1.1                          A bill for an act 
  1.2             relating to state government; authorizing the office 
  1.3             of strategic and long-range planning to monitor 
  1.4             requests by local units of government for waivers of 
  1.5             rules and statutes; authorizing the legislative audit 
  1.6             commission to monitor requests by local units of 
  1.7             government to combine; abolishing the board of 
  1.8             government innovation and cooperation; proposing 
  1.9             coding for new law in Minnesota Statutes, chapters 3; 
  1.10            and 15; repealing Minnesota Statutes 1994, sections 
  1.11            465.795; 465.796; 465.797; 465.798; 465.799; 465.801; 
  1.12            465.802; 465.81; 465.82; 465.83; 465.84; 465.85; 
  1.13            465.86; and 465.87. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  [3.9701] [COOPERATION AND COMBINATION PLANS.] 
  1.16     Subdivision 1.  [SCOPE.] This section establishes 
  1.17  procedures to be used by counties, cities, or towns that adopt 
  1.18  by resolution, an agreement providing a plan to provide combined 
  1.19  services during an initial two-year cooperation period and then 
  1.20  to merge into a single unit of government over the succeeding 
  1.21  two-year period. 
  1.22     Subd. 2.  [DEFINITIONS.] (a) As used in this section, the 
  1.23  words defined in this subdivision have the meanings given them.  
  1.24     (b) "City" means a home rule charter or statutory city. 
  1.25     (c) "Governing body" means, in the case of a county, the 
  1.26  county board; in the case of a city, the city council; and, in 
  1.27  the case of a town, the town board.  
  1.28     (d) "Local government unit" or "unit" includes counties, 
  1.29  cities, and towns. 
  2.1      Subd. 3.  [COMBINATION REQUIREMENTS.] Counties may combine 
  2.2   with one or more other counties.  Cities may combine with one or 
  2.3   more other cities or with one or more towns.  Towns may combine 
  2.4   with one or more other towns or with one or more cities.  Units 
  2.5   that combine must be contiguous. 
  2.6      Subd. 4.  [ADOPTION AND COMMISSION REVIEW.] Each governing 
  2.7   body that proposes to combine under this section must adopt by 
  2.8   resolution a plan for cooperation and combination.  The plan 
  2.9   must address each item in this subdivision.  The plan must be 
  2.10  specific for any item that will occur within three years and may 
  2.11  be general or set forth alternative proposals for an item that 
  2.12  will occur more than three years in the future.  The plan must 
  2.13  be submitted to the legislative audit commission for review and 
  2.14  comment.  For a metropolitan area local government unit, the 
  2.15  plan must also be submitted to the metropolitan council for 
  2.16  review and comment.  The council may point out any resources or 
  2.17  technical assistance it may be able to provide a governing body 
  2.18  submitting a plan under this subdivision.  Significant 
  2.19  modifications and specific resolutions of items must be 
  2.20  submitted to the commission and council, if appropriate, for 
  2.21  review and comment.  In the official newspaper of each local 
  2.22  government unit proposed for combination, the governing body 
  2.23  must publish at least a summary of the adopted plans, each 
  2.24  significant modification and resolution of items, and the 
  2.25  results of each commission and council, if appropriate, review 
  2.26  and comment. 
  2.27     Subd. 5.  [CONTENTS OF PLAN.] The plan shall state: 
  2.28     (1) the specific cooperative activities the units will 
  2.29  engage in during the first two years of the venture; 
  2.30     (2) the steps to be taken to effect the merger of the 
  2.31  governmental units, beginning in the third year of the process, 
  2.32  with completion no later than four years after the process 
  2.33  begins; 
  2.34     (3) the steps by which a single governing body will be 
  2.35  created.  Notwithstanding any other law to the contrary, all 
  2.36  current members of the governing bodies of the local government 
  3.1   units that propose to combine under this section may serve on 
  3.2   the initial governing body of the combined unit, until a gradual 
  3.3   reduction in membership is achieved by foregoing election of new 
  3.4   members when terms expire until the number permitted by law is 
  3.5   reached; 
  3.6      (4) changes in services provided, facilities used, 
  3.7   administrative operations and staffing to effect the preliminary 
  3.8   cooperative activities and the final merger; 
  3.9      (5) financial arrangements for the merger, specifically 
  3.10  including responsibility for debt service on outstanding 
  3.11  obligations of the merging entities; 
  3.12     (6) two, five, and ten-year projections prepared by the 
  3.13  department of revenue at the request of the local government 
  3.14  unit of revenues, expenditures, and property taxes for each unit 
  3.15  if it combined and if it remained separate; 
  3.16     (7) procedures for a referendum to be held prior to the 
  3.17  year of the proposed combination to approve combining the local 
  3.18  government units, specifically stating whether a majority of 
  3.19  those voting in each district proposed for combination or a 
  3.20  majority of those voting on the question in the entire area 
  3.21  proposed for combination would be needed to pass the referendum; 
  3.22  and 
  3.23     (8) a time schedule for implementation. 
  3.24     Subd. 6.  [COMMISSION APPROVAL.] Before scheduling a 
  3.25  referendum on the question of combining local government units 
  3.26  under this section, the units shall submit the plan adopted 
  3.27  under subdivision 5 to the legislative audit commission.  
  3.28  Metropolitan area units shall also submit the plan to the 
  3.29  metropolitan council for review and comment.  The commission may 
  3.30  require any information it deems necessary to evaluate the 
  3.31  plan.  The commission shall disapprove the proposed combination 
  3.32  if it finds that the plan is not reasonably likely to enable the 
  3.33  combined unit to provide services in a more efficient or less 
  3.34  costly manner than the separate units would provide them, or if 
  3.35  the plans or plan modification are incomplete.  If the 
  3.36  combination of local government units is approved by the 
  4.1   commission under this section, the local units are not required 
  4.2   to proceed under chapter 414 to accomplish the combination.  
  4.3      Subd. 7.  [REFERENDUM.] During the first or second year of 
  4.4   cooperation, and after approval of the plan by the legislative 
  4.5   audit commission under this section, a referendum on the 
  4.6   question of combination shall be conducted.  The referendum 
  4.7   shall be on a date called by the governing bodies of the units 
  4.8   that propose to combine.  The referendum shall be conducted 
  4.9   according to the Minnesota election law, as defined in section 
  4.10  200.01.  If the referendum fails, the same question or a 
  4.11  modified question may be submitted the following year.  If the 
  4.12  referendum fails again, the same question may not be submitted.  
  4.13  Referendums shall be conducted on the same date in all local 
  4.14  government units.  
  4.15     Subd. 8.  [COUNTY AUDITOR TO PREPARE PLAT.] Upon the 
  4.16  request of two or more local government units that have adopted 
  4.17  a resolution to cooperate and combine, the county auditor shall 
  4.18  prepare a plat.  If the proposed combined local government unit 
  4.19  is located in more than one county, the request shall be 
  4.20  submitted to the county auditor of the county that has the 
  4.21  greatest land area in the proposed district.  The plat must show:
  4.22     (1) the boundaries of each of the present units; 
  4.23     (2) the boundaries of the proposed unit; 
  4.24     (3) the boundaries of proposed election districts, if 
  4.25  requested; and 
  4.26     (4) other information deemed pertinent by the governing 
  4.27  bodies or the county auditor. 
  4.28     Subd. 9.  [BONDED DEBT AT THE TIME OF COMBINATION.] Debt 
  4.29  service for bonds outstanding at the time of the combination may 
  4.30  be levied by the combined governing body consistent with the 
  4.31  plan adopted according to this section, and any subsequent 
  4.32  modifications, subject to section 475.61.  The primary 
  4.33  obligation to pay the bonded indebtedness outstanding on the 
  4.34  effective date of combination remains with the local government 
  4.35  unit that issued the bonds, but a combined unit may make debt 
  4.36  service payments on behalf of a preexisting unit. 
  5.1      Sec. 2.  [15.99] [AUTHORITY TO GRANT WAIVERS AND EXEMPTIONS 
  5.2   FOR LOCAL GOVERNMENTS.] 
  5.3      Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
  5.4   section, the terms defined in this subdivision have the meanings 
  5.5   given: 
  5.6      (b) "Agency" means a department, agency, board, or other 
  5.7   instrumentality of state government that has jurisdiction over 
  5.8   an administrative rule or law from which a waiver is sought 
  5.9   under this section.  
  5.10     (c) "Council" or "metropolitan council" means the 
  5.11  metropolitan council established by section 473.123. 
  5.12     (d) "Local government unit" means a county, home rule 
  5.13  charter or statutory city, school district, town, or special 
  5.14  taxing district. 
  5.15     (e) "Metropolitan agency" has the meaning given in section 
  5.16  473.121, subdivision 5a. 
  5.17     (f) "Metropolitan area" has the meaning given in section 
  5.18  473,121, subdivision 2. 
  5.19     Subd. 2.  [DUTIES.] Agencies shall accept applications from 
  5.20  local government units for waivers of administrative rules and 
  5.21  exemptions from enforcement of procedural or substantive 
  5.22  requirements in state law.  Agencies shall make recommendations 
  5.23  to the governor and legislature regarding the elimination of 
  5.24  state mandates that inhibit local government efficiency, 
  5.25  innovation, and cooperation.  The office of strategic and 
  5.26  long-range planning shall monitor applications by local 
  5.27  governments for waivers of rules and laws. 
  5.28     Subd. 3.  [RULE AND LAW WAIVER REQUESTS.] (a) Except as 
  5.29  provided in paragraph (b), a local government unit may make a 
  5.30  request to an agency to grant a waiver from one or more 
  5.31  administrative rules or a temporary, limited exemption from 
  5.32  enforcement of state procedural or substantive laws governing 
  5.33  delivery of services by the local government unit.  Two or more 
  5.34  local government units may submit a joint application for a 
  5.35  waiver or exemption under this section if they propose to 
  5.36  cooperate in providing a service or program that is subject to 
  6.1   the rule or law.  Before submitting an application to the 
  6.2   agency, the governing body of the local government unit must 
  6.3   approve, in concept, the proposed waiver or exemption at a 
  6.4   meeting required to be public under section 471.705.  A local 
  6.5   government unit or two or more units acting jointly may apply 
  6.6   for a waiver or exemption on behalf of a nonprofit organization 
  6.7   providing services to clients whose costs are paid by the unit 
  6.8   or units.  A waiver or exemption granted to a nonprofit 
  6.9   organization under this section applies to services provided to 
  6.10  all the organization's clients. 
  6.11     (b) A school district that is granted a variance from rules 
  6.12  of the state board of education under section 121.11, 
  6.13  subdivision 12, need not apply to the agency for a waiver of 
  6.14  those rules under this section.  A school district may not seek 
  6.15  a waiver of rules under this section if the state board of 
  6.16  education has authority to grant a variance to the rules under 
  6.17  section 121.11, subdivision 12.  This paragraph does not 
  6.18  preclude a school district from being included in a cooperative 
  6.19  effort with another local government unit under this section. 
  6.20     Subd. 4.  [APPLICATION.] (a) A local government unit 
  6.21  requesting a waiver of a rule or exemption from enforcement of a 
  6.22  law under this section shall present a written application to 
  6.23  the agency and forward a copy of the application to the office 
  6.24  of strategic and long-range planning.  The application must 
  6.25  include: 
  6.26     (1) identification of the service or program at issue; 
  6.27     (2) identification of the administrative rule or the law 
  6.28  imposing a procedural requirement with respect to which the 
  6.29  waiver or exemption is sought; or 
  6.30     (3) identification of the law imposing a substantive 
  6.31  requirement together with a statement that demonstrates how the 
  6.32  legislative intent of the law as evidenced by the statutory 
  6.33  language will be met; and 
  6.34     (4) a description of the improved service outcome sought, 
  6.35  including an explanation of the effect of the waiver or 
  6.36  exemption in accomplishing that outcome.  
  7.1      (b) If no agency has jurisdiction over the rule or law, the 
  7.2   local government shall transmit the application to the 
  7.3   department of finance to determine which agency will be 
  7.4   designated the jurisdictional agency. 
  7.5      (c) For purposes of classifying whether a request is for 
  7.6   waiver of a procedural or substantive requirement, procedural 
  7.7   requirements include the following: 
  7.8      (1) who must deliver a service; 
  7.9      (2) where the service must be delivered; 
  7.10     (3) to whom and in what form reports regarding the service 
  7.11  must be made; and 
  7.12     (4) how long or how often the service must be made 
  7.13  available to a given recipient. 
  7.14     (d) All other waiver requests other than those described in 
  7.15  paragraph (c) are presumed to be substantive. 
  7.16     Subd. 5.  [REVIEW PROCESS.] (a) The agency may mail a 
  7.17  notice that it has received an application for a waiver or 
  7.18  exemption to all persons who have registered with the agency 
  7.19  under section 14.14, subdivision 1a, identifying the rule or law 
  7.20  from which a waiver or exemption is requested.  The agency shall 
  7.21  inform the local government unit and the office of strategic and 
  7.22  long-range planning by mail of its agreement with or objection 
  7.23  to and grounds for objection to the waiver or exemption request 
  7.24  within 45 days of the date when the application was received.  
  7.25  An agency's failure to do so is considered agreement to the 
  7.26  waiver or exemption. 
  7.27     (b) Upon receipt of an application from a local government 
  7.28  unit for a waiver of administrative rules or an exemption from a 
  7.29  procedural or substantive law, the agency shall review the 
  7.30  application.  The agency shall dismiss an application if it 
  7.31  finds that the application proposes a waiver of rules or 
  7.32  exemption from enforcement of procedural or substantive laws 
  7.33  that would result in due process violations, violations of 
  7.34  federal law or the state or federal Constitution, or the loss of 
  7.35  services to people who are entitled to them. 
  7.36     (c) For substantive waiver requests, the agency must 
  8.1   further find that the exemption sought is consistent with 
  8.2   legislative intent as reflected in the statute upon which the 
  8.3   waiver is sought.  Additionally, the agency must determine that 
  8.4   the exemption would result in improved delivery of the service 
  8.5   through collaboration or other alternative delivery options. 
  8.6      (d) If the application is submitted by a local government 
  8.7   unit in the metropolitan area and the unit requests a waiver of 
  8.8   a rule or temporary, limited exemptions from enforcement of a 
  8.9   procedural or substantive law over which the metropolitan 
  8.10  council or another metropolitan government unit has 
  8.11  jurisdiction, the agency shall also transmit a copy of the 
  8.12  application to the council or other metropolitan government unit 
  8.13  for review and comment.  The council or other governmental unit 
  8.14  shall report its comments to the agency within 20 days of the 
  8.15  date the application was transmitted to them.  The council or 
  8.16  other governmental unit may point out any resources or technical 
  8.17  assistance it may be able to provide a local government unit 
  8.18  submitting a request under this section. 
  8.19     (e) Upon reaching a decision on the application, the agency 
  8.20  shall notify the respective unit of local government and the 
  8.21  office of strategic and long-range planning. 
  8.22     Subd. 6.  [APPEAL.] If the agency denies the waiver or 
  8.23  exemption request, the agency shall refer the waiver decision to 
  8.24  the governor.  The unit of local government may submit a request 
  8.25  for appeal to the governor within 20 days of the date the 
  8.26  decision was mailed by the agency.  The governor may conduct an 
  8.27  informal hearing of the interested parties before rendering a 
  8.28  final decision.  If the governor does not respond to the appeal 
  8.29  within 20 days of receipt, the decision of the agency shall 
  8.30  stand. 
  8.31     Subd. 7.  [CONDITIONS OF AGREEMENTS.] If the agency grants 
  8.32  a request for a waiver or exemption, the agency and the local 
  8.33  government unit shall enter into an agreement providing for the 
  8.34  delivery of the service or program that is the subject of the 
  8.35  application.  The agreement must specify desired outcomes and 
  8.36  the means of measurement by which the agency will determine 
  9.1   whether the outcomes specified in the agreement have been met.  
  9.2   The agreement must specify the duration of the waiver or 
  9.3   exemption, which may be for no less than two years and no more 
  9.4   than four years.  If at the end of the waiver period the agency 
  9.5   finds that the desired outcomes have been achieved, the agency 
  9.6   shall submit a bill to the legislature to amend the statutes in 
  9.7   a manner that will authorize the changes without need of further 
  9.8   waivers.  The agency may reconsider or renegotiate the agreement 
  9.9   if the rule or law affected by the waiver or exemption is 
  9.10  amended or repealed during the term of the original agreement.  
  9.11  A waiver of a rule under this section has the effect of a 
  9.12  variance granted by an agency under section 14.05, subdivision 
  9.13  4.  A local unit of government that is granted an exemption from 
  9.14  enforcement of a procedural or substantive requirement in state 
  9.15  law under this section is exempt from that law for the duration 
  9.16  of the exemption.  The agency may require periodic reports from 
  9.17  the local government unit or conduct investigations of the 
  9.18  service or program. 
  9.19     Subd. 8.  [ENFORCEMENT.] If the agency finds that the local 
  9.20  government unit is failing to comply with the terms of the 
  9.21  agreement under subdivision 7, it may rescind the agreement.  
  9.22  Upon the rescission, the local unit of government becomes 
  9.23  subject to the rules and laws covered by the agreement. 
  9.24     Subd. 9.  [ACCESS TO DATA.] When an local government unit, 
  9.25  through a cooperative program under this section, accesses data 
  9.26  from another unit of government that would be private or 
  9.27  nonpublic under the terms of chapter 13, the data retains its 
  9.28  classification and is subject to the same restrictions governing 
  9.29  the data in the unit of government from which the data is 
  9.30  accessed under chapter 13. 
  9.31     Sec. 3.  [REPEALER.] 
  9.32     Minnesota Statutes 1994, sections 465.795; 465.796; 
  9.33  465.797; 465.798; 465.799; 465.801; 465.802; 465.81; 465.82; 
  9.34  465.83; 465.84; 465.85; 465.86; and 465.87, are repealed.