1.1                          A bill for an act 
  1.2             relating to public administration; clarifying the 
  1.3             authority and procedures of the board of government 
  1.4             innovation and cooperation; establishing application 
  1.5             procedures for cooperation planning grants; providing 
  1.6             planning aid for consolidation studies; appropriating 
  1.7             money; amending Minnesota Statutes 1994, sections 
  1.8             465.795, subdivision 7; 465.798; 465.799; 465.801; 
  1.9             465.81, subdivision 1; 465.82, subdivision 2; 465.84; 
  1.10            465.85; and 465.87; proposing coding for new law in 
  1.11            Minnesota Statutes, chapter 465. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 1994, section 465.795, 
  1.14  subdivision 7, is amended to read: 
  1.15     Subd. 7.  [SCOPE.] As used in sections 465.795 to 465.799 
  1.16  and sections 465.801 to 465.87 465.88, the terms defined in this 
  1.17  section have the meanings given them. 
  1.18     Sec. 2.  Minnesota Statutes 1994, section 465.798, is 
  1.19  amended to read: 
  1.20     465.798 [SERVICE BUDGET MANAGEMENT MODEL GRANTS.] 
  1.21     One or more local units of governments, an association of 
  1.22  local governments, the metropolitan council, a local unit of 
  1.23  government acting in conjunction with an organization or a state 
  1.24  agency, or an organization established by two or more local 
  1.25  units of government under a joint powers agreement may apply to 
  1.26  the board of government innovation and management for a grant to 
  1.27  be used to develop models for innovative service budget 
  1.28  management.  The application to the board must state what other 
  2.1   sources of funding have been considered by the local units of 
  2.2   government to implement the project and explain why it is not 
  2.3   possible to complete the project without assistance from the 
  2.4   board.  The board may not award a grant if it determines that 
  2.5   the local units of government could complete the project without 
  2.6   board assistance.  A copy of the application must be provided by 
  2.7   the units to the exclusive representatives certified under 
  2.8   section 179A.12 to represent employees who provide the service 
  2.9   or program affected by the application.  
  2.10     Proposed models may provide options to local governments, 
  2.11  neighborhood or community organizations, or individuals for 
  2.12  managing budgets for service delivery.  A copy of the work 
  2.13  product for which the grant was provided must be furnished to 
  2.14  the board upon completion, and the board may disseminate it to 
  2.15  other local units of government or interested groups.  If the 
  2.16  board finds that the model was not completed or implemented 
  2.17  according to the terms of the grant agreement, it may require 
  2.18  the grantee to repay all or a portion of the grant.  The board 
  2.19  shall award grants on the basis of each qualified applicant's 
  2.20  score under the scoring system in section 465.802.  The amount 
  2.21  of a grant under this section may not exceed $50,000. 
  2.22     Sec. 3.  Minnesota Statutes 1994, section 465.799, is 
  2.23  amended to read: 
  2.24     465.799 [COOPERATION PLANNING GRANTS.] 
  2.25     Two or more local government units; an association of local 
  2.26  governments; a local unit of government acting in conjunction 
  2.27  with the metropolitan council, an organization, or a state 
  2.28  agency; or an organization formed by two or more local units of 
  2.29  government under a joint powers agreement may apply to the board 
  2.30  of government innovation and cooperation for a grant to be used 
  2.31  to develop a plan for intergovernmental cooperation in providing 
  2.32  services.  The application to the board must state what other 
  2.33  sources of funding have been considered by the local units of 
  2.34  government to implement the project and explain why it is not 
  2.35  possible to complete the project without assistance from the 
  2.36  board.  The board may not award a grant if it determines that 
  3.1   the local units of government could complete the project without 
  3.2   board assistance.  A copy of the application must be submitted 
  3.3   by the applicants to the exclusive representatives certified 
  3.4   under section 179A.12 to represent employees who provide the 
  3.5   service or program affected by the application.  
  3.6      The plan may include model contracts or agreements to be 
  3.7   used to implement the plan.  A copy of the work product for 
  3.8   which the grant was provided must be furnished to the board upon 
  3.9   completion, and the board may disseminate it to other local 
  3.10  units of government or interested groups.  If the board finds 
  3.11  that the grantee has failed to implement the plan according to 
  3.12  the terms of the agreement, it may require the grantee to repay 
  3.13  all or a portion of the grant.  The board shall award grants on 
  3.14  the basis of each qualified applicant's score under the scoring 
  3.15  system in section 465.802.  The amount of a grant under this 
  3.16  section may not exceed $50,000. 
  3.17     Sec. 4.  Minnesota Statutes 1994, section 465.801, is 
  3.18  amended to read: 
  3.19     465.801 [SERVICE SHARING GRANTS.] 
  3.20     Two or more local units of government; an association of 
  3.21  local governments; a local unit of government acting in 
  3.22  conjunction with the metropolitan council, an organization, or a 
  3.23  state agency; or an organization established by two or more 
  3.24  local units of government under a joint powers agreement may 
  3.25  apply to the board of government innovation and cooperation for 
  3.26  a grant to be used to meet the start-up costs of providing 
  3.27  shared services or functions.  Agreements solely to make joint 
  3.28  purchases are not sufficient to qualify under this section.  The 
  3.29  application to the board must state what other sources of 
  3.30  funding have been considered by the local units of government to 
  3.31  implement the project and explain why it is not possible to 
  3.32  complete the project without assistance from the board.  The 
  3.33  board may not award a grant if it determines that the local 
  3.34  units of government could complete the project without board 
  3.35  assistance.  A copy of the application must be provided by the 
  3.36  applicants to the exclusive representatives certified under 
  4.1   section 179A.12 to represent employees who provide the service 
  4.2   or program affected by the application. 
  4.3      The proposal must include plans fully to integrate a 
  4.4   service or function provided by two or more local government 
  4.5   units.  A copy of the work product for which the grant was 
  4.6   provided must be furnished to the board upon completion, and the 
  4.7   board may disseminate it to other local units of government or 
  4.8   interested groups.  If the board finds that the grantee has 
  4.9   failed to implement the plan according to the terms of the 
  4.10  agreement, it may require the grantee to repay all or a portion 
  4.11  of the grant.  The board shall award grants on the basis of each 
  4.12  qualified applicant's score under the scoring system in section 
  4.13  465.802.  The amount of a grant under this section may not 
  4.14  exceed $100,000. 
  4.15     Sec. 5.  Minnesota Statutes 1994, section 465.81, 
  4.16  subdivision 1, is amended to read: 
  4.17     Subdivision 1.  [SCOPE.] Sections 465.81 to 465.87 
  4.18  establish procedures to be used by counties, cities, or towns 
  4.19  that adopt by resolution an agreement providing a plan to 
  4.20  provide combined services during an initial two-year cooperation 
  4.21  period that may not exceed two years and then to merge into a 
  4.22  single unit of government over the succeeding two-year period.  
  4.23     Sec. 6.  Minnesota Statutes 1994, section 465.82, 
  4.24  subdivision 2, is amended to read: 
  4.25     Subd. 2.  [CONTENTS OF PLAN.] The plan shall must state:  
  4.26     (1) the specific cooperative activities the units will 
  4.27  engage in during the first two years of the venture; 
  4.28     (2) the steps to be taken to effect the merger of the 
  4.29  governmental units, beginning in the third year of the process, 
  4.30  with completion no later than four years after the process 
  4.31  begins; 
  4.32     (3) the steps by which a single governing body will be 
  4.33  created.  Notwithstanding any other law to the contrary, all 
  4.34  current members of the governing bodies of the local government 
  4.35  units that propose to combine under sections 465.81 to 465.87 
  4.36  may serve on the initial governing body of the combined unit, 
  5.1   until a gradual reduction in membership is achieved by foregoing 
  5.2   election of new members when terms expire until the number 
  5.3   permitted by other law is reached; 
  5.4      (4) changes in services provided, facilities used, 
  5.5   administrative operations and staffing to effect the preliminary 
  5.6   cooperative activities and the final merger; 
  5.7      (5) treatment of employees of the merging governmental 
  5.8   units, specifically including provisions for reassigning 
  5.9   employees, dealing with unions, and providing financial 
  5.10  incentives to encourage early retirements; 
  5.11     (6) financial arrangements for the merger, specifically 
  5.12  including responsibility for debt service on outstanding 
  5.13  obligations of the merging entities; 
  5.14     (7) two, five, and ten-year projections prepared by the 
  5.15  department of revenue at the request of the local government 
  5.16  unit, of revenues, expenditures, and property taxes for each 
  5.17  unit if it combined and if it remained separate; 
  5.18     (8) procedures for a referendum to be held prior to the 
  5.19  year of before the proposed combination to approve combining the 
  5.20  local government units, specifically stating whether a majority 
  5.21  of those voting in each district proposed for combination or a 
  5.22  majority of those voting on the question in the entire area 
  5.23  proposed for combination would be needed to pass the referendum; 
  5.24  and 
  5.25     (9) a time schedule for implementation. 
  5.26     Notwithstanding clause (3) or any other law to the 
  5.27  contrary, all current members of the governing bodies of the 
  5.28  local governmental units that propose to combine under sections 
  5.29  465.81 to 465.87 may serve on the initial governing body of the 
  5.30  combined unit until a gradual reduction in membership is 
  5.31  achieved by foregoing election of new members when terms expire 
  5.32  until the number permitted by other law is reached. 
  5.33     Sec. 7.  Minnesota Statutes 1994, section 465.84, is 
  5.34  amended to read: 
  5.35     465.84 [REFERENDUM.] 
  5.36     During the first or second year of cooperation, and after 
  6.1   approval of the plan by the department board under section 
  6.2   465.83, a referendum on the question of combination shall must 
  6.3   be conducted.  The referendum shall must be on a date called by 
  6.4   the governing bodies of the units that propose to combine.  The 
  6.5   referendum shall must be conducted according to the Minnesota 
  6.6   election law, as defined in section 200.01.  If the referendum 
  6.7   fails, the same question or a modified question may be submitted 
  6.8   the following year.  If the referendum fails again, the same 
  6.9   question may not be submitted.  Referendums shall be conducted 
  6.10  on the same date in all local government units. 
  6.11     Sec. 8.  Minnesota Statutes 1994, section 465.85, is 
  6.12  amended to read: 
  6.13     465.85 [COUNTY AUDITOR TO PREPARE PLAT.] 
  6.14     Upon the request of two or more local government units that 
  6.15  have adopted a resolution to cooperate and combine, the county 
  6.16  auditor shall prepare a plat.  If the proposed combined local 
  6.17  government unit is located in more than one county, the request 
  6.18  shall must be submitted to the county auditor of the county that 
  6.19  has the greatest land area in the proposed district.  The plat 
  6.20  must show:  
  6.21     (1) the boundaries of each of the present units; 
  6.22     (2) the boundaries of the proposed unit; 
  6.23     (3) the boundaries of proposed election districts, if 
  6.24  requested; and 
  6.25     (4) other information deemed pertinent by the governing 
  6.26  bodies or the county auditor. 
  6.27     Sec. 9.  Minnesota Statutes 1994, section 465.87, is 
  6.28  amended to read: 
  6.29     465.87 [AIDS TO COOPERATING AND COMBINING UNITS.] 
  6.30     Subdivision 1.  [ELIGIBILITY.] A local government unit is 
  6.31  eligible to apply for aid under this section if the board has 
  6.32  approved its plan to cooperate and combine under section 465.83. 
  6.33     Subd. 1a.  [ADDITIONAL ELIGIBILITY.] A local government 
  6.34  unit is eligible to apply for aid under this section if it has 
  6.35  combined with another unit of government in accordance with any 
  6.36  process within chapter 414 that results in the elimination of at 
  7.1   least one local government unit and a copy of the municipal 
  7.2   board's order combining the two units of government is forwarded 
  7.3   to the board.  If two units of government cooperate in the 
  7.4   orderly annexation of the entire area of a third unit of 
  7.5   government which has a population of at least 8,000 people, the 
  7.6   two units of government are each eligible for the amount of aid 
  7.7   specified in subdivision 2.  
  7.8      Subd. 1b.  [APPLICATION PROCEDURES.] A local government 
  7.9   unit covered by subdivision 1 may submit an application to the 
  7.10  board along with the final plan for cooperation and combination 
  7.11  required by section 465.83.  A local government unit covered by 
  7.12  subdivision 1a may submit an application to the board after the 
  7.13  issuance of the municipal board's order combining the two units 
  7.14  of government.  The application must be on a form prescribed by 
  7.15  the board and must specify the total amount of aid requested up 
  7.16  to the maximum authorized by subdivision 2.  The application 
  7.17  must also include a detailed explanation of the need for the aid 
  7.18  and provide a budget indicating how the requested aid would be 
  7.19  used. 
  7.20     Subd. 1c.  [AID AWARD.] The board may grant or deny an 
  7.21  application for aid made by a local government under subdivision 
  7.22  1b.  The board may also grant aid to an applicant in an amount 
  7.23  that is less than the amount requested by the applicant.  The 
  7.24  board shall base its decision on the following criteria: 
  7.25     (1) whether the local government unit has adequately 
  7.26  demonstrated that the requested aid is essential to 
  7.27  accomplishing the proposed combination; 
  7.28     (2) whether the activities to be funded by the requested 
  7.29  aid are directly related to the combination; 
  7.30     (3) whether other sources of funding for the activities 
  7.31  identified in the application, including short-term cost 
  7.32  savings, are available to the applicant as a direct result of 
  7.33  the combination; and 
  7.34     (4) whether there are competing needs for the funding 
  7.35  available to the board that would provide a greater public 
  7.36  benefit than would be realized by the combination or activities 
  8.1   described in the application.  
  8.2      The board may award money to an applicant for a period not 
  8.3   to exceed four years.  Any funding awarded for a period beyond 
  8.4   the biennium in which an award is made, however, is contingent 
  8.5   on future appropriations to the board. 
  8.6      Subd. 2.  [AMOUNT OF AID.] The annual amount of aid to be 
  8.7   paid to each eligible local government unit is equal to may not 
  8.8   exceed the following per capita amounts, based on the combined 
  8.9   population of the units, not to exceed $100,000 per year for any 
  8.10  unit as estimated by the state demographer, or $100,000, 
  8.11  whichever is less. 
  8.12        Combined Population                   Aid
  8.13         after Combination                 Per Capita
  8.14               0 -  2,500                     $25 
  8.15           2,500 -  5,000                      20 
  8.16           5,000 - 20,000                      15
  8.17              over 20,000                      10
  8.18  Payments shall must be made on the dates provided for payments 
  8.19  of local government aid under section 477A.013, beginning in the 
  8.20  year during which substantial cooperative activities under the 
  8.21  plan initially occur, unless those activities begin after July 
  8.22  1, in which case the initial aid payment shall must be made in 
  8.23  the following calendar year.  Payments to a local government 
  8.24  unit that qualifies for aid pursuant to subdivision 1a must be 
  8.25  made on the dates provided for payments of local government aids 
  8.26  under section 477A.013, beginning in the calendar year during 
  8.27  which a combination in any form is expected to be ordered by the 
  8.28  Minnesota municipal board as evidenced in a resolution adopted 
  8.29  by July 1 by the affected local government units declaring their 
  8.30  intent to combine.  The resolutions must certify that the 
  8.31  combination agreement addressing all issues relative to the 
  8.32  combination is substantially complete.  The total amount of aid 
  8.33  paid may not exceed the amount appropriated to the board for 
  8.34  purposes of this section. 
  8.35     Subd. 3.  [TERMINATION OF AID; RECAPTURE.] If a second 
  8.36  referendum under section 465.84 fails, or if an initial 
  9.1   referendum fails and the governing body does not schedule a 
  9.2   second referendum within one year after the first has failed, or 
  9.3   if one or more of the local government units that proposed to 
  9.4   combine terminates its participation in the cooperation or 
  9.5   combination, no additional aid will may be paid under this 
  9.6   section.  The amount previously paid under this section to a 
  9.7   unit must be repaid if the governing body of the unit acts to 
  9.8   terminate its current level of participation in the plan.  The 
  9.9   amount previously paid to the unit must be repaid in annual 
  9.10  installments equal to the total amount paid to the unit for all 
  9.11  years under subdivision subdivisions 1c and 2, divided by the 
  9.12  number of years when payments were made. 
  9.13     Sec. 10.  [465.88] [PLANNING AID FOR CONSOLIDATION 
  9.14  STUDIES.] 
  9.15     Two local units of government with a combined population of 
  9.16  2,500 or less based on the most recent decennial census, may 
  9.17  apply to the board of aid to assist in the study of a possible 
  9.18  consolidation or combination.  To be eligible for receipt of aid 
  9.19  under this section, the two local units of government must be 
  9.20  subject to a municipal board motion to form a consolidation 
  9.21  commission pursuant to section 414.041, subdivision 2, or the 
  9.22  governing bodies of the local units of government must have 
  9.23  approved a resolution expressing their intent to develop and 
  9.24  submit a combination plan for consideration by the board.  The 
  9.25  application must be on a form prescribed by the board and must 
  9.26  provide a proposed budget detailing how the requested aid shall 
  9.27  be used.  The governing bodies of the local units of government 
  9.28  must also approve resolutions certifying that the requested aid 
  9.29  is essential for paying a portion of the costs associated with 
  9.30  the consolidation or combination study.  The board may grant up 
  9.31  to $10,000 in aid for each application received. 
  9.32     Sec. 11.  [APPROPRIATION.] 
  9.33     $....... is appropriated from the general fund to the board 
  9.34  of government innovation and cooperation, $....... to be 
  9.35  available for the fiscal year ending June 30, 1996, and $....... 
  9.36  to be available for the fiscal year ending June 30, 1997.  If 
 10.1   the appropriation for either year is insufficient, the 
 10.2   appropriation for the other year is available for it.