of the payment reduction under this clause.

(d) Any enrollee or family member of an enrollee who has previously been permanently disenrolled from MinnesotaCare for not applying for and cooperating with medical assistance shall be eligible to reenroll if 12 calendar months have elapsed since the date of disenrollment.

Sec. 6. 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. 7. 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 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. 8. 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. 9. 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. After October 1, 1995, the commissioner of human services may expand the definition of "eligible persons" to include all individuals and households with no children who have gross family incomes that are equal to or less than 135 percent of federal poverty guidelines and are not eligible for medical assistance without a spenddown under chapter 256B. This expansion may occur only if the financial management requirements of section 256.9352, subdivision 3, can be met.

(c) The commissioners of health and human services, in consultation with the legislative commission on health care access, shall make preliminary recommendations to the legislature by October 1, 1995, and final recommendations to the legislature by February 1, 1996, on whether a further expansion of the definition of "eligible persons" to include all individuals and households with no children who have gross family incomes that are equal to or less than 150 percent of federal poverty guidelines and are not eligible for medical assistance without a spenddown under chapter 256B would be allowed under the financial management constraints outlined in section 256.9352, subdivision 3.

(c) (d) 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. 10. Minnesota Statutes 1994, section 256.9355, subdivision 2, is amended to read:

Subd. 2. [COMMISSIONER'S DUTIES.] The commissioner shall use individuals' social security numbers as identifiers for purposes of administering the plan and conduct data matches to verify income. Applicants shall submit evidence of family income, earned and unearned, including the most recent income tax return, wage slips, or other documentation that is necessary to verify income eligibility. The commissioner shall perform random audits to verify reported income and eligibility. The commissioner may execute data sharing arrangements with the department of revenue and any other governmental agency in order to perform income verification related to eligibility and premium payment under the MinnesotaCare program.

Sec. 11. 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. 12. 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. 13. 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. 14. Minnesota Statutes 1994, section 256.9358, subdivision 3, is amended to read:

Subd. 3. [SLIDING SCALES AFTER JUNE 30, 1993.] Beginning July 1, 1993, the sliding scales begin with a premium of 1.5 percent of gross family income for individuals with incomes below the limits for the medical assistance program set at 133-1/3 percent of the AFDC payment standard and proceed through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 7.4, and 8.8. These percentages are matched to evenly spaced income steps ranging from the medical assistance income limit to a gross monthly income of $1,600 for an individual, $2,160 for a household of two, $2,720 for a household of three, $3,280 for a household of four, and $3,840 for a household of five, and $4,400 for households of six or more persons. For the period October 1, 1992 through June 30, 1993, the commissioner shall employ a sliding scale that sets required premiums at percentages of gross family income equal to two-thirds of the percentages specified in this subdivision.

Sec. 15. Minnesota Statutes 1994, section 256.9358, subdivision 4, is amended to read:

Subd. 4. [INELIGIBILITY.] Families with children whose gross monthly income is above the amount specified in subdivision 3 are not eligible for the plan. Beginning October 1, 1994, an individual or households with no children whose gross monthly income is greater than $767 for a single individual and $1,025 for a married couple without children are ineligible for the plan. Beginning October 1, 1995, an individual or families whose gross monthly income is above the amount specified in subdivision 3 are not eligible for the plan greater than 125 percent of the federal poverty guidelines are ineligible for the plan.

Sec. 16. 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. 17. Minnesota Statutes 1994, section 256.9363, subdivision 5, is amended to read:

Subd. 5. [ELIGIBILITY FOR OTHER STATE PROGRAMS.] MinnesotaCare enrollees who become eligible for medical assistance or general assistance medical care will remain in the same managed care plan if the managed care plan has a contract for that population. Contracts between the department of human services and managed care plans must include MinnesotaCare, and medical assistance and may, at the option of the commissioner of human services, also include general assistance medical care.

Sec. 18. [256.9366] [ELIGIBILITY FOR MINNESOTACARE FOR FAMILIES AND CHILDREN UNDER THE MINNESOTACARE HEALTH CARE REFORM WAIVER.]

Subdivision 1. [FAMILIES WITH CHILDREN; IN GENERAL.] Families with children with family income equal to or less than 275 percent of the federal poverty guidelines for the applicable family size shall be determined eligible for MinnesotaCare according to this section, and section 256.9354, subdivisions 2 to 4a, shall no longer apply. All other provisions of sections 256.9351 to 256.9363, including the insurance-related barriers to enrollment under section 256.9357, shall apply unless otherwise specified in sections 256.9366 to 256.9369.

Subd. 2. [CHILDREN.] For purposes of sections 256.9366 to 256.9369, a "child" is an individual under 21 years of age, including the unborn child of a pregnant woman, and including an emancipated minor, and the emancipated minor's spouse.

Subd. 3. [FAMILIES WITH CHILDREN.] For purposes of sections 256.9366 to 256.9369, a "family with children" means a parent or parents and their children, or legal guardians and their wards who are children, and dependent siblings, residing in the same household. The term includes children and dependent siblings who are temporarily absent from the household in settings such as schools, camps, or visitation with noncustodial parents. 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.

Subd. 4. [CHILDREN IN FAMILIES WITH INCOME AT OR LESS THAN 150 PERCENT OF FEDERAL POVERTY GUIDELINES.] Children who have gross family incomes that are equal to or less than 150 percent of the federal poverty guidelines and who are not otherwise insured for the covered services, are eligible for enrollment under sections 256.9366 to 256.9369. For the purposes of this section, "not otherwise insured for covered services" has the meaning given in Minnesota Rules, part 9506.0020, subpart 3, item B.

Subd. 5. [RESIDENCY.] Families and children who are otherwise eligible for enrollment under section 256.9366 are exempt from the Minnesota residency requirements of section 256.9359, if they meet the residency requirements of the medical assistance program according to chapter 256B.

Subd. 6. [COOPERATION WITH MEDICAL ASSISTANCE.] Pregnant women and children applying for MinnesotaCare under this section are not required to apply for the medical assistance program as a condition of enrollment. Other adults enrolled in MinnesotaCare determined by the commissioner to have a basis of eligibility for medical assistance must cooperate in completing an application for medical assistance by the last day of the third month following admission to an inpatient hospital. If an enrollee fails to complete an application for medical assistance within this time period, the enrollee shall be disenrolled and may not reenroll.

Subd. 7. [COOPERATION IN ESTABLISHING PATERNITY AND OTHER MEDICAL SUPPORT.] Families and children enrolled in the MinnesotaCare program must cooperate with the department of human services and the local agency in establishing paternity of an enrolled child and in obtaining medical care support and payments for the child and any other person for whom the person can legally assign rights, in accordance with applicable laws and rules governing the medical assistance program. A child shall not be ineligible for or disenrolled from the MinnesotaCare program solely because of the child's parent or caretaker's failure to cooperate in establishing paternity or obtaining medical support.

Sec. 19. [256.9367] [COVERED SERVICES FOR PREGNANT WOMEN AND CHILDREN UNDER THE MINNESOTACARE HEALTH CARE REFORM WAIVER.]

Children and pregnant women are eligible for coverage of all services that are eligible for reimbursement under the medical assistance program according to chapter 256B. Pregnant women and children are exempt from the provisions of section 256.9353, subdivision 7, regarding copayments.

Sec. 20. [256.9368] [PREMIUMS.]

Subdivision 1. [PREMIUM DETERMINATION.] Families and children enrolled according to sections 256.9366 to 256.9369 shall pay a premium determined according to a sliding fee based on the cost of coverage as a percentage of the family's gross family income. Pregnant women and children under age two are exempt from the provisions of section 256.9356, subdivision 3, clause (3), requiring disenrollment for failure to pay premiums. For pregnant women, this exemption continues until the first day of the month following the 60th day postpartum. Women who remain enrolled during pregnancy or the postpartum period, despite nonpayment of premiums, shall be disenrolled on the first of the month following the 60th day postpartum for the penalty period that otherwise applies under section 256.9356.

Subd. 2. [SLIDING SCALE TO DETERMINE PERCENTAGE OF GROSS FAMILY INCOME.] The commissioner shall establish a sliding fee scale to determine the percentage of gross family income that households at different income levels must pay to obtain coverage through the MinnesotaCare program. The sliding fee scale must be based on the enrollee's gross family income during the previous four months. The sliding fee scale begins with a premium of 1.5 percent of gross family income for families with incomes below the limits for the medical assistance program for families and children and proceeds through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 7.4, and 8.8 percent. These percentages are matched to evenly spaced income steps ranging from the medical assistance income limit for families and children to 275 percent of the federal poverty guidelines for the applicable family size. The sliding fee scale and percentages are not subject to the provisions of chapter 14. If a family reports increased income after enrollment, premiums shall not be adjusted until eligibility renewal.

Subd. 3. [EXCEPTIONS TO SLIDING SCALE.] An annual premium of $48 is required for all children who are eligible according to section 256.9366, subdivision 4.

Sec. 21. [256.9369] [PAYMENT RATES; SERVICES FOR FAMILIES AND CHILDREN UNDER THE MINNESOTACARE HEALTH CARE REFORM WAIVER.]

Section 256.9362, subdivision 2, shall not apply to services provided to children who are eligible to receive expanded services according to section 256.9367.

Sec. 22. Minnesota Statutes 1994, section 256B.037, subdivision 1, is amended to read:

Subdivision 1. [CONTRACT FOR DENTAL SERVICES.] The commissioner may conduct a demonstration project to contract, on a prospective per capita payment basis, with an organization or organizations licensed under chapter 62C or, 62D, or 62N for the provision of all dental care services beginning July 1, 1994, under the medical assistance, general assistance medical care, and MinnesotaCare programs, or when necessary waivers are granted by the secretary of health and human services, whichever occurs later. The commissioner shall identify a geographic area or areas, including both urban and rural areas, where access to dental services has been inadequate, in which to conduct demonstration projects. The commissioner shall seek any federal waivers or approvals necessary to implement this section from the secretary of health and human services.

The commissioner may exclude from participation in the demonstration project any or all groups currently excluded from participation in the prepaid medical assistance program under section 256B.69. Except for persons excluded from participation in the demonstration project, all persons who have been determined eligible for medical assistance, general assistance medical care and, if applicable, MinnesotaCare and reside in the designated geographic areas are required to enroll in a dental plan to receive their dental care services. Except for emergency services or out-of-plan services authorized by the dental plan, recipients must receive their dental services from dental care providers who are part of the dental plan provider network.

The commissioner shall select either multiple dental plans or a single dental plan in a designated area. A dental plan under contract with the department must serve both medical assistance recipients and general assistance medical care recipients in a designated geographic area and may serve MinnesotaCare recipients. The commissioner may limit the number of dental plans with which the department contracts within a designated geographic area, taking into consideration the number of recipients within the designated geographic area; the number of potential dental plan contractors; the size of the provider network offered by dental plans; the dental care services offered by a dental plan; qualifications of dental plan personnel; accessibility of services to recipients; dental plan assurances of recipient confidentiality; dental plan marketing and enrollment activities; dental plan compliance with this section; dental plan performance under other contracts with the department to serve medical assistance, general assistance medical care, or MinnesotaCare recipients; or any other factors necessary to provide the most economical care consistent with high standards of dental care.

For purposes of this section, "dental plan" means an organization licensed under chapter 62C, 62D, or 62N that contracts with the department to provide covered dental care services to recipients on a prepaid capitation basis. "Emergency services" has the meaning given in section 256B.0625, subdivision 4. "Multiple dental plan area" means a designated area in which more than one dental plan is offered. "Participating provider" means a dentist or dental clinic who is employed by or under contract with a dental plan to provide dental care services to recipients. "Single dental plan area" means a designated area in which only one dental plan is available.

Sec. 23. Minnesota Statutes 1994, section 256B.037, is amended by adding a subdivision to read:

Subd. 1a. [MULTIPLE DENTAL PLAN AREAS.] After the department has executed contracts with dental plans to provide covered dental care services in a multiple dental plan area, the department shall:

(1) inform applicants and recipients, in writing, of available dental plans, when written notice of dental plan selection must be submitted to the department, and when dental plan participation begins;

(2) randomly assign to a dental plan recipients who fail to notify the department in writing of their dental plan choice; and

(3) notify recipients, in writing, of their assigned dental plan before the effective date of the recipient's dental plan participation.

Sec. 24. Minnesota Statutes 1994, section 256B.037, is amended by adding a subdivision to read:

Subd. 1b. [SINGLE DENTAL PLAN AREAS.] After the department has executed a contract with a dental plan to provide covered dental care services as the sole dental plan in a geographic area, the provisions in paragraphs (a) to (c) apply.

(a) The department shall assure that applicants and recipients are informed, in writing, of participating providers in the dental plan and when dental plan participation begins.

(b) The dental plan may require the recipient to select a specific dentist or dental clinic and may assign to a specific dentist or dental clinic recipients who fail to notify the dental plan of their selection.

(c) The dental plan shall notify recipients in writing of their assigned providers before the effective date of dental plan participation.

Sec. 25. Minnesota Statutes 1994, section 256B.037, is amended by adding a subdivision to read:

Subd. 1c. [DENTAL CHOICE.] (a) In multiple dental plan areas, recipients may change dental plans once within the first year the recipient participates in a dental plan. After the first year of dental plan participation, recipients may change dental plans during the annual 30-day open enrollment period.

(b) In single dental plan areas, recipients may change their specific dentist or clinic at least once during the first year of dental plan participation. After the first year of dental plan participation, recipients may change their specific dentist or clinic at least once annually. The dental plan shall notify recipients of this change option.

(c) If a dental plan's contract with the department is terminated for any reason, recipients in that dental plan shall select a new dental plan and may change dental plans or a specific dentist or clinic within the first 60 days of participation in the second dental plan.

(d) Recipients may change dental plans or a specific dentist or clinic at any time as follows:

(1) in multiple dental plan areas, if the travel time from the recipient's residence to a general practice dentist is over 30 minutes, the recipient may change dental plans;

(2) in single dental plan areas, if the travel time from the recipient's residence to the recipient's specific dentist or clinic is over 30 minutes, the recipient may change providers; or

(3) if the recipient's dental plan or specific dentist or clinic was incorrectly designated due to department or dental plan error.

(e) Requests for change under this subdivision must be submitted to the department or dental plan in writing. The department or dental plan shall notify recipients whether the request is approved or denied within 30 days after receipt of the written request.

Sec. 26. Minnesota Statutes 1994, section 256B.037, subdivision 3, is amended to read:

Subd. 3. [APPEALS.] All recipients of services under this section have the right to appeal to the commissioner under section 256.045. A recipient participating in a dental plan may utilize the dental plan's internal complaint procedure but is not required to exhaust the internal complaint procedure before appealing to the commissioner. The appeal rights and procedures in Minnesota Rules, part 9500.1463, apply to recipients who enroll in dental plans.

Sec. 27. Minnesota Statutes 1994, section 256B.037, subdivision 4, is amended to read:

Subd. 4. [INFORMATION REQUIRED BY COMMISSIONER.] A contractor shall submit encounter-specific information as required by the commissioner, including, but not limited to, information required for assessing client satisfaction, quality of care, and cost and utilization of services. Dental plans and participating providers must provide the commissioner access to recipient dental records to monitor compliance with the requirements of this section.

Sec. 28. Minnesota Statutes 1994, section 256B.037, is amended by adding a subdivision to read:

Subd. 6. [RECIPIENT COSTS.] A dental plan and its participating providers or nonparticipating providers who provide emergency services or services authorized by the dental plan shall not charge recipients for any costs for covered services.

Sec. 29. Minnesota Statutes 1994, section 256B.037, is amended by adding a subdivision to read:

Subd. 7. [FINANCIAL ACCOUNTABILITY.] A dental plan is accountable to the commissioner for the fiscal management of covered dental care services. The state of Minnesota and recipients shall be held harmless for the payment of obligations incurred by a dental plan if the dental plan or a participating provider becomes insolvent and the department has made the payments due to the dental plan under the contract.

Sec. 30. Minnesota Statutes 1994, section 256B.037, is amended by adding a subdivision to read:

Subd. 8. [QUALITY IMPROVEMENT.] A dental plan shall have an internal quality improvement system. A dental plan shall permit the commissioner or the commissioner's agents to evaluate the quality, appropriateness, and timeliness of covered dental care services through inspections, site visits, and review of dental records.

Sec. 31. Minnesota Statutes 1994, section 256B.037, is amended by adding a subdivision to read:

Subd. 9. [THIRD-PARTY LIABILITY.] To the extent required under section 62A.046 and Minnesota Rules, part 9506.0080, a dental plan shall coordinate benefits for or recover the cost of dental care services provided recipients who have other dental care coverage. Coordination of benefits includes the dental plan paying applicable copayments or deductibles on behalf of a recipient.

Sec. 32. Minnesota Statutes 1994, section 256B.037, is amended by adding a subdivision to read:

Subd. 10. [FINANCIAL CAPACITY.] A dental plan shall demonstrate that its financial risk capacity is acceptable to its participating providers; except, an organization licensed as a health maintenance organization under chapter 62D, a nonprofit health service plan under chapter 62C, or an integrated service network or a community integrated service network under chapter 62N, is not required to demonstrate financial risk capacity beyond the requirements in those chapters for licensure or a certificate of authority.

Sec. 33. Minnesota Statutes 1994, section 256B.037, is amended by adding a subdivision to read:

Subd. 11. [DATA PRIVACY.] The contract between the commissioner and the dental plan must specify that the dental plan is an agent of the welfare system and shall have access to welfare data on recipients to the extent necessary to carry out the dental plan's responsibilities under the contract. The dental plan shall comply with chapter 13, the Minnesota government data practices act.

Sec. 34. Minnesota Statutes 1994, section 256B.04, is amended by adding a subdivision to read:

Subd. 18. [APPLICATIONS FOR MEDICAL ASSISTANCE.] The state agency may take applications for medical assistance and conduct eligibility determinations for MinnesotaCare enrollees who are required to apply for medical assistance according to section 256.9353, subdivision 3, paragraph (b).

Sec. 35. Minnesota Statutes 1994, section 256B.055, is amended by adding a subdivision to read:

Subd. 10a. [CHILDREN.] This subdivision supersedes subdivision 10, as long as the Minnesota health care reform waiver remains in effect. When the waiver expires, this subdivision expires and the commissioner of human services shall publish a notice in the State Register and notify the revisor of statutes. Medical assistance may be paid for a child less than two years of age, whose mother was eligible for and receiving medical assistance at the time of birth and who remains in the mother's household or who is in a family with countable income that is equal to or less than the income standard established under section 256B.057, subdivision 1.

Sec. 36. Minnesota Statutes 1994, section 256B.057, is amended by adding a subdivision to read:

Subd. 1b. [PREGNANT WOMEN AND INFANTS; EXPANSION.] This subdivision supersedes subdivision 1 as long as the Minnesota health care reform waiver remains in effect. When the waiver expires, the commissioner of human services shall publish a notice in the State Register and notify the revisor of statutes. An infant less than two years of age or a pregnant woman who has written verification of a positive pregnancy test from a physician or licensed registered nurse, is eligible for medical assistance if countable family income is equal to or less than 275 percent of the federal poverty guideline for the same family size. For purposes of this subdivision, "countable family income" means the amount of income considered available using the methodology of the AFDC program, except for the earned income disregard and employment deductions. An amount equal to the amount of earned income exceeding 275 percent of the federal poverty guideline, up to a maximum of the amount by which the combined total of 185 percent of the federal poverty guideline plus the earned income disregards and deductions of the AFDC program exceeds 275 percent of the federal poverty guideline will be deducted for pregnant women and infants less than two years of age. Eligibility for a pregnant woman or infant less than two years of age under this subdivision must be determined without regard to asset standards established in section 256B.056, subdivision 3.

An infant born on or after January 1, 1991, to a woman who was eligible for and receiving medical assistance on the date of the child's birth shall continue to be eligible for medical assistance without redetermination until the child's second birthday, as long as the child remains in the woman's household.

Sec. 37. Minnesota Statutes 1994, section 256B.057, is amended by adding a subdivision to read:

Subd. 2b. [NO ASSET TEST FOR CHILDREN AND THEIR PARENTS; EXPANSION.] This subdivision supersedes subdivision 2a as long as the Minnesota health care reform waiver remains in effect. When the waiver expires, this subdivision expires and the commissioner of human services shall publish a notice in the State Register and notify the revisor of statutes. Eligibility for medical assistance for a person under age 21, and the person's parents or relative caretakers as defined in the aid to families with dependent children program according to chapter 256, who are eligible under section 256B.055, subdivision 3, and who live in the same household as the person eligible under age 21, must be determined without regard to asset standards established in section 256B.056.

Sec. 38. Minnesota Statutes 1994, section 256B.0625, subdivision 30, is amended to read:

Subd. 30. [OTHER CLINIC SERVICES.] (a) Medical assistance covers rural health clinic services, federally qualified health center services, nonprofit community health clinic services, public health clinic services, and the services of a clinic meeting the criteria established in rule by the commissioner. Rural health clinic services and federally qualified health center services mean services defined in United States Code, title 42, section 1396d(a)(2)(B) and (C). Payment for rural health clinic and federally qualified health center services shall be made according to applicable federal law and regulation.

(b) A federally qualified health center that is beginning initial operation shall submit an estimate of budgeted costs and visits for the initial reporting period in the form and detail required by the commissioner. A federally qualified health center that is already in operation shall submit an initial report using actual costs and visits for the initial reporting period. Within 90 days of the end of its reporting period, a federally qualified health center shall submit, in the form and detail required by the commissioner, a report of its operations, including allowable costs actually incurred for the period and the actual number of visits for services furnished during the period, and other information

required by the commissioner. Federally qualified health centers that file Medicare cost reports shall provide the commissioner with a copy of the most recent Medicare cost report filed with the Medicare program intermediary for the reporting year which support the costs claimed on their cost report to the state.

(c) In order to continue cost-based payment under the medical assistance program according to paragraphs (a) and (b), a federally qualified health center or rural health clinic must apply for designation as an essential community provider within six months of final adoption of rules by the department of health according to section 62Q.19, subdivision 7. For those federally qualified health centers and rural health clinics that have applied for essential community provider status within the six-month time prescribed, medical assistance payments will continue to be made according to paragraphs (a) and (b) for the first three years of essential community provider status. For federally qualified health centers and rural health clinics that either do not apply within the time specified above, that are denied essential community provider status by the department of health, or who have had essential community provider status for three years, medical assistance payments for health services provided by these entities shall be according to the same rates and conditions applicable to the same service provided by health care providers that are not federally qualified health centers or rural health clinics. This paragraph takes effect only if the Minnesota health care reform waiver is approved by the federal government, and remains in effect for as long as the Minnesota health care reform waiver remains in effect. When the waiver expires, this paragraph expires, and the commissioner of human services shall publish a notice in the State Register and notify the revisor of statutes.

Sec. 39. [256B.0645] [PROVIDER PAYMENTS; RETROACTIVE CHANGES IN ELIGIBILITY.]

Payment to a provider for a health care service provided to a general assistance medical care recipient who is later determined eligible for medical assistance or MinnesotaCare according to section 256.9367 for the period in which the health care service was provided, shall be considered payment in full, and shall not be adjusted due to the change in eligibility. This section applies to both fee-for-service payments and payments made to health plans on a prepaid capitated basis.

Sec. 40. Minnesota Statutes 1994, section 256B.69, subdivision 2, is amended to read:

Subd. 2. [DEFINITIONS.] For the purposes of this section, the following terms have the meanings given.

(a) "Commissioner" means the commissioner of human services. For the remainder of this section, the commissioner's responsibilities for methods and policies for implementing the project will be proposed by the project advisory committees and approved by the commissioner.

(b) "Demonstration provider" means an individual, agency, organization, or group of these entities that participates in the demonstration project according to criteria, standards, methods, and other requirements established for the project and approved by the commissioner.

(c) "Eligible individuals" means those persons eligible for medical assistance benefits as defined in sections 256B.055, 256B.056, and 256B.06.

(d) "Limitation of choice" means suspending freedom of choice while allowing eligible individuals to choose among the demonstration providers.

(e) This paragraph supersedes paragraph (c) as long as the Minnesota health care reform waiver remains in effect. When the waiver expires, this paragraph expires and the commissioner of human services shall publish a notice in the State Register and notify the revisor of statutes. "Eligible individuals" means those persons eligible for medical assistance benefits as defined in sections 256B.055, 256B.056, and 256B.06. Notwithstanding sections 256B.055, 256B.056, and 256B.06, an individual who becomes ineligible for the program because of failure to submit income reports or recertification forms in a timely manner, shall remain enrolled in the prepaid health plan and shall remain eligible to receive medical assistance coverage through the last day of the month following the month in which the enrollee became ineligible for the medical assistance program.

Sec. 41. Minnesota Statutes 1994, section 256B.69, subdivision 4, is amended to read:

Subd. 4. [LIMITATION OF CHOICE.] The commissioner shall develop criteria to determine when limitation of choice may be implemented in the experimental counties. The criteria shall ensure that all eligible individuals in the county have continuing access to the full range of medical assistance services as specified in subdivision 6. The commissioner shall exempt the following persons from participation in the project, in addition to those who do not

meet the criteria for limitation of choice: (1) persons eligible for medical assistance according to section 256B.055, subdivision 1, and children under age 21 who are in foster placement; (2) persons eligible for medical assistance due to blindness or disability as determined by the social security administration or the state medical review team, unless they are 65 years of age or older, or unless they reside in Itasca county or they reside in a county in which the commissioner conducts a pilot project under a waiver granted pursuant to section 1115 of the Social Security Act; (3) recipients who currently have private coverage through a health maintenance organization; and (4) recipients who are eligible for medical assistance by spending down excess income for medical expenses other than the nursing facility per diem expense. Before limitation of choice is implemented, eligible individuals shall be notified and after notification, shall be allowed to choose only among demonstration providers. After initially choosing a provider, the recipient is allowed to change that choice only at specified times as allowed by the commissioner. If a demonstration provider ends participation in the project for any reason, a recipient enrolled with that provider must select a new provider but may change providers without cause once more within the first 60 days after enrollment with the second provider.

Sec. 42. Laws 1993, First Special Session chapter 1, article 8, section 30, subdivision 2, is amended to read:

Subd. 2. Sections 1 to 3, 8, 9, 13 to 17, 22, 23, and 26 to 29 are effective July 1, 1994, contingent upon federal recognition that group residential housing payments qualify as optional state supplement payments to the supplemental security income program under title XVI of the Social Security Act and confer categorical eligibility for medical assistance under the state plan for medical assistance. The amendments and repeals by Laws 1993, First Special Session chapter 1, article 8, sections 1 to 3, 8, 9, 13 to 17, 22, 23, 26, and 29, are effective July 1, 1994.

Sec. 43. [MANAGED CARE IMPLEMENTATION PLANS.]

Prior to enrollment of medical assistance or general assistance medical care recipients residing on an Indian Reservation into managed care plans, the commissioner shall consult with representatives of the Indian Reservation in developing a plan to implement managed care in that community, and shall present this implementation plan to the legislature and to the legislative commission on health care access.

Sec. 44. [MINNESOTACARE PROGRAM ADMINISTRATION.]

The commissioner of administration shall study the potential effectiveness of contracting with a private sector third-party administrator to administer the MinnesotaCare program. The commissioner shall determine whether the use of a third-party administrator to determine enrollee eligibility and process provider claims will reduce state administrative costs, improve the accuracy and timeliness of eligibility determination and claims payment, and allow effective coordination of MinnesotaCare with the medical assistance program and county social service agencies. The commissioner shall present recommendations to the legislature by February 1, 1996.

Sec. 45. [WAIVER REQUEST.]

(a) The commissioner of human services shall seek federal approval to add the benefit of drug coverage for qualified Medicare beneficiaries with incomes up to 150 percent of the federal poverty guidelines and to charge a copayment for this benefit.

(b) If federal approval is obtained, the commissioner of human services shall report to the legislature and present draft legislation expanding the qualified Medicare beneficiary program to the legislature for approval.

Sec. 46. [REPEALER.]

Minnesota Statutes 1994, section 256.9353, subdivisions 4 and 5, are repealed.

Sec. 47. [EFFECTIVE DATE.]

Sections 18 to 21 (256.9366 to 256.9369), 35, 36, 37, and 38 (256B.055, subdivision 10a; 256B.057, subdivision 1b; 256B.057, subdivision 2b; and 256B.0625, subdivision 30) are effective July 1, 1995. The commissioner of human services shall publish a notice in the State Register and notify the revisor of statutes when the waiver expires and the provisions in this section expire.

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. 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. 3. 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. 4. 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. 5. 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. 6. 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. An individual or group health maintenance contract may contain the copayment and deductible provisions specified in this subdivision. 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. 7. 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. 8. Minnesota Statutes 1994, section 62E.05, is amended to read:

62E.05 [CERTIFICATION OF INFORMATION ON QUALIFIED PLANS.]

Subdivision 1. [CERTIFICATION.] Upon application by an insurer, fraternal, or employer for certification of a plan of health coverage as a qualified plan or a qualified medicare supplement plan for the purposes of sections 62E.01 to 62E.16, the commissioner shall make a determination within 90 days as to whether the plan is qualified. All plans of health coverage, except Medicare supplement policies, shall be labeled as "qualified" or "nonqualified" on the front of the policy or evidence of insurance. All qualified plans shall indicate whether they are number one, two, or three coverage plans.

Subd. 2. [ANNUAL REPORT.] All health plan companies, as defined in section 62Q.01, shall annually report to the commissioner responsible for their regulation. The following information shall be reported to the appropriate commissioner on February 1 of each year:

(1) the number of individuals and groups who received coverage in the prior year through the qualified plans; and

(2) the number of individuals and groups who received coverage in the prior year through each of the unqualified plans sold by the company.

Sec. 9. 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. 10. 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. 11. 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. 12. 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. 13. 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 community integrated service network and an integrated service network operating under chapter 62N; 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 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. 14. 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);

(10) coverage provided by a health care network cooperative under chapter 62R or by a health provider cooperative under section 62R.17; or

(11) a plan similar to any of the above plans provided in this state or in another state as determined by the commissioner.

Sec. 15. 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. 16. 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. 17. 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. 18. 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. 19. [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 group or organization of political subdivisions;

(3) an educational cooperative service unit created under section 123.58; or

(4) 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 of commerce;

(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; and

(2) offer to small employers that are not members of the association, health benefit plans offered to, by, or through the qualified 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, except that 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. In comparing index rates for purposes of this clause, the 20 percent shall be calculated as a percent of the larger index rate.

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 the 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.

Subd. 5. [REGISTRATION.] The commissioner may require all associations that are subject to this section to register with the commissioner prior to an initial purchase of coverage under this section.

Sec. 20. 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. 21. 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. 22. 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. 23. 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. 24. 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. 25. 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. 26. 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. 27. 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.

(c) When an explanation of benefits or similar document claims a discount permitted under paragraph (b), 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. This paragraph does not apply if the entity that issues the explanation of benefits or similar document has a provider agreement with the provider.

(d) 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. 28. [REPEALER; POLITICAL SUBDIVISION ASSOCIATIONS.]

Minnesota Statutes 1994, section 62L.08, subdivision 7a, is repealed effective January 1, 1996.

Sec. 29. [EFFECTIVE DATES.]

Sections 1, 2, 3, 10, 11, 15, and 19 are effective January 1, 1996. Section 13 is effective retroactively to January 1, 1995. Sections 17 and 22 are effective the day following final enactment. Section 23 is effective retroactively to July 1, 1994.

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 28 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.

(h) (i) [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 2, is amended to read:

Subd. 2. [MEMBERSHIP.] (a) [NUMBER OF MEMBERS.] Each regional coordinating board consists of 17 members as provided in this subdivision. A member may designate a representative to act as a member of the board in the member's absence. The governor shall appoint the chair of each regional board from among its members. The appointing authorities under each paragraph for which there is to be chosen more than one member shall consult prior to appointments being made to ensure that, to the extent possible, the board includes a representative from each county within the region.

(b) [PROVIDER REPRESENTATIVES.] Each regional board must include four members representing health care providers who practice in the region. One member is appointed by the Minnesota Medical Association. One member is appointed by the Minnesota Hospital Association. One member is appointed by the Minnesota Nurses' Association. The remaining member is appointed by the governor to represent providers other than physicians, hospitals, and nurses.

(c) [HEALTH PLAN COMPANY REPRESENTATIVES.] Each regional board includes four members representing health plan companies who provide coverage for residents of the region, including one member representing health insurers who is elected by a vote of all health insurers providing coverage in the region, one member elected by a vote of all health maintenance organizations providing coverage in the region, and one member appointed by Blue Cross and Blue Shield of Minnesota. The fourth member is appointed by the governor.

(d) [EMPLOYER REPRESENTATIVES.] Regional boards include three members representing employers in the region. Employer representatives are appointed by the Minnesota chamber of commerce from nominations provided by members of chambers of commerce in the region. At least one member must represent self-insured employers.

(e) [EMPLOYEE UNIONS.] Regional boards include one member appointed by the AFL-CIO Minnesota who is a union member residing or working in the region or who is a representative of a union that is active in the region.

(f) [PUBLIC MEMBERS.] Regional boards include three consumer members. One consumer member is elected by the community health boards in the region, with each community health board having one vote. One consumer member is elected by the state legislators with districts in the region legislative commission on health care access. One consumer member is appointed by the governor.

(g) [COUNTY COMMISSIONER.] Regional boards include one member who is a county board member. The county board member is elected by a vote of all of the county board members in the region, with each county board having one vote.

(h) [STATE AGENCY.] Regional boards include one state agency commissioner appointed by the governor to represent state health coverage programs.

Sec. 5. Minnesota Statutes 1994, section 62J.09, is amended by adding a subdivision to read:

Subd. 3a. [COMMUNICATION WITH HEALTH CARE COMMISSION.] The chairs of the regional coordinating boards shall meet with the chair and the executive director of the health care commission on a periodic basis, but no less than biennially.

Sec. 6. 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. 7. 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. 8. 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. 9. Minnesota Statutes 1994, section 62J.17, subdivision 6a, is amended to read:

Subd. 6a. [PROSPECTIVE REVIEW AND APPROVAL.] (a) [REQUIREMENT.] No health care provider subject to prospective review under this subdivision shall make a major spending commitment unless:

(1) the provider has filed an application with the commissioner to proceed with the major spending commitment and has provided all supporting documentation and evidence requested by the commissioner; and

(2) the commissioner determines, based upon this documentation and evidence, that the major spending commitment is appropriate under the criteria provided in subdivision 5a in light of the alternatives available to the provider.

(b) [APPLICATION.] A provider subject to prospective review and approval shall submit an application to the commissioner before proceeding with any major spending commitment. The application must address each item listed in subdivision 4a, paragraph (a), and must also include documentation to support the response to each item. The provider may submit information, with supporting documentation, regarding why the major spending commitment should be excepted from prospective review under paragraph (d) subdivision 7. The submission may be made either in addition to or instead of the submission of information relating to the items listed in subdivision 4a, paragraph (a).

(c) [REVIEW.] The commissioner shall determine, based upon the information submitted, whether the major spending commitment is appropriate under the criteria provided in subdivision 5a, or whether it should be excepted from prospective review under paragraph (d) subdivision 7. In making this determination, the commissioner may

also consider relevant information from other sources. At the request of the commissioner, the Minnesota health care commission shall convene an expert review panel made up of persons with knowledge and expertise regarding medical equipment, specialized services, health care expenditures, and capital expenditures to review applications and make recommendations to the commissioner. The commissioner shall make a decision on the application within 60 days after an application is received.

(d) [EXCEPTIONS.] The prospective review and approval process does not apply to:

(1) a major spending commitment to replace existing equipment with comparable equipment, if the old equipment will no longer be used in the state;

(2) a major spending commitment made by a research and teaching institution for purposes of conducting medical education, medical research supported or sponsored by a medical school or by a federal or foundation grant, or clinical trials;

(3) a major spending commitment to repair, remodel, or replace existing buildings or fixtures if, in the judgment of the commissioner, the project does not involve a substantial expansion of service capacity or a substantial change in the nature of health care services provided; and

(4) mergers, acquisitions, and other changes in ownership or control that, in the judgment of the commissioner, do not involve a substantial expansion of service capacity or a substantial change in the nature of health care services provided.

(e) [NOTIFICATION REQUIRED FOR EXCEPTED MAJOR SPENDING COMMITMENT.] A provider making a major spending commitment covered by paragraph (d) shall provide notification of the major spending commitment as provided under subdivision 4a.

(f) (d) [PENALTIES AND REMEDIES.] The commissioner of health has the authority to issue fines, seek injunctions, and pursue other remedies as provided by law.

Sec. 10. Minnesota Statutes 1994, section 62J.17, is amended by adding a subdivision to read:

Subd. 7. [EXCEPTIONS.] (a) The retrospective review process as described in subdivision 5a and the prospective review and approval process as described in subdivision 6a do not apply to:

(1) a major spending commitment to replace existing equipment with comparable equipment used for direct patient care, upgrades of equipment beyond the current model, or comparable model must be reported;

(2) a major spending commitment made by a research and teaching institution for purposes of conducting medical education, medical research supported or sponsored by a medical school, or by a federal or foundation grant or clinical trials;

(3) a major spending commitment to repair, remodel, or replace existing buildings or fixtures if, in the judgment of the commissioner, the project does not involve a substantial expansion of service capacity or a substantial change in the nature of health care services provided;

(4) a major spending commitment for building maintenance including heating, water, electricity, and other maintenance-related expenditures;

(5) a major spending commitment for activities, not directly related to the delivery of patient care services, including food service, laundry, housekeeping, and other service-related activities; and

(6) a major spending commitment for computer equipment or data systems not directly related to the delivery of patient care services, including computer equipment or data systems related to medical record automation.

(b) In addition to the exceptions listed in subdivision 7, paragraph (a), the prospective review and approval process described in subdivision 6a does not apply to mergers, acquisitions, and other changes in ownership or control that, in the judgment of the commissioner, do not involve a substantial expansion of service capacity or a substantial change in the nature of health care services provided.

Sec. 11. 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 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 a health plan company, if approved by a designated representative of an integrated service network or a community service network a health plan company 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. 12. 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. 13. 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 in compliance with section 62M.07, paragraph (c). Clinical criteria and review procedures must be established with appropriate involvement from actively practicing physicians. 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. 14. 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. 15. Minnesota Statutes 1994, section 62P.05, subdivision 4, is amended to read:

Subd. 4. [MONITORING AND ENFORCEMENT.] Health care providers shall submit to the commissioner of health, in the form and at the times required by the commissioner, all information the commissioner determines to be necessary to implement and enforce this section. The commissioner shall regularly audit all health clinics employing or contracting with over 100 physicians. The commissioner shall also audit, at times and in a manner that does not interfere with delivery of patient care, a sample of smaller clinics and other health care providers. Providers that exceed revenue limits based on two-year average revenue data shall be required by the commissioner to pay back the amount exceeding the revenue limits during the following calendar year.

Pharmacists may adjust their revenue figures for increases in drug product costs that are set by the manufacturer. The commissioner shall consult with pharmacy groups, including pharmacies, wholesalers, drug manufacturers, health plans, and other interested parties, to determine the methodology for measuring and implementing the interim growth limits while taking into account the adjustments for drug product costs.

The commissioner shall monitor providers meeting the growth limits based on their current fees on an annual basis. The fee charged for each service must be based on a weighted average across 12 months and compared to the weighted average for the previous 12-month period. The percentage increase in the average fee from 1993 to 1994, and from 1994 to 1995, from 1995 to 1996, and from 1996 to 1997 is subject to the growth limits established under section 62J.04, subdivision 1, paragraph (b). The percentage increase in the average fee from 1995 to 1996, and from 1996 to 1997 is subject to the change in the regional consumer price index for urban consumers for the previous year published in the State Register in January of the year that the growth limit is in effect. The audit process may include a review of the provider's monthly fee schedule, and a random claims analysis for the provider during different parts of the year to monitor variations in fees. The commissioner shall require providers that exceed growth limits, based on annual fees, to pay back during the following calendar year the amount of fees received exceeding the limit.

The commissioner shall notify each provider that has exceeded its revenue or fee limit, at least 30 days before taking action, and shall provide each provider with ten days to provide an explanation for exceeding the revenue or fee limit. The commissioner shall review the explanation and may change a determination if the commissioner determines the explanation to be valid.

The commissioner may approve a different repayment schedule for a health care provider that takes into account the provider's financial condition.

A provider may appeal the commissioner's order to pay back the amount exceeding the revenue or fee limit by mailing a written notice of appeal to the commissioner within 30 days after the commissioner's order was mailed. The contested case and judicial review provisions of chapter 14 apply to the appeal. The provider shall pay the amount specified by the commissioner either to the commissioner or into an escrow account until final resolution of the appeal. Notwithstanding sections 3.762 to 3.765, each party is responsible for its own fees and expenses, including attorneys fees, for the appeal. Any amount required to be paid back under this section shall be deposited in the health care access fund.

Sec. 16. 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 hospital with less than 50 licensed beds.

Sec. 17. Minnesota Statutes 1994, section 62Q.075, subdivision 4, is amended to read:

Subd. 4. [REVIEW.] Upon receipt of the plan, the appropriate commissioner shall provide a copy to the regional coordinating boards, local community health boards, and other relevant community organizations within the managed care organization's service area. After reviewing the plan, these community groups may submit written comments on the plan to either the commissioner of health or commerce, as applicable, and may advise the commissioner of the managed care organization's effectiveness in assisting to achieve regional public health goals. The plan may be reviewed by the county boards, or city councils acting as a local board of health in accordance with chapter 145A,

within the managed care organization's service area to determine whether the plan is consistent with the goals and objectives of the plans required under chapters 145A and 256E and whether the plan meets the needs of the community. The county board, or applicable city council, may also review and make recommendations on the availability and accessibility of services provided by the managed care organization. The county board, or applicable city council, may submit written comments to the appropriate commissioner, and may advise the commissioner of the managed care organization's effectiveness in assisting to meet the needs and goals as defined under the responsibilities of chapters 145A and 256E. The commissioner of health shall develop recommendations to utilize the written comments submitted as part of the licensure process to ensure local public accountability. These recommendations shall be reported to the legislative commission on health care access by January 15, 1996. Copies of these written comments must be provided to the managed care organization. The plan and any comments submitted must be filed with the information clearinghouse to be distributed to the public.

Sec. 18. Minnesota Statutes 1994, section 62Q.32, is amended to read:

62Q.32 [LOCAL OMBUDSPERSON.]

County board or community health service agencies may establish an office of ombudsperson to provide a system of consumer advocacy for persons receiving health care services through a health plan company. The ombudsperson's functions may include, but are not limited to:

(a) mediation or advocacy on behalf of a person accessing the complaint and appeal procedures to ensure that necessary medical services are provided by the health plan company; and

(b) investigation of the quality of services provided to a person and determine the extent to which quality assurance mechanisms are needed or any other system change may be needed. The commissioner of health shall make recommendations for funding these functions including the amount of funding needed and a plan for distribution. The commissioner shall submit these recommendations to the legislative commission on health care access by January 15, 1996.

Sec. 19. Minnesota Statutes 1994, section 62Q.33, subdivision 4, is amended to read:

Subd. 4. [CAPACITY BUILDING, ACCOUNTABILITY AND FUNDING.] The recommendations required by subdivision 2 shall include:

(1) a definition of minimum outcomes for implementing core public health functions, including a local ombudsperson under the assurance of services function;

(2) the identification of counties and applicable cities with public health programs that need additional assistance to meet the minimum outcomes;

(3) a budget for supporting all functions needed to achieve the minimum outcomes, including the local ombudsperson assurance of services function;

(4) an analysis of the costs and benefits expected from achieving the minimum outcomes;

(5) strategies for improving local government public health functions throughout the state to meet the minimum outcomes including: (i) funding distribution for local government public health functions necessary to meet the minimum outcomes; and (ii) strategies for the financing of personal health care services within the uniform benefits set through the health plan companies and identifying appropriate mechanisms for the delivery of these services; and

(6) a recommended level of dedicated funding for local government public health functions in terms of a percentage of total health service expenditures by the state or in terms of a per capita basis, including methods of allocating the dedicated funds to local government. Funding recommendations must be broad-based and must consider all financial resources.

Sec. 20. Minnesota Statutes 1994, section 62Q.33, subdivision 5, is amended to read:

Subd. 5. [TIMELINE.] (a) By October 1, 1994, the commissioner shall submit to the legislative commission on health care access the initial report and recommendations required by subdivisions 2 to 4.

(b) By February January 15, 1995 1996, the commissioner, in cooperation with the legislative commission on health care access, shall submit a final report to the legislature, with specific recommendations for capacity building and financing to be implemented over the period from January 1, 1996, through December 31, 1997.

(c) (b) By January 1 15, 1997, and by January 1 15 of each odd-numbered year thereafter, the commissioner shall present to the legislature an updated report and recommendations.

Sec. 21. 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. 22. 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. 23. 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. 24. 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. 25. 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. 26. 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. 27. [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. 28. [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.

Sec. 29. 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. 30. 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. 31. 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. 32. 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. 33. 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. 34. 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. 35. Minnesota Statutes 1994, section 144.1487, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] (a) For purposes of sections 144.1487 to 144.1492, the following definitions apply definition applies.

(b) "Board" means the higher education coordinating board.

(c) "Health professional shortage area" means an area designated as such by the federal Secretary of Health and Human Services, as provided under Code of Federal Regulations, title 42, part 5, and United States Code, title 42, section 254E.

Sec. 36. Minnesota Statutes 1994, section 144.1488, subdivision 1, is amended to read:

Subdivision 1. [DUTIES OF THE COMMISSIONER OF HEALTH.] The commissioner shall administer the state loan repayment program. The commissioner shall:

(1) ensure that federal funds are used in accordance with program requirements established by the federal National Health Services Corps;

(2) notify potentially eligible loan repayment sites about the program;

(3) develop and disseminate application materials to sites;

(4) review and rank applications using the scoring criteria approved by the federal Department of Health and Human Services as part of the Minnesota department of health's National Health Services Corps state loan repayment program application;

(5) select sites that qualify for loan repayment based upon the availability of federal and state funding;

(6) provide the higher education coordinating board with a list of qualifying sites; and

(7) carry out other activities necessary to implement and administer sections 144.1487 to 144.1492.;

The commissioner shall enter into an interagency agreement with the higher education coordinating board to carry out the duties assigned to the board under sections 144.1487 to 144.1492.

(7) verify the eligibility of program participants;

(8) sign a contract with each participant that specifies the obligations of the participant and the state;

(9) arrange for the payment of qualifying educational loans for program participants;

(10) monitor the obligated service of program participants;

(11) waive or suspend service or payment obligations of participants in appropriate situations;

(12) place participants who fail to meet their obligations in default; and

(13) enforce penalties for default.

Sec. 37. Minnesota Statutes 1994, section 144.1488, subdivision 4, is amended to read:

Subd. 4. [ELIGIBLE HEALTH PROFESSIONALS.] (a) To be eligible to apply to the higher education coordinating board commissioner for the loan repayment program, health professionals must be citizens or nationals of the United States, must not have any unserved obligations for service to a federal, state, or local government, or other entity, and must be ready to begin full-time clinical practice upon signing a contract for obligated service.

(b) In selecting physicians for participation, the board commissioner shall give priority to physicians who are board certified or have completed a residency in family practice, osteopathic general practice, obstetrics and gynecology, internal medicine, or pediatrics. A physician selected for participation is not eligible for loan repayment until the physician has an employment agreement or contract with an eligible loan repayment site and has signed a contract for obligated service with the higher education coordinating board commissioner.

Sec. 38. Minnesota Statutes 1994, section 144.1489, subdivision 1, is amended to read:

Subdivision 1. [CONTRACT REQUIRED.] Before starting the period of obligated service, a participant must sign a contract with the higher education coordinating board commissioner that specifies the obligations of the participant and the board commissioner.

Sec. 39. 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. 40. Minnesota Statutes 1994, section 144.1489, subdivision 4, is amended to read:

Subd. 4. [AFFIDAVIT OF SERVICE REQUIRED.] Within 30 days of the start of obligated service, and by February 1 of each succeeding calendar year, a participant shall submit an affidavit to the board commissioner stating that the participant is providing the obligated service and which is signed by a representative of the organizational entity in which the service is provided. Participants must provide written notice to the board commissioner within 30 days of: a change in name or address, a decision not to fulfill a service obligation, or cessation of clinical practice.

Sec. 41. Minnesota Statutes 1994, section 144.1490, is amended to read:

144.1490 [RESPONSIBILITIES OF THE LOAN REPAYMENT PROGRAM.]

Subdivision 1. [LOAN REPAYMENT.] Subject to the availability of federal and state funds for the loan repayment program, the higher education coordinating board commissioner shall pay all or part of the qualifying education loans up to $20,000 annually for each primary care physician participant that fulfills the required service obligation. 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.

Subd. 2. [PROCEDURE FOR LOAN REPAYMENT.] Program participants, at the time of signing a contract, shall designate the qualifying loan or loans for which the higher education coordinating board commissioner is to make payments. The participant shall submit to the board commissioner all payment books for the designated loan or loans or all monthly billings for the designated loan or loans within five days of receipt. The board commissioner shall make payments in accordance with the terms and conditions of the designated loans, in an amount not to exceed $20,000 when annualized. If the amount paid by the board commissioner is less than $20,000 during a 12-month period, the board commissioner shall pay during the 12th month an additional amount towards a loan or loans designated by the participant, to bring the total paid to $20,000. The total amount paid by the board commissioner must not exceed the amount of principal and accrued interest of the designated loans.

Sec. 42. Minnesota Statutes 1994, section 144.1491, subdivision 2, is amended to read:

Subd. 2. [SUSPENSION OR WAIVER OF OBLIGATION.] Payment or service obligations cancel in the event of a participant's death. The board commissioner may waive or suspend payment or service obligations in case of total and permanent disability or long-term temporary disability lasting for more than two years. The board commissioner shall evaluate all other requests for suspension or waivers on a case-by-case basis.

Sec. 43. [144.1493] [NURSING GRANT PROGRAM.]

Subdivision 1. [ESTABLISHMENT.] A nursing grant program is established under the supervision of the commissioner of health and the administration of the metropolitan healthcare foundation's project LINC to provide grants to Minnesota health care facility employees seeking to complete a baccalaureate or master's degree in nursing.

Subd. 2. [RESPONSIBILITY OF METROPOLITAN HEALTHCARE FOUNDATION'S PROJECT LINC.] The metropolitan healthcare foundation's project LINC shall administer the grant program and award grants to eligible health care facility employees. To be eligible to receive a grant, a person must be:

(1) an employee of a health care facility located in Minnesota, whom the facility has recommended to the metropolitan healthcare foundation's project LINC for consideration;

(2) working part time, up to 32 hours per pay period, for the health care facility, while maintaining full salary and benefits;