Legislative Summary 2004

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Early Sunday morning, May 16, at 7:40 a.m., the Minnesota Legislature adjourned the 2004 regular session. The House and the Senate were unable to pass a budget-balancing bill to address the projected $160 million budget deficit or put together a bonding bill for construction projects.

Despite the logjam on the budget, a few key policy items for MDH were resolved:

Birth Defects Information System Attention: Non-MDH link

Provision allows the development of a system to understand and prevent birth defects and promote collaboration between health care and service providers, researchers, family advocacy groups, and local public health agencies. These changes will: clarify the duties of the Commissioner; establish data sources; allow for reporting without liability; provide an “opt out” method; specifically classify data as private; and allow for participation in regional and federal research as appropriate.

Speech Language Pathologists and Occupational Therapy Practitioners Attention: Non-MDH link

MDH initiated technical amendments to licensing regulations for Speech Language Pathologists and Occupational Therapy Practitioners. Provisions were amended onto the bill in policy committees that included technical and policy changes for alcohol and drug counselor licensing, supervision of speech language pathology assistants, dentists, physician assistants, nursing, podiatrists, acupuncture, establishing a transition plan for transfer of regulation of alcohol and drug counselor licensing and of unlicensed mental health practitioners from MDH to the health licensing boards, and extension of the sunset date for the Office of Mental Health Practice.

Medical Education and Research Costs (MERC) Attention: Non-MDH link

This provision allows a transfer from the University of Minnesota to MDH to occur twice within fiscal year 2005. This language was necessary because the federal CMS has been slow to approve a Medicaid state plan amendment that would allow MDH to use the U of M transfer to draw federal matching funds to increase MERC payments to teaching facilities in the state. If CMS’s approval of the state plan amendment does not occur within the state fiscal year, we would lose the ability to draw federal funds (approximately $4.85 million) for a year. This language gives the University and MDH the ability to match those funds twice next year, if approval of the state plan amendment with CMS does not occur in state FY 2004 (i.e., by June 30, 2004).

Emergency Health Powers Attention: Non-MDH link

The Minnesota Emergency Health Powers Act was passed by the 2002 Legislature to clarify and strengthen Minnesota’s ability to rapidly identify and effectively respond to an emergency caused by bioterrorism or an infectious disease. Emergency powers in Chapter 12 were enhanced to address issues such as use of public transportation, ability to commandeer facilities to care for sick or infectious patients, safe management of the deceased, and isolation and quarantine due process provisions. These changes had a sunset date of August 31, 2004. The bill proposed for the 2004 session included both an extension of the sunset date and a number of amendments reflecting requests from our partners and changes based on exercises or from the experience of Toronto in responding to the SARS outbreak of 2002/2003. The House approved the majority of the department’s proposal; the Senate bill did not meet deadline and was not taken up on the floor. Because of the scope of the powers, Emergency Health Powers Act needed to be heard in six committees in each house. Thus a compromise was made between the House and Senate. The Senate agreed to extend the sunset date for the Minnesota Emergency Health Powers Act through August 31, 2005.

Nursing Home Surveying Process Attention: Non-MDH link

The bill makes a number of changes in the nursing home regulatory programs of MDH. It amends existing law relating to the training requirements for nursing home providers, establishes a quality improvement program and requires annual reports; modifies procedures of the federally required survey process, requires legislative reports and continued efforts to obtain federal waivers for survey process modification.

The Long Term Care Imperative that jointly represents Care Providers of Minnesota and the Minnesota Health and Housing Association sponsored this bill. The bill was their response to changes that have occurred in the nursing home regulatory process.

Nuclear Regulatory Commission (NRC) Attention: Non-MDH link

MDH was first authorized to pursue the Agreement State status of this program from the federal government in 1999. Elements of the application to the NRC have been adopted by the Legislature almost every year since 1999. The federal regulatory program is already in place and once this fee revision and application approval are passed and signed, MDH will complete the formal application for the Governor’s signature to transfer the program to the state. There are two main reasons for pursuing the program:

  • To administer licensing of radioactive materials by the State. It’s a program that already exists at the federal level – 33 states have Agreement State status. It is a complement to our current public health program of x-ray and mammography inspections. There are approximately 160 licenses in the state in academia, industry, and hospitals/health care.
  • To enhance our capacity to respond to radiation emergencies and complaints.

Adverse Events Reporting Attention: Non-MDH link

The original Adverse Events Reporting Law was passed and signed in 2003. This law represents an important new policy initiative to help prevent the most serious types of medical errors in hospitals. The 2003 Adverse Health Events Reporting Law requires hospitals to report to the Minnesota Department of Health (MDH) any time one of 27 serious adverse events occurs in a hospital.

The new law seeks to balance the goals of quality improvement and accountability in a way that protects public health and safety. Because the new 2003 law was complex, a transition period was established to ensure important issues were identified. Several implementation issues have been identified and many have already been addressed.

The legislative changes passed this session:

  • Require the health licensing boards that regulate physicians, physician assistants, nurses, pharmacists, and podiatrists to report to MDH events that come to their attention that may qualify as adverse health care events.
  • Establish that the reported data submitted by facilities and the boards to MDH are classified as non-public, except as required to complete the annual public report specified in the 2003 law.
  • Define the relationship between the reporting law and the Maltreatment of Minors Act. The 2003 legislation provided that an adverse health event, if properly reported under the new reporting system, was excluded from the reporting requirements of the Vulnerable Adults Act (VAA). These paragraphs extend that exemption to apply to the Maltreatment of Minors Act.
  • Clarify that an investigation under the VAA or the Maltreatment of Minors Act is not required by MDH if the incident was properly reported as an adverse health care event. MDH would retain its authority under the hospital licensing statute (Minnesota Statutes, sections 144.50 to 144.564) and under its agreement with the federal government.

Niche Provider Bill Attention: Non-MDH link

Requires freestanding surgical centers to be licensed in a manner similar to that for hospitals. MDH under existing rules currently licenses these facilities. The bill:

  • specifically adds the term “outpatient surgical centers” to the licensing statute.
  • adds a staffing requirement mandating that surgical centers conform to national standards for operating rooms.
  • specifies that certain provisions of the Patient/Resident Bill of Rights apply to patients receiving services in the outpatient surgical centers.

Dangerous Animal Bill Attention: Non-MDH link

The bill makes it unlawful for private individuals to possess bears, exotic cats (any cat, except a domestic cat) and primates. Current owners of “regulated animals” are grandfathered in, provided they come into compliance with USDA regulations relating to facilities and care standards for the animal and they register with the local animal control authority. Minnesota’s small private zoo owners are protected because they are allowed to breed or purchase replacement animals to maintain current inventories, and they can sell their business to another USDA-licensed facility. The local animal control authority is required to report registration information and any enforcement actions annually to the Minnesota Board of Animal Health.

Electronic Health Records Attention: Non-MDH link

While MDH did not support the language that was proposed by the Senate regarding Electronic Medical Records, having all Minnesota health records in electronic format by 2010 was a laudable goal. Therefore MDH proposed a workgroup to identify an even better approach that puts Minnesota in the forefront of electronic health records, participating in the development of national standards, prepares us to implement them once adopted, and identifies an appropriate financing mechanism and will report to the Legislature by December 31, 2004. The workgroup established will consist of numerous health care representatives as well as a community of academics, state government purchasers, citizens, and others “with knowledge of health information technology and electronic health records systems.” The workgroup will file a report by the end of the year covering “preliminary assessments and recommendations” on funding, and the State’s role “in the development, financing, promotion, and implementation of an electronic health records system.” The workgroup shall:

  • identify barriers to the adoption and implementation of electronic health record systems in Minnesota;
  • identify core components of an electronic health record and standards for interoperability;
  • assess the status of current implementation of electronic health records in Minnesota;
  • assess the costs for primary and acute health care providers, including safety net clinics and hospitals, to implement electronic health records systems;
  • identify partnership models and collaboration potential for implementing electronic health records systems;
  • monitor the development of federal standards, coordinate input to the National Health Information Infrastructure Process, and ensure that Minnesota’s recommendations are consistent with emerging federal standards; and
  • identify barriers and develop a plan to develop a unified record system among public hospitals and clinics.

Public Health Data System Study Attention: Non-MDH link

Requires MDH to work with county public health departments to design a public health information system. The goal of the study is to create a plan to ensure that population-based data is available and reflects health trends as well as outcomes for public health programs and services. The system is intended to provide state and local public health departments with a cost-effective, reliable means for collecting, utilizing and disseminating public health data.

High School Diving Regulations Attention: Non-MDH link

Allows pools built before January 1, 1987, that are used for a one-meter board high school diving program during the 2000-2001 school year to be used for supervised competitive one-meter board high school diving. A school or district using a pool for supervised training practice for competitive high school diving that does not meet the requirements of Minnesota Rules, must provide appropriate notice to parents and participants as to the type of variance from Minnesota Rules and risk it may present.

MDH Fetal Alcohol Syndrome Dollars Transfer to Minnesota Organization for Fetal Alcohol Syndrome (MOFAS) Attention: Non-MDH link

Requires MDH to transfer annually $1,190,000 of the general fund appropriation currently coming to MDH for fetal alcohol spectrum disorder administration and grants to a statewide organization that focuses solely on prevention of and intervention with fetal alcohol spectrum disorder. The transfer of funds begins on July 1, 2004. The transfer is phased-in between July 1, 2005 and July 1, 2006 in order to honor existing grant contracts. The money shall be used for prevention and intervention services and programs, including, but not limited to, community grants, professional education, public awareness, and diagnosis. The organization may retain $60,000 of the transferred money for administrative costs. The organization shall report to the commissioner annually by January 15 on the services and programs funded by the appropriation. MDH would absorb the costs involved in developing and monitoring a contractual arrangement with a statewide organization that focuses solely on prevention of and intervention with fetal alcohol spectrum disorder. The organization referenced without being named in the legislation is Minnesota Organization for Fetal Alcohol Syndrome (MOFAS) and was developed by Susan Carlson.

Lead Poisoning Prevention Attention: Non-MDH link

A proposal to lower the current reporting and environmental intervention level for lead from 20 to 10 micrograms of lead per deciliter of whole blood (mc/dl) was part of the Senate Omnibus Budget Bill. The goal was to prevent child lead poisoning. No resources were provided for this increased responsibility. During the session the focus moved away from a statewide change and was limited to Ramsey, St. Louis and Hennepin Counties because of their federal HUD grants for lead hazard reduction. The Senate author agreed to wait on these changes and instead require a study that looks at lead prevention strategies. In the end, study language was included in the conference report. MDH will work with the named agencies and counties over the interim to examine lead prevention and bring forward recommendations that are reasonable with the available resources.

Best Practices Attention: Non-MDH link

Requires MDH to facilitate access to best practice guidelines and quality of care measurement information to providers, purchasers, and consumers by: identifying and promoting local community-based, physician-designed best practices care across the Minnesota health care system; disseminating information available to the commissioner on adherence to best practices care by physicians and other health care providers in Minnesota; educating consumers and purchasers on how to effectively use this information in choosing their providers and in making purchasing decisions; and making best practices and quality care measurement information available to enrollees and program participants through MDH’s Web site. The commissioner may convene an advisory committee to ensure that the Web site is designed to provide user friendly and easy accessibility.

.08 Legislation Attention: Non-MDH link

Lowering the state’s drunk driving limit from .10 blood alcohol content to .08 was passed. This provision will be effective starting August 2005. The Senate had passed a bill that lowered the limit this August, and a House bill delayed the change until 2007. The conference committee compromised on the August 2005 enactment date. Minnesota is one of the last states to lower the limit to .08, and would risk losing federal funds if it did not adopt the limit by 2007.

Due to the stalemate, here are some of the issues that were left unresolved:


Unfortunately, these provisions did not pass; however, several bills were introduced this Legislative session to address the epidemic of methamphetamine use and environmental concerns with byproducts from methamphetamine production. Senator Rosen and Representative Fuller introduced the most comprehensive bills on meth (SF 1580/ HF 1989). These bills would have increased penalties already in place and introduced new crimes and programs concerning the possession and sale of methamphetamine and its precursors (the products and over-the-counter drugs used to manufacture methamphetamine). Among the new requirements is the criminalizing of methamphetamine production before children or vulnerable adults, mandating health screening for children exposed to meth labs, and the notification of county health officials of clandestine (meth) lab sites. Other provisions included establishing a methamphetamine laboratory cleanup revolving fund for local units of government; requiring the remediation of lab sites prior to the re-occupation of the land or property; creating a methamphetamine awareness and educational account; and mandating the implementation of a methamphetamine awareness retail education program. This legislation provides a statewide response to the problems associated with methamphetamine use and production. The revolving loan fund would provide a resource for local units of government when citizens cannot afford or are unwilling to clean up affected properties. This resource would be particularly helpful to local units of government when property owners forfeit the contaminated property to the county rather than cleaning it themselves.

State Budget Deficit

The Legislature began the session with the knowledge they would need to resolve a projected $160 million budget deficit for 2004-2005. Because the Legislature failed to solve the deficit, Governor Pawlenty used the discretion he had to direct spending changes or delays to solve the FY 2004 deficit. He took these actions to preserve the state’s budget reserve and current bond ratings. His actions included a 3% operating reduction for state agencies ($17 M), a reduction in an anticipated one-time transfer from the General Fund to the Health Care Access Fund ($110 M), one-time savings from delaying bond sales ($26 M), and increased tax compliance ($6 M).

MDH Budget

As session came to a close without a solution in sight to solve the state’s FY2004-05 budget deficit ($160 million), the Governor asked agencies to freeze spending in order to provide him maximum flexibility to solve the deficit on his own. The freeze included a hold on any new obligations against general fund resources and a review of general fund grant agreements. The Governor’s actions to date to solve the deficit include a 3% operating budget reduction for MDH ($692,000)--similar to what he recommended in his budget to the Legislature last January. In addition, unobligated general fund grant balances are frozen for further review.

Tax Bill

The Senate tax bill included $60 million in additional Local Government Aid (LGA) for cities and towns who lost twice that amount last year as part of the budget-balancing bill. It also had language to change the apportionment formula for business income from 75% income, 12.5% property and 12.5% sales to a single sales apportionment factor effective December 31, 2004. The formula would only be enacted if a throwback rule requiring that corporations include sales that originate in this state and are not taxed in this state and services where a greater percentage of the service is provided in this state.

The House tax bill included a number of proposals that would raise revenue, adjust the alternative minimum tax, phase-in a single-sales factor for corporate franchise taxes and transfer budget reserves in case the state has an additional budget shortfall. The House bill generated $49.6 million in additional revenue in 2004-2005. The bill included the financial portion of the Canterbury Racino bill that passed last year, raising $39.7 million in additional revenue. The bill also included a franchise fee on card clubs.

Capitol Investment Legislation

Governor Pawlenty proposed a $760 million bonding package. The House passed a bill totaling $682.2 million. The bill took a number of the Governor’s recommendations but allocated some additional funds to higher education, transportation and local projects. Among those who received less under the House proposal than the Governor recommended were the Departments of Administration, Corrections, Education, Human Resources, and the Minnesota Housing Finance Agency.

The Senate’s bonding bill appropriated $948 million for capitol improvements to state and local facilities. The projects in the bill included $110 million for Higher Education; $60 million to expand the Correctional Facility in Faribault; $40 million for local bridges; and $39 million for wastewater infrastructure grants. The Senate bonding bill was two votes short of the sixty percent vote on the Senate floor required to pass it.

The bonding bill included money to finance the MDH move into the new lab and office buildings next year. Moving can be very expensive—especially when it involves some of the very sophisticated and fragile equipment in our labs. If the Governor did call a special session, a bonding bill would be the highest priority and we would continue to work with the Legislature to include our moving costs if and when that occurs. When a governor calls special sessions he states his recommendations or rationale for calling it but is not always able to set the agenda, nor control how long they stay in session.

Election Year

All 134 members of the House of Representatives are up for re-election in November. The Senate is not up for re-election until 2006. The 2005 Session will be a budget year where the Legislature will pass the state budget for the 2006-2007 biennium. It is projected that the Legislature will be facing a budget deficit next year as well. The Department of Finance has estimated a deficit of $441 million for 2005-2006, and, with inflationary estimates, this number could grow to $1.1 billion.

Commissioner Confirmations

The Senate rejected Education Commissioner Cheri Pierson Yecke’s confirmation. The Senate voted, in defiance of the Governor, to reject her confirmation on a 31-35 vote. Yecke is only the second confirmation to be voted down in the past 50 years. The Senate confirmed the Governor’s other appointments including Commissioner Dianne Mandernach, whose confirmation took place early in the 2004 session.


On closing night of session, seven House Republicans announced their decision not to seek re-election. They are:

Dale Walz (R-Brainerd)

Steve Strachan (R-Farmington)

Dick Borrell (R-Waverly)

Carl Jacobson (Vadnais Heights)

Eric Lipman (R-Lake Elmo)

Elaine Harder (R-Jackson)

Doug Stang (R-Cold Spring)

For more information

Please contact
Megan Helge, Legislative Coordinator

Updated Tuesday, 16-Nov-2010 12:27:51 CST