Section 75-02-06-05 - Compensation1. Compensation on an annual basis for top management personnel must be limited, prior to allocation, if any, to the highest market-driven compensation of an administrator employed by a freestanding facility, with licensed capacity, during the previous report year, at least equal to the licensed capacity of the smallest facility within the top quartile of all facilities ranked by licensed capacity, increased by the consumer price index for all urban consumers (all items, United States city average). Compensation for top management personnel employed for less than a year must be limited to an amount equal to the limitation divided by three hundred sixty-five times the number of calendar days the individual was employed.2. Compensation includes: a. Salary for managerial, administrative, professional, and other services.b. Amounts paid for the personal benefits of the individual, e.g., housing allowance, flat-rate automobile allowance.c. The cost of assets and services the individual receives from the facility.d. Deferred compensation, pensions, and annuities.e. Supplies and services for the personal use of the individual.f. The cost of a domestic or other employee who works in the home of the individual.g. Life and health insurance premiums paid for the individual and medical services furnished at facility expense.3. Reasonable compensation for a person with at least five percent ownership, individuals on the governing board, or any individual related within the third degree of kinship to top management personnel must be considered an allowable cost if services are actually performed and required to be performed. The amount to be allowed must be an amount determined by the department to be equal to the amount normally required to be paid for the same services if provided by a nonrelated employee. Reasonableness also requires that functions performed be necessary in that, had the services not been rendered, the facility would have to employ another person to perform them. Reasonable compensation on an hourly basis may not exceed the amount determined to be the limitation in subsection 1, divided by two thousand eighty.4. Costs otherwise nonallowable under this chapter may not be included as personal compensation.N.D. Admin Code 75-02-06-05
Effective September 1, 1980; amended effective July 1, 1981; December 1, 1983; September 1, 1987; January 1, 1990; November 22, 1993; January 1, 1996; January 1, 1999.Amended byAdministrative Rules Supplement 375, January 2020, effective1/1/2020Amended by Administrative Rules Supplement 2023-391, January 2024, effective 1/1/2024.General Authority: NDCC 50-24.1-04, 50-24.4-02
Law Implemented: NDCC 50-24.4; 42 USC 1396a(a)(13)