Journal of the House

Leppik moved that the rules be so far suspended that S. F. No. 157 be substituted for H. F. No. 197 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 351 and H. F. No. 182, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Greiling moved that the rules be so far suspended that S. F. No. 351 be substituted for H. F. No. 182 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 536 and H. F. No. 932, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Wejcman moved that the rules be so far suspended that S. F. No. 536 be substituted for H. F. No. 932 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 780 and H. F. No. 742, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Kahn moved that the rules be so far suspended that S. F. No. 780 be substituted for H. F. No. 742 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 839 and H. F. No. 810, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Wolf moved that the rules be so far suspended that S. F. No. 839 be substituted for H. F. No. 810 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 854 and H. F. No. 1078, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Koskinen moved that the rules be so far suspended that S. F. No. 854 be substituted for H. F. No. 1078 and that the House File be indefinitely postponed. The motion prevailed.

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S. F. No. 865 and H. F. No. 997, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Pugh moved that the rules be so far suspended that S. F. No. 865 be substituted for H. F. No. 997 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 890 and H. F. No. 890, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Entenza moved that the rules be so far suspended that S. F. No. 890 be substituted for H. F. No. 890 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 1000 and H. F. No. 1071, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Mulder moved that the rules be so far suspended that S. F. No. 1000 be substituted for H. F. No. 1071 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 1170 and H. F. No. 703, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Dawkins moved that the rules be so far suspended that S. F. No. 1170 be substituted for H. F. No. 703 and that the House File be indefinitely postponed. The motion prevailed.

S. F. No. 1266 and H. F. No. 1313, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Dehler moved that the rules be so far suspended that S. F. No. 1266 be substituted for H. F. No. 1313 and that the House File be indefinitely postponed. The motion prevailed.

SECOND READING OF SENATE BILLS

S. F. Nos. 157, 351, 536, 780, 839, 854, 865, 890, 1000, 1170 and 1266 were read for the second time.

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INTRODUCTION AND FIRST READING OF HOUSE BILLS

The following House Files were introduced:

Long, for the Committee on Taxes, introduced:

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3; 14; 16A; 124; 124A; 270; 273; 275; 290; 297A; 383A; 383B; 458D; 462A; 469; 477A; proposing coding for new law as Minnesota Statutes, chapter 290B; repealing Minnesota Statutes 1996, sections 3.982; 124.2131, subdivision 3a; 124.2134; 124.225, subdivisions 1, 3a, 7a, 7b, 7d, 7e, 7f, 8a, 8k, 8l, 8m, 9, 10, 13, 14, 15, 16, and 17; 124.226; 124.2442; 124.2601, subdivisions 4, 5, and 6; 124.2711, subdivisions 2a and 3; 124.2713, subdivisions 6, 6a, 6b, and 7; 124.2715, subdivisions 2 and 3; 124.2716, subdivisions 3 and 4; 124.2725, subdivisions 3, 4, 5, and 7; 124.2727, subdivisions 6b, 6c, and 9; 124.314, subdivision 2; 124.321; 124.91, subdivisions 2, 4, and 7; 124.912, subdivision 2; 124A.029; 124A.03, subdivisions 2a and 3b; 124A.0311; 124A.22, subdivisions 4a, 4b, 8a, 8b, 13d, and 13e; 124A.23, subdivisions 1, 2, 3, and 4; 124A.26, subdivisions 2 and 3; 124A.292, subdivisions 3 and 4; 270B.12, subdivision 11; 273.13, subdivisions 21a and 32; 273.1315; 273.1317; 273.1318; 273.1398, subdivisions 2, 2c, 2d, 3, and 3a; 273.1399; 273.166; 275.08, subdivisions 1c and 1d; 275.61; 276.012; 276A.06, subdivision 9; 290A.03, subdivisions 12a and 14; 290A.055; 290A.26; 297A.01, subdivisions 20 and 21; 297A.02, subdivision 5; 297A.25, subdivision 29; 462.384, subdivision 7; 462.385, subdivision 2; 462.389, subdivision 5; 462.391, subdivisions 1, 2, 3, 4, 6, 7, 8, and 9; 462.392; 469.176, subdivisions 1a and 5; 469.1782, subdivision 1; 469.181; 473F.08, subdivision 8a; and 645.34; Laws 1995, chapter 264, article 4, as amended.

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

Olson, E., and Kinkel introduced:

H. F. No. 2164, A bill for an act relating to natural resources; modifying membership of the forest resources council; amending Minnesota Statutes 1996, section 89A.03, subdivision 1.

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

Tunheim, Skare, Westrom, Westfall and Goodno introduced:

H. F. No. 2165, A bill for an act relating to flood relief; appropriating money for loans or grants to be paid for homes or class three property in disaster areas substantially damaged by the floods of 1997.

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

Anderson, I.; Lieder; Olson, E.; Finseth and Sviggum introduced:

H. F. No. 2166, A bill for an act relating to flood relief; appropriating money for loans or grants to be paid for homes or class three property in disaster areas substantially damaged by the floods of 1997.

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

Mulder introduced:

H. F. No. 2167, A bill for an act relating to Indians; recognizing the Sandy Lake Band of Mississippi Chippewa as a state recognized Indian tribe.

The bill was read for the first time and referred to the Committee on General Legislation, Veterans Affairs and Elections.

Mulder, Peterson, Kielkucki, Bakk and Harder introduced:

H. F. No. 2168, A bill for an act relating to state government; authorizing grants for reports on state mandates that increase costs to certain schools, local governments, and industries; appropriating money.

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

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MESSAGES FROM THE SENATE

The following messages were received from the Senate:

I hereby announce that the Senate accedes to the request of the House for the appointment of a Conference Committee on the amendments adopted by the Senate to the following House File:

H. F. No. 156, A bill for an act relating to state government; secretary of state; regulating filing fees and procedures; amending Minnesota Statutes 1996, sections 5.12; 5.23; 5.25, subdivision 1; 5A.03; 5A.04; 302A.821, subdivision 5; 303.14, subdivision 1; 308A.005, by adding a subdivision; 317A.821, subdivision 3; 317A.827, subdivision 1; 322A.03; 331A.02, subdivision 1; 336.9-403; 336.9-404; 336A.04, subdivision 4; and 514.08, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 5; repealing Minnesota Rules, part 3650.0030, subpart 8.

The Senate has appointed as such committee:

Messrs. Ten Eyck; Betzold and Knutson.

Said House File is herewith returned to the House.

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

S. F. No. 1722, A bill for an act relating to professions and occupations; defining pharmacy technician; amending Minnesota Statutes 1996, sections 151.01, by adding a subdivision; and 151.06, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 151.

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

Messrs. Sams; Samuelson and Day.

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

Delmont 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. 1722. The motion prevailed.

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

S. F. No. 277, A bill for an act relating to alcoholic beverages; providing for permits for alcoholic beverage manufacturer warehouses, central distribution centers, or holding facilities; providing certain purchase rights to certain retailers served by North Dakota wholesalers; allowing a municipality to authorize a holder of an on-sale intoxicating liquor license to

Journal of the House - 45th Day - Top of Page 2843

dispense intoxicating liquor at community festivals; modifying liability insurance requirements for liquor retailers; allowing municipalities to authorize on-sale of 3.2 percent malt liquor at 10 a.m. on Sundays; modifying time of day restrictions for the off-sale of intoxicating liquor in municipal liquor stores in certain cities; authorizing the sale of intoxicating liquor at professional athletic events in the St. Paul civic center; authorizing the issuance of intoxicating liquor licenses to the division of parks and recreation of the city of St. Paul; authorizing the city of Moorhead to issue two additional on-sale licenses; authorizing the city of Spring Lake Park to issue one additional on-sale license; amending Minnesota Statutes 1996, sections 340A.404, subdivision 4; 340A.409, subdivisions 1 and 4; 340A.417; and 340A.504, subdivision 3; Laws 1969, chapter 783, section 1, subdivision 1, as amended; and Laws 1990, chapter 554, section 19; proposing coding for new law in Minnesota Statutes, chapter 340A.

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

Mr. Solon; Ms. Wiener; and Mr. Belanger.

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

Tunheim 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. 277. The motion prevailed.

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendments the concurrence of the House is respectfully requested:

Kubly moved that the House refuse to concur in the Senate amendments to H. F. No. 753, that the Speaker appoint a Conference Committee of 3 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Journal of the House - 45th Day - Top of Page 2844

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendments the concurrence of the House is respectfully requested:

H. F. No. 591, A bill for an act relating to highways; requiring the commissioner of transportation to transfer certain easements to the city of Faribault.

CONCURRENCE AND REPASSAGE

Boudreau moved that the House concur in the Senate amendments to H. F. No. 591 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 591, A bill for an act relating to highways; requiring the commissioner of transportation to transfer certain easements to the city of Faribault; authorizing the commissioner of transportation to transfer certain excess property.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 130 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Mares Pawlenty Swenson, D.
Anderson, B. Evans Kalis Marko Paymar Swenson, H.
Anderson, I. Farrell Kelso McCollum Pelowski Sykora
Bakk Finseth Kielkucki McElroy Peterson Tingelstad
Bettermann Folliard Kinkel McGuire Pugh Tomassoni
Biernat Garcia Knight Milbert Rest Tompkins
Bishop Goodno Knoblach Molnau Reuter Trimble
Boudreau Greenfield Koppendrayer Mulder Rhodes Tuma
Bradley Greiling Koskinen Mullery Rifenberg Tunheim
Broecker Gunther Kraus Munger Rostberg Van Dellen
Carlson Haas Krinkie Murphy Rukavina Vickerman
Chaudhary Harder Kubly Ness Schumacher Wagenius
Clark Hasskamp Kuisle Nornes Seagren Weaver
Commers Hausman Larsen Olson, E. Seifert Wejcman
Daggett Hilty Leighton Olson, M. Sekhon Wenzel
Davids Holsten Leppik Opatz Skare Westfall
Dawkins Huntley Lieder Orfield Skoglund Westrom
Dehler Jaros Lindner Osskopp Smith Winter
Delmont Jefferson Long Osthoff Solberg Wolf
Dempsey Jennings Luther Otremba Stanek Spk. Carruthers
Dorn Johnson, A. Macklin Ozment Stang
Entenza Johnson, R. Mahon Paulsen Sviggum

The bill was repassed, as amended by the Senate, and its title agreed to.

Journal of the House - 45th Day - Top of Page 2845

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendments the concurrence of the House is respectfully requested:

H. F. No. 1123, A bill for an act relating to telecommunications; establishing the practices of slamming and loading as consumer fraud; providing penalties and remedies; making permanent the requirement to disclose local telecommunications service options; amending Minnesota Statutes 1996, sections 237.121; 237.16, subdivision 5; and 237.5799; proposing coding for new law in Minnesota Statutes, chapter 325F.

CONCURRENCE AND REPASSAGE

Delmont moved that the House concur in the Senate amendments to H. F. No. 1123 and that the bill be repassed as amended by the Senate. The motion prevailed.

H. F. No. 1123, A bill for an act relating to telecommunications; establishing the practices of slamming and loading as consumer fraud; providing penalties and remedies; making permanent the requirement to disclose local telecommunications service options; amending Minnesota Statutes 1996, sections 237.121; 237.16, subdivision 5; 237.5799; and 237.66, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 325F.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Mahon Paulsen Sviggum
Anderson, B. Evans Kahn Mares Pawlenty Swenson, D.
Anderson, I. Farrell Kalis Marko Paymar Swenson, H.
Bakk Finseth Kelso McCollum Pelowski Sykora
Bettermann Folliard Kielkucki McElroy Peterson Tingelstad
Biernat Garcia Kinkel McGuire Pugh Tomassoni
Bishop Goodno Knight Milbert Rest Tompkins
Boudreau Greenfield Knoblach Molnau Reuter Trimble
Bradley Greiling Koppendrayer Mulder Rhodes Tuma
Broecker Gunther Koskinen Mullery Rifenberg Tunheim
Carlson Haas Kraus Munger Rostberg Van Dellen
Chaudhary Harder Krinkie Murphy Rukavina Vickerman

Clark Hasskamp Kubly Ness Schumacher Wagenius

Commers Hausman Kuisle Nornes Seagren Weaver

Daggett Hilty Larsen Olson, E. Seifert Wejcman

Davids Holsten Leighton Olson, M. Sekhon Wenzel

Dawkins Huntley Leppik Opatz Skare Westfall

Dehler Jaros Lieder Orfield Skoglund Westrom

Delmont Jefferson Lindner Osskopp Smith Winter

Dempsey Jennings Long Osthoff Solberg Wolf

Dorn Johnson, A. Luther Otremba Stanek Workman

Entenza Johnson, R. Macklin Ozment Stang Spk. Carruthers

The bill was repassed, as amended by the Senate, and its title agreed to.

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Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendments the concurrence of the House is respectfully requested:

H. F. No. 2150, A bill for an act relating to the organization and operation of state government; appropriating money for environmental, natural resource, and agricultural purposes; establishing and modifying certain programs; providing for regulation of certain activities and practices; providing for accounts, assessments, and fees; amending Minnesota Statutes 1996, sections 17.76, by adding a subdivision; 32.394, subdivision 11; 32.415; 84.0273; 84.0887, subdivision 2; 84.794, subdivision 1; 84.803, subdivision 1; 84.927, subdivision 2; 85.015, by adding a subdivision; 85.22, subdivision 2a; 85A.04, subdivision 4; 86A.23; 86B.415, subdivision 9; 92.06, subdivision 4; 92.16, subdivision 1; 92.46, by adding a subdivision; 94.10, subdivision 2; 94.165; 97B.667; 103C.501, subdivision 6; 103F.378, subdivision 1; 115.03, subdivision 5; 115A.54, subdivision 2a; 116.07, by adding a subdivision; 296.421, subdivision 5; 300.111, by adding a subdivision; 308A.101, by adding a subdivision; 308A.201, by adding a subdivision; 325E.10, subdivision 2, and by adding subdivisions; 325E.11; 325E.112, subdivision 2; 373.01, subdivision 1; Laws 1995, chapter 220, section 19, subdivision 11; and Laws 1996, chapters 351, section 2; and 463, section 7, subdivision 24; proposing coding for new law in Minnesota Statutes, chapters 4; 17; 92; 115; 116; and 219; repealing Minnesota Statutes 1996, sections 1.31; 1.32; 1.33; 1.34; 1.35; 1.36; 1.37; 1.38; 1.39; 1.40; 84B.11; and 115A.9523; Laws 1995, chapters 77, section 3; and 220, section 21; Minnesota Rules, part 7009.0060.

Patrick E. Flahaven, Secretary of the Senate

Osthoff moved that the House refuse to concur in the Senate amendments to H. F. No. 2150, that the Speaker appoint a Conference Committee of 5 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendments the concurrence of the House is respectfully requested:

H. F. No. 2158, 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; establishing and modifying certain programs; providing for regulation of certain activities and practices; standardizing certain licensing service fees; establishing and modifying certain fees; modifying housing programs; establishing a task force; providing for a manufactured home park to be a conditional use; requiring reports; amending Minnesota Statutes 1996, sections 38.02, subdivisions 1, 2, and 3; 44A.01, subdivision 2; 60A.075, by adding a subdivision; 60A.23, subdivision 8; 60A.71, by adding a subdivision; 60K.06, subdivision 2; 65B.48, subdivision 3; 72B.04, subdivision 10; 79.253, subdivision 1; 79.255, by adding a subdivision; 79.361, subdivision 1; 79.371, by adding a subdivision; 82.21, subdivision 1; 82B.09, subdivision 1; 115A.908, subdivision 2; 115B.03, subdivision 5; 115C.021, by adding a subdivision; 115C.03, subdivision 9; 115C.08, subdivision 4; 115C.09, subdivision 3, and by adding a subdivision; 115C.13; 116J.551; 116J.552, subdivision 4; 116J.553, subdivision 2; 116J.554, subdivision 1; 116J.615, subdivision 1; 116L.04, subdivision 1; 116O.05, by adding a subdivision; 116O.122, subdivision 1; 138.91, by adding a subdivision; 155A.045, subdivision 1; 176.181, subdivision 2a; 268.022, subdivision 2; 268.362, subdivision 2; 268.38, subdivision 7; 268.63; 268.672, subdivision 6, and by adding subdivisions; 268.673, subdivisions 3, 4a, and 5; 268.6751, subdivision 1; 268.677, subdivision 1; 268.681; 268.917; 270.97; 298.22, by adding a subdivision; 326.86, subdivision 1; 394.25, by adding a subdivision; 446A.04, subdivision 5; 446A.081, subdivisions 1, 4, and 9; 446A.12, subdivision 1; 462.357, by adding a subdivision; 462A.05, subdivisions 14d, 30, 39, and by adding a subdivision; 462A.13; 462A.201, subdivision 2; 462A.205; 462A.206, subdivisions 2 and 4; 462A.207, subdivisions 1, 2, 3, 4, and 6; 462A.21, subdivision 12a; 469.303; and 469.305, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 45; 79; 116J; 268; 366; 462A; and 469; repealing Minnesota Statutes 1996, sections 115A.908, subdivision 3; 268.39; 268.672, subdivision 4; 268.673, subdivision 6; 268.676; 268.677, subdivisions 2 and 3; 268.678; 268.679, subdivision 3; 462A.05, subdivision 20; 462A.206, subdivision 5; and 462A.21, subdivisions 4k, 12, and 14.

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Jaros moved that the House refuse to concur in the Senate amendments to H. F. No. 2158, that the Speaker appoint a Conference Committee of 5 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following Senate Files, herewith transmitted:

S. F. Nos. 97, 457, 575 and 273.

Patrick E. Flahaven, Secretary of the Senate

Mr. Speaker:

I hereby announce the passage by the Senate of the following Senate Files, herewith transmitted:

S. F. Nos. 1122, 513, 512 and 724.

Patrick E. Flahaven, Secretary of the Senate

FIRST READING OF SENATE BILLS

S. F. No. 97, A bill for an act relating to health; providing for the isolation and detention of persons with active tuberculosis who pose an endangerment to the public health; establishing standards and procedures for isolation and detention; requiring reporting by licensed health professionals; modifying tuberculosis screening requirements; appropriating money; amending Minnesota Statutes 1996, section 144.445, subdivisions 1 and 3; proposing coding for new law in Minnesota Statutes, chapter 144.

The bill was read for the first time.

Goodno moved that S. F. No. 97 and H. F. No. 555, now on Technical General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 457, A bill for an act relating to professions; modifying provisions relating to the board of social work; providing civil penalties; amending Minnesota Statutes 1996, sections 13.99, subdivision 50; 148B.01, subdivisions 4 and 7; 148B.03; 148B.04, subdivisions 2, 3, and 4; 148B.06, subdivision 3; 148B.07; 148B.08, subdivision 2; 148B.18, subdivisions 4, 5, 11, and by adding subdivisions; 148B.19, subdivisions 1, 2, and 4; 148B.20, subdivision 1, and by adding a subdivision; 148B.21, subdivisions 3, 4, 5, 6, 7, and by adding a subdivision; 148B.215; 148B.22, by adding a subdivision; 148B.26, subdivision 1, and by adding a subdivision; 148B.27, subdivisions 1 and 2; and 148B.28, subdivisions 1 and 4; proposing coding for new law in Minnesota Statutes, chapter 148B; repealing Minnesota Statutes 1996, sections 148B.01, subdivision 3; 148B.18, subdivisions 6 and 7; 148B.19, subdivision 3; and 148B.23.

The bill was read for the first time.

McGuire moved that S. F. No. 457 and H. F. No. 864, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

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S. F. No. 575, A bill for an act relating to employment; modifying requirements for drug and alcohol testing; clarifying provisions on review of personnel records by employees; setting a limit for penalties on unpaid OSHA fines; providing the criminal penalty of gross misdemeanor for an assault on an occupational safety and health investigator; amending Minnesota Statutes 1996, sections 181.953, subdivision 6; 181.961, subdivision 2; 182.666, subdivision 7; and 609.2231, subdivision 6.

The bill was read for the first time.

Leighton moved that S. F. No. 575 and H. F. No. 1711, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 273, A bill for an act relating to veterans; authorizing certain improvements at the Hastings, Luverne, and Silver Bay veterans homes using donated funds; requiring accounting of donations.

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

S. F. No. 1122, A bill for an act relating to local governments; establishing an advisory council on local government roles and responsibilities.

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

S. F. No. 513, A bill for an act relating to public nuisance; adding to the acts that constitute a nuisance; modifying nuisance remedies and procedures; amending Minnesota Statutes 1996, sections 617.81, subdivision 2; 617.82; 617.83; and 617.85; repealing Minnesota Statutes 1996, section 617.80, subdivision 6.

The bill was read for the first time.

Dawkins moved that S. F. No. 513 and H. F. No. 246, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 512, A bill for an act relating to employment; making technical and administrative changes in the department of employee relations; modifying provisions governing state employment; modifying terms of certain pilot projects; requiring a study and report; amending Minnesota Statutes 1996, sections 13.67; 15.53, subdivision 2; 43A.04, subdivision 1; 43A.07, subdivision 5; 43A.08, subdivision 1; 43A.27, subdivision 3; and 43A.30, subdivisions 4 and 5; Laws 1993, chapter 301, section 1, subdivision 4; and Laws 1995, chapter 248, articles 12, section 2; and 13, sections 2, subdivisions 2, 5, and 6; and 3, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 15; and 43A; repealing Minnesota Statutes 1996, section 43A.182; and Laws 1995, chapter 248, article 10, section 12.

The bill was read for the first time.

Koppendrayer moved that S. F. No. 512 and H. F. No. 694, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 724, A bill for an act relating to transportation; exempting certain roads, streets, and highways from noise standards; clarifying that specific service signs may be placed at certain intersections of trunk highways; defining residential roadway; defining daytime and nighttime; directing the commissioner of transportation to determine cost reimbursement policies; correcting obsolete reference; directing commissioner of transportation to study and prepare a report proposing a comprehensive, statewide highway access management policy; directing transfer of ownership of licenses for public safety radio system frequencies; requiring reduced speed near stopped emergency vehicles; providing civil penalties; amending Minnesota Statutes 1996, sections 116.07, subdivision 2a; 160.292, subdivision 5; 169.01, subdivision 81, and by adding

Journal of the House - 45th Day - Top of Page 2849

subdivisions; 169.14, subdivisions 2, 3, and 5d; 169.17; 174.23, by adding a subdivision; and 473.894, subdivision 3; repealing Minnesota Statutes 1996, section 169.14, subdivision 4a; Minnesota Rules, parts 8840.0100; 8840.0200; 8840.0300; 8840.0400; 8840.0500; 8840.0600; 8840.0700; 8840.0800; 8840.0900; 8840.1000; 8840.1100; 8840.1200; and 8840.1300.

The bill was read for the first time.

Juhnke moved that S. F. No. 724 and H. F. No. 458, now on General Orders, be referred to the Chief Clerk for comparison. The motion prevailed.

The following Conference Committee Report was received:

CONFERENCE COMMITTEE REPORT ON H. F. NO. 473

A bill for an act relating to metropolitan government; permitting the metropolitan council to operate preventive health and employee recognition programs; amending Minnesota Statutes 1996, section 473.129, by adding a subdivision.

April 14, 1997

The Honorable Phil Carruthers

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

We, the undersigned conferees for H. F. No. 473, 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. 473 be further amended as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1996, section 473.129, is amended by adding a subdivision to read:

Subd. 10. [EMPLOYEE HEALTH AND WELLNESS.] The council may provide a program for health and wellness services for council employees and provide necessary staff, funds, equipment, and facilities.

Sec. 2. [APPLICATION.]

Section 1 applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington."

Delete the title and insert:

"A bill for an act relating to metropolitan government; permitting the metropolitan council to provide a program for health and wellness services for council employees; amending Minnesota Statutes 1996, section 473.129, by adding a subdivision."

We request adoption of this report and repassage of the bill.

House Conferees: Satveer Chaudhary, Edwina Garcia and Harry Mares.

Senate Conferees: Charles W. Wiger, Claire A. Robling and Linda I. Higgins.

Chaudhary moved that the report of the Conference Committee on H. F. No. 473 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

Journal of the House - 45th Day - Top of Page 2850

H. F. No. 473, A bill for an act relating to metropolitan government; permitting the metropolitan council to operate preventive health and employee recognition programs; amending Minnesota Statutes 1996, section 473.129, by adding a subdivision.

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 123 yeas and 6 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke McCollum Pelowski Swenson, H.

Anderson, I. Evans Kalis McElroy Peterson Sykora

Bakk Farrell Kelso McGuire Pugh Tingelstad

Bettermann Finseth Kielkucki Milbert Rest Tomassoni

Biernat Folliard Kinkel Molnau Reuter Tompkins

Bishop Garcia Knoblach Mulder Rhodes Trimble

Boudreau Goodno Koppendrayer Mullery Rifenberg Tunheim

Bradley Greenfield Koskinen Munger Rostberg Van Dellen

Broecker Greiling Kraus Murphy Rukavina Vickerman

Carlson Gunther Kubly Ness Schumacher Wagenius

Chaudhary Haas Kuisle Nornes Seagren Weaver

Clark Harder Larsen Olson, E. Seifert Wejcman

Commers Hasskamp Leighton Opatz Sekhon Wenzel

Daggett Hausman Leppik Orfield Skare Westfall

Davids Hilty Lieder Osskopp Skoglund Winter

Dawkins Holsten Lindner Osthoff Smith Wolf

Dehler Huntley Long Otremba Solberg Workman

Delmont Jaros Luther Ozment Stanek Spk. Carruthers

Dempsey Jennings Mahon Paulsen Stang

Dorn Johnson, A. Mares Pawlenty Sviggum

Entenza Johnson, R. Marko Paymar Swenson, D.

Those who voted in the negative were:

Anderson, B. Knight Krinkie Olson, M. Tuma Westrom

The bill was repassed, as amended by Conference, and its title agreed to.

SPECIAL ORDERS

S. F. No. 1094 was reported to the House.

Pugh and Bishop moved to amend S. F. No. 1094 as follows:

Page 2, line 1, delete "the owner,"

Page 2, line 2, delete everything before "provided" and insert "a person or an agent of a person licensed under this section,"

The motion prevailed and the amendment was adopted.

Journal of the House - 45th Day - Top of Page 2851

S. F. No. 1094, A bill for an act relating to real estate; regulating compensation paid by licensees to tenants for referrals; amending Minnesota Statutes 1996, section 82.19, subdivision 3.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 129 yeas and 2 nays as follows:

Those who voted in the affirmative were:

Abrams Evans Kahn Mares Paymar Sykora

Anderson, B. Farrell Kalis Marko Pelowski Tingelstad

Anderson, I. Finseth Kelso McCollum Peterson Tomassoni

Bakk Folliard Kielkucki McElroy Pugh Tompkins

Bettermann Garcia Kinkel McGuire Rest Trimble

Bishop Goodno Knight Milbert Reuter Tuma

Boudreau Greenfield Knoblach Molnau Rhodes Tunheim

Bradley Greiling Koppendrayer Mulder Rifenberg Van Dellen

Broecker Gunther Koskinen Mullery Rostberg Vickerman

Carlson Haas Kraus Munger Rukavina Wagenius

Chaudhary Harder Krinkie Murphy Schumacher Weaver

Clark Hasskamp Kubly Ness Seagren Wejcman

Commers Hausman Kuisle Nornes Seifert Wenzel

Daggett Hilty Larsen Olson, E. Sekhon Westfall

Davids Holsten Leighton Olson, M. Skare Westrom

Dawkins Huntley Leppik Opatz Skoglund Winter

Dehler Jaros Lieder Orfield Solberg Wolf

Delmont Jefferson Lindner Osskopp Stanek Workman

Dempsey Jennings Long Osthoff Stang Spk. Carruthers

Dorn Johnson, A. Luther Otremba Sviggum

Entenza Johnson, R. Macklin Paulsen Swenson, D.

Erhardt Juhnke Mahon Pawlenty Swenson, H.

Those who voted in the negative were:

OzmentSmith

The bill was passed, as amended, and its title agreed to.

The Speaker called Opatz to the Chair.

S. F. No. 652, A bill for an act relating to human services; establishing a task force to study treatment options for autism.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Mahon Paulsen Sviggum

Anderson, B. Evans Kahn Mares Pawlenty Swenson, D.

Anderson, I. Farrell Kalis Marko Paymar Swenson, H.

Bakk Finseth Kelso McCollum Pelowski Sykora

Bettermann Folliard Kielkucki McElroy Peterson Tingelstad

Biernat Garcia Kinkel McGuire Pugh Tomassoni

Bishop Goodno Knight Milbert Rest Tompkins

Boudreau Greenfield Knoblach Molnau Reuter Trimble

Bradley Greiling Koppendrayer Mulder Rhodes Tuma

Broecker Gunther Koskinen Mullery Rifenberg Tunheim

Carlson Haas Kraus Munger Rostberg Van Dellen

Chaudhary Harder Krinkie Murphy Rukavina Vickerman

Clark Hasskamp Kubly Ness Schumacher Wagenius

Commers Hausman Kuisle Nornes Seagren Weaver

Daggett Hilty Larsen Olson, E. Seifert Wejcman

Davids Holsten Leighton Olson, M. Sekhon Wenzel

Dawkins Huntley Leppik Opatz Skare Westfall

Dehler Jaros Lieder Orfield Skoglund Westrom

Journal of the House - 45th Day - Top of Page 2852

Delmont Jefferson Lindner Osskopp Smith Winter

Dempsey Jennings Long Osthoff Solberg Wolf

Dorn Johnson, A. Luther Otremba Stanek Workman

Entenza Johnson, R. Macklin Ozment Stang Spk. Carruthers

The bill was passed and its title agreed to.

S. F. No. 555 was reported to the House.

Clark moved to amend S. F. No. 555 as follows:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1996, section 237.065, is amended to read:

237.065 [RATES FOR SPECIAL SERVICE TO SCHOOLS AND TELECOMMUNICATION SERVICES PURCHASING COOPERATIVES.]

Subdivision 1. [BASIC SERVICES.] Each telephone company, including a company that has developed an incentive plan under section 237.625, that provides local telephone service in a service area that includes a school that has classes within the range from kindergarten to 12th grade shall provide, upon request, additional service to the school that is sufficient to ensure access to basic telephone service from each classroom and other areas within the school, as determined by the school board. Each company shall set a flat rate for this additional service that is less than the company's flat rate for an access line for a business and the same as or greater than the company's flat rate for an access line for a residence in the same local telephone service exchange. When a company's flat rates for businesses and residences are the same, the company shall use the residential rate for service to schools under this section. The rate required under this section is available only for a school that installs additional service that includes access to basic telephone service from each classroom and other areas within the school, as determined by the school board.

Subd. 2. [BASIC AND ADVANCED TELECOMMUNICATION SERVICES.] (a) Notwithstanding the provisions of sections 237.09, 237.14, 237.60, subdivision 3, and 237.74, each telephone company and telecommunications carrier that provides local telephone service in a service area that includes a school that has classes within the range from kindergarten to grade 12 ~~or that includes~~, a public library, or a telecommunication services purchasing cooperative may provide, upon request, basic and advanced telecommunication services at reduced or no cost to that school or, library, or may provide, upon request, advanced telecommunication services at wholesale rates or no cost to the members of a telecommunication services purchasing cooperative. For purposes of this section, a "telecommunication services purchasing cooperative" means a cooperative organized under section 308A.210. A school or library receiving telecommunications services at reduced or no cost may not resell or sublease the discounted services. No members of a telecommunication services purchasing cooperative may resell or sublease the discounted services. A purchasing cooperative is not required to negotiate or provide a uniform rate for its members. Telecommunications services shall be provided in accordance with Public Law Number 104-104, and the regulations of the Federal Communications Commission adopted under the act.

Journal of the House - 45th Day - Top of Page 2853

(b) An agent that provides telecommunications services to a school or library may request the favorable rate on behalf of and for the exclusive benefit of the school or library. The school or library must authorize the agent to make the request of the local telephone company or telecommunications carrier. The telephone company or telecommunications carrier is not required to offer the same price discount to the agent that it would offer to the school district or library. An agent that receives a price discount for telecommunications services on behalf of a school or library may only resell or sublease the discounted services to that school or library.

(c) For the purposes of this subdivision, "school" includes a public school as defined in section 120.05, nonpublic, and church or religious organization schools that provide instruction in compliance with sections 120.101 to 120.102.

Sec. 2. [308A.210] [TELECOMMUNICATION SERVICES PURCHASING COOPERATIVES.]

Subdivision 1. [PURPOSE; TERRITORY.] A telecommunication services purchasing cooperative may be formed under this chapter for the sole purpose of purchasing advanced telecommunications services by aggregating demand and negotiating reduced rates for its members. Any such telecommunication services shall be provided and directly billed by a telephone company or a telecommunication carrier. A purchasing cooperative must declare in its articles of incorporation a contiguous area comprising less than the entire state in which it may operate.

Subd. 2. [LOCAL GOVERNMENT UNITS.] In addition to others that may form a cooperative, a political subdivision of the state, including a service cooperative created under section 123.582, may act to organize a telecommunication services purchasing cooperative within its jurisdiction for the benefit of its residents.

Subd. 3. [POWERS.] A purchasing cooperative has all of the powers described in section 308A.201, except that a purchasing cooperative does not have the power of eminent domain. A purchasing cooperative is not a telephone or electric cooperative as those terms are used in this chapter and chapters 216B and 237.

Subd. 4. [GOVERNING BOARD.] A board of directors of five to seven members shall govern a telecommunication services purchasing cooperative. The directors must be elected according to the requirements of section 308A.311, except that:

(1) all of the directors must be members of the purchasing cooperative;

(2) a director may not be a provider of services to the cooperative or an employee of the provider;

(3) a director may not be a member of a governing body of a political subdivision; and

(4) a majority of the directors must be seeking to purchase some residential telecommunication services through the cooperative.

Subd. 5. [RESIDENTIAL MEMBERSHIP REQUIREMENT.] In order to ensure that residential customers experience the benefits of cooperative purchasing, at least 50 percent of the total number of entities or individuals who are members of the purchasing cooperative must be seeking to purchase residential telecommunication services through the cooperative. If the telecommunication services purchasing cooperative fails to comply with this subdivision, it shall notify the department of public service and shall have one year from the date of noncompliance to come into compliance. If it does not come into compliance, the telecommunication services purchasing cooperative shall be dissolved and its assets distributed to its members.

Subd. 6. [FILINGS WITH DEPARTMENT OF PUBLIC SERVICE.] A purchasing cooperative must immediately file a copy of its contracts with telecommunication services providers with the department of public service. A purchasing cooperative must file its annual financial statements with the department.

Subd. 7. [OPEN MEMBERSHIP.] Any person within the geographic operating area declared in a cooperative's articles of incorporation or any person within the exchange boundary or service area of a telephone company or telecommunication carrier that in whole or in part is included in the geographic operating area declared in the cooperative's articles of incorporation may become a member of the telecommunication services purchasing cooperative.

Journal of the House - 45th Day - Top of Page 2854

Subd. 8. [ADVANCED TELECOMMUNICATION SERVICES; DEFINED.] "Advanced telecommunications service" includes any service that would be classified as a flexibly priced service within the meaning of section 237.761, subdivision 4, or nonprice regulated service within the meaning of section 237.761, subdivision 4, provided that a service may be an advanced telephone service whether or not the telephone company has adopted an alternative rate plan within the meaning of section 237.76."

Delete the title and insert:

"A bill for an act relating to telecommunications; authorizing creation of telecommunication services purchasing cooperatives; amending Minnesota Statutes 1996, section 237.065; proposing coding for new law in Minnesota Statutes, chapter 308A."

The motion prevailed and the amendment was adopted.

Goodno moved to amend S. F. No. 555, as amended, as follows:

Page 5, after line 5, insert:

"Sec. 3. [MOORHEAD MAJORITY VOTE FOR CITY TELEPHONE EXCHANGE.]

Notwithstanding Minnesota Statutes, section 237.19, or other law, the city of Moorhead may construct a new telephone exchange in any case including where an exchange already exists if authorized by a majority of the electors voting on the proposition at a general election or a special election called for that purpose.

Sec. 4. [LOCAL APPROVAL AND STATE FILING REQUIRED.]

Section 3 is effective the day after the chief clerical officer of the city of Moorhead complies with Minnesota Statutes, section 645.021, subdivision 3."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

S. F. No. 555, A bill for an act relating to telecommunications; authorizing creation of telecommunication services purchasing cooperatives; proposing coding for new law in Minnesota Statutes, chapters 237; and 308A.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Mahon Paulsen Sviggum

Anderson, B. Evans Kahn Mares Pawlenty Swenson, D.

Anderson, I. Farrell Kalis Marko Paymar Swenson, H.

Bakk Finseth Kelso McCollum Pelowski Sykora

Bettermann Folliard Kielkucki McElroy Peterson Tingelstad

Biernat Garcia Kinkel McGuire Pugh Tomassoni

Bishop Goodno Knight Milbert Rest Tompkins

Boudreau Greenfield Knoblach Molnau Reuter Trimble

Bradley Greiling Koppendrayer Mulder Rhodes Tuma

Broecker Gunther Koskinen Mullery Rifenberg Tunheim

Carlson Haas Kraus Munger Rostberg Van Dellen

Chaudhary Harder Krinkie Murphy Rukavina Vickerman

Clark Hasskamp Kubly Ness Schumacher Wagenius

Commers Hausman Kuisle Nornes Seagren Weaver

Journal of the House - 45th Day - Top of Page 2855

Daggett Hilty Larsen Olson, E. Seifert Wejcman

Davids Holsten Leighton Olson, M. Sekhon Wenzel

Dawkins Huntley Leppik Opatz Skare Westfall

Dehler Jaros Lieder Orfield Skoglund Westrom

Delmont Jefferson Lindner Osskopp Smith Winter

Dempsey Jennings Long Osthoff Solberg Wolf

Dorn Johnson, A. Luther Otremba Stanek Workman

Entenza Johnson, R. Macklin Ozment Stang Spk. Carruthers

The bill was passed, as amended, and its title agreed to.

S. F. No. 526 was reported to the House.

Juhnke moved to amend S. F. No. 526 as follows:

Delete everything after the enacting clause and insert:

"Section 1. [31.96] [FOOD HANDLER CERTIFICATION.]

The commissioner may require certification of retail food handlers in establishments licensed under section 28A.05, paragraph (a), for retail food preparation, handling, and service practices. A retail food handler licensed under section 28A.05, paragraph (a), shall comply with the requirements for the manager certification program under section 157.011, subdivision 2. An interagency agreement with the department of health must be established for the transfer of funds to the commissioner to cover the cost of administering the manager certification program."

The motion prevailed and the amendment was adopted.

S. F. No. 526, A bill for an act relating to agriculture; providing for food handler certification; proposing coding for new law in Minnesota Statutes, chapter 31.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 130 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Farrell Kalis Marko Paymar Swenson, H.

Anderson, B. Finseth Kelso McCollum Pelowski Sykora

Anderson, I. Folliard Kielkucki McElroy Peterson Tingelstad

Bettermann Garcia Kinkel McGuire Pugh Tomassoni

Journal of the House - 45th Day - Top of Page 2856

Biernat Goodno Knight Milbert Rest Tompkins

Boudreau Greenfield Knoblach Molnau Reuter Trimble

Bradley Greiling Koppendrayer Mulder Rhodes Tuma

Broecker Gunther Koskinen Mullery Rifenberg Tunheim

Carlson Haas Kraus Munger Rostberg Van Dellen

Chaudhary Harder Krinkie Murphy Rukavina Vickerman

Clark Hasskamp Kubly Ness Schumacher Wagenius

Commers Hausman Kuisle Nornes Seagren Weaver

Daggett Hilty Larsen Olson, E. Seifert Wejcman

Davids Holsten Leighton Olson, M. Sekhon Wenzel

Dawkins Huntley Leppik Opatz Skare Westfall

Dehler Jaros Lieder Orfield Skoglund Westrom

Delmont Jefferson Lindner Osskopp Smith Winter

Dempsey Jennings Long Osthoff Solberg Wolf

Dorn Johnson, A. Luther Otremba Stanek Workman

Entenza Johnson, R. Macklin Ozment Stang Spk. Carruthers

Erhardt Juhnke Mahon Paulsen Sviggum

Evans Kahn Mares Pawlenty Swenson, D.

The bill was passed, as amended, and its title agreed to.

S. F. No. 1025, A bill for an act relating to motor vehicles; changing notice period relating to impounded vehicles in custody; amending Minnesota Statutes 1996, section 168B.06, subdivision 1.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Mahon Paulsen Sviggum

Anderson, B. Evans Kahn Mares Pawlenty Swenson, D.

Anderson, I. Farrell Kalis Marko Paymar Swenson, H.

Bakk Finseth Kelso McCollum Pelowski Sykora

Bettermann Folliard Kielkucki McElroy Peterson Tingelstad

Biernat Garcia Kinkel McGuire Pugh Tomassoni

Bishop Goodno Knight Milbert Rest Tompkins

Boudreau Greenfield Knoblach Molnau Reuter Trimble

Bradley Greiling Koppendrayer Mulder Rhodes Tuma

Broecker Gunther Koskinen Mullery Rifenberg Tunheim

Carlson Haas Kraus Munger Rostberg Van Dellen

Chaudhary Harder Krinkie Murphy Rukavina Vickerman

Clark Hasskamp Kubly Ness Schumacher Wagenius

Commers Hausman Kuisle Nornes Seagren Weaver

Daggett Hilty Larsen Olson, E. Seifert Wejcman

Davids Holsten Leighton Olson, M. Sekhon Wenzel

Dawkins Huntley Leppik Opatz Skare Westfall

Dehler Jaros Lieder Orfield Skoglund Westrom

Delmont Jefferson Lindner Osskopp Smith Winter

Dempsey Jennings Long Osthoff Solberg Wolf

Dorn Johnson, A. Luther Otremba Stanek Workman

Entenza Johnson, R. Macklin Ozment Stang Spk. Carruthers

The bill was passed and its title agreed to.

REPORT FROM THE COMMITTEE ON RULES AND

LEGISLATIVE ADMINISTRATION

Winter, from the Committee on Rules and Legislative Administration, pursuant to rule 1.09, designated the following bills as Special Orders to be acted upon today:

H. F. Nos. 735, 244, 1370 and 694; and S. F. Nos. 465, 951, 1037, 1669 and 612.

Journal of the House - 45th Day - Top of Page 2857
SPECIAL ORDERS

H. F. No. 735 was reported to the House.

Entenza and Rhodes moved to amend H. F. No. 735, the second engrossment, as follows:

Page 45, delete section 65

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

H. F. No. 735, A bill for an act relating to civil commitment; clarifying and reorganizing portions of the commitment act; allowing the designated agency to consent to voluntary treatment for certain incompetent persons; creating a new standard for court-ordered early intervention to provide less intrusive treatment; modifying standards and procedures for the administration of neuroleptic medications; providing for access to records; amending the provisional discharge procedures; requiring medical documentation of a patient's refusal to be examined and allowing determination of need for treatment based on other information; prohibiting prepetition screeners from filing commitment petitions; limiting use of prepetition screening reports in unrelated proceedings; requiring distribution to specified parties; increasing time for return after provisional discharge; modifying provisions governing special review boards; increasing time for hearing appeals; changing provisions for state liens for cost of care; amending Minnesota Statutes 1996, sections 13.42, subdivisions 2 and 3; 55.10, subdivision 4; 246B.01, subdivisions 3 and 4; 253B.01; 253B.02, subdivisions 2, 4, 4a, 7, 9, 13, 14, 15, 18, 18a, 18b, and by adding subdivisions; 253B.03, subdivisions 1, 2, 3, 4, 5, 6, 6b, 7, 8, and by adding a subdivision; 253B.04; 253B.05, subdivisions 1, 2, 3, 4, and by adding a subdivision; 253B.06; 253B.07, subdivisions 1, 2, 2a, 3, 4, 5, 7, and by adding subdivisions; 253B.08, subdivisions 1, 2, 3, 5, and by adding subdivisions; 253B.09, subdivisions 1, 2, 3, 5, and by adding a subdivision; 253B.095; 253B.10; 253B.11, subdivision 2, and by adding a subdivision; 253B.12, subdivisions 1, 3, 4, and by adding a subdivision; 253B.13, subdivisions 1 and 2; 253B.14; 253B.15, subdivisions 1, 1a, 2, 3, 5, 10, and by adding subdivisions; 253B.16, subdivision 1; 253B.17, subdivisions 1 and 3; 253B.18, subdivisions 1, 2, 3, 4, 4a, 4b, 5, 6, 7, 9, 12, 14, 15, and by adding a subdivision; 253B.185, subdivision 4; 253B.19, subdivisions 1, 2, 3, and 5; 253B.20, subdivisions 1, 3, 4, 6, and 7; 253B.21, subdivision 4; 253B.22, subdivision 1; 253B.23, subdivisions 1, 4, 6, 7, and 9; 256.015, subdivisions 1, 2, and 4; 256B.042, subdivisions 1, 2, and 4; 256B.37, subdivision 1; 514.71; 514.980, subdivision 2; 514.981, subdivision 2; 514.982, subdivisions 1 and 2; 514.985; 524.1-201; 524.3-801; 524.3-1004; 524.3-1201; and 524.6-207; proposing coding for new law in Minnesota Statutes, chapter 253B; repealing Minnesota Statutes 1996, sections 253B.03, subdivisions 6c and 9; 253B.05, subdivisions 2a and 5; 253B.07, subdivision 6; 253B.08, subdivisions 4 and 6; 253B.091; 253B.12, subdivisions 5 and 8; 253B.13, subdivision 3; 253B.15, subdivisions 4 and 6; 253B.18, subdivision 4; 253B.21, subdivision 5; and 253B.23, subdivision 1a.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 130 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Marko Paymar Swenson, H.

Anderson, B. Evans Kalis McCollum Pelowski Sykora

Anderson, I. Farrell Kelso McElroy Peterson Tingelstad

Bakk Finseth Kielkucki McGuire Pugh Tomassoni

Journal of the House - 45th Day - Top of Page 2858

Bettermann Folliard Kinkel Milbert Rest Tompkins

Biernat Garcia Knight Molnau Reuter Trimble

Bishop Goodno Knoblach Mulder Rhodes Tuma

Boudreau Greenfield Koppendrayer Mullery Rifenberg Tunheim

Bradley Greiling Koskinen Munger Rostberg Van Dellen

Broecker Gunther Kraus Murphy Rukavina Vickerman

Carlson Haas Krinkie Ness Schumacher Wagenius

Chaudhary Harder Kubly Nornes Seagren Weaver

Clark Hasskamp Kuisle Olson, E. Seifert Wejcman

Commers Hausman Larsen Olson, M. Sekhon Wenzel

Daggett Hilty Leighton Opatz Skare Westfall

Davids Holsten Leppik Orfield Skoglund Westrom

Dawkins Huntley Lieder Osskopp Smith Winter

Dehler Jaros Lindner Osthoff Solberg Wolf

Delmont Jefferson Luther Otremba Stanek Workman

Dempsey Jennings Macklin Ozment Stang Spk. Carruthers

Dorn Johnson, A. Mahon Paulsen Sviggum

Entenza Johnson, R. Mares Pawlenty Swenson, D.

The bill was passed, as amended, and its title agreed to.

H. F. No. 244 was reported to the House.

Bishop moved that H. F. No. 244 be continued on Special Orders. The motion prevailed.

H. F. No. 1370, A bill for an act relating to excavation notification; requiring notice of underground facilities in drawings for bid specifications or plans; amending Minnesota Statutes 1996, section 216D.04, by adding a subdivision.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 131 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Kahn Mares Pawlenty Swenson, D.

Anderson, B. Evans Kalis Marko Paymar Swenson, H.

Anderson, I. Farrell Kelso McCollum Pelowski Sykora

Bakk Finseth Kielkucki McElroy Peterson Tingelstad

Bettermann Folliard Kinkel McGuire Pugh Tomassoni

Biernat Garcia Knight Milbert Rest Tompkins

Bishop Goodno Knoblach Molnau Reuter Trimble

Boudreau Greiling Koppendrayer Mulder Rhodes Tuma

Bradley Gunther Koskinen Mullery Rifenberg Tunheim

Broecker Haas Kraus Munger Rostberg Van Dellen

Carlson Harder Krinkie Murphy Rukavina Vickerman

Chaudhary Hasskamp Kubly Ness Schumacher Wagenius

Clark Hausman Kuisle Nornes Seagren Weaver

Commers Hilty Larsen Olson, E. Seifert Wejcman

Daggett Holsten Leighton Olson, M. Sekhon Wenzel

Davids Huntley Leppik Opatz Skare Westfall

Dawkins Jaros Lieder Orfield Skoglund Westrom

Dehler Jefferson Lindner Osskopp Smith Winter

Delmont Jennings Long Osthoff Solberg Wolf

Dempsey Johnson, A. Luther Otremba Stanek Workman

Dorn Johnson, R. Macklin Ozment Stang Spk. Carruthers

Entenza Juhnke Mahon Paulsen Sviggum

The bill was passed and its title agreed to.

Journal of the House - 45th Day - Top of Page 2859

S. F. No. 465, A bill for an act relating to insurance; regulating the sale of certain qualified long-term care insurance policies; amending Minnesota Statutes 1996, sections 61A.072, subdivisions 1 and 4; 62A.011, subdivision 3; 62A.31, subdivision 6; 62A.48, by adding a subdivision; 62A.50, by adding a subdivision; and 62L.02, subdivision 15; proposing coding for new law as Minnesota Statutes, chapter 62S.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 132 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Juhnke Mahon Paulsen Sviggum

Anderson, B. Evans Kahn Mares Pawlenty Swenson, D.

Anderson, I. Farrell Kalis Marko Paymar Swenson, H.

Bakk Finseth Kelso McCollum Pelowski Sykora

Bettermann Folliard Kielkucki McElroy Peterson Tingelstad

Biernat Garcia Kinkel McGuire Pugh Tomassoni

Bishop Goodno Knight Milbert Rest Tompkins

Boudreau Greenfield Knoblach Molnau Reuter Trimble

Bradley Greiling Koppendrayer Mulder Rhodes Tuma

Broecker Gunther Koskinen Mullery Rifenberg Tunheim

Carlson Haas Kraus Munger Rostberg Van Dellen

Chaudhary Harder Krinkie Murphy Rukavina Vickerman

Clark Hasskamp Kubly Ness Schumacher Wagenius

Commers Hausman Kuisle Nornes Seagren Weaver

Daggett Hilty Larsen Olson, E. Seifert Wejcman

Davids Holsten Leighton Olson, M. Sekhon Wenzel

Dawkins Huntley Leppik Opatz Skare Westfall

Dehler Jaros Lieder Orfield Skoglund Westrom

Delmont Jefferson Lindner Osskopp Smith Winter

Dempsey Jennings Long Osthoff Solberg Wolf

Dorn Johnson, A. Luther Otremba Stanek Workman

Entenza Johnson, R. Macklin Ozment Stang Spk. Carruthers

The bill was passed and its title agreed to.

There being no objection, the order of business reverted to Reports of Standing Committees.

REPORTS OF STANDING COMMITTEES

Solberg from the Committee on Ways and Means to which was referred:

Journal of the House - 45th Day - Top of Page 2860

the amateur sports commission; restricting payments related to the Target Center; modifying appointment provisions for the board of ethical practices executive director; providing for additional legislative leadership positions; establishing the Minnesota office of technology; providing for repayment of certain local government grants; changing the name of the ethical practices board; amending Minnesota Statutes 1996, sections 3.099, subdivision 3; 6.47; 10A.02, subdivision 5; 14.05, subdivision 5; 14.131; 16A.10, subdivision 2; 16A.11, subdivisions 1, 3, and 3c; 16A.1285, subdivision 3; 16A.129, subdivision 3; 16A.15, subdivision 3; 16B.19, subdivision 2b; 16B.24, subdivision 5; 16B.35, by adding a subdivision; 16B.465, subdivision 3; 16B.70, subdivision 2; 176.611, by adding subdivisions; 240A.08; 327.33, subdivision 2; 327B.04, subdivision 7; 349.163, subdivision 4; 356.865, subdivision 3; 363.073, subdivision 1; and 473.556, subdivision 16; proposing coding for new law in Minnesota Statutes, chapters 14; 16A; 16B; 43A; 260; and 465; proposing coding for new law as Minnesota Statutes, chapter 237A; repealing Minnesota Statutes 1996, sections 10A.21; 15.95; 15.96; 16B.40; 16B.41; 16B.42; 16B.43; and 16B.58, subdivision 8.

Reported the same back with the following amendments to the unofficial engrossment:

Page 2, line 25, delete "$407,529,000" and insert "$316,914,000" and delete $296,519,000" and insert "$305,925,000" and delete "$704,048,000" and insert "$622,839,000"

Page 2, line 28, delete "11,160,000" and insert "11,866,000" and delete "12,180,000" and insert "13,311,000" and delete "23,340,000" and insert "25,177,000"

Page 2, line 36, delete "$425,646,000" and insert "$335,737,000" and delete "$315,801,000" and insert "$326,338,000" and delete "$741,447,000" and insert "$662,075,000"

Page 3, delete lines 32 to 55

Page 4, delete lines 1 to 4

Page 5, line 2, after "courts" insert "pilot projects. This appropriation shall not be included in the agency's base for future bienniums"

Page 5, line 27, delete "47,803,000" and insert "48,634,000" and delete "42,742,000" and insert "43,909,000"

Page 5, line 29, delete "38,892,000" and insert "39,017,000" and delete "32,886,000" and insert "32,922,000"

Page 5, line 31, delete "8,911,000" and insert "9,617,000" and delete "9,856,000" and insert "10,987,000"

Page 5, line 36, delete "3,402,000" and insert "3,563,000"

Page 5, line 43, after "ensure" insert "to the extent practical and to the extent consistent with the business needs of the state"

Page 5, line 45, delete "has a written plan" and insert "attempts"

Page 5, line 51, delete "10,422,000" and insert "11,128,000" and delete "11,615,000" and insert "12,746,000"

Page 5, line 55, delete "8,911,000" and insert "9,617,000" and delete "9,856,000" and insert "10,987,000"

Page 6, line 48, delete "2,407,000" and insert "2,241,000" and delete "2,462,000" and insert "2,294,000"

Page 7, line 25, delete "4,314,000" and insert "4,439,000" and delete "3,964,000" and insert "3,839,000"

Page 8, after line 8, insert:

"$125,000 the first year and $125,000 the second year are for one-time equipment grants to the Association of Minnesota Public Educational Radio Stations."

Journal of the House - 45th Day - Top of Page 2861

Page 8, line 20, delete "$750,000" and insert "$500,000"

Page 8, delete lines 57 to 64

Page 13, line 28, delete "79,651,000" and insert "80,342,000" and delete "81,883,000" and insert "82,574,000"

Page 13, line 30, delete "77,511,000" and insert "78,202,000" and delete "79,694,000" and insert "80,385,000"

Page 16, delete lines 49 to 60

Page 17, delete lines 1 to 13

Page 17, line 21, after "fund" insert ", from the lottery prize fund,"

Page 19, line 26, delete "$........." and insert "$4,925,000"

Page 19, line 27, delete "$........." and insert "$4,925,000"

Page 19, line 33, delete "$........." and insert "$1,000,000"

Page 19, line 34, delete "$........." and insert "$1,000,000"

Page 19, line 41, delete the first "$......." and insert "$378,000" and delete the second "$......." and insert "$375,000"

Page 23, line 4, strike "or"

Page 23, after line 4, insert:

"(2) by a national or multistate organization of governmental organizations or public officials to a participant in a conference, seminar, meeting, or trip sponsored by that organization, even if the gift to the official was made possible by a gift to the organization by a lobbyist or principal; or"

Page 23, line 5, strike "(2)" and insert "(3)"

Page 24, after line 10, insert:

"Sec. 42. Minnesota Statutes 1996, section 14.47, subdivision 8, is amended to read:

Subd. 8. [SALES AND DISTRIBUTION OF COMPILATION.] Any compilation, reissue, or supplement published by the revisor shall be sold by the revisor for a reasonable fee and its proceeds deposited in the general fund. An agency shall purchase from the revisor the number of copies of the compilation or supplement needed by the agency. The revisor shall provide without charge copies of each edition of any compilation, reissue, or supplement to the persons or bodies listed in this subdivision. Those copies must be marked with the words "State Copy" and kept for the use of the office. The revisor shall distribute:

(a) 25 copies to the office of the attorney general;

(b) ~~12 copies for the legislative commission for review of administrative rules~~ two copies to the leader of each caucus in the house of representatives and the senate, two copies to the legislative reference library, and one copy each to the house of representatives research department and the office of senate counsel and research;

(c) 3 copies to the revisor of statutes for transmission to the Library of Congress for copyright and depository purposes;

(d) 150 copies to the state law library;

Journal of the House - 45th Day - Top of Page 2862

(e) 10 copies to the law school of the University of Minnesota; and

(f) one copy of any compilation or supplement to each county library maintained pursuant to section 134.12 upon its request, except in counties containing cities of the first class. If a county has not established a county library pursuant to section 134.12, the copy will be provided to any public library in the county upon its request."

Page 29, delete section 49

Page 29, after line 30, insert:

"Sec. 50. Minnesota Statutes 1996, section 16A.103, subdivision 1, is amended to read:

Subdivision 1. [STATE REVENUE AND EXPENDITURES.] In February and November each year, the commissioner shall prepare and deliver to the governor and legislature a forecast of state revenue and expenditures. The forecast must assume the continuation of current laws and reasonable estimates of projected growth in the national and state economies and affected populations. Revenue must be estimated for all sources provided for in current law. Expenditures must be estimated for all obligations imposed by law and those projected to occur as a result of inflation and variables outside the control of the legislature. In determining the rate of inflation, the application of inflation, and the other variables to be included in the expenditure part of the forecast, the commissioner must consult with house and senate fiscal staff. In addition, the commissioner shall forecast Minnesota personal income for each of the years covered by the forecast and include these estimates in the forecast documents. A forecast prepared during the first fiscal year of a biennium must cover that biennium and the next biennium. A forecast prepared during the second fiscal year of a biennium must cover that biennium and the next two bienniums."

Page 34, delete section 58

Page 40, lines 24 and 26, delete "seven" and insert "eight"

Page 44, delete section 74

Pages 44 to 46, delete sections 75 and 76

Page 61, after line 34, insert:

"Sec. 89. Minnesota Statutes 1996, section 473.621, is amended by adding a subdivision to read:

Subd. 8. [SOUND INSULATION PROGRAM.] The commission shall provide at no cost to part 150 sound insulation program participants, all corrections and modifications necessary for a participant to meet the commission's program ventilation safety standards."

Page 71, line 22, delete "16A.102;"

Page 71, after line 25, insert:

"Sec. 105. [APPLICATION.]

Section 89 applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington."

Pages 103 and 104, delete section 6 and insert:

"Sec. 6. [62J.685] [PRESCRIPTION DRUG PRICE DISCLOSURE.]

By January 1, 1998, and annually thereafter, a health plan company or hospital licensed under chapter 144 must submit to the attorney general the total amount of: (1) aggregate purchases of prescription drugs, and (2) discount, rebate or other payment received during the previous calendar year for aggregate purchases of prescription drugs, including any fee

Journal of the House - 45th Day - Top of Page 2863

associated with education, data collection, research, training or market share movement received from a manufacturer as defined under section 151.44, paragraph (c), or wholesale drug distributor as defined under section 151.44, paragraph (d). The identification of individual manufacturers or wholesalers or specific drugs is not required. The attorney general shall make this information available to the public through the information clearinghouse under section 62J.2930."

Pages 123 to 138, delete Article 9 and insert:

"ARTICLE 9

CAPITAL INVESTMENT

Section 1. Minnesota Statutes 1996, section 16A.642, subdivision 1, is amended to read:

Subdivision 1. [REPORTS.] (a) The commissioner of finance shall report to the chairs of the senate committee on finance and the house of representatives committees on ways and means and on capital investment on February 1, 1998, and by February 1 of each ~~even-numbered~~ odd-numbered year on the following:

(1) all state building projects for which bonds have been authorized and issued by a law enacted more than seven years before February 1 of that even-numbered year and of which 20 percent or less of a project's authorization has been encumbered or otherwise obligated for the purpose stated in the law authorizing the issue; and

(2) all state bonds authorized and issued for purposes other than building projects reported under clause (1), by a law enacted more than seven years before February 1 of that even-numbered year, and the amount of any balance that is unencumbered or otherwise not obligated for the purpose stated in the law authorizing the issue.

(1) all laws authorizing the issuance of state bonds for state or local government building projects enacted more than five years before February 1 of that odd-numbered year; the projects authorized to be acquired and constructed with the bond proceeds for which less than 100 percent of the authorized total cost has been expended, encumbered, or otherwise obligated; the cost of contracts to be let in accordance with existing plans and specifications shall be considered expended for this report; and the amount of bonds not issued and bond proceeds held but not previously expended, encumbered, or otherwise obligated for these projects; and

(2) all laws authorizing the issuance of state bonds for state or local government programs or projects other than those described in clause (1), enacted more than five years before February 1 of that odd-numbered year; and the amount of bonds not issued and bond proceeds held but not previously expended, encumbered, or otherwise obligated for these programs and projects.

(b) The commissioner shall also report on bond authorizations or bond proceed balances that may be canceled because projects have been canceled, completed, or otherwise concluded, or because the purposes for which the bonds were authorized or issued have been canceled, completed, or otherwise concluded. The bond authorizations or bond proceed balances that are unencumbered or otherwise not obligated that are reported by the commissioner under this subdivision are canceled, effective July 1 of the year of the report, unless specifically reauthorized by act of the legislature.

Sec. 2. Minnesota Statutes 1996, section 16A.642, is amended by adding a subdivision to read:

Subd. 3. [APPLICATION OF UNUSED BOND PROCEEDS.] All canceled bond proceeds shall be transferred to the state bond fund and used to pay or redeem bonds from which they were derived.

Sec. 3. Minnesota Statutes 1996, section 475A.06, subdivision 7, is amended to read:

Subd. 7. [AUTHORITY FOR BONDS; LIMIT; APPROPRIATION PURPOSE; PROCEDURAL SOURCES.] The commissioner of finance is authorized to sell and issue Minnesota state municipal aid bonds in an aggregate principal amount not to exceed ~~$4,330,000~~ $1,192,295, the proceeds of which, except as provided in subdivision 1, are appropriated to the state municipal bond guaranty fund for the purpose of providing funds to be loaned to municipalities for the acquisition and betterment of public lands and buildings and other public improvements of a capital nature, when needed to pay the

Journal of the House - 45th Day - Top of Page 2864

principal of or interest on bonds issued for this purpose or bonds issued to refund such guaranteed bonds, in accordance with the provisions of sections 475A.01 to 475A.06. The bonds shall be sold, issued, and secured as provided in subdivisions 1 to 6 and in Article XI, Section 7 of the Constitution.

Sec. 4. [BOND SALE AUTHORIZATIONS REDUCED.]

The bond sale authorizations in the following laws are reduced by the amounts indicated:

(1) Laws 1987, chapter 400, section 25, subdivision 1, is reduced by $295,000.

(2) Laws 1989, chapter 300, article 1, section 23, subdivision 1, is reduced by $3,335,000.

(3) Laws 1990, chapter 610, article 1, section 30, subdivision 1, is reduced by $9,280,000.

(4) Laws 1990, chapter 610, article 1, section 30, subdivision 3, is reduced by $165,000.

(5) Laws 1991, chapter 350, article 1, section 2, subdivision 1, is reduced by $48,765,000.

(6) Laws 1992, chapter 558, section 28, subdivision 1, is reduced by $6,590,000.

(7) Laws 1993, chapter 373, section 19, subdivision 1, is reduced by $10,000.

(8) Laws 1996, chapter 463, section 27, subdivision 1, is reduced by $37,285,000.

Sec. 5. [EFFECTIVE DATE.]

Section 4 is effective the day following final enactment.

ARTICLE 10

TEEN COURT PILOT PROJECT

Section 1. [TEEN COURT PROGRAM.]

Subdivision 1. [DEFINITIONS.] (a) For purposes of this section, the following terms have the meanings given them.

(b) "Minor offense" means:

(1) a juvenile petty offense;

(2) a petty misdemeanor; or

(3) any misdemeanor, other than a misdemeanor-level violation of Minnesota Statutes, sections 518B.01, subdivision 14, 588.20, 609.224, 609.2242, 609.324, 609.563, 609.576, 609.66, 609.72, 609.746, 609.748, subdivision 6, or 617.23, a major traffic offense, or an adult traffic offense, as defined in Minnesota Statutes, section 260.193.

(d) "Teen court" and "teen court program" mean an alternative procedure under which local law enforcement, county attorneys, schools, or probation agencies may divert from the juvenile court system a teen who allegedly has committed a minor offense, on condition that the teen voluntarily appears before and receives a disposition from a jury of the teen's peers and successfully completes the terms and conditions of the disposition. These programs also may be used by schools as alternatives to formal school disciplinary proceedings provided each program complies with the disciplinary policy in the school district in which it is established.

Journal of the House - 45th Day - Top of Page 2865

Subd. 2. [APPLICATION TO ESTABLISH TEEN COURT.] (a) Any group of two or more adult sponsors may apply to the office of strategic and long-range planning to establish a teen court. These sponsors must be affiliated with an agency, entity, or other organized program or group.

(b) An application to establish a teen court shall include:

(1) the names, addresses, and telephone numbers of two or more adult sponsors and a description of the entity, agency, or other organized program or group with which the adult sponsors are affiliated;

(2) the names, addresses, and telephone numbers of all teens who have signed letters of commitment to participate voluntarily as teen court members in the teen court program; and

(3) a certification from adult sponsors that adequate adult sponsorship exists and that there are a sufficient number of teen volunteers to make the functioning of the teen court feasible and meaningful; and

(4) except as provided in paragraph (c), a letter from the county attorney of the county in which the teen court is seeking to operate, authorizing the establishment of the teen court program consistent with Minnesota Statutes, section 388.24.

(c) Teen court programs that operate only as an alternative to school disciplinary proceedings do not need to provide the letter referred to in paragraph (b), clause (4).

Subd. 3. [REFERRAL TO TEEN COURT PROGRAM.] Once the teen court program has been established, it may receive referrals for eligible teens from local law enforcement, county attorneys, school officials, and probation agencies. The process of referral is to be established by the individual teen court programs, in coordination with other established teen court and pretrial diversion programs in the county or counties in which the teen court will operate. The referral process for teen court programs operating as alternatives to school disciplinary proceedings must be consistent with the disciplinary policy in the school district in which the program is established.

Subd. 4. [FEE.] The teen court program may require a teen to pay a nonrefundable fee to cover the costs of administering the program. This fee must be reduced or waived for a participant who does not have the ability to pay the fee.

Subd. 5. [TEEN COURT PROGRAM COMPONENTS.] (a) Prior to a teen's participation in the teen court program, a teen court sponsor or the referring source must:

(1) contact the victim, if any, of the offense, or make a good faith attempt to contact the victim, if any, and the victim must be advised that the victim may participate in the teen court proceedings; and

(2) at least seven days prior to the teen's participation in the program, provide to the county attorney of the teen's residence the teen's name, date of birth, and residential address and a description of the offense.

(b) Prior to a teen court's imposition of dispositions, it must establish a range of dispositional alternatives for offenses which is appropriate to the teen court's community. These dispositions may include the following:

(i) community service;

(ii) mandatory participation in appropriate counseling, appropriate treatment, law-related educational classes, or other educational programs;

(iii) a requirement that the teen defendant participate as a juror in future proceedings before the teen court;

(iv) restitution, where appropriate; and

(v) a fine, not to exceed the amount permitted in Minnesota Statutes, section 260.195. The fine permitted in Minnesota Statutes, section 260.185 may only be imposed for misdemeanor-level offenses.

Journal of the House - 45th Day - Top of Page 2866

The teen court does not have the power to place a teen outside the home.

(i) the teen acknowledges responsibility for the offense;

(ii) the teen voluntarily agrees to participate in the teen court program;

(iii) the judge of the teen court is a judge or an attorney admitted to practice law in the state of Minnesota;

(iv) the teen's parent or legal guardian accompanies the teen in all teen court proceedings;

(v) the county attorney does not notify the teen court prior to the teen's participation that the offense will be handled in juvenile court or in a pretrial diversion program established under section 388.24; and

(vi) the teen court program has established a training component for teen and adult volunteers.

(d) When a teen court operates as an alternative to a school disciplinary policy, the teen's parent or legal guardian must be notified of the teen's involvement in the program, according to the school district's disciplinary policy. The teen's parent or legal guardian does not need to accompany the teen in teen court proceedings.

(e) The teen court shall notify the referring source as soon as possible upon discovery that the teen has failed to comply with any part of the disposition imposed under paragraph (b). Either juvenile court proceedings or formal school disciplinary proceedings, where applicable, or both, may be commenced against a teen who fails to comply with the disposition under paragraph (b).

Subd. 6. [EVALUATION AND REPORTS.] (a) The results of all proceedings in teen court must be reported to the office of strategic and long-range planning on a form provided by the office of strategic and long-range planning. The teen court must submit the report to the office of strategic and long-range planning no later than July 15 for all activity during the first six months of the calendar year and by January 15 for all activity during the last six months of the preceding calendar year. A copy of this report also must be provided to the county attorney of the county in which the teen court operates. Each report must include the following:

(i) the number of cases handled by the teen court, including a breakdown of the number of cases from each referring agency;

(ii) a list of the offenses for which the teen court imposed a disposition, including a breakdown showing the number of teen court participants committing each type of offense;

(iii) a list of the dispositions imposed by the teen court, including a breakdown showing the number of times each particular disposition was imposed; and

(iv) information on the cases that were referred back to the referring agency under subdivision 5, paragraph (e).

(b) Each teen court shall report to the office of strategic and long-range planning by June 30 each year on its progress in achieving outcome measures and indicators. The report required by this paragraph must include an analysis of recidivism rates for teen court participants, based upon a method for measuring these rates as determined by the office of strategic and long-range planning.

(c) Five percent of the appropriation for the teen court program is allocated to the office of strategic and long-range planning to assist teen court programs in developing outcome measures and indicators. These outcome measures and indicators must be established before any teen court begins to impose dispositions and must allow for both evaluation of each teen court program and for statewide evaluation of the teen court program.

Journal of the House - 45th Day - Top of Page 2867

Subd. 7. [ADMINISTRATION.] Up to five percent of the appropriation for teen court programs may be retained by the office of strategic and long-range planning for administrative costs incurred in administering the program. The office of strategic and long-range planning has authority to administer funds to teen court programs that comply with this section. The office of strategic and long-range planning may receive and administer public and private funds for the purposes of this section.

Sec. 2. [EFFECTIVE DATE.]

Section 1, subdivisions 1 and 2, are effective the day following final enactment. Section 1, subdivisions 3 to 8, are effective July 1, 1997."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Rules and Legislative Administration.

The report was adopted.

Winter moved that the House recess subject to the call of the Chair. The motion prevailed.

RECESS

RECONVENED

The House reconvened and was called to order by the Speaker.

Delmont was excused between the hours of 3:00 p.m. and 4:20 p.m.

REPORTS OF STANDING COMMITTEES, Continued

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

H. F. No. 300, A bill for an act relating to retirement; police state aid; revising various police state aid provisions to fully implement intended 1996 modifications; appropriating money as 1996 police state aid; ratifying the calculation of certain 1996 police state aid amounts; modifying various fire state aid provisions; amending Minnesota Statutes 1996, sections 69.021, subdivisions 4, 5, 6, 7a, 8, 9, 10, and 11; and 69.031, subdivisions 1, 3, and 5.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1996, section 69.021, subdivision 4, is amended to read:

Subd. 4. [DETERMINATION OF QUALIFIED STATE AID RECIPIENTS; CERTIFICATION TO COMMISSIONER OF ~~REVENUE~~ FINANCE.] (a) The commissioner shall determine which municipalities and independent nonprofit firefighting corporations are qualified to receive fire state aid and which municipalities and counties are qualified to receive police state ~~peace officer~~ aid.

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(b) The commissioner shall determine qualification for state aid upon receipt of:

(1) the fire department personnel and equipment certification or the police department and qualified peace officers certificate, whichever ~~is applicable~~ applies, required under section 69.011,;

(2) the financial compliance report required under section 6.495, subdivision 3, if applicable; and

(3) any other relevant information which comes to the attention of the commissioner.

(c) Upon completion of the determination, on or before October 1, the commissioner shall calculate ~~under subdivision 6~~ the amount of ~~(a) state peace officer~~:

(1) the police state aid which each county or municipality is to receive under subdivisions 5, 6, 7a, and 10; and

~~(b)~~ (2) the fire state aid which each municipality or nonprofit firefighting corporation is to receive under subdivisions 5 and 7.

(d) The commissioner shall certify to the commissioner of finance the name of each county or municipality, and the amount of state aid which each county or municipality is to receive, in the case of police state ~~peace officer~~ aid~~; and~~. The commissioner shall certify to the commissioner of finance the name of each municipality or independent nonprofit firefighting corporation and the amount of state aid which each municipality or independent nonprofit firefighting corporation is to receive, in the case of fire state aid.

Sec. 2. Minnesota Statutes 1996, section 69.021, subdivision 5, is amended to read:

Subd. 5. [CALCULATION OF STATE AID.] (a) The amount of fire state aid available for apportionment ~~shall be~~, before the addition of the minimum fire state aid allocation amount under subdivision 7, is equal to 107 percent of the amount of premium taxes paid to the state upon the fire, lightning, sprinkler leakage, and extended coverage premiums reported to the commissioner by insurers on the Minnesota Firetown Premium Report. This amount shall be reduced by the amount required to pay the state auditor's costs and expenses of the audits or exams of the firefighters relief associations.

(b) The total amount for apportionment in respect to peace officer state aid is equal to 104 percent of the amount of premium taxes paid to the state upon the premiums reported to the commissioner by insurers on the Minnesota Aid to Police Premium Report, plus the payment amounts received under section 60A.152 since the last aid apportionment, and reduced by the amount required to pay the state auditor's costs and expenses of the audits or exams of the police relief associations. The total amount for apportionment in respect to ~~firefighters~~ fire state aid ~~shall~~ must not be less than two percent of the premiums reported to the commissioner by insurers on the Minnesota Firetown Premium Report after subtracting the following amounts:

(1) the amount required to pay the state auditor's costs and expenses of the audits or exams of the firefighters relief associations,; and

(2) one percent of the premiums reported by town and farmers' mutual insurance companies and mutual property and casualty companies with total assets of $5,000,000 or less.

(b) The total amount for apportionment as police state aid is equal to 104 percent of the amount of premium taxes paid to the state on the premiums reported to the commissioner by insurers on the Minnesota Aid to Police Premium Report, plus the payment amounts received under section 60A.152 since the last aid apportionment, and reduced by the amount required to pay the costs and expenses of the state auditor for audits or exams of police relief associations. The total amount for apportionment in respect to the police state aid program ~~shall~~ must not be less than two percent of the amount of premiums reported to the commissioner by insurers on the Minnesota Aid to Police Premium Report after subtracting the amount required to pay the state auditor's cost and expenses of the audits or exams of the police relief associations.

(c) The commissioner shall calculate the percentage of increase or decrease reflected in the apportionment over or under the previous year's available state aid using the same premiums as a basis for comparison.

Journal of the House - 45th Day - Top of Page 2869

Sec. 3. Minnesota Statutes 1996, section 69.021, subdivision 6, is amended to read:

Subd. 6. [CALCULATION OF APPORTIONMENT OF POLICE STATE ~~PEACE OFFICERS~~ AID TO COUNTIES.] The ~~peace officers~~ police state aid available ~~shall~~ must be distributed to the counties in proportion to the relationship that the total number of active peace officers, as defined in section 69.011, subdivision 1, clause (g), in each county who are employed either by municipalities maintaining police departments or by the county, bears to the total number of peace officers employed by all municipalities and counties, subject to any reduction under subdivision 10. Any necessary additional adjustments shall be made to subsequent apportionments.

Sec. 4. Minnesota Statutes 1996, section 69.021, subdivision 7a, is amended to read:

Subd. 7a. [APPORTIONMENT OF POLICE STATE AID.] ~~(a)~~ Subject to the reduction provided for under subdivision 10, the commissioner shall apportion the police state ~~peace officer~~ aid to each municipality and to the county in the following manner:

(1) for all municipalities maintaining police departments and the county, the state aid must be distributed in proportion to the relationship that the total number of peace officers, as determined under section 69.011, subdivision 1, clause (g), and subdivision 2, clause (b), employed by ~~each~~ that municipality ~~and by the~~ or county for 12 calendar months and the proportional or fractional number who were employed less than 12 months bears to the total number of peace officers employed by all municipalities and counties subject to any reduction under subdivision 10;

(2) for each municipality which contracts with the county for police service, a proportionate amount of the state aid distributed to the county based on the full-time equivalent number of peace officers providing contract service to that municipality must be credited against the municipality's contract obligation; and

(3) for each municipality which contracts with another municipality for police service, a proportionate amount of the state aid distributed to the municipality providing contract service based on the full-time equivalent number of peace officers providing contract service to that municipality on a full-time equivalent basis must be credited against the contract obligation of the municipality receiving contract service.

(b) No municipality entitled to receive state peace officer aid may be apportioned less state peace officer aid for any year under Laws 1976, chapter 315, than the amount which was apportioned to it for calendar year 1975 based on premiums reported to the commissioner for calendar year 1974; provided, the amount of state peace officer aid to other municipalities within the county and to the county must be adjusted in proportion to the total number of peace officers in the municipalities and the county, so that the amount of state peace officer aid apportioned does not exceed the amount of state peace officer aid available for apportionment.

Sec. 5. Minnesota Statutes 1996, section 69.021, subdivision 8, is amended to read:

Subd. 8. [POPULATION AND MARKET VALUE.] In computations relating to fire state aid requiring the use of population figures, only official statewide federal census figures are to be used. Increases or decreases in population disclosed by reason of any special census ~~shall~~ must not be taken into consideration.

In calculations relating to fire state aid requiring the use of market value property figures, only the latest available market value property figures ~~are to~~ may be used.

Sec. 6. Minnesota Statutes 1996, section 69.021, subdivision 9, is amended to read:

Subd. 9. [APPEAL.] In the event that any municipality, county, fire relief association, or police ~~department~~ relief association feels itself to be aggrieved, it may request the commissioner to review and adjust the apportionment of funds within the county in the case of police state ~~peace officer~~ aid, ~~and~~ or within the state in the case of fire state aid~~, and~~. The decision of the commissioner ~~shall be~~ is subject to appeal, review, and adjustment by the district court in the county in which the applicable fire or police department is located.

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Sec. 7. Minnesota Statutes 1996, section 69.021, subdivision 10, is amended to read:

Subd. 10. [REDUCTION IN POLICE STATE AID APPORTIONMENT.] (a) The commissioner of revenue shall reduce the apportionment of police state aid under subdivisions 5, paragraph (b), 6, and 7 7a, for eligible employer units by any excess police state aid.

(b) "Excess police state aid" is:

(1) for counties and for municipalities in which police retirement coverage is provided wholly by the public employees police and fire fund and all police officers are members of the plan governed by sections 353.63 to 353.657, the amount in excess of the employer's total prior calendar year obligation ~~under section 353.65,~~ as defined in paragraph (c), as certified by the executive director of the public employees retirement association.;

(2) for municipalities in which police retirement coverage is provided in part by the public employees police and fire fund governed by sections 353.63 to 353.657 and in part by a local police consolidation account governed by chapter 353A, the amount in excess of the employer's total prior calendar year obligation as defined in paragraph (c), as certified by the executive director of the public employees retirement association;

(3) for municipalities in which police retirement coverage is provided in part by the public employees police and fire fund governed by sections 353.63 to 353.657 and in part by a local police relief association governed by sections 69.77 and 423A.01, the amount in excess of the employer's total prior calendar year obligation as defined in paragraph (c), as certified by the executive director of the public employees retirement association, plus the amount of the financial requirements of the relief association certified to the applicable municipality during the prior calendar year under section 69.77, subdivisions 2b and 2c, reduced by the amount of member contributions deducted from the covered salary of the relief association during the prior calendar year under section 69.77, subdivision 2a, as certified by the chief administrative officer of the applicable municipality; and

(4) for the metropolitan airports commission, if there are police officers hired before July 1, 1978, with retirement coverage by the Minneapolis employees retirement fund remaining, the amount in excess of the commission's total prior calendar year obligation as defined in paragraph (c), as certified by the executive director of the public employees retirement association, plus the amount determined by expressing the commission's total prior calendar year contribution to the Minneapolis employees retirement fund under section 422A.101, subdivisions 2 and 2a, as a percentage of the commission's total prior calendar year covered payroll for commission employees covered by the Minneapolis employees retirement fund and applying that percentage to the commission's total prior calendar year covered payroll for commission police officers covered by the Minneapolis employees retirement fund, as certified by the chief administrative officer of the metropolitan airports commission.

(c) The employer's total prior calendar year obligation with respect to the public employees police and fire plan is the total prior calendar year obligation under section 353.65, subdivision 3, for police officers as defined in section 353.64, subdivision 2, and the actual total prior calendar year obligation under section 353.65, subdivision 3, for firefighters, as defined in section 353.64, subdivision 3, but not to exceed for those firefighters the applicable following amount:

municipality maximum amount

Albert Lea $54,157.01

Anoka 10,399.31

Apple Valley 5,442.44

Austin 49,864.73

Bemidji 27,671.38

Brooklyn Center 6,605.92

Brooklyn Park 24,002.26

Burnsville 15,956.00

Cloquet 4,260.49

Coon Rapids 39,920.00

Cottage Grove 8,588.48

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Crystal 5,855.00

East Grand Forks 51,009.88

Edina 32,251.00

Elk River 5,216.55

Ely 13,584.16

Eveleth 16,288.27

Fergus Falls 6,742.00

Fridley 33,420.64

Golden Valley 11,744.61

Hastings 16,561.00

Hopkins 4,324.23

International Falls 14,400.69

Lakeville 782.35

Lino Lakes 5,324.00

Little Falls 7,889.41

Maple Grove 6,707.54

Maplewood 8,476.69

Minnetonka 10,403.00

Montevideo 1,307.66

Moorhead 68,069.26

New Hope 6,739.72

North St. Paul 4,241.14

Northfield 770.63

Owatonna 37,292.67

Plymouth 6,754.71

Red Wing 3,504.01

Richfield 53,757.96

Rosemount 1,712.55

Roseville 9,854.51

St. Anthony 33,055.00

St. Louis Park 53,643.11

Thief River Falls 28,365.04

Virginia 31,164.46

Waseca 11,135.17

West St. Paul 15,707.20

White Bear Lake 6,521.04

Woodbury 3,613.00.

(d) The total ~~shall~~ amount of excess police state aid must be deposited in ~~a separate~~ the excess police state-aid account in the general fund, administered and distributed as provided in subdivision 11.

Sec. 8. Minnesota Statutes 1996, section 69.021, subdivision 11, is amended to read:

Subd. 11. [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a) An The excess police state-aid holding account is established in the general fund. The excess police state-aid holding account must be administered by the commissioner.

(b) Excess police state aid determined according to ~~section 69.021,~~ subdivision 10, must be deposited in the excess police state-aid holding account.

(c) From the balance in the excess police state-aid holding account, $1,000,000 is appropriated to and must be transferred annually to the ambulance service personnel longevity award and incentive suspense account established by section 144C.03, subdivision 2.

(d) If a police officer stress reduction program is created by law and money is appropriated for that program, an amount equal to that appropriation must be transferred from the balance in the excess police state-aid holding account.

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(e) On October 1, 1997, and annually on each subsequent October 1, one-half of the balance of the excess police state-aid holding account remaining after the deductions under paragraphs (c) and (d) is appropriated for additional amortization aid under section 423A.02, subdivision 1b.

(f) Annually, the remaining balance in the excess police state-aid holding account, after the deductions under paragraphs (c), (d), and (e), cancels to the general fund.

Sec. 9. Minnesota Statutes 1996, section 69.031, subdivision 1, is amended to read:

Subdivision 1. [COMMISSIONER OF FINANCE'S WARRANT.] The commissioner of finance shall issue to the county, municipality, or independent nonprofit firefighting corporation certified to the commissioner of finance by the commissioner a warrant for an amount equal to the amount of fire state aid or police state aid, whichever applies, certified to for the applicable state aid recipient by the commissioner ~~pursuant to~~ under section 69.021. The amount of state aid due and not paid by October 1 accrues interest at the rate of one percent for each month or part of a month the amount remains unpaid, beginning the preceding July 1.

Sec. 10. Minnesota Statutes 1996, section 69.031, subdivision 3, is amended to read:

Subd. 3. [APPROPRIATIONS.] There is hereby appropriated annually from the state general fund to the commissioner of ~~revenue~~ finance an amount sufficient to make the police and fire state aid payments specified in this section and section 69.021.

Sec. 11. Minnesota Statutes 1996, section 69.031, subdivision 5, is amended to read:

Subd. 5. [DEPOSIT OF STATE AID.] ~~(1)~~ (a) The municipal treasurer, ~~on receiving the fire state aid,~~ shall, within 30 days after receipt, transmit it the fire state aid to the treasurer of the duly incorporated firefighters' relief association if there is one organized and the association has filed a financial report with the municipality~~; but~~. If the relief association has not filed a financial report with the municipality, the municipal treasurer shall delay transmission of the fire state aid to the relief association until the complete financial report is filed. If there is no relief association organized, or if ~~any~~ the association ~~dissolve, be removed, or~~ has ~~heretofore~~ dissolved, or has been removed as trustees of state aid, then the treasurer of the municipality shall ~~keep~~ deposit the money in the municipal treasury as provided for in section 424A.08 and ~~shall~~ the money may be disbursed only for the purposes and in the manner set forth in that section.

~~(2)~~ (b) The municipal treasurer, upon receipt of the police state aid, shall disburse the police state aid in the following manner:

~~(a)~~ (1) For a municipality in which a local police relief association exists and all peace officers are members of the association, the total state aid ~~shall~~ must be transmitted to the treasurer of the relief association within 30 days of the date of receipt, and the treasurer of the relief association shall immediately deposit the total state aid in the special fund of the relief association;

~~(b)~~ (2) For a municipality in which police retirement coverage is provided by the public employees police and fire fund and all peace officers are members of the fund, the total state aid ~~shall~~ must be applied toward the municipality's employer contribution to the public employees police and fire fund ~~pursuant~~ under to section 353.65, subdivision 3; or

~~(c)~~ (3) For a municipality other than a city of the first class with a population of more than 300,000 in which both a police relief association exists and police retirement coverage is provided in part by the public employees police and fire fund, the municipality may elect at its option to transmit the total state aid to the treasurer of the relief association as provided in clause ~~(a)~~ (1), to use the total state aid to apply toward the municipality's employer contribution to the public employees police and fire fund subject to all the provisions set forth in clause ~~(b)~~ (2), or to allot the total state aid proportionately to be transmitted to the police relief association as provided in this subdivision and to apply toward the municipality's employer contribution to the public employees police and fire fund subject to the provisions of clause ~~(b)~~ (2) on the basis of the respective number of active full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).

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For a city of the first class with a population of more than 300,000, in addition, the city may elect to allot the appropriate portion of the total police state aid to apply toward the employer contribution of the city to the public employees police and fire fund based on the covered salary of police officers covered by the fund each payroll period and to transmit the balance to the police relief association.; or

(4) For a municipality in which police retirement coverage is provided in part by the public employees police and fire fund and in part by a local police consolidation account governed by chapter 353A, the total police state aid must be applied toward the municipality's total employer contribution to the public employees police and fire fund and to the local police consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.

~~(3)~~ (c) The county treasurer, upon receipt of the police state aid for the county, shall apply the total state aid toward the county's employer contribution to the public employees police and fire fund ~~pursuant to~~ under section 353.65, subdivision 3.

~~(4)~~ (d) The designated metropolitan airports commission official, upon receipt of the police state aid for the metropolitan airports commission, shall apply the total police state aid first toward the commission's employer contribution for police officers to the Minneapolis employees retirement fund under section 422A.101, subdivision 2a, and, if there is any amount of police state aid remaining, shall apply that remainder toward the commission's employer contribution for police officers to the public employees police and fire plan under section 353.65, subdivision 3.

Sec. 12. [EFFECTIVE DATE.]

Sections 1 to 11 are effective the day following final enactment."

Amend the title as follows:

Page 1, line 2, after "police" insert "and fire"

Page 1, line 4, delete "as"

Page 1, delete line 5

Page 1, line 6, delete everything before the semicolon

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Rules and Legislative Administration.

The report was adopted.

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

H. F. No. 647, A bill for an act relating to retirement; increasing pension benefit accrual rates; adjusting financing for pension plans; adding supplemental financial conditions information for pension funds; authorizing defined contribution early retirement options; reducing appropriations; modifying homestead and agricultural credit aid; appropriating money; amending Minnesota Statutes 1996, sections 3A.02, subdivisions 1 and 4; 3A.07; 11A.18, subdivision 9; 273.1398, by adding a subdivision; 352.01, subdivision 25; 352.04, subdivisions 2 and 3; 352.115, subdivision 3; 352.72, subdivision 2; 352.92, subdivisions 1 and 2; 352.93, subdivisions 2, 3, and by adding a subdivision; 352.95, subdivisions 1 and 5; 352B.02, subdivisions 1a and 1c; 352B.08, subdivisions 2 and 2a; 352B.10, subdivision 1; 352B.30, by adding a subdivision; 352C.031, subdivision 4; 352C.033; 353.01, subdivision 37; 353.27, subdivisions 2 and 3a; 353.29, subdivision 3; 353.651, subdivision 3; 353.656, subdivision 1; 353.71, subdivision 2; 353A.08, subdivision 1; 353A.083, by adding a subdivision; 353C.06, subdivisions 3, 4, and by adding a subdivision; 353C.08, subdivision 1; 353C.09; 354.05, subdivision 38; 354.42, subdivisions 2, 3, and 5; 354.44, subdivision 6; 354.53, subdivision 1; 354.55, subdivision 11; 354A.011, subdivision 15a; 354A.12, subdivisions 1, 2a, 3a, and 3c; 354A.31, subdivisions 4 and 4a; 356.215, subdivisions 1 and 4d; 356.25; 356.30, subdivision 1; 356.88, by adding a subdivision; 423B.01, subdivision 9; 423B.06,

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by adding a subdivision; 423B.07; 423B.09, subdivision 1, and by adding a subdivision; 423B.10, subdivision 1; 423B.15, subdivisions 2, 3, and 6; and 490.124, subdivision 1; Laws 1965, chapter 519, section 1, as amended; Laws 1989, chapter 319, article 19, section 7, subdivisions 1, as amended, 3, 4, as amended, and 7; and Laws 1993, chapter 125, article 1, section 1; proposing coding for new law in Minnesota Statutes, chapters 124A; 352; 352C; and 356; proposing coding for new law as Minnesota Statutes, chapter 352E; repealing Minnesota Statutes 1996, sections 354A.12, subdivision 2b; 356.70; and 356.88, subdivision 2.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"ARTICLE 1

PENSION UNIFORMITY PROVISIONS

Section 1. Minnesota Statutes 1996, section 3.85, subdivision 11, is amended to read:

Subd. 11. [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The commission shall contract with an established actuarial consulting firm to conduct annual actuarial valuations for the retirement plans named in paragraph (b). The contract must include provisions for performing cost analyses of proposals for changes in benefit and funding policies.

(b) The contract for actuarial valuation must include the following retirement plans:

(1) the teachers retirement plan, teachers retirement association;

(2) the general state employees retirement plan, Minnesota state retirement system;

(3) the correctional employees retirement plan, Minnesota state retirement system;

(4) the state patrol retirement plan, Minnesota state retirement system;

(5) the judges retirement plan, Minnesota state retirement system;

(6) the Minneapolis employees retirement plan, Minneapolis employees retirement fund;

(7) the public employees retirement plan, public employees retirement association;

(8) the public employees police and fire plan, public employees retirement association;

(9) the Duluth teachers retirement plan, Duluth teachers retirement fund association;

(10) the Minneapolis teachers retirement plan, Minneapolis teachers retirement fund association;

(11) the St. Paul teachers retirement plan, St. Paul teachers retirement fund association;

(12) the legislators retirement plan, Minnesota state retirement system; and

(13) the elective state officers retirement plan, Minnesota state retirement system~~; and~~

~~(14) the public employees local government correctional service retirement plan, public employees retirement association, if there are any participants in that plan~~.

(c) The contract must specify completion of annual actuarial valuation calculations on a fiscal year basis with their contents as specified in section 356.215, and the standards for actuarial work adopted by the commission.

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The contract must specify completion of annual experience data collection and processing and a quadrennial published experience study for the plans listed in paragraph (b), clauses (1), (2), and (7), as provided for in the standards for actuarial work adopted by the commission. The experience data collection, processing, and analysis must evaluate the following:

(1) individual salary progression;

(2) rate of return on investments based on current asset value;

(3) payroll growth;

(4) mortality;

(5) retirement age;

(6) withdrawal; and

(7) disablement.

(d) The actuary retained by the commission shall annually prepare a report to the legislature, including the commentary on the actuarial valuation calculations for the plans named in paragraph (b) and summarizing the results of the actuarial valuation calculations. The commission-retained actuary shall include with the report the actuary's recommendations concerning the appropriateness of the support rates to achieve proper funding of the retirement funds by the required funding dates. The commission-retained actuary shall, as part of the quadrennial published experience study, include recommendations to the legislature on the appropriateness of the actuarial valuation assumptions required for evaluation in the study.

(e) If the actuarial gain and loss analysis in the actuarial valuation calculations indicates a persistent pattern of sizable gains or losses, as directed by the commission, the actuary retained by the commission shall prepare a special experience study for a plan listed in paragraph (b), clause (3), (4), (5), (6), (8), (9), (10), (11), (12), or (13), ~~or (14),~~ in the manner provided for in the standards for actuarial work adopted by the commission.

(f) The term of the contract between the commission and the actuary retained by the commission is two years, plus not to exceed two one-year extensions before competitive bidding. The contract is subject to competitive bidding procedures as specified by the commission.

Sec. 2. Minnesota Statutes 1996, section 3.85, subdivision 12, is amended to read:

Subd. 12. [ALLOCATION OF ACTUARIAL COST.] (a) The commission shall assess each retirement plan specified in subdivision 11, paragraph (b), the compensation paid to the actuary retained by the commission for the actuarial valuation calculations, quadrennial projection valuations, and quadrennial experience studies. The assessment is 100 percent of the amount of contract compensation for the actuarial consulting firm retained by the commission for actuarial valuation calculations, including the public employees police and fire plan consolidation accounts of the public employees retirement association, annual experience data collection and processing, and quadrennial experience studies.

The portion of the total assessment payable by each retirement system or pension plan must be determined as follows:

(1) Each pension plan specified in subdivision 11, paragraph (b), clauses (1) to ~~(14)~~ (13), must pay the following indexed amount based on its total active, deferred, inactive, and benefit recipient membership:

up to 2,000 members, inclusive$2.55 per member

2,001 through 10,000 members$1.13 per member

over 10,000 members $0.11 per member

The amount specified is applicable for the assessment of the July 1, 1991, to June 30, 1992, fiscal year actuarial compensation amounts. For the July 1, 1992, to June 30, 1993, fiscal year and subsequent fiscal year actuarial compensation amounts, the amount specified must be increased at the same percentage increase rate as the implicit price deflator for state

Journal of the House - 45th Day - Top of Page 2876

and local government purchases of goods and services for the 12-month period ending with the first quarter of the calendar year following the completion date for the actuarial valuation calculations, as published by the federal Department of Commerce, and rounded upward to the nearest full cent.

(2) The total per-member portion of the allocation must be determined, and that total per-member amount must be subtracted from the total amount for allocation. Of the remainder dollar amount, the following per-retirement system and per-pension plan charges must be determined and the charges must be paid by the system or plan:

(i) 37.87 percent is the total additional per-retirement system charge, of which one-seventh must be paid by each retirement system specified in subdivision 11, paragraph (b), clauses (1), (2), (6), (7), (9), (10), and (11).

(ii) 62.13 percent is the total additional per-pension plan charge, of which one-thirteenth must be paid by each pension plan specified in subdivision 11, paragraph (b), clauses (1) to (13), if there are not any participants in the plan specified in subdivision 11, paragraph (b), clause (14), or of which one-fourteenth must be paid by each pension plan specified in subdivision 11, paragraph (b), clauses (1) to (14), if there are participants in the plan specified in subdivision 11, paragraph (b), clause (14).

(b) The assessment must be made following the completion of the actuarial valuation calculations and the experience analysis. The amount of the assessment is appropriated from the retirement fund applicable to the retirement plan. Receipts from assessments must be deposited in the state treasury and credited to the general fund.

Sec. 3. Minnesota Statutes 1996, section 3A.02, subdivision 1, is amended to read:

Subdivision 1. [QUALIFICATIONS.] (a) A former legislator is entitled, upon written application to the director, to receive a retirement allowance monthly, if the person:

(1) has served at least six full years, without regard to the application of section 3A.10, subdivision 2, or has served during all or part of four regular sessions as a member of the legislature, which service need not be continuous;

(2) has attained the normal retirement age;

(3) has retired as a member of the legislature; and

(4) has made all contributions provided for in section 3A.03, has made payments for past service under subdivision 2, or has made payments in lieu of contributions under Minnesota Statutes 1992, section 3A.031, prior to July 1, 1994.

(b) This paragraph applies to members of the legislature who terminate service as a legislator before July 1, 1997. For service rendered before the beginning of the 1979 legislative session, but not to exceed eight years of service, the retirement allowance is an amount equal to five percent per year of service of that member's average monthly salary. For service in excess of eight years rendered before the beginning of the 1979 legislative session, and for service rendered after the beginning of the 1979 legislative session, the retirement allowance is an amount equal to 2-1/2 percent per year of service of that member's average monthly salary.

(c) This paragraph applies to members of the legislature who terminate service as a legislator after June 30, 1997. The retirement allowance is an amount equal to the applicable rate or rates under paragraph (b) per year of service of the member's average monthly salary adjusted for that person on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent. The adjustment must be calculated by or, alternatively, the adjustment procedure must be specified by, the actuary retained by the legislative commission on pensions and retirement.

(d) The retirement allowance accrues beginning with the first day of the month of receipt of the application, but not before age 60, and for the remainder of the former legislator's life, if the former legislator is not serving as a member of the legislature or as a constitutional officer or commissioner as defined in section 352C.021, subdivisions 2 and 3. The annuity ~~shall~~ does not begin to accrue prior to retirement as a legislator. No annuity payment ~~shall~~ may be made retroactive for more than 180 days before the date the annuity application is filed with the director.

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~~(d)~~ (e) Any member who has served during all or part of four regular sessions is considered to have served eight years as a member of the legislature.

~~(e)~~ (f) The retirement allowance ceases with the last payment that accrued to the retired legislator during the retired legislator's lifetime, except that the surviving spouse, if any, is entitled to the retirement allowance for the calendar month in which the retired legislator died.

Sec. 4. Minnesota Statutes 1996, section 3A.02, subdivision 4, is amended to read:

Subd. 4. [DEFERRED ANNUITIES AUGMENTATION.] (a) The deferred annuity of any former legislator ~~shall~~ must be augmented as provided herein. The required reserves applicable to the deferred annuity, determined as of the date the benefit begins to accrue using an appropriate mortality table and an interest assumption of ~~five~~ six percent, ~~shall~~ must be augmented from the first of the month following termination of service, or July 1, 1973, whichever is later, to the first day of the month in which the annuity begins to accrue, at the rate of five percent per annum compounded annually until January 1, 1981, and thereafter at the rate of three percent per annum compounded annually until January 1 of the year in which the former legislator attains age 55. From that date to the effective date of retirement, the rate is five percent compounded annually.

(b) The retirement allowance of, or the survivor benefit payable on behalf of, a former member of the legislature who terminated service before July 1, 1997, which is not first payable until after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent under a calculation procedure and tables adopted by the board of directors of the Minnesota state retirement system and approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 5. Minnesota Statutes 1996, section 11A.18, subdivision 9, is amended to read:

Subd. 9. [CALCULATION OF POSTRETIREMENT ADJUSTMENT.] (a) Annually, following June 30, the state board shall use the procedures in paragraphs (b), (c), and (d) to determine whether a postretirement adjustment is payable and to determine the amount of any postretirement adjustment.

(b) If the Consumer Price Index for urban wage earners and clerical workers all items index published by the Bureau of Labor Statistics of the United States Department of Labor increases from June 30 of the preceding year to June 30 of the current year, the state board shall certify the percentage increase. The amount certified ~~may~~ must not exceed the lesser of the difference between the preretirement interest assumption and postretirement interest assumption in section 356.215, subdivision 4d, paragraph (a), or ~~3.5~~ 2.5 percent. For the Minneapolis employees retirement fund, the amount certified must not exceed 3.5 percent.

(c) In addition to any percentage increase certified under paragraph (b), the board shall use the following procedures to determine if a postretirement adjustment is payable under this paragraph:

(1) The state board shall determine the market value of the fund on June 30 of that year;

(2) The amount of reserves required for the annuity or benefit payable to an annuitant and benefit recipient of the participating public pension plans or funds ~~shall~~ must be determined by the commission-retained actuary as of the current June 30. An annuitant or benefit recipient who has been receiving an annuity or benefit for at least 12 full months as of the current June 30 is eligible to receive a full postretirement adjustment. An annuitant or benefit recipient who has been receiving an annuity or benefit for at least one full month, but less than 12 full months as of the current June 30, is eligible to receive a partial postretirement adjustment. Each fund shall report separately the amount of the reserves for those annuitants and benefit recipients who are eligible to receive a full postretirement benefit adjustment. This amount is known as "eligible reserves." Each fund shall also report separately the amount of the reserves for those annuitants and benefit recipients who are not eligible to receive a postretirement adjustment. This amount is known as "noneligible reserves." For an annuitant or benefit recipient who is eligible to receive a partial postretirement adjustment, each fund shall report separately as additional "eligible reserves" an amount that bears the same ratio to the total reserves required for the annuitant or benefit recipient as the number of full months of annuity or benefit receipt as of the current June 30 bears to 12 full

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months. The remainder of the annuitant's or benefit recipient's reserves ~~shall~~ must be separately reported as additional "noneligible reserves." The amount of "eligible" and "noneligible" required reserves ~~shall~~ must be certified to the board by the commission-retained actuary as soon as is practical following the current June 30;

(3) The state board shall determine the percentage increase certified under paragraph (b) multiplied by the eligible required reserves, as adjusted for mortality gains and losses under subdivision 11, determined under clause (2);

(4) The state board shall add the amount of reserves required for the annuities or benefits payable to annuitants and benefit recipients of the participating public pension plans or funds as of the current June 30 to the amount determined under clause (3);

(5) The state board shall subtract the amount determined under clause (4) from the market value of the fund determined under clause (1);

(6) The state board shall adjust the amount determined under clause (5) by the cumulative current balance determined pursuant to clause (8) and any negative balance carried forward under clause (9);

(7) A positive amount resulting from the calculations in clauses (1) to (6) is the excess market value. A negative amount is the negative balance;

(8) The state board shall allocate one-fifth of the excess market value or one-fifth of the negative balance to each of five consecutive years, beginning with the fiscal year ending the current June 30; and

(9) To calculate the postretirement adjustment under this paragraph based on investment performance for a fiscal year, the state board shall add together all excess market value allocated to that year and subtract from the sum all negative balances allocated to that year. If this calculation results in a negative number, the entire negative balance must be carried forward and allocated to the next year. If the resulting amount is positive, a postretirement adjustment is payable under this paragraph. The board shall express a positive amount as a percentage of the total eligible required reserves certified to the board under clause (2).

(d) The state board shall determine the amount of any postretirement adjustment which is payable using the following procedure:

(1) The total "eligible" required reserves as of the first of January next following the end of the fiscal year for the annuitants and benefit recipients eligible to receive a full or partial postretirement adjustment as determined by clause (2) ~~shall~~ must be certified to the state board by the commission-retained actuary. The total "eligible" required reserves ~~shall~~ must be determined by the commission-retained actuary on the assumption that all annuitants and benefit recipients eligible to receive a full or partial postretirement adjustment will be alive on the January 1 in question; and

(2) The state board shall add the percentage certified under paragraph (b) to any positive percentage calculated under paragraph (c). The board shall not subtract from the percentage certified under paragraph (b) any negative amount calculated under paragraph (c). The sum of these percentages ~~shall~~ must be carried to five decimal places and ~~shall~~ must be certified to each participating public pension fund or plan as the full postretirement adjustment percentage.

(e) A retirement annuity payable in the event of retirement before becoming eligible for social security benefits as provided in section 352.116, subdivision 3; 353.29, subdivision 6; or 354.35 must be treated as the sum of a period certain retirement annuity and a life retirement annuity for the purposes of any postretirement adjustment. The period certain retirement annuity plus the life retirement annuity ~~shall~~ must be the annuity amount payable until age 62 or 65, whichever applies. A postretirement adjustment granted on the period certain retirement annuity must terminate when the period certain retirement annuity terminates.

Sec. 6. [124.2141] [AID ADJUSTMENTS DUE TO CHANGES IN EMPLOYER RETIREMENT CONTRIBUTION RATES.]

Subdivision 1. [AID ADJUSTMENT.] Beginning in fiscal year 1998 and each year thereafter, the commissioner of children, families, and learning shall adjust state aid payments to school operating funds for independent school district No. 625, independent school district No. 709 and special school district No. 1, by the net amount of clauses (1) and

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(2) and for all other districts, including charter schools, but excluding any education organizations that are prohibited from receiving direct state aids under section 124.193 or 124.32, subdivision 12, by the net amount of clauses (1), (2) and (3):

(1) a decrease equal to each district's share of the fiscal year 1997 adjustment effected under Minnesota Statutes 1996, section 124.2139;

(2) an increase equal to one percent of the salaries paid to members of the general plan of the public employees retirement association in fiscal year 1997, multiplied by 0.35 for fiscal year 1998 and 0.70 each year thereafter;

(3) a decrease equal to 2.34 percent of the salaries paid to members of the teachers retirement association in fiscal year 1997.

Subd. 2. [APPROPRIATION AND ESTIMATED NET SAVINGS.] The amounts necessary to pay any positive net adjustments under this section to any school district are appropriated annually from the general fund to the commissioner of children, families, and learning. The estimated net general fund savings under this section is $29,819,000 in fiscal year 1998, and $26,997,000 in each fiscal year thereafter.

Subd. 3. [LIMITS ON ADJUSTMENTS AND POTENTIAL REDUCTIONS.] Increases to any school districts under subdivision 1, clause (2), and decreases under subdivision 1, clauses (1) and (3), are limited to the fiscal year 1999 amounts. The commissioner of children, families, and learning may permanently reduce the adjustments to school districts under subdivision 1, clauses (1) and (2), in the same manner as prescribed for nonschool jurisdictions under section 273.13985, subdivision 2. The commissioner may, from time to time, require that the most recent fiscal year payroll information be certified by the executive director of the teachers retirement association. For any school district where the newly certified teachers retirement association payroll is significantly lower than the fiscal 1997 amount as determined by the commissioner, the commissioner shall recalculate the lower reduction under subdivision 1, clause (3), and shall permanently reduce the adjustment amount in subsequent years.

Subd. 4. [EFFECT OF REORGANIZATIONS.] The commissioner of children, families, and learning shall reapportion the aid adjustments to school districts under this section to account for significant changes in boundaries or consolidations, as determined by the commissioner. If a school district is dissolved, or a school district function thereof is assumed by either the state or a nonpublic organization, adjustments for all or the appropriate fraction of the total payroll under this section must terminate.

Subd. 5. [ADJUSTMENT TERMINATION.] All adjustments under this section terminate on June 30, 2020.

Sec. 7. [273.13985] [AID FOR PUBLIC EMPLOYEES RETIREMENT ASSOCIATION EMPLOYER CONTRIBUTION RATE INCREASE.]

Subdivision 1. [AID TO OFFSET RATE INCREASE.] Beginning with the December 26, 1997, payment, and according to the schedule for payment of local aid under section 477A.015 thereafter, the commissioner of revenue shall pay to each city, county, town, and other nonschool jurisdiction an amount equal to 0.35 percent of the fiscal year 1997 payroll for employees who were members of the general plan of the public employees retirement association. Except for the December 1997 distribution under this section, the amount of aid must be certified before September 1 of the year preceding the distribution year to the affected local government. The executive director of the public employees retirement association shall certify the general plan fiscal year covered payroll and other information requested by the commissioner of revenue, on or before August 1, 1997, and in subsequent years where necessary, in order to facilitate administration of this section. The amount necessary to make these aid payments is appropriated annually from the general fund to the commissioner of revenue. Expenditures under this section are estimated to be $7,942,500 in fiscal year 1998, and $15,885,000 in each subsequent fiscal year, less any future reductions under subdivision 2.

Subd. 2. [LIMIT ON AID AND POTENTIAL FUTURE PERMANENT AID REDUCTIONS.] The aid amount received by any jurisdiction in fiscal year 2000 or any year thereafter may not exceed the amount it received in fiscal year 1999. The commissioner may, from time to time, request the most recent fiscal year payroll information by jurisdiction to be certified by the executive director of the public employees retirement association. For any jurisdiction where newly certified public employees retirement association general plan payroll is significantly lower than the fiscal 1997 amount, as determined by the commissioner, the commissioner shall recalculate the aid amount based on the most recent fiscal year payroll information, certify the recalculated aid amount for the next distribution year, and permanently reduce the aid amount to that jurisdiction.

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Subd. 3. [EFFECT OF REORGANIZATIONS.] The commissioner of revenue may adjust the aid amounts for separate jurisdictions to account for significant changes in boundaries or in the form of government, as determined by the commissioner. If a local government function and the associated public employees retirement association general plan payroll is assumed by either the state, or a nonpublic organization, the aid amounts attributable to the function under this section must terminate.

Subd. 4. [AID TERMINATION.] The aid provided under this section terminates on June 30, 2020.

Sec. 8. Minnesota Statutes 1996, section 352.01, subdivision 25, is amended to read:

Subd. 25. [NORMAL RETIREMENT AGE.] "Normal retirement age" means age 65 for a person who first became a covered employee or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989. For a person who first becomes a covered employee after June 30, 1989, normal retirement age means the higher of age 65 or "retirement age," as defined in United States Code, title 42, section 416(l), as amended, but not to exceed age 66.

Sec. 9. Minnesota Statutes 1996, section 352.04, subdivision 2, is amended to read:

Subd. 2. [EMPLOYEE CONTRIBUTIONS.] The employee contribution to the fund must be equal to ~~4.07~~ 4.0 percent of salary. These contributions must be made by deduction from salary as provided in subdivision 4.

Sec. 10. Minnesota Statutes 1996, section 352.04, subdivision 3, is amended to read:

Subd. 3. [EMPLOYER CONTRIBUTIONS.] ~~(a)~~ The employer contribution to the fund must be equal to ~~4.2~~ 4.0 percent of salary.

(b) By January 1 of each year, the board of directors shall report to the legislative commission on pensions and retirement, the chair of the committee on appropriations of the house of representatives, and the chair of the committee on finance of the senate on the amount raised by the employer and employee contribution rates in effect and whether the total amount is less than, the same as, or more than the actuarial requirement determined under section 356.215.

(c) If the legislative commission on pensions and retirement, based on the most recent valuation performed by its actuary, determines that the total amount raised by the employer and employee contributions under subdivision 2 and paragraph (b) is less than the actuarial requirements determined under section 356.215, the employer and employee rates must be increased by equal amounts as necessary to meet the actuarial requirements. The employee rate may not exceed 4.15 percent of salary and the employer rate may not exceed 4.29 percent of salary. The increases are effective on the next January 1 following the determination by the commission. The executive director of the Minnesota state retirement system shall notify employing units of any increases under this paragraph.

Sec. 11. Minnesota Statutes 1996, section 352.115, subdivision 3, is amended to read:

Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, in conjunction with section 352.116, subdivision 1, applies to a person who became a covered employee or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, unless paragraph (b), in conjunction with section 352.116, subdivision 1a, produces a higher annuity amount, in which case paragraph (b) will apply. The employee's average salary, as defined in subdivision 2, multiplied by ~~one~~ the percent specified in section 356.19, subdivision 1, per year of allowable service for the first ten years and ~~1.5~~ the percent specified in section 356.19, subdivision 2, for each later year of allowable service and pro rata for completed months less than a full year shall determine the amount of the retirement annuity to which the employee is entitled.

(b) This paragraph applies to a person who has become at least 55 years old and first became a covered employee after June 30, 1989, and to any other covered employee who has become at least 55 years old and whose annuity amount, when calculated under this paragraph and in conjunction with section 352.116, subdivision 1a, is higher than it is when calculated under paragraph (a), in conjunction with section 352.116, subdivision 1. The employee's average salary, as defined in subdivision 2, multiplied by ~~1.5~~ the percent specified in section 356.19, subdivision 2, for each year of allowable service and pro rata for months less than a full year shall determine the amount of the retirement annuity to which the employee is entitled.

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Sec. 12. Minnesota Statutes 1996, section 352.72, subdivision 2, is amended to read:

Subd. 2. [COMPUTATION OF DEFERRED ANNUITY.] (a) The deferred annuity, if any, accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as provided in section 352.22, subdivision 3, on the basis of allowable service before termination of state service and augmented as provided herein. The required reserves applicable to a deferred annuity or to an annuity for which a former employee was eligible but had not applied or to any deferred segment of an annuity must be determined as of the date the benefit begins to accrue and augmented by interest compounded annually from the first day of the month following the month in which the employee ceased to be a state employee, or July 1, 1971, whichever is later, to the first day of the month in which the annuity begins to accrue. The rates of interest used for this purpose must be five percent compounded annually until January 1, 1981, and three percent compounded annually thereafter until January 1 of the year following the year in which the former employee attains age 55. From that date to the effective date of retirement, the rate is five percent compounded annually. If a person has more than one period of uninterrupted service, the required reserves related to each period must be augmented by interest under this subdivision. The sum of the augmented required reserves so determined is the present value of the annuity. "Uninterrupted service" for the purpose of this subdivision means periods of covered employment during which the employee has not been separated from state service for more than two years. If a person repays a refund, the service restored by the repayment must be considered continuous with the next period of service for which the employee has credit with this system. The formula percentages used for each period of uninterrupted service must be those applicable to a new employee. The mortality table and interest assumption used to compute the annuity must be those in effect when the employee files application for annuity. This section ~~shall~~ does not reduce the annuity otherwise payable under this chapter.

(b) The retirement annuity or disability benefit of, or the survivor benefit payable on behalf of, a former state employee who terminated service before July 1, 1997, which is not first payable until after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent under a calculation procedure and the tables adopted by the board and approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 13. Minnesota Statutes 1996, section 352.92, subdivision 1, is amended to read:

Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] ~~Beginning with the first full pay period after July 1, 1984, in lieu of employee contributions payable under section 352.04, subdivision 2,~~ Employee contributions by of covered correctional employees must be in an amount equal to ~~4.90~~ 5.50 percent of salary.

Sec. 14. Minnesota Statutes 1996, section 352.92, subdivision 2, is amended to read:

Subd. 2. [EMPLOYER CONTRIBUTIONS.] ~~In lieu of employer contributions payable under section 352.04, subdivision 3,~~ The employer shall contribute for covered correctional employees an amount equal to ~~6.75~~ 7.70 percent of salary.

Sec. 15. Minnesota Statutes 1996, section 352.93, subdivision 2, is amended to read:

Subd. 2. [CALCULATING MONTHLY ANNUITY.] The monthly annuity under this section must be determined by multiplying the average monthly salary by the number of years, or completed months, of covered correctional service by ~~2.5~~ the percent specified in section 356.19, subdivision 5. ~~However, the monthly annuity must not exceed 75 percent of the average monthly salary.~~

Sec. 16. Minnesota Statutes 1996, section 352.93, subdivision 3, is amended to read:

Subd. 3. [~~PAYMENTS; DURATION AND AMOUNT~~ ANNUITY ACCRUAL.] The annuity under this section ~~shall~~ must begin to accrue as provided in section 352.115, subdivision 8., and must be paid for an additional 84 full calendar months or to the first of the month following the month in which the employee attains normal retirement age, whichever occurs first, except that payment must not cease before the first of the month following the month in which the employee becomes 62. It must then be reduced to the amount as calculated at normal retirement age under section 352.115, except that if this amount, when added to that portion of the social security benefit based on state service the employee would be eligible to receive at the time, is less than the benefit payable under subdivision 2, the retired employee shall receive an

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amount that when added to the social security benefit will equal the amount payable under subdivision 2. If the employee retired prior to age 55, the reduced benefit as calculated under section 352.115 must be actuarially reduced as provided in subdivision 2a.

When an annuity is reduced under this subdivision, the percentage adjustments, if any, that have been applied to the original annuity under section 11A.18, before the reduction, must be compounded and applied to the reduced annuity. A former correctional employee employed by the state in a position covered by the regular plan or the unclassified employees retirement program between the age of 58 and normal retirement age shall receive a partial return of correctional contributions at retirement with six percent interest based on the following formula:

~~Employee contributions~~ ~~Years and complete~~

~~contributed as a~~ ~~months of regular~~

~~correctional employee~~ ~~service between~~

~~in excess of the~~ ~~age 58 and the~~

~~contributions the~~ ~~normal retirement age~~

~~employee would have~~ X ~~.....................~~

~~contributed as a~~ ~~number of years between~~

~~regular employee~~ ~~age 58 and normal~~

~~retirement age~~

Sec. 17. Minnesota Statutes 1996, section 352.93, is amended by adding a subdivision to read:

Subd. 3a. [OPTIONAL ANNUITIES.] The board may establish optional annuity forms to pay a higher amount from the date of retirement until an employee is first eligible to draw social security benefits or up to the age the employee is eligible to receive unreduced social security benefits, at which time the monthly benefits must be reduced. The optional annuity forms must be actuarially equivalent to the normal single life annuity form provided in subdivision 2. The optional annuity forms must be approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 18. [352.931] [SURVIVOR BENEFITS.]

Subdivision 1. [SURVIVING SPOUSE BENEFIT.] (a) If the correctional employee was at least age 50, has credit for at least three years allowable service, and dies before an annuity or disability benefit has become payable, notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the employee may elect to receive, in lieu of the refund under section 352.12, subdivision 1, an annuity for life equal to the joint and 100 percent survivor annuity which the employee could have qualified for had the employee terminated service on the date of death. The election may be made at any time after the date of death of the employee. The surviving spouse benefit begins to accrue as of the first of the month next following the date on which the application for the benefit was filed.

(b) If the employee was under age 50, dies, and had credit for at least three years of allowable service credit on the date of death but did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent joint and survivor annuity based on the age of the employee and surviving spouse at the time of death. The annuity is payable using the early retirement reduction under section 352.93, subdivision 2a, to age 50, and one-half of the early retirement reduction from age 50 to the age payment begins. The surviving spouse eligible for surviving spouse benefits under this paragraph may apply for the annuity at any time after the employee's death. Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or surviving spouse benefit payable under this subdivision.

(c) The annuity must cease with the last payment received by the surviving spouse in the lifetime of the surviving spouse. Any employee may request in writing that this subdivision not apply and that payment be made only to a designated beneficiary as otherwise provided by this chapter.

Subd. 2. [SURVIVING SPOUSE COVERAGE; TERM CERTAIN.] In lieu of the 100 percent optional annuity under subdivision 1, the surviving spouse of a deceased employee may elect to receive survivor coverage in a term certain of ten, 15, or 20 years. The monthly term certain annuity must be actuarially equivalent to the 100 percent optional annuity under subdivision 1 and must be approved by the actuary retained by the legislative commission on pensions and retirement. The optional annuity ceases upon the expiration of the term certain period. If a survivor elects a term certain annuity and dies before the expiration of the specified term certain period, the commuted value of the remaining annuity payments must be paid in a lump sum to the survivor's estate.

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Subd. 3. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is no surviving spouse eligible for benefits under subdivision 1, a dependent child as defined in section 352.01, subdivision 26, is eligible for a dependent child survivor benefit. Benefits to a dependent child must be paid from the date of the employee's death to the date the dependent child attains age 20 if the child is under age 15 on the date of death. If the child is 15 years or older on the date of death, the benefit is payable for five years. The payment to a dependent child is an amount actuarially equivalent to the value of a 100 percent joint and survivor optional annuity using the age of the employee and age of the dependent child at the date of death in lieu of the age of the surviving spouse. If there is more than one dependent child, each dependent child shall receive a proportionate share of the actuarial value of the employee's account, with the amount of the benefit payable to each child to be determined based on the portion of the total eligibility period that each child is eligible. The process for calculating the dependent child survivor benefit must be approved by the actuary retained by the legislative commission on pensions and retirement.

Subd. 4. [DEATH REFUND.] An amount equal to the excess, if any, of the accumulated contributions credited to the account of the deceased employee in excess of the total of the benefits paid to the surviving spouse and surviving child or children must be paid to the deceased employee's last designated beneficiary or, if none, as specified under section 352.12, subdivision 1.

Subd. 5. [APPLICATION.] The benefit elections under this section must be made on an application form prescribed by the executive director and must be filed with the executive director.

Sec. 19. Minnesota Statutes 1996, section 352.95, subdivision 1, is amended to read:

Subdivision 1. [JOB-RELATED DISABILITY.] A covered correctional employee who becomes disabled and physically unfit to perform the duties of the position as a direct result of an injury, sickness, or other disability incurred in or arising out of any act of duty that makes the employee physically or mentally unable to perform the duties, is entitled to a disability benefit based on covered correctional service only. The benefit amount must equal 50 percent of the average salary defined in section 352.93, plus an additional ~~2-1/2~~ percent equal to that specified in section 356.19, subdivision 5, for each year of covered correctional service in excess of 20 years, ten months, prorated for completed months.

Sec. 20. Minnesota Statutes 1996, section 352.95, subdivision 5, is amended to read:

Subd. 5. [RETIREMENT STATUS AT NORMAL RETIREMENT AGE.] The disability benefit paid to a disabled correctional employee under this section shall terminate at the end of the month in which the employee reaches age 62. If the disabled correctional employee is still disabled when the employee reaches age 62, the employee shall be deemed to be a retired employee. If the employee had elected an optional annuity under subdivision 1a, the employee shall receive an annuity in accordance with the terms of the optional annuity previously elected. If the employee had not elected an optional annuity under subdivision 1a, the employee may within 90 days of attaining age 65 or reaching the five-year anniversary of the effective date of the disability benefit, whichever is later, either elect to receive a normal retirement annuity computed in the manner provided in section ~~352.115~~ 352.93 or elect to receive an optional annuity as provided in section 352.116, subdivision 3, based on the same length of service as used in the calculation of the disability benefit. Election of an optional annuity must be made within 90 days before attaining age 65 or reaching the five-year anniversary of the effective date of the disability benefit, whichever is later. The reduction for retirement before normal retirement age as provided in section 352.116, subdivision 1 or 1a, does not apply. The savings clause provision of section 352.93, subdivision 3, applies. If an optional annuity is elected, the optional annuity shall begin to accrue on the first of the month following the month in which the employee reaches age 65 or the five-year anniversary of the effective date of the disability benefit, whichever is later.

Sec. 21. Minnesota Statutes 1996, section 352B.02, subdivision 1a, is amended to read:

Subd. 1a. [MEMBER CONTRIBUTIONS.] Each member shall pay a sum equal to ~~8.92~~ 8.40 percent of the member's salary, which shall constitute the member contribution to the fund.

Sec. 22. Minnesota Statutes 1996, section 352B.02, subdivision 1c, is amended to read:

Subd. 1c. [EMPLOYER CONTRIBUTIONS.] ~~(a)~~ In addition to member contributions, department heads shall pay a sum equal to ~~14.88~~ 12.60 percent of the salary upon which deductions were made, which shall constitute the employer contribution to the fund. Department contributions must be paid out of money appropriated to departments for this purpose.

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Sec. 23. Minnesota Statutes 1996, section 352B.08, subdivision 2, is amended to read:

Subd. 2. [NORMAL RETIREMENT ANNUITY.] The annuity must be paid in monthly installments. The annuity shall be equal to the amount determined by multiplying the average monthly salary of the member by ~~2.65~~ the percent specified in section 356.19, subdivision 6, for each year and pro rata for completed months of service.

Sec. 24. Minnesota Statutes 1996, section 352B.08, subdivision 2a, is amended to read:

Subd. 2a. [EARLY RETIREMENT.] Any member who has become at least 50 years old~~, or former member if service ended after June 30, 1989,~~ and who has at least three years of allowable service is entitled upon application to a reduced retirement annuity equal to the annuity calculated under subdivision 2, reduced ~~so that the reduced annuity is the actuarial equivalent of the annuity that would be payable if the member deferred receipt of the annuity from the day the annuity begins to accrue to age 55~~ by two-tenths of one percent for each month that the member is under age 55 at the time of retirement.

Sec. 25. Minnesota Statutes 1996, section 352B.10, subdivision 1, is amended to read:

Subdivision 1. [INJURIES, PAYMENT AMOUNTS.] Any member who becomes disabled and physically or mentally unfit to perform duties as a direct result of an injury, sickness, or other disability incurred in or arising out of any act of duty, shall receive disability benefits while disabled. The benefits must be paid in monthly installments equal to the member's average monthly salary multiplied by 53 60 percent, plus an additional ~~2.65~~ percent equal to that specified in section 356.19, subdivision 6, for each year and pro rata for completed months of service in excess of 20 years, if any.

Sec. 26. Minnesota Statutes 1996, section 352B.30, is amended by adding a subdivision to read:

Subd. 4. [1997 POSTRETIREMENT FUND INTEREST CHANGES.] The retirement annuity or disability benefit of, or the survivor benefit payable on behalf of, a former member who terminated service before July 1, 1997, which is not first payable until after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent under a calculation procedure and tables adopted by the board and approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 27. Minnesota Statutes 1996, section 352C.031, subdivision 4, is amended to read:

Subd. 4. [RETIREMENT ALLOWANCE FORMULA.] (a) This paragraph applies to constitutional officers who terminate that service before July 1, 1997. The average salary multiplied by 2-1/2 percent for each year of allowable service and pro rata for completed months less than a full year shall determine the amount of the normal retirement allowance.

(b) This paragraph applies to constitutional officers who terminate that service after June 30, 1997. The retirement allowance is an amount equal to the rate under paragraph (a) per year of service of the constitutional officer's average monthly salary adjusted for that person on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent. The adjustment must be calculated by or, alternatively, the adjustment procedure must be specified by the actuary retained by the legislative commission on pensions and retirement.

Sec. 28. Minnesota Statutes 1996, section 352C.033, is amended to read:

352C.033 [DEFERRED ANNUITIES AUGMENTATION.]

(a) The deferred retirement allowance for any former constitutional officer ~~shall~~ must be augmented as provided in this section. The required reserves applicable to the deferred retirement allowance, determined as of the date the retirement allowance begins to accrue using the appropriate mortality table and an interest assumption of ~~five~~ six percent, shall be

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augmented from the first of the month following termination of service as a constitutional officer, or January 1, 1979, whichever is later, to the first day of the month in which the annuity begins to accrue, at the rate of five percent per annum compounded annually until January 1, 1981, and thereafter at the rate of three percent per annum compounded annually until January 1 of the year in which the former constitutional officer attains age 55. From that date to the effective date of retirement, the rate is five percent compounded annually.

(b) The retirement allowance of, or the survivor benefit payable on behalf of, a former constitutional officer who terminated service before July 1, 1997, which is not first payable until after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent under a calculation procedure and tables adopted by the board as recommended by an approved actuary and approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 29. Minnesota Statutes 1996, section 353.01, subdivision 37, is amended to read:

Subd. 37. [NORMAL RETIREMENT AGE.] "Normal retirement age" means age 65 for a person who first became a public employee or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989. For a person who first becomes a public employee after June 30, 1989, "normal retirement age" means the higher of age 65 or "retirement age," as defined in United States Code, title 42, section 416(l), as amended, but not to exceed age 66.

Sec. 30. Minnesota Statutes 1996, section 353.27, subdivision 2, is amended to read:

Subd. 2. [EMPLOYEE CONTRIBUTION.] The employee contribution shall be an amount (a) for a "basic member" equal to ~~8.23~~ 8.75 percent of total salary; and (b) for a "coordinated member" equal to ~~4.23~~ 4.75 percent of total salary. These contributions ~~shall~~ must be made by deduction from salary in the manner provided in subdivision 4. Where any portion of a member's salary is paid from other than public funds, such member's employee contribution ~~shall~~ must be based on the total salary received from all sources.

Sec. 31. Minnesota Statutes 1996, section 353.27, subdivision 3a, is amended to read:

Subd. 3a. [ADDITIONAL EMPLOYER CONTRIBUTION.] (a) An additional employer contribution ~~shall~~ must be made equal to (a) ~~2-1/2~~ 2.68 percent of the total salary of each "basic member"; and (b) ~~one-quarter of one~~ .43 percent of the total salary of each "coordinated member." These contributions ~~shall~~ must be made from funds available to the employing subdivision by the means and in the manner provided in section 353.28.

(b) This subdivision is repealed once the actuarial value of the assets of the plan equal or exceed the actuarial accrued liability of the plan as determined by the actuary retained by the legislative commission on pensions and retirement under section 356.215. The repeal is effective on the first day of the first full pay period occurring after March 31 of the calendar year following the issuance of the actuarial valuation upon which the repeal is based.

Sec. 32. Minnesota Statutes 1996, section 353.29, subdivision 3, is amended to read:

Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, in conjunction with section 353.30, subdivisions 1, 1a, 1b, and 1c, applies to any member who first became a public employee or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, unless paragraph (b), in conjunction with section 353.30, subdivision 5, produces a higher annuity amount, in which case paragraph (b) will apply. The average salary as defined in subdivision 2, multiplied by ~~two~~ the percent specified in section 356.19, subdivision 3, for each year of allowable service for the first ten years and thereafter by ~~2.5~~ the percent specified in section 356.19, subdivision 4, per year of allowable service and completed months less than a full year for the "basic member," and ~~one~~ the percent specified in section 356.19, subdivision 1, for each year of allowable service for the first ten years and thereafter by ~~1.5~~ the percent specified in section 356.19, subdivision 2, per year of allowable service and completed months less than a full year for the "coordinated member," shall determine the amount of the "normal" retirement annuity.

(b) This paragraph applies to a member who has become at least 55 years old and first became a public employee after June 30, 1989, and to any other member whose annuity amount, when calculated under this paragraph and in conjunction with section 353.30, subdivision 5, is higher than it is when calculated under paragraph (a), in conjunction with

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section 353.30, subdivisions 1, 1a, 1b, and 1c. The average salary, as defined in subdivision 2, multiplied by ~~2.5~~ the percent specified in section 356.19, subdivision 4, for each year of allowable service and completed months less than a full year for a basic member and ~~1.5~~ the percent specified in section 356.19, subdivision 2, per year of allowable service and completed months less than a full year for a coordinated member, shall determine the amount of the normal retirement annuity.

Sec. 33. Minnesota Statutes 1996, section 353.651, subdivision 3, is amended to read:

Subd. 3. [RETIREMENT ANNUITY FORMULA.] The average salary as defined in subdivision 2, multiplied by ~~2.65~~ the percent specified in section 356.19, subdivision 6, per year of allowable service determines the amount of the normal retirement annuity. If the member has earned allowable service for performing services other than those of a police officer or firefighter, the annuity representing such service is computed under sections 353.29 and 353.30.

Sec. 34. Minnesota Statutes 1996, section 353.656, subdivision 1, is amended to read:

Subdivision 1. [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] A member of the police and fire fund who becomes disabled and physically unfit to perform duties as a police officer or firefighter subsequent to June 30, 1973, as a direct result of an injury, sickness, or other disability incurred in or arising out of any act of duty, which has or is expected to render the member physically or mentally unable to perform duties as a police officer or firefighter for a period of at least one year, shall receive disability benefits during the period of such disability. The benefits must be in an amount equal to 53 60 percent of the "average salary" under subdivision 3, plus an additional ~~2.65~~ percent specified in section 356.19, subdivision 6, of said average salary for each year of service in excess of 20 years. Should disability under this subdivision occur before the member has at least five years of allowable service credit in the police and fire fund, the disability benefit must be computed on the "average salary" from which deductions were made for contribution to the police and fire fund.

Sec. 35. Minnesota Statutes 1996, section 353.71, subdivision 2, is amended to read:

Subd. 2. [DEFERRED ANNUITY COMPUTATION; AUGMENTATION.] (a) The deferred annuity, if any, accruing under subdivision 1, or sections 353.34, subdivision 3, and 353.68, subdivision 4, ~~shall~~ must be computed in the manner provided in said sections, on the basis of allowable service prior to termination of public service and augmented as provided herein. The required reserves applicable to a deferred annuity, or to an annuity for which a former member was eligible but had not applied, or to any deferred segment of an annuity shall be determined as of the date the annuity begins to accrue and shall be augmented from the first day of the month following the month in which the former member ceased to be a public employee, or July 1, 1971, whichever is later, to the first day of the month in which the annuity begins to accrue, at the rate of five percent per annum compounded annually until January 1, 1981, and at the rate of three percent thereafter until January 1 of the year following the year in which the former member attains age 55. From that date to the effective date of retirement, the rate is five percent per annum compounded annually. If a person has more than one period of uninterrupted service, the required reserves related to each period shall be augmented by interest pursuant to this subdivision. The sum of the augmented required reserves so determined shall be the present value of the annuity. Uninterrupted service for the purpose of this subdivision shall mean periods of covered employment during which the employee has not been separated from public service for more than two years. If a person repays a refund, the service restored thereby shall be considered as continuous with the next period of service for which the employee has credit with this association. The formula percentages used for each period of uninterrupted service shall be those as would be applicable to a new employee. This section shall not reduce the annuity otherwise payable under this chapter. This subdivision shall apply to deferred annuitants of record on July 1, 1971, and to employees who thereafter become deferred annuitants; it shall also apply from July 1, 1971, to former members who make application for an annuity after July 1, 1973.

(b) The retirement annuity or disability benefit of, or the survivor benefit payable on behalf of, a former member who terminated service before July 1, 1997, which is not first payable until after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent under a calculation procedure and tables adopted by the board and approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 36. Minnesota Statutes 1996, section 353A.08, subdivision 1, is amended to read:

Subdivision 1. [ELECTION OF COVERAGE BY CURRENT RETIREES.] A person who is receiving a service pension, disability benefit, or ~~survivorship~~ survivor benefit is eligible to elect benefit coverage provided under the relevant provisions of the public employees police and fire fund benefit plan or to retain benefit coverage provided under the relief

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association benefit plan in effect on the effective date of the consolidation. The relevant provisions of the public employees police and fire fund benefit plan for the person electing that benefit coverage are limited to participation in the Minnesota postretirement investment fund for any future postretirement adjustments based on the amount of the benefit or pension payable on December 31, if December 31 is the effective date of consolidation, or on the December 1 following the effective date of the consolidation, if other than December 31. The ~~survivorship~~ survivor benefit payable on behalf of any service pension or disability benefit recipient who elects benefit coverage under the public employees police and fire fund benefit plan must be calculated under the relief association benefit plan and is subject to participation in the Minnesota postretirement investment fund for any future postretirement adjustments based on the amount of the ~~survivorship~~ survivor benefit payable.

A survivor benefit calculated under the relief association benefit plan which is first payable after June 30, 1997, to the surviving spouse of a retired member of a consolidation account who, before July 1, 1997, chose to participate in the Minnesota postretirement investment fund as provided under this subdivision must be increased on the effective date of the survivor benefit on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent under a calculation procedure and tables adopted by the board and approved by the actuary retained by the legislative commission on pensions and retirement.

By electing the public employees police and fire fund benefit plan, a current service pension or disability benefit recipient who, as of the first January 1 occurring after the effective date of consolidation, has been receiving the pension or benefit for at least seven months, or any survivor benefit recipient who, as of the first January 1 occurring after the effective date of consolidation, has been receiving the benefit on the person's own behalf or in combination with a prior applicable service pension or disability benefit for at least seven months is eligible to receive a partial adjustment payable from the Minnesota postretirement investment fund under section 11A.18, subdivision 9.

The election by any pension or benefit recipient must be made on or before the deadline established by the board of the public employees retirement association in a manner that recognizes the number of persons eligible to make the election and the anticipated time required to conduct any required benefit counseling.

Sec. 37. Minnesota Statutes 1996, section 353A.08, subdivision 2, is amended to read:

Subd. 2. [ELECTION OF COVERAGE BY CURRENT DEFERRED RETIREES.] (a) Any person who has terminated active employment as a police officer or firefighter, whichever applies, with the municipality, has sufficient credit for service to entitle the person to an eventual service pension and has not taken a refund of accumulated member contributions, if applicable, shall have the option to elect to have benefit coverage provided under the relevant provisions of the public employees police and fire fund benefit plan or to retain benefit coverage provided by the relief association benefit plan in effect on the effective date of consolidation. The relevant provisions of the public employees police and fire fund benefit plan for the person electing that benefit coverage shall be the provisions specified in subdivision 1.

The election shall be made when the person files an application for receipt of the deferred service pension and shall accompany that application.

(b) The retirement annuity for a deferred member of a consolidated local relief association which consolidated before July 1, 1997, who elected the relevant provisions of the public employees police and fire fund benefit plan under subdivision 1 must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent under a calculation procedure and tables adopted by the board of trustees of the public employees retirement association and approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 38. Minnesota Statutes 1996, section 353A.083, is amended by adding a subdivision to read:

Subd. 3. [PRE-1997 CONSOLIDATION.] (a) For any consolidation plan account in effect on July 1, 1997, the applicable benefit plan coverage defined in paragraph (b) or (c) applies unless the consolidation account's city approves the extension of the post-June 30, 1997, public employees police and fire fund benefit plan to the consolidation account members.

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(b) If the applicable municipality has approved the July 1, 1993, public employees police and fire fund benefit provisions, but has not approved the extension of the post-June 30, 1997, public employees police and fire fund benefit provisions:

(1) the benefit accrual rate for calculating retirement annuities that apply to consolidation account members who have elected or elect coverage under the provisions of the public employees police and fire fund benefit plan is 2.9 percent of average salary under section 353.651, subdivision 2, per year of allowable service;

(2) the optional survivor annuities payable to the survivors of these consolidated members who elected coverage under the provisions of the public employees police and fire fund benefit plan must be determined using a benefit accrual rate of 2.9 percent of average salary under section 353.651, subdivision 2, per year of the member's allowable service;

(3) the disability benefit payable for these consolidated members who elected or elect coverage under the provisions of the public employees police and fire fund benefit plan and:

(i) who become disabled in the line of duty, as defined under section 353.656, subdivision 1, is an amount equal to 58 percent of average salary under section 353.651, subdivision 2, plus an additional 2.9 percent of that average salary for each year of service in excess of 20 years; or

(ii) who become disabled because of sickness or injury occurring while not on duty, as defined under section 353.656, subdivision 3, is an amount equal to 43.50 percent of average salary under section 353.651, subdivision 2, plus an additional 2.9 percent of that average salary for each year of service in excess of 15 years.

(c) If the applicable municipality has not approved the July 1, 1993, public employees police and fire fund benefit provisions, and has not approved the extension of the post-June 30, 1997, public employees police and fire fund benefit provisions:

(1) the benefit accrual rate for calculating retirement annuities that apply to consolidation account members who have elected or elect coverage under the provisions of the public employees police and fire fund benefit plan is 2.74 percent of average salary under section 353.651, subdivision 2, per year of allowable service;

2) the optional survivor annuities payable to the survivors of these consolidated members who elected coverage under the provisions of the public employees police and fire fund benefit plan must be determined using a benefit accrual rate of 2.74 percent of average salary under section 353.651, subdivision 2, per year of the member's allowable service;

(3) the disability benefit payable for consolidated members who elected or elect the coverage under the provisions of the public employees police and fire fund benefit plan and:

(i) who become disabled in the line of duty, as defined under section 353.656, subdivision 1, is an amount equal to 54.80 percent of the average salary under section 353.651, subdivision 2, plus an additional 2.74 percent of that average salary for each year of service in excess of 20 years; or

(ii) who become disabled because of sickness or injury occurring while not on duty, as defined under section 353.656, subdivision 3, is an amount equal to 41.10 percent of the average salary under section 353.651, subdivision 2, plus an additional 2.74 percent of that average salary for each year of service in excess of 15 years.

Sec. 39. Minnesota Statutes 1996, section 354.05, subdivision 38, is amended to read:

Subd. 38. [NORMAL RETIREMENT AGE.] "Normal retirement age" means age 65 for a person who first became a member of the association or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989. For a person who first becomes a member of the association after June 30, 1989, normal retirement age means the higher of age 65 or "retirement age," as defined in United States Code, title 42, section 416(l), as amended, but not to exceed age 66.

Sec. 40. Minnesota Statutes 1996, section 354.42, subdivision 2, is amended to read:

Subd. 2. [EMPLOYEE.] The employee contribution to the fund ~~shall be~~ is an amount equal to ~~6.5~~ 5.0 percent of the salary of every coordinated member and ~~10.5~~ 9.0 percent of the salary of every basic member. This contribution ~~shall~~ must be made by deduction from salary. Where any portion of a member's salary is paid from other than public funds, ~~such~~ the member's employee contribution ~~shall~~ must be based on the entire salary received.

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Sec. 41. Minnesota Statutes 1996, section 354.42, subdivision 3, is amended to read:

Subd. 3. [EMPLOYER.] The employer contribution to the fund ~~shall be~~ is an amount equal to ~~4-1/2~~ 5.0 percent of the salary of each coordinated member and ~~8-1/2~~ 9.0 percent of the salary of each basic member.

Sec. 42. Minnesota Statutes 1996, section 354.42, subdivision 5, is amended to read:

Subd. 5. [ADDITIONAL EMPLOYER CONTRIBUTION.] (a) To amortize the unfunded actuarial accrued liability computed under the entry age actuarial cost method and disclosed under the annual actuarial valuations prepared by the commission-retained actuary under section 356.215, an additional employer contribution ~~shall~~ must be made in the amount of ~~3.64~~ 1.64 percent of the salary of each member.

(b) This contribution must be made in the manner provided in section 354.52, subdivision 4.

(c) This subdivision is repealed once the actuarial value of the assets of the plan equal or exceed the actuarial accrued liability of the plan as determined by the actuary retained by the legislative commission on pensions and retirement under section 356.215. The repeal is effective on the first day of the first full pay period occurring after March 31 of the calendar year following the issuance of the actuarial valuation upon which the repeal is based.

By January 1 of each year, the board of directors shall report to the legislative commission on pensions and retirement, the chair of the committee on appropriations of the house of representatives, and the chair of the committee on finance of the senate on the amount raised by the additional employer contribution rate in effect and whether that amount is less than, the same as, or more than the required amortization contribution determined under section 356.215.

Sec. 43. Minnesota Statutes 1996, section 354.44, subdivision 6, is amended to read:

Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT ANNUITY.] (1) The formula retirement annuity ~~hereunder shall~~ must be computed in accordance with the applicable provisions of the formulas stated in clause (2) or (4) on the basis of each member's average salary for the period of the member's formula service credit.

For all years of formula service credit, "average salary," for the purpose of determining the member's retirement annuity, means the average salary upon which contributions were made and upon which payments were made to increase the salary limitation provided in Minnesota Statutes 1971, section 354.511, for the highest five successive years of formula service credit provided, however, that such "average salary" shall not include any more than the equivalent of 60 monthly salary payments. Average salary must be based upon all years of formula service credit if this service credit is less than five years.

(2) This clause, in conjunction with clause (3), applies to a person who first became a member of the association or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, unless clause (4), in conjunction with clause (5), produces a higher annuity amount, in which case clause (4) applies. The average salary as defined in clause (1), multiplied by the following percentages per year of formula service credit shall determine the amount of the annuity to which the member qualifying therefor is entitled:

Coordinated Member Basic Member

Each year of service ~~1.13~~ the ~~2.13~~ the

during first ten percent percent

specified in specified in

section 356.19, section 356.19,

subdivision 1, subdivision 3,

per year per year

Each year of service ~~1.63~~ the ~~2.63~~ the

thereafter percent percent

specified in specified in

section 356.19, section 356.19,

subdivision 2, subdivision 4,

per year per year

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(3)(i) This clause applies only to a person who first became a member of the association or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, and whose annuity is higher when calculated under clause (2), in conjunction with this clause than when calculated under clause (4), in conjunction with clause (5).

(ii) Where any member retires prior to normal retirement age under a formula annuity, the member shall be paid a retirement annuity in an amount equal to the normal annuity provided in clause (2) reduced by one-quarter of one percent for each month that the member is under normal retirement age at the time of retirement except that for any member who has 30 or more years of allowable service credit, the reduction shall be applied only for each month that the member is under age 62.

(iii) Any member whose attained age plus credited allowable service totals 90 years is entitled, upon application, to a retirement annuity in an amount equal to the normal annuity provided in clause (2), without any reduction by reason of early retirement.

(4) This clause applies to a member who has become at least 55 years old and first became a member of the association after June 30, 1989, and to any other member who has become at least 55 years old and whose annuity amount when calculated under this clause and in conjunction with clause (5), is higher than it is when calculated under clause (2), in conjunction with clause (3). The average salary, as defined in clause (1) multiplied by ~~2.63~~ the percent specified by section 356.19, subdivision 4, for each year of service for a basic member and by ~~1.63~~ the percent specified in section 356.19, subdivision 2, for each year of service for a coordinated member shall determine the amount of the retirement annuity to which the member is entitled.

(5) This clause applies to a person who has become at least 55 years old and first becomes a member of the association after June 30, 1989, and to any other member who has become at least 55 years old and whose annuity is higher when calculated under clause (4) in conjunction with this clause than when calculated under clause (2), in conjunction with clause (3). An employee who retires under the formula annuity before the normal retirement age shall be paid the normal annuity provided in clause (4) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would be payable to the employee if the employee deferred receipt of the annuity and the annuity amount were augmented at an annual rate of three percent compounded annually from the day the annuity begins to accrue until the normal retirement age.

Sec. 44. Minnesota Statutes 1996, section 354.44, is amended by adding a subdivision to read:

Subd. 6a. [EXTENSION OF 1997 PERMANENT INCREASE.] (a) A percentage of the permanent increase for benefit recipients effective July 1, 1997, under section 62, as specified in paragraph (b), is payable to:

(1) a member who terminates service after June 30, 1997, and whose benefit begins to accrue during the period of July 2, 1997, to July 1, 2002, based on the member's age at retirement.

(2) a member who is determined to be totally and permanently disabled under section 354.05, subdivision 14, after June 30, 1997, and whose benefit begins to accrue during the period of July 2, 1997, to July 1, 2002, based on the member's age at disability.

(3) the survivor of a member who dies after June 30, 1997, and whose benefit begins to accrue during the period of July 2, 1997, to July 1, 2002.

(b) The percentage of the permanent increase is the amount designated for the applicable beginning benefit accrual date, as follows:

Beginning Benefit Percentage of

Accrual Date Permanent Increase

July 2, 1997 to July 1, 1998 50 percent

July 2, 1998 to July 1, 1999 40 percent

July 2, 1999 to July 1, 2000 30 percent

July 2, 2000 to July 1, 2001 20 percent

July 2, 2001 to July 1, 2002 10 percent

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Sec. 45. Minnesota Statutes 1996, section 354.53, subdivision 1, is amended to read:

Subdivision 1. [EMPLOYEE AND EMPLOYER CONTRIBUTIONS.] Any employee given a leave of absence to enter military service and who returns to teaching service upon discharge from military service as provided in section 192.262, ~~shall~~ may obtain credit for the period of military service but shall not receive credit for any voluntary extension of military service at the instance of the member beyond the initial period of enlistment, induction or call to active duty. The member shall obtain credit by paying into the fund an employee contribution based upon the ~~salary of the member at the date of return from military service. The amount of this contribution shall be as follows:~~

~~Period~~ ~~Basic Member~~ ~~Coordinated Member~~

~~July 1, 1973~~ ~~8 percent~~ ~~4 percent~~

~~thru~~

~~June 30, 1979~~

~~July 1, 1979~~

~~and 8.5 percent 4.5 percent~~

~~thereafter~~

~~The contributions specified in this subdivision shall be~~ contribution rates in effect at the time that the military service was performed multiplied by the annual salary rate of the member for the year beginning with the date of return from military service and the number of years of military service together with interest thereon at an annual rate of 8.5 percent compounded annually from the time the military service was rendered to the first date of payment. The employer contribution and additional contribution provided in section 354.42 ~~shall~~ must be paid by the employing unit at the rates in effect at the time that the military service was performed, applied to the annual salary rate of the member for the year beginning with the date of return from military service, in the manner provided in section 354.52, subdivision 4.

Sec. 46. Minnesota Statutes 1996, section 354.55, subdivision 11, is amended to read:

Subd. 11. [DEFERRED ANNUITY; AUGMENTATION.] (a) Any person covered under section 354.44, subdivision 6, who ceases to render teaching service, may leave the person's accumulated deductions in the fund for the purpose of receiving a deferred annuity at retirement. Eligibility for an annuity under this subdivision ~~shall be~~ is governed pursuant to section 354.44, subdivision 1, or 354.60.

(b) The amount of the deferred retirement annuity ~~shall be~~ is determined by section 354.44, subdivision 6, and augmented as provided in this subdivision. The required reserves related to that portion of the annuity which had accrued when the member ceased to render teaching service ~~shall~~ must be augmented by interest compounded annually from the first day of the month following the month during which the member ceased to render teaching service to the effective date of retirement. There shall be no augmentation if this period is less than three months or if this period commences prior to July 1, 1971. The rates of interest used for this purpose ~~shall~~ must be five percent compounded annually commencing July 1, 1971, until January 1, 1981, and three percent compounded annually thereafter until January 1 of the year following the year in which the former member attains age 55. From that date to the effective date of retirement, the rate is five percent compounded annually. If a person has more than one period of uninterrupted service, a separate average salary determined under section 354.44, subdivision 6, must be used for each period and the required reserves related to each period ~~shall~~ must be augmented by interest pursuant to this subdivision. The sum of the augmented required reserves so determined shall be the basis for purchasing the deferred annuity. If a person repays a refund, the service restored by the repayment must be considered as continuous with the next period of service for which the person has credit with this fund. If a person does not render teaching service in any one fiscal year or more consecutive fiscal years and then resumes teaching service, the formula percentages used from the date of the resumption of teaching service ~~shall~~ must be those applicable to new members. The mortality table and interest assumption used to compute the annuity ~~shall~~ must be the applicable mortality table established by the board under section 354.07, subdivision 1, and the interest rate assumption under section 356.215 in effect when the member retires. A period of uninterrupted service for the purposes of this subdivision means a period of covered teaching service during which the member has not been separated from active service for more than one fiscal year.

(c) In no case shall the annuity payable under this subdivision be less than the amount of annuity payable pursuant to section 354.44, subdivision 6.

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(d) The requirements and provisions for retirement before normal retirement age contained in section 354.44, subdivision 6, clause (3) or (5), shall also apply to an employee fulfilling the requirements with a combination of service as provided in section 354.60.

(e) The augmentation provided by this subdivision applies to the benefit provided in section 354.46, subdivision 2.

(f) The augmentation provided by this subdivision shall not apply to any period in which a person is on an approved leave of absence from an employer unit covered by the provisions of this chapter.

(g) The retirement annuity or disability benefit of, or the survivor benefit payable on behalf of, a former teacher who terminated service before July 1, 1997, which is not first payable until after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent under a calculation procedure and tables adopted by the board as recommended by an approved actuary and approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 47. [356.19] [RETIREMENT BENEFIT FORMULA PERCENTAGES.]

Subdivision 1. [COORDINATED PLAN MEMBERS.] The applicable benefit accrual rate is 1.2 percent.

Subd. 2. [COORDINATED PLAN MEMBERS.] The applicable benefit accrual rate is 1.7 percent.

Subd. 3. [BASIC PLAN MEMBERS.] The applicable benefit accrual rate is 2.2 percent.

Subd. 4. [BASIC PLAN MEMBERS.] The applicable benefit accrual rate is 2.7 percent.

Subd. 5. [CORRECTIONAL PLAN MEMBERS.] The applicable benefit accrual rate is 2.4 percent.

Subd. 6. [STATE TROOPERS PLAN AND POLICE/FIRE PLAN MEMBERS.] The applicable benefit accrual rate is 3.0 percent.

Subd. 7. [JUDGES PLAN.] The applicable benefit accrual rate is 2.7 percent.

Subd. 8. [JUDGES PLAN.] The applicable benefit accrual rate is 3.2 percent.

Subd. 9. [FUTURE BENEFIT ACCRUAL RATE INCREASES.] After January 2, 1998, benefit accrual rate increases under this section must apply only to allowable service or formula service rendered after the effective date of the benefit accrual rate increase.

Sec. 48. Minnesota Statutes 1996, section 356.20, subdivision 2, is amended to read:

Subd. 2. [COVERED PUBLIC PENSION FUNDS.] This section applies to the following public pension plans:

(1) State employees retirement fund.

(2) Public employees retirement fund.

(3) Teachers retirement association.

(4) State patrol retirement fund.

(5) Minneapolis teachers retirement fund association.

(6) St. Paul teachers retirement fund association.

Journal of the House - 45th Day - Top of Page 2893

(7) Duluth teachers retirement fund association.

(8) Minneapolis employees retirement fund.

(9) University of Minnesota faculty retirement plan.

(10) University of Minnesota faculty supplemental retirement plan.

(11) Judges retirement fund.

(12) Any police or firefighter's relief association enumerated in section 69.77, subdivision 1a or 69.771, subdivision 1.

(13) Public employees police and fire fund.

(14) Minnesota state retirement system correctional officers retirement fund.

~~(15) Public employees local government correctional service retirement plan.~~

Sec. 49. Minnesota Statutes 1996, section 356.215, subdivision 2, is amended to read:

Subd. 2. [REQUIREMENTS.] (a) It is the policy of the legislature that it is necessary and appropriate to determine annually the financial status of tax supported retirement and pension plans for public employees. To achieve this goal, the legislative commission on pensions and retirement shall have prepared by the actuary retained by the commission annual actuarial valuations of the retirement plans enumerated in section 3.85, subdivision 11, paragraph (b), ~~and~~ quadrennial experience studies of the retirement plans enumerated in section 3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7), and, two years after each set of quadrennial experience studies, quadrennial projection valuations of the retirement plans enumerated in section 3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7), and of any other retirement plan enumerated in section 3.85, subdivision 11, paragraph (b), for which it determines that the analysis is beneficial. The governing or managing board or administrative officials of each public pension and retirement fund or plan enumerated in section 356.20, subdivision 2, clauses (9), (10), and (12), shall have prepared by an approved actuary annual actuarial valuations of their respective funds as provided in this section. This requirement also applies to any fund that is the successor to any organization enumerated in section 356.20, subdivision 2, or to the governing or managing board or administrative officials of any newly formed retirement fund or association operating under the control or supervision of any public employee group, governmental unit, or institution receiving a portion of its support through legislative appropriations, and any local police or fire fund coming within the provisions of section 356.216.

(b) The quadrennial projection valuations required under paragraph (a) are intended to serve as an additional analytical tool with which policy makers may assess the future funding status of public plans through forecasting and testing various potential outcomes over time if certain plan assumptions or valuation methods were to be modified. In consultation with the executive director of the legislative commission on pensions and retirement, the retirement fund directors, the state economist, the state demographer, the commissioner of finance, and the commissioner of employee relations, the actuary retained by the legislative commission on pensions and retirement shall perform the quadrennial projection valuations, testing future implications for plan funding by modifying assumptions and methods currently in place. The commission-retained actuary shall provide advice to the commission as to the periods over which such projections should be made, the nature and scope of the scenarios to be analyzed, the measures of funding status to be employed, and shall report the results of these analyses in the same manner as for quadrennial experience studies.

Sec. 50. Minnesota Statutes 1996, section 356.215, subdivision 4d, is amended to read:

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

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

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

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

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

General stateGeneral public

employees employees Teachers

retirement retirement retirement

Age plan plan plan

16 7.2500% 8.71% 7.25%

17 7.2500 8.71 7.25

18 7.2500 8.70 7.25

19 7.2500 8.70 7.25

20 7.2500 7.70 7.25

21 7.1454 7.70 7.25

22 7.1094 7.70 7.25

23 7.0725 7.70 7.20

24 7.0363 7.70 7.15

25 7.0000 7.60 7.10

26 7.0000 7.51 7.05

27 7.0000 7.39 7.00

28 7.0000 7.30 7.00

29 7.0000 7.20 7.00

30 7.0000 7.20 7.00

31 7.0000 7.10 7.00

32 7.0000 7.10 7.00

33 7.0000 7.00 7.00

34 7.0000 7.00 7.00

35 7.0000 6.90 7.00

36 6.9019 6.80 7.00

37 6.8074 6.70 7.00

38 6.7125 6.60 6.90

39 6.6054 6.50 6.80

40 6.5000 6.40 6.70

41 6.3540 6.30 6.60

42 6.2087 6.30 6.50

43 6.0622 6.30 6.35

44 5.9048 6.20 6.20

Journal of the House - 45th Day - Top of Page 2895

45 5.7500 6.20 6.05

46 5.6940 6.09 5.90

47 5.6375 6.00 5.75

48 5.5822 5.90 5.70

49 5.5405 5.80 5.65

50 5.5000 5.70 5.60

51 5.4384 5.70 5.55

52 5.3776 5.70 5.50

53 5.3167 5.70 5.45

54 5.2826 5.70 5.40

55 5.2500 5.70 5.35

56 5.2500 5.70 5.30

57 5.2500 5.70 5.25

58 5.2500 5.70 5.25

59 5.2500 5.70 5.25

60 5.2500 5.00 5.25

61 5.2500 5.00 5.25

62 5.2500 5.00 5.25

63 5.2500 5.00 5.25

64 5.2500 5.00 5.25

65 5.2500 5.00 5.25

66 5.2500 5.00 5.25

67 5.2500 5.00 5.25

68 5.2500 5.00 5.25

69 5.2500 5.00 5.25

70 5.2500 5.00 5.25

Sec. 51. Minnesota Statutes 1996, section 356.215, subdivision 4g, is amended to read:

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

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

(c) For any fund or plan other than the Minneapolis employees retirement fund, after the first actuarial valuation date occurring after June 1, 1989, if there has been a change in any or all of the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a change in the benefit plan governing annuities and benefits payable from the fund, a change in the actuarial cost method used in calculating the actuarial accrued liability of all or a portion of the fund, or a

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combination of the three, and the change or changes, by themselves and without inclusion of any other items of increase or decrease, produce a net increase in the unfunded actuarial accrued liability in the fund, the established date for full funding must be determined using the following procedure:

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

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

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

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

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

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

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

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

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

Sec. 52. Minnesota Statutes 1996, section 356.217, is amended to read:

356.217 [MODIFICATIONS IN ACTUARIAL SERVICES.]

(a) The actuary retained by the legislative commission on pensions and retirement is not required to prepare actuarial valuations of the public employees local government correctional employees retirement plan unless the plan is implemented by a county under section 353C.04.

~~(b)~~ The cost of any requested benefit projections by the commission-retained actuary relating to the Minnesota postretirement investment fund for the state board of investment is payable by the state board of investment.

~~(c)~~ (b) Actuarial valuations under section 356.215, for July 1, 1991, and thereafter, are not required to have an individual commentary section. The commentary section, if omitted from the individual plan actuarial valuation, must be included in an appropriate generalized format as part of the report to the legislature under section 3.85, subdivision 11.

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~~(d)~~ (c) Actuarial valuations under section 356.215, for July 1, 1991, and thereafter, are not required to contain separate actuarial valuation results for basic and coordinated programs unless each program has a membership of at least ten percent of the total membership of the fund. Actuarial valuations under section 356.215, for July 1, 1991, and thereafter, are not required to contain cash flow forecasts.

~~(e)~~ (d) Actuarial valuations of the public employees police and fire fund local consolidation accounts for July 1, 1991, and thereafter, are not required to contain separate tabulations or summaries of active member, service retirement, disability retirement, and survivor data for each local consolidation account.

~~(f)~~ (e) The commission-retained actuary is:

(1) required to publish experience findings for plans for which experience findings are required only on a quadrennial basis for the four-year period ending June 30, 1992, and every four years thereafter;

(2) not required to prepare a separate experience analysis or publish separate experience findings for basic and coordinated programs if separate actuarial valuation results for the programs are not required; and

(3) not required to calculate investment rate of return experience results on any basis other than current asset value as defined in section 356.215, subdivision 1, clause (6).

Sec. 53. Minnesota Statutes 1996, section 356.30, subdivision 1, is amended to read:

Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) Notwithstanding any provisions to the contrary of the laws governing the funds enumerated in subdivision 3, a person who has met the qualifications of clause (2) may elect to receive a retirement annuity from each fund in which the person has at least six months allowable service, based on the allowable service in each fund, subject to the provisions of clause (3).

(2) A person may receive upon retirement a retirement annuity from each fund in which the person has at least six months allowable service, and augmentation of a deferred annuity calculated under the laws governing each public pension plan or fund named in subdivision 3, from the date the person terminated all public service if:

(a) the person has allowable service totaling an amount that allows the person to receive an annuity in any two or more of the enumerated funds; and

(b) the person has not begun to receive an annuity from any enumerated fund or the person has made application for benefits from all funds and the effective dates of the retirement annuity with each fund under which the person chooses to receive an annuity are within a one-year period.

(3) The retirement annuity from each fund must be based upon the allowable service in each fund, except that:

(a) The laws governing annuities must be the law in effect on the date of termination from the last period of public service under a covered fund with which the person earned a minimum of one-half year of allowable service credit during that employment.

(b) The "average salary" on which the annuity from each covered fund in which the employee has credit in a formula plan shall be based on the employee's highest five successive years of covered salary during the entire service in covered funds.

(c) The formula percentages to be used by each fund must be those percentages prescribed by each fund's formula as continued for the respective years of allowable service from one fund to the next, recognizing all previous allowable service with the other covered funds.

(d) Allowable service in all the funds must be combined in determining eligibility for and the application of each fund's provisions in respect to actuarial reduction in the annuity amount for retirement prior to normal retirement.

(e) The annuity amount payable for any allowable service under a nonformula plan of a covered fund must not be affected but such service and covered salary must be used in the above calculation.

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(f) This section shall not apply to any person whose final termination from the last public service under a covered fund is prior to May 1, 1975.

(g) For the purpose of computing annuities under this section the formula percentages used by any covered fund, except ~~the basic program of the teachers retirement association,~~ the public employees police and fire fund, and the state patrol retirement fund, must not exceed ~~2-1/2~~ the percent specified in section 356.19, subdivision 4, per year of service for any year of service or fraction thereof. The formula percentage used by the public employees police and fire fund and the state patrol retirement fund must not exceed ~~2.65~~ the percent specified in section 356.19, subdivision 6, per year of service for any year of service or fraction thereof. ~~The formula percentage used by the teachers retirement association must not exceed 2.63 percent per year of basic program service for any year of basic program service or fraction thereof.~~ The formula percentage used by the legislators retirement plan and the elective state officers retirement must not exceed 2.5 percent, but this limit does not apply to the adjustment provided under section 3A.02, subdivision 1, paragraph (c), or 352C.031, paragraph (b).

(h) Any period of time for which a person has credit in more than one of the covered funds must be used only once for the purpose of determining total allowable service.

(i) If the period of duplicated service credit is more than six months, or the person has credit for more than six months with each of the funds, each fund shall apply its formula to a prorated service credit for the period of duplicated service based on a fraction of the salary on which deductions were paid to that fund for the period divided by the total salary on which deductions were paid to all funds for the period.

(j) If the period of duplicated service credit is less than six months, or when added to other service credit with that fund is less than six months, the service credit must be ignored and a refund of contributions made to the person in accord with that fund's refund provisions.

Sec. 54. Minnesota Statutes 1996, section 356.30, subdivision 3, is amended to read:

Subd. 3. [COVERED FUNDS.] This section applies to the following retirement funds:

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

(2) correctional employees retirement program, established pursuant to chapter 352;

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

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

(5) legislators' retirement plan, established pursuant to chapter 3A;

(6) elective state officers' retirement plan, established pursuant to chapter 352C;

(7) public employees retirement association, established pursuant to chapter 353;

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

(9) teachers retirement association, established pursuant to chapter 354;

(10) Minneapolis employees retirement fund, established pursuant to chapter 422A;

(11) Minneapolis teachers retirement fund association, established pursuant to chapter 354A;

(12) St. Paul teachers retirement fund association, established pursuant to chapter 354A;

(13) Duluth teachers retirement fund association, established pursuant to chapter 354A;

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~~(14) public employees local government correctional service retirement plan established by sections 353C.01 to 353C.10;~~ and

~~(15)~~ (14) judges' retirement fund, established by sections 490.121 to 490.132.

Sec. 55. Minnesota Statutes 1996, section 356.32, subdivision 2, is amended to read:

Subd. 2. [COVERED FUNDS.] The provisions of this section shall apply to the following retirement funds:

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

(2) correctional employees retirement program, established pursuant to chapter 352;

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

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

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

(6) teachers retirement association, established pursuant to chapter 354;

(7) Minneapolis employees retirement fund, established pursuant to chapter 422A;

(8) Duluth teachers retirement fund association, established pursuant to chapter 354A;

(9) Minneapolis teachers retirement fund association, established pursuant to chapter 354A; and

(10) St. Paul teachers retirement fund association, established pursuant to chapter 354A;

~~(11) public employees local government correctional service retirement plan established by sections 353B.01 to 353B.10~~.

Sec. 56. Minnesota Statutes 1996, section 422A.06, subdivision 8, is amended to read:

Subd. 8. [RETIREMENT BENEFIT FUND.] (a) The retirement benefit fund shall consist of amounts held for payment of retirement allowances for members retired pursuant to this chapter.

(b) Assets equal to the required reserves for retirement allowances pursuant to this chapter determined in accordance with the appropriate mortality table adopted by the board of trustees based on the experience of the fund as recommended by the commission-retained actuary shall be transferred from the deposit accumulation fund to the retirement benefit fund as of the last business day of the month in which the retirement allowance begins. The income from investments of these assets shall be allocated to this fund. There shall be paid from this fund the retirement annuities authorized by law. A required reserve calculation for the retirement benefit fund must be made by the actuary retained by the legislative commission on pensions and retirement and must be certified to the retirement board by the commission-retained actuary.

(c) The retirement benefit fund shall be governed by the applicable laws governing the accounting and audit procedures, investment, actuarial requirements, calculation and payment of postretirement benefit adjustments, discharge of any deficiency in the assets of the fund when compared to the actuarially determined required reserves, and other applicable operations and procedures regarding the Minnesota postretirement investment fund in effect on June 30, 1997, established ~~pursuant to~~ under Minnesota Statutes 1996, section 11A.18, and any legal or administrative interpretations of those laws of the state board of investment, the legal advisor to the board of investment and the executive director of the state board of investment in effect on June 30, 1997. If a deferred yield adjustment account is established for the Minnesota postretirement investment fund before June 30, 1997, under Minnesota Statutes 1996, section 11A.18, subdivision 5, the retirement board shall also establish and maintain a deferred yield adjustment account within this fund.

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(d) Annually, following the calculation of any postretirement adjustment payable from the retirement benefit fund, the board of trustees shall submit a report to the executive director of the legislative commission on pensions and retirement and to the commissioner of finance indicating the amount of any postretirement adjustment and the underlying calculations on which that postretirement adjustment amount is based, including the amount of dividends, the amount of interest, and the amount of net realized capital gains or losses utilized in the calculations.

(e) With respect to a former contributing member who began receiving a retirement annuity or disability benefit under section 422A.151, paragraph (a), clause (2), after June 30, 1997, or with respect to a survivor of a former contributing member who began receiving a survivor benefit under section 422A.151, paragraph (a), clause (2), after June 30, 1997, the reserves attributable to the one percent lower amount of the cost-of-living adjustment payable to those annuity or benefit recipients annually must be transferred back to the deposit accumulation fund to the credit of the metropolitan airports commission. The calculation of this annual reduced cost-of-living adjustment reserve transfer must be reviewed by the actuary retained by the legislative commission on pensions and retirement.

Sec. 57. Minnesota Statutes 1996, section 422A.151, is amended to read:

422A.151 [ALTERNATIVE CALCULATION OF ANNUITY.]

(a) In the case of a contributing member of the Minneapolis employees retirement fund who is employed as a licensed peace officer or firefighter with the metropolitan airports commission and who retires, becomes disabled within the meaning of section 422A.18, or dies, the retirement, disability, or survivor allowance is equal to the higher of the following:

(1) the retirement, disability, or survivor allowance calculated for the person under the applicable provisions of the Minneapolis employees retirement fund; or

(2) the retirement, disability, or survivor benefit that the person would be entitled to upon meeting the applicable age and allowable service requirements of section 353.651, 353.656, or 353.657 if all employment as a licensed peace officer or firefighter with the metropolitan airports commission had been allowable service under the public employees retirement association police and fire fund, instead of being covered by the Minneapolis employees retirement fund. In computing the alternative benefit under section 353.651, 353.656, or 353.657, the applicable definitions and related provisions of chapter 353 must be used.

A firefighter or licensed peace officer terminating employment by the metropolitan airports commission after June 30, 1997, or the survivor of a deceased firefighter or licensed peace officer terminating employment by the metropolitan airports commission after June 30, 1997, under section 353.651, 353.656, or 353.657, shall receive a one percent lower cost-of-living adjustment than otherwise payable under section 422A.06, subdivision 5. If the cost-of-living adjustment payable under section 422A.06, subdivision 5, is less than one percent, the firefighter or licensed peace officer who retired after June 30, 1997, must not have a reduction in the previously received annuity or benefit amount, but future cost-of-living adjustments must be modified equal to the percentage the benefit would have been reduced below the person's current annuity or benefit amount to reflect the one percent lower cost-of-living adjustment under section 422A.06, subdivision 5.

(b) If a contributing member under paragraph (a) has periods of coverage by the Minneapolis employees retirement fund that include service other than employment as a licensed peace officer or firefighter as well as employment as a licensed peace officer or firefighter, the calculation of the benefit under paragraph (a), clause (2), may only utilize service as a licensed peace officer or firefighter employed by the metropolitan airports commission.

Sec. 58. Minnesota Statutes 1996, section 490.124, subdivision 1, is amended to read:

Subdivision 1. [BASIC RETIREMENT ANNUITY.] Except as qualified hereinafter from and after mandatory retirement date, normal retirement date, early retirement date, or one year from the disability retirement date, as the case may be, a retirement annuity shall be payable to a retiring judge from the judges' retirement fund in an amount equal to: (1) ~~2-1/2~~ the percent of specified in section 356.19, subdivision 7, multiplied by the judge's final average compensation multiplied by the number of years and fractions of years of allowable service rendered prior to July 1, 1980; plus (2) ~~three~~ the percent of specified in section 356.19, subdivision 8, multiplied by the judge's final average compensation multiplied by the number of years and fractions of years of allowable service rendered after June 30, 1980; provided that the annuity ~~shall~~ must not exceed 65 70 percent of the judge's annual salary for the 12 months immediately preceding retirement.

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Sec. 59. Minnesota Statutes 1996, section 490.124, subdivision 5, is amended to read:

Subd. 5. [DEFERRED BENEFITS.] (a) Any benefit to which a judge is entitled under this section may be deferred until early or normal retirement date, notwithstanding termination of such judge's service prior thereto.

(b) The retirement annuity of, or the survivor benefit payable on behalf of, a former judge, who terminated service before July 1, 1997, which is not first payable until after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 4d, from five percent to six percent under a calculation procedure and tables adopted by the board of directors of the Minnesota state retirement system and approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 60. [APPROPRIATIONS; DEPARTMENT OF CORRECTIONS AND LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT.]

(a) $900,000 in fiscal year 1998 and $900,000 in fiscal year 1999 is appropriated from the general fund to the commissioner of corrections. The commissioner of finance shall include this amount in the base budget for the agency when developing the governor's budget recommendations for the biennium ending June 30, 2001.

(b) For fiscal year 1999, $50,000 is appropriated to the legislative coordinating commission for allocation to the legislative commission on pensions and retirement.

Sec. 61. [APPROPRIATION REDUCTION.]

Subdivision 1. [REDUCTIONS BY RETIREMENT PLAN AND EMPLOYER.] In fiscal years 1998 and 1999, the commissioner of finance shall reduce allotments and cancel to the general fund the amounts determined by multiplying the general fund supported salaries of employees who are members of the teachers retirement association according to clauses (1) and (2), and for employees who are members of the general state employees retirement plan of the Minnesota state retirement system according to clauses (3), (4), and (5):

(1) 0.90 percent for the Minnesota state colleges and universities;

(2) 1.50 percent for all agencies other than the Minnesota state colleges and universities

(3) 0.20 percent for all agencies other than the Minnesota state colleges and universities and the university of Minnesota;

(4) 0.12 percent for the Minnesota state colleges and universities;

(5) 0.0728 percent for the university of Minnesota.

Subd. 2. [APPROPRIATION REDUCTIONS APPLIED TO BASE BUDGETS.] The commissioner of finance shall include the reductions under subdivision 1 when developing the base budgets for all affected organizations as submitted with the governor's recommended budget for the biennium ending June 30, 2001.

Subd. 3. [PROJECTED SAVINGS.] For the biennium ending June 30, 1999, the projected general fund savings attributable to the reductions under subdivision 1 are as follows:

fiscal year

1998 1999

subdivision 1, clauses (1) and (2) $1,937,000 $2,053,000

subdivision 1, clauses (3) $1,162,000 $1,233,000

subdivision 1, clauses (4) and (5) $ 480,000 $ 509,000

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Sec. 62. [PERMANENT INCREASE FOR BENEFIT RECIPIENTS.]

A monthly survivor, disability, or retirement benefit paid under Minnesota Statutes, chapters 3A, 352, 352B, 352C, 352D, 353, 353A, 354, and 490 on June 30, 1997, is permanently increased effective July 1, 1997, to reflect the change in the postretirement fund interest assumption from five percent to six percent. The benefit payable under the six percent postretirement interest assumption must be actuarially equivalent to the benefit payable under the five percent interest assumption and must be based on tables adopted by the applicable board and approved by the actuary retained by the legislative commission on pensions and retirement.

Sec. 63. [ALTERNATIVE BENEFIT ADJUSTMENTS.]

If the permanent increase under section 62, along with the annual cost-of-living adjustments paid during the ten years after the effective date of this section averages less than inflation as measured by the Consumer Price Index or 3.5 percent, whichever is lower, the executive directors of the teachers retirement association, public employees retirement association, and the Minnesota state retirement system shall suggest alternative benefit adjustments for retirees receiving benefits on June 30, 1997, who exceed their life expectancy by three or more years.

Sec. 64. [MANDATED PENSION COMMISSION STUDY; DISPOSITION OF PERA-P&F CONSOLIDATION ACCOUNTS.]

(a) The legislative commission on pensions and retirement, in consultation with the affected constituencies, shall study the advantages and disadvantages of the blending of some or all local police and salaried firefighter consolidation accounts into the public employees police and fire retirement plan established under Minnesota Statutes, sections 353.63 to 353.68.

(b) The report must be transmitted on or before January 31, 1998, to the chair of the committee on governmental operations and veterans of the senate, the chair of the governmental operations budget division of the senate, the chair of the committee on governmental operations of the house of representatives, and the chair of the state government finance division of the house of representatives.

Sec. 65. [MANDATED PENSION COMMISSION STUDY; FIRST CLASS CITY TEACHER RETIREMENT FUND CONSOLIDATION OPTIONS.]

(a) The legislative commission on pensions and retirement, in consultation with the affected constituencies, shall study the advantages and disadvantages of the restructuring or the consolidation of the first class city teacher retirement fund associations and the statewide teachers retirement association. In its deliberations, the commission shall review the future state funding needs of the Minneapolis employees retirement fund and other applicable state pension funding resources.

Sec. 66. [REPEALER.]

(a) Minnesota Statutes 1996, sections 124.195, subdivision 12; 124.2139; 356.70; and 356.88, subdivision 2, are repealed.

(b) Minnesota Statutes 1996, sections 353C.01; 353C.02; 353C.03; 353C.04; 353C.05; 353C.06; 353C.07; 353C.08; 353C.09; and 353C.10, are repealed.

Sec. 67. [EFFECTIVE DATES.]

Sections 30 and 31 are effective the first full pay period after December 31, 1997. Sections 9, 10, 13, 14, 21, and 22 are effective the first full pay period after June 30, 1997. Sections 40, 41, and 42 are effective for all salary paid July 1, 1997, or later. Sections 1 to 8, 11, 12, 15 to 20, 23 to 29, 32 to 39, and 43 to 66 are effective July 1, 1997.

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ARTICLE 2

LEGISLATORS AND CONSTITUTIONAL OFFICERS

Section 1. Minnesota Statutes 1996, section 3A.07, is amended to read:

3A.07 [APPLICATION.]

This chapter applies to members of the legislature in service ~~upon~~ after July 1, 1965, ~~or thereafter,~~ who otherwise meet the requirements of this chapter, except that members elected for the first time after June 30, 1997, are covered by the elected officers plan in chapter 352E.

Sec. 2. [352C.011] [APPLICABILITY.]

This chapter applies only to constitutional officers first elected before July 1, 1997, to a constitutional office. Constitutional officers elected for the first time to a constitutional office after June 30, 1997, are covered by the elected officers plan under chapter 352E.

Sec. 3. [352E.051] [ESTABLISHMENT.]

A retirement program for legislators and constitutional officers to be known as the elected officers plan is established in the Minnesota state retirement system.

Sec. 4. [352E.052] [DEFINITIONS.]

Subdivision 1. [TERMS.] As used in this chapter, unless the language, context, or subject matter indicates otherwise, the terms in this section have the meanings given them.

Subd. 2. [COVERED EMPLOYMENT.] "Covered employment" means any period for which a constitutional officer or legislator serves in office.

Subd. 3. [ELECTED OFFICERS PLAN.] "Elected officers plan" means the retirement program established by this chapter for legislators and constitutional officers who were elected for the first time to their positions after June 30, 1997.

Subd. 4. [EMPLOYEE SHARES.] "Employee shares" means shares in the supplemental fund purchased with the elected officer's contributions.

Subd. 5. [EMPLOYER SHARES.] "Employer shares" means shares in the supplemental fund purchased with the employer's contributions.

Subd. 6. [SUPPLEMENTAL FUND.] "Supplemental fund" means the fund established and governed by section 11A.17.

Subd. 7. [TOTAL SHARES.] "Total shares" means all the employee shares and employer shares credited to a participant. Where applicable, the term contributions means shares.

Subd. 8. [VALUE.] "Value" means cash value at the end of the month following receipt of an application. If no application is required, value means the cash value at the end of the month in which the event necessitating the transfer occurs.

Subd. 9. [EXECUTIVE DIRECTOR.] "Executive director" means the executive director of the Minnesota state retirement system appointed under section 352.03, subdivision 5.

Subd. 10. [PARTICIPANT.] "Participant" means any elected official who has shares invested in the elected officers plan.

Sec. 5. [352E.053] [COVERAGE.]

First-time constitutional officers elected to any constitutional office and first-time legislators elected after June 30, 1997, are eligible for coverage under the elected officers plan.

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Sec. 6. [352E.0535] [MEMBER AND EMPLOYER CONTRIBUTIONS.]

(a) The money used to purchase shares under this section are the employee and employer contributions provided in this subdivision.

(b) The employee contribution is five percent of salary.

(d) These contributions must be made by deduction from salary in the manner provided in section 352.04, subdivisions 4, 5, and 6.

Sec. 7. [352E.054] [INVESTMENT OPTIONS.]

(a) An employee may elect to purchase shares in one or a combination of the income share account, growth share account, international share account, money market account, bond market account, fixed interest account, or common stock index account established in section 11A.17. The employee may elect to participate in one or more of the investment accounts in the fund by specifying, on a form provided by the executive director, the percentage of the employee's contributions provided in subdivision 2 to be used to purchase shares in each of the accounts.

(b) A participant may indicate in writing on forms provided by the Minnesota state retirement system a choice of options for subsequent purchases of shares. Until a different written indication is made by the participant, the executive director shall purchase shares in the supplemental fund as selected by the participant. If no initial option is chosen, 100 percent income shares must be purchased for a participant.

(c) A participant or former participant may also change the investment options selected for all or a portion of the participant's shares previously purchased in accounts.

Sec. 8. [352E.055] [WITHDRAWAL OPTIONS.]

Subdivision 1. [PAYMENT AFTER TERMINATION.] No withdrawal of shares shall be permitted prior to termination of covered employment.

Subd. 2. [WITHDRAWAL OPTIONS.] After termination of covered employment or any time thereafter, a participant is entitled, upon application, to withdraw the cash value of the participant's total shares or leave such shares on deposit with the supplemental retirement fund. Shares not withdrawn remain on deposit with the supplemental retirement fund until the former participant becomes at least 55 years old, and applies for an annuity under section 352E.06, subdivision 1.

Sec. 9. [352E.06] [ANNUITIES.]

Subdivision 1. [ANNUITY PURCHASE.] When a participant attains at least age 55, is retired from covered service, and applies for a retirement annuity, the cash value of the participant's shares must be transferred to the Minnesota postretirement investment fund and used to provide an annuity for the retired employee based upon the participant's age when the benefit begins to accrue according to the reserve basis used by the state employees retirement fund in determining pensions and reserves.

Subd. 2. [LUMP SUM PLUS ANNUITY OPTION.] A participant has the option in an application for an annuity to apply for and receive the value of one-half of the total shares and thereafter receive an annuity, as provided in subdivision 1, based on the value of one-half of the total shares.

Subd. 3. [ANNUITY ACCRUED.] An annuity herein begins to accrue the first day of the first full month after an application is received or after termination of state service, whichever is later.

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Sec. 10. [352E.07] [DISABILITY BENEFITS.]

Subdivision 1. [PAYMENT OPTION.] A participant who becomes totally and permanently disabled has the option to receive:

(1) the value of the participant's total shares;

(2) the value of one-half of the total shares and an annuity based on the value of one-half of the total shares; or

(3) an annuity based on the value of the participant's total shares.

Subd. 2. [ACCRUAL.] The annuity payable under this section begins to accrue the first day of the month following the day of disability and is based on the participant's age when the annuity begins to accrue. The shares must be valued as of the end of the month following authorization of payments.

Subd. 3. [PAYMENT IN ADDITION TO WORKERS' COMPENSATION.] The benefits payable under this section must not be reduced by amounts received or receivable under applicable workers' compensation laws.

Subd. 4. [REPAYMENT PROHIBITION.] A participant who returns to covered service after receiving benefits under this section shall not be required or allowed to repay such benefits.

Sec. 11. [352E.08] [DEATH BENEFITS.]

Subdivision 1. [SURVIVOR BENEFITS.] If a participant dies leaving a spouse and there is no named beneficiary who survives to receive payment or the spouse is named beneficiary, the spouse may receive:

(1) the value of the participant's total shares;

(2) the value of one-half of the total shares, and receive an annuity based on the value of one-half of the total shares, provided that if the spouse dies before receiving any annuity payments the value of said shares shall be paid to the spouse's children in equal shares, but if no such children survive, then to the parents of the spouse in equal shares, but if no such children or parents survive, then to the estate of the spouse; or

(3) an annuity based on the value of the total shares, provided that if the spouse dies before receiving any annuity payments the value of said shares shall be paid to the spouse's children in equal shares, but if no such children survive, then to the parents of the spouse in equal shares, but if no such children or parent survive, then to the estate of the spouse; and further provided, if said spouse dies after receiving annuity payments but before receiving payments equal to the value of the employee shares, the value of the employee shares remaining shall be paid to the spouse's children in equal shares, but if no such children survive, then to the parents of the spouse in equal shares, but if no such children or parents survive, then to the estate of the spouse.

Subd. 2. [PAYMENT WITHOUT BENEFICIARY DESIGNATION.] If a participant dies and has named a beneficiary, the value of the total shares must be paid to such beneficiary, but if such beneficiary dies before receiving payment, or if no beneficiary has been named and there is no spouse, the value of said shares must be paid to the children of the participant in equal shares, but if no such children survive then in equal shares to the parents of the participant, but if no such children or parents survive, then to the estate of the participant.

Sec. 12. [352E.09] [ADMINISTRATION.]

Subdivision 1. [FIDUCIARY RESPONSIBILITY.] The elected officers plan and the provisions of this chapter must be administered by the Minnesota state retirement system. Fiduciary activities of the elected officers plan must be undertaken in a manner consistent with chapter 356A.

Subd. 2. [REDEMPTION OR PURCHASE OF SHARES.] Whenever redemption or purchases from the supplemental retirement fund are required to be made, the executive director shall make them.

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Subd. 3. [PROSPECTUS.] The executive director shall annually distribute the prospectus prepared by the supplemental fund to each participant in covered employment.

Subd. 4. [APPLICATION.] Whenever benefits or withdrawals are authorized or required to be paid, payment must be made only after receipt of an application signed by the person or representative authorized to receive the benefit or withdrawal. Such application must be made only on forms authorized by the executive director.

Subd. 5. [DISBURSEMENT OF ACCOUNT.] If the beneficiary, surviving spouse, or estate has not made application for benefits within ten years after the date of death of a participant, the value of the shares must be appropriated to the regular fund according to section 352.12, subdivision 12. If a former participant fails to make a claim for benefits by April 1 following the year in which the former participant attains the age of 70 years and six months, the value of the shares are appropriated to the general employees retirement fund according to section 352.22, subdivision 8.

Subd. 6. [ADMINISTRATIVE FEES.] Up to one-tenth of one percent of salary must be deducted from the employee contributions and up to one-tenth of one percent salary must be deducted from the employer contributions, as authorized by section 352E.054, subdivision 2, to pay the administrative expenses of the elected officers plan.

Sec. 13. [EFFECTIVE DATE.]

Sections 1 to 12 are effective July 1, 1997.

ARTICLE 3

FIRST CLASS CITY TEACHER RETIREMENT FUNDS

Section 1. Minnesota Statutes 1996, section 354A.011, subdivision 15a, is amended to read:

Subd. 15a. [NORMAL RETIREMENT AGE.] "Normal retirement age" means age 65 for a person who first became a member of the coordinated program of the Minneapolis or St. Paul teachers retirement fund association or the new law coordinated program of the Duluth teachers retirement fund association or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989. For a person who first became a member of the coordinated program of the Minneapolis or St. Paul teachers retirement fund association or the new law coordinated program of the Duluth teachers retirement fund association after June 30, 1989, normal retirement age means the higher of age 65 or retirement age, as defined in United States Code, title 42, section 416(l), as amended, but not to exceed age 66. For a person who is a member of the basic program of the Minneapolis or St. Paul teachers retirement fund association or the old law coordinated program of the Duluth teachers retirement fund association, normal retirement age means the age at which a teacher becomes eligible for a normal retirement annuity computed upon meeting the age and service requirements specified in the applicable provisions of the articles of incorporation or bylaws of the respective teachers retirement fund association.

Sec. 2. Minnesota Statutes 1996, section 354A.12, subdivision 1, is amended to read:

Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] The contribution required to be paid by each member of a teachers retirement fund association shall not be less than the percentage of total salary specified below for the applicable association and program:

Association and Program Percentage of

Total Salary

Duluth teachers retirement association

old law and new law

coordinated programs 5.5 percent

Minneapolis teachers retirement association

basic program 8.5 percent

coordinated program ~~4.5~~ 5.5 percent

St. Paul teachers retirement association

basic program 8 percent

coordinated program ~~4.5~~ 5.5 percent

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Contributions shall be made by deduction from salary and must be remitted directly to the respective teachers retirement fund association at least once each month.

Sec. 3. Minnesota Statutes 1996, section 354A.12, subdivision 2a, is amended to read:

Subd. 2a. [EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION RATES.] (a) The employing units shall make the following employer contributions to teachers retirement fund associations:

(1) for any coordinated member of a teachers retirement fund association in a city of the first class, the employing unit shall pay the employer social security taxes in accordance with section 355.46, subdivision 3, clause (b);

(2) for any coordinated member of one of the following teachers retirement fund associations in a city of the first class, the employing unit shall make a regular employer contribution to the respective retirement fund association in an amount equal to the designated percentage of the salary of the coordinated member as provided below:

Duluth teachers retirement fund association 4.50 percent

Minneapolis teachers retirement fund association 4.50 percent

St. Paul teachers retirement fund association 4.50 percent;

(3) for any basic member of one of the following teachers retirement fund associations in a city of the first class, the employing unit shall make a regular employer contribution to the respective retirement fund in an amount equal to the designated percentage of the salary of the basic member as provided below:

Minneapolis teachers retirement fund association 8.50 percent

St. Paul teachers retirement fund association 8.00 percent

(4) for a basic member of a teachers retirement fund association in a city of the first class, the employing unit shall make an additional employer contribution to the respective fund in an amount equal to the designated percentage of the salary of the basic member, as provided below:

Minneapolis teachers retirement fund association

July 1, 1993 - June 30, 1994 4.85 percent

July 1, 1994, and thereafter 3.64 percent

St. Paul teachers retirement fund association

July 1, 1993 - June 30, 1995 4.63 percent

July 1, 1995, and thereafter 3.64 percent

(5) for a coordinated member of a teachers retirement fund association in a city of the first class, the employing unit shall make an additional employer contribution to the respective fund in an amount equal to the applicable percentage of the coordinated member's salary, as provided below:

Duluth teachers retirement fund association 1.29 percent

Minneapolis teachers retirement fund association

July 1, 1993 - June 30, 1994 0.50 percent

July 1, 1994, and thereafter 3.64 percent

St. Paul teachers retirement fund association

July 1, 1993 - June 30, 1994 0.50 percent

July 1, 1994 - June 30, 1995 1.50 percent

July 1, ~~1995~~ 1997, and thereafter ~~3.64~~

3.84 percent

(b) The regular and additional employer contributions must be remitted directly to the respective teachers retirement fund association at least once each month. Delinquent amounts are payable with interest under the procedure in subdivision 1a.

(c) Payments of regular and additional employer contributions for school district or technical college employees who are paid from normal operating funds must be made from the appropriate fund of the district or technical college.

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Sec. 4. Minnesota Statutes 1996, section 354A.12, subdivision 3a, is amended to read:

Subd. 3a. [SPECIAL DIRECT STATE AID TO ~~ST. PAUL~~ FIRST CLASS CITY TEACHERS RETIREMENT FUND ~~ASSOCIATION~~ ASSOCIATIONS.] (a) In fiscal year 1998, the state shall pay $5,545,000 to the St. Paul teachers retirement fund association ~~$500,000 in fiscal year 1994~~, $21,324,000 to the Minneapolis teachers retirement fund association, and $486,000 to the Duluth teachers retirement fund association. In each subsequent fiscal year, ~~the payment~~ these payments to the ~~St. Paul~~ first class city teachers retirement fund ~~association~~ associations must be ~~increased at the same rate as the increase in the general education revenue formula allowance under section 124A.22, subdivision 2, in subsequent fiscal years~~ $2,827,000 for St. Paul, $12,954,000 for Minneapolis, and $486,000 for Duluth.

(b) The direct state ~~aid is~~ aids under this subdivision are payable October 1 annually. The commissioner of finance shall pay the direct state aid. The amount required under this subdivision is appropriated annually from the general fund to the commissioner of finance.

Sec. 5. Minnesota Statutes 1996, section 354A.12, subdivision 3c, is amended to read:

Subd. 3c. [TERMINATION OF SUPPLEMENTAL CONTRIBUTIONS AND DIRECT MATCHING AND STATE AID.] (a) The supplemental contributions payable to the Minneapolis teachers retirement fund association by special school district No. 1 and the city of Minneapolis under section 423A.02, subdivision 3, or to the St. Paul teachers retirement fund association by independent school district No. 625 under section 423A.02, subdivision 3, or the direct state ~~aid~~ aids under subdivision 3a to the ~~St. Paul~~ first class city teachers retirement ~~association~~ associations, and the direct matching and state aid under subdivision 3b to the Minneapolis teachers retirement fund association ~~terminates~~ terminate for the respective fund at the end of the fiscal year in which the accrued liability funding ratio for that fund, as determined in the most recent actuarial report for that fund by the actuary retained by the legislative commission on pensions and retirement, equals or exceeds the accrued liability funding ratio for the teachers retirement association, as determined in the most recent actuarial report for the teachers retirement association by the actuary retained by the legislative commission on pensions and retirement.

(b) If the state direct matching, state supplemental, or state aid is terminated for ~~the St. Paul~~ a first class city teachers retirement fund association ~~or the Minneapolis teachers retirement fund association~~ under paragraph (a), it may not again be received by that fund.

(c) If either the Minneapolis teachers retirement fund association, or the St. Paul teachers retirement fund association, or the Duluth teachers retirement fund association remain funded at less than the funding ratio applicable to the teachers retirement association when the provisions of paragraph (b) become effective, then any state aid not distributed to that association must be immediately transferred to the other ~~association~~ associations in proportion to the relative sizes of their unfunded actuarial accrued liabilities.

Sec. 6. [354A.29] [ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION POSTRETIREMENT ADJUSTMENT.]

Subdivision 1. [ARTICLES OF INCORPORATION AND BYLAWS.] Permission is granted for the St. Paul teachers retirement fund association under Minnesota Statutes, section 354A.12, subdivision 4, to amend its articles of incorporation and bylaws to provide postretirement adjustments under this section.

Subd. 2. [ELIMINATION OF PRIOR LUMP SUM POSTRETIREMENT ADJUSTMENT MECHANISM.] As a condition precedent to the implementation of subdivisions 3 through 6, the lump sum postretirement adjustment mechanism in effect on the date of enactment of this section must be eliminated and the articles of incorporation and bylaws of the association must be amended accordingly.

Subd. 3. [POSTRETIREMENT ADJUSTMENT.] (a) The postretirement adjustment described in the articles and bylaws of the St. Paul teachers retirement fund association must be determined by the board annually after June 30 using the procedures under this section.

(b) Each eligible person who has been receiving an annuity or benefit under the articles of incorporation, the bylaws, or this chapter for at least 12 months as of the end of the fiscal year is eligible to receive a postretirement adjustment of 2.0 percent that is payable each January 1.

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Subd. 4. [ADDITIONAL INVESTMENT PERCENTAGE ADJUSTMENT.] (a) An excess investment earnings percentage adjustment must be computed and paid under this subdivision to those annuitants and eligible benefit recipients who have been receiving an annuity or benefit for at least 12 months as determined each June 30 by the board of trustees.

(b) The board shall also determine the five-year annualized rate of return attributable to the assets of the St. Paul teachers retirement fund association under the formula specified in section 11A.04, clause (11), and the amount of the excess five-year annualized rate of return over the preretirement interest assumption specified in Minnesota Statutes, section 356.215.

(c) The excess investment percentage adjustment must be determined by multiplying the quantity one minus the rate of contribution deficiency, as specified in the most recent actuarial report of the actuary retained by the legislative commission on pensions and retirement under section 356.215, by the rate of return excess as determined in paragraph (b).

(d) The excess investment percentage adjustment is payable to all annuitants and benefit recipients on the following January 1.

Subd. 5. [EFFECT ON ANNUITY.] The adjustments calculated under subdivisions 3 and 4 must be included in all annuities or benefits paid to the recipient after the adjustments take effect.

Subd. 6. [LUMP SUM POSTRETIREMENT ADJUSTMENT TRANSITION.] This subdivision applies to all annuitants and beneficiaries of the association who received a lump sum postretirement adjustment before the calculation of the first postretirement adjustment under subdivisions 3 and 4. Before the calculation of the first postretirement adjustment under subdivisions 3 and 4, the annual retirement annuity must be increased by the amount of the lump sum postretirement adjustment described in the association bylaws and paid to the annuitant or beneficiary in 1997 before the effective date of this section or if the annuitant or beneficiary was not eligible for a lump sum postretirement adjustment, then the annual benefit paid to that annuitant or benefit recipient must be increased by the cumulative percentage increase in the Consumer Price Index for urban wage earners and clerical workers All Items Index published by the United States Department of Labor, Bureau of Labor Statistics, from the date of the initial receipt of a retirement annuity or benefit of the person whose service is the basis of the benefit to June 30, 1997.

Sec. 7. Minnesota Statutes 1996, section 354A.31, subdivision 4, is amended to read:

Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision applies to the coordinated programs of the Minneapolis teachers retirement fund association and the St. Paul teachers retirement fund association.

(b) The normal coordinated retirement annuity shall be an amount equal to a retiring coordinated member's average salary multiplied by the retirement annuity formula percentage. Average salary for purposes of this section shall mean an amount equal to the average salary upon which contributions were made for the highest five successive years of service credit, but which shall not in any event include any more than the equivalent of 60 monthly salary payments. Average salary must be based upon all years of service credit if this service credit is less than five years.

(c) This paragraph, in conjunction with subdivision 6, applies to a person who first became a member or a member in a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a higher annuity amount, in which case paragraph (d) will apply. The retirement annuity formula percentage for purposes of this paragraph is ~~one~~ the percent specified in section 356.19, subdivision 1, per year for each year of coordinated service for the first ten years and ~~1.5~~ the percent specified in section 356.19, subdivision 2, for each year of coordinated service thereafter.

(d) This paragraph applies to a person who has become at least 55 years old and who first becomes a member after June 30, 1989, and to any other member who has become at least 55 years old and whose annuity amount, when calculated under this paragraph and in conjunction with subdivision 7 is higher than it is when calculated under paragraph (c), in conjunction with the provisions of subdivision 6. The retirement annuity formula percentage for purposes of this paragraph is ~~1.5~~ the percent specified in section 356.19, subdivision 2, for each year of coordinated service.

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Sec. 8. Minnesota Statutes 1996, section 354A.31, subdivision 4a, is amended to read:

Subd. 4a. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies to the new law coordinated program of the Duluth teachers retirement fund association.

(b) The normal coordinated retirement annuity is an amount equal to a retiring coordinated member's average salary multiplied by the retirement annuity formula percentage. Average salary for purposes of this section means an amount equal to the average salary upon which contributions were made for the highest five successive years of service credit, but may not in any event include any more than the equivalent of 60 monthly salary payments. Average salary must be based upon all years of service credit if this service credit is less than five years.

(c) This paragraph, in conjunction with subdivision 6, applies to a person who first became a member or a member in a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a higher annuity amount, in which case paragraph (d) applies. The retirement annuity formula percentage for purposes of this paragraph is ~~1.13~~ the percent specified in section 356.19, subdivision 1, per year for each year of coordinated service for the first ten years and ~~1.63~~ the percent specified in section 356.19, subdivision 2, for each subsequent year of coordinated service.

(d) This paragraph applies to a person who is at least 55 years old and who first becomes a member after June 30, 1989, and to any other member who is at least 55 years old and whose annuity amount, when calculated under this paragraph and in conjunction with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction with subdivision 6. The retirement annuity formula percentage for purposes of this paragraph is ~~1.63~~ the percent specified in section 356.19, subdivision 2, for each year of coordinated service.

Sec. 9. Laws 1979, chapter 109, section 1, as amended by Laws 1981, chapter 157, section 1, is amended to read:

Section 1. Authorization is hereby granted in accordance with Minnesota Statutes, Section 354A.12, for the St. Paul teachers retirement fund association to amend its bylaws as follows:

(1) Paragraph 9 of Section 3 of Article IV of the bylaws may be amended to provide a lump sum payment to annuitants and survivor benefit recipients who have been receiving annuities or benefits for at least three years, payable three months following the end of a fiscal year. The payments shall only be made if the investment income of the fund during the preceding fiscal year was in excess of 5-1/2 percent of the asset value of the fund at the end of that fiscal year. The amount that each eligible annuitant or benefit recipient shall be entitled to receive shall be determined as follows:

~~(a) The years of service of each annuitant as credited by the fund and the years of service of each person on behalf of whom a survivor benefit is paid as credited by the fund shall be totaled;~~

~~(b) The dollar amount equal to one-half of one percent of the asset value of the fund at the end of the previous fiscal year shall be determined;~~

(c) The dollar amount determined pursuant to clause (b) shall be divided by the aggregate years of credited service totaled pursuant to clause (a), the result to be considered the bonus figure per year of service credit;

(d) For each eligible annuitant and benefit recipient, the payment shall be equal to the bonus figure per year of service credit determined pursuant to clause (c) multiplied by each year of service credited for that person by the fund.

~~(2)~~ A new paragraph may be added to Section 2 of Article IV of the bylaws to provide that any active member of the fund with service credit prior to July 1, 1978 who elects in the social security referendum to become a coordinated member shall be entitled to a retirement annuity when otherwise qualified, the calculation of which shall utilize the formula specified in Laws 1977, Chapter 429, Section 61 for that portion of credited service which was served prior to July 1, 1978 and the new coordinated formula specified in the bylaws for the remainder of credited service, both applied to the average salary as specified in Paragraph 2 of Section 1 of Article IX. The formula percentages to be used in calculating the coordinated portion of a retirement annuity on coordinated service shall recognize the coordinated service as a continuation of any service prior to July 1, 1978.

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~~(3)~~ (2) Paragraph 5 of Section 3 of Article IV of the bylaws in effect on June 1, 1978 may be amended to provide that the recomputation of a disability benefit in an amount equal to a service pension shall occur when the member attains the age of 60 years and shall be recomputed without any reduction for early retirement, and that if the disability terminates prior to age 60 the member shall be eligible for benefits as provided in Paragraph 1 of Section 3 of Article IV and the years of service and final average salary accrued to disability termination date would be used as provided in Paragraph 5 of Section 3 of Article IV of the bylaws in effect June 1, 1978 and that Paragraph 3 of Section 4 of Article IV be amended to conform to this provision.

~~(4)~~ (3) Article VIII of the bylaws in effect July 1, 1978 may be amended by adding a new section 5 providing augmentation of benefits in the same manner as Minnesota Statutes 1978, Section 354.55, Subdivision 11.

Sec. 10. [DULUTH OLD PLAN BYLAWS; AUTHORITY GRANTED TO INCREASE FORMULAS.]

In accordance with Minnesota Statutes, section 354A.12, subdivision 4, approval is granted for the Duluth teachers retirement fund association to amend its articles of incorporation or bylaws by increasing the formula percentage used in computing annuities for old law coordinated program members in the Duluth teachers retirement fund association to 1.45 percent for each year of credited service.

Sec. 11. [REPEALER.]

(a) Minnesota Statutes 1996, section 354A.12, subdivision 2b, is repealed.

(b) Laws 1985, chapter 259, section 3; and Laws 1993, chapter 336, article 3, section 1, are repealed.

Sec. 12. [EFFECTIVE DATES.]

Sections 2 and 3 are effective for all salary paid on or after July 1, 1997. Sections 1 and 4 to 11 are effective July 1, 1997.

ARTICLE 4

MINNEAPOLIS POLICE AND FIREFIGHTERS

Section 1. Minnesota Statutes 1996, section 423B.01, subdivision 9, is amended to read:

Subd. 9. [EXCESS INVESTMENT INCOME.] "Excess investment income" means the amount, if any, by which the average time weighted total rate of return earned by the fund in the most recent prior five fiscal years has exceeded the actual average percentage increase in the current monthly salary of a first grade patrol officer in the most recent prior five fiscal years plus two percent, and must be expressed as a dollar amount ~~and~~. The amount may not exceed one percent of the total assets of the fund, except when the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is greater than 102 percent of its actuarial accrued liabilities, in which case the amount must not exceed 1-1/2 percent of the total assets of the fund, and does not exist unless the yearly average percentage increase of the time weighted total rate of return of the fund for the previous five years exceeds by two percent the yearly average percentage increase in monthly salary of a first grade patrol officer during the previous five calendar years.

Sec. 2. Minnesota Statutes 1996, section 423B.01 is amended by adding a new subdivision to read:

Subd. 15. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" or "actuarially equivalent" means the condition of one annuity or benefit having an equal actuarial present value as another annuity or benefit, determined as of a given date at a specified age with each actuarial present value based on the appropriate mortality table adopted by the board of directors based on the experience of the fund and approved by the actuary retained by the legislative commission on pensions and retirement and using the applicable preretirement or postretirement interest rate assumptions specified in section 356.216.

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Sec. 3. Minnesota Statutes 1996, section 423B.06, is amended by adding a subdivision to read:

Subd. 5. [TAX LEVY.] Notwithstanding any provision of section 69.77 to the contrary, if in any year after the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is greater than 102 percent of the actuarial accrued liabilities of the fund and subsequently the actuarial value of assets are less than 100 percent of the actuarial accrued liabilities, the city of Minneapolis is not required to levy a property tax to amortize any unfunded actuarial accrued liability unless the fund experiences two successive years when the actuarial value of assets are less than 100 percent of the actuarial accrued liabilities according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216.

Sec. 4. Minnesota Statutes 1996, section 423B.07, is amended to read:

423B.07 [AUTHORIZED FUND DISBURSEMENTS.]

The police pension fund may be used only for the payment of:

(1) service, disability, or dependency pensions;

(2) notwithstanding a contrary provision of section 69.80, the salary of the secretary of the association in an amount not to exceed 30 percent of the base salary of a first grade patrol officer, the salary of the president of the association in an amount not to exceed ten percent of the base salary of a first grade patrol officer, and the salaries of the other elected members of the board of trustees in an amount not to exceed three units;

(3) expenses of officers and employees of the association in connection with the protection of the fund;

(4) expenses of operating and maintaining the association, including the administrative expenses related to the administration of the insurance plan authorized in section 423B.08;

(5) support for hospital and medical insurance for pensioners who have completed 20 years or more of service or permanent disabilitants and surviving spouses of deceased active members, disabilitants, or service pensioners who have completed 20 years or more of service in an amount equal to one unit per month, to be added to the pension otherwise provided;

(6) health and welfare benefits of one unit per month in addition to other benefits for members who retired after July 1, 1980, and have completed 20 years or more of service or for members who are permanent disabilitants; and

~~(7)~~ (5) other expenses authorized by section 69.80, or other applicable law.

Sec. 5. Minnesota Statutes 1996, section 423B.09, subdivision 1, is amended to read:

Subdivision 1. [MINNEAPOLIS POLICE; PERSONS ENTITLED TO RECEIVE PENSIONS.] The association shall grant pensions payable from the police pension fund in monthly installments to persons entitled to pensions in the manner and for the following purposes.

(a) When the actuarial value of assets of the fund according to the most recent annual actuarial valuation performed in accordance with sections 356.215 and 356.216 is less than 90 percent of the actuarial accrued liabilities, an active member or a deferred pensioner who has performed duty as a member of the police department of the city for five years or more, upon written application after retiring from duty and reaching at least age 50, is entitled to be paid monthly for life a service pension equal to eight units. For full years of service beyond five years, the service pension increases by 1.6 units for each full year, to a maximum of 40 units. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is of greater than 90 percent of actuarial accrued liabilities, active members, deferred members, and service pensioners are entitled to a service pension according to the following schedule:

5 years 8.0 units

6 years 9.6 units

7 years 11.2 units

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8 years 12.8 units

9 years 14.4 units

10 years 16.0 units

11 years 17.6 units

12 years 19.2 units

13 years 20.8 units

14 years 22.4 units

15 years 24.0 units

16 years 25.6 units

17 years 27.2 units

18 years 28.8 units

19 years 30.4 units

20 years 34.0 units

21 years 35.6 units

22 years 37.2 units

23 years 38.8 units

24 years 40.4 units

25 years 42.0 units

Fractional years of service may not be used in computing pensions.

(b) An active member who after five years' service but less than 20 years' service with the police department of the city, becomes superannuated so as to be permanently unable to perform the person's assigned duties, is entitled to be paid monthly for life a superannuation pension equal to two units for five years of service and an additional two units for each full year of service over five years and less than 20 years.

(c) An active member who is not eligible for a service pension and who, while a member of the police department of the city, becomes diseased or sustains an injury while in the service that permanently unfits the member for the performance of police duties is entitled to be paid monthly for life a pension equal to 32 units while so disabled.

Sec. 6. Minnesota Statutes 1996, section 423B.09, is amended by adding a subdivision to read:

Subd. 6. [OPTIONAL ANNUITIES.] A member who is retired or disabled on the effective date of this subdivision may elect an optional retirement annuity within 60 days of the effective date instead of the normal retirement annuity. A member who retires or becomes disabled after the effective date of this subdivision may elect an optional retirement annuity prior to the receipt of any benefits. The optional retirement annuity may be a 50 percent, a 75 percent, or a 100 percent joint and survivor annuity without reinstatement in the event of the designated beneficiary predeceasing the member or a 50 percent, a 75 percent, or a 100 percent joint and survivor annuity with reinstatement in the event of the designated beneficiary predeceasing the member. Optional retirement annuity forms must be actuarially equivalent to the service pension and automatic survivor coverage otherwise payable to the retiring member and the member's beneficiaries. Once selected, the optional annuity is irrevocable.

Sec. 7. Minnesota Statutes 1996, section 423B.10, subdivision 1, is amended to read:

Subdivision 1. [ENTITLEMENT; BENEFIT AMOUNT.] (a) The surviving spouse of a deceased service pensioner, disability pensioner, deferred pensioner, superannuation pensioner, or active member, who was the legally married spouse of the decedent, residing with the decedent, and who was married while or before the time the decedent was on the payroll of the police department, and who, if the deceased member was a service or deferred pensioner, was legally married to the member for a period of at least one year before retirement from the police department, is entitled to a surviving spouse benefit. The surviving spouse benefit is equal to 21 22 units per month if the person is the surviving spouse of a deceased active member or disabilitant. The surviving spouse benefit is equal to six units per month, plus an additional one unit for each year of service to the credit of the decedent in excess of five years, to a maximum of 21 22 units per month, if the person is the surviving spouse of a deceased service pensioner, deferred pensioner, or superannuation pensioner. The surviving spouse benefit is payable for the life of the surviving spouse.

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(b) A surviving child of a deceased service pensioner, disability pensioner, deferred pensioner, superannuation pensioner, or active member, who was living while the decedent was an active member of the police department or was born within nine months after the decedent terminated active service in the police department, is entitled to a surviving child benefit. The surviving child benefit is equal to eight units per month if the person is the surviving child of a deceased active member or disabilitant. The surviving child benefit is equal to two units per month, plus an additional four-tenths of one unit per month for each year of service to the credit of the decedent in excess of five years, to a maximum of eight units, if the person is the surviving child of a deceased service pensioner, deferred pensioner, or superannuation pensioner. The surviving child benefit is payable until the person attains age 18, or, if in full-time attendance during the normal school year, in a school approved by the board of directors, until the person receives a bachelor's degree or attains the age of 22 years, whichever occurs first. In the event of the death of both parents leaving a surviving child or children entitled to a surviving child benefit as determined in this paragraph, the surviving child is, or the surviving children are, entitled to a surviving child benefit in such sums as determined by the board of directors to be necessary for the care and education of such surviving child or children, but not to exceed the family maximum benefit per month, to the children of any one family.

(c) The surviving spouse and surviving child benefits are subject to a family maximum benefit. The family maximum benefit is 40 41 units per month.

(d) A surviving spouse who is otherwise not qualified may receive a benefit if the surviving spouse was married to the decedent for a period of five years and was residing with the decedent at the time of death. The surviving spouse benefit is the same as that provided in paragraph (a), except that if the surviving spouse is younger than the decedent, the surviving spouse benefit must be actuarially equivalent to a surviving spouse benefit that would have been paid to the member's spouse had the member been married to a person of the same age or a greater age than the member's age before retirement.

Sec. 8. Minnesota Statutes 1996, section 423B.15, subdivision 2, is amended to read:

Subd. 2. [DETERMINATION OF EXCESS INVESTMENT INCOME.] The board of trustees of the relief association shall determine by May 1 of each year whether or not the fund has excess investment income. The amount of excess investment income, if any, must be stated as a dollar amount and reported by the chief administrative officer of the relief association to the mayor and governing body of the city, the state auditor, the commissioner of finance, and the executive director of the legislative commission on pensions and retirement. The dollar amount of excess investment income up to one percent of the assets of the fund, except when the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is greater than 102 percent of its actuarial accrued liabilities in which case the amount may not exceed 1-1/2 percent of the assets of the fund, must be applied for the purpose specified in subdivision 3. Excess investment income must not be considered as income to or assets of the fund for actuarial valuations of the fund for that year under sections 69.77, 356.215, and 356.216 and the provisions of this section except to offset the annual postretirement payment. Additional investment income is any realized or unrealized investment income other than the excess investment income and must be included in the actuarial valuations performed under sections 69.77, 356.215, and 356.216 and the provisions of this section.

Sec. 9. Minnesota Statutes 1996, section 423B.15, subdivision 3, is amended to read:

Subd. 3. [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The amount determined under subdivision 2 must be applied in accordance with this subdivision. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is less than 102 percent of its total actuarial liabilities, the relief association shall apply the first one-half of excess investment income to the payment of an annual postretirement payment as specified in this subdivision. and the second one-half of excess investment income up to one-half of one percent of the assets of the fund must be applied to reduce the state amortization state aid or supplementary amortization state aid payments otherwise due to the relief association under section 423A.02 for the current calendar year. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is less than 102 percent funded and other conditions are met, the relief association shall pay an annual postretirement payment to all eligible members in an amount not to exceed one-half of one percent of the assets of the fund. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is greater than 102 percent of its actuarial accrued liabilities, the relief association shall pay an annual postretirement payment to all eligible members in an amount not to exceed 1-1/2 percent of the assets of the fund. Payment of the annual postretirement payment must be in a lump sum amount on June 1 following

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the determination date in any year. Payment of the annual postretirement payment may be made only if the average time weighted total rate of return for the most recent prior five years exceeds by two percent the actual average percentage increase in the current monthly salary of a top grade patrol officer in the most recent prior five fiscal years. The total amount of all payments to members may not exceed the amount determined under this subdivision. Payment to each eligible member must be calculated by dividing the total number of pension units to which eligible members are entitled into the excess investment income available for distribution to members, and then multiplying that result by the number of units to which each eligible member is entitled to determine each eligible member's annual postretirement payment. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is less than 102 percent of its actuarial accrued liabilities, payment to each eligible member may not exceed an amount equal to the total monthly benefit that the eligible member was entitled to in the prior year under the terms of the benefit plan of the relief association or each eligible member's proportionate share of the excess investment income, whichever is less. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is greater than 102 percent of its actuarial accrued liabilities, payment to each eligible member must not exceed the member's proportionate share of 1-1/2 percent of the assets of the fund.

A person who received a pension or benefit for the entire 12 months before the determination date is eligible for a full annual postretirement payment. A person who received a pension or benefit for less than 12 months before the determination date is eligible for a prorated annual postretirement payment.

Sec. 10. Minnesota Statutes 1996, section 423B.15, subdivision 6, is amended to read:

Subd. 6. [NO GUARANTEE OF ANNUAL POSTRETIREMENT PAYMENT.] No provision of or payment made under this section may be interpreted or relied upon by any member of the relief association to guarantee or entitle a member to annual postretirement payments for a period when no excess investment income is earned by the fund. If the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with sections 356.215 and 356.216 is less than 102 percent of its actuarial accrued liabilities, the distribution of assets under this section must not exceed one-half of one percent.

Sec. 11. Minnesota Statutes 1996, section 423B.15, is amended by adding a subdivision to read:

Subd. 7. [ANNUAL ACTUARIAL VALUATION DATE.] Notwithstanding any provision of section 69.77, subdivision 2h, 356.215 or 356.216 to the contrary, the annual actuarial valuation of the fund must be completed by May 1 of each year.

Sec. 12. Laws 1965, chapter 519, section 1, as amended by Laws 1967, chapter 819, section 1; Laws 1969, chapter 123, section 1; Laws 1975, chapter 57, section 1; Laws 1977, chapter 164, section 2; Laws 1990, chapter 589, article 1, section 5; Laws 1992, chapter 454, section 2; and Laws 1994, chapter 591, article 1, section 1, is amended to read:

Section 1. [MINNEAPOLIS, CITY OF; FIREFIGHTER'S RELIEF ASSOCIATION; SURVIVING SPOUSE'S ENTITLEMENT.] Notwithstanding the provisions of Minnesota Statutes 1965, Section 69.48, to the contrary, when a service pensioner, disability pensioner, or deferred pensioner, or an active member of a relief association dies, leaving:

(1) A surviving spouse who was a legally married spouse, residing with the decedent, and who was married while or prior to the time the decedent was on the payroll of the fire department in the case of a deceased active member; and who, in case the deceased member was a service or deferred pensioner was legally married to the member at least five years before death; or

(2) A child or children who were living while the deceased was on the payroll of the fire department, or born within nine months after the decedent was withdrawn from the payroll of the fire department, the surviving spouse and the child or children shall be entitled to a pension or pensions, as follows:

(a) To the surviving spouse, a pension of not less than 17 units, and not to exceed the total of 22 units per month, as the bylaws of the association provide~~, for life~~; provided, that if the spouse shall remarry then the pension shall cease and terminate as of the date of remarriage; provided, further, if the remarriage terminates for any reason, the surviving spouse shall again be entitled to a pension as the bylaws of the association provide;

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(b) To the child or children, if their other parent is living, a pension of not to exceed eight units per month for each child up to the time each child reaches the age of not less than 16 years and not to exceed an age of 18 years; provided, however, upon approval by the board of trustees, such a child who is a full-time student, upon proof of compliance with the provisions of this act, may be entitled to such pension so long as the child is a full-time student and has not reached 22 years of age, all in conformity with the bylaws of the association; provided, further, the total pensions hereunder for the surviving spouse and children of the deceased member shall not exceed the sum of 41 units per month;

(c) A child or children of a deceased member after the death of their other parent, or in the event their other parent predeceases the member, be entitled to receive a pension or pensions in such amount as the board of trustees of the association shall deem necessary to properly support the child or children until they reach the age of not less than 16 and not more than 18 years; provided, however, upon approval by the board of trustees, such a child who is a full-time student, upon proof of compliance with the provisions of this act, may be entitled to such pension so long as the child is a full-time student and has not reached 22 years of age, as the bylaws of the association may provide; but the total amount of the pension or pensions hereunder for any child or children shall not exceed the sum of 41 units per month;

(d) For the purposes of this act, a full-time student is defined as an individual who is in full-time attendance as a student at an educational institution. Whether or not the student was in full-time attendance would be determined by the board of trustees of the association in the light of the standards and practices of the school involved. Specifically excluded is a person who is paid by the person's employer while attending school at the request of the person's employer. Benefits may continue during any period of four calendar months or less in any 12 month period in which a person does not attend school if the person shows to the satisfaction of the board of trustees that the person intends to continue in full-time school attendance immediately after the end of the period. An educational institution is defined so as to permit the payment of benefits to students taking vocational or academic courses in all approved, accredited or licensed schools, colleges, and universities. The board of trustees shall make the final determination of eligibility for benefits if any question arises concerning the approved status of the educational institution which the student attends or proposes to attend;

(e) In the event that a child who is receiving a pension as provided above shall marry before the age of 22 years, the pension shall cease as of the date of the marriage.; and

(f) A surviving spouse of a deceased service pensioner, disability pensioner, deferred pensioner, or service pensioner who is otherwise not qualified may receive a benefit if the surviving spouse was legally married to the decedent for a period of five years and was residing with the decedent at the time of death. The surviving spouse benefit is the same as that provided under paragraph (a), except that if the surviving spouse is younger than the decedent, the surviving spouse benefit must be actuarially equivalent to a surviving spouse benefit that would have been paid to the member's spouse had the member been married to a person of the same age or a greater age than the member's age prior to retirement. A benefit paid under this paragraph may be less than 17 units, notwithstanding the 17 unit minimum established under paragraph (a).

Sec. 13. Laws 1989, chapter 319, article 19, section 7, subdivision 1, as amended by Laws 1992, chapter 471, article 2, section 5, and Laws 1996, chapter 438, article 4, section 12, is amended to read:

Subdivision 1. [MINNEAPOLIS FIRE DEPARTMENT RELIEF ASSOCIATION; DEFINITIONS.] For the purposes of this section, each of the terms in this subdivision have the meanings given them in paragraphs (a) to (h).

(a) "Annual postretirement payment" means the payment of a lump sum postretirement benefit to an eligible member on June 1 following the determination date in any year.

(b) "City" means the city of Minneapolis.

(d) "Eligible member" means a person, including a service pensioner, a disability pensioner, a survivor, or dependent of a deceased active member, service pensioner, or disability pensioner, who received a pension or benefit from the relief association during the 12 months before the determination date. A person who received a pension or benefit for the entire 12 months before the determination date is eligible for a full annual postretirement payment. A person who received a pension or benefit for less than 12 months before the determination date is eligible for a prorated annual postretirement payment.

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(e) "Excess investment income" means the amount by which the average time weighted total rate of return earned by the fund in the most recent prior five fiscal years has exceeded the actual average percentage increase in the current monthly salary of a top grade firefighter in the most recent prior five fiscal years plus two percent. The excess investment income must be expressed as a dollar amount and may not exceed one percent of the total assets of the fund, except when the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is greater than 102 percent of its actuarial accrued liabilities in which case the amount must not exceed 1-1/2 percent of the assets of the funds.

(f) "Fund" means the Minneapolis fire department relief association.

(g) "Relief association" means the Minneapolis fire department relief association.

(h) "Time weighted total rate of return" means the percentage amount determined by using the formula or formulas established by the state board of investment under Minnesota Statutes, section 11A.04, clause (11), and in effect on January 1, 1987.

Sec. 14. Laws 1989, chapter 319, article 19, section 7, subdivision 3, is amended to read:

Subd. 3. [DETERMINATION OF EXCESS INVESTMENT INCOME.] The board of trustees of the relief association shall determine by May 1 of each year whether or not the relief association has excess investment income. The amount of excess investment income, if any, must be stated as a dollar amount and reported by the chief administrative officer of the relief association to the mayor and governing body of the city, the state auditor, the commissioner of finance, and the executive director of the legislative commission on pensions and retirement. The dollar amount of excess investment income up to one percent of the assets of the fund, except if the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is greater than 102 percent of its actuarial accrued liabilities, must be applied for the purpose specified in subdivision 4. Excess investment income must not be considered as income to or assets of the fund for actuarial valuations of the fund for that year under sections 69.77, 356.215, and 356.216 and the provisions of this section except to offset the annual postretirement payment. Additional investment income is any realized or unrealized investment income other than the excess investment income and must be included in the actuarial valuations performed under sections 69.77, 356.215, and 356.216 and the provisions of this section.

Sec. 15. Laws 1989, chapter 319, article 19, section 7, subdivision 4, as amended by Laws 1990, chapter 570, article 12, section 63, Laws 1992, chapter 471, article 2, section 6, and Laws 1996, chapter 438, article 4, section 13, is amended to read:

Subd. 4. [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The amount determined under subdivision 3 must be applied in accordance with this subdivision. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is less than 102 percent of its actuarial accrued liabilities, the relief association shall apply the first one-half of one percent of assets which constitute excess investment income to the payment of an annual postretirement payment as specified in this subdivision. and the second one-half of one percent of assets which constitute excess investment income shall be applied to reduce the state amortization state aid or supplementary amortization state aid payments otherwise due to the relief association under section 423A.02 for the current calendar year. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is less than 102 percent of its actuarial accrued liabilities, the relief association shall pay an annual postretirement payment to all eligible members in an amount not to exceed one-half of one percent of the assets of the fund. Payment of the annual postretirement payment must be in a lump sum amount on June 1 following the determination date in any year. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is greater than 102 percent of its actuarial accrued liabilities, the relief association shall pay an annual postretirement payment to all eligible members in an amount not to exceed 1-1/2 percent of the assets of the fund. Payment of the annual postretirement payment may be made only if the average time weighted total rate of return in the most recent prior five fiscal years exceeds by two percent the actual average percentage increase in the current monthly salary of a top grade firefighter in the most recent prior five fiscal years. The total amount of all payments to members may not exceed the amount determined under subdivision 3. Payment to each eligible member must be

Journal of the House - 45th Day - Top of Page 2918

calculated by dividing the total number of pension units to which eligible members are entitled into the excess investment income available for distribution to members, and then multiplying that result by the number of units to which each eligible member is entitled to determine each eligible member's annual postretirement payment. When the fund actuarial value of assets according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is less than 102 percent of its actuarial accrued liabilities, payment to each eligible member may not exceed an amount equal to the total monthly benefit that the eligible member was entitled to in the prior year under the terms of the benefit plan of the relief association or each eligible member's proportionate share of the excess investment income, whichever is less. When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is greater than 102 percent of its actuarial accrued liabilities, payment to each eligible member may not exceed the member's proportionate share of 1-1/2 percent of assets of the fund.

Sec. 16. Laws 1989, chapter 319, article 19, section 7, subdivision 7, is amended to read:

Subd. 7. [NO GUARANTEE OF ANNUAL POSTRETIREMENT PAYMENT.] No provision of or payment made under this section may be interpreted or relied upon by any member of the relief association to guarantee or entitle a member to annual postretirement payments for a period when no excess investment income is earned by the fund. If the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is less than 102 percent of its actuarial accrued liabilities, a distribution of the fund assets must not exceed one-half of one percent.

Sec. 17. Laws 1993, chapter 125, article 1, section 1, is amended to read:

Section 1. [MINNEAPOLIS, CITY OF; SERVICE PENSION RATES.]

Notwithstanding the provisions of Minnesota Statutes, section 69.45, Laws 1971, chapter 542, section 1, and Laws 1980, chapter 607, article XV, section 9, to the contrary, when the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is less than 90 percent of its actuarial accrued liabilities, the service pensions payable by the Minneapolis fire department relief association for members terminating active service as a Minneapolis firefighter after June 1, 1993, must be computed as follows:

length of service

credited service pension payable

10 years 16.0 units

11 years 17.6 units

12 years 19.2 units

13 years 20.8 units

14 years 22.4 units

15 years 24.0 units

16 years 25.6 units

17 years 27.2 units

18 years 28.8 units

19 years 30.4 units

20 years 33.0 units

21 years 34.6 units

22 years 36.2 units

23 years 37.8 units

24 years 39.4 units

25 years 41.0 units

Journal of the House - 45th Day - Top of Page 2919

liabilities, the following schedule applies to all active members and retired service pensioners who otherwise met the then existing requirements to receive a benefit:

length of service

credited service pension payable

5 years 8.0 units

6 years 9.6 units

7 years 11.2 units

8 years 12.8 units

9 years 14.4 units

10 years 16.0 units

11 years 17.6 units

12 years 19.2 units

13 years 20.8 units

14 years 22.4 units

15 years 24.0 units

16 years 25.6 units

17 years 27.2 units

18 years 28.8 units

19 years 30.4 units

20 years ~~33.0~~ 33.5 units

21 years ~~34.6~~ 35.1 units

22 years ~~36.2~~ 37.7 units

23 years ~~37.8~~ 38.3 units

24 years ~~39.4~~ 39.9 units

25 years ~~41.0~~ 41.5 units

When the actuarial value of assets of the fund according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is of greater than 92.5 percent of actuarial accrued liabilities, the following schedule applies to all active members and retired service pensioners who otherwise met the then existing requirements to receive a benefit:

length of service

credited service pension payable

5 years 8.0 units

6 years 9.6 units

7 years 11.2 units

8 years 12.8 units

9 years 14.4 units

10 years 16.0 units

11 years 17.6 units

12 years 19.2 units

13 years 20.8 units

14 years 22.4 units

15 years 24.0 units

16 years 25.6 units

17 years 27.2 units

18 years 28.8 units

19 years 30.4 units

20 years 34.0 units

21 years 35.6 units

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22 years 37.2 units

23 years 38.8 units

24 years 40.4 units

25 years 42.0 units

Sec. 18. [MINNEAPOLIS FIRE DEPARTMENT RELIEF ASSOCIATION; OPTIONAL ANNUITIES.]

A member of the Minneapolis fire department relief association who is retired or disabled on the effective date of this section may elect an optional retirement annuity within 60 days of the effective date instead of the normal retirement pension. A member who retires or becomes disabled after the effective date of this section may elect an optional retirement annuity prior to the receipt of any benefits. The optional retirement annuity may be a 50 percent, a 75 percent, or a 100 percent joint and survivor annuity without reinstatement in the event of the designated beneficiary predeceasing the member or a joint and survivor annuity with reinstatement in the event of the designated beneficiary predeceasing the member. An optional retirement annuity must be actuarially equivalent to the service pension and automatic survivor coverage otherwise payable to the retiring member and the member's beneficiaries. Once selected, the optional annuity is irrevocable.

Sec. 19. [MINNEAPOLIS FIRE DEPARTMENT RELIEF ASSOCIATION TAX LEVY.]

If in any year after the Minneapolis fire department relief actuarial value of assets of the association according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216 is greater than 102 percent of the actuarial accrued liabilities of the fund and subsequently the actuarial value of assets are less than 100 percent of the actuarial accrued liabilities according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216, the city of Minneapolis is not required to levy a property tax to fund any deficit unless the fund has two successive years when the actuarial value of assets are less than 100 percent of the actuarial accrued liabilities according to the most recent annual actuarial valuation prepared in accordance with Minnesota Statutes, sections 356.215 and 356.216.

Sec. 20. [ACTUARIAL VALUATION DATE.]

Notwithstanding Minnesota Statutes, section 69.77, subdivision 2h, 356.215 or 356.216, the annual actuarial valuation of the Minneapolis fire department relief association must be completed by May 1 of each year.

Sec. 21. [ACTUARIAL EQUIVALENT.]

For the purposes of the Minneapolis fire department relief association, "actuarial equivalent" or "actuarially equivalent" means the condition of one annuity or benefit having an equal actuarial present value as another annuity or benefit, determined as of a given date at a specified age with each actuarial present value based on the appropriate mortality table adopted by the board of directors based on the experience of the fund and approved by the actuary retained by the legislative commission on pensions and retirement and using the applicable preretirement or postretirement interest rate assumptions specified in Minnesota Statutes, section 356.216.

Sec. 22. [BENEFIT EXCHANGE.]

The one unit health and welfare benefit granted to members of the Minneapolis fire department relief association in Laws 1980, chapter 667, article XV, section 9, who retired after July 1, 1980, must be reduced by one-half unit upon the implementation of the benefit improvement in section 17 when the actuarial value of assets of the fund according to the most recent annual actuarial valuation report under Minnesota Statutes, sections 356.215 and 356.216 exceeds 90 percent of its actuarial accrued liabilities and the benefit must be eliminated when the actuarial value of assets of the fund exceeds 92.5 percent of its actuarial accrued liabilities and the benefit in section 15 is fully implemented.

Sec. 23. [EFFECTIVE DATE.]

The sections of this article are effective on the day after compliance by the governing body of the city of Minneapolis with Minnesota Statutes, section 645.021, subdivision 2. Section 4 is effective when the provisions of section 5 take effect. Sections 7 and 12 are effective retroactive to July 1, 1996 and apply to all current spouses of members, except that the unit increases for surviving spouses in section 7 shall not otherwise increase the surviving spouse benefit beyond 22 units."

Journal of the House - 45th Day - Top of Page 2921

Delete the title and insert:

"A bill for an act relating to retirement; increasing pension benefit accrual rates; adjusting financing for pension plans; adding supplemental financial conditions information for pension funds; reducing appropriations; modifying or establishing various pension aids; appropriating money; amending Minnesota Statutes 1996, sections 3.85, subdivisions 11 and 12; 3A.02, subdivisions 1 and 4; 3A.07; 11A.18, subdivision 9; 352.01, subdivision 25; 352.04, subdivisions 2 and 3; 352.115, subdivision 3; 352.72, subdivision 2; 352.92, subdivisions 1 and 2; 352.93, subdivisions 2, 3, and by adding a subdivision; 352.95, subdivisions 1 and 5; 352B.02, subdivisions 1a and 1c; 352B.08, subdivisions 2 and 2a; 352B.10, subdivision 1; 352B.30, by adding a subdivision; 352C.031, subdivision 4; 352C.033; 353.01, subdivision 37; 353.27, subdivisions 2 and 3a; 353.29, subdivision 3; 353.651, subdivision 3; 353.656, subdivision 1; 353.71, subdivision 2; 353A.08, subdivisions 1 and 2; 353A.083, by adding a subdivision; 354.05, subdivision 38; 354.42, subdivisions 2, 3, and 5; 354.44, subdivision 6, and by adding a subdivision; 354.53, subdivision 1; 354.55, subdivision 11; 354A.011, subdivision 15a; 354A.12, subdivisions 1, 2a, 3a, and 3c; 354A.31, subdivisions 4 and 4a; 356.20, subdivision 2; 356.215, subdivisions 2, 4d, and 4g; 356.217; 356.30, subdivisions 1 and 3; 356.32, subdivision 2; 422A.06, subdivision 8; 422A.151; 423B.01, subdivision 9, and by adding a subdivision; 423B.06, by adding a subdivision; 423B.07; 423B.09, subdivision 1, and by adding a subdivision; 423B.10, subdivision 1; 423B.15, subdivisions 2, 3, 6, and by adding a subdivision; and 490.124, subdivisions 1 and 5; Laws 1965, chapter 519, section 1, as amended; Laws 1979, chapter 109, section 1, as amended; Laws 1989, chapter 319, article 19, section 7, subdivisions 1, as amended, 3, 4, as amended, and 7; and Laws 1993, chapter 125, article 1, section 1; proposing coding for new law in Minnesota Statutes, chapters 124; 273; 352; 352C; 352E; 354A; and 356; repealing Minnesota Statutes 1996, sections 124.195, subdivision 12; 124.2139; 353C.01; 353C.02; 353C.03; 353C.04; 353C.05; 353C.06; 353C.07; 353C.08; 353C.09; 353C.10; 354A.12, subdivision 2b; 356.70; and 356.88, subdivision 2; and Laws 1985, chapter 259, section 3; and Laws 1993, chapter 336, article 3, section 1."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Rules and Legislative Administration.

The report was adopted.

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

H. F. No. 1386, A bill for an act relating to public administration; authorizing spending to acquire and better public land and buildings and other public improvements of a capital nature with certain conditions; authorizing the commissioner of administration, with the approval of the commissioner of finance, to enter into lease-purchase agreements and to provide for the issuance of certificates of participation; prescribing certain conditions; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 16B.

Reported the same back with the following amendments:

Page 1, line 18, after "new" insert "or existing building for use as a"

Page 3, line 8, delete "n" and insert "in"

Page 4, line 31, delete "be a low-rise"

Page 4, line 32, delete everything before the second "at" and insert "provide"

Page 5, line 5, after "headquarters" insert "or another existing building determined by the commissioner to be suitable for use as a headquarters building for the department of revenue"

Page 5, line 23, after "new" insert "or existing"

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Rules and Legislative Administration.

The report was adopted.

Journal of the House - 45th Day - Top of Page 2922

Dorn from the Committee on Health and Human Services to which was referred:

H. F. No. 1441, A bill for an act relating to health insurance; limiting the growth limits; requiring loss ratio disclosures; repealing the health care commission; modifying the regional coordinating boards; modifying the health technology advisory committee; modifying the eligibility and the asset requirements for the MinnesotaCare program; providing penalties; modifying the enforcement mechanisms for the provider tax pass-through; providing enrollee access to discounted provider fees under certain plans; modifying mandatory Medicare assignment; amending Minnesota Statutes 1996, sections 62A.021, by adding a subdivision; 62A.61; 62A.65, subdivision 3; 62J.04, subdivisions 1, 1a, and 9; 62J.041; 62J.06; 62J.07, subdivisions 1 and 3; 62J.09, subdivision 1; 62J.15, subdivision 1; 62J.152, subdivisions 1, 2, 4, and 5; 62J.17, subdivision 6a; 62J.22; 62J.25; 62J.2914, subdivision 1; 62J.2915; 62J.2916, subdivision 1; 62J.2917, subdivision 2; 62J.2921, subdivision 2; 62J.451, subdivision 6b; 62L.08, subdivision 8; 62N.25, subdivision 5; 62Q.03, subdivision 5a; 62Q.33, subdivision 2; 256.9354, subdivision 5; 256.9355, by adding a subdivision; 256.9357, subdivision 1; and 295.582; proposing coding for new law in Minnesota Statutes, chapters 62Q; and 256; repealing Minnesota Statutes 1996, sections 62J.03, subdivision 3; 62J.041, subdivision 7; 62J.042; 62J.05; 62J.051; 62J.09, subdivision 3a; 62N.02, subdivision 3; 62Q.165, subdivision 3; 62Q.25; 62Q.29; and 62Q.41; Laws 1993, chapter 247, article 4, section 8; Laws 1994, chapter 625, article 5, section 5, subdivision 1, as amended; Laws 1995, chapter 96, section 2; and Laws 1995, First Special Session chapter 3, article 13, section 2.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"ARTICLE 1

MINNESOTACARE PROGRAM/GAMC

Section 1. Minnesota Statutes 1996, 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, nursing home or intermediate care facilities services, inpatient mental health services, and chemical dependency services. Effective July 1, 1998, adult dental care for nonpreventive services with the exception of orthodontic services is available to persons who qualify under section 256.9354, subdivisions 1 to 5, or 256.9366, with family gross income equal to or less than 175 percent of the federal poverty guidelines. 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. 2. Minnesota Statutes 1996, 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. Prior to July 1, 1997, the inpatient hospital benefit for adult enrollees is subject to an annual benefit limit of $10,000. Effective July 1, 1997, the inpatient hospital benefit for adult enrollees who qualify under section 256.9354, subdivision 5, is subject to an annual limit of $10,000.

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(b) Enrollees who qualify under section 256.9354, subdivision 5, are 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 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. 3. Minnesota Statutes 1996, section 256.9353, subdivision 7, is amended to read:

Subd. 7. [COPAYMENTS AND COINSURANCE.] The MinnesotaCare benefit plan shall include the following copayments and coinsurance requirements:

(1) ten percent of the paid charges ~~submitted~~ for inpatient hospital services for adult enrollees not eligible for medical assistance, subject to an annual inpatient out-of-pocket maximum of $1,000 per individual and $3,000 per family;

(2) $3 per prescription for adult enrollees; ~~and~~

(3) $25 for eyeglasses for adult enrollees; and

(4) effective July 1, 1998, 50 percent of paid charges for adult dental care services other than preventive care services for persons eligible under section 256.9354, subdivisions 1 to 5, or 256.9366 with income equal to or less than 175 percent of the federal poverty guidelines.

Prior to July 1, 1997, enrollees who are not eligible for medical assistance with or without a spenddown shall be financially responsible for the coinsurance amount and amounts which exceed the $10,000 benefit limit. MinnesotaCare shall be financially responsible for the spenddown amount up to the $10,000 benefit limit for enrollees who are eligible for medical assistance with a spenddown; enrollees who are eligible for medical assistance with a spenddown are financially responsible for amounts which exceed the $10,000 benefit limit. Effective July 1, 1997, the inpatient hospital benefit for adult enrollees who qualify under section 256.9354, subdivision 5, and who are not eligible for medical assistance with or without a spenddown shall be financially responsible for the coinsurance amount and amounts which exceed the $10,000 benefit limit.

Sec. 4. Minnesota Statutes 1996, 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 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.

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Sec. 5. Minnesota Statutes 1996, 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" 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) 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.

~~(d)~~ (b) Beginning July 1, 1997, the definition of eligible persons is expanded to include all individuals and households with no children who have gross family incomes that are equal to or less than 175 percent of the federal poverty guidelines and who are not eligible for medical assistance without a spenddown under chapter 256B.

(c) All eligible persons under paragraphs (a) and (b) are eligible for coverage through the MinnesotaCare program but must pay a premium as determined under sections 256.9357 and 256.9358. Individuals and families whose income is greater than the limits established under section 256.9358 may not enroll in the MinnesotaCare program.

Sec. 6. Minnesota Statutes 1996, section 256.9354, subdivision 6, is amended to read:

Subd. 6. [APPLICANTS POTENTIALLY ELIGIBLE FOR MEDICAL ASSISTANCE.] Individuals who apply for MinnesotaCare who qualify under section 256.9354, subdivision 5, but who are potentially eligible for medical assistance without a spenddown shall be allowed to enroll in MinnesotaCare for a period of 60 days, so long as the applicant meets all other conditions of eligibility. The commissioner shall identify and refer such individuals to their county social service agency. The enrollee must cooperate with the county social service agency in determining medical assistance eligibility within the 60-day enrollment period. Enrollees who do not apply for and cooperate with medical assistance within the 60-day enrollment period, and their other family members, shall be disenrolled from the plan within one calendar month. Persons disenrolled for nonapplication for medical assistance may not reenroll until they have obtained a medical assistance eligibility determination for the family member or members who were referred to the county agency. Persons disenrolled for noncooperation with medical assistance may not reenroll until they have cooperated with the county agency and have obtained a medical assistance eligibility determination. The commissioner shall redetermine provider payments made under MinnesotaCare to the appropriate medical assistance payments for those enrollees who subsequently become eligible for medical assistance.

Sec. 7. Minnesota Statutes 1996, section 256.9354, subdivision 7, is amended to read:

Subd. 7. [GENERAL ASSISTANCE MEDICAL CARE.] A person cannot have coverage under both MinnesotaCare and general assistance medical care in the same month~~, except that a MinnesotaCare enrollee may be eligible for retroactive general assistance medical care according to section 256D.03, subdivision 3, paragraph (b)~~.

Sec. 8. Minnesota Statutes 1996, section 256.9354, is amended by adding a subdivision to read:

Subd. 8. [MINNESOTACARE OUTREACH.] The commissioner shall award grants to public or private organizations to provide information on the importance of maintaining insurance coverage and on how to obtain coverage through the MinnesotaCare program in areas of the state with high uninsured populations.

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Sec. 9. Minnesota Statutes 1996, section 256.9355, subdivision 1, is amended to read:

Subdivision 1. [APPLICATION AND INFORMATION AVAILABILITY.] Applications and other information must be made available to provider offices, local human services agencies, school districts, public and private elementary schools in which 25 percent or more of the students receive free or reduced price lunches, community health offices, and Women, Infants and Children (WIC) program sites. These sites may accept applications~~, collect the enrollment fee or initial premium fee,~~ and forward the forms ~~and fees~~ to the commissioner. Otherwise, applicants may apply directly to the commissioner. Beginning January 1, 2000, MinnesotaCare enrollment sites will be expanded to include local county human services agencies which choose to participate.

Sec. 10. Minnesota Statutes 1996, 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 and any form W-2 wage and tax statements, 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 1996, section 256.9355, subdivision 4, is amended to read:

Subd. 4. [APPLICATION PROCESSING.] The commissioner of human services shall determine an applicant's eligibility for MinnesotaCare no more than 30 days from the date that the application is received by the department of human services. ~~This requirement shall be suspended for four months following the dates in which single adults and families without children become eligible for the program.~~ Beginning July 1, 2000, this requirement also applies to local county human services agencies that determine eligibility for MinnesotaCare.

Sec. 12. Minnesota Statutes 1996, section 256.9355, is amended by adding a subdivision to read:

Subd. 5. [AVAILABILITY OF PRIVATE INSURANCE.] The commissioner, in consultation with the commissioners of health and commerce, shall provide information regarding the availability of private health insurance coverage to all families and individuals enrolled in the MinnesotaCare program whose gross family income is equal to or more than 200 percent of the federal poverty guidelines. This information must be provided upon initial enrollment and annually thereafter.

Sec. 13. Minnesota Statutes 1996, section 256.9357, subdivision 1, is amended to read:

Subdivision 1. [GENERAL REQUIREMENTS.] 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 or 256.9366, and whose income increases above the limits established in ~~section~~ sections 256.9358 and 256.9366, ~~may continue enrollment and pay the full cost of coverage~~ are no longer eligible for the program and shall be disenrolled by the commissioner. MinnesotaCare coverage terminates the last day of the calendar month following the month in which the department determines that the income of a family or individual, determined as required by section 256.9358, exceeds program income limits.

Sec. 14. Minnesota Statutes 1996, 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

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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 or as required by 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;

(2) families and individuals initially enrolled under section 256.9354, subdivisions 1, paragraph (a), and 2;

(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; or

(5) individuals and families whose only health coverage during the four months prior to application was a qualified or Medicare supplement plan issued by the Minnesota comprehensive health association under chapter 62E.

Sec. 15. Minnesota Statutes 1996, 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 income is greater than ~~125 percent of the federal poverty guidelines~~ the amount specified in section 256.9354, subdivision 5, are ineligible for the plan.

Sec. 16. Minnesota Statutes 1996, section 256.9359, subdivision 2, is amended to read:

Subd. 2. [RESIDENCY REQUIREMENT.] (a) Prior to July 1, 1997, to be eligible for health coverage under the MinnesotaCare program, families and individuals must be permanent residents of Minnesota.

(b) Effective July 1, 1997, to be eligible for health coverage under the MinnesotaCare program, adults without children must be permanent residents of Minnesota.

(c) Effective July 1, 1997, to be eligible for health coverage under the MinnesotaCare program, pregnant women, families, and children must meet the residency requirements as provided by Code of Federal Regulations, title 42, section 435.403, except that the provisions of section 256B.056, subdivision 1, shall apply upon receipt of federal approval.

Sec. 17. Minnesota Statutes 1996, 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. Effective January 1, 1998, MinnesotaCare enrollees who were formerly eligible for general assistance medical care pursuant to section 256D.03, subdivision 3, within six months of MinnesotaCare enrollment and were enrolled in a prepaid health plan pursuant to section 256D.03, subdivision 4, paragraph (d), must 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. [256.937] [ASSET REQUIREMENT FOR MINNESOTACARE.]

Subdivision 1. [DEFINITIONS.] For purposes of this section, the following definitions apply.

(a) "Asset" means cash and other personal property, as well as any real property, that a family or individual owns which has monetary value.

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(b) "Homestead" means the home that is owned by, and is the usual residence of, the family or individual, together with the surrounding property which is not separated from the home by intervening property owned by others. Public rights-of-way, such as roads that run through the surrounding property and separate it from the home, will not affect the exemption of the property. "Usual residence" includes the home from which the family or individual is temporarily absent due to illness, employment, or education, or because the home is temporarily not habitable due to casualty or natural disaster.

(c) "Net asset" means the asset's fair market value minus any encumbrances including, but not limited to, liens and mortgages.

Subd. 2. [LIMIT ON TOTAL ASSETS.] (a) Effective April 1, 1997, or upon federal approval, whichever is later, in order to be eligible for the MinnesotaCare program, a household of two or more persons must not own more than $30,000 in total net assets, and a household of one person must not own more than $15,000 in total net assets.

(b) For purposes of this subdivision, total net assets include all assets, with the following exceptions:

(1) a homestead is not considered;

(2) household goods and personal effects are not considered; and

(3) capital and operating assets of a trade or business up to $200,000 in net assets are not considered.

(c) If an asset excluded under paragraph (b) has a negative value, the negative value shall be subtracted from the total net assets under paragraph (a).

Subd. 3. [DOCUMENTATION.] (a) The commissioner of human services shall require individuals and families, at the time of application or renewal, to indicate on a checkoff form developed by the commissioner whether they satisfy the MinnesotaCare asset requirement. This form must include the following or similar language: "To be eligible for MinnesotaCare, individuals and families must not own net assets in excess of $30,000 for a household of two or more persons or $15,000 for a household of one person, not including a homestead, household goods and personal effects, and capital and operating assets of a trade or business up to $200,000. Do you and your household own net assets in excess of these limits?"

(b) The commissioner may require individuals and families to provide any information the commissioner determines necessary to verify compliance with the asset requirement, if the commissioner determines that there is reason to believe that an individual or family has assets that exceed the program limit.

Subd. 4. [PENALTIES.] Individuals or families who are found to have knowingly misreported the amount of their assets as described in this section shall be subject to the penalties in section 256.98. The commissioner shall present recommendations on additional penalties to the 1998 legislature.

Sec. 19. [256.9371] [PENALTIES.]

Whoever obtains or attempts to obtain, or aids or abets any person to obtain by means of a willfully false statement or representation, or by the intentional withholding or concealment of a material fact, or by impersonation, or other fraudulent device:

(1) benefits under the MinnesotaCare program to which the person is not entitled; or

(2) benefits under the MinnesotaCare program greater than that to which the person is reasonably entitled;

shall be considered to have violated section 256.98, and shall be subject to both the criminal and civil penalties provided under that section.

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Sec. 20. Minnesota Statutes 1996, section 256D.03, subdivision 3, is amended to read:

Subd. 3. [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] (a) General assistance medical care may be paid for any person who is not eligible for medical assistance under chapter 256B, including eligibility for medical assistance based on a spenddown of excess income according to section 256B.056, subdivision 5, or MinnesotaCare as defined in clause (4), except as provided in paragraph (b); and:

(1) who is receiving assistance under section 256D.05, except for families with children who are eligible under Minnesota family investment program-statewide (MFIP-S), or who is having a payment made on the person's behalf under sections 256I.01 to 256I.06; or

(2)(i) who is a resident of Minnesota; and whose equity in assets is not in excess of $1,000 per assistance unit. No asset test shall be applied to children and their parents living in the same household. Exempt assets, the reduction of excess assets, and the waiver of excess assets must conform to the medical assistance program in chapter 256B, with the following exception: the maximum amount of undistributed funds in a trust that could be distributed to or on behalf of the beneficiary by the trustee, assuming the full exercise of the trustee's discretion under the terms of the trust, must be applied toward the asset maximum; and

(ii) who has countable income not in excess of the assistance standards established in section 256B.056, subdivision 4, or whose excess income is spent down pursuant to section 256B.056, subdivision 5, using a six-month budget period~~, except that a one-month budget period must be used for recipients residing in a long-term care facility~~. The method for calculating earned income disregards and deductions for a person who resides with a dependent child under age 21 shall ~~be as specified in section 256.74, subdivision 1~~ follow section 256B.056, subdivision 1a. However, if a disregard of $30 and one-third of the remainder ~~described in section 256.74, subdivision 1, clause (4),~~ has been applied to the wage earner's income, the disregard shall not be applied again until the wage earner's income has not been considered in an eligibility determination for general assistance, general assistance medical care, medical assistance, or ~~aid to families with dependent children~~ MFIP-S for 12 consecutive months. The earned income and work expense deductions for a person who does not reside with a dependent child under age 21 shall be the same as the method used to determine eligibility for a person under section 256D.06, subdivision 1, except the disregard of the first $50 of earned income is not allowed; or

(3) who would be eligible for medical assistance except that the person resides in a facility that is determined by the commissioner or the federal health care financing administration to be an institution for mental diseases.

(4) Beginning July 1, 1998, applicants or recipients who meet all eligibility requirements of MinnesotaCare as defined in sections 256.9351 to 256.9363 and 256.9366 to 256.9369, and are:

(i) adults with dependent children under 21 whose gross family income is equal to or less than 275 percent of the federal poverty guidelines; or

(ii) adults without children with earned income and whose family gross income is between 75 percent of the federal poverty guidelines and the amount set by section 256.9354, subdivision 5, shall be terminated from general assistance medical care upon enrollment in MinnesotaCare.

(b) ~~Eligibility is available for the month of application, and for three months prior to application if the person was eligible in those prior months.~~ For services rendered on or after July 1, 1997, eligibility is limited to one month prior to application if the person is determined eligible in the prior month. A redetermination of eligibility must occur every 12 months. Beginning July 1, 1998, Minnesota health care program applications completed by recipients and applicants who are persons described in paragraph (a), clause (4), may be returned to the county agency to be forwarded to the department of human services or sent directly to the department of human services for enrollment in MinnesotaCare. If all other eligibility requirements of this subdivision are met, eligibility for general assistance medical care shall be available in any month during which a MinnesotaCare eligibility determination and enrollment are pending. Upon notification of eligibility for MinnesotaCare, notice of termination for eligibility for general assistance medical care shall be sent to an applicant or recipient. If all other eligibility requirements of this subdivision are met, eligibility for general assistance medical care shall be available until enrollment in MinnesotaCare subject to the provisions of paragraph (d).

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(c) An initial Minnesota health care program application shall be considered complete and determination of eligibility underway if the recipient or applicant has provided their name, address, social security number, and best estimate of prior year's income. If the recipient or applicant is unable to provide this information when health care is delivered due to a medical condition or disability, a health care provider may act on their behalf to complete the initial application.

(d) County agencies are authorized to use all automated databases containing information regarding recipients' or applicants' income in order to determine eligibility for general assistance medical care or MinnesotaCare. Such use shall be considered sufficient in order to determine eligibility and premium payments by the county agency.

~~(c)~~ (e) General assistance medical care is not available for a person in a correctional facility unless the person is detained by law for less than one year in a county correctional or detention facility as a person accused or convicted of a crime, or admitted as an inpatient to a hospital on a criminal hold order, and the person is a recipient of general assistance medical care at the time the person is detained by law or admitted on a criminal hold order and as long as the person continues to meet other eligibility requirements of this subdivision.

~~(d)~~ (f) General assistance medical care is not available for applicants or recipients who do not cooperate with the county agency to meet the requirements of medical assistance. General assistance medical care is limited to payment of emergency services only for applicants or recipients as described in paragraph (a), clause (4), whose MinnesotaCare coverage is denied or terminated for nonpayment of premiums as required by sections 256.9356 to 256.9358.

~~(e)~~ (g) In determining the amount of assets of an individual, there shall be included any asset or interest in an asset, including an asset excluded under paragraph (a), that was given away, sold, or disposed of for less than fair market value within the 60 months preceding application for general assistance medical care or during the period of eligibility. Any transfer described in this paragraph shall be presumed to have been for the purpose of establishing eligibility for general assistance medical care, unless the individual furnishes convincing evidence to establish that the transaction was exclusively for another purpose. For purposes of this paragraph, the value of the asset or interest shall be the fair market value at the time it was given away, sold, or disposed of, less the amount of compensation received. For any uncompensated transfer, the number of months of ineligibility, including partial months, shall be calculated by dividing the uncompensated transfer amount by the average monthly per person payment made by the medical assistance program to skilled nursing facilities for the previous calendar year. The individual shall remain ineligible until this fixed period has expired. The period of ineligibility may exceed 30 months, and a reapplication for benefits after 30 months from the date of the transfer shall not result in eligibility unless and until the period of ineligibility has expired. The period of ineligibility begins in the month the transfer was reported to the county agency, or if the transfer was not reported, the month in which the county agency discovered the transfer, whichever comes first. For applicants, the period of ineligibility begins on the date of the first approved application.

~~(f)(1)~~ (h) Beginning October 1, 1993, an undocumented alien or a nonimmigrant is ineligible for general assistance medical care other than emergency services. For purposes of this subdivision, a nonimmigrant is an individual in one or more of the classes listed in United States Code, title 8, section 1101(a)(15), and an undocumented alien is an individual who resides in the United States without the approval or acquiescence of the Immigration and Naturalization Service.

~~(2)~~ (i) This subdivision does not apply to a child under age 18, to a Cuban or Haitian entrant as defined in Public Law Number 96-422, section 501(e)(1) or (2)(a), or to an alien who is aged, blind, or disabled as defined in United States Code, title 42, section 1382c(a)(1).

~~(3)~~ (j) For purposes of ~~paragraph~~ paragraphs (f) and (h), "emergency services" has the meaning given in Code of Federal Regulations, title 42, section 440.255(b)(1), except that it also means services rendered because of suspected or actual pesticide poisoning.

Sec. 21. [TRANSITION PLAN FOR MINNESOTACARE ENROLLEES.]

(a) The commissioner of human services, in consultation with the legislative commission on health care access and the commissioners of employee relations, health, and commerce, shall develop an implementation plan to transition higher-income MinnesotaCare enrollees to private sector or other nonsubsidized coverage. In developing the plan, the commissioner shall examine the feasibility of using the health insurance program for state employees administered by the

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commissioner of employee relations as a source of coverage, and shall also examine methods to increase the affordability of private sector coverage for individuals and families transitioning off MinnesotaCare. The commissioner shall submit the implementation plan to the legislature by December 15, 1997.

(b) The commissioner of human services shall also report to the legislature by January 15, 1998, on the impact of the outreach efforts conducted by the department of human services for the MinnesotaCare program, affordability of the MinnesotaCare premium schedule, and the reasons why families and individuals are leaving the MinnesotaCare program; regarding recommendations on the eligibility income level that will result in the greatest number of individuals having health insurance; what will encourage greater availability of coverage in the private market; steps to increase the availability of insurance in the small employer market; the need, if any, for increasing the MinnesotaCare program eligibility level for single adults and households without children; and shall make recommendations on the feasibility of increasing the eligibility income level for single adults and households without children in the MinnesotaCare program.

Sec. 22. [EFFECTIVE DATE.]

Section 4 is effective July 1, 1998. Section 14, subdivision 3, clause (5), is effective the day following final enactment.

ARTICLE 2

MISCELLANEOUS CHANGES TO HEALTH CARE REFORM

Section 1. Minnesota Statutes 1996, section 60A.951, subdivision 5, is amended to read:

Subd. 5. [INSURER.] "Insurer" means insurance company, risk retention group as defined in section 60E.02, service plan corporation as defined in section 62C.02, health maintenance organization as defined in section 62D.02, community integrated service network as defined in section 62N.02, fraternal benefit society regulated under chapter 64B, township mutual company regulated under chapter 67A, joint self-insurance plan or multiple employer trust regulated under chapter 60F, 62H, or section 471.617, subdivision 2, persons administering a self-insurance plan as defined in section 60A.23, subdivision 8, clause (2), paragraphs (a) and (d), and the workers' compensation reinsurance association established in section 79.34.

Sec. 2. Minnesota Statutes 1996, section 62A.021, is amended by adding a subdivision to read:

Subd. 3. [LOSS RATIO DISCLOSURE.] Each health care policy form or health care certificate form for which subdivision 1 requires the commissioner's approval of premium rates shall contain on its front page the following statement:

"Minnesota law requires that this policy or contract include this paragraph disclosing the loss ratio. The loss ratio is the average percentage of premiums that is expected to be paid for health care for the enrollee. This policy or contract is expected to have a loss ratio of (fill in estimated loss ratio accepted by commissioner). The lowest loss ratio permitted by state law for this policy or contract is (fill in applicable minimum loss ratio)."

Sec. 3. Minnesota Statutes 1996, section 62A.61, is amended to read:

62A.61 [DISCLOSURE OF METHODS USED BY HEALTH CARRIERS TO DETERMINE USUAL AND CUSTOMARY FEES.]

(a) A health carrier that bases reimbursement to health care providers upon a usual and customary fee must maintain in its office a copy of a description of the methodology used to calculate fees including at least the following:

(1) the frequency of the determination of usual and customary fees;

(2) a general description of the methodology used to determine usual and customary fees; and

(3) the percentile of usual and customary fees that determines the maximum allowable reimbursement.

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(b) A health carrier must provide a copy of the information described in paragraph (a) to ~~the Minnesota health care commission,~~ the commissioner of health, or the commissioner of commerce, upon request.

(c) The commissioner of health or the commissioner of commerce, as appropriate, may use to enforce this section any enforcement powers otherwise available to the commissioner with respect to the health carrier. ~~The appropriate commissioner shall enforce compliance with a request made under this section by the Minnesota health care commission, at the request of the commissioner.~~ The commissioner of health or commerce, as appropriate, may require health carriers to provide the information required under this section and may use any powers granted under other laws relating to the regulation of health carriers to enforce compliance.

(d) For purposes of this section, "health carrier" has the meaning given in section 62A.011.

Sec. 4. Minnesota Statutes 1996, section 62A.65, subdivision 3, is amended to read:

Subd. 3. [PREMIUM RATE RESTRICTIONS.] No individual health plan may be offered, sold, issued, or renewed to a Minnesota resident unless the premium rate charged is determined in accordance with the following requirements:

(a) Premium rates must be no more than 25 percent above and no more than 25 percent below the index rate charged to individuals for the same or similar coverage, adjusted pro rata for rating periods of less than one year. The premium variations permitted by this paragraph must be based only upon health status, claims experience, and occupation. For purposes of this paragraph, health status includes refraining from tobacco use or other actuarially valid lifestyle factors associated with good health, provided that the lifestyle factor and its effect upon premium rates have been determined by the commissioner to be actuarially valid and have been approved by the commissioner. Variations permitted under this paragraph must not be based upon age or applied differently at different ages. This paragraph does not prohibit use of a constant percentage adjustment for factors permitted to be used under this paragraph.

(b) Premium rates may vary based upon the ages of covered persons only as provided in this paragraph. In addition to the variation permitted under paragraph (a), each health carrier may use an additional premium variation based upon age of up to plus or minus 50 percent of the index rate.

(c) A health carrier may request approval by the commissioner to establish no more than three geographic regions and to establish separate index rates for each region, provided that the index rates do not vary between any two regions by more than 20 percent. Health carriers that do not do business in the Minneapolis/St. Paul metropolitan area may request approval for no more than two geographic regions, and clauses (2) and (3) do not apply to approval of requests made by those health carriers. The commissioner may grant approval if the following conditions are met:

(1) the geographic regions must be applied uniformly by the health carrier;

(2) one geographic region must be based on the Minneapolis/St. Paul metropolitan area;

(3) for each geographic region that is rural, the index rate for that region must not exceed the index rate for the Minneapolis/St. Paul metropolitan area; and

(4) the health carrier provides actuarial justification acceptable to the commissioner for the proposed geographic variations in index rates, establishing that the variations are based upon differences in the cost to the health carrier of providing coverage.

(d) Health carriers may use rate cells and must file with the commissioner the rate cells they use. Rate cells must be based upon the number of adults or children covered under the policy and may reflect the availability of Medicare coverage. The rates for different rate cells must not in any way reflect generalized differences in expected costs between principal insureds and their spouses.

(e) In developing its index rates and premiums for a health plan, a health carrier shall take into account only the following factors:

(1) actuarially valid differences in rating factors permitted under paragraphs (a) and (b); and

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(2) actuarially valid geographic variations if approved by the commissioner as provided in paragraph (c).

(f) All premium variations must be justified in initial rate filings and upon request of the commissioner in rate revision filings. All rate variations are subject to approval by the commissioner.

(g) The loss ratio must comply with the section 62A.021 requirements for individual health plans.

(h) The rates must not be approved, unless the commissioner has determined that the rates are reasonable. In determining reasonableness, the commissioner shall consider the ~~growth rates applied~~ cost containment goals established under section 62J.04, subdivision 1, paragraph (b), to the calendar year or years that the proposed premium rate would be in effect, actuarially valid changes in risks associated with the enrollee populations, and actuarially valid changes as a result of statutory changes in Laws 1992, chapter 549.

Sec. 5. Minnesota Statutes 1996, section 62D.02, subdivision 5, is amended to read:

Subd. 5. "Evidence of coverage" means any certificate, agreement or contract, and amendments thereto, issued to an enrollee which sets out the coverage to which the enrollee is entitled under the health maintenance contract which covers the enrollee.

Sec. 6. Minnesota Statutes 1996, section 62D.09, subdivision 3, is amended to read:

Subd. 3. Every health maintenance organization or its representative shall annually, before June 1, provide to its enrollees the following: (1) a summary of its most recent annual financial statement including a balance sheet and statement of receipts and disbursements; (2) a description of the health maintenance organization, its health care plan or plans, its facilities and personnel, any material changes therein since the last report; (3) the current evidence of coverage, or ~~contract~~ amendments thereto; and (4) a statement of consumer information and rights as described in section 62D.07, subdivision 3, paragraph (c). Under clause (3), a health maintenance organization may annually alternate between providing enrollees with amendments and providing current evidence of coverage.

Sec. 7. Minnesota Statutes 1996, 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. 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 restructured health care financing and delivery system must be enacted or adopted by January 1, 1996.

Sec. 8. Minnesota Statutes 1996, section 62J.04, subdivision 1, is amended to read:

Subdivision 1. [~~LIMITS ON THE RATE OF GROWTH~~ COST CONTAINMENT GOALS.] (a) The commissioner of health shall set annual ~~limits on the rate of growth of~~ cost containment goals for public and private spending on health care services for Minnesota residents, as provided in paragraph (b). The ~~limits on growth~~ cost containment goals must be set at levels the commissioner determines to be realistic and achievable but that will reduce the rate of growth in health care spending by at least ten percent per year for the next five years. The commissioner shall set ~~limits on growth~~ cost containment goals based on available data on spending and growth trends, including data from group purchasers, national data on public and private sector health care spending and cost trends, and trend information from other states.

(b) The commissioner shall set the following annual ~~limits on the rate of growth of~~ cost containment goals for public and private spending on health care services for Minnesota residents:

(1) for calendar year 1994, the ~~rate of growth~~ cost containment goal must not exceed the change in the regional consumer price index for urban consumers for calendar year 1993 plus 6.5 percentage points;

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(2) for calendar year 1995, the ~~rate of growth~~ cost containment goal must not exceed the change in the regional consumer price index for urban consumers for calendar year 1994 plus 5.3 percentage points;

(3) for calendar year 1996, the ~~rate of growth~~ cost containment goal must not exceed the change in the regional consumer price index for urban consumers for calendar year 1995 plus 4.3 percentage points;

(4) for calendar year 1997, the ~~rate of growth~~ cost containment goal must not exceed the change in the regional consumer price index for urban consumers for calendar year 1996 plus 3.4 percentage points; ~~and~~

(5) for calendar year 1998, the ~~rate of growth~~ cost containment goal must not exceed the change in the regional consumer price index for urban consumers for calendar year 1997 plus 2.6 percentage points; and

(6) for calendar years after 1998, the commissioner shall set annual cost containment goals based on available data on spending and growth trends, including data from group purchasers, national data on public and private sector health care spending and cost trends, and trend information from other states.

~~The commissioner shall adjust the growth limit set for calendar year 1995 to recover savings in health care spending required for the period July 1, 1993 to December 31, 1993.~~

(1) the projected ~~limits~~ cost containment goal in the State Register by April 15 of the year immediately preceding the year in which the ~~limit~~ cost containment goal will be effective except for the year 1993, in which the ~~limit~~ cost containment goal shall be published by July 1, 1993;

(2) the quarterly change in the regional consumer price index for urban consumers; and

(3) the health care financing administration forecast for total growth in the national health care expenditures. In setting ~~an annual limit~~ the cost containment goals, the commissioner is exempt from the rulemaking requirements of chapter 14. The commissioner's decision on ~~an annual limit~~ the cost containment goals is not appealable.

Sec. 9. Minnesota Statutes 1996, section 62J.04, subdivision 1a, is amended to read:

Subd. 1a. [~~ADJUSTED GROWTH LIMITS AND ENFORCEMENT~~ COST CONTAINMENT GOALS.] ~~(a)~~ The commissioner shall publish the final adjusted ~~growth limit~~ cost containment goal in the State Register by January 31 of the year that the ~~expenditure limit~~ cost containment goal is to be in effect. The adjusted ~~limit~~ cost containment goal 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~~ cost containment goal 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~~ cost containment goal. 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~~ cost containment goals 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~~

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~~(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.~~

(c) The commissioner shall enforce limits on growth in spending for 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.

(d) The commissioner shall impose and enforce overall limits on growth in spending for health plan companies, with adjustments for changes in enrollment, benefits, severity, and risks. If a health plan company exceeds the growth limits, the commissioner may impose financial penalties up to the amount exceeding the applicable growth limit.

Sec. 10. Minnesota Statutes 1996, section 62J.04, subdivision 9, is amended to read:

Subd. 9. [~~GROWTH LIMITS~~ COST CONTAINMENT GOALS; FEDERAL PROGRAMS.] The commissioners of health and human services shall establish a rate methodology for Medicare and Medicaid risk-based contracting with health plan companies that is consistent with statewide ~~growth limits~~ cost containment goals. The methodology shall be presented for review by ~~the Minnesota health care commission and~~ the legislative commission on health care access prior to the submission of a waiver request to the health care financing administration and subsequent implementation of the methodology.

Sec. 11. Minnesota Statutes 1996, section 62J.041, is amended to read:

62J.041 [INTERIM HEALTH PLAN COMPANY EXPENDITURE LIMITS.]

Subdivision 1. [DEFINITIONS.] (a) For purposes of this section, the following definitions apply.

(b) "Health plan company" has the definition provided in section 62Q.01.

(c) "Total expenditures" means incurred claims or expenditures on health care services, administrative expenses, charitable contributions, and all other payments made by health plan companies out of premium revenues.

(d) "Net expenditures" means total expenditures minus exempted taxes and assessments and payments or allocations made to establish or maintain reserves.

(e) "Exempted taxes and assessments" means direct payments for taxes to government agencies, contributions to the Minnesota comprehensive health association, the medical assistance provider's surcharge under section 256.9657, the MinnesotaCare provider tax under section 295.52, assessments by the health coverage reinsurance association, assessments by the Minnesota life and health insurance guaranty association, assessments by the Minnesota risk adjustment association, and any new assessments imposed by federal or state law.

(f) "Consumer cost-sharing or subscriber liability" means enrollee coinsurance, copayment, deductible payments, and amounts in excess of benefit plan maximums.

Subd. 2. [ESTABLISHMENT.] The commissioner of health shall establish ~~limits on~~ cost containment goals for the increase in net expenditures by each health carrier plan company for calendar years 1994, 1995, 1996, and 1997. The ~~limits~~ cost containment goals must be the same as the annual ~~rate of growth in~~ cost containment goals for health care spending established under section 62J.04, subdivision 1, paragraph (b). Health plan companies that are affiliates may elect to meet one combined ~~expenditure limit~~ cost containment goal.

Subd. 3. [DETERMINATION OF EXPENDITURES.] Health plan companies shall submit to the commissioner of health, by April 1, 1994, for calendar year 1993; April 1, 1995, for calendar year 1994; April 1, 1996, for calendar year 1995; April 1, 1997, for calendar year 1996; and April 1, 1998, for calendar year 1997 all information the commissioner determines to be necessary to implement and enforce this section. The information must be submitted in the

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form specified by the commissioner. The information must include, but is not limited to, expenditures per member per month or cost per employee per month, and detailed information on revenues and reserves. The commissioner, to the extent possible, shall coordinate the submittal of the information required under this section with the submittal of the financial data required under chapter 62J, to minimize the administrative burden on health plan companies. The commissioner may adjust final expenditure figures for demographic changes, risk selection, changes in basic benefits, and legislative initiatives that materially change health care costs, as long as these adjustments are consistent with the methodology submitted by the health plan company to the commissioner, and approved by the commissioner as actuarially justified. The methodology to be used for adjustments and the election to meet one ~~expenditure limit~~ cost containment goal for affiliated health plan companies must be submitted to the commissioner by September 1, 1994. Community integrated service networks may submit the information with their application for licensure. The commissioner shall also accept changes to methodologies already submitted. The adjustment methodology submitted and approved by the commissioner must apply to the data submitted for calendar years 1994 and 1995. The commissioner may allow changes to accepted adjustment methodologies for data submitted for calendar years 1996 and 1997. Changes to the adjustment methodology must be received by September 1, 1996, and must be approved by the commissioner.

Subd. 4. [MONITORING OF RESERVES.] ~~(a)~~ The commissioners of health and commerce shall monitor health plan company reserves and net worth as established under chapters 60A, 62C, 62D, 62H, and 64B, with respect to the health plan companies that each commissioner respectively regulates to ~~ensure that~~ assess the degree to which savings resulting from the establishment of ~~expenditure limits~~ cost containment goals are passed on to consumers in the form of lower premium rates.

(b) Health plan companies shall fully reflect in the premium rates the savings generated by the expenditure limits. No premium rate, currently reviewed by the departments of health or commerce, may be approved for those health plan companies unless the health plan company establishes to the satisfaction of the commissioner of commerce or the commissioner of health, as appropriate, that the proposed new rate would comply with this paragraph.

(c) Health plan companies, except those licensed under chapter 60A to sell accident and sickness insurance under chapter 62A, shall annually before the end of the fourth fiscal quarter provide to the commissioner of health or commerce, as applicable, a projection of the level of reserves the company expects to attain during each quarter of the following fiscal year. These health plan companies shall submit with required quarterly financial statements a calculation of the actual reserve level attained by the company at the end of each quarter including identification of the sources of any significant changes in the reserve level and an updated projection of the level of reserves the health plan company expects to attain by the end of the fiscal year. In cases where the health plan company has been given a certificate to operate a new health maintenance organization under chapter 62D, or been licensed as an integrated service network or community integrated service network under chapter 62N, or formed an affiliation with one of these organizations, the health plan company shall also submit with its quarterly financial statement, total enrollment at the beginning and end of the quarter and enrollment changes within each service area of the new organization. The reserve calculations shall be maintained by the commissioners as trade secret information, except to the extent that such information is also required to be filed by another provision of state law and is not treated as trade secret information under such other provisions.

(d) Health plan companies in paragraph (c) whose reserves are less than the required minimum or more than the required maximum at the end of the fiscal year shall submit a plan of corrective action to the commissioner of health or commerce under subdivision 7.

(e) The commissioner of commerce, in consultation with the commissioner of health, shall report to the legislature no later than January 15, 1995, as to whether the concept of a reserve corridor or other mechanism for purposes of monitoring reserves is adaptable for use with indemnity health insurers that do business in multiple states and that must comply with their domiciliary state's reserves requirements.

Subd. 5. [NOTICE.] The commissioner of health shall publish in the State Register and make available to the public by July 1, 1995, a list of all health plan companies that exceeded their ~~expenditure limit~~ cost containment goal for the 1994 calendar year. The commissioner shall publish in the State Register and make available to the public by July 1, 1996, a list of all health plan companies that exceeded their combined ~~expenditure limit~~ cost containment goal for calendar years 1994 and 1995. The commissioner shall notify each health plan company that the commissioner has determined that the health plan company exceeded its ~~expenditure limit~~ cost containment goal, at least 30 days before publishing the list, and shall provide each health plan company with ten days to provide an explanation for exceeding the ~~expenditure limit~~ cost containment goal. The commissioner shall review the explanation and may change a determination if the commissioner determines the explanation to be valid.

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Subd. 6. [ASSISTANCE BY THE COMMISSIONER OF COMMERCE.] The commissioner of commerce shall provide assistance to the commissioner of health in monitoring health plan companies regulated by the commissioner of commerce. The commissioner of commerce, in consultation with the commissioner of health, shall enforce compliance with ~~expenditure limits~~ the cost containment goals for those health plan companies in which the commissioner of commerce approves the premium rates.

Subd. 7. [ENFORCEMENT.] (a) The commissioners of health and commerce shall enforce the reserve limits referenced in subdivision 4, with respect to the health plan companies that each commissioner respectively regulates. Each commissioner shall require health plan companies under the commissioner's jurisdiction to submit plans of corrective action when the reserve requirement is not met. The plan of correction must address the following:

~~(1) actuarial assumptions used in forecasting future financial results;~~

~~(2) trend assumptions used in setting future premiums;~~

~~(3) demographic, geographic, and private and public sector mix of the population covered by the health plan company;~~

~~(4) proposed rate increases or decreases;~~

~~(5) growth limits applied under section 62J.04, subdivision 1, paragraph (b); and~~

~~(6) other factors deemed appropriate by the health plan company or commissioner.~~

If the health plan company's reserves exceed the required maximum, the plan of correction shall address how the health plan company will come into compliance and set forth a timetable within which compliance would be achieved. The plan of correction may propose premium refunds, credits for prior premiums paid, policyholder dividends, or any combination of these or other methods which will benefit enrollees and/or Minnesota residents and are such that the reserve requirements can reasonably be expected to be met. The commissioner's evaluation of the plan of correction must consider:

~~(1) whether implementation of the plan would provide the company with an unfair advantage in the market;~~

~~(2) the extent to which the reserve excess was created by any movement of enrolled persons to another organization formed by the company;~~

~~(3) whether any proposed premium refund, credit, and/or dividend represents an equitable allocation to policyholders covered in prior periods as determined using sound actuarial practice; and~~

~~(4) any other factors deemed appropriate by the applicable commissioner.~~

(b) The plan of correction is subject to approval by the commissioner of health or commerce, as applicable. If such a plan is not approved by the applicable commissioner, the applicable commissioner shall enter an order stating the steps that the health plan company must take to come into compliance. Within 30 days of the date of such order, the health plan company must file a notice of appeal with the applicable commissioner or comply with the commissioner's order. If an appeal is filed, such appeal is governed by chapter 14.

(c) Health plan companies that exceed the expenditure limits based on two-year average expenditure data (1994 and 1995, 1996 and 1997) shall be required by the appropriate commissioner to pay back the amount exceeding the expenditure limit through an assessment on the health plan company. A health plan company may appeal the commissioner's order to pay back the amount exceeding the expenditure limit by mailing to the commissioner a written notice of appeal within 30 days from the date the commissioner's order was mailed. The contested case and judicial review provisions of chapter 14 apply to the appeal. The health plan company 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 15.472 to 15.475, 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. The appropriate commissioner may approve a different repayment method to take into account the health plan company's financial condition. Health plan companies shall comply with the

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limits but shall also guarantee that their contractual obligations are met. Health plan companies are prohibited from meeting spending obligations by increasing subscriber liability, including copayments and deductibles and amounts in excess of benefit plan maximums.

Sec. 12. Minnesota Statutes 1996, 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 technology advisory committee established under section 62J.15, 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. 13. Minnesota Statutes 1996, section 62J.07, subdivision 1, is amended to read:

Subdivision 1. [LEGISLATIVE OVERSIGHT.] The legislative commission on health care access reviews the activities of the commissioner of health, the ~~state health care commission~~ regional coordinating boards, the health technology advisory committee, and all other state agencies involved in the implementation and administration of this chapter, including efforts to obtain federal approval through waivers and other means.

Sec. 14. Minnesota Statutes 1996, section 62J.07, subdivision 3, is amended to read:

Subd. 3. [REPORTS TO THE COMMISSION.] The commissioner of health ~~and the Minnesota health care commission~~, the regional coordinating boards, and the health technology advisory committee shall report on their activities ~~and the activities of the regional boards~~ annually and at other times at the request of the legislative commission on health care access. The commissioners of health, commerce, and human services shall provide periodic reports to the legislative commission on the progress of rulemaking that is authorized or required under this act and shall notify members of the commission when a draft of a proposed rule has been completed and scheduled for publication in the State Register. At the request of a member of the commission, a commissioner shall provide a description and a copy of a proposed rule.

Sec. 15. Minnesota Statutes 1996, section 62J.09, subdivision 1, is amended to read:

Subdivision 1. [GENERAL DUTIES.] (a) The commissioner shall divide the state into five rural regions, which shall include all areas of the state, except for the seven-county metropolitan area.

~~The~~ (b) Each rural region shall establish a locally controlled regional coordinating ~~boards are locally controlled boards~~ board consisting of providers, health plan companies, employers, consumers, and elected officials. Regional coordinating boards may:

(1) undertake voluntary activities to educate consumers, providers, and purchasers about community plans and projects promoting health care cost containment, consumer accountability, access, and quality and efforts to achieve public health goals;

(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;

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(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. 16. Minnesota Statutes 1996, section 62J.15, subdivision 1, is amended to read:

Subdivision 1. [HEALTH TECHNOLOGY ADVISORY COMMITTEE.] The ~~Minnesota health care commission shall convene~~ commissioner of health shall convene an advisory committee to conduct evaluations of existing research and technology assessments conducted by other entities of new and existing health care technologies as designated by the legislative commission on health care access, the commissioner, or the advisory committee. ~~The advisory committee may include members of the state commission and other persons appointed by the commission.~~ The advisory committee must include at least one person representing physicians, at least one person representing hospitals, and at least one person representing the health care technology industry. Health care technologies include high-cost drugs, devices, procedures, or processes applied to human health care, such as high-cost transplants and expensive scanners and imagers. The advisory committee is governed by section 15.0575, subdivision 3, except that members do not receive per diem payments.

Sec. 17. Minnesota Statutes 1996, section 62J.152, subdivision 1, is amended to read:

Subdivision 1. [GENERALLY.] The health technology advisory committee established in section 62J.15 shall:

(1) develop criteria and processes for evaluating health care technology assessments made by other entities;

(2) conduct evaluations of specific technologies and their specific use and application;

(3) provide the legislature with scientific evaluations of proposed benefit mandates that utilize health care technologies for a specific use and application;

(4) report the results of the evaluations to the commissioner and the ~~Minnesota health care commission~~ legislative commission on health care access; and

~~(4)~~ (5) carry out other duties relating to health technology assigned by the ~~commission~~ legislature or the legislative commission on health care access.

Sec. 18. Minnesota Statutes 1996, section 62J.152, subdivision 2, is amended to read:

Subd. 2. [~~PRIORITIES FOR DESIGNATING TECHNOLOGIES~~ CRITERIA FOR ~~ASSESSMENT~~ EVALUATION.] The health technology advisory committee shall consider the following criteria in ~~designating~~ assessing or evaluating technologies ~~for evaluation~~:

(1) the level of controversy within the medical or scientific community, including questionable or undetermined efficacy;

(2) the cost implications;

(3) the potential for rapid diffusion;

(4) the impact on a substantial patient population;

(5) the existence of alternative technologies;

(6) the impact on patient safety and health outcome;

(7) the public health importance;

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(8) the level of public and professional demand;

(9) the social, ethical, and legal concerns; and

(10) the prevalence of the disease or condition.

The committee may give different weights or attach different importance to each of the criteria, depending on the technology being considered. The committee shall consider any additional criteria approved by the commissioner and the ~~Minnesota health care commission~~ legislative commission on health care access. The committee shall present its list of technologies for evaluation to the legislative commission on health care access for review.

Sec. 19. Minnesota Statutes 1996, section 62J.152, subdivision 4, is amended to read:

Subd. 4. [TECHNOLOGY EVALUATION PROCESS.] (a) The health technology advisory committee shall collect and evaluate studies and research findings on the technologies selected for evaluation from as wide of a range of sources as needed, including, but not limited to: federal agencies or other units of government, international organizations conducting health care technology assessments, health carriers, insurers, manufacturers, professional and trade associations, nonprofit organizations, and academic institutions. The health technology advisory committee may use consultants or experts and solicit testimony or other input as needed to evaluate a specific technology.

(b) When the evaluation process on a specific technology has been completed, the health technology advisory committee shall submit a preliminary report to the ~~health care commission~~ commissioner and the legislative commission on health care access and publish a summary of the preliminary report in the State Register with a notice that written comments may be submitted. The preliminary report must include the results of the technology assessment evaluation, studies and research findings considered in conducting the evaluation, and the health technology advisory committee's summary statement about the evaluation. Any interested persons or organizations may submit to the health technology advisory committee written comments regarding the technology evaluation within 30 days from the date the preliminary report was published in the State Register. The health technology advisory committee's final report on its technology evaluation must be submitted to the ~~health care commission~~ commissioner, to the legislature, and to the information clearinghouse. A summary of written comments received by the health technology advisory committee within the 30-day period must be included in the final report. The health care commission shall review the final report and prepare its comments and recommendations. Before completing its final comments and recommendations, the health care commission shall provide adequate public notice that testimony will be accepted by the health care commission. The health care commission shall then forward the final report, its comments and recommendations, and a summary of the public's comments to the commissioner and information clearinghouse.

(c) The reports of the health technology advisory committee ~~and the comments and recommendations of the health care commission~~ should not eliminate or bar new technology, and are not rules as defined in the administrative procedure act.

Sec. 20. Minnesota Statutes 1996, 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 organizations in the development of practice parameters;

(4) by health care providers in making decisions about adding or replacing technology and the appropriate use of technology;

(5) by consumers in making decisions about treatment;

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(6) by medical device manufacturers in developing and marketing new technologies; and

(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.

Sec. 21. Minnesota Statutes 1996, 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 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 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~~ health technology advisory committee 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) [PENALTIES AND REMEDIES.] The commissioner of health has the authority to issue fines, seek injunctions, and pursue other remedies as provided by law.

Sec. 22. Minnesota Statutes 1996, section 62J.22, is amended to read:

62J.22 [PARTICIPATION OF FEDERAL PROGRAMS.]

The commissioner of health shall seek the full participation of federal health care programs under this chapter, including Medicare, medical assistance, veterans administration programs, and other federal programs. The commissioner of human services shall ~~under the direction of the health care commission~~ submit waiver requests and take other action necessary to obtain federal approval to allow participation of the medical assistance program. ~~Other state agencies shall provide assistance at the request of the commission.~~ If federal approval is not given for one or more federal programs, data on the amount of health care spending that is collected under section 62J.04 shall be adjusted so that state and regional spending limits take into account the failure of the federal program to participate.

Sec. 23. Minnesota Statutes 1996, section 62J.25, is amended to read:

62J.25 [MANDATORY MEDICARE ASSIGNMENT.]

(a) Effective January 1, 1993, a health care provider ~~authorized to participate in the Medicare program~~ shall not charge to or collect from a Medicare beneficiary who is a Minnesota resident any amount in excess of 115 percent of the Medicare-approved amount for any Medicare-covered service provided.

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(b) Effective January 1, 1994, a health care provider ~~authorized to participate in the Medicare program~~ shall not charge to or collect from a Medicare beneficiary who is a Minnesota resident any amount in excess of 110 percent of the Medicare-approved amount for any Medicare-covered service provided.

(c) Effective January 1, 1995, a health care provider ~~authorized to participate in the Medicare program~~ shall not charge to or collect from a Medicare beneficiary who is a Minnesota resident any amount in excess of 105 percent of the Medicare-approved amount for any Medicare-covered service provided.

(d) Effective January 1, 1996, a health care provider ~~authorized to participate in the Medicare program~~ shall not charge to or collect from a Medicare beneficiary who is a Minnesota resident any amount in excess of the Medicare-approved amount for any Medicare-covered service provided.

(e) This section does not apply to ambulance services as defined in section 144.801, subdivision 4, or medical supplies and equipment.

Sec. 24. Minnesota Statutes 1996, section 62J.2914, subdivision 1, is amended to read:

Subdivision 1. [DISCLOSURE.] An application for approval must include, to the extent applicable, disclosure of the following:

(1) a descriptive title;

(2) a table of contents;

(3) exact names of each party to the application and the address of the principal business office of each party;

(4) the name, address, and telephone number of the persons authorized to receive notices and communications with respect to the application;

(5) a verified statement by a responsible officer of each party to the application attesting to the accuracy and completeness of the enclosed information;

(6) background information relating to the proposed arrangement, including:

(i) a description of the proposed arrangement, including a list of any services or products that are the subject of the proposed arrangement;

(ii) an identification of any tangential services or products associated with the services or products that are the subject of the proposed arrangement;

(iii) a description of the geographic territory involved in the proposed arrangement;

(iv) if the geographic territory described in item (iii), is different from the territory in which the applicants have engaged in the type of business at issue over the last five years, a description of how and why the geographic territory differs;

(v) identification of all products or services that a substantial share of consumers would consider substitutes for any service or product that is the subject of the proposed arrangement;

(vi) identification of whether any services or products of the proposed arrangement are currently being offered, capable of being offered, utilized, or capable of being utilized by other providers or purchasers in the geographic territory described in item (iii);

(vii) identification of the steps necessary, under current market and regulatory conditions, for other parties to enter the territory described in item (iii) and compete with the applicant;

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(viii) a description of the previous history of dealings between the parties to the application;

(ix) a detailed explanation of the projected effects, including expected volume, change in price, and increased revenue, of the arrangement on each party's current businesses, both generally as well as the aspects of the business directly involved in the proposed arrangement;

(x) the present market share of the parties to the application and of others affected by the proposed arrangement, and projected market shares after implementation of the proposed arrangement;

(xi) a statement of why the projected levels of cost, access, or quality could not be achieved in the existing market without the proposed arrangement; and

(xii) an explanation of how the arrangement relates to any ~~Minnesota health care commission or~~ applicable regional coordinating board plans for delivery of health care; and

(7) a detailed explanation of how the transaction will affect cost, access, and quality. The explanation must address the factors in section 62J.2917, subdivision 2, paragraphs (b) to (d), to the extent applicable.

Sec. 25. Minnesota Statutes 1996, section 62J.2915, is amended to read:

62J.2915 [NOTICE AND COMMENT.]

Subdivision 1. [NOTICE.] The commissioner shall cause the notice described in section 62J.2914, subdivision 2, to be published in the State Register and sent to ~~the Minnesota health care commission,~~ the regional coordinating boards for any regions that include all or part of the territory covered by the proposed arrangement, and any person who has requested to be placed on a list to receive notice of applications. The commissioner may maintain separate notice lists for different regions of the state. The commissioner may also send a copy of the notice to any person together with a request that the person comment as provided under subdivision 2. Copies of the request must be provided to the applicant.

Subd. 2. [COMMENTS.] Within 20 days after the notice is published, any person may mail to the commissioner written comments with respect to the application. Within 30 days after the notice is published, ~~the Minnesota health care commission or~~ any regional coordinating board may mail to the commissioner comments with respect to the application. Persons submitting comments shall provide a copy of the comments to the applicant. The applicant may mail to the commissioner written responses to any comments within ten days after the deadline for mailing such comments. The applicant shall send a copy of the response to the person submitting the comment.

Sec. 26. Minnesota Statutes 1996, section 62J.2916, subdivision 1, is amended to read:

Subdivision 1. [CHOICE OF PROCEDURES.] After the conclusion of the period provided in section 62J.2915, subdivision 2, for the applicant to respond to comments, the commissioner shall select one of the three procedures provided in subdivision 2. In determining which procedure to use, the commissioner shall consider the following criteria:

(1) the size of the proposed arrangement, in terms of number of parties and amount of money involved;

(2) the complexity of the proposed arrangement;

(3) the novelty of the proposed arrangement;

(4) the substance and quantity of the comments received;

(5) any comments received from the ~~Minnesota health care commission or~~ regional coordinating boards; and

(6) the presence or absence of any significant gaps in the factual record.

If the applicant demands a contested case hearing no later than the conclusion of the period provided in section 62J.2915, subdivision 2, for the applicant to respond to comments, the commissioner shall not select a procedure. Instead, the applicant shall be given a contested case proceeding as a matter of right.

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Sec. 27. Minnesota Statutes 1996, section 62J.2917, subdivision 2, is amended to read:

Subd. 2. [FACTORS.] (a) [GENERALLY APPLICABLE FACTORS.] In making a determination about cost, access, and quality, the commissioner may consider the following factors, to the extent relevant:

(1) whether the proposal is compatible with the ~~cost containment plan or other plan of the Minnesota health care commission or the~~ applicable regional plans of the regional coordinating boards;

(2) market structure:

(i) actual and potential sellers and buyers, or providers and purchasers;

(ii) actual and potential consumers;

(iii) geographic market area; and

(iv) entry conditions;

(3) current market conditions;

(4) the historical behavior of the market;

(5) performance of other, similar arrangements;

(6) whether the proposal unnecessarily restrains competition or restrains competition in ways not reasonably related to the purposes of this chapter; and

(7) the financial condition of the applicant.

(b) [COST.] The commissioner's analysis of cost must focus on the individual consumer of health care. Cost savings to be realized by providers, health carriers, group purchasers, or other participants in the health care system are relevant only to the extent that the savings are likely to be passed on to the consumer. However, where an application is submitted by providers or purchasers who are paid primarily by third party payers unaffiliated with the applicant, it is sufficient for the applicant to show that cost savings are likely to be passed on to the unaffiliated third party payers; the applicants do not have the burden of proving that third party payers with whom the applicants are not affiliated will pass on cost savings to individuals receiving coverage through the third party payers. In making determinations as to costs, the commissioner may consider:

(1) the cost savings likely to result to the applicant;

(2) the extent to which the cost savings are likely to be passed on to the consumer and in what form;

(3) the extent to which the proposed arrangement is likely to result in cost shifting by the applicant onto other payers or purchasers of other products or services;

(4) the extent to which the cost shifting by the applicant is likely to be followed by other persons in the market;

(5) the current and anticipated supply and demand for any products or services at issue;

(6) the representations and guarantees of the applicant and their enforceability;

(7) likely effectiveness of regulation by the commissioner;

(8) inferences to be drawn from market structure;

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(9) the cost of regulation, both for the state and for the applicant; and

(10) any other factors tending to show that the proposed arrangement is or is not likely to reduce cost.

(1) the extent to which the utilization of needed health care services or products by the intended targeted population is likely to increase or decrease. When a proposed arrangement is likely to increase access in one geographic area, by lowering prices or otherwise expanding supply, but limits access in another geographic area by removing service capabilities from that second area, the commissioner shall articulate the criteria employed to balance these effects;

(2) the extent to which the proposed arrangement is likely to make available a new and needed service or product to a certain geographic area; and

(3) the extent to which the proposed arrangement is likely to otherwise make health care services or products more financially or geographically available to persons who need them.

If the commissioner determines that the proposed arrangement is likely to increase access and bases that determination on a projected increase in utilization, the commissioner shall also determine and make a specific finding that the increased utilization does not reflect overutilization.

(d) [QUALITY.] In making determinations as to quality, the commissioner may consider the extent to which the proposed arrangement is likely to:

(1) decrease morbidity and mortality;

(2) result in faster convalescence;

(3) result in fewer hospital days;

(4) permit providers to attain needed experience or frequency of treatment, likely to lead to better outcomes;

(5) increase patient satisfaction; and

(6) have any other features likely to improve or reduce the quality of health care.

Sec. 28. Minnesota Statutes 1996, section 62J.2921, subdivision 2, is amended to read:

Subd. 2. [NOTICE.] The commissioner shall begin a proceeding to revoke approval by providing written notice to the applicant describing in detail the basis for the proposed revocation. Notice of the proceeding must be published in the State Register and submitted to ~~the Minnesota health care commission and~~ the applicable regional coordinating boards. The notice must invite the submission of comments to the commissioner.

Sec. 29. Minnesota Statutes 1996, section 62J.451, subdivision 6b, is amended to read:

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

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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.

Sec. 30. Minnesota Statutes 1996, section 62L.08, subdivision 8, is amended to read:

Subd. 8. [FILING REQUIREMENT.] No later than July 1, 1993, and each year thereafter, a health carrier that offers, sells, issues, or renews a health benefit plan for small employers shall file with the commissioner the index rates and must demonstrate that all rates shall be within the rating restrictions defined in this chapter. Such demonstration must include the allowable range of rates from the index rates and a description of how the health carrier intends to use demographic factors including case characteristics in calculating the premium rates. The rates shall not be approved, unless the commissioner has determined that the rates are reasonable. In determining reasonableness, the commissioner shall consider the ~~growth rates applied~~ cost containment goals established under section 62J.04, subdivision 1, paragraph (b), to the calendar year or years that the proposed premium rate would be in effect, actuarially valid changes in risk associated with the enrollee population, and actuarially valid changes as a result of statutory changes in Laws 1992, chapter 549. For premium rates proposed to go into effect between July 1, 1993 and December 31, 1993, the pertinent growth rate is the growth rate applied under section 62J.04, subdivision 1, paragraph (b), to calendar year 1994.

Sec. 31. Minnesota Statutes 1996, section 62M.02, subdivision 21, is amended to read:

Subd. 21. [UTILIZATION REVIEW ORGANIZATION.] "Utilization review organization" means an entity including but not limited to 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 licensed under chapter 62C; a health maintenance organization licensed under chapter 62D; a community integrated service network ~~or an integrated service network~~ licensed

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under chapter 62N; a fraternal benefit society operating under chapter 64B; a joint self-insurance employee health plan operating under chapter 62H; a multiple employer welfare arrangement, as defined in section 3 of the Employee Retirement Income Security Act of 1974 (ERISA), United States Code, title 29, section 1103, as amended; a third party administrator licensed under section 60A.23, subdivision 8, which conducts utilization review and determines certification of an admission, extension of stay, or other health care services for a Minnesota resident; or any entity performing utilization review that is affiliated with, under contract with, or conducting utilization review on behalf of, a business entity in this state.

Sec. 32. Minnesota Statutes 1996, section 62N.01, subdivision 1, is amended to read:

Subdivision 1. [CITATION.] This chapter may be cited as the "Minnesota community integrated service network act."

Sec. 33. Minnesota Statutes 1996, section 62N.22, is amended to read:

62N.22 [DISCLOSURE OF COMMISSIONS.]

Before selling any coverage or enrollment in a community integrated service network ~~or an integrated service network~~, a person selling the coverage or enrollment shall disclose in writing to the prospective purchaser the amount of any commission or other compensation the person will receive as a direct result of the sale. The disclosure may be expressed in dollars or as a percentage of the premium. The amount disclosed need not include any anticipated renewal commissions.

Sec. 34. Minnesota Statutes 1996, section 62N.23, is amended to read:

62N.23 [TECHNICAL ASSISTANCE; LOANS.]

(a) The commissioner shall provide technical assistance to parties interested in establishing or operating a community integrated service network ~~or an integrated service network~~. This shall be known as the community integrated service network technical assistance program ~~(ISNTAP)~~ (CISNTAP).

The technical assistance program shall offer seminars on the establishment and operation of community integrated service networks ~~or integrated service networks~~ in all regions of Minnesota. The commissioner shall advertise these seminars in local and regional newspapers, and attendance at these seminars shall be free.

The commissioner shall write a guide to establishing and operating a community integrated service network ~~or an integrated service network~~. The guide must provide basic instructions for parties wishing to establish a community integrated service network ~~or an integrated service network~~. The guide must be provided free of charge to interested parties. The commissioner shall update this guide when appropriate.

The commissioner shall establish a toll-free telephone line that interested parties may call to obtain assistance in establishing or operating a community integrated service network ~~or an integrated service network~~.

(b) The commissioner shall grant loans for organizational and start-up expenses to entities forming community integrated service networks ~~or integrated service networks~~, or to networks less than one year old, to the extent of any appropriation for that purpose. The commissioner shall allocate the available funds among applicants based upon the following criteria, as evaluated by the commissioner within the commissioner's discretion:

(1) the applicant's need for the loan;

(2) the likelihood that the loan will foster the formation or growth of a network; and

(3) the likelihood of repayment.

The commissioner shall determine any necessary application deadlines and forms and is exempt from rulemaking in doing so.

Sec. 35. Minnesota Statutes 1996, section 62N.25, subdivision 5, is amended to read:

Subd. 5. [BENEFITS.] Community integrated service networks must offer the health maintenance organization benefit set, as defined in chapter 62D, and other laws applicable to entities regulated under chapter 62D~~, except that the community integrated service network may impose a deductible, not to exceed $1,000 per person per year, provided that out-of-pocket~~

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expenses on covered services do not exceed $3,000 per person or $5,000 per family per year. The deductible must not apply to preventive health services as described in Minnesota Rules, part 4685.0801, subpart 8. Community networks and chemical dependency facilities under contract with a community network shall use the assessment criteria in Minnesota Rules, parts 9530.6600 to 9530.6660, when assessing enrollees for chemical dependency treatment.

Sec. 36. Minnesota Statutes 1996, section 62N.26, is amended to read:

62N.26 [SHARED SERVICES COOPERATIVE.]

The commissioner of health shall establish, or assist in establishing, a shared services cooperative organized under chapter 308A to make available administrative and legal services, technical assistance, provider contracting and billing services, and other services to those community integrated service networks ~~and integrated service networks~~ that choose to participate in the cooperative. The commissioner shall provide, to the extent funds are appropriated, start-up loans sufficient to maintain the shared services cooperative until its operations can be maintained by fees and contributions. The cooperative must not be staffed, administered, or supervised by the commissioner of health. The cooperative shall make use of existing resources that are already available in the community, to the extent possible.

Sec. 37. Minnesota Statutes 1996, section 62N.40, is amended to read:

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. 38. Minnesota Statutes 1996, 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; a policy, contract, or certificate issued by a community integrated service network~~; or an integrated service network~~.

Sec. 39. Minnesota Statutes 1996, 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; or

(2) ~~an integrated service network as defined under section 62N.02, subdivision 8; or~~

~~(3)~~ a community integrated service network as defined under section 62N.02, subdivision 4a.

Sec. 40. Minnesota Statutes 1996, section 62Q.01, subdivision 5, is amended 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; or (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. 41. Minnesota Statutes 1996, section 62Q.03, subdivision 5a, is amended 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

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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 public programs risk adjustment work group is governed by section 15.059 for purposes of membership terms and removal of members and shall terminate on June 30, 1999. The work group shall meet at the discretion of the commissioners of health and human services. 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 programs 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. 42. Minnesota Statutes 1996, section 62Q.106, is amended to read:

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, or chapter 45, 60A, or 62D.

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Sec. 43. Minnesota Statutes 1996, section 62Q.33, subdivision 2, is amended to read:

Subd. 2. [REPORT ON SYSTEM DEVELOPMENT.] The commissioner of health, in consultation with the state community health services advisory committee and the commissioner of human services, and representatives of local health departments, county government, a municipal government acting as a local board of health, ~~the Minnesota health care commission,~~ area Indian health services, health care providers, and citizens concerned about public health, shall coordinate the process for defining implementation and financing responsibilities of the local government core public health functions. The commissioner shall submit recommendations and an initial and final report on local government core public health functions according to the timeline established in subdivision 5.

Sec. 44. Minnesota Statutes 1996, section 62Q.45, subdivision 2, is amended to read:

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; or (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. 45. [62Q.52] [REFERRALS FOR RESIDENTS OF HEALTH CARE FACILITIES.]

If an enrollee is a resident of a health care facility licensed under chapter 144A or a housing with services establishment registered under chapter 144D, the enrollee's primary care physician must refer the enrollee to that facility's skilled nursing unit or that facility's appropriate care setting, provided that the health plan company and the provider can best meet the patient's needs in that setting, if the following conditions are met:

(1) the facility agrees to be reimbursed at that health plan company's contract rate negotiated with similar providers for the same services and supplies; and

(2) the facility meets all guidelines established by the health plan company related to quality of care, utilization, referral authorization, risk assumption, use of health plan company network, and other criteria applicable to providers under contract for the same services and supplies.

Sec. 46. [62Q.65] [ACCESS TO PROVIDER DISCOUNTS.]

Subdivision 1. [REQUIREMENT.] A high deductible health plan must, when used in connection with a medical savings account, provide the enrollee access to any discounted provider fees for services covered by the high deductible health plan, regardless of whether the enrollee has satisfied the deductible for the high deductible health plan.

Subd. 2. [DEFINITIONS.] For purposes of this section, the following terms have the meanings given:

(1) "high deductible health plan" has the meaning given under the Internal Revenue Code of 1986, section 220(c)(2);

(2) "medical savings account" has the meaning given under the Internal Revenue Code of 1986, section 220(d)(1); and

(3) "discounted provider fees" means fees contained in a provider agreement entered into by the issuer of the high deductible health plan, or an affiliate of the issuer, for use in connection with the high deductible health plan.

Sec. 47. Minnesota Statutes 1996, section 256.9363, subdivision 1, is amended to read:

Subdivision 1. [SELECTION OF VENDORS.] In order to contain costs, the commissioner of human services shall select vendors of medical care who can provide the most economical care consistent with high medical standards and shall, where possible, contract with organizations on a prepaid capitation basis to provide these services. The commissioner shall consider proposals by counties and vendors for managed care plans which may include: prepaid capitation programs, competitive bidding programs, or other vendor payment mechanisms designed to provide services in an economical manner or to control utilization, with safeguards to ensure that necessary services are provided. ~~Managed care plans may include integrated service networks as defined in section 62N.02.~~

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Sec. 48. Minnesota Statutes 1996, section 256.9657, subdivision 3, is amended to read:

Subd. 3. [HEALTH MAINTENANCE ORGANIZATION; COMMUNITY INTEGRATED SERVICE NETWORK SURCHARGE.] (a) Effective October 1, 1992, each health maintenance organization with a certificate of authority issued by the commissioner of health under chapter 62D and each ~~integrated service network and~~ community integrated service network licensed by the commissioner under chapter 62N shall pay to the commissioner of human services a surcharge equal to six-tenths of one percent of the total premium revenues of the health maintenance organization~~, integrated service network,~~ or community integrated service network as reported to the commissioner of health according to the schedule in subdivision 4.

(b) For purposes of this subdivision, total premium revenue means:

(1) premium revenue recognized on a prepaid basis from individuals and groups for provision of a specified range of health services over a defined period of time which is normally one month, excluding premiums paid to a health maintenance organization~~, integrated service network,~~ or community integrated service network from the Federal Employees Health Benefit Program;

(2) premiums from Medicare wrap-around subscribers for health benefits which supplement Medicare coverage;

(3) Medicare revenue, as a result of an arrangement between a health maintenance organization~~, an integrated service network,~~ or a community integrated service network and the health care financing administration of the federal Department of Health and Human Services, for services to a Medicare beneficiary; and

(4) medical assistance revenue, as a result of an arrangement between a health maintenance organization~~, integrated service network,~~ or community integrated service network and a Medicaid state agency, for services to a medical assistance beneficiary.

If advance payments are made under clause (1) or (2) to the health maintenance organization~~, integrated service network,~~ or community integrated service network for more than one reporting period, the portion of the payment that has not yet been earned must be treated as a liability.

(c) When a health maintenance organization or ~~an integrated service network or~~ community integrated service network merges or consolidates with or is acquired by another health maintenance organization~~, integrated service network,~~ or community integrated service network, the surviving corporation or the new corporation shall be responsible for the annual surcharge originally imposed on each of the entities or corporations subject to the merger, consolidation, or acquisition, regardless of whether one of the entities or corporations does not retain a certificate of authority under chapter 62D or a license under chapter 62N.

(d) Effective July 1 of each year, the surviving corporation's or the new corporation's surcharge shall be based on the revenues earned in the second previous calendar year by all of the entities or corporations subject to the merger, consolidation, or acquisition regardless of whether one of the entities or corporations does not retain a certificate of authority under chapter 62D or a license under chapter 62N until the total premium revenues of the surviving corporation include the total premium revenues of all the merged entities as reported to the commissioner of health.

(e) When a health maintenance organization~~, integrated service network,~~ or community integrated service network, which is subject to liability for the surcharge under this chapter, transfers, assigns, sells, leases, or disposes of all or substantially all of its property or assets, liability for the surcharge imposed by this chapter is imposed on the transferee, assignee, or buyer of the health maintenance organization~~, integrated service network,~~ or community integrated service network.

(f) In the event a health maintenance organization~~, integrated service network,~~ or community integrated service network converts its licensure to a different type of entity subject to liability for the surcharge under this chapter, but survives in the same or substantially similar form, the surviving entity remains liable for the surcharge regardless of whether one of the entities or corporations does not retain a certificate of authority under chapter 62D or a license under chapter 62N.

(g) The surcharge assessed to a health maintenance organization~~, integrated service network,~~ or community integrated service network ends when the entity ceases providing services for premiums and the cessation is not connected with a merger, consolidation, acquisition, or conversion.

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Sec. 49. [MEIP STUDY.]

The commissioner of employee relations shall study the current Minnesota employees insurance program (MEIP) and report to the legislature by January 15, 1998, on recommendations on whether this program provides greater accessibility to small employers for purchasing health insurance and on the continued viability of the program.

Sec. 50. [REVISOR INSTRUCTIONS.]

The revisor of statutes shall delete references to "integrated service network," but not "community integrated service network," wherever it appears in Minnesota Statutes and make conforming changes as necessary.

Sec. 51. [REPEALER.]

(a) Minnesota Statutes 1996, sections 62J.03, subdivision 3; 62J.04, subdivisions 4 and 7; 62J.041, subdivision 7; 62J.042; 62J.05; 62J.051; 62J.09, subdivision 3a; 62J.37; 62N.01, subdivision 2; 62N.02, subdivisions 2, 3, 4b, 4c, 6, 7, 8, 9, 10, and 12; 62N.03; 62N.04; 62N.05; 62N.06; 62N.065; 62N.071; 62N.072; 62N.073; 62N.074; 62N.076; 62N.077; 62N.078; 62N.10; 62N.11; 62N.12; 62N.13; 62N.14; 62N.15; 62N.17; 62N.18; 62N.24; 62N.38; 62Q.165, subdivision 3; 62Q.25; 62Q.29; and 62Q.41, are repealed.

(b) Laws 1993, chapter 247, article 4, section 8; Laws 1995, chapter 96, section 2; and Laws 1995, First Special Session chapter 3, article 13, section 2, are repealed.

(c) Laws 1994, chapter 625, article 5, section 5, as amended by Laws 1995, chapter 234, article 3, section 8, is repealed.

Sec. 52. [EFFECTIVE DATE.]

Section 23 [62J.25] is effective the day following final enactment. Section 46 [62Q.65] is effective January 1, 1998, and applies to high deductible health plans issued or renewed on or after that date.

ARTICLE 3

MINNESOTACARE TAXES

Section 1. [16A.76] [FEDERAL RESERVE; HEALTH CARE ACCESS FUND.]

Subdivision 1. [ESTABLISH RESERVE.] The federal contingency reserve is established within the health care access fund for uses necessary to preserve access to basic health care services when federal funding is significantly reduced.

Subd. 2. [RESERVE FINANCING.] The funds in reserve shall be equal to the amount of federal financial participation received since July 1, 1995, for services and administrative activities funded by the health care access fund up to a reserve limit of $150,000,000. Investment income attributed to the federal contingency reserve balances shall also be included in the total reserve amount.

Subd. 3. [PERMITTED USE.] The federal contingency reserve is established to protect access to basic health care services that are publicly funded. Funds held in the federal contingency reserve are available for appropriation in the event that federal funds for basic health care services are significantly reduced such as under federal reform or other significant changes to federal law.

Subd. 4. [LIMITS ON USE.] The federal contingency reserve is not available for supplementing reductions in federal funding resulting from application of current federal law funding formulas, for funding long-term care services, or for replacing existing general fund commitments.

Sec. 2. Minnesota Statutes 1996, section 60A.15, subdivision 1, is amended to read:

Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or before April 1, June 1, and December 1 of each year, every domestic and foreign company, including town and farmers' mutual insurance companies, domestic mutual insurance companies, marine insurance companies, health maintenance organizations, ~~integrated service networks,~~

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community integrated service networks, and nonprofit health service plan corporations, shall pay to the commissioner of revenue installments equal to one-third of the insurer's total estimated tax for the current year. Except as provided in paragraphs (d) and (e), installments must be based on a sum equal to two percent of the premiums described in paragraph (b).

(b) Installments under paragraph (a), (d), or (e) are percentages of gross premiums less return premiums on all direct business received by the insurer in this state, or by its agents for it, in cash or otherwise, during such year.

(c) Failure of a company to make payments of at least one-third of either (1) the total tax paid during the previous calendar year or (2) 80 percent of the actual tax for the current calendar year shall subject the company to the penalty and interest provided in this section, unless the total tax for the current tax year is $500 or less.

(d) For health maintenance organizations, nonprofit health services plan corporations, ~~integrated service networks,~~ and community integrated service networks, the installments must be based on an amount equal to one percent of premiums described in paragraph (b) that are paid after December 31, 1995.

(e) For purposes of computing installments for town and farmers' mutual insurance companies and for mutual property casualty companies with total assets on December 31, 1989, of $1,600,000,000 or less, the following rates apply:

(1) for all life insurance, two percent;

(2) for town and farmers' mutual insurance companies and for mutual property and casualty companies with total assets of $5,000,000 or less, on all other coverages, one percent; and

(3) for mutual property and casualty companies with total assets on December 31, 1989, of $1,600,000,000 or less, on all other coverages, 1.26 percent.

(f) Premiums under medical assistance, general assistance medical care, the MinnesotaCare program, and the Minnesota comprehensive health insurance plan and all payments, revenues, and reimbursements received from the federal government for Medicare-related coverage as defined in section 62A.31, subdivision 3, paragraph (e), are not subject to tax under this section.

Sec. 3. Minnesota Statutes 1996, 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~~ in accordance with section 16A.76. The commissioner must make a quarterly assessment of the expected expenditures for the covered services for the remainder of the current biennium and for the following biennium. The estimated expenditure, including ~~minimum~~ the reserve requirements described in section 16A.76, 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, 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 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 shall further limit enrollment or decrease premium subsidies.

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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.

(c) Notwithstanding 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 (b).

Sec. 4. Minnesota Statutes 1996, section 295.50, subdivision 3, is amended to read:

Subd. 3. [GROSS REVENUES.] "Gross revenues" are total amounts received in money or otherwise by:

(1) a hospital for patient services;

(2) a surgical center for patient services;

(3) a health care provider, other than a staff model health carrier, for patient services;

(4) a wholesale drug distributor for sale or distribution of legend drugs that are delivered~~: (i) to a Minnesota resident by a wholesale drug distributor who is a nonresident pharmacy directly, by common carrier, or by mail; or (ii)~~ in Minnesota by the wholesale drug distributor, by common carrier, or by mail, unless the legend drugs are delivered to another wholesale drug distributor who sells legend drugs exclusively at wholesale. Legend drugs do not include nutritional products as defined in Minnesota Rules, part 9505.0325; and

(5) a staff model health plan company as gross premiums for enrollees, copayments, deductibles, coinsurance, and fees for patient services covered under its contracts with groups and enrollees~~; and~~

~~(6) a pharmacy for medical supplies, appliances, and equipment~~.

Sec. 5. Minnesota Statutes 1996, section 295.50, subdivision 4, is amended to read:

Subd. 4. [HEALTH CARE PROVIDER.] (a) "Health care provider" means:

(1) a person whose health care occupation is regulated or required to be regulated by the state of Minnesota furnishing any or all of the following goods or services directly to a patient or consumer: medical, surgical, optical, visual, dental, hearing, nursing services, drugs, ~~medical supplies, medical appliances,~~ or laboratory, diagnostic, or therapeutic services~~, or any~~;

(2) a person who provides goods and services not listed ~~above~~ in clause (1) that qualify for reimbursement under the medical assistance program provided under chapter 256B. For purposes of this clause, "directly to a patient or consumer" includes goods and services provided in connection with independent medical examinations under section 65B.56 or other examinations for purposes of litigation or insurance claims;

~~(2)~~ (3) a staff model health plan company; or

~~(3)~~ (4) an ambulance service required to be licensed; or

(5) a person who sells or repairs hearing aids and related equipment or prescription eyewear.

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(b) Health care provider does not include hospitals,; medical supplies distributors, except as specified under paragraph (a), clause (5); nursing homes licensed under chapter 144A or licensed in any other jurisdiction,; pharmacies,; surgical centers,; bus and taxicab transportation, or any other providers of transportation services other than ambulance services required to be licensed,; supervised living facilities for persons with mental retardation or related conditions, licensed under Minnesota Rules, parts 4665.0100 to 4665.9900,; residential care homes licensed under chapter 144B,; board and lodging establishments providing only custodial services that are licensed under chapter 157 and registered under section 157.17 to provide supportive services or health supervision services,; adult foster homes as defined in Minnesota Rules, part 9555.5105,; day training and habilitation services for adults with mental retardation and related conditions as defined in section 252.41, subdivision 3,; and boarding care homes, as defined in Minnesota Rules, part 4655.0100.

(c) For purposes of this subdivision, "directly to a patient or consumer" includes goods and services provided in connection with independent medical examinations under section 65B.56 or other examinations for purposes of litigation or insurance claims.

Sec. 6. Minnesota Statutes 1996, section 295.50, subdivision 6, is amended to read:

Subd. 6. [HOME HEALTH CARE SERVICES.] "Home health care services" are services:

(1) defined under the state medical assistance program as home health agency services provided by a home health agency, personal care services and supervision of personal care services, private duty nursing services, and waivered services or services by home care providers required to be licensed under chapter 144A; and

(2) provided at a recipient's residence, if the recipient does not live in a hospital, nursing facility, as defined in section 62A.46, subdivision 3, or intermediate care facility for persons with mental retardation as defined in section 256B.055, subdivision 12, paragraph (d).

Sec. 7. Minnesota Statutes 1996, section 295.50, subdivision 7, is amended to read:

Subd. 7. [HOSPITAL.] "Hospital" means a hospital licensed under chapter 144, or a hospital licensed by any other ~~state or province or territory of Canada~~ jurisdiction.

Sec. 8. Minnesota Statutes 1996, section 295.50, subdivision 13, is amended to read:

Subd. 13. [SURGICAL CENTER.] "Surgical center" is an outpatient surgical center as defined in Minnesota Rules, chapter 4675 or a similar facility located in any other ~~state or province or territory of Canada~~ jurisdiction.

Sec. 9. Minnesota Statutes 1996, section 295.50, subdivision 14, is amended to read:

Subd. 14. [WHOLESALE DRUG DISTRIBUTOR.] "Wholesale drug distributor" means a wholesale drug distributor required to be licensed under sections 151.42 to 151.51 ~~or a nonresident pharmacy required to be registered under section 151.19~~.

Sec. 10. Minnesota Statutes 1996, section 295.51, subdivision 1, is amended to read:

Subdivision 1. [BUSINESS TRANSACTIONS IN MINNESOTA.] A hospital, surgical center, ~~pharmacy,~~ or health care provider is subject to tax under sections 295.50 to 295.59 if it is "transacting business in Minnesota." A hospital, surgical center, ~~pharmacy,~~ or health care provider is transacting business in Minnesota if it maintains contacts with or presence in the state of Minnesota sufficient to permit taxation of gross revenues received for patient services under the United States Constitution.

Sec. 11. Minnesota Statutes 1996, section 295.52, subdivision 1, is amended to read:

Subdivision 1. [HOSPITAL TAX.] A tax is imposed on each hospital equal to ~~two~~ 1.50 percent of its gross revenues.

Sec. 12. Minnesota Statutes 1996, section 295.52, subdivision 1a, is amended to read:

Subd. 1a. [SURGICAL CENTER TAX.] A tax is imposed on each surgical center equal to ~~two~~ 1.50 percent of its gross revenues.

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Sec. 13. Minnesota Statutes 1996, section 295.52, subdivision 2, is amended to read:

Subd. 2. [PROVIDER TAX.] A tax is imposed on each health care provider equal to ~~two~~ 1.50 percent of its gross revenues.

Sec. 14. Minnesota Statutes 1996, section 295.52, subdivision 3, is amended to read:

Subd. 3. [WHOLESALE DRUG DISTRIBUTOR TAX.] A tax is imposed on each wholesale drug distributor equal to ~~two~~ 1.50 percent of its gross revenues.

Sec. 15. Minnesota Statutes 1996, section 295.52, subdivision 4, is amended to read:

Subd. 4. [USE TAX; PRESCRIPTION DRUGS.] A person that receives prescription drugs for resale or use in Minnesota, other than from a wholesale drug distributor that paid the tax under subdivision 3, is subject to a tax equal to ~~two~~ 1.50 percent of the price paid. Liability for the tax is incurred when prescription drugs are received or delivered in Minnesota by the person.

Sec. 16. Minnesota Statutes 1996, section 295.52, is amended by adding a subdivision to read:

Subd. 6. [HEARING AIDS AND PRESCRIPTION EYEWEAR.] The tax liability of a person who meets the definition of a health care provider solely because the person sells or repairs hearing aids and related equipment or prescription eyewear is limited to the gross revenues received from the sale or repair of these items.

Sec. 17. Minnesota Statutes 1996, section 295.53, subdivision 1, is amended to read:

Subdivision 1. [EXEMPTIONS.] (a) The following payments are excluded from the gross revenues subject to the hospital, surgical center, or health care provider taxes under sections 295.50 to 295.57:

(1) payments received for services provided under the Medicare program, including payments received from the government, and organizations governed by sections 1833 and 1876 of title XVIII of the federal Social Security Act, United States Code, title 42, section 1395, and enrollee deductibles, coinsurance, and copayments, whether paid by the Medicare enrollee or by a Medicare supplemental coverage as defined in section 62A.011, subdivision 3, clause (10). Payments for services not covered by Medicare are taxable;

(2) medical assistance payments including payments received directly from the government or from a prepaid plan;

(3) payments received for home health care services;

(4) payments received from hospitals or surgical centers for goods and services on which liability for tax is imposed under section 295.52 or the source of funds for the payment is exempt under clause (1), (2), (7), (8), or (10);

(5) payments received from health care providers for goods and services on which liability for tax is imposed under this chapter or the source of funds for the payment is exempt under clause (1), (2), (7), (8), or (10);

(6) amounts paid for legend drugs, other than nutritional products, to a wholesale drug distributor who is subject to tax under section 295.52, subdivision 3, reduced by reimbursements received for legend drugs under clauses (1), (2), (7), and (8);

(7) payments received under the general assistance medical care program including payments received directly from the government or from a prepaid plan;

(8) payments received for providing services under the MinnesotaCare program including payments received directly from the government or from a prepaid plan and enrollee deductibles, coinsurance, and copayments. For purposes of this clause, coinsurance means the portion of payment that the enrollee is required to pay for the covered service;

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(9) payments received by a health care provider or the wholly owned subsidiary of a health care provider for care provided outside Minnesota to a patient who is not domiciled in Minnesota;

(10) payments received from the chemical dependency fund under chapter 254B;

(11) payments received in the nature of charitable donations that are not designated for providing patient services to a specific individual or group;

(12) payments received for providing patient services incurred through a formal program of health care research conducted in conformity with federal regulations governing research on human subjects. Payments received from patients or from other persons paying on behalf of the patients are subject to tax;

(13) payments received from any governmental agency for services benefiting the public, not including payments made by the government in its capacity as an employer or insurer;

(14) payments received for services provided by community residential mental health facilities licensed under Minnesota Rules, parts 9520.0500 to 9520.0690, community support programs and family community support programs approved under Minnesota Rules, parts 9535.1700 to 9535.1760, and community mental health centers as defined in section 245.62, subdivision 2;

(15) government payments received by a regional treatment center;

(16) payments received for hospice care services;

(17) payments received by a health care provider for ~~medical supplies, appliances, and equipment~~ hearing aids and related equipment or prescription eyewear delivered outside of Minnesota;

(18) payments received by a post-secondary educational institution from student tuition, student activity fees, health care service fees, government appropriations, donations, or grants. Fee for service payments and payments for extended coverage are taxable; and

(19) payments received for services provided by: assisted living programs and congregate housing programs.

(b) Payments received by wholesale drug distributors for ~~prescription~~ legend drugs sold directly to veterinarians or veterinary bulk purchasing organizations are excluded from the gross revenues subject to the wholesale drug distributor tax under sections 295.50 to 295.59.

Sec. 18. Minnesota Statutes 1996, section 295.53, subdivision 3, is amended to read:

Subd. 3. [SEPARATE STATEMENT OF TAX.] A hospital, surgical center, ~~pharmacy,~~ or health care provider must not state the tax obligation under section 295.52 in a deceptive or misleading manner. It must not separately state tax obligations on bills provided to patients, consumers, or other payers when the amount received for the services or goods is not subject to tax.

Pharmacies that separately state the tax obligations on bills provided to consumers or to other payers who purchase legend drugs may state the tax obligation as ~~two~~ 1.50 percent of the wholesale price of the legend drugs. Pharmacies must not state the tax obligation as ~~two~~ 1.50 percent of the retail price.

Whenever the commissioner determines that a person has engaged in any act or practice constituting a violation of this subdivision, the commissioner may bring an action in the name of the state in the district court of the appropriate county to enjoin the act or practice and to enforce compliance with this subdivision, or the commissioner may refer the matter to the attorney general or the county attorney of the appropriate county. Upon a proper showing, a permanent or temporary injunction, restraining order, or other appropriate relief must be granted.

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Sec. 19. Minnesota Statutes 1996, section 295.53, subdivision 4, is amended to read:

Subd. 4. [DEDUCTION FOR RESEARCH.] (a) In addition to the exemptions allowed under subdivision 1, a hospital or health care provider ~~which is exempt under section 501(c)(3) of the Internal Revenue Code of 1986 or is owned and operated under authority of a governmental unit,~~ may deduct from its gross revenues subject to the hospital or health care provider taxes under sections 295.50 to 295.57 revenues equal to expenditures for qualifying research conducted by an allowable research ~~programs~~ program.

(b) For purposes of this subdivision, the following requirements apply:

(1) expenditures ~~for allowable research programs are the direct and general~~ must be for program costs ~~for activities which are part~~ of qualifying research conducted by an allowable research program;

(2) an allowable research program must be a formal program of medical and health care research ~~approved by the governing body of the hospital or health care provider which also includes active solicitation of research funds from government and private sources. Allowable~~ conducted by an entity which is exempt under section 501(c)(3) of the Internal Revenue Code of 1986 or is owned and operated under authority of a governmental unit; and

(3) qualifying research must:

(i) be approved in writing by the governing body of the hospital or health care provider which is taking the deduction under this subdivision;

~~(1)~~ (ii) have as its purpose the development of new knowledge in basic or applied science relating to the diagnosis and treatment of conditions affecting the human body;

~~(2)~~ (iii) be subject to review by individuals with expertise in the subject matter of the proposed study but who have no financial interest in the proposed study and are not involved in the conduct of the proposed study; and

~~(3)~~ (iv) be subject to review and supervision by an institutional review board operating in conformity with federal regulations if the research involves human subjects or an institutional animal care and use committee operating in conformity with federal regulations if the research involves animal subjects. Research expenses are not exempt if the study is a routine evaluation of health care methods or products used in a particular setting conducted for the purpose of making a management decision. Costs of clinical research activities paid directly for the benefit of an individual patient are excluded from this exemption. Basic research in fields including biochemistry, molecular biology, and physiology are also included if such programs are subject to a peer review process.

(c) No deduction shall be allowed under this subdivision for any revenue received by the hospital or health care provider in the form of a grant, gift, or otherwise, whether from a government or nongovernment source, on which the tax liability under section 295.52 is not imposed ~~or for which the tax liability under section 295.52 has been received from a third party as provided for in section 295.582~~.

(d) Effective beginning with calendar year 1995, the taxpayer shall not take the deduction under this section into account in determining estimated tax payments or the payment made with the annual return under section 295.55. The total deduction allowable to all taxpayers under this section for calendar years beginning after December 31, 1994, may not exceed $65,000,000. To implement this limit, each qualifying hospital and qualifying health care provider shall submit to the commissioner by March 15 its total expenditures qualifying for the deduction under this section for the previous calendar year. The commissioner shall sum the total expenditures of all taxpayers qualifying under this section for the calendar year. If the resulting amount exceeds $65,000,000, the commissioner shall allocate a part of the $65,000,000 deduction limit to each qualifying hospital and health care provider in proportion to its share of the total deductions. The commissioner shall pay a refund to each qualifying hospital or provider equal to its share of the deduction limit multiplied by ~~two~~ 1.50 percent. The commissioner shall pay the refund no later than May 15 of the calendar year.

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Sec. 20. Minnesota Statutes 1996, section 295.54, subdivision 1, is amended to read:

Subdivision 1. [TAXES PAID TO ANOTHER STATE.] A hospital, surgical center, ~~pharmacy,~~ or health care provider that has paid taxes to another ~~state or province or territory of Canada~~ jurisdiction measured by gross revenues and is subject to tax under sections 295.52 to 295.59 on the same gross revenues is entitled to a credit for the tax legally due and paid to another ~~state or province or territory of Canada~~ jurisdiction to the extent of the lesser of (1) the tax actually paid to the other ~~state or province or territory of Canada~~ jurisdiction, or (2) the amount of tax imposed by Minnesota on the gross revenues subject to tax in the other taxing jurisdictions.

Sec. 21. Minnesota Statutes 1996, section 295.54, subdivision 2, is amended to read:

Subd. 2. [PHARMACY ~~CREDIT~~ REFUND.] A pharmacy may claim ~~a quarterly credit~~ an annual refund against the total amount of tax, if any, the pharmacy owes during that ~~quarter~~ calendar year under section 295.52, subdivision ~~1b, as provided in this subdivision~~ 2. The ~~credit~~ refund shall equal ~~two~~ 1.50 percent of the amount paid by the pharmacy to a wholesale drug distributor subject to tax under section 295.52, subdivision 3, for legend drugs delivered by the pharmacy outside of Minnesota. ~~If the amount of the credit exceeds the tax liability of the pharmacy under section 295.52, subdivision 1b, the commissioner shall provide the pharmacy with a refund equal to the excess amount.~~ Each qualifying pharmacy must apply for the refund on the annual return as provided under section 295.55, subdivision 5. The refund must be claimed within one year of the due date of the return. Interest on refunds paid under this subdivision will begin to accrue 60 days after the date a claim for refund is filed. For purposes of this subdivision, the date a claim is filed is the due date of the return or the date of the actual claim for refund, whichever is later.

Sec. 22. Minnesota Statutes 1996, section 295.55, subdivision 2, is amended to read:

Subd. 2. [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) Each hospital or surgical center must make estimated payments of the taxes for the calendar year in monthly installments to the commissioner within ~~ten~~ 15 days after the end of the month.

(b) Estimated tax payments are not required of hospitals or surgical centers if the tax for the calendar year is less than $500 or if a hospital has been allowed a grant under section 144.1484, subdivision 2, for the year.

(c) Underpayment of estimated installments bear interest at the rate specified in section 270.75, from the due date of the payment until paid or until the due date of the annual return at the rate specified in section 270.75. An underpayment of an estimated installment is the difference between the amount paid and the lesser of (1) 90 percent of one-twelfth of the tax for the calendar year or (2) the tax for the actual gross revenues received during the month.

Sec. 23. Minnesota Statutes 1996, section 295.582, is amended to read:

295.582 [AUTHORITY.]

(a) A hospital, surgical center, ~~pharmacy,~~ or health care provider that is subject to a tax under section 295.52, or a pharmacy that has paid additional expense transferred under this section by a wholesale drug distributor, may transfer additional expense generated by section 295.52 obligations on to all third-party contracts for the purchase of health care services on behalf of a patient or consumer. The additional expense transferred to the third-party purchaser must not exceed ~~two~~ 1.50 percent of the gross revenues received under the third-party contract, and ~~two~~ 1.50 percent of copayments and deductibles paid by the individual patient or consumer. The expense must not be generated on revenues derived from payments that are excluded from the tax under section 295.53. All third-party purchasers of health care services including, but not limited to, third-party purchasers regulated under chapter 60A, 62A, 62C, 62D, 62H, 62N, 64B, 65A, 65B, 79, or 79A, or under section 471.61 or 471.617, must pay the transferred expense in addition to any payments due under existing contracts with the hospital, surgical center, pharmacy, or health care provider, to the extent allowed under federal law. A third-party purchaser of health care services includes, but is not limited to, a health carrier~~, integrated service network,~~ or community integrated service network that pays for health care services on behalf of patients or that reimburses, indemnifies, compensates, or otherwise insures patients for health care services. A third-party purchaser shall comply with this section regardless of whether the third-party purchaser is a for-profit, not-for-profit, or nonprofit entity. A wholesale drug distributor may transfer additional expense generated by section 295.52 obligations to entities that purchase from the

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wholesaler, and the entities must pay the additional expense. Nothing in this section limits the ability of a hospital, surgical center, pharmacy, wholesale drug distributor, or health care provider to recover all or part of the section 295.52 obligation by other methods, including increasing fees or charges.

(b) Each third-party purchaser regulated under any chapter cited in paragraph (a) shall include with its annual renewal for certification of authority or licensure documentation indicating compliance with paragraph (a).

(c) Any hospital, surgical center, or health care provider subject to a tax under section 295.52 or a pharmacy that has paid additional expense transferred under this section by a wholesale drug distributor may file a complaint with the commissioner responsible for regulating the third-party purchaser if at any time the third-party purchaser fails to comply with paragraph (a).

(d) If the commissioner responsible for regulating the third-party purchaser finds at any time that the third-party purchaser has not complied with paragraph (a), the commissioner may take enforcement action against a third-party purchaser which is subject to the commissioner's regulatory jurisdiction and which does not allow a hospital, surgical center, pharmacy, or provider to pass-through the tax. The commissioner may by order fine or censure the third-party purchaser or revoke or suspend the certificate of authority or license of the third-party purchaser to do business in this state if the commissioner finds that the third-party purchaser has not complied with this section. The third-party purchaser may appeal the commissioner's order through a contested case hearing in accordance with chapter 14.

Sec. 24. [REPEALER.]

Minnesota Statutes 1996, sections 295.52, subdivision 1b; and 295.53, subdivision 5, are repealed.

Sec. 25. [EFFECTIVE DATES.]

Sections 7 [295.50, s.7], 8 [295.50, s.13], 9 [295.50, s.14], 15 [295.52, s.4], and 20 [295.54, s.1] are effective the day following final enactment.

Section 19 [295.53, s.4] is effective for research expenditures incurred after December 31, 1996.

Section 22 [295.55, s.2] is effective for estimated payments due after July 1, 1997.

Section 16 [295.52, s.6] is effective for services rendered and revenue received after December 3, 1997.

Sections 4 [295.50, s.3], 5 [295.50, s.4], 6 [295.50, s.6], 10 [295.51, s.1], 17 [295.53, s.1], and 18 [295.53, s.3] are effective January 1, 1998.

ARTICLE 4

SENIOR CITIZEN DRUG PROGRAM

Section 1. [256.955] [SENIOR CITIZEN DRUG PROGRAM.]

Subdivision 1. [ESTABLISHMENT.] The commissioner, in consultation with county social service agencies, shall establish and administer a senior citizen drug program. Qualified senior citizens shall be eligible for prescription drug coverage under the program beginning January 1, 1998.

Subd. 2. [DEFINITIONS.] (a) For purposes of this section, the following definitions apply.

(b) "Health plan" has the meaning provided in section 62Q.01, subdivision 3.

(d) "Qualified senior citizen" means an individual age 65 or older who:

(1) has a household income that does not exceed 120 percent of the federal poverty guidelines;

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(2) owns assets whose value does not exceed twice the limit used to determine eligibility under the supplemental security income program;

(3) is enrolled in Medicare Part A and Part B;

(4) is not eligible for prescription drug coverage under a health plan;

(5) does 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 1876 of the federal Social Security Act, United States Code, title 42, section 1395, et seq., as amended;

(6) is not eligible for medical assistance without a spenddown, general assistance medical care without a spenddown, or MinnesotaCare;

(7) has not had coverage described in clauses (4) and (5) for at least four months prior to application for the program; and

(8) is a permanent resident of Minnesota as defined in section 256.9359.

(b) Persons who initially enrolled in the senior citizen drug program under this section and whose income increases above the limits established in paragraph (a) may continue enrollment but must pay the full cost of coverage.

Subd. 3. [PRESCRIPTION DRUG COVERAGE.] (a) Coverage under the program is limited to prescription drugs covered under the medical assistance program, except as provided in paragraph (b).

(b) As of the date the commissioner determines that, in a given county, at least two health plan companies offer policies, contracts, or certificates governed by section 1833 or 1876 of the federal Social Security Act that provide a prescription drug benefit as part of their standard coverage for Medicare enrollees, eligibility for prescription drug coverage under the senior drug program for enrollees who are residents of the county shall be limited to coverage of prescription drug costs in excess of any annual expenditure limit for enrollees of the health plan companies.

Subd. 4. [APPLICATION PROCEDURES AND ADMINISTRATION.] Applications and information on the program must be made available at county social service agencies, health care provider offices, and agencies and organizations serving senior citizens. Senior citizens shall submit applications and any information specified by the commissioner as being necessary to verify eligibility directly to the county social service agencies. County social service agencies shall determine an applicant's eligibility for the program within 30 days from the date the application is received.

Subd. 5. [DRUG UTILIZATION REVIEW PROGRAM.] The commissioner shall implement a drug utilization review program for program enrollees. The commissioner shall establish an advisory committee to assist the commissioner in developing criteria for the utilization review program. The committee shall be comprised of an equal number of physicians and pharmacists with expertise in treating elderly persons, and shall use a consensus process to develop clinically relevant standards for drug utilization review designed to improve health care outcomes for senior citizens. The advisory committee is governed by section 15.059.

Subd. 6. [PHARMACY ENROLLMENT AND REIMBURSEMENT.] Pharmacies may apply to the commissioner to participate in the senior citizen drug program. The commissioner shall reimburse participating pharmacies for drug and dispensing costs at the MinnesotaCare reimbursement level, minus the copayment required under subdivision 7.

Subd. 7. [PREMIUM PAYMENTS AND COST SHARING.] (a) Program enrollees shall pay premiums according to the sliding scale established under section 256.9358.

(b) Program enrollees shall pay a copayment of $10 for each prescription.

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(d) The commissioner shall include payments or expenditures by an enrollee under this subdivision as expenses for medical care when determining an enrollee's eligibility for medical assistance or general assistance medical care based upon a spenddown.

Subd. 8. [REPORT.] The commissioner shall submit to the legislature by December 1, 1998, a report on the senior citizen drug program. The report must include demographic information on enrollees, per-prescription expenditures, total program expenditures, hospital and nursing home costs avoided by enrollees, any savings to medical assistance and Medicare resulting from the provision of prescription drug coverage under Medicare by health maintenance organizations, other public and private options for drug assistance to the senior population, and any recommendations for changes in the senior drug program.

Subd. 9. [SUNSET.] The commissioner shall have no authority under this section and section 256B.04, subdivision 19, to pay claims for prescription drugs, accept premiums from qualified senior citizens, or impose rebates on manufacturers for drugs dispensed to qualified senior citizens, on or after the effective date of any waiver approved by the federal Health Care Financing Administration that would allow the commissioner to provide prescription drug coverage to Medicare beneficiaries whose income is less than 150 percent of the federal poverty guidelines.

Sec. 2. Minnesota Statutes 1996, section 256B.04, is amended by adding a subdivision to read:

Subd. 19. [PRESCRIPTION DRUG CONTRACT REQUIREMENT.] The commissioner shall include, as part of any medical assistance prescription drug contract with a drug manufacturer, a requirement that the drug manufacturer provide for payment of a 15.1 percent rebate on each unit of drug paid for by the senior citizen drug program under section 256.955 on behalf of a qualified senior citizen enrolled in the program, after satisfaction of any deductible and copayment requirements.

ARTICLE 5

MINNESOTA COMPREHENSIVE HEALTH ASSOCIATION

Section 1. Minnesota Statutes 1996, section 62E.02, subdivision 13, is amended to read:

Subd. 13. [ELIGIBLE PERSON.] (a) "Eligible person" means an individual who:

(1) is currently and has been a resident of Minnesota for the six months immediately preceding the date of receipt by the association or its writing carrier of a completed certificate of eligibility ~~and who~~;

(2) meets the enrollment requirements of section 62E.14; and

(3) is not otherwise ineligible under this subdivision.

(b) No individual is eligible for coverage under a qualified or a Medicare supplement plan issued by the association for whom a premium is paid or reimbursed by a federal, state, or local agency as of the first day of any term for which a premium amount is paid or reimbursed.

Sec. 2. Minnesota Statutes 1996, section 62E.02, subdivision 18, is amended to read:

Subd. 18. [WRITING CARRIER.] "Writing carrier" means the insurer or insurers, health maintenance organization or organizations, integrated service network or networks, ~~and~~ community integrated service network or networks, or other entity selected by the association and approved by the commissioner to administer the comprehensive health insurance plan.

Sec. 3. Minnesota Statutes 1996, section 62E.11, is amended by adding a subdivision to read:

Subd. 13. [REPORT TO LEGISLATURE.] The commissioner shall report to the legislature annually on the costs incurred by the association in providing coverage to individuals enrolled in medical assistance under chapter 256B or general assistance medical care under chapter 256D. The report shall be provided to the chairs of the house committee on health

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and human services and the senate committee on health and family security no later than January 15 of each year. The report's contents shall be determined by the commissioner, in consultation with the department of human services and the association. At a minimum, the report shall provide a breakdown, for the association in aggregate and for each category of individuals enrolled in medical assistance under chapter 256B or general assistance medical care under chapter 256D, of:

(1) administrative costs;

(2) claims costs;

(3) premiums paid;

(4) deductibles, coinsurance, and copayments paid;

(5) state payments to providers satisfying deductibles, coinsurance, or copayments required to be paid under a qualified or Medicare supplement plan issued by the association;

(6) the number of individuals;

(7) losses; and

(8) appropriated state funds.

The commissioner of human services, the association, and the writing carrier shall cooperate with the commissioner and provide all information that the commissioner determines is necessary to prepare this report.

Sec. 4. Minnesota Statutes 1996, section 62E.13, subdivision 2, is amended to read:

Subd. 2. The association may select policies and contracts, or parts thereof, submitted by a member or members of the association, or by the association or others, to develop specifications for bids from any ~~members~~ entity which ~~wish~~ wishes to be selected as a writing carrier to administer the state plan. The selection of the writing carrier shall be based upon criteria ~~including~~ established by the board of directors of the association and approved by the commissioner. The criteria shall outline specific qualifications that an entity must satisfy in order to be selected and, at a minimum, shall include the ~~member's~~ entity's proven ability to handle large group accident and health insurance cases, efficient claim paying capacity, and the estimate of total charges for administering the plan. The association may select separate writing carriers for the two types of qualified plans, the qualified medicare supplement plan, and the health maintenance organization contract.

Sec. 5. Minnesota Statutes 1996, section 256B.056, subdivision 8, is amended to read:

Subd. 8. [COOPERATION.] To be eligible for medical assistance, applicants and recipients must cooperate with the state and local agency to identify potentially liable third-party payers and assist the state in obtaining third party payments, unless good cause for noncooperation is determined according to Code of Federal Regulations, title 42, part 433.147. "Cooperation" includes identifying any third party who may be liable for care and services provided under this chapter to the applicant, recipient, or any other family member for whom application is made and providing relevant information to assist the state in pursuing a potentially liable third party. Cooperation also includes providing information about a group health plan for which the person may be eligible and if the plan is determined cost-effective by the state agency and premiums are paid by the local agency or there is no cost to the recipient, they must enroll or remain enrolled with the group. For purposes of this subdivision, coverage provided by the Minnesota comprehensive health association under chapter 62E shall not be considered group health plan coverage or cost-effective by the state and local agency. Cost-effective insurance premiums approved for payment by the state agency and paid by the local agency are eligible for reimbursement according to section 256B.19.

Sec. 6. Minnesota Statutes 1996, section 256B.0625, subdivision 15, is amended to read:

Subd. 15. [HEALTH PLAN PREMIUMS AND COPAYMENTS.] (a) Medical assistance covers health care prepayment plan premiums, insurance premiums, and copayments if determined to be cost-effective by the commissioner. For purposes of obtaining Medicare part A and part B, and copayments, expenditures may be made even if federal funding is not available.

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(b) Effective for all premiums due on or after June 30, 1997, medical assistance does not cover premiums that a recipient is required to pay under a qualified or Medicare supplement plan issued by the Minnesota comprehensive health association.

Sec. 7. Minnesota Statutes 1996, section 256D.03, subdivision 3b, is amended to read:

Subd. 3b. [COOPERATION.] (a) General assistance or general assistance medical care applicants and recipients must cooperate with the state and local agency to identify potentially liable third-party payors and assist the state in obtaining third-party payments. Cooperation includes identifying any third party who may be liable for care and services provided under this chapter to the applicant, recipient, or any other family member for whom application is made and providing relevant information to assist the state in pursuing a potentially liable third party. General assistance medical care applicants and recipients must cooperate by providing information about any group health plan in which they may be eligible to enroll. They must cooperate with the state and local agency in determining if the plan is cost-effective. For purposes of this subdivision, coverage provided by the Minnesota comprehensive health association under chapter 62E shall not be considered group health plan coverage or cost-effective by the state and local agency. If the plan is determined cost-effective and the premium will be paid by the state or local agency or is available at no cost to the person, they must enroll or remain enrolled in the group health plan. Cost-effective insurance premiums approved for payment by the state agency and paid by the local agency are eligible for reimbursement according to subdivision 6.

(b) Effective for all premiums due on or after June 30, 1997, general assistance medical care does not cover premiums that a recipient is required to pay under a qualified or Medicare supplement plan issued by the Minnesota comprehensive health association.

Sec. 8. Minnesota Statutes 1996, section 295.58, is amended to read:

295.58 [DEPOSIT OF REVENUES AND PAYMENT OF REFUNDS.]

(a) The commissioner shall deposit all revenues, including penalties and interest, derived from the taxes imposed by sections 295.50 to 295.57 ~~and from the insurance premiums tax on health maintenance organizations, community integrated service networks, integrated service networks, and nonprofit health service plan corporations~~ in the health care access fund in the state treasury. Refunds of overpayments must be paid from the health care access fund in the state treasury. There is annually appropriated from the health care access fund to the commissioner of revenue the amount necessary to make any refunds required under section 295.54.

(b) The revenues, including penalties and interest, derived from the tax on insurance premiums imposed by section 60A.15 on health maintenance organizations, community integrated service networks, and nonprofit health service plan corporations must be deposited in the general fund and are annually appropriated to the Minnesota comprehensive health association to offset assessments made to subsidize the costs of the Minnesota comprehensive insurance plan established under chapter 62E.

Sec. 9. [EFFECTIVE DATE.]

Sections 1 to 8 are effective the day following final enactment.

ARTICLE 6

RURAL HEALTH CARE

Section 1. Minnesota Statutes 1996, section 62Q.19, subdivision 1, is amended to read:

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

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(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;

(3) status as a local government unit as defined in section 62D.02, subdivision 11, a hospital district created or reorganized under sections 447.31 to 447.37, an Indian tribal government, an Indian health service unit, or a community health board as defined in chapter 145A; or

(4) status as a former state hospital that specializes in the treatment of cerebral palsy, spina bifida, epilepsy, closed head injuries, specialized orthopedic problems, and other disabling conditions; or

(5) status as a rural hospital that qualifies for a sole community hospital financial assistance grant under section 144.1484, subdivision 1.

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.

Sec. 2. Minnesota Statutes 1996, section 144.1465, is amended to read:

144.1465 [FINDING AND PURPOSE.]

The legislature finds that rural hospitals are an integral part of the health care delivery system and are fundamental to the development of a sound rural economy. The legislature further finds that access to rural health care must be assured to all Minnesota residents. The rural health care system is undergoing a restructuring that threatens to jeopardize access in rural areas to quality health services. To assure continued rural health care access the legislature proposes to establish a grant program to assist rural hospitals and their communities with the development of strategic plans and transition projects~~, provide subsidies for geographically isolated hospitals facing closure,~~ that encourage and maintain the development of rural health networks, support cooperative efforts among hospitals to restructure the delivery of health care services towards outpatient care, develop telemedicine relationships, encourage the appropriate consolidation of rural hospital emergency services, and ~~examine the problem of~~ support efforts at recruitment and retention of rural physicians, nurses, and other allied health care professionals. The legislature also proposes to establish a grant program to provide subsidies for geographically isolated rural hospitals facing closure.

Sec. 3. Minnesota Statutes 1996, 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~~ 50 or fewer beds; and

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(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. 4. Minnesota Statutes 1996, section 144.147, subdivision 2, is amended to read:

Subd. 2. [GRANTS AUTHORIZED.] The commissioner shall establish a program of grants to assist eligible rural hospitals. The commissioner shall award grants to hospitals and communities for the purposes set forth in paragraphs (a) and (b).

(a) Grants may be used by hospitals and their communities to develop strategic plans for preserving or enhancing access to health services. At a minimum, a strategic plan must consist of:

(1) a needs assessment to determine what health services are needed and desired by the community. The assessment must include interviews with or surveys of area health professionals, local community leaders, and public hearings;

(2) an assessment of the feasibility of providing needed health services that identifies priorities and timeliness for potential changes; and

(3) an implementation plan.

The strategic plan must be developed by a committee that includes representatives from the hospital, local public health agencies, other health providers, and consumers from the community.

(b) The grants may also be used by eligible rural hospitals that have developed strategic plans to implement transition projects to modify the type and extent of services provided, in order to reflect the needs of that plan. Grants may be used by hospitals under this paragraph to develop hospital-based physician practices that integrate hospital and existing medical practice facilities that agree to transfer their practices, equipment, staffing, and administration to the hospital. The grants may also be used by the hospital to establish a health provider cooperative, a telemedicine system, or a rural health care system. Not more than one-third of any grant shall be used to offset losses incurred by physicians agreeing to transfer their practices to hospitals.

Sec. 5. Minnesota Statutes 1996, section 144.147, subdivision 3, is amended to read:

Subd. 3. [CONSIDERATION OF GRANTS.] In determining which hospitals will receive grants under this section, the commissioner shall take into account:

(1) improving community access to hospital or health services;

(2) changes in service populations;

(3) demand for ambulatory and emergency services;

(4) the extent that the health needs of the community are not currently being met by other providers in the service area;

(5) the need to recruit and retain health professionals;

(6) the ~~involvement and~~ extent of community support ~~of the community and local health care providers~~; ~~and~~

(7) the coordination with local community organizations, such as community development and public health agencies; and

(8) the financial condition of the hospital.

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Sec. 6. Minnesota Statutes 1996, section 144.147, subdivision 4, is amended to read:

Subd. 4. [ALLOCATION OF GRANTS.] (a) Eligible hospitals must apply to the commissioner no later than September 1 of each fiscal year for grants awarded for that fiscal year. A grant may be awarded upon signing of a grant contract.

(b) The commissioner must make a final decision on the funding of each application within 60 days of the deadline for receiving applications.

(c) Each relevant community health board has 30 days in which to review and comment to the commissioner on grant applications from hospitals in their community health service area.

(d) In determining which hospitals will receive grants under this section, the commissioner shall consider the following factors:

(1) Description of the problem, description of the project, and the likelihood of successful outcome of the project. The applicant must explain clearly the nature of the health services problems in their service area, how the grant funds will be used, what will be accomplished, and the results expected. The applicant should describe achievable objectives, a timetable, and roles and capabilities of responsible individuals and organizations.

(2) The extent of community support for the hospital and this proposed project. The applicant should demonstrate support for the hospital and for the proposed project from other local health service providers and from local community and government leaders. Evidence of such support may include past commitments of financial support from local individuals, organizations, or government entities; and commitment of financial support, in-kind services or cash, for this project.

(3) The comments, if any, resulting from a review of the application by the community health board in whose community health service area the hospital is located.

(e) In evaluating applications, the commissioner shall score each application on a 100 point scale, assigning the maximum of 70 points for an applicant's understanding of the problem, description of the project, and likelihood of successful outcome of the project; and a maximum of 30 points for the extent of community support for the hospital and this project. The commissioner may also take into account other relevant factors.

(f) A grant to a hospital, including hospitals that submit applications as consortia, may not exceed ~~$37,500~~ $50,000 a year and may not exceed a term of two years. Prior to the receipt of any grant, the hospital must certify to the commissioner that at least one-half of the amount, which may include in-kind services, is available for the same purposes from nonstate sources. A hospital receiving a grant under this section may use the grant for any expenses incurred in the development of strategic plans or the implementation of transition projects with respect to which the grant is made. Project grants may not be used to retire debt incurred with respect to any capital expenditure made prior to the date on which the project is initiated.

(g) The commissioner may adopt rules to implement this section.

Sec. 7. [144.1475] [RURAL HOSPITAL DEMONSTRATION PROJECT.]

Subdivision 1. [LEGISLATIVE PURPOSE.] The legislature finds that some rural hospitals in close proximity to other like hospitals are at risk of either closing or reducing operations. The legislature further finds that it is in the interest of all Minnesotans to move toward an efficient and cooperative rural health care delivery system. Therefore, the legislature believes it is important to implement a demonstration project to assist rural hospitals in consolidating or cooperating with one another.

Subd. 2. [ESTABLISHMENT.] The commissioner of health, for the biennium ending June 30, 1999, shall establish at least three demonstration projects per fiscal year to assist rural hospitals in the planning and implementation process to either consolidate or cooperate with another existing hospital in its service area to provide better quality health care to its community. A demonstration project must include at least two eligible hospitals. For purposes of this section, an "eligible hospital" means a hospital that:

(1) is located outside the seven-county metropolitan area;

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(2) has 50 or fewer licensed beds; and

(3) is located within a 25-mile radius of another hospital.

At least one of the eligible hospitals in a demonstration project must have had a negative operating margin during one of the two years prior to application.

Subd. 3. [APPLICATION.] (a) An eligible hospital seeking to be a participant in a demonstration project must submit an application to the commissioner of health detailing the hospital's efforts to consolidate health care delivery in its service area, cooperate with another hospital in the delivery of health care, or both consolidate and cooperate. Applications must be submitted by October 15 of each fiscal year for grants awarded for that fiscal year.

(b) Applications must:

(1) describe the problem that the proposed consolidation or cooperation will address, the consolidation or cooperation project, how the grant funds will be used, what will be accomplished, and the results expected;

(2) describe achievable objectives, a time table, and the roles and capabilities of responsible individuals and organizations;

(3) include written commitments from the applicant hospital and at least one other hospital that will participate in the consolidation or cooperation demonstration project, that specify the activities the organization will undertake during the project, the resources the organization will contribute to the demonstration project, and the expected role and nature of the organization's involvement in proposed consolidation or cooperation activities; and

(4) provide evidence of support for the proposed project from other local health service providers and from local community and government leaders.

Subd. 4. [GRANTS.] The commissioner of health shall allocate a grant of up to $100,000 to the highest scoring applicants each year until available funding is expended. Grants may be used by eligible hospitals to:

(1) conduct consolidation or cooperation negotiations;

(2) develop consolidation or cooperation plans, including financial plans and architectural designs;

(3) seek community input and conduct community education on proposed or planned consolidations or cooperative activities; and

(4) implement consolidation or cooperation plans.

Subd. 5. [CONSIDERATION OF GRANTS.] In evaluating applications, the commissioner shall score each application on a 100-point scale, assigning: a maximum of 40 points for an applicant's understanding of the problem, description of the project, and likelihood of successful outcome of the project; a maximum of 30 points for explicit and unequivocal written commitments from organizations participating in the project; a maximum of 20 points for matching funds or in-kind services committed by the applicant or others to the project; and a maximum of 10 points for the extent of community support for the project. The commissioner shall consider the comments, if any, resulting from a review of the application by the community health board in whose community health service area the applicant is located. The commissioner may also take into account other relevant factors.

Subd. 6. [EVALUATION.] The commissioner of health shall evaluate the overall effectiveness of the demonstration projects and report to the legislature by September 1, 2000. The commissioner may collect, from the hospitals receiving grants, any information necessary to evaluate the demonstration project.

Sec. 8. [144.148] [RURAL HOSPITAL CAPITAL IMPROVEMENT GRANT AND LOAN PROGRAM.]

Subdivision 1. [PURPOSE.] The legislature finds that Minnesota's rural hospital community is in need of modernization to continue providing quality health care to Minnesota residents. Furthermore, funds needed for modernization projects to update, remodel, and replace aging facilities and equipment are scarce due to reductions in reimbursements from both public

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and private payers. Therefore, the legislature finds that it is imperative to establish a rural hospital capital improvement grant and loan program to ensure all health care delivered in Minnesota is of the highest quality.

Subd. 2. [DEFINITION.] (a) For purposes of this section, the following definitions apply.

(b) "Eligible rural hospital" means a hospital that:

(1) is located outside the seven-county metropolitan area;

(2) has 50 or fewer licensed hospital beds with a net hospital operating margin not greater than two percent in the two fiscal years prior to application; and

(3) is 25 miles or more from another hospital.

(c) "Eligible project" means a modernization project to update, remodel, or replace aging hospital facilities and equipment necessary to maintain the operations of a hospital.

Subd. 3. [PROGRAM.] The commissioner of health shall award rural hospital capital improvement grants or loans to eligible rural hospitals. A grant or loan shall not exceed $1,500,000 per hospital. Grants or loans shall be interest free. An eligible rural hospital may apply the funds retroactively to capital improvements made during the two fiscal years preceding the fiscal year in which the grant or loan was received, provided the hospital met the eligibility criteria during that time period.

Subd. 4. [APPLICATIONS.] Eligible hospitals seeking a grant or loan shall apply to the commissioner. Applications must include a description of the problem that the proposed project will address, a description of the project including construction and remodeling drawings or specifications, sources of funds for the project, uses of funds for the project, the results expected, and a plan to maintain or operate any facility or equipment included in the project. The applicant must describe achievable objectives, a timetable, and roles and capabilities of responsible individuals and organizations. Applicants must submit to the commissioner evidence that competitive bidding was used to select contractors for the project.

Subd. 5. [CONSIDERATION OF APPLICATIONS.] The commissioner shall review each application to determine whether or not the hospital's application is complete and whether the hospital and the project are eligible for a grant or loan. In evaluating applications, the commissioner shall score each application on a 100-point scale, assigning: a maximum of 40 points for an applicant's clarity and thoroughness in describing the problem and the project; a maximum of 40 points for the extent to which the applicant has demonstrated that the applicant has made adequate provisions to assure proper and efficient operation of the facility once the project is completed; and a maximum of 20 points for the extent to which the proposed project is consistent with the hospital's capital improvement plan or strategic plan. The commissioner may also take into account other relevant factors. During application review, the commissioner may request additional information about a proposed project, including information on project cost. Failure to provide the information requested disqualifies a loan applicant.

Subd. 6. [PROGRAM OVERSIGHT.] The commissioner of health shall review audited financial information of the hospital to assess eligibility. The commissioner shall determine the amount of a grant or loan to be given to an eligible rural hospital based on the relative score of each eligible hospital's application and the funds available to the commissioner. The grant or loan shall be used to update, remodel, or replace aging facilities and equipment necessary to maintain the operations of the hospital.

Subd. 7. [LOAN PAYMENT.] Loans shall be repaid as provided in this subdivision over a period of 15 years. In those years when an eligible rural hospital experiences a positive net operating margin in excess of two percent, the eligible rural hospital shall pay to the state one-half of the excess above two percent, up to the yearly payment amount based upon a loan period of 15 years. If the amount paid back in any year is less than the yearly payment amount, or if no payment is required because the eligible rural hospital does not experience a positive net operating margin in excess of two percent, the amount unpaid for that year shall be forgiven by the state without any financial penalty. As a condition of receiving an award through this program, eligible hospitals must agree to any and all collection activities the commissioner finds necessary to collect loan payments in those years a payment is due.

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Subd. 8. [ACCOUNTING TREATMENT.] The commissioner of finance shall record as grants in the state accounting system funds obligated by this section. Loan payments received under this section shall be deposited in the health care access fund.

Subd. 9. [EXPIRATION.] This section expires June 30, 1999.

Sec. 9. Minnesota Statutes 1996, 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 operating income losses in ~~the~~ two of the previous three 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 operating loss margin (total operating losses as a percentage of total operating revenue) for ~~the~~ two of the previous three most recent consecutive fiscal years for which audited financial information is available and the total amount of funding available. For purposes of calculating a hospital's operating loss margin, total operating revenue does not include grant funding provided under this subdivision. One hundred percent of the available funds will be disbursed proportionately based on the operating loss margins of the eligible hospitals.

Sec. 10. [EFFECTIVE DATE.]

Sections 7 and 8 are effective July 1, 1997.

ARTICLE 7

APPROPRIATIONS

Section 1. [APPROPRIATIONS.]

Except as otherwise provided in this act, the sums set forth in the columns designated "fiscal year 1998" and "fiscal year 1999" are appropriated from the general fund, or other named fund, to the agencies for the purposes specified in this act for the fiscal years ending June 30, 1998, and June 30, 1999.

SUMMARY BY FUND

1998 1999 TOTAL

Health Care Access Fund $103,559,000 $140,063,000 $243,622,000

Subdivision 1. Department of Human Services

Health Care Access Fund $ 86,421,000 $122,783,000 $209,204,000

Subd. 2. Department of Health

Health Care Access Fund 12,800,000 12,895,000 25,695,000

Health care access fund appropriations for student loan forgiveness programs for health care providers are available for either year of the biennium.

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Subd. 3. University of Minnesota

Health Care Access Fund 2,592,000 2,592,000 5,184,000

$470,000 is appropriated to the board of regents of the University of Minnesota for the biennium ending June 30, 1999, for primary care physician education and training under Minnesota Statutes, sections 137.38 to 137.40. This appropriation is in addition to the current base appropriation for these activities and shall become part of the base appropriation for the fiscal year 2000-2001 biennium.

Subd. 4. Department of Revenue

Health Care Access Fund 1,621,000 1,668,000 3,289,000

Subd. 5. Legislative Coordinating Commission

Health Care Access Fund 125,000 125,000 250,000

Sec. 2. CARRYOVER

None of the appropriations in this act which are allowed to be carried forward from fiscal year 1998 to fiscal year 1999 shall become part of the base level funding for the 2000-2001 biennial budget, unless specifically directed by the legislature.

Sec. 3. SUNSET

All uncodified language contained in this article expires on June 30, 1999, unless a different expiration is explicit."

Delete the title and insert:

"A bill for an act relating to health; modifying provisions relating to MinnesotaCare and general assistance medical care; providing for health care reform; modifying MinnesotaCare tax provisions; establishing a senior citizen drug program; modifying provisions relating to the Minnesota comprehensive health association; providing for rural health care; providing civil and criminal penalties; appropriating money; amending Minnesota Statutes 1996, sections 60A.15, subdivision 1; 60A.951, subdivision 5; 62A.021, by adding a subdivision; 62A.61; 62A.65, subdivision 3; 62D.02, subdivision 5; 62D.09, subdivision 3; 62E.02, subdivisions 13 and 18; 62E.11, by adding a subdivision; 62E.13, subdivision 2; 62J.017; 62J.04, subdivisions 1, 1a, and 9; 62J.041; 62J.06; 62J.07, subdivisions 1 and 3; 62J.09, subdivision 1; 62J.15, subdivision 1; 62J.152, subdivisions 1, 2, 4, and 5; 62J.17, subdivision 6a; 62J.22; 62J.25; 62J.2914, subdivision 1; 62J.2915; 62J.2916, subdivision 1; 62J.2917, subdivision 2; 62J.2921, subdivision 2; 62J.451, subdivision 6b; 62L.08, subdivision 8; 62M.02, subdivision 21; 62N.01, subdivision 1; 62N.22; 62N.23; 62N.25, subdivision 5; 62N.26; 62N.40; 62Q.01, subdivisions 3, 4, and 5; 62Q.03, subdivision 5a; 62Q.106; 62Q.19, subdivision 1; 62Q.33, subdivision 2; 62Q.45, subdivision 2; 144.1465; 144.147, subdivisions 1, 2, 3, and 4; 144.1484, subdivision 1; 256.9352, subdivision 3; 256.9353, subdivisions 1, 3, and 7; 256.9354, subdivisions 4, 5, 6, 7, and by adding a subdivision; 256.9355, subdivisions 1, 2, 4, and by adding a subdivision; 256.9357, subdivisions 1 and 3; 256.9358, subdivision 4; 256.9359, subdivision 2; 256.9363, subdivisions 1 and 5; 256.9657, subdivision 3; 256B.04, by adding a subdivision; 256B.056, subdivision 8; 256B.0625, subdivision 15; 256D.03, subdivisions 3 and 3b; 295.50, subdivisions 3, 4, 6, 7, 13, and 14; 295.51, subdivision 1; 295.52, subdivisions 1, 1a, 2, 3, 4, and by adding a subdivision; 295.53, subdivisions 1, 3, and 4; 295.54, subdivisions 1 and 2; 295.55, subdivision 2; 295.58; and 295.582; proposing coding for new law in Minnesota Statutes, chapters 16A; 62Q; 144; and 256; repealing Minnesota Statutes 1996, sections 62J.03, subdivision 3; 62J.04, subdivisions 4 and 7; 62J.041, subdivision 7; 62J.042; 62J.05; 62J.051; 62J.09, subdivision 3a; 62J.37; 62N.01, subdivision 2; 62N.02, subdivisions 2, 3, 4b, 4c, 6, 7, 8, 9, 10, and 12; 62N.03; 62N.04; 62N.05; 62N.06; 62N.065; 62N.071; 62N.072; 62N.073; 62N.074; 62N.076; 62N.077; 62N.078; 62N.10; 62N.11; 62N.12; 62N.13; 62N.14; 62N.15; 62N.17; 62N.18; 62N.24; 62N.38;

Journal of the House - 45th Day - Top of Page 2971

62Q.165, subdivision 3; 62Q.25; 62Q.29; 62Q.41; 295.52, subdivision 1b; and 295.53, subdivision 5; Laws 1993, chapter 247, article 4, section 8; Laws 1994, chapter 625, article 5, section 5, as amended; Laws 1995, chapter 96, section 2; and Laws 1995, First Special Session chapter 3, article 13, section 2."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Taxes.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

Journal of the House - 45th Day - Top of Page 2972

1996, chapter 408, article 8, sections 21; 22, subdivision 1; and 24; proposing coding for new law in Minnesota Statutes, chapters 16A; 241; 242; 243; 257; 259; 299A; 299C; 299F; 609; 611A; and 626; repealing Minnesota Statutes 1996, sections 119A.30; 145.406; 242.51; 244.09, subdivision 11a; 259.33; 299F.07; and 609.684, subdivision 2.

Reported the same back with the following amendments to the unofficial engrossment:

Page 2, line 50, delete "$481,162,000" and insert "$481,265,000" and delete "$492,316,000" and insert "$492,491,000" and delete "$974,871,000" and insert "$975,149,000"

Page 3, line 3, delete "$488,669,000" and insert "$488,772,000" and delete "$500,321,000" and insert "$500,496,000" and delete "$990,383,000" and insert "$990,661,000"

Page 5, line 20, delete "32,498,000" and insert "32,601,000" and delete "30,392,000" and insert "30,567,000"

Page 9, line 38, delete the first "...,-0-,..." and insert "103,000" and delete the second "...,-0-,..." and insert "175,000"

Page 11, delete lines 15 to 21, and insert:

"The department may use up to $320,000 of dedicated receipts to design, construct, furnish, and equip a new building for Thistledew Camp's new wilderness endeavors program. The building must provide a ten bed training and juvenile dorm area, plus storage."

Page 72, line 12, after "section" insert "609.185, clause (2),"

Page 77, line 8, delete "AND TEEN COURT"

Pages 77 to 81, delete section 1

Page 115, delete lines 15 to 17

Page 154, line 1, after the second comma, insert "St. Cloud,"

Page 182, after line 20, insert:

"Sec. 17. Minnesota Statutes 1996, section 243.51, subdivision 1, is amended to read:

Subdivision 1. The commissioner of corrections is hereby authorized to contract with agencies and bureaus of the United States and with the proper officials of other states or a county of this state for the custody, care, subsistence, education, treatment and training of persons convicted of criminal offenses constituting felonies in the courts of this state, the United States, or other states of the United States. Such contracts shall provide for reimbursing the state of Minnesota for all costs or other expenses involved. Funds received under such contracts shall be deposited in the state treasury and are appropriated to the commissioner of corrections for correctional purposes, including capital improvements. Any prisoner transferred to the state of Minnesota pursuant to this subdivision shall be subject to the terms and conditions of the prisoner's original sentence as if the prisoner were serving the same within the confines of the state in which the conviction and sentence was had or in the custody of the United States. Nothing herein shall deprive such inmate of the right to parole or the rights to legal process in the courts of this state.

Sec. 18. Minnesota Statutes 1996, section 243.51, subdivision 3, is amended to read:

Subd. 3. [TEMPORARY DETENTION.] The commissioner of corrections is authorized to contract with agencies and bureaus of the United States and with the appropriate officials of any other state or county of this state for the temporary detention of any person in custody pursuant to any process issued under the authority of the United States, other states of the United States, or the district courts of this state. The contract shall provide for reimbursement to the state of Minnesota for all costs and expenses involved. Money received under contracts shall be deposited in the state treasury and are appropriated to the commissioner of corrections for correctional purposes, including capital improvements."

Journal of the House - 45th Day - Top of Page 2973

Page 188, after line 9, insert:

"Sec. 30. Minnesota Statutes 1996, section 641.12, is amended to read:

641.12 [COLLECTION OF FEES AND BOARD BILLS.]

Subdivision 1. [FEE.] Each person who is booked and confined at a county or regional jail may be charged a fee of up to $10 to the sheriff's department of the county in which the jail is located. The fee is payable immediately from any money then possessed by the person being booked, or any money deposited with the sheriff's department on the person's behalf. If the fee is assessed and the person has no funds at the time of booking or during the period of any incarceration, the sheriff shall notify the district court in the county where the charges related to the booking are pending, and shall request the assessment of the fee. Notwithstanding section 609.10, 609.125, or any other law to the contrary, upon notification from the sheriff, the district court must order the fee paid to the sheriff's department as part of any sentence or disposition imposed. If the person is not charged, is acquitted, or if the charges are dismissed, the sheriff shall return the fee to the person at the last known address listed in the booking records.

Subd. 2. [BOARD.] At the end of every month the sheriff of each county shall render to the county auditor a statement showing the name of each fugitive from justice, United States prisoner, one committed from another county or one committed by virtue of any city ordinance, the amount due the county for board of each and from whom, and also of all amounts due for board of prisoners for the preceding month."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

With the recommendation that when so amended the bill pass.

The report was adopted.

Winter from the Committee on Rules and Legislative Administration to which was referred:

S. F. No. 1905, A bill for an act relating to the organization and operation of state government; appropriating money for the general legislative and administrative expenses of state government; requiring studies; creating working groups; creating state accounts; modifying local government financial reporting provisions; modifying agency and budget reporting provisions; modifying cash advance provisions; modifying provisions for claims against appropriations; providing for disposition of lawsuit proceeds; modifying state property rental provisions; providing a teen court program; providing for a uniform business identifier and electronic business licensing; authorizing the payment of salary differential for reserve forces on active duty in Haiti; waiving contractor's bond for art in state buildings; modifying the disposition of certain fees and surcharges; authorizing reimbursement charges for certain inspections; modifying responsibilities for payment of certain retirement supplemental benefits; setting state policy for regulatory rules and programs of agencies; regulating obsolete, unnecessary, or duplicative rules; providing for expansion of international trading opportunities; modifying provisions of the amateur sports commission; restricting payments related to the Target Center; modifying appointment provisions for the board of ethical practices executive director; providing for additional legislative leadership positions; establishing the Minnesota office of technology; providing for repayment of certain local government grants; changing the name of the ethical practices board; amending Minnesota Statutes 1996, sections 3.099, subdivision 3; 6.47; 10A.02, subdivision 5; 14.05, subdivision 5; 14.131; 16A.10, subdivision 2; 16A.11, subdivisions 1, 3, and 3c; 16A.1285, subdivision 3; 16A.129, subdivision 3; 16A.15, subdivision 3; 16B.19, subdivision 2b; 16B.24, subdivision 5; 16B.35, by adding a subdivision; 16B.465, subdivision 3; 16B.70, subdivision 2; 176.611, by adding subdivisions; 240A.08; 327.33, subdivision 2; 327B.04, subdivision 7; 349.163, subdivision 4; 356.865, subdivision 3; 363.073, subdivision 1; and 473.556, subdivision 16; proposing coding for new law in Minnesota Statutes, chapters 14; 16A; 16B; 43A; 260; and 465; proposing coding for new law as Minnesota Statutes, chapter 237A; repealing Minnesota Statutes 1996, sections 10A.21; 15.95; 15.96; 16B.40; 16B.41; 16B.42; 16B.43; and 16B.58, subdivision 8.

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

The report was adopted.

Journal of the House - 45th Day - Top of Page 2974
SECOND READING OF SENATE BILLS

S. F. Nos. 1880 and 1905 were read for the second time.

CONSIDERATION UNDER RULE 1.10

Pursuant to rule 1.10, Solberg requested immediate consideration of S. F. No. 1881.

S. F. No. 1881 was reported to the House.

Davids and Kuisle moved to amend S. F. No. 1881, the second unofficial engrossment, as follows:

Page 22, after line 2, insert:

"Sec. 19. Minnesota Statutes 1996, section 161.14, subdivision 29, is amended to read:

Subd. 29. [LAURA INGALLS WILDER HISTORIC HIGHWAY.] Marked trunk highway No. 14, from its intersection with ~~marked trunk highway No. 169 in or near the city of Mankato to its terminus at~~ the Minnesota-South Dakota border, easterly to its intersection with marked U.S. highway No. 63 in or near Rochester and then northerly and southerly along marked U.S. highway No. 63, as follows:

(1) northerly along marked U.S. highway No. 63 to its intersection with marked U.S. highway No. 61 in or near Lake City and then southeasterly along U.S. highway No. 61 to its intersection with marked trunk highway No. 60 in or near the city of Wabasha and then northeasterly along marked trunk highway No. 60 to its intersection with the Minnesota-Wisconsin border; and

(2) southerly along marked U.S. highway No. 63 to its intersection with marked trunk highway No. 16 and then easterly along marked trunk highway No. 16 to its intersection with marked U.S. highway No. 52 in or near the city of Preston and then southerly and easterly along marked U.S. highway No. 52 to the Minnesota-Iowa border,

is designated the "Laura Ingalls Wilder Historic Highway."

Pursuant to section 161.139, the commissioner of transportation shall adopt a suitable marking design to mark this highway and shall erect appropriate signs. The people of the communities, having resolved to support and financially back the marking of these routes, shall reimburse the department for costs incurred in marking and memorializing this highway."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Dehler moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 19, after line 35, insert:

"Sec. 17. Minnesota Statutes, section 97B.020, is amended to read:

97B.020 [FIREARMS SAFETY CERTIFICATE REQUIRED.]

Except as provided in this section, a person born after December 31, 1979, may not obtain a license to take wild animals by firearms. A person may obtain a hunting license if the person has a firearms safety certificate or equivalent certificate, a driver's license or Minnesota ID card with a firearms safety certificate indicator under section 171.06, subdivision 7,

Journal of the House - 45th Day - Top of Page 2975

previous hunting license, or other evidence indicating that the person has completed in this state or in another state a hunter safety course recognized by the department under a reciprocity agreement. A person who is on active duty and has successfully completed basic training in the United States armed forces, reserve component, or national guard may obtain a hunting license or approval authorizing hunting regardless of whether the person is issued a firearms safety certificate."

Page 33, after line 9, insert:

"Sec. 33. Minnesota Statutes 1996, section 171.07, is amended by adding a subdivision to read:

Subd. 7. [FIREARMS SAFETY CERTIFICATE.] (a) The department shall maintain in its records information transmitted electronically from the commissioner of natural resources identifying each person to whom the commissioner has issued a firearms safety certificate under section 97B.015, subdivision 5.

(b) After receiving information under paragraph (a) that a person has received a firearms safety certificate, the department shall include, on all driver's licenses or Minnesota ID cards subsequently issued to the person, a graphic or written indication that the person has received the certificate.

(c) If a person who has received a firearms safety certificate applies for a driver's license or Minnesota ID card before that information has been transmitted to the department, the department may accept a copy of the certificate as proof of its issuance and shall then follow the procedures in paragraph (b)."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Daggett moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 27, after line 18, insert:

"Sec. 26. Minnesota Statutes 1996, section 169.045, subdivision 1, is amended to read:

Subdivision 1. [DESIGNATION OF ROADWAYS, PERMIT.] The governing body of any county, home rule charter or statutory city, or town may by ordinance authorize the operation of motorized golf carts, or four-wheel all-terrain vehicles, on designated roadways or portions thereof under its jurisdiction. Authorization to operate a motorized golf cart or four-wheel all-terrain vehicle is by permit only. For purposes of this section, a four-wheel all-terrain vehicle is a motorized flotation-tired vehicle with four low-pressure tires that is limited in engine displacement of less than 800 cubic centimeters and total dry weight less than 600 pounds."

The motion prevailed and the amendment was adopted.

CALL OF THE HOUSE

On the motion of Winter and on the demand of 10 members, a call of the House was ordered. The following members answered to their names:

Abrams Evans Kelso McCollum Peterson Tingelstad

Anderson, B. Finseth Kielkucki McElroy Pugh Tomassoni

Anderson, I. Folliard Kinkel McGuire Rest Tompkins

Bakk Garcia Knight Milbert Reuter Trimble

Bettermann Greenfield Knoblach Molnau Rhodes Tuma

Biernat Greiling Koppendrayer Mulder Rifenberg Tunheim

Bishop Gunther Koskinen Mullery Rostberg Van Dellen

Boudreau Haas Kraus Munger Rukavina Vickerman

Journal of the House - 45th Day - Top of Page 2976

Bradley Harder Krinkie Murphy Schumacher Wagenius

Broecker Hasskamp Kubly Ness Seagren Weaver

Carlson Hausman Kuisle Nornes Seifert Wejcman

Chaudhary Hilty Larsen Olson, E. Sekhon Wenzel

Clark Holsten Leighton Olson, M. Skare Westfall

Commers Huntley Leppik Opatz Skoglund Westrom

Daggett Jaros Lieder Orfield Smith Winter

Davids Jefferson Lindner Osskopp Solberg Wolf

Dawkins Jennings Long Otremba Stanek Workman

Dehler Johnson, A. Luther Ozment Stang Spk. Carruthers

Dempsey Johnson, R. Macklin Paulsen Sviggum

Dorn Juhnke Mahon Pawlenty Swenson, D.

Entenza Kahn Mares Paymar Swenson, H.

Erhardt Kalis Marko Pelowski Sykora

Winter moved that further proceedings of the roll call be suspended and that the Sergeant at Arms be instructed to bring in the absentees. The motion prevailed and it was so ordered.

Kuisle, Stang, Kraus, Rifenberg, Kielkucki, Seifert and Westrom moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 5, line 39, delete "446,533,000" and insert "462,533,000"

Page 9, line 37, delete "73,100,000" and insert "57,100,000"

Page 10, delete lines 46 to 55

Adjust totals accordingly

Renumber or reletter in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Kuisle et al amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 36 yeas and 92 nays as follows:

Those who voted in the affirmative were:

Anderson, B. Davids Koppendrayer Ness Rostberg Tompkins

Bettermann Dehler Kraus Nornes Seifert Tuma

Bishop Finseth Kuisle Olson, M. Stanek Vickerman

Boudreau Harder Lindner Osskopp Stang Weaver

Bradley Kielkucki Molnau Reuter Sviggum Westfall

Daggett Knoblach Mulder Rifenberg Swenson, H. Westrom

Journal of the House - 45th Day - Top of Page 2977

Those who voted in the negative were:

Abrams Folliard Kahn Mares Paymar Tingelstad

Anderson, I. Garcia Kalis Marko Pelowski Tomassoni

Bakk Greenfield Kelso McCollum Peterson Trimble

Biernat Greiling Kinkel McElroy Pugh Tunheim

Broecker Gunther Knight McGuire Rest Van Dellen

Carlson Hasskamp Koskinen Milbert Rhodes Wagenius

Chaudhary Hausman Krinkie Mullery Rukavina Wejcman

Clark Hilty Kubly Munger Schumacher Wenzel

Commers Holsten Larsen Murphy Seagren Winter

Dawkins Huntley Leighton Olson, E. Sekhon Wolf

Dempsey Jaros Leppik Opatz Skare Workman

Dorn Jefferson Lieder Orfield Skoglund Spk. Carruthers

Entenza Jennings Long Otremba Smith

Erhardt Johnson, A. Luther Ozment Solberg

Evans Johnson, R. Macklin Paulsen Swenson, D.

Farrell Juhnke Mahon Pawlenty Sykora

The motion did not prevail and the amendment was not adopted.

Swenson, D., moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 5, line 22, delete "21,800,000" and insert "20,359,000" and delete "16,000,000" and insert "15,117,000"

Page 5, line 31, delete "$16,000,000" and insert "$14,559,000"

Page 5, line 32, delete "$16,000,000" and insert "$15,117,000"

Page 5, line 34, delete "811,101,000" and insert "810,741,000" and delete "821,349,000" and insert "820,989,000"

Page 7, line 29, delete "72,448,000" and insert "72,088,000" and delete "73,860,000" and insert "73,500,000"

Page 12, line 15, delete "52,001,000" and insert "53,442,000" and delete "56,115,000" and insert "57,718,000"

Page 12, line 26, delete the first "$864,000" and insert "$466,000"

Page 12, line 26, delete the second "$864,000" and insert "$592,000"

Page 12, line 40, delete "$3,480,000" and insert "$4,200,000"

Page 12, line 42, delete "29" and insert "35"

Page 12, after line 55, insert:

"$1,441,000 for the first year and $883,000 for the second year is from the general fund for employment of up to 15 additional state troopers."

Correct the totals and the summaries by fund accordingly

Journal of the House - 45th Day - Top of Page 2978

The question was taken on the Swenson, D., amendment and the roll was called. There were 59 yeas and 73 nays as follows:

Those who voted in the affirmative were:

Abrams Dempsey Koppendrayer Mulder Rhodes Sykora

Anderson, B. Erhardt Kraus Ness Rifenberg Tingelstad

Bettermann Farrell Krinkie Nornes Rostberg Tompkins

Bishop Goodno Larsen Olson, M. Seagren Tuma

Boudreau Haas Leppik Orfield Seifert Van Dellen

Bradley Harder Lindner Osskopp Smith Vickerman

Broecker Holsten Macklin Ozment Stanek Weaver

Commers Kielkucki Mares Paulsen Sviggum Westfall

Daggett Knight McElroy Pawlenty Swenson, D. Workman

Davids Knoblach Molnau Reuter Swenson, H.

Those who voted in the negative were:

Anderson, I. Folliard Johnson, R. Mahon Pelowski Tunheim

Bakk Garcia Juhnke Marko Peterson Wagenius

Biernat Greenfield Kahn McCollum Pugh Wejcman

Carlson Greiling Kalis McGuire Rest Wenzel

Chaudhary Gunther Kelso Milbert Rukavina Westrom

Clark Hasskamp Kinkel Mullery Schumacher Winter

Dawkins Hausman Koskinen Munger Sekhon Wolf

Dehler Hilty Kubly Murphy Skare Spk. Carruthers

Delmont Huntley Kuisle Olson, E. Skoglund

Dorn Jaros Leighton Opatz Solberg

Entenza Jefferson Lieder Osthoff Stang

Evans Jennings Long Otremba Tomassoni

Finseth Johnson, A. Luther Paymar Trimble

The motion did not prevail and the amendment was not adopted.

Workman, Molnau and Paulsen moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 41, after line 4, insert:

"Sec. 48. [REPEALER.]

Minnesota Statutes 1996, sections 160.84; 160.85; 160.86; 160.87; 160.88; 160.89; 160.90; 160.91; and 160.92, are repealed."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Workman et al amendment and the roll was called.

Journal of the House - 45th Day - Top of Page 2979

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 90 yeas and 41 nays as follows:

Those who voted in the affirmative were:

Abrams Dorn Holsten Lindner Otremba Stanek

Anderson, B. Entenza Huntley Luther Paulsen Stang

Anderson, I. Erhardt Jaros Macklin Pawlenty Sviggum

Bettermann Evans Jennings Mahon Pelowski Swenson, D.

Biernat Farrell Johnson, A. Mares Rest Sykora

Bishop Finseth Johnson, R. Marko Reuter Tingelstad

Boudreau Folliard Kielkucki McCollum Rhodes Tompkins

Bradley Garcia Kinkel Molnau Rifenberg Trimble

Broecker Goodno Knight Mulder Rostberg Van Dellen

Carlson Greiling Knoblach Munger Schumacher Vickerman

Chaudhary Gunther Koppendrayer Murphy Seagren Weaver

Commers Haas Koskinen Ness Seifert Westfall

Daggett Harder Kubly Nornes Sekhon Westrom

Dawkins Hasskamp Kuisle Olson, M. Smith Workman

Delmont Hilty Larsen Osskopp Solberg Spk. Carruthers

Those who voted in the negative were:

Bakk Jefferson Leighton Olson, E. Pugh Tunheim

Clark Juhnke Leppik Opatz Rukavina Wagenius

Davids Kahn Lieder Orfield Skare Wejcman

Dehler Kalis McElroy Osthoff Skoglund Wenzel

Dempsey Kelso McGuire Ozment Swenson, H. Winter

Greenfield Kraus Milbert Paymar Tomassoni Wolf

Hausman Krinkie Mullery Peterson Tuma

The motion prevailed and the amendment was adopted.

Opatz moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 35, after line 30, insert:

"Sec. 37. Minnesota Statutes 1996, section 221.84, subdivision 1, is amended to read:

Subdivision 1. [DEFINITION.] "Limousine service" means a service that:

(1) is not provided on a regular route;

(2) is provided in ~~an unmarked~~ a luxury passenger automobile that is not a van or station wagon and has a seating capacity of not more than 12 persons, excluding the driver;

(3) provides only prearranged pickup; and

(4) charges more than a taxicab fare for a comparable trip."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Journal of the House - 45th Day - Top of Page 2980

Rukavina moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 29, after line 4, insert:

"Sec. 28. Minnesota Statutes 1996, section 169.48, is amended to read:

169.48 [VEHICLE LIGHTING.]

Subdivision 1. [LIGHTS ~~TO BE~~ DISPLAYED 24 HOURS.] (a) Every vehicle when in motion or upon a street or highway within this state shall display lighted head lamps, subject to exceptions with respect to parked vehicles and law enforcement vehicles under sections 169.53 and 169.541.

(b) Every vehicle when in motion or upon a street or highway within this state:

(1) at any time from sunset to sunrise;

(2) at any time when it is raining, snowing, sleeting, or hailing; and

(3) at any other time when visibility is impaired by weather, smoke, fog or other conditions or there is not sufficient light to render clearly discernible persons and vehicles on the highway at a distance of 500 feet ahead, shall display other lighted lamps and illuminating devices, as hereinafter, respectively, required for different classes of vehicles, subject to exceptions with respect to parked vehicles and law enforcement vehicles~~, as hereinafter stated~~ under sections 169.53 and 169.541.

(c) In addition to the other requirements of this ~~paragraph~~ subdivision, every school bus transporting children upon a highway within this state, at any time from a half hour before sunrise to a half hour after sunset, shall display lighted head lamps, other lamps, and illuminating devices as required by this ~~paragraph~~ subdivision, except that the operator shall use the lowermost distribution of light specified in section 169.60 unless conditions warrant otherwise.

(d) When a requirement is hereinafter declared as to the distance from which certain lamps and devices shall render objects visible or within which such lamps or devices shall be visible, these provisions shall apply during the time stated in this section upon a straight level unlighted highway under normal atmospheric conditions unless a different time or condition is expressly stated and unless otherwise specified the location of lamps and devices shall refer to the center of such lamps or devices. Parking lamps shall not be used in lieu of head lamps to satisfy the requirements of this section.

Subd. 2. [CERTAIN VIOLATIONS; NEGLIGENCE.] Notwithstanding section 169.96, a violation of subdivision 1, paragraph (b), clause (2), is not negligence per se or prima facie evidence of negligence.

Subd. 3. [MANUFACTURER REQUIREMENT OF 24-HOUR HEAD LAMPS.] A 2001 model year passenger vehicle, and every passenger vehicle manufactured after that model year, shall not be sold in Minnesota unless the vehicle is equipped and wired so that the head lamps are lighted automatically when the vehicle's ignition is started."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion did not prevail and the amendment was not adopted.

Weaver moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 27, after line 18, insert:

"Section 26. Minnesota Statutes 1996, section 169.01, subdivision 78, is amended to read:

Subd. 78. [RECREATIONAL VEHICLE COMBINATION.] "Recreational vehicle combination" means a combination of vehicles consisting of a pickup truck as defined in section 168.011, subdivision 29, attached by means of a fifth-wheel coupling to a camper-semitrailer which has hitched to it a trailer carrying a watercraft as defined in section 86B.005,

Journal of the House - 45th Day - Top of Page 2981

subdivision 18; off-highway motorcycle as defined in section 84.787, subdivision 7; snowmobile as defined in section 84.81, subdivision 3; or all-terrain vehicle as defined in section 84.92, subdivision 8. For purposes of this subdivision:

(a) A "fifth-wheel coupling" is a coupling between a camper-semitrailer and a towing pickup truck in which a portion of the weight of the camper-semitrailer is carried over or forward of the rear axle of the towing pickup.

(b) A "camper-semitrailer" is a trailer, other than a manufactured home as defined in section 327B.01, subdivision 13, designed for human habitation and used for vacation or recreational purposes for limited periods."

Page 29, after line 4, insert:

"Sec. 29. Minnesota Statutes 1996, 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 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, off-highway motorcycle, snowmobile, or all-terrain vehicle 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."

Page 41, after line 12, insert:

"(c) Sections 26 and 29 are effective July 1, 1997."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Kinkel, Daggett and Olson, E., moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 26, after line 26, insert:

"Sec. 25. Minnesota Statutes 1996, section 168.27, subdivision 5a, is amended to read:

Subd. 5a. [CONSIGNMENT SALES.] No person may solicit, accept, offer for sale, or sell motor vehicles for consignment sale unless licensed as a new or used motor vehicle dealer, a motor vehicle wholesaler, or a motor vehicle

Journal of the House - 45th Day - Top of Page 2982

auctioneer. This requirement does not apply to a licensed auctioneer selling motor vehicles at an auction if, in the ordinary course of the auctioneer's business, the sale of motor vehicles is incidental to the sale of other real or personal property. Incidental means up to a total of ten but no more than ten percent of the items in the posted auction bill are motor vehicles."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Ozment and Johnson, A., moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 29, after line 4, insert:

"Sec. 28. Minnesota Statutes 1996, section 169.21, subdivision 2, is amended to read:

Subd. 2. [RIGHTS IN ABSENCE OF SIGNALS.] (a) Where traffic-control signals are not in place or in operation, the driver of a vehicle shall stop to yield the right-of-way to a pedestrian crossing the roadway within a marked crosswalk or within any crosswalk at an intersection but no pedestrian shall suddenly leave a curb or other place of safety and walk or run into the path of a vehicle which is so close that it is impossible for the driver to yield. This provision shall not apply under the conditions as otherwise provided in this subdivision.

(b) When any vehicle is stopped at a marked crosswalk or at any unmarked crosswalk at an intersection to permit a pedestrian to cross the roadway, the driver of any other vehicle approaching from the rear shall not overtake and pass the stopped vehicle.

(c) It is unlawful for any person to drive a motor vehicle through a column of school children crossing a street or highway or past a member of a school safety patrol or adult crossing guard, while the member of the school safety patrol or adult crossing guard is directing the movement of children across a street or highway and while the school safety patrol member or adult crossing guard is holding an official signal in the stop position. A peace officer may arrest the driver of a motor vehicle if the peace officer has probable cause to believe that the driver has operated the vehicle in violation of this paragraph within the past four hours.

(d) A person who violates this subdivision is guilty of a misdemeanor and may be sentenced to imprisonment for not more than 90 days or to payment of a fine of not more than $700, or both. A person who violates this subdivision a second or subsequent time within one year of a previous conviction under this subdivision is guilty of a gross misdemeanor and may be sentenced to imprisonment for not more than one year or to payment of a fine of not more than $3,000, or both.

Sec. 29. Minnesota Statutes 1996, section 169.444, is amended by adding a subdivision to read:

Subd. 1a. [PASSING ON RIGHT.] No person may pass or attempt to pass a school bus in a motor vehicle on the right-hand, passenger-door side of the bus when the school bus is displaying the prewarning flashing amber signals as required in section 169.443, subdivision 1.

Sec. 30. Minnesota Statutes 1996, section 169.444, subdivision 2, is amended to read:

Subd. 2. [VIOLATIONS BY DRIVERS; PENALTIES.] (a) A person who fails to stop a vehicle or to keep it stopped, as required in subdivision 1, or who violates subdivision 1a, is guilty of a misdemeanor punishable by a fine of not less than $300.

(b) A person is guilty of a gross misdemeanor if the person fails to stop a motor vehicle or to keep it stopped, as required in subdivision 1, or who violates subdivision 1a, and commits either or both of the following acts:

(1) passes or attempts to pass the school bus in a motor vehicle on the right-hand, passenger-door side of the bus; or

Journal of the House - 45th Day - Top of Page 2983

(2) passes or attempts to pass the school bus in a motor vehicle when a school child is outside of and on the street or highway used by the school bus or on the adjacent sidewalk.

Sec. 31. Minnesota Statutes 1996, section 169.444, subdivision 5, is amended to read:

Subd. 5. [CAUSE FOR ARREST.] A peace officer may arrest the driver of a motor vehicle if the peace officer has probable cause to believe that the driver has operated the vehicle in violation of subdivision 1 or 1a within the past four hours.

Sec. 32. Minnesota Statutes 1996, section 169.444, subdivision 6, is amended to read:

Subd. 6. [VIOLATION; PENALTY FOR OWNERS AND LESSEES.] (a) If a motor vehicle is operated in violation of subdivision 1 or 1a, the owner of the vehicle, or for a leased motor vehicle the lessee of the vehicle, is guilty of a petty misdemeanor.

(b) The owner or lessee may not be fined under paragraph (a) if (1) another person is convicted for that violation, or (2) the motor vehicle was stolen at the time of the violation.

(c) Paragraph (a) does not apply to a lessor of a motor vehicle if the lessor keeps a record of the name and address of the lessee.

(d) Paragraph (a) does not prohibit or limit the prosecution of a motor vehicle operator for violating subdivision 1 or 1a.

(e) A violation under paragraph (a) does not constitute grounds for revocation or suspension of the owner's or lessee's driver's license.

Sec. 33. Minnesota Statutes 1996, section 169.444, subdivision 7, is amended to read:

Subd. 7. [EVIDENTIARY PRESUMPTIONS.] (a) There is a rebuttable presumption that signals described in section 169.442 were in working order and operable when a violation of subdivision 1, 1a, 2, or 5 was allegedly committed, if the signals of the applicable school bus were inspected and visually found to be in working order and operable within 12 hours preceding the incident giving rise to the violation.

(b) There is a rebuttable presumption that a motor vehicle outwardly equipped and identified as a school bus satisfies all of the identification and equipment requirements of section 169.441 when a violation of subdivision 1, 1a, 2, or 5 was allegedly committed, if the applicable school bus bears a current inspection certificate issued under section 169.451."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Milbert, Rukavina, Tomassoni, Jaros, Kraus, Jennings, Macklin, Long, Tuma, Osskopp, Abrams, Holsten, Davids, Finseth, Wolf,. Trimble, Van Dellen and Anderson, I., moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 29, after line 4, insert:

"Sec. 28. Minnesota Statutes 1996, section 169.18, is amended by adding a subdivision to read:

Subd. 11. [FREEWAYS; LIMITED USE OF LEFT LANE.] On a freeway, as defined in section 160.02, subdivision 16, which has at least two lanes for travel in the same direction, the operator of a motor vehicle may drive the vehicle in the left-hand lane only for that time and distance necessary for the operator to overtake and pass a slower moving vehicle, to exit

Journal of the House - 45th Day - Top of Page 2984

the freeway via an off-ramp from the left-hand lane, or when directed to use another lane by a peace officer or official traffic-control device."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Sviggum moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 41, after line 4, insert:

"Sec. 48. [GENERAL FUND REDUCTION.]

All general fund appropriations in sections 2 to 4 are reduced by two percent. The resulting savings are intended to be returned to the taxpayers of this state."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Sviggum amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 59 yeas and 72 nays as follows:

Those who voted in the affirmative were:

Abrams Dempsey Koppendrayer Mulder Seagren Tompkins

Anderson, B. Erhardt Kraus Nornes Seifert Tuma

Bettermann Goodno Krinkie Olson, M. Smith Van Dellen

Bishop Gunther Kuisle Osskopp Stanek Vickerman

Boudreau Haas Larsen Ozment Stang Weaver

Bradley Harder Lindner Paulsen Sviggum Westfall

Broecker Holsten Macklin Pawlenty Swenson, D. Westrom

Commers Kielkucki Mares Reuter Swenson, H. Wolf

Daggett Knight McElroy Rifenberg Sykora Workman

Dehler Knoblach Molnau Rostberg Tingelstad

Those who voted in the negative were:

Anderson, I. Farrell Jennings Long Opatz Sekhon

Bakk Finseth Johnson, A. Luther Orfield Skare

Biernat Folliard Johnson, R. Mahon Osthoff Skoglund

Carlson Garcia Juhnke Marko Otremba Solberg

Chaudhary Greenfield Kalis McCollum Paymar Tomassoni

Clark Greiling Kelso McGuire Pelowski Trimble

Journal of the House - 45th Day - Top of Page 2985

Davids Hasskamp Kinkel Milbert Peterson Tunheim

Dawkins Hausman Koskinen Mullery Pugh Wagenius

Delmont Hilty Kubly Munger Rest Wejcman

Dorn Huntley Leighton Murphy Rhodes Wenzel

Entenza Jaros Leppik Ness Rukavina Winter

Evans Jefferson Lieder Olson, E. Schumacher Spk. Carruthers

The motion did not prevail and the amendment was not adopted.

Workman moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 26, after line 26, insert:

"Sec. 25. Minnesota Statutes 1996, section 168.275, is amended to read:

168.275 [SALE OF MOTOR VEHICLES ON SUNDAY FORBIDDEN.]

Subdivision 1. [PROHIBITIONS; PENALTIES.] Any person who shall carry on or engage in the business of buying, selling, exchanging, dealing in or trading in new or used motor vehicles; or who shall open any place of business or lot wherein the person attempts to or does engage in the business of buying, selling, exchanging, dealing or trading in new or used motor vehicles; or who does buy, sell, exchange, deal or trade in new or used motor vehicles as a business on the first day of the week, commonly known and designated as Sunday, is guilty of a misdemeanor for the first offense, and a gross misdemeanor for each succeeding offense. Such a person upon conviction for the first offense shall pay a fine not to exceed $700 or be imprisoned for a period of not more than ten days; and for the second offense shall pay a fine not to exceed $3,000 or be imprisoned for a period of not more than 30 days or both; and for the third or each subsequent offense shall pay a fine of not more than $3,000 or be imprisoned for a period of not more than six months or both.

Subd. 2. [EXCEPTION.] This section does not apply to buying, selling, exchanging, trading, or dealing in collector vehicles registered under section 168.10, subdivision 1a, 1b, 1c, 1d, or 1h, or registered under section 168.105."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Westrom amendment and the roll was called.

Tunheim raised a point of order pursuant to rule 3.09 that the Workman amendment was not in order. The Speaker ruled the point of order not well taken and the Workman amendment in order.

The question recurred on the Workman amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 31 yeas and 100 nays as follows:

Those who voted in the affirmative were:

Journal of the House - 45th Day - Top of Page 2986

Abrams Haas Kuisle Reuter Swenson, H. Workman

Anderson, B. Holsten Leppik Rhodes Sykora

Bishop Kielkucki Macklin Rifenberg Tuma

Davids Knoblach Olson, M. Rostberg Van Dellen

Erhardt Koppendrayer Paulsen Smith Vickerman

Gunther Kraus Paymar Swenson, D. Wenzel

Those who voted in the negative were:

Anderson, I. Entenza Johnson, A. Mahon Osskopp Stanek

Bakk Evans Johnson, R. Mares Osthoff Stang

Bettermann Farrell Juhnke Marko Otremba Sviggum

Biernat Finseth Kahn McCollum Ozment Tingelstad

Boudreau Folliard Kalis McElroy Pawlenty Tomassoni

Bradley Garcia Kelso McGuire Pelowski Tompkins

Broecker Goodno Kinkel Milbert Peterson Trimble

Carlson Greenfield Knight Molnau Pugh Tunheim

Chaudhary Greiling Koskinen Mulder Rest Wagenius

Clark Harder Krinkie Mullery Rukavina Wejcman

Commers Hasskamp Kubly Munger Schumacher Westfall

Daggett Hausman Larsen Murphy Seagren Westrom

Dawkins Hilty Leighton Ness Seifert Winter

Dehler Huntley Lieder Nornes Sekhon Wolf

Delmont Jaros Lindner Olson, E. Skare Spk. Carruthers

Dempsey Jefferson Long Opatz Skoglund

Dorn Jennings Luther Orfield Solberg

The motion did not prevail and the amendment was not adopted.

Rhodes moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 5, line 22, delete "21,800,000" and insert "18,800,000"

Page 9, line 37, delete "73,100,000" and insert "74,600,000"

Page 9, line 39, delete "$36,000,000" and insert "$39,000,000"

Adjust fund totals accordingly

A roll call was requested and properly seconded.

The question was taken on the Rhodes amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 30 yeas and 100 nays as follows:

Those who voted in the affirmative were:

Abrams Dempsey Garcia Lindner Paulsen Swenson, D.

Bettermann Erhardt Haas Mares Paymar Sykora

Bradley Evans Holsten McElroy Pugh Tompkins

Clark Farrell Knight Osthoff Rhodes Vickerman

Delmont Folliard Leppik Ozment Seagren Workman

Those who voted in the negative were:

Anderson, B. Greiling Kinkel McGuire Peterson Tingelstad

Journal of the House - 45th Day - Top of Page 2987

Anderson, I. Gunther Knoblach Milbert Rest Tomassoni

Bakk Harder Koppendrayer Molnau Reuter Trimble

Biernat Hasskamp Koskinen Mulder Rifenberg Tuma

Bishop Hausman Kraus Mullery Rostberg Tunheim

Boudreau Hilty Krinkie Munger Rukavina Van Dellen

Broecker Huntley Kubly Murphy Schumacher Wagenius

Carlson Jaros Kuisle Ness Seifert Weaver

Chaudhary Jefferson Larsen Nornes Sekhon Wejcman

Commers Jennings Leighton Olson, E. Skare Wenzel

Daggett Johnson, A. Lieder Olson, M. Skoglund Westfall

Davids Johnson, R. Long Opatz Smith Westrom

Dehler Juhnke Luther Orfield Solberg Winter

Dorn Kahn Macklin Osskopp Stanek Wolf

Finseth Kalis Mahon Otremba Stang Spk. Carruthers

Goodno Kelso Marko Pawlenty Sviggum

Greenfield Kielkucki McCollum Pelowski Swenson, H.

The motion did not prevail and the amendment was not adopted.

Westrom moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 10, after line 55, insert:

"The transportation accessibility advisory committee established in Minnesota Statutes section 473.386, subdivision 2, shall study metro mobility service and alternatives to it. The study shall include:

(1) the level of consumer service provided by metro mobility;

(2) the ability of metro mobility to respond to consumer complaints, questions, and needs;

(3) the ability of metro mobility to meet transportation requirements under the Americans with Disabilities Act;

(4) the types of vehicles used by metro mobility and the suitability of those vehicles for special transportation service;

(5) the efficiency and effectiveness of metro mobility dispatching methods and systems; and

(6) the costs and benefits of metro mobility, and the costs and benefits of alternatives to metro mobility, including privatization of the service, in providing special transportation service in the metropolitan area.

The advisory committee shall report by January 15, 1998, to the senate and house of representatives committees with jurisdiction over transportation policy on the results of the study."

A roll call was requested and properly seconded.

Journal of the House - 45th Day - Top of Page 2988

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 131 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Kahn Mares Pawlenty Swenson, D.

Anderson, B. Evans Kalis Marko Paymar Swenson, H.

Anderson, I. Farrell Kelso McCollum Pelowski Sykora

Bakk Finseth Kielkucki McElroy Peterson Tingelstad

Bettermann Folliard Kinkel McGuire Pugh Tomassoni

Biernat Garcia Knight Milbert Rest Tompkins

Bishop Goodno Knoblach Molnau Reuter Trimble

Boudreau Greenfield Koppendrayer Mulder Rhodes Tuma

Bradley Greiling Koskinen Mullery Rifenberg Tunheim

Broecker Gunther Kraus Munger Rostberg Van Dellen

Carlson Haas Krinkie Murphy Rukavina Vickerman

Chaudhary Harder Kubly Ness Schumacher Wagenius

Clark Hasskamp Kuisle Nornes Seagren Weaver

Commers Hausman Larsen Olson, E. Seifert Wejcman

Daggett Hilty Leighton Olson, M. Sekhon Wenzel

Davids Holsten Leppik Opatz Skare Westfall

Dawkins Huntley Lieder Orfield Skoglund Westrom

Dehler Jefferson Lindner Osskopp Smith Winter

Delmont Jennings Long Osthoff Solberg Wolf

Dempsey Johnson, A. Luther Otremba Stanek Workman

Dorn Johnson, R. Macklin Ozment Stang Spk. Carruthers

Entenza Juhnke Mahon Paulsen Sviggum

The motion prevailed and the amendment was adopted.

Molnau offered an amendment to S. F. No. 1881, the second unofficial engrossment, as amended.

Johnson, A., raised a point of order pursuant to rule 3.09 that the Molnau amendment was not in order. The Speaker ruled the point of order well taken and the Molnau amendment out of order.

Stang moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Pages 26 to 27, delete section 25

Page 36, delete section 39

Renumber the sections in sequence and correct internal references

Amend the title accordingly

Journal of the House - 45th Day - Top of Page 2989

The question was taken on the Stang amendment and the roll was called. There were 65 yeas and 67 nays as follows:

Those who voted in the affirmative were:

Abrams Dempsey Knight McElroy Rhodes Tompkins

Anderson, B. Erhardt Knoblach Molnau Rifenberg Trimble

Bettermann Farrell Koppendrayer Mulder Rostberg Tuma

Bishop Finseth Kraus Ness Seagren Van Dellen

Boudreau Goodno Krinkie Nornes Seifert Vickerman

Bradley Gunther Kuisle Olson, M. Smith Weaver

Broecker Haas Larsen Osskopp Stang Westfall

Commers Harder Leppik Ozment Sviggum Westrom

Daggett Hasskamp Lindner Paulsen Swenson, H. Wolf

Davids Holsten Macklin Pawlenty Sykora Workman

Dehler Kielkucki Mares Reuter Tingelstad

Those who voted in the negative were:

Anderson, I. Garcia Kahn McCollum Pelowski Tomassoni

Bakk Greenfield Kalis McGuire Peterson Tunheim

Biernat Greiling Kelso Milbert Pugh Wagenius

Carlson Hausman Kinkel Mullery Rest Wejcman

Chaudhary Hilty Koskinen Munger Rukavina Wenzel

Clark Huntley Kubly Murphy Schumacher Winter

Dawkins Jaros Leighton Olson, E. Sekhon Spk. Carruthers

Delmont Jefferson Lieder Opatz Skare

Dorn Jennings Long Orfield Skoglund

Entenza Johnson, A. Luther Osthoff Solberg

Evans Johnson, R. Mahon Otremba Stanek

Folliard Juhnke Marko Paymar Swenson, D.

The motion did not prevail and the amendment was not adopted.

Bettermann offered an amendment to S. F. No. 1881, the second unofficial engrossment, as amended.

Sykora was excused between the hours of 6:20 p.m. and 8:50 p.m.

Rukavina raised a point of order pursuant to rule 3.09 that the Bettermann amendment was not in order. The Speaker ruled the point of order well taken and the Bettermann amendment out of order.

Kraus moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 1, line 13, of the Weaver amendment adopted earlier, after the semicolon, insert "motorcycles; motorized bicycles;"

Page 2, line 15, of the Weaver amendment adopted earlier, after the comma, insert "motorcycle, motorized bicycle,"

The motion prevailed and the amendment was adopted.

Journal of the House - 45th Day - Top of Page 2990

Boudreau; Swenson, H.; Tuma; Stang; Westfall and Kuisle moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 35, after line 30, insert:

"Sec. 37. Minnesota Statutes 1996, section 297B.09, subdivision 1, is amended to read:

Subdivision 1. [GENERAL FUND SHARE.] (a) Money collected and received under this chapter must be deposited in the state treasury and credited to the general fund. The amounts collected and received shall be credited as provided in this subdivision, and transferred from the general fund on July 15 and February 15 of each fiscal year. The commissioner of finance must make each transfer based upon the actual receipts of the preceding six calendar months and include the interest earned during that six-month period. The commissioner of finance may establish a quarterly or other schedule providing for more frequent payments to the transit assistance fund if the commissioner determines it is necessary or desirable to provide for the cash flow needs of the recipients of money from the transit assistance fund.

(b) Twenty-five percent of the money collected and received under this chapter after June 30, 1990, and before July 1, 1991, must be transferred to the highway user tax distribution fund and the transit assistance fund for apportionment as follows: 75 percent must be transferred to the highway user tax distribution fund for apportionment in the same manner and for the same purposes as other money in that fund, and the remaining 25 percent of the money must be transferred to the transit assistance fund to be appropriated to the commissioner of transportation for transit assistance within the state and to the metropolitan council.

(c) The distributions under this subdivision to the highway user tax distribution fund until June 30, 1991, and to the trunk highway fund thereafter, must be reduced by the amount necessary to fund the appropriation under section 41A.09, subdivision 1. For the fiscal years ending June 30, 1988, and June 30, 1989, the commissioner of finance, before making the transfers required on July 15 and January 15 of each year, shall estimate the amount required to fund the appropriation under section 41A.09, subdivision 1, for the six-month period for which the transfer is being made. The commissioner shall then reduce the amount transferred to the highway user tax distribution fund by the amount of that estimate. The commissioner shall reduce the estimate for any six-month period by the amount by which the estimate for the previous six-month period exceeded the amount needed to fund the appropriation under section 41A.09, subdivision 1, for that previous six-month period. If at any time during a six-month period in those fiscal years the amount of reduction in the transfer to the highway user tax distribution fund is insufficient to fund the appropriation under section 41A.09, subdivision 1, for that period, the commissioner shall transfer to the general fund from the highway user tax distribution fund an additional amount sufficient to fund the appropriation for that period, but the additional amount so transferred to the general fund in a six-month period may not exceed the amount transferred to the highway user tax distribution fund for that six-month period as follows:

(1) From July 1, 1999, to June 30, 2001, 75 percent must be deposited in the general fund, 18.75 percent in the highway user tax distribution fund, and 6.25 percent in the transit assistance fund.

(2) From July 1, 2001, to June 30, 2003, 50 percent must be deposited in the general fund, 37.5 percent in the highway user tax distribution fund, and 12.5 percent in the transit assistance fund.

(3) From July 1, 2003, to June 30, 2005, 25 percent must be deposited in the general fund, 56.25 percent in the highway user tax distribution fund, and 18.75 percent in the transit assistance fund.

(4) On and after July 1, 2006, 75 percent must be deposited in the highway user tax distribution fund and 25 percent must be deposited in the transit assistance fund."

Page 41, line 12, after the period insert: "Section 37 is effective July 1, 1999."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

Journal of the House - 45th Day - Top of Page 2991

POINT OF ORDER

Lieder raised a point of order pursuant to Article 4, Section 18 of the Constitution of the State of Minnesota relating to revenue bills to originate in the House. Pursuant to Section 242, paragraph 2, of "Mason's Manual of Legislative Procedure", the Speaker ruled the point of order not in order.

Winter raised a point of order pursuant to rule 3.09 that the Boudreau amendment was not in order. The Speaker ruled the point of order not well taken and the Boudreau amendment in order.

The question recurred on the Boudreau amendment and the roll was called. There were 64 yeas and 67 nays as follows:

Those who voted in the affirmative were:

Abrams Dempsey Knoblach Molnau Rifenberg Tompkins

Anderson, B. Erhardt Koppendrayer Mulder Rostberg Tuma

Bettermann Finseth Kraus Ness Seagren Van Dellen

Bishop Goodno Krinkie Nornes Seifert Vickerman

Boudreau Gunther Kubly Olson, M. Smith Weaver

Bradley Haas Kuisle Osskopp Stanek Westfall

Broecker Harder Larsen Ozment Stang Westrom

Commers Holsten Lindner Paulsen Sviggum Wolf

Daggett Juhnke Macklin Pawlenty Swenson, D. Workman

Davids Kielkucki Mares Reuter Swenson, H.

Dehler Knight McElroy Rhodes Tingelstad

Those who voted in the negative were:

Anderson, I. Folliard Johnson, R. Marko Paymar Trimble

Bakk Garcia Kahn McCollum Pelowski Tunheim

Biernat Greenfield Kalis McGuire Peterson Wagenius

Carlson Greiling Kelso Milbert Pugh Wejcman

Chaudhary Hasskamp Kinkel Mullery Rest Wenzel

Clark Hausman Koskinen Munger Rukavina Winter

Dawkins Hilty Leighton Murphy Schumacher Spk. Carruthers

Delmont Huntley Leppik Olson, E. Sekhon

Dorn Jaros Lieder Opatz Skare

Entenza Jefferson Long Orfield Skoglund

Evans Jennings Luther Osthoff Solberg

Farrell Johnson, A. Mahon Otremba Tomassoni

The motion did not prevail and the amendment was not adopted.

Sviggum moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 10, after line 55, insert:

"In either year of the biennium ending June 30, 1999, the metropolitan council may not operate any regular route if the farebox recovery for that route during the previous fiscal year was less than ten percent of the total operating cost for that route for that fiscal year."

Journal of the House - 45th Day - Top of Page 2992

The question was taken on the Sviggum amendment and the roll was called. There were 56 yeas and 75 nays as follows:

Those who voted in the affirmative were:

Abrams Dehler Knoblach Mulder Seifert Van Dellen

Anderson, B. Dempsey Koppendrayer Ness Smith Vickerman

Bettermann Erhardt Kraus Nornes Stanek Weaver

Bishop Finseth Krinkie Olson, M. Stang Westfall

Boudreau Goodno Kuisle Osskopp Sviggum Westrom

Bradley Haas Leppik Ozment Swenson, D. Workman

Broecker Harder Lindner Paulsen Swenson, H.

Commers Holsten Macklin Pawlenty Tingelstad

Daggett Kielkucki Mares Reuter Tompkins

Davids Knight Molnau Rifenberg Tuma

Those who voted in the negative were:

Anderson, I. Garcia Juhnke Marko Paymar Solberg

Bakk Greenfield Kahn McCollum Pelowski Tomassoni

Biernat Greiling Kalis McElroy Peterson Trimble

Carlson Gunther Kelso McGuire Pugh Tunheim

Chaudhary Hasskamp Kinkel Milbert Rest Wagenius

Clark Hausman Koskinen Mullery Rhodes Wejcman

Dawkins Hilty Kubly Munger Rostberg Wenzel

Delmont Huntley Larsen Murphy Rukavina Winter

Dorn Jaros Leighton Olson, E. Schumacher Wolf

Entenza Jefferson Lieder Opatz Seagren Spk. Carruthers

Evans Jennings Long Orfield Sekhon

Farrell Johnson, A. Luther Osthoff Skare

Folliard Johnson, R. Mahon Otremba Skoglund

The motion did not prevail and the amendment was not adopted.

Workman moved to amend S. F. No. 1881, the second unofficial engrossment, as amended, as follows:

Page 29, after line 4, insert:

"Sec. 28. Minnesota Statutes 1996, section 169.14, subdivision 5a, is amended to read:

Subd. 5a. [SPEED ZONING IN SCHOOL ZONES.] Local authorities may establish a school speed limit within a school zone of a public or nonpublic school upon the basis of an engineering and traffic investigation as prescribed by the commissioner of transportation. The establishment of a school speed limit on any trunk highway shall be with the consent of the commissioner of transportation. Such school speed limits shall be in effect when children are present, going to or leaving school during opening or closing hours or during school recess periods. The school speed limit shall not be lower than 15 miles per hour and shall not be more than 20 miles per hour below the established speed limit on an affected street or highway if the established speed limit is 40 miles per hour or greater.

The school speed limit shall be effective upon the erection of appropriate signs designating the speed and indicating the beginning and end of the reduced speed zone. Any speed in excess of such posted school speed limit is unlawful. All such signs shall be erected by the local authorities on those streets and highways under their respective jurisdictions and by the commissioner of transportation on trunk highways.

For the purpose of this subdivision, "school zone" means that section of a street or highway which abuts the grounds of a school where children have access to the street or highway from the school property or where an established school crossing is located provided the school advance sign prescribed by the manual on uniform traffic control devices adopted by the commissioner of transportation pursuant to section 169.06 is in place. All signs erected by local authorities to designate speed limits in school zones shall conform to the manual on uniform control devices.

Journal of the House - 45th Day - Top of Page 2993

Notwithstanding section 609.0331 or 609.101 or other law to the contrary, a person who violates a speed limit established under this subdivision is assessed an additional surcharge equal to the amount of the fine imposed for the violation, but not less than $25.

Sec. 29. Minnesota Statutes 1996, section 169.14, is amended by adding a subdivision to read:

Subd. 5f. [SPEED ZONE AROUND PLAYGROUND.] Local authorities may establish speed limits on streets and highways around public playgrounds and public parks having playgrounds for the purpose of protecting and enhancing the safety of children using the playgrounds. The speed limit may not be lower than 15 miles per hour and shall not be more than 20 miles per hour below the established speed limit on an affected street or highway if the established speed limit is 40 miles per hour or greater.

The playground speed limit shall be effective upon the erection of appropriate signs designating the speed and indicating the beginning and end of the reduced speed zone. Any speed in excess of the posted playground speed limit is unlawful. All signs erected must be by the appropriate road authority, as defined in section 160.02, subdivision 9, and in accordance with the manual on uniform traffic devices.

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Workman amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 106 yeas and 23 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Kelso Mares Pelowski Sviggum

Anderson, B. Evans Kielkucki Marko Peterson Swenson, D.

Anderson, I. Farrell Knight McCollum Pugh Swenson, H.

Bettermann Finseth Knoblach McElroy Rest Tingelstad

Biernat Garcia Koppendrayer Milbert Reuter Trimble

Bishop Goodno Koskinen Molnau Rhodes Tuma

Boudreau Greiling Kraus Mulder Rifenberg Tunheim

Bradley Gunther Krinkie Munger Rostberg Van Dellen

Broecker Haas Kubly Murphy Schumacher Vickerman

Carlson Harder Kuisle Ness Seagren Weaver

Chaudhary Hilty Larsen Nornes Seifert Wenzel

Clark Holsten Leighton Olson, M. Sekhon Westfall

Commers Jefferson Leppik Osskopp Skare Westrom

Daggett Jennings Lindner Otremba Skoglund Winter

Davids Johnson, R. Long Ozment Smith Wolf

Dehler Juhnke Luther Paulsen Solberg Workman

Dempsey Kahn Macklin Pawlenty Stanek

Dorn Kalis Mahon Paymar Stang

Journal of the House - 45th Day - Top of Page 2994

Those who voted in the negative were:

Bakk Folliard Jaros McGuire Orfield Wagenius

Dawkins Hasskamp Johnson, A. Mullery Rukavina Wejcman

Delmont Hausman Kinkel Olson, E. Tomassoni Spk. Carruthers

Entenza Huntley Lieder Opatz Tompkins

The motion prevailed and the amendment was adopted.

Workman offered an amendment to S. F. No. 1881, the second unofficial engrossment, as amended.

Winter raised a point of order pursuant to rule 3.09 that the Workman amendment was not in order. The Speaker ruled the point of order well taken and the Workman amendment out of order.

Marko; Johnson, A.; Kelso; Weaver and Workman offered an amendment to S. F. No. 1881, the second unofficial engrossment, as amended.

Kahn raised a point of order pursuant to rule 3.10 that the Marko et al amendment was not in order. The Speaker ruled the point of order well taken and the Marko et al amendment out of order.

S. F. No. 1881, 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; regulating certain activities and practices; providing for fees; establishing revolving account; requiring a study; amending Minnesota Statutes 1996, sections 16B.335, subdivision 1; 161.082, by adding a subdivision; 168.011, subdivision 9; 168.018; 168A.29, subdivision 1; 169.974, subdivision 2; 171.06, subdivision 2a; 171.13, by adding a subdivision; 173.13, subdivision 4; 296.16, subdivision 1; 360.015, by adding a subdivision; 360.017, subdivision 1; and 457A.04, subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 299A; repealing Minnesota Statutes 1996, section 299D.10.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 102 yeas and 30 nays as follows:

Those who voted in the affirmative were:

Anderson, I. Finseth Johnson, R. Mares Paymar Stang

Bakk Folliard Juhnke Marko Pelowski Swenson, D.

Biernat Garcia Kahn McCollum Peterson Swenson, H.

Bishop Goodno Kalis McGuire Pugh Tingelstad

Journal of the House - 45th Day - Top of Page 2995

Broecker Greenfield Kelso Milbert Rest Tomassoni

Carlson Greiling Kinkel Molnau Rhodes Trimble

Chaudhary Gunther Koskinen Mullery Rukavina Tunheim

Clark Harder Kubly Munger Schumacher Vickerman

Daggett Hasskamp Kuisle Murphy Seagren Wagenius

Davids Hausman Larsen Ness Seifert Weaver

Dawkins Hilty Leighton Nornes Sekhon Wejcman

Dehler Holsten Leppik Olson, E. Skare Wenzel

Delmont Huntley Lieder Opatz Skoglund Westfall

Dorn Jaros Long Orfield Slawik Westrom

Entenza Jefferson Luther Osthoff Smith Winter

Evans Jennings Macklin Otremba Solberg Workman

Farrell Johnson, A. Mahon Ozment Stanek Spk. Carruthers

Those who voted in the negative were:

Abrams Commers Knight Lindner Paulsen Sviggum

Anderson, B. Dempsey Knoblach McElroy Pawlenty Tompkins

Bettermann Erhardt Koppendrayer Mulder Reuter Tuma

Boudreau Haas Kraus Olson, M. Rifenberg Van Dellen

Bradley Kielkucki Krinkie Osskopp Rostberg Wolf

The bill was passed, as amended, and its title agreed to.

Farrell moved that the call of the House be suspended. The motion did not prevail.

CONSIDERATION UNDER RULE 1.10

Pursuant to rule 1.10, Solberg requested immediate consideration of H. F. No. 1684.

H. F. No. 1684 was reported to the House.

Koppendrayer moved to amend H. F. No. 1684, the third engrossment, as follows:

Page 50, after line 32, insert:

"Sec. 69. [BUS PURCHASE LEVY.]

Independent school district No. 195, Randolph, may levy an amount not to exceed $100,000 for 1997 taxes payable in 1998 only, for the purpose of providing sufficient funds to purchase two school buses."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Weaver; Anderson, B.; Rifenberg; Seifert; Kielkucki; Davids; Reuter and Dehler moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 167, after line 36, insert:

"This software must be available at no cost to districts for use in the Minnesota Learning Network."

Page 168, line 3, after "usage" insert "and use protective software"

Journal of the House - 45th Day - Top of Page 2996

The question was taken on the Weaver et al amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 131 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams Erhardt Kahn Mares Pawlenty Sviggum

Anderson, B. Evans Kalis Marko Paymar Swenson, D.

Anderson, I. Farrell Kelso McCollum Pelowski Swenson, H.

Bakk Finseth Kielkucki McElroy Peterson Tingelstad

Bettermann Folliard Kinkel McGuire Pugh Tomassoni

Biernat Garcia Knight Milbert Rest Tompkins

Bishop Goodno Knoblach Molnau Reuter Trimble

Boudreau Greenfield Koppendrayer Mulder Rhodes Tuma

Bradley Gunther Koskinen Mullery Rifenberg Tunheim

Broecker Haas Kraus Munger Rostberg Van Dellen

Carlson Harder Krinkie Murphy Rukavina Vickerman

Chaudhary Hasskamp Kubly Ness Schumacher Wagenius

Clark Hausman Kuisle Nornes Seagren Weaver

Commers Hilty Larsen Olson, E. Seifert Wejcman

Daggett Holsten Leighton Olson, M. Sekhon Wenzel

Davids Huntley Leppik Opatz Skare Westfall

Dawkins Jaros Lieder Orfield Skoglund Westrom

Dehler Jefferson Lindner Osskopp Slawik Winter

Delmont Jennings Long Osthoff Smith Wolf

Dempsey Johnson, A. Luther Otremba Solberg Workman

Dorn Johnson, R. Macklin Ozment Stanek Spk. Carruthers

Entenza Juhnke Mahon Paulsen Stang

The motion prevailed and the amendment was adopted.

Anderson, I.; Johnson, A.; Bakk and Rukavina moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 37, line 16, delete "$3,355" and insert "$3,422"

Page 50, after line 32, insert:

"Sec. 69. [STATE GENERAL FUND BUDGET RESERVE.]

The state general fund balance reserve established under article 12, section 1, of the omnibus house tax bill, identified as House File 2163, or under any similarly styled provision is reduced from $522,000,000 to $482,000,000.

Notwithstanding article 1, section 5, of the omnibus house tax bill, identified as House File 2163, or any similarly styled provision, commercial and industrial property above the first $150,000 of market value has a class rate of 4.4 percent and the additional state aid paid under article 1, section 9 of the omnibus tax bill or a similarly styled provision, is correspondingly reduced."

Page 51, line 11, delete "$2,495,217,000" and insert "$2,555,517,000"

Page 51, line 15, delete "$2,254,773,000" and insert "$2,315,073,000"

Weaver moved to amend the Anderson, I., et al amendment to H. F. No. 1684, the third engrossment, as amended, as follows:

Page 1, delete lines 3 to 16

Journal of the House - 45th Day - Top of Page 2997

Page 1, delete lines 17 to 20

Page 1, after line 2, insert:

"Page 37, line 34, delete "$175" and insert "$100"

Page 47, line 3, delete section 59

Page 49, line 4, delete section 64

Page 50, line 24, delete "$165" and insert "$100"

Page 50, after line 32, insert:

"Sec. 69. [CLASS SIZE REDUCTION AID.]

For fiscal year 1999 only, each school district is eligible for class size reduction aid of $67 per pupil unit. Class size reduction aid must be used only to reduce the student teacher ratio in each classroom. Class size reduction aid must not be used to supplement salary levels."

Page 53, line 34, delete subdivision 12

Page 54, line 14, delete subdivision 13

Page 111, line 30, delete section 18

Page 124, line 24, delete subdivision 8

Page 146, lines 28 and 29, delete "$1,875,000" and insert "$1,075,000"

Page 146, line 30, delete "$400,000" and insert "$200,000"

Page 146, line 36, delete "$1,175,000" and insert "$825,000"

Page 147, line 5, delete "$300,000" and insert "$150,000"

Page 148, lines 22 and 23, delete "$3,000,000" and insert "$1,000,000"

Page 149, delete lines 14 and 15

Page 150, lines 2 and 3, delete "$2,500,000" and insert "$1,000,000"

Page 153, line 6, delete section 7

Page 154, line 26, delete section 8

Page 159, lines 3 and 4, delete "$8,754,000" and insert "$7,254,000"

Page 185, line 13, delete "$10,069,000" and insert "$7,819,000"

Page 185, line 14, delete "$10,319,000" and insert "$7,819,000"

Page 185, line 16, delete "$9,288,000" and insert "$7,819,000"

Page 185, line 17, delete "$1,032,000" and insert "$781,000"

Page 185, line 18, delete "$9,287,000" and insert "$7,819,000""

Journal of the House - 45th Day - Top of Page 2998

Anderson, I., raised a point of order pursuant to rule 3.09 that the Weaver amendment to the Anderson, I., et al amendment was not in order. The Speaker ruled the point of order not well taken and the Weaver amendment to the Anderson, I., et al amendment in order.

Entenza raised a point of order pursuant to Section 401, paragraph 2, of "Mason's Manual of Legislative Procedure" relating to frivolous and improper amendments. The Speaker ruled the point of order well taken and the Weaver amendment to the Anderson, I., et al amendment out of order.

Sviggum moved to amend the Anderson, I., et al amendment to H. F. No. 1684, the third engrossment, as amended, as follows:

Page 1, delete lines 6 to 9

Page 160, line 14, delete "$25,800,000" and insert "$5,000,000"

Page 160, line 15, delete "$25,800,000" and insert "$5,000,000"

Adjust totals accordingly

Renumber or reletter in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

Johnson, A., raised a point of order pursuant to rule 3.09 that the Sviggum amendment to the Anderson, I., et al amendment was not in order. The Speaker ruled the point of order not well taken and the Sviggum amendment to the Anderson, I., et al amendment in order.

The question was taken on the first portion of the Anderson, I., et al amendment and the roll was called. There were 21 yeas and 112 nays as follows:

Johnson, A., raised a point of order pursuant to Section 401, paragraph 2, of "Mason's Manual of Legislative Procedure" relating to frivolous and improper amendments. The Speaker ruled the point of order not well taken and the Sviggum amendment to the Anderson, I., et al amendment in order.

The question recurred on the Sviggum amendment to the Anderson, I., et al amendment and the roll was called. There were 60 yeas and 72 nays as follows:

Those who voted in the affirmative were:

Abrams Dehler Knoblach McElroy Rhodes Swenson, H.

Anderson, B. Dempsey Koppendrayer Molnau Rifenberg Tingelstad

Bettermann Erhardt Kraus Mulder Rostberg Tompkins

Bishop Finseth Krinkie Ness Seagren Tuma

Boudreau Goodno Kuisle Nornes Seifert Vickerman

Bradley Gunther Larsen Olson, M. Smith Weaver

Broecker Haas Leppik Osskopp Stanek Westfall

Commers Harder Lindner Ozment Stang Westrom

Journal of the House - 45th Day - Top of Page 2999

Daggett Holsten Macklin Paulsen Sviggum Wolf

Davids Kielkucki Mares Reuter Swenson, D. Workman

Those who voted in the negative were:

Anderson, I. Folliard Johnson, R. Luther Osthoff Skoglund

Bakk Garcia Juhnke Mahon Otremba Slawik

Biernat Greenfield Kahn Marko Pawlenty Solberg

Carlson Greiling Kalis McCollum Paymar Tomassoni

Chaudhary Hasskamp Kelso McGuire Pelowski Trimble

Clark Hausman Kinkel Milbert Peterson Tunheim

Dawkins Hilty Knight Mullery Pugh Van Dellen

Delmont Huntley Koskinen Munger Rest Wagenius

Dorn Jaros Kubly Murphy Rukavina Wejcman

Entenza Jefferson Leighton Olson, E. Schumacher Wenzel

Evans Jennings Lieder Opatz Sekhon Winter

Farrell Johnson, A. Long Orfield Skare Spk. Carruthers

The motion did not prevail and the amendment to the amendment was not adopted.

Van Dellen requested a division of the Anderson, I., et al amendment to H. F. No. 1684, the third engrossment, as amended.

The first portion of the Anderson, I., et al amendment to H. F. No. 1684, the third engrossment, as amended, reads as follows:

Page 50, after line 32, insert:

"Sec. 69. [STATE GENERAL FUND BUDGET RESERVE.]

A roll call was requested and properly seconded.

Journal of the House - 45th Day - Top of Page 3000

Those who voted in the affirmative were:

Anderson, I. Hasskamp Knight Ness Pugh Wenzel

Bakk Jaros Kraus Osskopp Rukavina

Davids Johnson, A. Luther Osthoff Sekhon

Farrell Kahn Milbert Otremba Trimble

Those who voted in the negative were:

Abrams Erhardt Kalis Marko Peterson Sykora

Anderson, B. Evans Kelso McCollum Rest Tingelstad

Bettermann Finseth Kielkucki McElroy Reuter Tomassoni

Biernat Folliard Kinkel McGuire Rhodes Tompkins

Bishop Garcia Knoblach Molnau Rifenberg Tuma

Boudreau Goodno Koppendrayer Mulder Rostberg Tunheim

Bradley Greenfield Koskinen Mullery Schumacher Van Dellen

Broecker Greiling Krinkie Munger Seagren Vickerman

Carlson Gunther Kubly Murphy Seifert Wagenius

Chaudhary Haas Kuisle Nornes Skare Weaver

Clark Harder Larsen Olson, E. Skoglund Wejcman

Commers Hausman Leighton Olson, M. Slawik Westfall

Daggett Hilty Leppik Opatz Smith Westrom

Dawkins Holsten Lieder Orfield Solberg Winter

Dehler Huntley Lindner Ozment Stanek Wolf

Delmont Jefferson Long Paulsen Stang Workman

Dempsey Jennings Macklin Pawlenty Sviggum Spk. Carruthers

Dorn Johnson, R. Mahon Paymar Swenson, D.

Entenza Juhnke Mares Pelowski Swenson, H.

The motion did not prevail and the first portion of the Anderson, I., et al amendment was not adopted.

The second portion of the Anderson, I., et al amendment to H. F. No. 1684, the third engrossment, as amended, reads as follows:

Page 37, line 16, delete "$3,355" and insert "$3,422"

Page 51, line 11, delete "$2,495,217,000" and insert "$2,555,517,000"

Page 51, line 13, delete "$2,254,773,000" and insert "$2,315,073,000"

The motion did not prevail and the second portion of the Anderson, I., et al amendment was not adopted.

Ness moved to amend H. F. No. 1864, the third engrossment, as amended, as follows:

Page 2, after line 31, insert:

"Section 1. Minnesota Statutes 1996, section 16A.11, is amended by adding a subdivision to read:

Subd. 3b. [EDUCATION BUDGET.] The K-12 education budget must provide a comparison of direct K-12 educational expenditures and revenue needs. To the extent possible, the commissioner shall separate all social service and community service aspects of the K-12 education budget. The commissioner shall separate any education expenditures not intended for children between the ages of five and 18."

Journal of the House - 45th Day - Top of Page 3001

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Knoblach, Kelso, Skoglund, Dorn and Jennings moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 170, after line 15, insert:

"Sec. 15. [256J.775] [TRUANCY PREVENTION PROGRAM.]

Subdivision 1. [PILOT PROJECTS.] The commissioner of human services, in consultation with the commissioner of the department of children, families and learning, shall develop a truancy prevention pilot program to prevent tardiness and ensure school attendance of children receiving assistance under chapters 256, 256J and 256K. The pilot program shall be developed in at least two school districts, one rural and one urban. The pilots shall be developed in collaboration with local school districts and county social service agencies and shall serve families on public assistance whose children are under the age of 13 and are subject to the compulsory attendance requirements of section 120.101, and are frequently tardy or are not attending school regularly, as defined by the local school district. The program shall require the local schools to refer such families to county social service agencies for an assessment and development of a corrective action plan to ensure punctual and regular school attendance by the children in the family.

Subd. 2. [TRANSFER OF ATTENDANCE DATA.] Notwithstanding the requirements of section 13.32, the commissioners of children, families, and learning and human services shall develop procedures to implement the transmittal of data on student attendance to county social services agencies to implement the program authorized by this section."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Weaver; Mulder; Kielkucki; Mares; Molnau; Van Dellen; Harder; Swenson, D.; Tuma; Gunther; Seagren; Kuisle; Kraus; Sviggum; Davids; Tingelstad; Stang; Bradley; Seifert; Swenson, H.; Macklin; Holsten; Rifenberg; Daggett; Dempsey; Lindner and Stanek moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 37, line 34, delete "$175" and insert "$100"

Page 47, line 3, delete section 59

Page 49, line 4, delete section 64

Page 50, line 24, delete "$165" and insert "$100"

Page 50, after line 32, insert:

"Sec. 69. [CLASS SIZE REDUCTION AID.]

Journal of the House - 45th Day - Top of Page 3002

Page 53, line 34, delete subdivision 12

Page 54, line 14, delete subdivision 13 and insert:

"Subd. 12. [CLASS SIZE REDUCTION AID.] To fund reduced class sizes under section 69:

$64,700,000 . . . . . 1999"

Page 111, line 30, delete section 18

Page 124, line 24, delete subdivision 8

Page 146, lines 28 and 29, delete "$1,875,000" and insert "$1,075,000"

Page 146, line 30, delete "$400,000" and insert "$200,000"

Page 146, line 36, delete "$1,175,000" and insert "$825,000"

Page 147, line 5, delete "$300,000" and insert "$150,000"

Page 148, lines 22 and 23, delete "$3,000,000" and insert "$1,000,000"

Page 149, delete lines 14 and 15

Page 150, lines 2 and 3, delete "$2,500,000" and insert "$1,000,000"

Page 153, line 6, delete section 7

Page 154, line 26, delete section 8

Page 159, lines 3 and 4, delete "$8,754,000" and insert "$7,254,000"

Page 185, line 13, delete "$10,069,000" and insert "$7,819,000"

Page 185, line 14, delete "$10,319,000" and insert "$7,819,000"

Page 185, line 16, delete "$9,288,000" and insert "$7,819,000"

Page 185, line 17, delete "$1,032,000" and insert "$781,000"

Page 185, line 18, delete "$9,287,000" and insert "$7,819,000"

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Weaver et al amendment and the roll was called.

Journal of the House - 45th Day - Top of Page 3003

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 61 yeas and 71 nays as follows:

Those who voted in the affirmative were:

Abrams Dempsey Knoblach Ness Seifert Van Dellen

Anderson, B. Erhardt Koppendrayer Nornes Smith Weaver

Bettermann Farrell Kraus Olson, M. Stanek Westfall

Bishop Finseth Krinkie Osthoff Stang Westrom

Boudreau Goodno Kuisle Ozment Sviggum Wolf

Bradley Gunther Lindner Paulsen Swenson, D. Workman

Broecker Haas Macklin Pawlenty Swenson, H.

Commers Harder Mares Reuter Sykora

Daggett Holsten McElroy Rifenberg Tingelstad

Davids Kielkucki Molnau Rostberg Tompkins

Dehler Knight Mulder Seagren Tuma

Those who voted in the negative were:

Bakk Greenfield Kahn Mahon Otremba Slawik

Biernat Greiling Kalis Mariani Paymar Solberg

Carlson Hasskamp Kelso Marko Pelowski Tomassoni

Chaudhary Hausman Kinkel McCollum Peterson Trimble

Clark Hilty Koskinen McGuire Pugh Tunheim

Dawkins Huntley Kubly Mullery Rest Vickerman

Delmont Jaros Larsen Munger Rhodes Wagenius

Dorn Jefferson Leighton Murphy Rukavina Wejcman

Entenza Jennings Leppik Olson, E. Schumacher Wenzel

Evans Johnson, A. Lieder Opatz Sekhon Winter

Folliard Johnson, R. Long Orfield Skare Spk. Carruthers

Garcia Juhnke Luther Osskopp Skoglund

The motion did not prevail and the amendment was not adopted.

The Speaker called Opatz to the Chair.

Trimble, Evans, Farrell, Opatz, Hasskamp, Osskopp, Larsen, Peterson, Kahn, Leppik, Sykora and Greiling moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 170, after line 15, insert:

"Sec. 15. [128C.06] [STUDENT ELIGIBILITY; NONSCHOOL COMPETITION.]

The league shall not adopt nor enforce a rule or policy regulating nonschool competition by students in individual sports."

Page 181, line 8, delete "16" and insert "17" and delete "21 to 23" and insert "22 to 24"

Page 181, after line 9, insert:

"(c) Section 15 is effective the day following final enactment and applies to any rule or policy regulating nonschool competition by students in individual sports adopted before, on, or after that date."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

Journal of the House - 45th Day - Top of Page 3004

The question was taken on the Trimble et al amendment and the roll was called. There were 62 yeas and 70 nays as follows:

Those who voted in the affirmative were:

Abrams Evans Kahn Mariani Osthoff Sykora

Anderson, I. Farrell Kelso Marko Paulsen Trimble

Biernat Folliard Kinkel McCollum Peterson Van Dellen

Bishop Garcia Knight McGuire Pugh Vickerman

Chaudhary Greiling Koskinen Milbert Rhodes Wagenius

Clark Gunther Krinkie Mullery Rostberg Wejcman

Commers Hasskamp Kubly Munger Sekhon Winter

Davids Hausman Larsen Murphy Skare

Dawkins Hilty Leighton Opatz Solberg

Entenza Huntley Leppik Orfield Stanek

Erhardt Jaros Long Osskopp Swenson, D.

Those who voted in the negative were:

Anderson, B. Goodno Koppendrayer Ness Rukavina Tompkins

Bakk Haas Kraus Nornes Schumacher Tuma

Bettermann Harder Kuisle Olson, E. Seagren Tunheim

Boudreau Holsten Lieder Olson, M. Seifert Weaver

Broecker Jefferson Lindner Otremba Skoglund Wenzel

Carlson Jennings Luther Ozment Slawik Westfall

Daggett Johnson, A. Macklin Pawlenty Smith Westrom

Dehler Johnson, R. Mahon Paymar Stang Wolf

Delmont Juhnke Mares Pelowski Sviggum Workman

Dempsey Kalis McElroy Rest Swenson, H. Spk. Carruthers

Dorn Kielkucki Molnau Reuter Tingelstad

Finseth Knoblach Mulder Rifenberg Tomassoni

The motion did not prevail and the amendment was not adopted.

Olson, M., and Luther moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 51, line 22, before "For" insert "(a)"

Page 51, line 31, before "Up" insert "(b)"

Page 51, line 35, delete "or"

Page 51, line 35, after "lights" insert "; or (6) a school bus safety public education campaign according to paragraph (c).

(c) A school district may locally develop and implement a school bus safety public education campaign designed to create a safer environment for children who are transported by school districts. The campaign may include motorist education and may focus specific attention on safety awareness in the areas where children are getting on and off the school bus."

The motion prevailed and the amendment was adopted.

Olson, M., and Luther moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 51, line 22, before "For" insert "(a)"

Journal of the House - 45th Day - Top of Page 3005

Page 51, line 31, before "Up" insert "(b)"

Page 51, line 34, after "seatbelts" insert "consistent with paragraph (c)"

Page 51, after line 35, insert:

"(c) any school buses purchased or retrofitted with seatbelts under paragraph (b) shall meet design and installation standards established by the commissioner of public safety. The standards are not subject to Minnesota Statutes, chapter 14, and are not subject to Minnesota Statutes, section 14.386. This paragraph does not apply to specially equipped school buses defined according to Minnesota Statutes, section 169.4504."

The motion prevailed and the amendment was adopted.

Swenson, D.; Ness; Koppendrayer; Luther; Mares and Johnson, A., moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 207, after line 18, insert:

"ARTICLE 12

SCHOOL BUS SAFETY

Section 1. Minnesota Statutes 1996, section 123.799, subdivision 1, is amended to read:

Subdivision 1. [RESERVED REVENUE USE.] A district shall use the student transportation safety reserved revenue under section 124.225, subdivision 7f, for providing student transportation safety programs to enhance student conduct and safety on the bus or when boarding and exiting the bus. A district's student transportation policy must specify the student transportation safety activities to be carried out under this section. A district's student transportation safety reserved revenue may only be used for the following purposes:

(1) to provide paid adult bus monitors, including training and salary costs;

(2) to provide a volunteer bus monitor program, including training costs and the cost of a program coordinator;

(3) to purchase or lease optional external public address systems or video recording cameras for use on buses; and

(4) other activities or equipment that have been ~~reviewed by the state school bus safety advisory committee and~~ approved by the commissioner of public safety.

Sec. 2. Minnesota Statutes 1996, section 123.7991, subdivision 1, is amended to read:

Subdivision 1. [SCHOOL BUS SAFETY WEEK.] The ~~first~~ third week of school is designated as school bus safety week.

A school board may designate one day of school bus safety week as school bus driver day.

Sec. 3. Minnesota Statutes 1996, section 123.7991, subdivision 2, is amended to read:

Subd. 2. [STUDENT TRAINING.] (a) Each school district shall provide public school pupils enrolled in grades kindergarten through 10 with age-appropriate school bus safety training. The training shall be results-oriented and shall consist of both classroom instruction and practical training using a school bus. Upon completing the training, a student shall be able to demonstrate knowledge and understanding of at least the following competencies and concepts:

(1) transportation by school bus is a privilege and not a right;

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(2) district policies for student conduct and school bus safety;

(3) appropriate conduct while on the school bus;

(4) the danger zones surrounding a school bus;

(5) procedures for safely boarding and leaving a school bus;

(6) procedures for safe street or road crossing; and

(7) school bus evacuation and other emergency procedures.

(b) Each nonpublic school located within the district shall provide all nonpublic school pupils enrolled in grades kindergarten through 10 who are transported by school bus at public expense and attend school within the district's boundaries with training as required in paragraph (a). The school district shall make a bus available for the practical training if the district transports the nonpublic students. Each nonpublic school shall provide the instruction.

(c) ~~Student school bus safety training shall commence during school bus safety week.~~ All students enrolled in grades kindergarten through 3 who are transported by school bus and are enrolled during the first or second week of school must demonstrate achievement of the school bus safety training competencies by the end of the third week of school. All students enrolled in grades 4 through 10 who are transported by school bus and are enrolled during the first or second week of school must demonstrate achievement of the competencies by the end of the sixth week of school. Students enrolled in grades kindergarten through 10 who enroll in a school after the second week of school and are transported by school bus shall undergo school bus safety training and demonstrate achievement of the school bus safety competencies within four weeks of the first day of attendance. The pupil transportation safety director in each district must certify to the commissioner of children, families, and learning annually that all students transported by school bus within the district have satisfactorily demonstrated knowledge and understanding of the school bus safety competencies according to this section or provide an explanation for a student's failure to demonstrate the competencies. The principal or other chief administrator of each nonpublic school must certify annually to the public transportation safety director of the district in which the school is located that all of the school's students transported by school bus at public expense have received training. A school district may deny transportation to a student who fails to demonstrate the competencies, unless the student is unable to achieve the competencies due to a disability, or to a student who attends a nonpublic school that fails to provide training as required by this subdivision.

(d) A school district and a nonpublic school with students transported by school bus at public expense must, to the extent possible, provide kindergarten pupils with bus safety training before the first day of school.

(e) A school district and a nonpublic school with students transported by school bus at public expense must also provide student safety education for bicycling and pedestrian safety, for students enrolled in grades kindergarten through 5.

(f) A school district and a nonpublic school with students transported by school bus at public expense must make reasonable accommodations for the school bus, bicycle, and pedestrian safety training of pupils known to speak English as a second language and pupils with disabilities.

Sec. 4. Minnesota Statutes 1996, section 169.01, subdivision 6, is amended to read:

Subd. 6. [SCHOOL BUS.] "School bus" means a motor vehicle used to transport pupils to or from a school defined in section 120.101, or to or from school-related activities, by the school or a school district, or by someone under an agreement with the school or a school district. A school bus does not include a motor vehicle transporting children to or from school for which parents or guardians receive direct compensation from a school district, a motor coach operating under charter carrier authority, a transit bus providing services as defined in section 174.22, subdivision 7, or a vehicle otherwise qualifying as a type III vehicle under paragraph (5), when the vehicle is properly registered and insured and being driven by an employee or agent of a school district for nonscheduled transportation. A school bus may be type A, type B, type C, or type D, or type III as follows:

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(1) A "type A school bus" is a conversion or body constructed upon a van-type ~~compact truck or a front-section vehicle, with a gross vehicle weight rating of 10,000 pounds or less~~ or cutaway front section vehicle with a left-side driver's door, designed for carrying more than ten persons. This definition includes two classifications: type A-I, with a gross vehicle weight rating (GVWR) over 10,000 pounds; and type A-II, with a GVWR of 10,000 pounds or less.

(2) A "type B school bus" is a conversion or body constructed and installed upon a van or front-section vehicle chassis, or stripped chassis, with a gross vehicle weight rating of more than 10,000 pounds, designed for carrying more than ten persons. Part of the engine is beneath or behind the windshield and beside the driver's seat. The entrance door is behind the front wheels.

(3) A "type C school bus" is a body installed upon a flat back cowl chassis with a gross vehicle weight rating of more than 10,000 pounds, designed for carrying more than ten persons. All of the engine is in front of the windshield and the entrance door is behind the front wheels.

(4) A "type D school bus" is a body installed upon a chassis, with the engine mounted in the front, midship or rear, with a gross vehicle weight rating of more than 10,000 pounds, designed for carrying more than ten persons. The engine may be behind the windshield and beside the driver's seat; it may be at the rear of the bus, behind the rear wheels, or midship between the front and rear axles. The entrance door is ahead of the front wheels.

(5) Type III school buses and type III Head Start buses are restricted to passenger cars, station wagons, vans, and buses having a maximum manufacturer's rated seating capacity of ten people, including the driver, and a gross vehicle weight rating of 10,000 pounds or less. In this subdivision, "gross vehicle weight rating" means the value specified by the manufacturer as the loaded weight of a single vehicle. A "type III school bus" and "type III Head Start bus" must not be outwardly equipped and identified as a type A, B, C, or D school bus or type A, B, C, or D Head Start bus.

Sec. 5. Minnesota Statutes 1996, section 169.447, subdivision 6, is amended to read:

Subd. 6. [OVERHEAD BOOK RACKS; STORAGE COMPARTMENTS.] ~~Types A, B, C, and D~~ School buses may be equipped with padded, permanent overhead book racks that do not hang over the center aisle of the bus. School buses manufactured after January 1, 1998, may also be equipped with interior overhead storage compartments provided they meet the requirements of the 1995 "National Standards for School Buses and School Bus Operations."

Sec. 6. Minnesota Statutes 1996, section 169.4501, subdivision 1, is amended to read:

Subdivision 1. [NATIONAL STANDARDS ADOPTED.] Except as provided in sections 169.4502 and 169.4503, the construction, design, equipment, and color of types A, B, C, and D school buses used for the transportation of school children shall meet the requirements of the "bus chassis standards" and "bus body standards" in the ~~1990~~ 1995 revised edition of the "National Standards for School Buses and School Bus Operations" adopted by the ~~Eleventh~~ Twelfth National Conference on School Transportation ~~and published by the National Safety Council~~. Except as provided in section 169.4504, the construction, design, and equipment of types A, B, C, and D school buses used for the transportation of students with disabilities also shall meet the requirements of the "specially equipped school bus standards" in the ~~1990~~ 1995 National Standards for School Buses and School Bus Operations. The "bus chassis standards," "bus body standards," and "specially equipped school bus standards" sections of the ~~1990~~ 1995 revised edition of the "National Standards for School Buses and School Bus Operations" are incorporated by reference in this chapter.

Sec. 7. Minnesota Statutes 1996, section 169.4501, subdivision 2, is amended to read:

Subd. 2. [APPLICABILITY.] (a) The standards adopted in this section and sections 169.4502 and 169.4503, govern the construction, design, equipment, and color of school buses used for the transportation of school children, when owned and operated by a school or privately owned and operated under a contract with a school, and these standards must be made a part of that contract by reference. Each school, its officers and employees, and each person employed under the contract is subject to these standards.

(b) The standards apply to school buses manufactured after December 31, ~~1994~~ 1997. Buses complying with these standards when manufactured need not comply with standards established later except as specifically provided for by law.

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(c) A school bus manufactured on or before December 31, ~~1994~~ 1997, must conform to the Minnesota standards in effect on the date the vehicle was manufactured except as specifically provided for in law.

(d) A new bus body may be remounted on a used chassis provided that the remounted vehicle meets state and federal standards for new buses which are current at the time of the remounting. Permission must be obtained from the commissioner of public safety before the remounting is done. A used bus body may not be remounted on a new or used chassis.

Sec. 8. Minnesota Statutes 1996, section 169.4502, subdivision 2, is amended to read:

Subd. 2. [BRAKES.] ~~The braking system must include an emergency brake.~~ The braking system must meet federal motor vehicle safety standards in effect at the time of manufacture. ~~All buses manufactured with air brakes after January 1, 1995, shall have automatic slack adjusters.~~

Sec. 9. Minnesota Statutes 1996, section 169.4502, subdivision 7, is amended to read:

Subd. 7. [EXHAUST SYSTEM.] The tailpipe must:

~~(1) extend to but not more than one inch beyond the bumper and be mounted outside of the chassis frame rail; or~~

~~(2)~~ extend to but not more than ~~one inch~~ two inches beyond the left side of the bus, behind the driver's compartment. A type A bus and a type B bus with a gross vehicle weight rating under 15,000 pounds, shall comply with the manufacturer's standard. No exhaust pipe may exit beneath an emergency exit, or, on a type C or type D bus, under the fuel fill location. No exhaust pipe shall be reduced in size beyond the muffler.

Sec. 10. Minnesota Statutes 1996, section 169.4502, subdivision 11, is amended to read:

Subd. 11. [TIRES AND RIMS.] The use of multipiece rims or tube-type tires is permitted. Radial and bias ply tires shall not be used on the same axle. Front tire tread depth shall not be less than 4/32 inch in any major tire tread groove. Rear tire tread shall not be less than 2/32 inch. Tires must be measured in three locations around the tire, in two adjoining grooves. No recapped tires shall be used on the front wheels. Recapped tires are permitted on the rear wheels.

Sec. 11. Minnesota Statutes 1996, section 169.4502, is amended by adding a subdivision to read:

Subd. 13. [AIR CLEANER.] The air intake system for diesel buses may have an air cleaner restriction indicator installed.

Sec. 12. Minnesota Statutes 1996, section 169.4502, is amended by adding a subdivision to read:

Subd. 14. [CLUTCH.] A starter interlock may be installed to prevent actuation of the starter if the clutch is not depressed.

Sec. 13. Minnesota Statutes 1996, section 169.4502, is amended by adding a subdivision to read:

Subd. 15. [OIL FILTER.] An oil filtration system may be used in lieu of an oil filter.

Sec. 14. Minnesota Statutes 1996, section 169.4503, subdivision 1, is amended to read:

Subdivision 1. [RELATION TO NATIONAL STANDARDS.] The bus body standards contained in this section are required in addition to those required by sections ~~169.450~~ 169.4501 and 169.4502. When a Minnesota standard contained in this section conflicts with a national standard adopted in section ~~169.450~~ 169.4501, the Minnesota standard contained in this section is controlling.

Sec. 15. Minnesota Statutes 1996, section 169.4503, subdivision 2, is amended to read:

Subd. 2. [BACKUP WARNING ALARM.] An automatic audible backup alarm may be installed. A spring-loaded button in the driver's compartment that will temporarily disable the backup alarm is allowed for usage in school bus overnight parking lots and repair facilities.

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Sec. 16. Minnesota Statutes 1996, section 169.4503, subdivision 10, is amended to read:

Subd. 10. [EMERGENCY EQUIPMENT; FIRE EXTINGUISHERS.] ~~The fire extinguisher must have at least a 10BC rating~~ The bus must be equipped with at least one UL-approved pressurized, dry chemical fire extinguisher with a total rating of 2A10BC or greater.

Sec. 17. Minnesota Statutes 1996, section 169.4503, subdivision 13, is amended to read:

Subd. 13. [IDENTIFICATION.] (a) Each bus shall, in the beltline, identify the school district serviced, or company name, or owner of the bus. Numbers necessary for identification must appear on the sides and rear of the bus. Symbols or letters may be used on the outside of the bus near the entrance door for student identification. A manufacturer's nameplate or logo may be placed on the ~~side of the~~ bus ~~near the entrance door and on the rear~~.

(b) Effective December 31, 1994, all buses sold must display lettering "Unlawful to pass when red lights are flashing" on the rear of the bus. The lettering shall be in two-inch black letters on school bus yellow background. This message shall be displayed directly below the upper window of the rear door. On rear engine buses, it shall be centered at approximately the same location. Only signs and lettering approved or required by state law may be displayed.

Sec. 18. Minnesota Statutes 1996, section 169.4503, subdivision 14, is amended to read:

Subd. 14. [INSULATION.] (a) Ceilings and wall shall be insulated to a minimum of one and one-half inch fiberglass and installed so the insulation does not compact or sag. Floor insulation must be nominal 19/32 inches thick plywood, or a material of equal or greater strength and insulation R value that equals or exceeds properties of exterior-type softwood plywood, C-D grade as specified in standard issued by the United States Department of Commerce. Type ~~A and B~~ A-II buses ~~with a gross vehicle weight rating under 15,000 pounds~~ must have a minimum of one-half inch plywood. All exposed edges on plywood shall be sealed. Every school bus shall be constructed so that the noise level taken at the ear of the occupant nearest to the primary vehicle noise source shall not exceed 85 dba when tested according to procedures in the ~~1990~~ 1995 National Standards for School Buses and School Bus Operations.

(b) The underside of metal floor may be undercoated with polyurethane floor insulation, foamed in place. The floor insulation must be combustion resistant. The authorization in this paragraph does not replace the plywood requirement.

Sec. 19. Minnesota Statutes 1996, section 169.4503, subdivision 17, is amended to read:

Subd. 17. [MIRRORS.] A type B bus with a gross vehicle weight rating less than 15,000 pounds shall have a minimum of six-inch by 16-inch mirror. A type B bus with a gross vehicle weight rating over 15,000 pounds shall have a minimum of a six-inch by 30-inch mirror. After January 1, 1995, all school buses must be equipped with a minimum of two crossover mirrors, mounted to the left and right sides of the bus.

Sec. 20. Minnesota Statutes 1996, section 169.4503, subdivision 19, is amended to read:

Subd. 19. [RUB RAILS.] There shall be one rub rail at the base of the skirt of the bus on all type A, excluding van conversions, B, C, and D buses.

Sec. 21. Minnesota Statutes 1996, section 169.4503, subdivision 23, is amended to read:

Subd. 23. [WINDOWS.] Windshield, entrance, and rear emergency exit doors must be of approved safety glass. Laminated or tempered glass (AS-2 or AS-3) is permitted in all other windows. All glass shall be federally approved and marked as provided in section 169.74. The windshield may be of uniform tint throughout or may have a horizontal gradient band starting slightly above the line of vision and gradually decreasing in light transmission to 20 percent or less at the top of the windshield. The use of tinted glass, as approved by section 169.71, is permitted on side windows and rear windows except for the entrance door, the first window behind the service door, and the window to the left of the driver. The window to the left of the driver, the upper service door windows, and the window immediately behind the entrance door must be thermal glass. The window to the left of the driver for type A ~~and B~~ buses ~~with a gross vehicle weight rating under 15,000 pounds~~ need not be thermal glass.

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Sec. 22. Minnesota Statutes 1996, section 169.4503, subdivision 24, is amended to read:

Subd. 24. [WIRING.] ~~If not protected by a grommet, wire that passes through holes shall be encased in an abrasive-resistant protective covering.~~ If a master cutoff switch is used, it shall not be wired as to kill power to the electric brake system.

Sec. 23. Minnesota Statutes 1996, section 169.4503, is amended by adding a subdivision to read:

Subd. 25. [DRIVER COMPARTMENT.] The driver's seat must be a high-back seat.

Sec. 24. Minnesota Statutes 1996, section 169.4504, subdivision 1, is amended to read:

Subdivision 1. [RELATION TO NATIONAL STANDARDS.] The specially equipped school bus standards contained in this section are required in addition to those required by section ~~169.450~~ 169.4501. When a Minnesota standard contained in this section conflicts with a national standard adopted in section ~~169.450~~ 169.4501, the Minnesota standard contained in this section is controlling.

Sec. 25. Minnesota Statutes 1996, section 169.4504, is amended by adding a subdivision to read:

Subd. 6. [SECUREMENT AND RESTRAINT SYSTEM.] The securement and restraint system must be located and installed so that when an occupied wheelchair or other mobility aid is secured, the installation meets the requirements of the applicable federal motor vehicle safety standard.

Sec. 26. Minnesota Statutes 1996, section 169.452, is amended to read:

169.452 [ACCIDENT AND SERIOUS INCIDENT REPORTING.]

The department of public safety shall develop uniform definitions of a school bus accident, an incident of serious misconduct, and an incident that results in personal injury or death. The department shall determine what type of information on school bus accidents and incidents, including criminal conduct, and bus driver dismissals for cause should be collected and develop a uniform accident and incident reporting form to collect those data, including data relating to type III vehicles~~, statewide~~. In addition to the form, the department shall have an alternative method of reporting that allows school districts to use computer technology to provide the required information. School districts selected by the commissioner shall report the information required by the department using either format. A school district must not be charged for reporting forms or reporting procedures under this section. Data collected under this section shall be analyzed to help develop accident, crime, and misconduct prevention programs. This section is not subject to chapter 14.

Sec. 27. Minnesota Statutes 1996, section 171.3215, subdivision 4, is amended to read:

Subd. 4. [WAIVER OF PERMANENT CANCELLATION.] The commissioner of public safety or the commissioner's designee, in consultation with the ~~school bus safety advisory committee~~ division of driver and vehicle services, may waive the permanent cancellation requirement of section 171.3215 for a person convicted of a nonfelony violation of chapter 152 or a felony that is not a violent crime under section 609.152.

Sec. 28. [REPEALER.]

Minnesota Statutes 1996, sections 169.4502, subdivisions 6 and 9; 169.4503, subdivisions 3, 8, 9, 11, 12, and 22; and 169.454, subdivision 11, are repealed."

The motion prevailed and the amendment was adopted.

Ness moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 21, line 2, strike "zero" and insert "1.03"

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Page 21, line 36, strike "1.0" and insert "1.03"

Page 22, line 6, delete "$3.50 and insert "$2.50"

Page 37, line 34, delete "$175" and insert "$100"

Page 50, line 24, delete "$165" and insert "$100"

Page 51, line 20, delete "$172,141,000" and insert "$177,141,000"

Page 51, line 21, delete "$191,267,000" and insert "$197,817,000"

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion did not prevail and the amendment was not adopted.

The Speaker resumed the Chair.

Haas and Knight moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Pages 47 and 48, delete section 59

Page 84, delete lines 10 to 13

Renumber the subdivisions in sequence

Pages 111 and 112, delete section 18

Page 124, delete lines 16 to 23

Renumber the subdivisions in sequence

Page 150, delete lines 6 to 14

Page 161, delete lines 1 to 6

Page 179, delete lines 33 to 36

Page 180, delete lines 35 and 36

Page 181, delete lines 1 to 5

Renumber the subdivisions in sequence

Pages 192 and 193, delete section 9

Page 199, delete line 36

Page 200, delete lines 1 and 2

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Renumber the subdivisions in sequence

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Haas and Knight amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 20 yeas and 112 nays as follows:

Those who voted in the affirmative were:

Anderson, B. Kielkucki McElroy Osskopp Tingelstad Weaver

Boudreau Knight Molnau Rifenberg Tuma

Commers Krinkie Mulder Sviggum Van Dellen

Haas Lindner Olson, M. Swenson, D.

Those who voted in the negative were:

Abrams Erhardt Johnson, A. Macklin Pawlenty Stanek

Anderson, I. Evans Johnson, R. Mahon Paymar Stang

Bakk Farrell Juhnke Mares Pelowski Swenson, H.

Bettermann Finseth Kahn Mariani Peterson Sykora

Biernat Folliard Kalis Marko Pugh Tomassoni

Bishop Garcia Kelso McCollum Rest Tompkins

Bradley Goodno Kinkel McGuire Reuter Trimble

Broecker Greenfield Knoblach Milbert Rhodes Tunheim

Carlson Greiling Koppendrayer Mullery Rostberg Vickerman

Chaudhary Gunther Koskinen Munger Rukavina Wagenius

Clark Harder Kraus Murphy Schumacher Wejcman

Daggett Hasskamp Kubly Ness Seagren Wenzel

Davids Hausman Kuisle Nornes Seifert Westfall

Dawkins Hilty Larsen Olson, E. Sekhon Westrom

Dehler Holsten Leighton Opatz Skare Winter

Delmont Huntley Leppik Orfield Skoglund Wolf

Dempsey Jaros Lieder Otremba Slawik Spk. Carruthers

Dorn Jefferson Long Ozment Smith

Entenza Jennings Luther Paulsen Solberg

The motion did not prevail and the amendment was not adopted.

Reuter moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 198, after line 27, insert:

"Sec. 16. [YEAR 2000 READY.]

The commissioner of children, families and learning shall ensure that any computer software or hardware that is purchased with money appropriated in this bill must be year 2000 ready."

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Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Sviggum, Kraus and Rifenberg moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 11, line 8, delete section 13

Page 12, line 36, delete section 14

Page 13, line 33, delete section 15

Page 14, line 16, delete section 16

Page 14, line 35, delete section 17

Page 22, line 2, delete section 22

Page 37, line 15, delete "$3,580" and insert "$3,805"

Page 37, line 16, delete "$3,355" and insert "$3,422"

Page 37, delete lines 34 and 35

Page 37, line 36, delete "(4)" and insert "(3)"

Page 46, line 17, delete section 57

Page 47, line 3, delete section 59

Page 49, line 4, delete section 64

Page 50, line 6, delete section 65

Page 50, line 21, delete section 67

Page 50, after line 32, insert:

"Sec. 69. [AID PAYMENT SCHEDULE.]

Notwithstanding any other law to the contrary, beginning July 1, 1999, 85 percent of school district state aids and credit entitlements shall be paid in the current year and the remaining 15 percent of the state aids and credit entitlements shall be paid in the following year according to Minnesota Statutes, section 124.195, subdivisions 2, 7, 10, and 11."

Page 50, line 33, delete section 69

Page 51, line 10, delete "$2,524,183,000" and insert "$2,726,683,000"

Page 51, line 11, delete "$2,495,217,000" and insert "$2,607,160,000"

Page 51, line 13, delete "$2,296,684,000" and insert "$2,499,183,000"

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Page 51, line 14, delete "$220,440,000" and insert "$227,687,000"

Page 51, line 15, delete "$2,254,773,000" and insert "$2,329,473,000"

Page 51, line 25, delete "$3,430,000" and insert "$1,430,000"

Page 51, line 26, delete "$3,458,000" and insert "$1,458,000"

Page 51, line 28, delete "$3,301,000" and insert "$1,301,000"

Page 51, line 30, delete "$3,314,000" and insert "$1,314,000"

Page 51, delete lines 31 to 35

Page 53, line 34, delete subdivision 12

Page 54, line 14, delete subdivision 13

Page 59, after line 26, insert:

"(c) Minnesota Statutes 1996, section 124A.26, is repealed the day following final enactment for revenue for fiscal years 1998 and later."

Page 56, line 23, delete section 2

Page 58, line 14, delete section 5

Page 60, line 3, delete section 8

Page 66, line 24, delete section 20

Page 70, line 26, delete section 26

Page 71, line 8, delete section 27

Page 72, line 18, delete section 28

Page 81, line 4, delete "$282,505,000" and insert "$277,443,000"

Page 81, line 5, delete "$382,519,000" and insert "$369,803,000"

Page 81, line 7, delete "$258,159,000" and insert "$253,097,000"

Page 81, line 8, delete "$28,684,000" and insert "$28,121,000"

Page 81, line 9, delete "$353,835,000" and insert "$341,681,000"

Page 95, line 11, delete section 22

Page 95, line 22, delete section 23

Page 95, line 35, delete section 25

Page 97, line 12, delete subdivision 4

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Page 98, line 20, delete subdivision 7

Page 98, line 31, delete subdivision 8

Page 99, line 4, delete subdivision 9

Page 111, line 30, delete section 18

Page 124, line 16, delete subdivisions 7, 8, 9, 10 and 11

Page 141, line 36, delete section 23

Page 143, line 13, delete section 24

Page 144, line 27, delete section 25

Page 145, line 7, delete section 26

Page 146, line 9, delete subdivisions 2 and 3

Page 146, lines 28 and 29, delete "$1,875,000" and insert "$1,075,000"

Page 146, line 30, delete "$400,000" and insert "$200,000"

Page 146, line 36, delete "$1,175,000" and insert "$825,000"

Page 147, line 5, delete "$300,000" and insert "$150,000"

Page 147, line 36, delete subdivisions 5 and 6

Page 149, line 26, delete subdivisions 8, 9, 10, 11 and 12

Page 153, line 6, delete section 7

Page 154, line 26, delete section 8

Page 154, line 33, delete section 9

Page 157, line 7, delete section 12

Page 159, lines 3 and 4, delete "$8,754,000" and insert "$7,254,000"

Page 160, line 11, delete subdivisions 8, 9, 10 and 11

Page 172, line 2, delete section 17

Page 174, line 9, delete section 18

Page 175, line 30, delete section 19

Page 176, line 13, delete section 20

Page 179, line 12, delete section 25

Page 185, line 13, delete "$10,069,000" and insert "$7,819,000"

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Page 185, line 14, delete "$10,319,000" and insert "$7,819,000"

Page 185, line 16, delete "$9,288,000" and insert "$7,819,000"

Page 185, line 17, delete "$1,032,000" and insert "$781,000"

Page 185, line 18, delete "$9,287,000" and insert "$7,819,000"

Page 185, delete line 29

Page 185, line 35, delete "$865,000" and insert "$527,000"

Page 185, line 36, delete "$865,000" and insert "$527,000"

Page 186, line 2, delete "$813,000" and insert "$527,000"

Page 186, line 3, delete "$90,000" and insert "$52,000"

Page 186, line 4, delete "$813,000" and insert "$527,000"

Page 186, line 17, delete section 1

page 187, line 36, delete section 2

Page 191, line 14, delete sections 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15

Page 199, line 16, delete subdivisions 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12

Page 201, line 25, delete subdivisions 14, 15 and 16

A roll call was requested and properly seconded.

Anderson, I., moved to amend the Sviggum et al amendment to H. F. No. 1684, the third engrossment, as amended, as follows:

Page 1, delete line 9

The motion did not prevail and the amendment to the amendment was not adopted.

The question recurred on the Sviggum et al amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 57 yeas and 76 nays as follows:

Those who voted in the affirmative were:

Journal of the House - 45th Day - Top of Page 3017

Abrams Dehler Knight Molnau Seifert Tuma

Anderson, B. Dempsey Knoblach Mulder Smith Van Dellen

Bettermann Erhardt Koppendrayer Ness Stanek Vickerman

Bishop Finseth Kraus Nornes Stang Weaver

Boudreau Goodno Krinkie Olson, M. Sviggum Westfall

Bradley Gunther Kuisle Osskopp Swenson, D. Westrom

Broecker Haas Larsen Osthoff Swenson, H. Workman

Commers Harder Lindner Reuter Sykora

Daggett Holsten Mares Rifenberg Tingelstad

Davids Kielkucki McElroy Rostberg Tompkins

Those who voted in the negative were:

Anderson, I. Greenfield Kalis Marko Pawlenty Slawik

Bakk Greiling Kelso McCollum Paymar Solberg

Biernat Hasskamp Kinkel McGuire Pelowski Tomassoni

Carlson Hausman Koskinen Milbert Peterson Trimble

Chaudhary Hilty Kubly Mullery Pugh Tunheim

Clark Huntley Leighton Munger Rest Wagenius

Dawkins Jaros Leppik Murphy Rhodes Wejcman

Delmont Jefferson Lieder Olson, E. Rukavina Wenzel

Dorn Jennings Long Opatz Schumacher Winter

Entenza Johnson, A. Luther Orfield Seagren Wolf

Evans Johnson, R. Macklin Otremba Sekhon Spk. Carruthers

Folliard Juhnke Mahon Ozment Skare

Garcia Kahn Mariani Paulsen Skoglund

The motion did not prevail and the amendment was not adopted.

Seifert, Kielkucki, Stang, Rifenberg, Westrom, Kuisle, Nornes, Reuter and Westfall moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 49, delete lines 4 to 36

Page 50, delete lines 1 to 5

Page 54, delete lines 14 to 18

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Seifert et al amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 69 yeas and 64 nays as follows:

Those who voted in the affirmative were:

Journal of the House - 45th Day - Top of Page 3018

Abrams Erhardt Knoblach Mulder Rostberg Trimble

Anderson, B. Farrell Koppendrayer Ness Seagren Tuma

Bettermann Finseth Kraus Nornes Seifert Van Dellen

Bishop Goodno Krinkie Olson, M. Skare Vickerman

Boudreau Gunther Kuisle Osskopp Smith Weaver

Bradley Haas Larsen Osthoff Stanek Westfall

Broecker Harder Leppik Ozment Stang Westrom

Commers Hasskamp Lindner Paulsen Sviggum Wolf

Daggett Holsten Macklin Pawlenty Swenson, D. Workman

Davids Kielkucki Mares Rest Swenson, H.

Dehler Kinkel McElroy Reuter Sykora

Dempsey Knight Molnau Rifenberg Tingelstad

Those who voted in the negative were:

Anderson, I. Folliard Juhnke Mariani Otremba Solberg

Bakk Garcia Kahn Marko Paymar Tomassoni

Biernat Greiling Kalis McCollum Pelowski Tompkins

Carlson Hausman Kelso McGuire Peterson Tunheim

Chaudhary Hilty Koskinen Milbert Pugh Wagenius

Clark Huntley Kubly Mullery Rhodes Wejcman

Dawkins Jaros Leighton Munger Rukavina Wenzel

Delmont Jefferson Lieder Murphy Schumacher Winter

Dorn Jennings Long Olson, E. Sekhon Spk. Carruthers

Entenza Johnson, A. Luther Opatz Skoglund

Evans Johnson, R. Mahon Orfield Slawik

The motion prevailed and the amendment was adopted.

Wolf moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 51, after line 2, insert:

"Sec. 70. [EDUCATION FUNDING.]

Subdivision 1. [INTENT.] It is the intent of the legislature that kindergarten through grade 12 education funding be used primarily to benefit Minnesota students, rather than primarily to benefit the providers of educational services. By this, the legislature intends to fund first those efforts which directly improve students' learning opportunities.

Subd. 2. [TEACHER SETTLEMENTS FOR THE 1998-1999 BIENNIUM.] A school board that ratifies a new collective bargaining agreement affecting compensation for teachers during the 1997-1998 and 1998-1999 school years is encouraged to limit the total package cost of the agreement to the forecasted rate of inflation. For the purposes of this section, "total package cost" means the percentage total compensation cost increase by year as calculated on the form provided to districts by the Minnesota school boards association. For the purposes of this section, "forecasted rate of inflation" means the estimate of the average annual appreciation in the Consumer Price Index for all urban wage earners over the same period, which is applied by the commissioner of finance to determine future discretionary inflation cost impacts on state general fund expenditures, as reported in the most recent forecast of state revenues and expenditures under Minnesota Statutes, section 16A.103. For any bargaining agreement where the total costs of the agreement are expected to exceed this inflation estimate, the legislature requests that the additional costs are attributable to compensation that is primarily related to merit or performance of teachers, rather than time in service, steps, and lanes.

Subd. 3. [STUDY.] The legislative audit commission is requested to perform a study to assess the extent to which agreements ratified by school boards statewide are consistent with the goals stated under subdivisions 1 and 2."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

Journal of the House - 45th Day - Top of Page 3019

The question was taken on the Wolf amendment and the roll was called. There were 39 yeas and 95 nays as follows:

Those who voted in the affirmative were:

Abrams Daggett Koppendrayer Mulder Rostberg Van Dellen

Anderson, B. Dehler Krinkie Olson, M. Seagren Vickerman

Bettermann Erhardt Kuisle Paulsen Sviggum Westfall

Bishop Goodno Leppik Pawlenty Swenson, D. Wolf

Boudreau Haas Lindner Reuter Sykora

Bradley Harder McElroy Rhodes Tompkins

Commers Knight Molnau Rifenberg Tuma

Those who voted in the negative were:

Anderson, I. Folliard Kahn Mares Otremba Stanek

Bakk Garcia Kalis Mariani Ozment Stang

Biernat Greenfield Kelso Marko Paymar Swenson, H.

Broecker Greiling Kielkucki McCollum Pelowski Tingelstad

Carlson Gunther Kinkel McGuire Peterson Tomassoni

Chaudhary Hasskamp Knoblach Milbert Pugh Trimble

Clark Hausman Koskinen Mullery Rest Tunheim

Davids Hilty Kraus Munger Rukavina Wagenius

Dawkins Holsten Kubly Murphy Schumacher Weaver

Delmont Huntley Larsen Ness Seifert Wejcman

Dempsey Jaros Leighton Nornes Sekhon Wenzel

Dorn Jefferson Lieder Olson, E. Skare Westrom

Entenza Jennings Long Opatz Skoglund Winter

Evans Johnson, A. Luther Orfield Slawik Workman

Farrell Johnson, R. Macklin Osskopp Smith Spk. Carruthers

Finseth Juhnke Mahon Osthoff Solberg

The motion did not prevail and the amendment was not adopted.

Westrom moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 43, line 3, after "exceeds" insert "the greater of $250,000 or"

The motion prevailed and the amendment was adopted.

Kahn, Farrell, Pawlenty, Clark, Trimble, Paulsen, Abrams, Osskopp, Milbert, Hasskamp, McGuire, Osthoff, Long, Larsen, Bishop, Wagenius, Delmont, Leppik, Opatz, Slawik, Kinkel, Pugh, Greiling, Evans and Peterson offered an amendment to H. F. No. 1684, the third engrossment, as amended.

Dehler raised a point of order pursuant to Section 401, paragraph 4, of "Mason's Manual of Legislative Procedure" relating to frivolous and improper amendments. The Speaker ruled the point of order well taken and the Kahn et al amendment out of order.

Journal of the House - 45th Day - Top of Page 3020

Reuter, Kielkucki, Schumacher, Seagren, Tompkins, Hasskamp, Seifert, Dempsey, Rifenberg, Wenzel and Tingelstad moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 168, after line 3, insert:

"Sec. 10. [126.85] [PROHIBITION AGAINST PROGRAMS ADVOCATING SEXUAL ACTIVITY BY STUDENTS.]

A public elementary, middle, or secondary school, or state agency shall not implement or carry out a program, activity, or curriculum that has the purpose or demonstrable effect of encouraging sexual activity by students."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

Anderson, B., moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 175, delete lines 30 to 36

Page 176, delete lines 1 to 12

Page 179, delete lines 27 to 32

Page 181, after line 5, insert:

"Sec. 26. [APPROPRIATION RETURNED.]

$75,000 in fiscal year 1998 and $75,000 in fiscal year 1999 appropriated from the general fund to the commissioner of children, families and learning for the purpose of administering the grant program for preventing violence through developing plays, workshops and educational resources are deleted from section 25 of this article and returned to the state general fund to better benefit the people of Minnesota."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Anderson, B., amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 64 yeas and 70 nays as follows:

Those who voted in the affirmative were:

Abrams Dempsey Knoblach McElroy Rifenberg Tompkins

Anderson, B. Erhardt Koppendrayer Molnau Rostberg Tuma

Bettermann Farrell Kraus Mulder Seagren Van Dellen

Bishop Finseth Krinkie Ness Seifert Vickerman

Boudreau Goodno Kuisle Nornes Stanek Weaver

Bradley Gunther Larsen Olson, M. Stang Westfall

Broecker Haas Leppik Osskopp Sviggum Westrom

Commers Harder Lindner Paulsen Swenson, D. Wolf

Journal of the House - 45th Day - Top of Page 3021

Daggett Holsten Macklin Pawlenty Swenson, H. Workman

Davids Kielkucki Mahon Reuter Sykora

Dehler Knight Mares Rhodes Tingelstad

Those who voted in the negative were:

Anderson, I. Garcia Juhnke Marko Ozment Smith

Bakk Greenfield Kahn McCollum Paymar Solberg

Biernat Greiling Kalis McGuire Pelowski Tomassoni

Carlson Hasskamp Kelso Milbert Peterson Trimble

Chaudhary Hausman Kinkel Mullery Pugh Tunheim

Clark Hilty Koskinen Munger Rest Wagenius

Dawkins Huntley Kubly Murphy Rukavina Wejcman

Delmont Jaros Leighton Olson, E. Schumacher Wenzel

Dorn Jefferson Lieder Opatz Sekhon Winter

Entenza Jennings Long Orfield Skare Spk. Carruthers

Evans Johnson, A. Luther Osthoff Skoglund

Folliard Johnson, R. Mariani Otremba Slawik

The motion did not prevail and the amendment was not adopted.

Wenzel moved to amend H. F. No. 1684, the third engrossment, as amended, as follows:

Page 152, delete line 36

Page 153, delete lines 1 to 3

Page 153, line 4, delete "15A.082."

A roll call was requested and properly seconded.

The question was taken on the Wenzel amendment and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 66 yeas and 67 nays as follows:

Those who voted in the affirmative were:

Abrams Farrell Kielkucki Molnau Seifert Tompkins

Anderson, I. Finseth Knight Mulder Sekhon Trimble

Bakk Goodno Knoblach Nornes Skare Tuma

Bettermann Gunther Kraus Olson, M. Smith Tunheim

Boudreau Haas Krinkie Otremba Stanek Van Dellen

Commers Harder Kubly Pelowski Stang Vickerman

Daggett Hasskamp Kuisle Peterson Sviggum Weaver

Davids Hilty Lindner Reuter Swenson, D. Wenzel

Dawkins Holsten Mahon Rifenberg Swenson, H. Westfall

Dehler Jaros Marko Rostberg Tingelstad Westrom

Dorn Johnson, A. McCollum Rukavina Tomassoni Winter

Journal of the House - 45th Day - Top of Page 3022

Those who voted in the negative were:

Anderson, B. Folliard Kelso Mariani Osthoff Solberg

Biernat Garcia Kinkel McElroy Ozment Sykora

Bishop Greenfield Koppendrayer McGuire Paulsen Wagenius

Broecker Greiling Koskinen Milbert Pawlenty Wejcman

Carlson Hausman Larsen Mullery Paymar Wolf

Chaudhary Huntley Leighton Munger Pugh Workman

Clark Jefferson Leppik Murphy Rest Spk. Carruthers

Delmont Jennings Lieder Ness Rhodes

Dempsey Johnson, R. Long Olson, E. Schumacher

Entenza Juhnke Luther Opatz Seagren

Erhardt Kahn Macklin Orfield Skoglund

Evans Kalis Mares Osskopp Slawik

The motion did not prevail and the amendment was not adopted.

MOTION FOR RECONSIDERATION

Trimble moved that the vote whereby the Seifert et al amendment to H. F. No. 1684, the third engrossment, as amended, was adopted earlier today, be now reconsidered.

A roll call was requested and properly seconded.

Bishop moved that the rules be so far suspended and that the House resolve itself into the Committee of the Whole. The motion did not prevail.

The question recurred on the Trimble motion and the roll was called.

Winter moved that those not voting be excused from voting. The motion prevailed.

There were 60 yeas and 74 nays as follows:

Those who voted in the affirmative were:

Bakk Garcia Johnson, R. Long Orfield Skoglund

Biernat Greenfield Juhnke Luther Otremba Slawik

Carlson Greiling Kahn Mahon Paymar Tomassoni

Chaudhary Hausman Kalis Mariani Pelowski Trimble

Clark Hilty Kelso Marko Peterson Tunheim

Dawkins Huntley Kinkel McCollum Rest Wagenius

Delmont Jaros Koskinen Mullery Rukavina Wejcman

Dorn Jefferson Kubly Munger Schumacher Wenzel

Entenza Jennings Leighton Murphy Sekhon Winter

Folliard Johnson, A. Lieder Opatz Skare Spk. Carruthers

Those who voted in the negative were:

Abrams Erhardt Koppendrayer Mulder Rifenberg Tompkins

Anderson, B. Evans Kraus Ness Rostberg Tuma

Anderson, I. Farrell Krinkie Nornes Seagren Van Dellen

Bettermann Finseth Kuisle Olson, E. Seifert Vickerman

Bishop Goodno Larsen Olson, M. Smith Weaver

Boudreau Gunther Leppik Osskopp Solberg Westfall

Bradley Haas Lindner Osthoff Stanek Westrom

Broecker Harder Macklin Ozment Stang Wolf

Commers Hasskamp Mares Paulsen Sviggum Workman

Daggett Holsten McElroy Pawlenty Swenson, D.

Davids Kielkucki McGuire Pugh Swenson, H.

Journal of the House - 45th Day - Top of Page 3023

Dehler Knight Milbert Reuter Sykora

Dempsey Knoblach Molnau Rhodes Tingelstad

The motion did not prevail.

Farrell, Kahn, McGuire, Trimble, Osskopp, Krinkie and Abrams offered an amendment to H. F. No. 1684, the third engrossment, as amended.

Sviggum raised a point of order pursuant to Section 411, of "Mason's Manual of Legislative Procedure" relating to amendments by inserting words. The Speaker ruled the point of order not well taken and the Farrell et al amendment in order.