Cost estimate of a moratorium exception project.

deleted text begin (a) deleted text end For the purposes of this section and section 144A.073 , the cost estimate of a moratorium exception project shall include the effects of the proposed project on the costs of the state subsidy for community-based services, nursing services, and housing in institutional and noninstitutional settings. The commissioner of health, in cooperation with the commissioner of human services, shall define the method for estimating these costs in the permanent rule implementing section 144A.073 . The commissioner of human services shall prepare an estimate of the new text begin property payment rate to be established upon completion of the project and new text end total state annual long-term costs of each moratorium exception proposal. new text begin The property payment rate estimate shall be based upon the estimated costs and total building valuation to be used in the total property payment rate calculation under section 256R.26. For the purposes of determining the actual total property payment rate under section 256R.26 upon completion of the project, the final building valuation is the lesser of the limited depreciated replacement cost as determined under section 256R.26, subdivision 3, following a physical building appraisal or 105 percent of the estimated total building valuation from the moratorium application. new text end

deleted text begin (b) The interest rate to be used for estimating the cost of each moratorium exception project proposal shall be the lesser of either the prime rate plus two percentage points, or the posted yield for standard conventional fixed rate mortgages of the Federal Home Loan Mortgage Corporation plus two percentage points as published in the Wall Street Journal and in effect 56 days prior to the application deadline. If the applicant's proposal uses this interest rate, the commissioner of human services, in determining the facility's actual property-related payment rate to be established upon completion of the project must use the actual interest rate obtained by the facility for the project's permanent financing up to the maximum permitted under Minnesota Rules, part 9549.0060 , subpart 6. deleted text end

deleted text begin The applicant may choose an alternate interest rate for estimating the project's cost. If the applicant makes this election, the commissioner of human services, in determining the facility's actual property-related payment rate to be established upon completion of the project, must use the lesser of the actual interest rate obtained for the project's permanent financing or the interest rate which was used to estimate the proposal's project cost. For succeeding rate years, the applicant is at risk for financing costs in excess of the interest rate selected. deleted text end