1.1    .................... moves to amend H. F. No. 721 as follows:
1.2Page 1, after line 10, insert:

1.5Page 10, after line 2, insert:


1.8    Section 1. Minnesota Statutes 2006, section 144A.073, subdivision 4, is amended to
1.9read:
1.10    Subd. 4. Criteria for review. The following criteria shall be used in a consistent
1.11manner to compare, evaluate, and rank all proposals submitted. Except for the criteria
1.12specified in clause (3), the application of criteria listed under this subdivision shall not
1.13reflect any distinction based on the geographic location of the proposed project:
1.14    (1) the extent to which the proposal furthers state long-term care goals, including
1.15the goal of enhancing the availability and use of alternative care services and the goal of
1.16reducing the number of long-term care resident rooms with more than two beds;
1.17    (2) the proposal's long-term effects on state costs including the cost estimate of the
1.18project according to section 144A.071, subdivision 5a;
1.19    (3) the extent to which the proposal promotes equitable access to long-term care
1.20services in nursing homes through redistribution of the nursing home bed supply, as
1.21measured by the number of beds relative to the population 85 or older, projected to the
1.22year 2000 by the state demographer, and according to items (i) to (iv):
1.23    (i) reduce beds in counties where the supply is high, relative to the statewide mean,
1.24and increase beds in counties where the supply is low, relative to the statewide mean;
1.25    (ii) adjust the bed supply so as to create the greatest benefits in improving the
1.26distribution of beds;
2.1    (iii) adjust the existing bed supply in counties so that the bed supply in a county
2.2moves toward the statewide mean; and
2.3    (iv) adjust the existing bed supply so that the distribution of beds as projected for the
2.4year 2020 would be consistent with projected need, based on the methodology outlined in
2.5the Interagency Long-Term Care Committee's nursing home bed distribution study;
2.6    (4) the extent to which the project improves conditions that affect the health or
2.7safety of residents, such as narrow corridors, narrow door frames, unenclosed fire exits,
2.8and wood frame construction, and similar provisions contained in fire and life safety
2.9codes and licensure and certification rules;
2.10    (5) the extent to which the project improves conditions that affect the comfort or
2.11quality of life of residents in a facility or the ability of the facility to provide efficient
2.12care, such as a relatively high number of residents in a room; inadequate lighting or
2.13ventilation; poor access to bathing or toilet facilities; a lack of available ancillary space for
2.14dining rooms, day rooms, or rooms used for other activities; problems relating to heating,
2.15cooling, or energy efficiency; inefficient location of nursing stations; narrow corridors; or
2.16other provisions contained in the licensure and certification rules;
2.17    (6) the extent to which the applicant demonstrates the delivery of quality care, as
2.18defined in state and federal statutes and rules, to residents as evidenced by the two most
2.19recent state agency certification surveys and the applicants' response to those surveys;
2.20    (7) the extent to which the project removes the need for waivers or variances
2.21previously granted by either the licensing agency, certifying agency, fire marshal, or
2.22local government entity;
2.23    (8) the extent to which the project increases the number of private or single bed
2.24rooms; and
2.25    (9) the extent to which the applicant demonstrates the continuing need for nursing
2.26facility care in the community; and
2.27    (10) other factors that may be developed in permanent rule by the commissioner of
2.28health that evaluate and assess how the proposed project will further promote or protect
2.29the health, safety, comfort, treatment, or well-being of the facility's residents.
2.30EFFECTIVE DATE.This section is effective July 1, 2007.

2.31    Sec. 2. Minnesota Statutes 2006, section 256B.431, subdivision 17a, is amended to
2.32read:
2.33    Subd. 17a. Allowable interest expense. (a) Notwithstanding Minnesota Rules, part
2.349549.0060, subparts 5, item A, subitems (1) and (3), and 7, item D, allowable interest
2.35expense on debt shall include:
3.1    (1) interest expense on debt related to the cost of purchasing or replacing depreciable
3.2equipment, excluding vehicles, not to exceed six ten percent of the total historical cost
3.3of the project; and
3.4    (2) interest expense on debt related to financing or refinancing costs, including costs
3.5related to points, loan origination fees, financing charges, legal fees, and title searches; and
3.6issuance costs including bond discounts, bond counsel, underwriter's counsel, corporate
3.7counsel, printing, and financial forecasts. Allowable debt related to items in this clause
3.8shall not exceed seven percent of the total historical cost of the project. To the extent
3.9these costs are financed, the straight-line amortization of the costs in this clause is not an
3.10allowable cost; and
3.11    (3) interest on debt incurred for the establishment of a debt reserve fund, net of the
3.12interest earned on the debt reserve fund.
3.13    (b) Debt incurred for costs under paragraph (a) is not subject to Minnesota Rules,
3.14part 9549.0060, subpart 5, item A, subitem (5) or (6).
3.15EFFECTIVE DATE.This section is effective October 1, 2007.

3.16    Sec. 3. Minnesota Statutes 2006, section 256B.431, subdivision 17e, is amended to
3.17read:
3.18    Subd. 17e. Replacement-costs-new per bed limit effective July 1, 2001 October
3.191, 2007. Notwithstanding Minnesota Rules, part 9549.0060, subpart 11, item C, subitem
3.20(2), for a total replacement, as defined in paragraph (f), authorized under section 144A.071
3.21or 144A.073 after July 1, 1999, or any building project that is a relocation, renovation,
3.22upgrading, or conversion completed on or after July 1, 2001 eligible for reimbursement
3.23under section 256B.434, subdivision 4f, the replacement-costs-new per bed limit effective
3.24October 1, 2007, shall be $74,280 $165,000 per licensed bed in multiple-bed rooms,
3.25$92,850 $195,000 per licensed bed in semiprivate rooms with a fixed partition separating
3.26the resident beds, and $111,420 $225,000 per licensed bed in single rooms. Minnesota
3.27Rules, part 9549.0060, subpart 11, item C, subitem (2), does not apply. These amounts
3.28must be adjusted annually as specified in subdivision 3f, paragraph (a), beginning January
3.291, 2000 January 1, 2008.
3.30EFFECTIVE DATE.This section is effective October 1, 2007.

3.31    Sec. 4. Minnesota Statutes 2006, section 256B.434, is amended by adding a
3.32subdivision to read:
3.33    Subd. 19. Reimbursement for mandatory property loss. (a) Notwithstanding
3.34the threshold in section 256B.431, subdivision 16, facilities that take action to come into
3.35compliance with existing or expected requirements of the federal certification standards,
4.1life safety code, or other building codes shall receive reimbursement for the property,
4.2equipment, and technology costs associated with compliance if all of the following
4.3circumstances are met:
4.4    (1) the costs associated with compliance were incurred on or after January 1, 2005;
4.5    (2) the costs were not otherwise reimbursed under sections 144A.071, 144A.073, or
4.6subdivision 4f; and
4.7    (3) the total allowable cost reported under this subdivision during a reporting year
4.8exceeds $50,000.
4.9    (b) Property rate increases for projects under this subdivision shall be calculated
4.10according to the formula in subdivision 4f, with the exception that any equipment costs
4.11under this subdivision shall be depreciated using the American Hospital Association
4.12useful life guidelines.
4.13EFFECTIVE DATE.This section is effective October 1, 2007.

4.14    Sec. 5. AUTHORIZATION FOR MORATORIUM EXCEPTION PROJECTS.
4.15    During fiscal year 2008, the commissioner of health may approve moratorium
4.16exception projects under Minnesota Statutes, section 144A.073, for which the full
4.17annualized state share of medical assistance costs does not exceed $10,000,000. During
4.18fiscal year 2009, the commissioner of health may approve moratorium exception projects
4.19under Minnesota Statutes, section 144A.073, for which the full annualized state share of
4.20medical assistance costs does not exceed $10,000,000 less the amount approved during
4.21the first year.
4.22EFFECTIVE DATE.This section is effective July 1, 2007."
4.23Amend the title accordingly