1.1                          A bill for an act 
  1.2             relating to state government; requiring local 
  1.3             government impact notes; requiring a determination of 
  1.4             the aggregate cost of complying with proposed rules; 
  1.5             amending Minnesota Statutes 2002, section 3.987, 
  1.6             subdivision 1; proposing coding for new law in 
  1.7             Minnesota Statutes, chapter 14. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2002, section 3.987, 
  1.10  subdivision 1, is amended to read: 
  1.11     Subdivision 1.  [LOCAL IMPACT NOTES.] The commissioner of 
  1.12  finance shall coordinate the development of a local impact note 
  1.13  for any proposed legislation introduced after June 30, 1997, or 
  1.14  any rule proposed after December 31, 1999, upon request of the 
  1.15  chair or the ranking minority member of either legislative tax 
  1.16  committee, the ways and means committee in the house, or the 
  1.17  finance committee in the senate.  Upon receipt of a request to 
  1.18  prepare a local impact note, the commissioner must notify the 
  1.19  authors of the proposed legislation or, for an administrative 
  1.20  rule, the head of the relevant executive agency or department, 
  1.21  that the request has been made.  The local impact note must be 
  1.22  made available to the public upon request.  If the action is 
  1.23  among the exceptions listed in section 3.988, a local impact 
  1.24  note need not be requested nor prepared.  The commissioner shall 
  1.25  make a reasonable and timely estimate of the local fiscal impact 
  1.26  on each type of political subdivision that would result from the 
  2.1   proposed legislation.  The commissioner of finance may require 
  2.2   any political subdivision or the commissioner of an 
  2.3   administrative agency of the state to supply in a timely manner 
  2.4   any information determined to be necessary to determine local 
  2.5   fiscal impact.  The political subdivision, its representative 
  2.6   association, or commissioner shall convey the requested 
  2.7   information to the commissioner of finance with a signed 
  2.8   statement to the effect that the information is accurate and 
  2.9   complete to the best of its ability.  The political subdivision, 
  2.10  its representative association, or commissioner, when requested, 
  2.11  shall update its determination of local fiscal impact based on 
  2.12  actual cost or revenue figures, improved estimates, or both.  
  2.13  Upon completion of the note, the commissioner must provide a 
  2.14  copy to the authors of the proposed legislation or, for an 
  2.15  administrative rule, to the head of the relevant executive 
  2.16  agency or department. 
  2.17     Sec. 2.  [14.112] [LOCAL GOVERNMENT IMPACT.] 
  2.18     Subdivision 1.  [REQUEST AND PREPARATION.] The elected 
  2.19  governing body of a statutory or home rule city, township, 
  2.20  county, school district, soil and water conservation district, 
  2.21  or sanitary district may request the commissioner of finance to 
  2.22  prepare a local fiscal impact and fiscal benefit note on a rule 
  2.23  proposed by a state agency.  The request must be made by 
  2.24  submitting a resolution of the governing body to the 
  2.25  commissioner of finance at least ten days before a public 
  2.26  hearing on a proposed rule is held or, if the agency intends to 
  2.27  adopt the rule without a public hearing, at least ten days 
  2.28  before the deadline for requesting a public hearing.  Upon 
  2.29  receipt of a request, the commissioner of finance must prepare 
  2.30  an estimate of the fiscal impact and fiscal benefit of the rule 
  2.31  on each category of political subdivision requesting a local 
  2.32  impact note and on any other local jurisdiction impacted by the 
  2.33  rule.  In assessing the fiscal benefit of the rule, the 
  2.34  commissioner shall consider the fiscal impact on the political 
  2.35  subdivision requesting the local impact note if the rule is not 
  2.36  adopted.  The commissioner may require any political subdivision 
  3.1   or state agency to supply information necessary for the 
  3.2   commissioner to determine fiscal impact and fiscal benefit.  
  3.3   Relevant information submitted by a political subdivision, 
  3.4   whether or not requested by the commissioner, must be considered 
  3.5   by the commissioner and commented on in the local fiscal impact 
  3.6   and fiscal benefit note.  The commissioner must prepare the 
  3.7   local fiscal impact and fiscal benefit note before the close of 
  3.8   the hearing record or, if there is no public hearing, before the 
  3.9   agency submits the record to the administrative law judge. 
  3.10     Subd. 2.  [FEE.] (a) The commissioner of finance may bill 
  3.11  the political subdivision requesting the local fiscal impact and 
  3.12  fiscal benefit note up to $35 per hour for time spent preparing 
  3.13  the note.  Upon receiving a request for a note from a political 
  3.14  subdivision, the commissioner must give the political 
  3.15  subdivision an estimate of the fee that the commissioner will 
  3.16  charge.  The political subdivision may withdraw the request for 
  3.17  the note.  Upon completion of the note, the requesting political 
  3.18  subdivision must pay the fee in the time and manner requested by 
  3.19  the commissioner of finance.  Fees collected under this 
  3.20  subdivision must be deposited in the general fund. 
  3.21     (b) If more than one political subdivision requests a 
  3.22  fiscal impact and fiscal benefit note on the same rule, the 
  3.23  commissioner must split the fee equally among the requesting 
  3.24  political subdivisions.  A political subdivision that does not 
  3.25  request a fiscal impact and benefit note may agree to reimburse 
  3.26  a political subdivision that does request a note for part of the 
  3.27  fee charged under this section. 
  3.28     Sec. 3.  [14.127] [LEGISLATIVE APPROVAL REQUIRED.] 
  3.29     An agency must determine if the initial or yearly net cost 
  3.30  of complying with proposed rules for any one person or entity 
  3.31  will exceed $10,000 and the initial or yearly net cost of not 
  3.32  complying with the rule on other local jurisdictions.  An agency 
  3.33  must make this determination before the close of the hearing 
  3.34  record, or before the agency submits the record to the 
  3.35  administrative law judge if there is no hearing.  If the agency 
  3.36  determines that the initial or yearly net cost for any one 
  4.1   person or entity will exceed $10,000, the rules may not take 
  4.2   effect until the rules are approved by a law enacted after the 
  4.3   agency determination.  The administrative law judge must review 
  4.4   and approve the agency's determination under this section.  If 
  4.5   the administrative law judge does not approve the agency's 
  4.6   determination, the rules may not take effect until the rules are 
  4.7   approved by a law enacted after the agency determination.  This 
  4.8   section does not apply if the administrative law judge 
  4.9   determines that: 
  4.10     (1) the legislature has appropriated money to sufficiently 
  4.11  fund the expected cost of the rule upon the public proposed to 
  4.12  be regulated by the rule; 
  4.13     (2) the rule has been proposed pursuant to a specific 
  4.14  federal statutory or regulatory mandate; or 
  4.15     (3) the rule is adopted under section 14.388 or under 
  4.16  another law specifying that the rulemaking procedures of chapter 
  4.17  14 do not apply.  
  4.18     For purposes of this section, "net cost" means the cost to 
  4.19  an affected person or entity minus the fiscal benefit of the 
  4.20  proposed rule to an affected person or entity. 
  4.21     Sec. 4.  [EFFECTIVE DATE.] 
  4.22     Sections 2 and 3 are effective the day following final 
  4.23  enactment.  These sections apply to any rule for which the 
  4.24  hearing record has not closed before that date, or if there is 
  4.25  no public hearing, for which the agency has not submitted the 
  4.26  record to the administrative law judge before that date.