1.1                          A bill for an act
  1.2             relating to local government; requiring certain aid 
  1.3             amounts to be approved by the board of government 
  1.4             innovation and cooperation; proposing coding for new 
  1.5             law in Minnesota Statutes, chapter 477A. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [477A.0133] [AID APPROVAL REQUIREMENT.] 
  1.8      Subdivision 1.  [APPLICATION REQUIRED.] Five percent of the 
  1.9   aid amount of each unit of government, other than a school 
  1.10  district, under sections 273.1398, subdivision 2, and 477A.013 
  1.11  shall be available to the governmental unit only upon successful 
  1.12  application with the board of government innovation and 
  1.13  cooperation established under section 465.796. 
  1.14     Subd. 2.  [FORM OF APPLICATION.] The application must be 
  1.15  submitted by December 31 of the preceding year.  The application 
  1.16  must be made available to the general public upon request.  The 
  1.17  application must answer the following three questions for each 
  1.18  major service provided by the governmental unit, as determined 
  1.19  by the board.  The responses should include examples wherever 
  1.20  practical.  If the answer to any of the questions is not 
  1.21  affirmative, either a rationale must be provided or a plan must 
  1.22  be included indicating that the governmental unit will be able 
  1.23  to respond affirmatively in the future. 
  1.24     (1) Whether the service is being provided by the 
  1.25  appropriate level of government, considering: 
  2.1      (a) at what level the service can be provided most 
  2.2   efficiently; 
  2.3      (b) at what level economies of scale can be realized; 
  2.4      (c) at what level direct intervention is most feasible to 
  2.5   correct problems in service delivery; and 
  2.6      (d) whether the service is being provided by the level of 
  2.7   government that best knows who the consumer is and has the best 
  2.8   vision of what the service is supposed to achieve? 
  2.9      (2) Whether all opportunities to provide the service 
  2.10  cooperatively with other units of government have been explored, 
  2.11  or are being explored? 
  2.12     (3) Whether the service is being provided effectively, 
  2.13  especially with regard to the following criteria: 
  2.14     (a) whether outcome measures are used to measure success; 
  2.15     (b) whether spending has been linked to results; 
  2.16     (c) whether evaluation is performed by someone other than 
  2.17  the service provider; 
  2.18     (d) whether a long-term outlook has been adopted in program 
  2.19  planning; 
  2.20     (e) whether competitive pressures have been taken advantage 
  2.21  of in providing the service, if they exist; 
  2.22     (f) whether the service is priced at its true cost, if it 
  2.23  is priced at all; and 
  2.24     (g) whether any pertinent recommendations resulting from 
  2.25  best practices reviews under section 3.971, subdivision 4, have 
  2.26  been adopted? 
  2.27     Subd. 3.  [REVIEW AND APPROVAL.] The board shall review 
  2.28  each application, and approve the application if the 
  2.29  governmental unit has answered each question affirmatively, 
  2.30  demonstrating that it is striving to achieve the maximum 
  2.31  possible level of effectiveness and efficiency for the taxpayer, 
  2.32  taking into account the application for the current year as well 
  2.33  as for prior years.  The board may request further information 
  2.34  from any governmental unit on any of the services provided, or 
  2.35  subjects discussed in the application.  The board may hold a 
  2.36  public hearing on a governmental unit's application to solicit 
  3.1   input from the public regarding topics covered in the 
  3.2   application.  The board may conduct its own investigation into 
  3.3   any of the services being provided by a unit of government, 
  3.4   beyond the information provided in the application.  If a 
  3.5   governmental unit's application is approved prior to June 1, it 
  3.6   is entitled to receive its withheld aid amount under subdivision 
  3.7   1.  Alternatively, the board may determine that the governmental 
  3.8   unit needs to make further efforts to achieve efficiency and 
  3.9   effectiveness, and therefore its withheld aid amount will be 
  3.10  placed in escrow.  If the board refuses to accept the unit's 
  3.11  application for its excess distribution, it must state the 
  3.12  causes for the refusal in its notice to the governmental unit. 
  3.13     Subd. 4.  [REVISED APPLICATION PROCEDURES.] The board shall 
  3.14  establish procedures for accepting revised applications from 
  3.15  governmental units whose initial applications have been denied. 
  3.16  If the board approves a revised application, the withheld aid 
  3.17  amount held in escrow shall be released to the governmental unit.
  3.18     Subd. 5.  [ESCROW.] The board shall notify the commissioner 
  3.19  of revenue of any unit whose application for receiving its 
  3.20  withheld aid amount has been denied.  The commissioner shall 
  3.21  adjust the aid payment amounts to reflect that the commissioner 
  3.22  will hold money in escrow for those units whose applications 
  3.23  have been denied.  The commissioner shall hold the funds in 
  3.24  escrow until notified by the board that the funds should be 
  3.25  released to the governmental unit.  Any aid amount that is held 
  3.26  in escrow for a period of two years shall be distributed as an 
  3.27  equal percentage increase in aid under sections 273.1398, 
  3.28  subdivision 2, and 477A.013, for the following year. 
  3.29     Sec. 2.  [APPLICATIONS.] 
  3.30     This act applies in the counties of Anoka, Carver, Dakota, 
  3.31  Hennepin, Ramsey, Scott, and Washington. 
  3.32     Sec. 3.  [EFFECTIVE DATE.] 
  3.33     This act is effective for taxes payable in 1996 and 
  3.34  subsequent years.