1.1                          A bill for an act 
  1.2             relating to public administration; establishing 
  1.3             various pilot projects to improve the efficiency and 
  1.4             effectiveness of state agencies; authorizing waivers 
  1.5             of certain rules and policies; improving the 
  1.6             efficiencies of certain human services programs; 
  1.7             proposing coding for new law in Minnesota Statutes, 
  1.8             chapter 465. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10                             ARTICLE 1
  1.11                              PURPOSE
  1.12     Section 1.  [PURPOSE.] 
  1.13     The purpose of this act is to make government work better 
  1.14  and cost less.  To accomplish this purpose, this act creates 
  1.15  incentives for state and local employees to act in a manner that 
  1.16  provides the best and most efficient services to the public.  
  1.17  The act also removes barriers that currently discourage state 
  1.18  and local agencies from taking innovative approaches to 
  1.19  improving services and achieving cost savings. 
  1.20                             ARTICLE 2
  1.21                       HUMAN RESOURCES SYSTEM
  1.22     Section 1.  [POLICY.] 
  1.23     The legislature reaffirms its commitment to an efficient 
  1.24  and effective merit-based human resources system that meets the 
  1.25  management needs of the state and that meets the program needs 
  1.26  of the people of the state.  The purpose of this article is to 
  1.27  establish a process to ensure the continuation of merit-based 
  2.1   principles, while removing rules and procedures that cause 
  2.2   unnecessary inefficiencies in the state human resources system. 
  2.3      Sec. 2.  [PILOT PROJECT.] 
  2.4      During the biennium ending June 30, 1997, the governor 
  2.5   shall designate an executive agency that will conduct a pilot 
  2.6   civil service project.  The pilot program must adhere to the 
  2.7   policies expressed in section 1 and in Minnesota Statutes, 
  2.8   section 43A.01.  For the purposes of conducting the pilot 
  2.9   project, the commissioner of the designated agency is exempt 
  2.10  from the provisions that relate to employment in Minnesota 
  2.11  Statutes, chapter 43A, Minnesota Rules, chapter 3900, and 
  2.12  administrative procedures and policies of the department of 
  2.13  employee relations.  If a proposed exemption from the provisions 
  2.14  that relate to employment in Minnesota Statutes, chapter 43A, 
  2.15  Minnesota Rules, chapter 3900, and administrative procedures and 
  2.16  policies of the department of employee relations would violate 
  2.17  the terms of a collective bargaining agreement effective under 
  2.18  Minnesota Statutes, chapter 179A, the exemption is not effective 
  2.19  without the consent of the exclusive representative that is a 
  2.20  party to the agreement.  Upon request of the commissioner 
  2.21  carrying out the pilot project, the commissioner of employee 
  2.22  relations shall provide technical assistance in support of the 
  2.23  pilot project.  This section does not exempt an agency from 
  2.24  compliance with Minnesota Statutes, sections 43A.19 and 43A.191, 
  2.25  or from rules adopted to implement those sections. 
  2.26     Sec. 3.  [EVALUATION.] 
  2.27     The commissioner of employee relations, in consultation 
  2.28  with the agency selected in section 2, shall design and 
  2.29  implement a system for evaluating the success of the pilot 
  2.30  project in section 2.  The system specifically must: 
  2.31     (1) evaluate the extent to which the agency has been 
  2.32  successful in maintaining a merit-based human resources system 
  2.33  in the absence of the traditional civil service rules and 
  2.34  procedures; 
  2.35     (2) quantify time and money saved in the hiring process 
  2.36  under the pilot project as compared to hiring under the 
  3.1   traditional rules and procedures; and 
  3.2      (3) document the extent of complaints or problems arising 
  3.3   under the new system. 
  3.4      The agency involved in the pilot project under this article 
  3.5   and the department of employee relations must report to the 
  3.6   legislature by January 1, 1997, and January 1, 1998, on the 
  3.7   progress and results of the project.  The report must include at 
  3.8   least the elements required in this section, and must also make 
  3.9   recommendations for legislative changes needed to ensure the 
  3.10  state will have the most efficient and effective merit-based 
  3.11  human resources system possible. 
  3.12     Sec. 4.  [WORKING GROUP.] 
  3.13     The governor shall appoint a stakeholder working group to 
  3.14  advise the agency selected in section 2 and the commissioner of 
  3.15  employee relations on implementation of the pilot project under 
  3.16  this article.  The group shall include not more than 15 people, 
  3.17  and must include: 
  3.18     (1) not more than five representatives of management of the 
  3.19  agency selected for the pilot project; 
  3.20     (2) not more than five representatives of exclusive 
  3.21  representatives of the agency selected by the pilot project, 
  3.22  chosen by the exclusive representatives, provided that the 
  3.23  number of representatives under this clause may not be less than 
  3.24  the number of management representatives under clause (1); 
  3.25     (3) up to three representatives of customers of the 
  3.26  services provided by the agency selected for the pilot project; 
  3.27  and 
  3.28     (4) up to two representatives of nonprofit citizens' 
  3.29  organizations devoted to the study and improvement of government 
  3.30  services.  
  3.31     Sec. 5.  [PILOT PROJECT.] 
  3.32     During the biennium ending June 30, 1997, the human 
  3.33  resources innovation committee established under Laws 1993, 
  3.34  chapter 301, section 1, subdivision 6, shall designate state job 
  3.35  classifications to be included in a pilot project.  Under this 
  3.36  pilot project:  (1) resumes of applicants for positions to be 
  4.1   filled through a competitive open process will be evaluated 
  4.2   through an objective computerized system that will identify 
  4.3   which applicants have the required skills; and (2) information 
  4.4   on applicants determined to have required skills will be 
  4.5   forwarded to the agency seeking to fill a vacancy, without 
  4.6   ranking these applicants, and without a limit on the number of 
  4.7   applicants that may be forwarded to the hiring agency.  Laws or 
  4.8   rules that govern examination, ranking of eligibles, and 
  4.9   certification of eligibles for competitive open positions do not 
  4.10  apply to those job classifications included in the pilot 
  4.11  project.  Before designating a job classification under this 
  4.12  section, the committee must assure that the hiring process for 
  4.13  those job classifications complies with the policies in section 
  4.14  1. 
  4.15     Sec. 6.  [EVALUATION.] 
  4.16     The commissioner of employee relations, in consultation 
  4.17  with the human resources innovation committee, shall design and 
  4.18  implement a system for evaluating the success of the pilot 
  4.19  project in section 5.  By January 1, 1997, and January 1, 1998, 
  4.20  the commissioner must report to the legislature on the pilot 
  4.21  project.  The report must:  
  4.22     (1) list job classifications subject to the pilot project, 
  4.23  and the number of positions filled under these job classes; 
  4.24     (2) evaluate the extent to which the project has been 
  4.25  successful in maintaining a merit-based system in the absence of 
  4.26  traditional civil service laws and rules; 
  4.27     (3) quantify time and money saved in the hiring process 
  4.28  under the pilot project, as compared to hiring under the 
  4.29  traditional laws and rules; 
  4.30     (4) document the extent of complaints or problems arising 
  4.31  under the new system; and 
  4.32     (5) recommend any changes in laws or rules needed to make 
  4.33  permanent the successes of the pilot project. 
  4.34     Sec. 7.  [EXTENSION.] 
  4.35     Laws 1993, chapter 301, section 1, subdivision 6, is not 
  4.36  repealed until June 30, 1997. 
  5.1      Sec. 8.  [REPEALER.] 
  5.2      Minnesota Rules, parts 3900.0100 to 3900.4700 and 3900.6100 
  5.3   to 3900.9100, and all administrative procedures of the 
  5.4   department of employee relations that control the manner in 
  5.5   which state agencies hire employees, are repealed on June 30, 
  5.6   1999. 
  5.7                              ARTICLE 3
  5.8                             GAINSHARING
  5.9      Section 1.  [FINDINGS.] 
  5.10     The legislature recognizes state employees as crucial 
  5.11  resources in providing effective and efficient government 
  5.12  services to the people of Minnesota.  The legislature believes 
  5.13  that state employees should benefit from successful efforts they 
  5.14  make to improve government efficiency and effectiveness. 
  5.15     Sec. 2.  [PILOT PROJECT.] 
  5.16     During the biennium ending June 30, 1997, the department of 
  5.17  employee relations must implement a system of incentives 
  5.18  including economic incentives for unrepresented employees for 
  5.19  employees in the department.  The system must be approved by the 
  5.20  commissioner of finance before being implemented.  The system 
  5.21  must have the following characteristics: 
  5.22     (1) it must provide nonmanagerial unrepresented employees 
  5.23  within the agency the possibility of earning economic rewards by 
  5.24  suggesting changes in operation of the department's programs; 
  5.25     (2) it must provide groups of nonmanagerial represented 
  5.26  employees within the agency the possibility of receiving group 
  5.27  rewards in the form of training opportunities, additional 
  5.28  employee complement, or other resources that benefit overall 
  5.29  group performance; 
  5.30     (3) any economic awards must be based on changes in 
  5.31  operations suggested by nonmanagerial employees that result in 
  5.32  objectively measurable cost savings of at least $25,000 or 
  5.33  significant and objectively measurable efficiencies in services 
  5.34  that the agency provides to its customers or clients, without 
  5.35  decreasing the quality of these services; 
  5.36     (4) awards must be a minimum of $500 up to a maximum of 
  6.1   $2,500 per year to unrepresented nonmanagerial employees who 
  6.2   were instrumental in identifying and implementing the efficiency 
  6.3   and cost-saving measures; 
  6.4      (5) an "efficiency savings account" must be created within 
  6.5   each fund that is used to provide money for department 
  6.6   services.  Each account consists of money saved directly as a 
  6.7   result of initiatives under this article.  Any awards under this 
  6.8   article must be paid from money in an efficiency savings 
  6.9   account; 
  6.10     (6) no award shall be given except upon approval of a team 
  6.11  comprised of equal numbers of management and nonmanagement 
  6.12  employees selected by the commissioner of employee relations 
  6.13  from state employees outside of the department; and 
  6.14     (7) the economic awards granted to unrepresented employees 
  6.15  must be one-time awards, and must not add to the base salary of 
  6.16  employees. 
  6.17     Sec. 3.  [REPORTING.] 
  6.18     The department of employee relations must report to the 
  6.19  legislature on January 1, 1997, and January 1, 1998, on the 
  6.20  progress and results of the incentive programs under this 
  6.21  article.  The reports must include: 
  6.22     (1) a description of the measurable cost savings and 
  6.23  in-agency services that were used as the basis for rewards; and 
  6.24     (2) a list of the number and amount of awards granted. 
  6.25                             ARTICLE 4
  6.26                            PROCUREMENT
  6.27     Section 1.  [PURPOSE.] 
  6.28     The primary purpose of the laws governing state contracting 
  6.29  is to ensure that state agencies obtain high quality goods and 
  6.30  services at the least cost and in the most efficient and 
  6.31  effective manner.  The purpose of this article is to establish a 
  6.32  process to ensure that agencies obtain goods and services in 
  6.33  this manner, while removing rules and procedures that cause 
  6.34  unnecessary inefficiencies in the purchasing system. 
  6.35     Sec. 2.  [PILOT PROJECT.] 
  6.36     Notwithstanding any law to the contrary, the governor shall 
  7.1   designate an executive agency that, during the biennium ending 
  7.2   June 30, 1997, is exempt from any procurement-related law, rule, 
  7.3   or administrative procedure before an agency enters into a 
  7.4   contract.  The agency selected in this section must establish a 
  7.5   process for obtaining goods and services that complies with the 
  7.6   policies in section 1.  The process must include guidelines to 
  7.7   prevent conflicts of interest for agency employees involved in 
  7.8   developing bid specifications or proposals, evaluating bids or 
  7.9   proposals, entering into contracts, or evaluating the 
  7.10  performance of a contractor.  The guidelines must attempt to 
  7.11  ensure that such an employee: 
  7.12     (1) does not have any financial interest in and does not 
  7.13  personally benefit from the contract; 
  7.14     (2) does not accept from a contractor or bidder any 
  7.15  promise, obligation, contract for future reward, or gift, other 
  7.16  than an item of nominal value; and 
  7.17     (3) does not appear to have a conflict of interest because 
  7.18  of a family or close personal relationship to a contractor or 
  7.19  bidder, or because of a past employment or business relationship 
  7.20  with a contractor or bidder.  
  7.21     Upon request of the agency, the department of 
  7.22  administration shall provide the agency technical assistance in 
  7.23  designing such a process. 
  7.24     Sec. 3.  [EVALUATION.] 
  7.25     The commissioner of administration, in consultation with 
  7.26  the agency selected in section 2, shall design and implement a 
  7.27  system for evaluating the success of the pilot project in 
  7.28  section 2.  The system specifically must: 
  7.29     (1) evaluate the extent to which the agency has been 
  7.30  successful in obtaining high quality goods and services at the 
  7.31  least cost in the absence of the traditional checks placed on 
  7.32  agencies by laws, rules, and procedures administered by the 
  7.33  commissioner of administration; 
  7.34     (2) quantify time and money saved in the procurement 
  7.35  process under the pilot project as compared to purchasing goods 
  7.36  and services under the traditional rules and procedures; and 
  8.1      (3) document the extent of complaints or problems arising 
  8.2   under the new system. 
  8.3      The agency involved in the pilot project under this article 
  8.4   and the commissioner of administration must report to the 
  8.5   legislature by January 1, 1997, and January 1, 1998, on the 
  8.6   progress and results of the project.  The reports must include 
  8.7   at least the elements required in clauses (1) to (3) and must 
  8.8   also make recommendations for legislative changes needed to 
  8.9   ensure that the state will have the most efficient and effective 
  8.10  system possible for purchasing goods and services. 
  8.11                             ARTICLE 5
  8.12                        BOARD OF INNOVATION
  8.13     Section 1.  [465.7971] [WAIVERS OF STATE RULES; POLICIES.] 
  8.14     Subdivision 1.  [APPLICATION.] A state agency may apply to 
  8.15  the board for a waiver from:  (1) an administrative rule or 
  8.16  policy adopted by the department of employee relations that 
  8.17  deals with the state personnel system; (2) an administrative 
  8.18  rule or policy of the department of administration that deals 
  8.19  with the state procurement system; or (3) a policy of the 
  8.20  department of finance that deals with the state accounting 
  8.21  system.  Two or more state agencies may submit a joint 
  8.22  application.  A waiver application must identify the rule or 
  8.23  policy at issue, and must describe the improved outcome sought 
  8.24  through the waiver. 
  8.25     Subd. 2.  [REVIEW PROCESS.] (a) The board shall review all 
  8.26  applications submitted under this section.  The board shall 
  8.27  dismiss an application if it finds that the application proposes 
  8.28  a waiver that would result in due process violations, violations 
  8.29  of federal law or the state or federal constitution, or the loss 
  8.30  of services to people who are entitled to them.  If a proposed 
  8.31  waiver would violate the terms of a collective bargaining 
  8.32  agreement effective under chapter 179A the waiver is not 
  8.33  effective without the consent of the exclusive representative 
  8.34  that is a party to the agreement.  The board may approve a 
  8.35  waiver only if the board determines that if the waiver is 
  8.36  granted:  (1) services can be provided in a more efficient or 
  9.1   effective manner; and (2) services related to human resources 
  9.2   must be provided in a manner consistent with the policies 
  9.3   expressed in article 2, section 1, and in section 43A.01 and 
  9.4   services related to procurement must be provided in a manner 
  9.5   consistent with the policies expressed in article 4, section 1.  
  9.6   In the case of a waiver from a policy of the department of 
  9.7   finance, the board may approve the waiver only if it determines 
  9.8   that services will be provided in a more efficient or effective 
  9.9   manner and that state funds will be adequately accounted for and 
  9.10  safeguarded in a manner that complies with generally accepted 
  9.11  government accounting principles. 
  9.12     (b) Within 15 days of receipt of the application, the board 
  9.13  must send a copy of the application to:  (1) the agency whose 
  9.14  rule or policy is involved; and (2) all exclusive 
  9.15  representatives who represent employees of the agency requesting 
  9.16  the waiver.  The agency whose rule or policy is involved may 
  9.17  mail a copy of the application to all persons who have 
  9.18  registered with the agency under section 14.14, subdivision 1a. 
  9.19     (c) The agency whose rule or policy is involved or an 
  9.20  exclusive representative must notify the board of its agreement 
  9.21  with or objection to and grounds for objection to the waiver 
  9.22  within 60 days of the date when the application was transmitted 
  9.23  to the agency or the exclusive representative.  An agency's or 
  9.24  exclusive representative's failure to do so is considered 
  9.25  agreement to the waiver. 
  9.26     (d) If the agency or the exclusive representative objects 
  9.27  to the waiver, the board must schedule a meeting at which the 
  9.28  agency requesting the waiver can present its case for the 
  9.29  waiver, and the objecting party can respond.  The board shall 
  9.30  decide whether to grant a waiver at its next regularly scheduled 
  9.31  meeting following its receipt of an agency's response, or the 
  9.32  end of the 60-day response period, whichever occurs first.  If 
  9.33  consideration of an application is not concluded at the meeting, 
  9.34  the matter may be carried over to the next meeting of the 
  9.35  board.  Interested persons may submit written comments to the 
  9.36  board on the waiver request. 
 10.1      (e) If the board grants a request for a waiver, the board 
 10.2   and the agency requesting the waiver shall enter into an 
 10.3   agreement relating to the outcomes desired as a result of the 
 10.4   waiver and the means of measurement to determine if these 
 10.5   outcomes have been achieved with the waiver.  The agreement must 
 10.6   specify the duration of the waiver, which must be for at least 
 10.7   two years and not more than four years.  If the board determines 
 10.8   that an agency to which a waiver is granted is failing to comply 
 10.9   with the terms of the agreement, the board may rescind the 
 10.10  agreement. 
 10.11     Subd. 3.  [BOARD.] For purposes of evaluating waiver 
 10.12  requests involving rules or policies of the department of 
 10.13  administration, the chief administrative law judge shall appoint 
 10.14  a third administrative law judge to replace the commissioner of 
 10.15  administration on the board. 
 10.16                             ARTICLE 6
 10.17                      UNIVERSITY OF MINNESOTA 
 10.18     Section 1.  [UNIVERSITY OF MINNESOTA CONTRACTING.] 
 10.19     Notwithstanding any law to the contrary, the governor shall 
 10.20  designate one executive agency that will work with the 
 10.21  University of Minnesota to develop more efficient and effective 
 10.22  procedures for state agencies to contract with the University of 
 10.23  Minnesota.  Consideration shall be given to using a single 
 10.24  agency and a single set of administrative procedures for all 
 10.25  state contracting with the University.  As part of its 1998-1999 
 10.26  biennial budget request, the University of Minnesota shall 
 10.27  include measures demonstrating the efficiency gained through 
 10.28  these procedures and any recommendations for further 
 10.29  improvements. 
 10.30                             ARTICLE 7
 10.31               PRESERVATION OF COLLECTIVE BARGAINING
 10.32     Section 1.  [POLICY.] 
 10.33     Nothing in articles 1 to 6 authorizes the unilateral 
 10.34  modification or abrogation of a right under a collective 
 10.35  bargaining agreement.  The legislature affirmatively encourages 
 10.36  state agencies and bargaining units, when negotiating future 
 11.1   agreements, to allow for participation in pilot projects that 
 11.2   foster innovation, creativity, and productivity within the state 
 11.3   human resource system and within individual agencies, 
 11.4   departments, or units thereof. 
 11.5                              ARTICLE 8
 11.6      Section 1.  [EFFECTIVE DATE.] 
 11.7      Articles 1 to 7 are effective the day following final 
 11.8   enactment.