Bill Text: MN HF975 | 2013-2014 | 88th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Human services fair hearing and internal audit provisions modified, Cultural and Ethnic Leadership Communities Council created, obsolete language removed, and technical changes made.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2013-05-24 - Secretary of State Chapter 107 [HF975 Detail]

Download: Minnesota-2013-HF975-Engrossed.html

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A bill for an act

relating to human services; modifying provisions related to fair hearings and
internal audits; creating the Cultural and Ethnic Leadership Communities
Council; removing obsolete language; making technical changes;amending
Minnesota Statutes 2012, sections 245.4661, subdivisions 2, 6; 245.482,
subdivision 5; 256.01, subdivision 2; 256.017, subdivision 1; 256.045,
subdivisions 1, 3, 4, 5; 256.0451, subdivisions 5, 13, 22, 24; 256B.055,
subdivision 12; 256B.056, subdivision 11; 256B.057, subdivision 3b; 256B.0595,
subdivisions 1, 2, 4, 9; 256D.02, subdivision 12a; 256J.30, subdivisions 8,
9; 256J.37, subdivision 3a; 256J.395, subdivision 1; 256J.575, subdivision
3; 256J.626, subdivisions 6, 7; 256J.72, subdivisions 1, 3; proposing coding
for new law in Minnesota Statutes, chapter 256; repealing Minnesota Statutes
2012, sections 245.461, subdivision 3; 245.463, subdivisions 1, 3, 4; 256.01,
subdivisions 2a, 13, 23a; 256B.0185; 256D.02, subdivision 4a; 256J.575,
subdivision 4; 256J.74, subdivision 4; 256L.04, subdivision 9.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

FAIR HEARINGS

    Section 1. Minnesota Statutes 2012, section 256.045, subdivision 1, is amended to read:
    Subdivision 1. Powers of the state agency. The commissioner of human services
may appoint one or more state human services referees to conduct hearings and
recommend orders in accordance with subdivisions 3, 3a, 3b, 4a, and 5. Human services
referees designated pursuant to this section may administer oaths and shall be under the
control and supervision of the commissioner of human services and shall not be a part
of the Office of Administrative Hearings established pursuant to sections 14.48 to 14.56.
The commissioner shall only appoint as a full-time human services judge an individual
who is licensed to practice law in Minnesota and who is:
(1) in active status;
(2) an inactive resident;
(3) retired;
(4) on disabled status; or
(5) on retired senior status.
EFFECTIVE DATE.This section is effective July 1, 2013.

    Sec. 2. Minnesota Statutes 2012, section 256.045, subdivision 3, is amended to read:
    Subd. 3. State agency hearings. (a) State agency hearings are available for the
following:
    (1) any person applying for, receiving or having received public assistance, medical
care, or a program of social services granted by the state agency or a county agency or
the federal Food Stamp Act whose application for assistance is denied, not acted upon
with reasonable promptness, or whose assistance is suspended, reduced, terminated, or
claimed to have been incorrectly paid;
    (2) any patient or relative aggrieved by an order of the commissioner under section
252.27 ;
    (3) a party aggrieved by a ruling of a prepaid health plan;
    (4) except as provided under chapter 245C, any individual or facility determined by a
lead investigative agency to have maltreated a vulnerable adult under section 626.557 after
they have exercised their right to administrative reconsideration under section 626.557;
    (5) any person whose claim for foster care payment according to a placement of the
child resulting from a child protection assessment under section 626.556 is denied or not
acted upon with reasonable promptness, regardless of funding source;
    (6) any person to whom a right of appeal according to this section is given by other
provision of law;
    (7) an applicant aggrieved by an adverse decision to an application for a hardship
waiver under section 256B.15;
    (8) an applicant aggrieved by an adverse decision to an application or redetermination
for a Medicare Part D prescription drug subsidy under section 256B.04, subdivision 4a;
    (9) except as provided under chapter 245A, an individual or facility determined
to have maltreated a minor under section 626.556, after the individual or facility has
exercised the right to administrative reconsideration under section 626.556;
    (10) except as provided under chapter 245C, an individual disqualified under
sections 245C.14 and 245C.15, following a reconsideration decision issued under section
245C.23 , on the basis of serious or recurring maltreatment; a preponderance of the
evidence that the individual has committed an act or acts that meet the definition of any of
the crimes listed in section 245C.15, subdivisions 1 to 4; or for failing to make reports
required under section 626.556, subdivision 3, or 626.557, subdivision 3. Hearings
regarding a maltreatment determination under clause (4) or (9) and a disqualification under
this clause in which the basis for a disqualification is serious or recurring maltreatment,
shall be consolidated into a single fair hearing. In such cases, the scope of review by
the human services referee shall include both the maltreatment determination and the
disqualification. The failure to exercise the right to an administrative reconsideration shall
not be a bar to a hearing under this section if federal law provides an individual the right to
a hearing to dispute a finding of maltreatment. Individuals and organizations specified in
this section may contest the specified action, decision, or final disposition before the state
agency by submitting a written request for a hearing to the state agency within 30 days
after receiving written notice of the action, decision, or final disposition, or within 90 days
of such written notice if the applicant, recipient, patient, or relative shows good cause why
the request was not submitted within the 30-day time limit; or
    (11) any person with an outstanding debt resulting from receipt of public assistance,
medical care, or the federal Food Stamp Act who is contesting a setoff claim by the
Department of Human Services or a county agency. The scope of the appeal is the validity
of the claimant agency's intention to request a setoff of a refund under chapter 270A
against the debt.
    (b) The hearing for an individual or facility under paragraph (a), clause (4), (9), or
(10), is the only administrative appeal to the final agency determination specifically,
including a challenge to the accuracy and completeness of data under section 13.04.
Hearings requested under paragraph (a), clause (4), apply only to incidents of maltreatment
that occur on or after October 1, 1995. Hearings requested by nursing assistants in nursing
homes alleged to have maltreated a resident prior to October 1, 1995, shall be held as a
contested case proceeding under the provisions of chapter 14. Hearings requested under
paragraph (a), clause (9), apply only to incidents of maltreatment that occur on or after
July 1, 1997. A hearing for an individual or facility under paragraph (a), clause clauses
(4), (9), and (10), is only available when there is no juvenile court or adult criminal district
court action pending. If such action is filed in either district court while an administrative
review is pending, that arises out of some or all of the events or circumstances on which
the appeal is based the administrative review must be suspended until the judicial actions
are completed. If the juvenile court action or criminal charge is district court proceedings
are completed, dismissed, or the criminal action overturned, the matter may be considered
in an administrative hearing.
    (c) For purposes of this section, bargaining unit grievance procedures are not an
administrative appeal.
    (d) The scope of hearings involving claims to foster care payments under paragraph
(a), clause (5), shall be limited to the issue of whether the county is legally responsible for a
child's placement under court order or voluntary placement agreement and, if so, the correct
amount of foster care payment to be made on the child's behalf and shall not include review
of the propriety of the county's child protection determination or child placement decision.
    (e) A vendor of medical care as defined in section 256B.02, subdivision 7, or a
vendor under contract with a county agency to provide social services is not a party and
may not request a hearing under this section, except if assisting a recipient as provided in
subdivision 4.
    (f) An applicant or recipient is not entitled to receive social services beyond the
services prescribed under chapter 256M or other social services the person is eligible
for under state law.
    (g) The commissioner may summarily affirm the county or state agency's proposed
action without a hearing when the sole issue is an automatic change due to a change in
state or federal law.
    (h) Unless federal or Minnesota law specifies a different time frame in which to file
an appeal, an individual or organization specified in this section may contest the specified
action, decision, or final disposition before the state agency by submitting a written request
for a hearing to the state agency within 30 days after receiving written notice of the action,
decision, or final disposition, or within 90 days of such written notice if the applicant,
recipient, patient, or relative shows good cause, as defined in section 256.0451, subdivision
13, why the request was not submitted within the 30-day time limit. The individual filing
the appeal has the burden of proving good cause by a preponderance of the evidence.

    Sec. 3. Minnesota Statutes 2012, section 256.045, subdivision 4, is amended to read:
    Subd. 4. Conduct of hearings. (a) All hearings held pursuant to subdivision 3, 3a,
3b, or 4a shall be conducted according to the provisions of the federal Social Security
Act and the regulations implemented in accordance with that act to enable this state to
qualify for federal grants-in-aid, and according to the rules and written policies of the
commissioner of human services. County agencies shall install equipment necessary to
conduct telephone hearings. A state human services referee may schedule a telephone
conference hearing when the distance or time required to travel to the county agency
offices will cause a delay in the issuance of an order, or to promote efficiency, or at the
mutual request of the parties. Hearings may be conducted by telephone conferences unless
the applicant, recipient, former recipient, person, or facility contesting maltreatment
objects. Human services judges may grant a request for a hearing in person by holding the
hearing by interactive video technology or in person. The human services judge must hear
the case in person if the person asserts that either the person or a witness has a physical
or mental disability that would impair their ability to fully participate in a hearing held
by interactive video technology. The hearing shall not be held earlier than five days after
filing of the required notice with the county or state agency. The state human services
referee shall notify all interested persons of the time, date, and location of the hearing at
least five days before the date of the hearing. Interested persons may be represented
by legal counsel or other representative of their choice, including a provider of therapy
services, at the hearing and may appear personally, testify and offer evidence, and examine
and cross-examine witnesses. The applicant, recipient, former recipient, person, or facility
contesting maltreatment shall have the opportunity to examine the contents of the case
file and all documents and records to be used by the county or state agency at the hearing
at a reasonable time before the date of the hearing and during the hearing. In hearings
under subdivision 3, paragraph (a), clauses (4), (8), and (9), either party may subpoena the
private data relating to the investigation prepared by the agency under section 626.556
or 626.557 that is not otherwise accessible under section 13.04, provided the identity of
the reporter may not be disclosed.
(b) The private data obtained by subpoena in a hearing under subdivision 3,
paragraph (a), clause (4), (8), or (9), must be subject to a protective order which prohibits
its disclosure for any other purpose outside the hearing provided for in this section without
prior order of the district court. Disclosure without court order is punishable by a sentence
of not more than 90 days imprisonment or a fine of not more than $1,000, or both. These
restrictions on the use of private data do not prohibit access to the data under section 13.03,
subdivision 6 . Except for appeals under subdivision 3, paragraph (a), clauses (4), (5), (8),
and (9), upon request, the county agency shall provide reimbursement for transportation,
child care, photocopying, medical assessment, witness fee, and other necessary and
reasonable costs incurred by the applicant, recipient, or former recipient in connection with
the appeal. All evidence, except that privileged by law, commonly accepted by reasonable
people in the conduct of their affairs as having probative value with respect to the issues
shall be submitted at the hearing and such hearing shall not be "a contested case" within
the meaning of section 14.02, subdivision 3. The agency must present its evidence prior to
or at the hearing, and may not submit evidence after the hearing except by agreement of
the parties at the hearing, provided the petitioner has the opportunity to respond.
(c) In hearings under subdivision 3, paragraph (a), clauses (4), (8), and (9), involving
determinations of maltreatment or disqualification made by more than one county agency,
by a county agency and a state agency, or by more than one state agency, the hearings
may be consolidated into a single fair hearing upon the consent of all parties and the state
human services referee.
(d) For hearings under subdivision 3, paragraph (a), clause (4) or (10), involving a
vulnerable adult, the human services referee shall notify the vulnerable adult who is the
subject of the maltreatment determination and, if known, a guardian of the vulnerable adult
appointed under section 524.5-310, or a health care agent designated by the vulnerable
adult in a health care directive that is currently effective under section 145C.06 and whose
authority to make health care decisions is not suspended under section 524.5-310, of the
hearing. The notice must be sent by certified mail and inform the vulnerable adult of the
right to file a signed written statement in the proceedings. A guardian or health care agent
who prepares or files a written statement for the vulnerable adult must indicate in the
statement that the person is the vulnerable adult's guardian or health care agent and sign
the statement in that capacity. The vulnerable adult, the guardian, or the health care agent
may file a written statement with the human services referee hearing the case no later than
five business days before commencement of the hearing. The human services referee shall
include the written statement in the hearing record and consider the statement in deciding
the appeal. This subdivision does not limit, prevent, or excuse the vulnerable adult from
being called as a witness testifying at the hearing or grant the vulnerable adult, the guardian,
or health care agent a right to participate in the proceedings or appeal the human services
referee's decision in the case. The lead investigative agency must consider including the
vulnerable adult victim of maltreatment as a witness in the hearing. If the lead investigative
agency determines that participation in the hearing would endanger the well-being of the
vulnerable adult or not be in the best interests of the vulnerable adult, the lead investigative
agency shall inform the human services referee of the basis for this determination, which
must be included in the final order. If the human services referee is not reasonably able to
determine the address of the vulnerable adult, the guardian, or the health care agent, the
human services referee is not required to send a hearing notice under this subdivision.

    Sec. 4. Minnesota Statutes 2012, section 256.045, subdivision 5, is amended to read:
    Subd. 5. Orders of the commissioner of human services. A state human
services referee shall conduct a hearing on the appeal and shall recommend an order
to the commissioner of human services. The recommended order must be based on all
relevant evidence and must not be limited to a review of the propriety of the state or
county agency's action. A referee may take official notice of adjudicative facts. The
commissioner of human services may accept the recommended order of a state human
services referee and issue the order to the county agency and the applicant, recipient,
former recipient, or prepaid health plan. The commissioner on refusing to accept the
recommended order of the state human services referee, shall notify the petitioner, the
agency, or prepaid health plan of that fact and shall state reasons therefor and shall allow
each party ten days' time to submit additional written argument on the matter. After the
expiration of the ten-day period, the commissioner shall issue an order on the matter to the
petitioner, the agency, or prepaid health plan.
    A party aggrieved by an order of the commissioner may appeal under subdivision
7, or request reconsideration by the commissioner within 30 days after the date the
commissioner issues the order. The commissioner may reconsider an order upon request
of any party or on the commissioner's own motion. A request for reconsideration does
not stay implementation of the commissioner's order. The person seeking reconsideration
has the burden to demonstrate why the matter should be reconsidered. The request for
reconsideration may include legal argument and proposed additional evidence supporting
the request. If proposed additional evidence is submitted, the person must explain
why the proposed additional evidence was not provided at the time of the hearing. If
reconsideration is granted, the other participants must be sent a copy of all material
submitted in support of the request for reconsideration and must be given ten days to
respond. Upon reconsideration, the commissioner may issue an amended order or an
order affirming the original order.
    Any order of the commissioner issued under this subdivision shall be conclusive
upon the parties unless appeal is taken in the manner provided by subdivision 7. Any
order of the commissioner is binding on the parties and must be implemented by the state
agency, a county agency, or a prepaid health plan according to subdivision 3a, until the
order is reversed by the district court, or unless the commissioner or a district court orders
monthly assistance or aid or services paid or provided under subdivision 10.
    A vendor of medical care as defined in section 256B.02, subdivision 7, or a vendor
under contract with a county agency to provide social services is not a party and may not
request a hearing or seek judicial review of an order issued under this section, unless
assisting a recipient as provided in subdivision 4. A prepaid health plan is a party to an
appeal under subdivision 3a, but cannot seek judicial review of an order issued under
this section.

    Sec. 5. Minnesota Statutes 2012, section 256.0451, subdivision 5, is amended to read:
    Subd. 5. Prehearing conferences. (a) The appeals referee prior to a fair hearing
appeal may hold a prehearing conference to further the interests of justice or efficiency
and must include the person involved in the appeal. A person involved in a fair hearing
appeal or the agency may request a prehearing conference. The prehearing conference
may be conducted by telephone, in person, or in writing. The prehearing conference
may address the following:
(1) disputes regarding access to files, evidence, subpoenas, or testimony;
(2) the time required for the hearing or any need for expedited procedures or decision;
(3) identification or clarification of legal or other issues that may arise at the hearing;
(4) identification of and possible agreement to factual issues; and
(5) scheduling and any other matter which will aid in the proper and fair functioning
of the hearing.
(b) The appeals referee shall make a record or otherwise contemporaneously
summarize the prehearing conference in writing, which shall be sent to both the person
involved in the hearing, the person's attorney or authorized representative, and the agency.
A human services judge may make and issue rulings and orders while the appeal is
pending. During the pendency of the appeal these rulings and orders are not subject to
a request for reconsideration or appeal. These rulings and orders are subject to review
under subdivision 24 and section 256.045, subdivision 7.

    Sec. 6. Minnesota Statutes 2012, section 256.0451, subdivision 13, is amended to read:
    Subd. 13. Failure to appear; good cause. If a person involved in a fair hearing
appeal fails to appear at the hearing, the appeals referee may dismiss the appeal. The
person human services judge may reopen the appeal if within ten working days after the
date of the dismissal the person submits files information to in writing with the appeals
referee to show good cause for not appearing. Good cause can be shown when there is:
(1) a death or serious illness in the person's family;
(2) a personal injury or illness which reasonably prevents the person from attending
the hearing;
(3) an emergency, crisis, or unforeseen event which reasonably prevents the person
from attending the hearing;
(4) an obligation or responsibility of the person which a reasonable person, in the
conduct of one's affairs, could reasonably determine takes precedence over attending
the hearing;
(5) lack of or failure to receive timely notice of the hearing in the preferred language
of the person involved in the hearing; and
(6) excusable neglect, excusable inadvertence, excusable mistake, or other good
cause as determined by the appeals referee.

    Sec. 7. Minnesota Statutes 2012, section 256.0451, subdivision 22, is amended to read:
    Subd. 22. Decisions. A timely, written decision must be issued in every appeal.
Each decision must contain a clear ruling on the issues presented in the appeal hearing
and should contain a ruling only on questions directly presented by the appeal and the
arguments raised in the appeal.
(a) A written decision must be issued within 90 days of the date the person involved
requested the appeal unless a shorter time is required by law. An additional 30 days is
provided in those cases where the commissioner refuses to accept the recommended
decision. In appeals of maltreatment determinations or disqualifications filed pursuant
to section 256.045, subdivision 3, paragraph (a), clause (4), (9), or (10), that also give
rise to possible licensing actions, the 90-day period for issuing final decisions does not
begin until the later of the date that the licensing authority provides notice to the appeals
division that the authority has made the final determination in the matter or the date the
appellant files the last appeal in the consolidated matters.
(b) The decision must contain both findings of fact and conclusions of law, clearly
separated and identified. The findings of fact must be based on the entire record. Each
finding of fact made by the appeals referee shall be supported by a preponderance of
the evidence unless a different standard is required under the regulations of a particular
program. The "preponderance of the evidence" means, in light of the record as a whole,
the evidence leads the appeals referee to believe that the finding of fact is more likely to be
true than not true. The legal claims or arguments of a participant do not constitute either a
finding of fact or a conclusion of law, except to the extent the appeals referee adopts an
argument as a finding of fact or conclusion of law.
The decision shall contain at least the following:
(1) a listing of the date and place of the hearing and the participants at the hearing;
(2) a clear and precise statement of the issues, including the dispute under
consideration and the specific points which must be resolved in order to decide the case;
(3) a listing of the material, including exhibits, records, reports, placed into evidence
at the hearing, and upon which the hearing decision is based;
(4) the findings of fact based upon the entire hearing record. The findings of fact
must be adequate to inform the participants and any interested person in the public of the
basis of the decision. If the evidence is in conflict on an issue which must be resolved, the
findings of fact must state the reasoning used in resolving the conflict;
(5) conclusions of law that address the legal authority for the hearing and the ruling,
and which give appropriate attention to the claims of the participants to the hearing;
(6) a clear and precise statement of the decision made resolving the dispute under
consideration in the hearing; and
(7) written notice of the right to appeal to district court or to request reconsideration,
and of the actions required and the time limits for taking appropriate action to appeal to
district court or to request a reconsideration.
(c) The appeals referee shall not independently investigate facts or otherwise rely on
information not presented at the hearing. The appeals referee may not contact other agency
personnel, except as provided in subdivision 18. The appeals referee's recommended
decision must be based exclusively on the testimony and evidence presented at the hearing,
and legal arguments presented, and the appeals referee's research and knowledge of the law.
(d) The commissioner will review the recommended decision and accept or refuse to
accept the decision according to section 256.045, subdivision 5.

    Sec. 8. Minnesota Statutes 2012, section 256.0451, subdivision 24, is amended to read:
    Subd. 24. Reconsideration. (a) Reconsideration may be requested within 30 days
of the date of the commissioner's final order. If reconsideration is requested under section
256.045, subdivision 5, the other participants in the appeal shall be informed of the
request. The person seeking reconsideration has the burden to demonstrate why the matter
should be reconsidered. The request for reconsideration may include legal argument and
may include proposed additional evidence supporting the request. The other participants
shall be sent a copy of all material submitted in support of the request for reconsideration
and must be given ten days to respond.
(a) (b) When the requesting party raises a question as to the appropriateness of the
findings of fact, the commissioner shall review the entire record.
(b) (c) When the requesting party questions the appropriateness of a conclusion
of law, the commissioner shall consider the recommended decision, the decision under
reconsideration, and the material submitted in connection with the reconsideration. The
commissioner shall review the remaining record as necessary to issue a reconsidered
decision.
(c) (d) The commissioner shall issue a written decision on reconsideration in a
timely fashion. The decision must clearly inform the parties that this constitutes the final
administrative decision, advise the participants of the right to seek judicial review, and
the deadline for doing so.

    Sec. 9. REVISOR'S INSTRUCTION.
The revisor is instructed to substitute the term "human services judge" for the term
"appeals examiner," "human services referee," "referee," or any similar terms referring
to the human services referees appointed by the commissioner of human services under
Minnesota Statutes, section 256.045, subdivision 1, wherever they appear in Minnesota
Statutes, sections 256.045, 256.0451, 256.046, or elsewhere in Minnesota Statutes.

ARTICLE 2

CULTURAL AND ETHNIC COMMUNITIES
LEADERSHIP COUNCIL

    Section 1. [256.999] CULTURAL AND ETHNIC COMMUNITIES LEADERSHIP
COUNCIL.
    Subdivision 1. Establishment; purpose. There is hereby established the Cultural
and Ethnic Communities Leadership Council for the Department of Human Services. The
purpose of the council is to advise the commissioner of human services on reducing
disparities that affect racial and ethnic groups.
    Subd. 2. Members. (a) The council must consist of no fewer than 15 and no more
than 25 members appointed by the commissioner of human services, in consultation with
county, tribal, cultural, and ethnic communities; diverse program participants; and parent
representatives from these communities. The commissioner shall direct the development
of guidelines defining the membership of the council; setting out definitions; and
developing duties of the commissioner, the council, and council members regarding racial
and ethnic disparities reduction. The guidelines must be developed in consultation with:
(1) the chairs of relevant committees; and
(2) county, tribal, and cultural communities and program participants from these
communities.
(b) Members must be appointed to allow for representation of the following groups:
(1) racial and ethnic minority groups;
(2) tribal service providers;
(3) culturally and linguistically specific advocacy groups and service providers;
(4) human services program participants;
(5) public and private institutions;
(6) parents of human services program participants;
(7) members of the faith community;
(8) Department of Human Services employees;
(9) chairs of relevant legislative committees; and
(10) any other group the commissioner deems appropriate to facilitate the goals
and duties of the council.
(c) Notwithstanding section 15.059, each member of the council must be appointed to
either a one-year or two-year term. The commissioner shall appoint one member as chair.
(d) Notwithstanding section 15.059, members of the council shall receive no
compensation for their services.
    Subd. 3. Duties of commissioner. (a) The commissioner of human services or the
commissioner's designee shall:
(1) maintain the council established in this section;
(2) supervise and coordinate policies for persons from racial, ethnic, cultural,
linguistic, and tribal communities who experience disparities in access and outcomes;
(3) identify human services rules or statutes affecting persons from racial, ethnic,
cultural, linguistic, and tribal communities that may need to be revised;
(4) investigate and implement cost-effective models of service delivery such as
careful adaptation of clinically proven services that constitute one strategy for increasing the
number of culturally relevant services available to currently underserved populations; and
(5) based on recommendations of the council, review identified department
policies that maintain racial, ethnic, cultural, linguistic, and tribal disparities, and make
adjustments to ensure those disparities are not perpetuated.
(b) The commissioner of human services or the commissioner's designee shall
consult with the council and receive recommendations from the council when meeting the
requirements in this subdivision.
    Subd. 4. Duties of council. The Cultural and Ethnic Communities Leadership
Council shall:
(1) recommend to the commissioner for review identified policies in the Department
of Human Services that maintain racial, ethnic, cultural, linguistic, and tribal disparities;
(2) identify issues regarding disparities by engaging diverse populations in human
services programs;
(3) engage in mutual learning essential for achieving human services parity and
optimal wellness for service recipients;
(4) raise awareness about human services disparities to the legislature and media;
(5) provide technical assistance and consultation support to counties, private
nonprofit agencies, and other service providers to build their capacity to provide equitable
human services for persons from racial, ethnic, cultural, linguistic, and tribal communities
who experience disparities in access and outcomes;
(6) provide technical assistance to promote statewide development of culturally
and linguistically appropriate, accessible, and cost-effective human services and related
policies;
(7) provide training and outreach to facilitate access to culturally and linguistically
appropriate, accessible, and cost-effective human services to prevent disparities;
(8) facilitate culturally appropriate and culturally sensitive admissions, continued
services, discharges, and utilization review for human services agencies and institutions;
(9) form work groups to help carry out the duties of the council that include, but are
not limited to, persons who provide and receive services and representatives of advocacy
groups, and provide the work groups with clear guidelines, standardized parameters, and
tasks for the work groups to accomplish; and
(10) promote information-sharing in the human services community and statewide.
    Subd. 5. Duties of council members. The members of the council shall:
(1) attend and participate in scheduled meetings and be prepared by reviewing
meeting notes;
(2) maintain open communication channels with respective constituencies;
(3) identify and communicate issues and risks that could impact the timely
completion of tasks;
(4) collaborate on disparity reduction efforts;
(5) communicate updates of the council's work progress and status on the
Department of Human Services Web site; and
(6) participate in any activities the council or chair deem appropriate and necessary
to facilitate the goals and duties of the council.
    Subd. 6. Expiration. Notwithstanding section 15.059, the council does not expire
unless directed by the commissioner.

ARTICLE 3

INTERNAL AUDITS

    Section 1. Minnesota Statutes 2012, section 256.017, subdivision 1, is amended to read:
    Subdivision 1. Authority and purpose. The commissioner shall administer a
compliance system for the Minnesota family investment program, the food stamp or food
support program, emergency assistance, general assistance, medical assistance, general
assistance medical care, emergency general assistance, Minnesota supplemental assistance,
preadmission screening, alternative care grants, and the child care assistance program, and
all other programs administered by the commissioner or on behalf of the commissioner
under the powers and authorities named in section 256.01, subdivision 2. The purpose of
the compliance system is to permit the commissioner to supervise the administration of
public assistance programs and to enforce timely and accurate distribution of benefits,
completeness of service and efficient and effective program management and operations,
to increase uniformity and consistency in the administration and delivery of public
assistance programs throughout the state, and to reduce the possibility of sanctions and
fiscal disallowances for noncompliance with federal regulations and state statutes. The
commissioner, or the commissioner's representative, may issue administrative subpoenas
as needed in administering the compliance system.
    The commissioner shall utilize training, technical assistance, and monitoring
activities, as specified in section 256.01, subdivision 2, to encourage county agency
compliance with written policies and procedures.

ARTICLE 4

TECHNICAL CHANGES

    Section 1. Minnesota Statutes 2012, section 245.4661, subdivision 2, is amended to read:
    Subd. 2. Program design and implementation. (a) The pilot projects shall be
established to design, plan, and improve the mental health service delivery system for
adults with serious and persistent mental illness that would:
(1) provide an expanded array of services from which clients can choose services
appropriate to their needs;
(2) be based on purchasing strategies that improve access and coordinate services
without cost shifting;
(3) incorporate existing state facilities and resources into the community mental
health infrastructure through creative partnerships with local vendors; and
(4) utilize existing categorical funding streams and reimbursement sources in
combined and creative ways, except appropriations to regional treatment centers and all
funds that are attributable to the operation of state-operated services are excluded unless
appropriated specifically by the legislature for a purpose consistent with this section or
section 246.0136, subdivision 1.
(b) All projects funded by January 1, 1997, must complete the planning phase and be
operational by June 30, 1997; all projects funded by January 1, 1998, must be operational
by June 30, 1998.

    Sec. 2. Minnesota Statutes 2012, section 245.4661, subdivision 6, is amended to read:
    Subd. 6. Duties of commissioner. (a) For purposes of the pilot projects, the
commissioner shall facilitate integration of funds or other resources as needed and
requested by each project. These resources may include:
(1) residential services funds administered under Minnesota Rules, parts 9535.2000
to 9535.3000, in an amount to be determined by mutual agreement between the project's
managing entity and the commissioner of human services after an examination of the
county's historical utilization of facilities located both within and outside of the county
and licensed under Minnesota Rules, parts 9520.0500 to 9520.0690;
(2) (1) community support services funds administered under Minnesota Rules,
parts 9535.1700 to 9535.1760;
(3) (2) other mental health special project funds;
(4) (3) medical assistance, general assistance medical care, MinnesotaCare and group
residential housing if requested by the project's managing entity, and if the commissioner
determines this would be consistent with the state's overall health care reform efforts; and
(5) (4) regional treatment center resources consistent with section 246.0136,
subdivision 1 .
(b) The commissioner shall consider the following criteria in awarding start-up and
implementation grants for the pilot projects:
(1) the ability of the proposed projects to accomplish the objectives described in
subdivision 2;
(2) the size of the target population to be served; and
(3) geographical distribution.
(c) The commissioner shall review overall status of the projects initiatives at least
every two years and recommend any legislative changes needed by January 15 of each
odd-numbered year.
(d) The commissioner may waive administrative rule requirements which are
incompatible with the implementation of the pilot project.
(e) The commissioner may exempt the participating counties from fiscal sanctions
for noncompliance with requirements in laws and rules which are incompatible with the
implementation of the pilot project.
(f) The commissioner may award grants to an entity designated by a county board or
group of county boards to pay for start-up and implementation costs of the pilot project.

    Sec. 3. Minnesota Statutes 2012, section 245.482, subdivision 5, is amended to read:
    Subd. 5. Commissioner's consolidated reporting recommendations. The
commissioner's reports of February 15, 1990, required under sections 245.461, subdivision
3 , and section 245.487, subdivision 4, shall include recommended measures to provide
coordinated, interdepartmental efforts to ensure early identification and intervention for
children with, or at risk of developing, emotional disturbance, to improve the efficiency
of the mental health funding mechanisms, and to standardize and consolidate fiscal and
program reporting. The recommended measures must provide that client needs are met
in an effective and accountable manner and that state and county resources are used as
efficiently as possible. The commissioner shall consider the advice of the state advisory
council and the children's subcommittee in developing these recommendations.

    Sec. 4. Minnesota Statutes 2012, section 256.01, subdivision 2, is amended to read:
    Subd. 2. Specific powers. Subject to the provisions of section 241.021, subdivision
2 , the commissioner of human services shall carry out the specific duties in paragraphs (a)
through (cc):
    (a) Administer and supervise all forms of public assistance provided for by state law
and other welfare activities or services as are vested in the commissioner. Administration
and supervision of human services activities or services includes, but is not limited to,
assuring timely and accurate distribution of benefits, completeness of service, and quality
program management. In addition to administering and supervising human services
activities vested by law in the department, the commissioner shall have the authority to:
    (1) require county agency participation in training and technical assistance programs
to promote compliance with statutes, rules, federal laws, regulations, and policies
governing human services;
    (2) monitor, on an ongoing basis, the performance of county agencies in the
operation and administration of human services, enforce compliance with statutes, rules,
federal laws, regulations, and policies governing welfare services and promote excellence
of administration and program operation;
    (3) develop a quality control program or other monitoring program to review county
performance and accuracy of benefit determinations;
    (4) require county agencies to make an adjustment to the public assistance benefits
issued to any individual consistent with federal law and regulation and state law and rule
and to issue or recover benefits as appropriate;
    (5) delay or deny payment of all or part of the state and federal share of benefits and
administrative reimbursement according to the procedures set forth in section 256.017;
    (6) make contracts with and grants to public and private agencies and organizations,
both profit and nonprofit, and individuals, using appropriated funds; and
    (7) enter into contractual agreements with federally recognized Indian tribes with
a reservation in Minnesota to the extent necessary for the tribe to operate a federally
approved family assistance program or any other program under the supervision of the
commissioner. The commissioner shall consult with the affected county or counties in
the contractual agreement negotiations, if the county or counties wish to be included,
in order to avoid the duplication of county and tribal assistance program services. The
commissioner may establish necessary accounts for the purposes of receiving and
disbursing funds as necessary for the operation of the programs.
    (b) Inform county agencies, on a timely basis, of changes in statute, rule, federal law,
regulation, and policy necessary to county agency administration of the programs.
    (c) Administer and supervise all child welfare activities; promote the enforcement of
laws protecting disabled, dependent, neglected and delinquent children, and children born
to mothers who were not married to the children's fathers at the times of the conception
nor at the births of the children; license and supervise child-caring and child-placing
agencies and institutions; supervise the care of children in boarding and foster homes or
in private institutions; and generally perform all functions relating to the field of child
welfare now vested in the State Board of Control.
    (d) Administer and supervise all noninstitutional service to disabled persons,
including those who are visually impaired, hearing impaired, or physically impaired
or otherwise disabled. The commissioner may provide and contract for the care and
treatment of qualified indigent children in facilities other than those located and available
at state hospitals when it is not feasible to provide the service in state hospitals.
    (e) Assist and actively cooperate with other departments, agencies and institutions,
local, state, and federal, by performing services in conformity with the purposes of Laws
1939, chapter 431.
    (f) Act as the agent of and cooperate with the federal government in matters of
mutual concern relative to and in conformity with the provisions of Laws 1939, chapter
431, including the administration of any federal funds granted to the state to aid in the
performance of any functions of the commissioner as specified in Laws 1939, chapter 431,
and including the promulgation of rules making uniformly available medical care benefits
to all recipients of public assistance, at such times as the federal government increases its
participation in assistance expenditures for medical care to recipients of public assistance,
the cost thereof to be borne in the same proportion as are grants of aid to said recipients.
    (g) Establish and maintain any administrative units reasonably necessary for the
performance of administrative functions common to all divisions of the department.
    (h) Act as designated guardian of both the estate and the person of all the wards of
the state of Minnesota, whether by operation of law or by an order of court, without any
further act or proceeding whatever, except as to persons committed as developmentally
disabled. For children under the guardianship of the commissioner or a tribe in Minnesota
recognized by the Secretary of the Interior whose interests would be best served by
adoptive placement, the commissioner may contract with a licensed child-placing agency
or a Minnesota tribal social services agency to provide adoption services. A contract
with a licensed child-placing agency must be designed to supplement existing county
efforts and may not replace existing county programs or tribal social services, unless the
replacement is agreed to by the county board and the appropriate exclusive bargaining
representative, tribal governing body, or the commissioner has evidence that child
placements of the county continue to be substantially below that of other counties. Funds
encumbered and obligated under an agreement for a specific child shall remain available
until the terms of the agreement are fulfilled or the agreement is terminated.
    (i) Act as coordinating referral and informational center on requests for service for
newly arrived immigrants coming to Minnesota.
    (j) The specific enumeration of powers and duties as hereinabove set forth shall in no
way be construed to be a limitation upon the general transfer of powers herein contained.
    (k) Establish county, regional, or statewide schedules of maximum fees and charges
which may be paid by county agencies for medical, dental, surgical, hospital, nursing and
nursing home care and medicine and medical supplies under all programs of medical
care provided by the state and for congregate living care under the income maintenance
programs.
    (l) Have the authority to conduct and administer experimental projects to test methods
and procedures of administering assistance and services to recipients or potential recipients
of public welfare. To carry out such experimental projects, it is further provided that the
commissioner of human services is authorized to waive the enforcement of existing specific
statutory program requirements, rules, and standards in one or more counties. The order
establishing the waiver shall provide alternative methods and procedures of administration,
shall not be in conflict with the basic purposes, coverage, or benefits provided by law, and
in no event shall the duration of a project exceed four years. It is further provided that no
order establishing an experimental project as authorized by the provisions of this section
shall become effective until the following conditions have been met:
    (1) the secretary of health and human services of the United States has agreed, for
the same project, to waive state plan requirements relative to statewide uniformity; and
    (2) a comprehensive plan, including estimated project costs, shall be approved by
the Legislative Advisory Commission and filed with the commissioner of administration.
    (m) According to federal requirements, establish procedures to be followed by
local welfare boards in creating citizen advisory committees, including procedures for
selection of committee members.
    (n) Allocate federal fiscal disallowances or sanctions which are based on quality
control error rates for the aid to families with dependent children program formerly
codified in sections 256.72 to 256.87, medical assistance, or food stamp program in the
following manner:
    (1) one-half of the total amount of the disallowance shall be borne by the county
boards responsible for administering the programs. For the medical assistance and the
AFDC program formerly codified in sections 256.72 to 256.87, disallowances shall be
shared by each county board in the same proportion as that county's expenditures for the
sanctioned program are to the total of all counties' expenditures for the AFDC program
formerly codified in sections 256.72 to 256.87, and medical assistance programs. For the
food stamp program, sanctions shall be shared by each county board, with 50 percent of
the sanction being distributed to each county in the same proportion as that county's
administrative costs for food stamps are to the total of all food stamp administrative costs
for all counties, and 50 percent of the sanctions being distributed to each county in the
same proportion as that county's value of food stamp benefits issued are to the total of
all benefits issued for all counties. Each county shall pay its share of the disallowance
to the state of Minnesota. When a county fails to pay the amount due hereunder, the
commissioner may deduct the amount from reimbursement otherwise due the county, or
the attorney general, upon the request of the commissioner, may institute civil action
to recover the amount due; and
    (2) notwithstanding the provisions of clause (1), if the disallowance results from
knowing noncompliance by one or more counties with a specific program instruction, and
that knowing noncompliance is a matter of official county board record, the commissioner
may require payment or recover from the county or counties, in the manner prescribed in
clause (1), an amount equal to the portion of the total disallowance which resulted from the
noncompliance, and may distribute the balance of the disallowance according to clause (1).
    (o) Develop and implement special projects that maximize reimbursements and
result in the recovery of money to the state. For the purpose of recovering state money,
the commissioner may enter into contracts with third parties. Any recoveries that result
from projects or contracts entered into under this paragraph shall be deposited in the
state treasury and credited to a special account until the balance in the account reaches
$1,000,000. When the balance in the account exceeds $1,000,000, the excess shall be
transferred and credited to the general fund. All money in the account is appropriated to
the commissioner for the purposes of this paragraph.
    (p) Have the authority to make direct payments to facilities providing shelter
to women and their children according to section 256D.05, subdivision 3. Upon
the written request of a shelter facility that has been denied payments under section
256D.05, subdivision 3 , the commissioner shall review all relevant evidence and make
a determination within 30 days of the request for review regarding issuance of direct
payments to the shelter facility. Failure to act within 30 days shall be considered a
determination not to issue direct payments.
    (q) Have the authority to establish and enforce the following county reporting
requirements:
    (1) the commissioner shall establish fiscal and statistical reporting requirements
necessary to account for the expenditure of funds allocated to counties for human
services programs. When establishing financial and statistical reporting requirements, the
commissioner shall evaluate all reports, in consultation with the counties, to determine if
the reports can be simplified or the number of reports can be reduced;
    (2) the county board shall submit monthly or quarterly reports to the department
as required by the commissioner. Monthly reports are due no later than 15 working days
after the end of the month. Quarterly reports are due no later than 30 calendar days after
the end of the quarter, unless the commissioner determines that the deadline must be
shortened to 20 calendar days to avoid jeopardizing compliance with federal deadlines
or risking a loss of federal funding. Only reports that are complete, legible, and in the
required format shall be accepted by the commissioner;
    (3) if the required reports are not received by the deadlines established in clause (2),
the commissioner may delay payments and withhold funds from the county board until
the next reporting period. When the report is needed to account for the use of federal
funds and the late report results in a reduction in federal funding, the commissioner shall
withhold from the county boards with late reports an amount equal to the reduction in
federal funding until full federal funding is received;
    (4) a county board that submits reports that are late, illegible, incomplete, or not
in the required format for two out of three consecutive reporting periods is considered
noncompliant. When a county board is found to be noncompliant, the commissioner
shall notify the county board of the reason the county board is considered noncompliant
and request that the county board develop a corrective action plan stating how the
county board plans to correct the problem. The corrective action plan must be submitted
to the commissioner within 45 days after the date the county board received notice
of noncompliance;
    (5) the final deadline for fiscal reports or amendments to fiscal reports is one year
after the date the report was originally due. If the commissioner does not receive a report
by the final deadline, the county board forfeits the funding associated with the report for
that reporting period and the county board must repay any funds associated with the
report received for that reporting period;
    (6) the commissioner may not delay payments, withhold funds, or require repayment
under clause (3) or (5) if the county demonstrates that the commissioner failed to
provide appropriate forms, guidelines, and technical assistance to enable the county to
comply with the requirements. If the county board disagrees with an action taken by the
commissioner under clause (3) or (5), the county board may appeal the action according
to sections 14.57 to 14.69; and
    (7) counties subject to withholding of funds under clause (3) or forfeiture or
repayment of funds under clause (5) shall not reduce or withhold benefits or services to
clients to cover costs incurred due to actions taken by the commissioner under clause
(3) or (5).
    (r) Allocate federal fiscal disallowances or sanctions for audit exceptions when
federal fiscal disallowances or sanctions are based on a statewide random sample in direct
proportion to each county's claim for that period.
    (s) Be responsible for ensuring the detection, prevention, investigation, and
resolution of fraudulent activities or behavior by applicants, recipients, and other
participants in the human services programs administered by the department.
    (t) Require county agencies to identify overpayments, establish claims, and utilize
all available and cost-beneficial methodologies to collect and recover these overpayments
in the human services programs administered by the department.
    (u) Have the authority to administer a drug rebate program for drugs purchased
pursuant to the prescription drug program established under section 256.955 after the
beneficiary's satisfaction of any deductible established in the program. The commissioner
shall require a rebate agreement from all manufacturers of covered drugs as defined in
section 256B.0625, subdivision 13. Rebate agreements for prescription drugs delivered on
or after July 1, 2002, must include rebates for individuals covered under the prescription
drug program who are under 65 years of age. For each drug, the amount of the rebate shall
be equal to the rebate as defined for purposes of the federal rebate program in United
States Code, title 42, section 1396r-8. The manufacturers must provide full payment
within 30 days of receipt of the state invoice for the rebate within the terms and conditions
used for the federal rebate program established pursuant to section 1927 of title XIX of
the Social Security Act. The manufacturers must provide the commissioner with any
information necessary to verify the rebate determined per drug. The rebate program shall
utilize the terms and conditions used for the federal rebate program established pursuant to
section 1927 of title XIX of the Social Security Act.
    (v) (u) Have the authority to administer the federal drug rebate program for drugs
purchased under the medical assistance program as allowed by section 1927 of title XIX
of the Social Security Act and according to the terms and conditions of section 1927.
Rebates shall be collected for all drugs that have been dispensed or administered in an
outpatient setting and that are from manufacturers who have signed a rebate agreement
with the United States Department of Health and Human Services.
    (w) (v) Have the authority to administer a supplemental drug rebate program for
drugs purchased under the medical assistance program. The commissioner may enter into
supplemental rebate contracts with pharmaceutical manufacturers and may require prior
authorization for drugs that are from manufacturers that have not signed a supplemental
rebate contract. Prior authorization of drugs shall be subject to the provisions of section
256B.0625, subdivision 13 .
    (x) (w) Operate the department's communication systems account established
in Laws 1993, First Special Session chapter 1, article 1, section 2, subdivision 2, to
manage shared communication costs necessary for the operation of the programs the
commissioner supervises. A communications account may also be established for each
regional treatment center which operates communications systems. Each account must be
used to manage shared communication costs necessary for the operations of the programs
the commissioner supervises. The commissioner may distribute the costs of operating and
maintaining communication systems to participants in a manner that reflects actual usage.
Costs may include acquisition, licensing, insurance, maintenance, repair, staff time and
other costs as determined by the commissioner. Nonprofit organizations and state, county,
and local government agencies involved in the operation of programs the commissioner
supervises may participate in the use of the department's communications technology and
share in the cost of operation. The commissioner may accept on behalf of the state any
gift, bequest, devise or personal property of any kind, or money tendered to the state for
any lawful purpose pertaining to the communication activities of the department. Any
money received for this purpose must be deposited in the department's communication
systems accounts. Money collected by the commissioner for the use of communication
systems must be deposited in the state communication systems account and is appropriated
to the commissioner for purposes of this section.
    (y) (x) Receive any federal matching money that is made available through the
medical assistance program for the consumer satisfaction survey. Any federal money
received for the survey is appropriated to the commissioner for this purpose. The
commissioner may expend the federal money received for the consumer satisfaction
survey in either year of the biennium.
    (z) (y) Designate community information and referral call centers and incorporate
cost reimbursement claims from the designated community information and referral
call centers into the federal cost reimbursement claiming processes of the department
according to federal law, rule, and regulations. Existing information and referral centers
provided by Greater Twin Cities United Way or existing call centers for which Greater
Twin Cities United Way has legal authority to represent, shall be included in these
designations upon review by the commissioner and assurance that these services are
accredited and in compliance with national standards. Any reimbursement is appropriated
to the commissioner and all designated information and referral centers shall receive
payments according to normal department schedules established by the commissioner
upon final approval of allocation methodologies from the United States Department of
Health and Human Services Division of Cost Allocation or other appropriate authorities.
    (aa) (z) Develop recommended standards for foster care homes that address the
components of specialized therapeutic services to be provided by foster care homes with
those services.
    (bb) (aa) Authorize the method of payment to or from the department as part of the
human services programs administered by the department. This authorization includes the
receipt or disbursement of funds held by the department in a fiduciary capacity as part of
the human services programs administered by the department.
    (cc) Have the authority to administer a drug rebate program for drugs purchased for
persons eligible for general assistance medical care under section 256D.03, subdivision 3.
For manufacturers that agree to participate in the general assistance medical care rebate
program, the commissioner shall enter into a rebate agreement for covered drugs as
defined in section 256B.0625, subdivisions 13 and 13d. For each drug, the amount of the
rebate shall be equal to the rebate as defined for purposes of the federal rebate program in
United States Code, title 42, section 1396r-8. The manufacturers must provide payment
within the terms and conditions used for the federal rebate program established under
section 1927 of title XIX of the Social Security Act. The rebate program shall utilize
the terms and conditions used for the federal rebate program established under section
1927 of title XIX of the Social Security Act.
    Effective January 1, 2006, drug coverage under general assistance medical care shall
be limited to those prescription drugs that:
    (1) are covered under the medical assistance program as described in section
256B.0625, subdivisions 13 and 13d; and
    (2) are provided by manufacturers that have fully executed general assistance
medical care rebate agreements with the commissioner and comply with such agreements.
Prescription drug coverage under general assistance medical care shall conform to
coverage under the medical assistance program according to section 256B.0625,
subdivisions 13 to 13g .
    The rebate revenues collected under the drug rebate program are deposited in the
general fund.

    Sec. 5. Minnesota Statutes 2012, section 256B.055, subdivision 12, is amended to read:
    Subd. 12. Disabled children. (a) A person is eligible for medical assistance if the
person is under age 19 and qualifies as a disabled individual under United States Code,
title 42, section 1382c(a), and would be eligible for medical assistance under the state
plan if residing in a medical institution, and the child requires a level of care provided in
a hospital, nursing facility, or intermediate care facility for persons with developmental
disabilities, for whom home care is appropriate, provided that the cost to medical
assistance under this section is not more than the amount that medical assistance would pay
for if the child resides in an institution. After the child is determined to be eligible under
this section, the commissioner shall review the child's disability under United States Code,
title 42, section 1382c(a) and level of care defined under this section no more often than
annually and may elect, based on the recommendation of health care professionals under
contract with the state medical review team, to extend the review of disability and level of
care up to a maximum of four years. The commissioner's decision on the frequency of
continuing review of disability and level of care is not subject to administrative appeal
under section 256.045. The county agency shall send a notice of disability review to the
enrollee six months prior to the date the recertification of disability is due. Nothing in this
subdivision shall be construed as affecting other redeterminations of medical assistance
eligibility under this chapter and annual cost-effective reviews under this section.
    (b) For purposes of this subdivision, "hospital" means an institution as defined
in section 144.696, subdivision 3, 144.55, subdivision 3, or Minnesota Rules, part
4640.3600, and licensed pursuant to sections 144.50 to 144.58. For purposes of this
subdivision, a child requires a level of care provided in a hospital if the child is determined
by the commissioner to need an extensive array of health services, including mental health
services, for an undetermined period of time, whose health condition requires frequent
monitoring and treatment by a health care professional or by a person supervised by a
health care professional, who would reside in a hospital or require frequent hospitalization
if these services were not provided, and the daily care needs are more complex than
a nursing facility level of care.
    A child with serious emotional disturbance requires a level of care provided in a
hospital if the commissioner determines that the individual requires 24-hour supervision
because the person exhibits recurrent or frequent suicidal or homicidal ideation or
behavior, recurrent or frequent psychosomatic disorders or somatopsychic disorders that
may become life threatening, recurrent or frequent severe socially unacceptable behavior
associated with psychiatric disorder, ongoing and chronic psychosis or severe, ongoing
and chronic developmental problems requiring continuous skilled observation, or severe
disabling symptoms for which office-centered outpatient treatment is not adequate, and
which overall severely impact the individual's ability to function.
    (c) For purposes of this subdivision, "nursing facility" means a facility which
provides nursing care as defined in section 144A.01, subdivision 5, licensed pursuant to
sections 144A.02 to 144A.10, which is appropriate if a person is in active restorative
treatment; is in need of special treatments provided or supervised by a licensed nurse; or
has unpredictable episodes of active disease processes requiring immediate judgment
by a licensed nurse. For purposes of this subdivision, a child requires the level of care
provided in a nursing facility if the child is determined by the commissioner to meet
the requirements of the preadmission screening assessment document under section
256B.0911 , adjusted to address age-appropriate standards for children age 18 and under.
    (d) For purposes of this subdivision, "intermediate care facility for persons with
developmental disabilities" or "ICF/MR" means a program licensed to provide services to
persons with developmental disabilities under section 252.28, and chapter 245A, and a
physical plant licensed as a supervised living facility under chapter 144, which together
are certified by the Minnesota Department of Health as meeting the standards in Code of
Federal Regulations, title 42, part 483, for an intermediate care facility which provides
services for persons with developmental disabilities who require 24-hour supervision
and active treatment for medical, behavioral, or habilitation needs. For purposes of this
subdivision, a child requires a level of care provided in an ICF/MR if the commissioner
finds that the child has a developmental disability in accordance with section 256B.092, is
in need of a 24-hour plan of care and active treatment similar to persons with developmental
disabilities, and there is a reasonable indication that the child will need ICF/MR services.
    (e) For purposes of this subdivision, a person requires the level of care provided
in a nursing facility if the person requires 24-hour monitoring or supervision and a plan
of mental health treatment because of specific symptoms or functional impairments
associated with a serious mental illness or disorder diagnosis, which meet severity criteria
for mental health established by the commissioner and published in March 1997 as
the Minnesota Mental Health Level of Care for Children and Adolescents with Severe
Emotional Disorders.
    (f) The determination of the level of care needed by the child shall be made by
the commissioner based on information supplied to the commissioner by the parent or
guardian, the child's physician or physicians, and other professionals as requested by the
commissioner. The commissioner shall establish a screening team to conduct the level of
care determinations according to this subdivision.
    (g) If a child meets the conditions in paragraph (b), (c), (d), or (e), the commissioner
must assess the case to determine whether:
    (1) the child qualifies as a disabled individual under United States Code, title 42,
section 1382c(a), and would be eligible for medical assistance if residing in a medical
institution; and
    (2) the cost of medical assistance services for the child, if eligible under this
subdivision, would not be more than the cost to medical assistance if the child resides in a
medical institution to be determined as follows:
    (i) for a child who requires a level of care provided in an ICF/MR, the cost of
care for the child in an institution shall be determined using the average payment rate
established for the regional treatment centers that are certified as ICF's/MR;
    (ii) for a child who requires a level of care provided in an inpatient hospital setting
according to paragraph (b), cost-effectiveness shall be determined according to Minnesota
Rules, part 9505.3520, items F and G; and
    (iii) for a child who requires a level of care provided in a nursing facility according
to paragraph (c) or (e), cost-effectiveness shall be determined according to Minnesota
Rules, part 9505.3040, except that the nursing facility average rate shall be adjusted to
reflect rates which would be paid for children under age 16. The commissioner may
authorize an amount up to the amount medical assistance would pay for a child referred to
the commissioner by the preadmission screening team under section 256B.0911.
    (h) Children eligible for medical assistance services under section 256B.055,
subdivision 12 , as of June 30, 1995, must be screened according to the criteria in this
subdivision prior to January 1, 1996. Children found to be ineligible may not be removed
from the program until January 1, 1996.

    Sec. 6. Minnesota Statutes 2012, section 256B.056, subdivision 11, is amended to read:
    Subd. 11. Treatment of annuities. (a) Any person requesting medical assistance
payment of long-term care services shall provide a complete description of any interest
either the person or the person's spouse has in annuities on a form designated by the
department. The form shall include a statement that the state becomes a preferred
remainder beneficiary of annuities or similar financial instruments by virtue of the receipt
of medical assistance payment of long-term care services. The person and the person's
spouse shall furnish the agency responsible for determining eligibility with complete
current copies of their annuities and related documents and complete the form designating
the state as the preferred remainder beneficiary for each annuity in which the person or the
person's spouse has an interest.
    (b) The department shall provide notice to the issuer of the department's right under
this section as a preferred remainder beneficiary under the annuity or similar financial
instrument for medical assistance furnished to the person or the person's spouse, and
provide notice of the issuer's responsibilities as provided in paragraph (c).
    (c) An issuer of an annuity or similar financial instrument who receives notice of
the state's right to be named a preferred remainder beneficiary as described in paragraph
(b) shall provide confirmation to the requesting agency that the state has been made a
preferred remainder beneficiary. The issuer shall also notify the county agency when a
change in the amount of income or principal being withdrawn from the annuity or other
similar financial instrument or a change in the state's preferred remainder beneficiary
designation under the annuity or other similar financial instrument occurs. The county
agency shall provide the issuer with the name, address, and telephone number of a unit
within the department that the issuer can contact to comply with this paragraph.
    (d) "Preferred remainder beneficiary" for purposes of this subdivision and sections
256B.0594 and 256B.0595 means the state is a remainder beneficiary in the first position in
an amount equal to the amount of medical assistance paid on behalf of the institutionalized
person, or is a remainder beneficiary in the second position if the institutionalized person
designates and is survived by a remainder beneficiary who is (1) a spouse who does not
reside in a medical institution, (2) a minor child, or (3) a child of any age who is blind or
permanently and totally disabled as defined in the Supplemental Security Income program.
Notwithstanding this paragraph, the state is the remainder beneficiary in the first position
if the spouse or child disposes of the remainder for less than fair market value.
    (e) For purposes of this subdivision, "institutionalized person" and "long-term care
services" have the meanings given in section 256B.0595, subdivision 1, paragraph (h) (g).
    (f) For purposes of this subdivision, "medical institution" means a skilled
nursing facility, intermediate care facility, intermediate care facility for persons with
developmental disabilities, nursing facility, or inpatient hospital.

    Sec. 7. Minnesota Statutes 2012, section 256B.057, subdivision 3b, is amended to read:
    Subd. 3b. Qualifying individuals. Beginning July 1, 1998, contingent upon federal
funding, a person who would otherwise be eligible as a qualified Medicare beneficiary
under subdivision 3, except that the person's income is in excess of the limit, is eligible as
a qualifying individual according to the following criteria:.
(1) If the person's income is greater than 120 percent, but less than 135 percent of
the official federal poverty guidelines for the applicable family size, the person is eligible
for medical assistance reimbursement of Medicare Part B premiums; or.
(2) if the person's income is equal to or greater than 135 percent but less than 175
percent of the official federal poverty guidelines for the applicable family size, the person
is eligible for medical assistance reimbursement of that portion of the Medicare Part B
premium attributable to an increase in Part B expenditures which resulted from the shift of
home care services from Medicare Part A to Medicare Part B under Public Law 105-33,
section 4732, the Balanced Budget Act of 1997.
The commissioner shall limit enrollment of qualifying individuals under this
subdivision according to the requirements of Public Law 105-33, section 4732.

    Sec. 8. Minnesota Statutes 2012, section 256B.0595, subdivision 1, is amended to read:
    Subdivision 1. Prohibited transfers. (a) For transfers of assets made on or before
August 10, 1993, if an institutionalized person or the institutionalized person's spouse has
given away, sold, or disposed of, for less than fair market value, any asset or interest
therein, except assets other than the homestead that are excluded under the supplemental
security program, within 30 months before or any time after the date of institutionalization
if the person has been determined eligible for medical assistance, or within 30 months
before or any time after the date of the first approved application for medical assistance
if the person has not yet been determined eligible for medical assistance, the person is
ineligible for long-term care services for the period of time determined under subdivision 2.
    (b) (a) Effective for transfers made after August 10, 1993, an institutionalized
person, an institutionalized person's spouse, or any person, court, or administrative body
with legal authority to act in place of, on behalf of, at the direction of, or upon the request
of the institutionalized person or institutionalized person's spouse, may not give away,
sell, or dispose of, for less than fair market value, any asset or interest therein, except
assets other than the homestead that are excluded under the Supplemental Security Income
program, for the purpose of establishing or maintaining medical assistance eligibility. This
applies to all transfers, including those made by a community spouse after the month in
which the institutionalized spouse is determined eligible for medical assistance. For
purposes of determining eligibility for long-term care services, any transfer of such
assets within 36 months before or any time after an institutionalized person requests
medical assistance payment of long-term care services, or 36 months before or any time
after a medical assistance recipient becomes an institutionalized person, for less than
fair market value may be considered. Any such transfer is presumed to have been made
for the purpose of establishing or maintaining medical assistance eligibility and the
institutionalized person is ineligible for long-term care services for the period of time
determined under subdivision 2, unless the institutionalized person furnishes convincing
evidence to establish that the transaction was exclusively for another purpose, or unless
the transfer is permitted under subdivision 3 or 4. In the case of payments from a trust or
portions of a trust that are considered transfers of assets under federal law, or in the case of
any other disposal of assets made on or after February 8, 2006, any transfers made within
60 months before or any time after an institutionalized person requests medical assistance
payment of long-term care services and within 60 months before or any time after a
medical assistance recipient becomes an institutionalized person, may be considered.
    (c) (b) This section applies to transfers, for less than fair market value, of income
or assets, including assets that are considered income in the month received, such as
inheritances, court settlements, and retroactive benefit payments or income to which the
institutionalized person or the institutionalized person's spouse is entitled but does not
receive due to action by the institutionalized person, the institutionalized person's spouse,
or any person, court, or administrative body with legal authority to act in place of, on
behalf of, at the direction of, or upon the request of the institutionalized person or the
institutionalized person's spouse.
    (d) (c) This section applies to payments for care or personal services provided by a
relative, unless the compensation was stipulated in a notarized, written agreement which
was in existence when the service was performed, the care or services directly benefited
the person, and the payments made represented reasonable compensation for the care
or services provided. A notarized written agreement is not required if payment for the
services was made within 60 days after the service was provided.
    (e) (d) This section applies to the portion of any asset or interest that an
institutionalized person, an institutionalized person's spouse, or any person, court, or
administrative body with legal authority to act in place of, on behalf of, at the direction of,
or upon the request of the institutionalized person or the institutionalized person's spouse,
transfers to any annuity that exceeds the value of the benefit likely to be returned to the
institutionalized person or institutionalized person's spouse while alive, based on estimated
life expectancy as determined according to the current actuarial tables published by the
Office of the Chief Actuary of the Social Security Administration. The commissioner may
adopt rules reducing life expectancies based on the need for long-term care. This section
applies to an annuity purchased on or after March 1, 2002, that:
    (1) is not purchased from an insurance company or financial institution that is
subject to licensing or regulation by the Minnesota Department of Commerce or a similar
regulatory agency of another state;
    (2) does not pay out principal and interest in equal monthly installments; or
    (3) does not begin payment at the earliest possible date after annuitization.
    (f) (e) Effective for transactions, including the purchase of an annuity, occurring
on or after February 8, 2006, by or on behalf of an institutionalized person who has
applied for or is receiving long-term care services or the institutionalized person's spouse
shall be treated as the disposal of an asset for less than fair market value unless the
department is named a preferred remainder beneficiary as described in section 256B.056,
subdivision 11 . Any subsequent change to the designation of the department as a preferred
remainder beneficiary shall result in the annuity being treated as a disposal of assets for
less than fair market value. The amount of such transfer shall be the maximum amount
the institutionalized person or the institutionalized person's spouse could receive from
the annuity or similar financial instrument. Any change in the amount of the income or
principal being withdrawn from the annuity or other similar financial instrument at the
time of the most recent disclosure shall be deemed to be a transfer of assets for less than
fair market value unless the institutionalized person or the institutionalized person's spouse
demonstrates that the transaction was for fair market value. In the event a distribution
of income or principal has been improperly distributed or disbursed from an annuity or
other retirement planning instrument of an institutionalized person or the institutionalized
person's spouse, a cause of action exists against the individual receiving the improper
distribution for the cost of medical assistance services provided or the amount of the
improper distribution, whichever is less.
    (g) (f) Effective for transactions, including the purchase of an annuity, occurring on
or after February 8, 2006, by or on behalf of an institutionalized person applying for or
receiving long-term care services shall be treated as a disposal of assets for less than fair
market value unless it is:
    (i) an annuity described in subsection (b) or (q) of section 408 of the Internal
Revenue Code of 1986; or
    (ii) purchased with proceeds from:
    (A) an account or trust described in subsection (a), (c), or (p) of section 408 of the
Internal Revenue Code;
    (B) a simplified employee pension within the meaning of section 408(k) of the
Internal Revenue Code; or
    (C) a Roth IRA described in section 408A of the Internal Revenue Code; or
    (iii) an annuity that is irrevocable and nonassignable; is actuarially sound as
determined in accordance with actuarial publications of the Office of the Chief Actuary of
the Social Security Administration; and provides for payments in equal amounts during
the term of the annuity, with no deferral and no balloon payments made.
    (h) (g) For purposes of this section, long-term care services include services in a
nursing facility, services that are eligible for payment according to section 256B.0625,
subdivision 2 , because they are provided in a swing bed, intermediate care facility
for persons with developmental disabilities, and home and community-based services
provided pursuant to sections 256B.0915, 256B.092, and 256B.49. For purposes of this
subdivision and subdivisions 2, 3, and 4, "institutionalized person" includes a person who
is an inpatient in a nursing facility or in a swing bed, or intermediate care facility for
persons with developmental disabilities or who is receiving home and community-based
services under sections 256B.0915, 256B.092, and 256B.49.
    (i) (h) This section applies to funds used to purchase a promissory note, loan, or
mortgage unless the note, loan, or mortgage:
    (1) has a repayment term that is actuarially sound;
    (2) provides for payments to be made in equal amounts during the term of the loan,
with no deferral and no balloon payments made; and
    (3) prohibits the cancellation of the balance upon the death of the lender.
    In the case of a promissory note, loan, or mortgage that does not meet an exception
in clauses (1) to (3), the value of such note, loan, or mortgage shall be the outstanding
balance due as of the date of the institutionalized person's request for medical assistance
payment of long-term care services.
    (j) (i) This section applies to the purchase of a life estate interest in another person's
home unless the purchaser resides in the home for a period of at least one year after the
date of purchase.
(k) (j) This section applies to transfers into a pooled trust that qualifies under United
States Code, title 42, section 1396p(d)(4)(C), by:
(1) a person age 65 or older or the person's spouse; or
(2) any person, court, or administrative body with legal authority to act in place
of, on behalf of, at the direction of, or upon the request of a person age 65 or older or
the person's spouse.

    Sec. 9. Minnesota Statutes 2012, section 256B.0595, subdivision 2, is amended to read:
    Subd. 2. Period of ineligibility for long-term care services. (a) For any
uncompensated transfer occurring on or before August 10, 1993, the number of months
of ineligibility for long-term care services shall be the lesser of 30 months, or the
uncompensated transfer amount divided by the average medical assistance rate for nursing
facility services in the state in effect on the date of application. The amount used to
calculate the average medical assistance payment rate shall be adjusted each July 1 to
reflect payment rates for the previous calendar year. The period of ineligibility begins with
the month in which the assets were transferred. If the transfer was not reported to the local
agency at the time of application, and the applicant received long-term care services during
what would have been the period of ineligibility if the transfer had been reported, a cause of
action exists against the transferee for the cost of long-term care services provided during
the period of ineligibility, or for the uncompensated amount of the transfer, whichever is
less. The uncompensated transfer amount is the fair market value of the asset at the time it
was given away, sold, or disposed of, less the amount of compensation received.
    (b) (a) For uncompensated transfers made after August 10, 1993, the number of
months of ineligibility for long-term care services shall be the total uncompensated value
of the resources transferred divided by the average medical assistance rate for nursing
facility services in the state in effect on the date of application. The amount used to
calculate the average medical assistance payment rate shall be adjusted each July 1 to
reflect payment rates for the previous calendar year. The period of ineligibility begins with
the first day of the month after the month in which the assets were transferred except that
if one or more uncompensated transfers are made during a period of ineligibility, the
total assets transferred during the ineligibility period shall be combined and a penalty
period calculated to begin on the first day of the month after the month in which the first
uncompensated transfer was made. If the transfer was reported to the local agency after
the date that advance notice of a period of ineligibility that affects the next month could
be provided to the recipient and the recipient received medical assistance services or the
transfer was not reported to the local agency, and the applicant or recipient received
medical assistance services during what would have been the period of ineligibility if
the transfer had been reported, a cause of action exists against the transferee for that
portion of long-term care services provided during the period of ineligibility, or for the
uncompensated amount of the transfer, whichever is less. The uncompensated transfer
amount is the fair market value of the asset at the time it was given away, sold, or disposed
of, less the amount of compensation received. Effective for transfers made on or after
March 1, 1996, involving persons who apply for medical assistance on or after April 13,
1996, no cause of action exists for a transfer unless:
    (1) the transferee knew or should have known that the transfer was being made by a
person who was a resident of a long-term care facility or was receiving that level of care in
the community at the time of the transfer;
    (2) the transferee knew or should have known that the transfer was being made to
assist the person to qualify for or retain medical assistance eligibility; or
    (3) the transferee actively solicited the transfer with intent to assist the person to
qualify for or retain eligibility for medical assistance.
    (c) (b) For uncompensated transfers made on or after February 8, 2006, the period
of ineligibility:
    (1) for uncompensated transfers by or on behalf of individuals receiving medical
assistance payment of long-term care services, begins the first day of the month following
advance notice of the period of ineligibility, but no later than the first day of the month that
follows three full calendar months from the date of the report or discovery of the transfer; or
    (2) for uncompensated transfers by individuals requesting medical assistance
payment of long-term care services, begins the date on which the individual is eligible
for medical assistance under the Medicaid state plan and would otherwise be receiving
long-term care services based on an approved application for such care but for the period
of ineligibility resulting from the uncompensated transfer; and
    (3) cannot begin during any other period of ineligibility.
    (d) (c) If a calculation of a period of ineligibility results in a partial month, payments
for long-term care services shall be reduced in an amount equal to the fraction.
    (e) (d) In the case of multiple fractional transfers of assets in more than one month
for less than fair market value on or after February 8, 2006, the period of ineligibility is
calculated by treating the total, cumulative, uncompensated value of all assets transferred
during all months on or after February 8, 2006, as one transfer.
    (f) (e) A period of ineligibility established under paragraph (c) (b) may be eliminated
if all of the assets transferred for less than fair market value used to calculate the period of
ineligibility, or cash equal to the value of the assets at the time of the transfer, are returned.
A period of ineligibility must not be adjusted if less than the full amount of the transferred
assets or the full cash value of the transferred assets are returned.

    Sec. 10. Minnesota Statutes 2012, section 256B.0595, subdivision 4, is amended to read:
    Subd. 4. Other exceptions to transfer prohibition. (a) An institutionalized person,
as defined in subdivision 1, paragraph (h) (g), who has made, or whose spouse has made
a transfer prohibited by subdivision 1, is not ineligible for long-term care services if
one of the following conditions applies:
    (1) the assets were transferred to the individual's spouse or to another for the sole
benefit of the spouse; or
    (2) the institutionalized spouse, prior to being institutionalized, transferred assets
to a spouse, provided that the spouse to whom the assets were transferred does not then
transfer those assets to another person for less than fair market value. (At the time when
one spouse is institutionalized, assets must be allocated between the spouses as provided
under section 256B.059); or
    (3) the assets were transferred to the individual's child who is blind or permanently
and totally disabled as determined in the supplemental security income program; or
    (4) a satisfactory showing is made that the individual intended to dispose of the
assets either at fair market value or for other valuable consideration; or
    (5) the local agency determines that denial of eligibility for long-term care
services would work an undue hardship and grants a waiver of a period of ineligibility
resulting from a transfer for less than fair market value based on an imminent threat to
the individual's health and well-being. Imminent threat to the individual's health and
well-being means that imposing a period of ineligibility would endanger the individual's
health or life or cause serious deprivation of food, clothing, or shelter. Whenever an
applicant or recipient is denied eligibility because of a transfer for less than fair market
value, the local agency shall notify the applicant or recipient that the applicant or recipient
may request a waiver of the period of ineligibility if the denial of eligibility will cause
undue hardship. With the written consent of the individual or the personal representative
of the individual, a long-term care facility in which an individual is residing may file an
undue hardship waiver request, on behalf of the individual who is denied eligibility for
long-term care services on or after July 1, 2006, due to a period of ineligibility resulting
from a transfer on or after February 8, 2006.
(b) Subject to paragraph (c), when evaluating a hardship waiver, the local agency
shall take into account whether the individual was the victim of financial exploitation,
whether the individual has made reasonable efforts to recover the transferred property or
resource, whether the individual has taken any action to prevent the designation of the
department as a remainder beneficiary on an annuity as described in section 256B.056,
subdivision 11, and other factors relevant to a determination of hardship.
(c) In the case of an imminent threat to the individual's health and well-being, the
local agency shall approve a hardship waiver of the portion of an individual's period of
ineligibility resulting from a transfer of assets for less than fair market value by or to
a person:
(1) convicted of financial exploitation, fraud, or theft upon the individual for the
transfer of assets; or
(2) against whom a report of financial exploitation upon the individual has been
substantiated. For purposes of this paragraph, "financial exploitation" and "substantiated"
have the meanings given in section 626.5572.
(d) The local agency shall make a determination within 30 days of the receipt of all
necessary information needed to make such a determination. If the local agency does not
approve a hardship waiver, the local agency shall issue a written notice to the individual
stating the reasons for the denial and the process for appealing the local agency's decision.
When a waiver is granted, a cause of action exists against the person to whom the assets
were transferred for that portion of long-term care services provided within:
    (1) 30 months of a transfer made on or before August 10, 1993;
    (2) 60 months of a transfer if the assets were transferred after August 30, 1993, to a
trust or portion of a trust that is considered a transfer of assets under federal law;
    (3) 36 months of a transfer if transferred in any other manner after August 10, 1993,
but prior to February 8, 2006; or
    (4) 60 months of any transfer made on or after February 8, 2006,
or the amount of the uncompensated transfer, whichever is less, together with the costs
incurred due to the action; or
    (5) for transfers occurring after August 10, 1993, the assets were transferred by the
person or person's spouse: (i) into a trust established for the sole benefit of a son or daughter
of any age who is blind or disabled as defined by the Supplemental Security Income
program; or (ii) into a trust established for the sole benefit of an individual who is under
65 years of age who is disabled as defined by the Supplemental Security Income program.
    "For the sole benefit of" has the meaning found in section 256B.059, subdivision 1.

    Sec. 11. Minnesota Statutes 2012, section 256B.0595, subdivision 9, is amended to read:
    Subd. 9. Filing cause of action; limitation. (a) The county of financial responsibility
under chapter 256G may bring a cause of action under any or all of the following:
    (1) subdivision 1, paragraph (f) (e);
    (2) subdivision 2, paragraphs paragraph (a) and (b);
    (3) subdivision 3, paragraph (b);
    (4) subdivision 4, paragraph (d); and
    (5) subdivision 8
on behalf of the claimant who must be the commissioner.
    (b) Notwithstanding any other law to the contrary, a cause of action under subdivision
2, paragraph (a) or (b), or 8, must be commenced within six years of the date the local
agency determines that a transfer was made for less than fair market value. Notwithstanding
any other law to the contrary, a cause of action under subdivision 3, paragraph (b), or 4,
clause (5), must be commenced within six years of the date of approval of a waiver of the
penalty period for a transfer for less than fair market value based on undue hardship.

    Sec. 12. Minnesota Statutes 2012, section 256D.02, subdivision 12a, is amended to read:
    Subd. 12a. Resident. (a) For purposes of eligibility for general assistance and
general assistance medical care, a person must be a resident of this state.
(b) A "resident" is a person living in the state for at least 30 days with the intention of
making the person's home here and not for any temporary purpose. Time spent in a shelter
for battered women shall count toward satisfying the 30-day residency requirement. All
applicants for these programs are required to demonstrate the requisite intent and can do
so in any of the following ways:
(1) by showing that the applicant maintains a residence at a verified address, other
than a place of public accommodation. An applicant may verify a residence address by
presenting a valid state driver's license, a state identification card, a voter registration card,
a rent receipt, a statement by the landlord, apartment manager, or homeowner verifying
that the individual is residing at the address, or other form of verification approved by
the commissioner; or
(2) by verifying residence according to Minnesota Rules, part 9500.1219, subpart
3, item C.
(c) For general assistance medical care, a county agency shall waive the 30-day
residency requirement in cases of medical emergencies. For general assistance, a county
shall waive the 30-day residency requirement where unusual hardship would result from
denial of general assistance. For purposes of this subdivision, "unusual hardship" means
the applicant is without shelter or is without available resources for food.
The county agency must report to the commissioner within 30 days on any waiver
granted under this section. The county shall not deny an application solely because the
applicant does not meet at least one of the criteria in this subdivision, but shall continue to
process the application and leave the application pending until the residency requirement
is met or until eligibility or ineligibility is established.
(d) For purposes of paragraph (c), the following definitions apply (1) "metropolitan
statistical area" is as defined by the United States Census Bureau; (2) "shelter" includes
any shelter that is located within the metropolitan statistical area containing the county
and for which the applicant is eligible, provided the applicant does not have to travel more
than 20 miles to reach the shelter and has access to transportation to the shelter. Clause (2)
does not apply to counties in the Minneapolis-St. Paul metropolitan statistical area.
(e) Migrant workers as defined in section 256J.08 and, until March 31, 1998, their
immediate families are exempt from the residency requirements of this section, provided
the migrant worker provides verification that the migrant family worked in this state
within the last 12 months and earned at least $1,000 in gross wages during the time the
migrant worker worked in this state.
(f) For purposes of eligibility for emergency general assistance, the 30-day residency
requirement under this section shall not be waived.
(g) If any provision of this subdivision is enjoined from implementation or found
unconstitutional by any court of competent jurisdiction, the remaining provisions shall
remain valid and shall be given full effect.

    Sec. 13. Minnesota Statutes 2012, section 256J.30, subdivision 8, is amended to read:
    Subd. 8. Late MFIP household report forms. (a) Paragraphs (b) to (e) apply to the
reporting requirements in subdivision 7.
(b) When the county agency receives an incomplete MFIP household report form,
the county agency must immediately return the incomplete form and clearly state what the
caregiver must do for the form to be complete.
(c) The automated eligibility system must send a notice of proposed termination
of assistance to the assistance unit if a complete MFIP household report form is not
received by a county agency. The automated notice must be mailed to the caregiver by
approximately the 16th of the month. When a caregiver submits an incomplete form on
or after the date a notice of proposed termination has been sent, the termination is valid
unless the caregiver submits a complete form before the end of the month.
(d) An assistance unit required to submit an MFIP household report form is considered
to have continued its application for assistance if a complete MFIP household report
form is received within a calendar month after the month in which the form was due and
assistance shall be paid for the period beginning with the first day of that calendar month.
(e) A county agency must allow good cause exemptions from the reporting
requirements under subdivisions subdivision 5 and 6 when any of the following factors
cause a caregiver to fail to provide the county agency with a completed MFIP household
report form before the end of the month in which the form is due:
(1) an employer delays completion of employment verification;
(2) a county agency does not help a caregiver complete the MFIP household report
form when the caregiver asks for help;
(3) a caregiver does not receive an MFIP household report form due to mistake on
the part of the department or the county agency or due to a reported change in address;
(4) a caregiver is ill, or physically or mentally incapacitated; or
(5) some other circumstance occurs that a caregiver could not avoid with reasonable
care which prevents the caregiver from providing a completed MFIP household report
form before the end of the month in which the form is due.

    Sec. 14. Minnesota Statutes 2012, section 256J.30, subdivision 9, is amended to read:
    Subd. 9. Changes that must be reported. A caregiver must report the changes or
anticipated changes specified in clauses (1) to (16) within ten days of the date they occur,
at the time of the periodic recertification of eligibility under section 256J.32, subdivision
6 , or within eight calendar days of a reporting period as in subdivision 5 or 6, whichever
occurs first. A caregiver must report other changes at the time of the periodic recertification
of eligibility under section 256J.32, subdivision 6, or at the end of a reporting period under
subdivision 5 or 6, as applicable. A caregiver must make these reports in writing to the
county agency. When a county agency could have reduced or terminated assistance for
one or more payment months if a delay in reporting a change specified under clauses (1)
to (15) had not occurred, the county agency must determine whether a timely notice
under section 256J.31, subdivision 4, could have been issued on the day that the change
occurred. When a timely notice could have been issued, each month's overpayment
subsequent to that notice must be considered a client error overpayment under section
256J.38 . Calculation of overpayments for late reporting under clause (16) is specified in
section 256J.09, subdivision 9. Changes in circumstances which must be reported within
ten days must also be reported on the MFIP household report form for the reporting period
in which those changes occurred. Within ten days, a caregiver must report:
(1) a change in initial employment;
(2) a change in initial receipt of unearned income;
(3) a recurring change in unearned income;
(4) a nonrecurring change of unearned income that exceeds $30;
(5) the receipt of a lump sum;
(6) an increase in assets that may cause the assistance unit to exceed asset limits;
(7) a change in the physical or mental status of an incapacitated member of the
assistance unit if the physical or mental status is the basis for reducing the hourly
participation requirements under section 256J.55, subdivision 1, or the type of activities
included in an employment plan under section 256J.521, subdivision 2;
(8) a change in employment status;
(9) information affecting an exception under section 256J.24, subdivision 9;
(10) the marriage or divorce of an assistance unit member;
(11) the death of a parent, minor child, or financially responsible person;
(12) a change in address or living quarters of the assistance unit;
(13) the sale, purchase, or other transfer of property;
(14) a change in school attendance of a caregiver under age 20 or an employed child;
(15) filing a lawsuit, a workers' compensation claim, or a monetary claim against a
third party; and
(16) a change in household composition, including births, returns to and departures
from the home of assistance unit members and financially responsible persons, or a change
in the custody of a minor child.

    Sec. 15. Minnesota Statutes 2012, section 256J.37, subdivision 3a, is amended to read:
    Subd. 3a. Rental subsidies; unearned income. (a) Effective July 1, 2003, the
county agency shall count $50 of the value of public and assisted rental subsidies provided
through the Department of Housing and Urban Development (HUD) as unearned income
to the cash portion of the MFIP grant. The full amount of the subsidy must be counted as
unearned income when the subsidy is less than $50. The income from this subsidy shall
be budgeted according to section 256J.34.
(b) The provisions of this subdivision shall not apply to an MFIP assistance unit
which includes a participant who is:
(1) age 60 or older;
(2) a caregiver who is suffering from an illness, injury, or incapacity that has been
certified by a qualified professional when the illness, injury, or incapacity is expected
to continue for more than 30 days and severely limits the person's ability to obtain or
maintain suitable employment; or
(3) a caregiver whose presence in the home is required due to the illness or
incapacity of another member in the assistance unit, a relative in the household, or a foster
child in the household when the illness or incapacity and the need for the participant's
presence in the home has been certified by a qualified professional and is expected to
continue for more than 30 days.
(c) The provisions of this subdivision shall not apply to an MFIP assistance unit
where the parental caregiver is an SSI recipient.
(d) Prior to implementing this provision, the commissioner must identify the MFIP
participants subject to this provision and provide written notice to these participants at
least 30 days before the first grant reduction. The notice must inform the participant of the
basis for the potential grant reduction, the exceptions to the provision, if any, and inform
the participant of the steps necessary to claim an exception. A person who is found not to
meet one of the exceptions to the provision must be notified and informed of the right to a
fair hearing under section 256J.40. The notice must also inform the participant that the
participant may be eligible for a rent reduction resulting from a reduction in the MFIP
grant and encourage the participant to contact the local housing authority.

    Sec. 16. Minnesota Statutes 2012, section 256J.395, subdivision 1, is amended to read:
    Subdivision 1. Vendor payment. (a) Effective July 1, 1997, when a county is
required to provide assistance to a participant in vendor form for shelter costs and utilities
under this chapter, or chapter 256, 256D, or 256K, the cost of utilities for a given family
may be assumed to be:
(1) the average of the actual monthly cost of utilities for that family for the prior
12 months at the family's current residence, if applicable;
(2) the monthly plan amount, if any, set by the local utilities for that family at the
family's current residence; or
(3) the estimated monthly utility costs for the dwelling in which the family currently
resides.
(b) For purposes of this section, "utility" means any of the following: municipal
water and sewer service; electric, gas, or heating fuel service; or wood, if that is the
heating source.
(c) In any instance where a vendor payment for rent is directed to a landlord not
legally entitled to the payment, the county social services agency shall immediately
institute proceedings to collect the amount of the vendored rent payment, which shall be
considered a debt under section 270A.03, subdivision 5.

    Sec. 17. Minnesota Statutes 2012, section 256J.575, subdivision 3, is amended to read:
    Subd. 3. Eligibility. (a) The following MFIP participants are eligible for the
services under this section:
    (1) a participant who meets the requirements for or has been granted a hardship
extension under section 256J.425, subdivision 2 or 3, except that it is not necessary for
the participant to have reached or be approaching 60 months of eligibility for this section
to apply;
    (2) a participant who is applying for Supplemental Security Income or Social
Security disability insurance;
    (3) a participant who is a noncitizen who has been in the United States for 12 or
fewer months; and
(4) a participant who is age 60 or older.
    (b) Families must meet all other eligibility requirements for MFIP established in
this chapter. Families are eligible for financial assistance to the same extent as if they
were participating in MFIP.
    (c) (b) A participant under paragraph (a), clause (3), must be provided with English
as a second language opportunities and skills training for up to 12 months. After 12
months, the case manager and participant must determine whether the participant should
continue with English as a second language classes or skills training, or both, and continue
to receive family stabilization services.
(d) (c) If a county agency or employment services provider has information that
an MFIP participant may meet the eligibility criteria set forth in this subdivision, the
county agency or employment services provider must assist the participant in obtaining
the documentation necessary to determine eligibility.

    Sec. 18. Minnesota Statutes 2012, section 256J.626, subdivision 6, is amended to read:
    Subd. 6. Base allocation to counties and tribes; definitions. (a) For purposes of
this section, the following terms have the meanings given.
    (1) "2002 historic spending base" means the commissioner's determination of
the sum of the reimbursement related to fiscal year 2002 of county or tribal agency
expenditures for the base programs listed in clause (6), items (i) through (iv), and earnings
related to calendar year 2002 in the base program listed in clause (6), item (v), and the
amount of spending in fiscal year 2002 in the base program listed in clause (6), item (vi),
issued to or on behalf of persons residing in the county or tribal service delivery area.
    (2) "Adjusted caseload factor" means a factor weighted:
    (i) 47 percent on the MFIP cases in each county at four points in time in the most
recent 12-month period for which data is available multiplied by the county's caseload
difficulty factor; and
    (ii) 53 percent on the count of adults on MFIP in each county and tribe at four points
in time in the most recent 12-month period for which data is available multiplied by the
county or tribe's caseload difficulty factor.
    (3) "Caseload difficulty factor" means a factor determined by the commissioner for
each county and tribe based upon the self-support index described in section 256J.751,
subdivision 2 , clause (6).
    (4) "Initial allocation" means the amount potentially available to each county or tribe
based on the formula in paragraphs (b) through (d).
    (5) "Final allocation" means the amount available to each county or tribe based on
the formula in paragraphs (b) through (d), after adjustment by subdivision 7.
    (6) "Base programs" means the:
    (i) MFIP employment and training services under Minnesota Statutes 2002, section
256J.62, subdivision 1 , in effect June 30, 2002;
    (ii) bilingual employment and training services to refugees under Minnesota Statutes
2002, section 256J.62, subdivision 6, in effect June 30, 2002;
    (iii) work literacy language programs under Minnesota Statutes 2002, section
256J.62, subdivision 7 , in effect June 30, 2002;
    (iv) supported work program authorized in Laws 2001, First Special Session chapter
9, article 17, section 2, in effect June 30, 2002;
    (v) administrative aid program under section 256J.76 in effect December 31, 2002;
and
    (vi) emergency assistance program under Minnesota Statutes 2002, section 256J.48,
in effect June 30, 2002.
    (b) The commissioner shall:
    (1) beginning July 1, 2003, determine the initial allocation of funds available under
this section according to clause (2);
    (2) allocate all of the funds available for the period beginning July 1, 2003, and
ending December 31, 2004, to each county or tribe in proportion to the county's or tribe's
share of the statewide 2002 historic spending base;
    (3) determine for calendar year 2005 the initial allocation of funds to be made
available under this section in proportion to the county or tribe's initial allocation for the
period of July 1, 2003, to December 31, 2004;
    (4) determine for calendar year 2006 the initial allocation of funds to be made
available under this section based 90 percent on the proportion of the county or tribe's
share of the statewide 2002 historic spending base and ten percent on the proportion of
the county or tribe's share of the adjusted caseload factor;
    (5) determine for calendar year 2007 the initial allocation of funds to be made
available under this section based 70 percent on the proportion of the county or tribe's
share of the statewide 2002 historic spending base and 30 percent on the proportion of the
county or tribe's share of the adjusted caseload factor; and
    (6) determine for calendar year 2008 and subsequent years the initial allocation of
funds to be made available under this section based 50 percent on the proportion of the
county or tribe's share of the statewide 2002 historic spending base and 50 percent on the
proportion of the county or tribe's share of the adjusted caseload factor.
    (c) With the commencement of a new or expanded tribal TANF program or an
agreement under section 256.01, subdivision 2, paragraph (g), in which some or all of
the responsibilities of particular counties under this section are transferred to a tribe,
the commissioner shall:
    (1) in the case where all responsibilities under this section are transferred to a tribal
program, determine the percentage of the county's current caseload that is transferring to a
tribal program and adjust the affected county's allocation accordingly; and
    (2) in the case where a portion of the responsibilities under this section are
transferred to a tribal program, the commissioner shall consult with the affected county or
counties to determine an appropriate adjustment to the allocation.
    (d) Effective January 1, 2005, counties and tribes will have their final allocations
adjusted based on the performance provisions of subdivision 7.

    Sec. 19. Minnesota Statutes 2012, section 256J.626, subdivision 7, is amended to read:
    Subd. 7. Performance base funds. (a) For the purpose of this section, the following
terms have the meanings given.
(1) "Caseload Reduction Credit" (CRC) means the measure of how much Minnesota
TANF and separate state program caseload has fallen relative to federal fiscal year 2005
based on caseload data from October 1 to September 30.
(2) "TANF participation rate target" means a 50 percent participation rate reduced by
the CRC for the previous year.
(b) For calendar year 2010 and yearly thereafter, Each county and tribe will be
allocated 95 percent of their initial calendar year allocation. Counties and tribes will be
allocated additional funds based on performance as follows:
    (1) a county or tribe that achieves the TANF participation rate target or a five
percentage point improvement over the previous year's TANF participation rate under
section 256J.751, subdivision 2, clause (7), as averaged across 12 consecutive months for
the most recent year for which the measurements are available, will receive an additional
allocation equal to 2.5 percent of its initial allocation;
    (2) a county or tribe that performs within or above its range of expected performance
on the annualized three-year self-support index under section 256J.751, subdivision 2,
clause (6), will receive an additional allocation equal to 2.5 percent of its initial allocation;
and
    (3) a county or tribe that does not achieve the TANF participation rate target or
a five percentage point improvement over the previous year's TANF participation rate
under section 256J.751, subdivision 2, clause (7), as averaged across 12 consecutive
months for the most recent year for which the measurements are available, will not
receive an additional 2.5 percent of its initial allocation until after negotiating a multiyear
improvement plan with the commissioner; or
    (4) a county or tribe that does not perform within or above its range of expected
performance on the annualized three-year self-support index under section 256J.751,
subdivision 2 , clause (6), will not receive an additional allocation equal to 2.5 percent
of its initial allocation until after negotiating a multiyear improvement plan with the
commissioner.
    (c) For calendar year 2009 and yearly thereafter, performance-based funds for a
federally approved tribal TANF program in which the state and tribe have in place a contract
under section 256.01, addressing consolidated funding, will be allocated as follows:
    (1) a tribe that achieves the participation rate approved in its federal TANF plan
using the average of 12 consecutive months for the most recent year for which the
measurements are available, will receive an additional allocation equal to 2.5 percent of
its initial allocation; and
    (2) a tribe that performs within or above its range of expected performance on the
annualized three-year self-support index under section 256J.751, subdivision 2, clause (6),
will receive an additional allocation equal to 2.5 percent of its initial allocation; or
    (3) a tribe that does not achieve the participation rate approved in its federal TANF
plan using the average of 12 consecutive months for the most recent year for which the
measurements are available, will not receive an additional allocation equal to 2.5 percent
of its initial allocation until after negotiating a multiyear improvement plan with the
commissioner; or
    (4) a tribe that does not perform within or above its range of expected performance
on the annualized three-year self-support index under section 256J.751, subdivision
2 , clause (6), will not receive an additional allocation equal to 2.5 percent until after
negotiating a multiyear improvement plan with the commissioner.
    (d) Funds remaining unallocated after the performance-based allocations in paragraph
(b) are available to the commissioner for innovation projects under subdivision 5.
     (1) If available funds are insufficient to meet county and tribal allocations under
paragraph (b), the commissioner may make available for allocation funds that are
unobligated and available from the innovation projects through the end of the current
biennium.
    (2) If after the application of clause (1) funds remain insufficient to meet county and
tribal allocations under paragraph (b), the commissioner must proportionally reduce the
allocation of each county and tribe with respect to their maximum allocation available
under paragraph (b).

    Sec. 20. Minnesota Statutes 2012, section 256J.72, subdivision 1, is amended to read:
    Subdivision 1. Nondisplacement protection. For job assignments under jobs
programs established under this chapter or chapter 256, or 256D, or 256K, the county
agency must provide written notification to and obtain the written concurrence of the
appropriate exclusive bargaining representatives with respect to job duties covered under
collective bargaining agreements and ensure that no work assignment under this chapter
or chapter 256, or 256D, or 256K results in:
(1) termination, layoff, or reduction of the work hours of an employee for the
purpose of hiring an individual under this section;
(2) the hiring of an individual if any other person is on layoff, including seasonal
layoff, from the same or a substantially equivalent job;
(3) any infringement of the promotional opportunities of any currently employed
individual;
(4) the impairment of existing contract for services of collective bargaining
agreements; or
(5) a participant filling an established unfilled position vacancy, except for on-the-job
training.
The written notification must be provided to the appropriate exclusive bargaining
representatives at least 14 days in advance of placing recipients in temporary public
service employment. The notice must include the number of individuals involved, their
work locations and anticipated hours of work, a summary of the tasks to be performed,
and a description of how the individuals will be trained and supervised.

    Sec. 21. Minnesota Statutes 2012, section 256J.72, subdivision 3, is amended to read:
    Subd. 3. Status of participant. A participant may not work in a temporary public
service or community service job for a public employer for more than 67 working days or
536 hours, whichever is greater, as part of a work program established under this chapter,
or chapter 256, or chapter 256D, or 256K. A participant who exceeds the time limits in
this subdivision is a public employee, as that term is used in chapter 179A. Upon the
written request of the exclusive bargaining representative, a county or public service
employer shall make available to the affected exclusive bargaining representative a report
of hours worked by participants in temporary public service or community service jobs.

    Sec. 22. REPEALER.
Minnesota Statutes 2012, sections 245.461, subdivision 3; 245.463, subdivisions
1, 3, and 4; 256.01, subdivisions 2a, 13, and 23a; 256B.0185; 256D.02, subdivision 4a;
256J.575, subdivision 4; 256J.74, subdivision 4; and 256L.04, subdivision 9, are repealed.