1.1 	A bill for an act
1.2 	relating to local government; authorizing the state
1.3 	auditor to waive certain rules and laws applying to
1.4 	local government units; creating a grants board to
1.5 	fund cooperative efforts in public service delivery;
1.6 	proposing coding for new law in Minnesota Statutes,
1.7 	chapter 6.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 	LOCAL GOVERNMENT WAIVERS AND GRANTS

1.10 	Section 1. [6.79] DUTIES OF STATE AUDITOR.
1.11 	The state auditor shall:
1.12 	(1) accept applications from local government units for
1.13 	waivers of administrative rules and temporary, limited
1.14 	exemptions from enforcement of procedural requirements in state
1.15 	law, and determine whether to approve, modify, or reject the
1.16 	application; and 
1.17 	(2) accept applications for grants to local government
1.18 	units and related organizations proposing to promote cooperative
1.19 	efforts in public service delivery and determine whether to
1.20 	approve, modify, or reject the application.

1.21 	Sec. 2. [6.80] RULE AND LAW WAIVER REQUESTS.
1.22 		Subdivision 1.Generally. (a) Except as provided in
1.23 	paragraph (b), a local government unit may request the state
1.24 	auditor to grant a waiver from one or more administrative rules
1.25 	or a temporary, limited exemption from enforcement of state
1.26 	procedural laws governing delivery of services by the local
2.1 	government unit.  Two or more local government units may submit
2.2 	a joint application for a waiver or exemption under this section
2.3 	if they propose to cooperate in providing a service or program
2.4 	that is subject to the rule or law.  Before submitting an
2.5 	application to the state auditor, the governing body of the
2.6 	local government unit must approve, in concept, the proposed
2.7 	waiver or exemption at a meeting required to be public under
2.8 	chapter 13D.  A local government unit or two or more units
2.9 	acting jointly may apply for a waiver or exemption on behalf of
2.10 	a nonprofit organization providing services to clients whose
2.11 	costs are paid by the unit or units.  A waiver or exemption
2.12 	granted to a nonprofit organization under this section applies
2.13 	to services provided to all the organization's clients.
2.14 	(b) A school district that is granted a variance from rules
2.15 	of the commissioner of education under section 122A.163, need
2.16 	not apply for a waiver of those rules under this section.  A
2.17 	school district may not seek a waiver of rules under this
2.18 	section if the commissioner of education has authority to grant
2.19 	a variance to the rules under section 122A.163.  This paragraph
2.20 	does not preclude a school district from being included in a
2.21 	cooperative effort with another local government unit under this
2.22 	section.
2.23 	(c) Before petitioning the State Auditor's Office for an
2.24 	exemption from an administrative rule, the petitioner must have
2.25 	requested and been denied such an exemption from the appropriate
2.26 	agency pursuant to sections 14.055 and 14.056.
2.27 		Subd. 2.Application. A local government unit requesting
2.28 	a waiver of a rule or exemption from enforcement of a law under
2.29 	this section shall present a written application to the state
2.30 	auditor.  The application must include:
2.31 	(1) the name and address of the entity for whom a waiver of
2.32 	a rule or exemption from enforcement of a law is being
2.33 	requested;
2.34 	(2) identification of the service or program at issue;
2.35 	(3) identification of the administrative rule or the law
2.36 	imposing a procedural requirement with respect to which the
3.1 	waiver or exemption is sought;
3.2 	(4) a description of the improved service outcome sought,
3.3 	including an explanation of the effect of the waiver or
3.4 	exemption in accomplishing that outcome, and why that outcome
3.5 	cannot be accomplished under established rules or laws;
3.6 	(5) information on the State Auditor's Office treatment on
3.7 	similar cases;
3.8 	(6) the name, address, and telephone number of any person,
3.9 	business, or other government unit the petitioner knows would be
3.10 	adversely affected by the grant of the petition; and 
3.11 	(7) a signed statement as to the accuracy of the facts
3.12 	presented.
3.13 	A copy of the application must be provided by the requesting
3.14 	local government unit to the exclusive representative certified
3.15 	under section 179A.12 to represent employees who provide the
3.16 	service or program affected by the requested waiver or exemption.
3.17 		Subd. 3.Review process. (a) Upon receipt of an
3.18 	application from a local government unit, the state auditor
3.19 	shall review the application.  The state auditor shall dismiss
3.20 	an application if the application proposes a waiver of rules or
3.21 	exemption from enforcement of laws that would result in due
3.22 	process violations, violations of federal law or the state or
3.23 	federal constitution, or the loss of services to people who are
3.24 	entitled to them.
3.25 	(b) The state auditor shall determine whether a law from
3.26 	which an exemption for enforcement is sought is a procedural
3.27 	law, specifying how a local government unit is to achieve an
3.28 	outcome, rather than a substantive law prescribing the outcome
3.29 	or otherwise establishing policy.  In making its determination,
3.30 	the state auditor shall consider whether the law specifies such
3.31 	requirements as:
3.32 	(1) who must deliver a service;
3.33 	(2) where the service must be delivered;
3.34 	(3) to whom and in what form reports regarding the service
3.35 	must be made; and 
3.36 	(4) how long or how often the service must be made
4.1 	available to a given recipient.  For purposes of this section
4.2 	procedural law does not include a statutory notice requirement.
4.3 	(c) If the application is submitted by a local government
4.4 	unit in the metropolitan area or the unit requests a waiver of a
4.5 	rule or temporary, limited exemptions from enforcement of a
4.6 	procedural law over which the Metropolitan Council or a
4.7 	metropolitan agency has jurisdiction, the state auditor shall
4.8 	also transmit a copy of the application to the council for
4.9 	review and comment.  The council shall report its comments to
4.10 	the board within 60 days of the date the application was
4.11 	transmitted to the council.  The council may point out any
4.12 	resources or technical assistance it may be able to provide a
4.13 	local government submitting a request under this section.
4.14 	(d) Within 15 days after receipt of the application, the
4.15 	state auditor shall transmit a copy of it to the commissioner of
4.16 	each agency having jurisdiction over a rule or law from which a
4.17 	waiver or exemption is sought.  The agency may mail a notice
4.18 	that it has received an application for a waiver or exemption to
4.19 	all persons who have registered with the agency under section
4.20 	14.14, subdivision 1a, identifying the rule or law from which a
4.21 	waiver or exemption is requested.  If no agency has jurisdiction
4.22 	over the rule or law, the state auditor shall transmit a copy of
4.23 	the application to the attorney general.  The agency shall
4.24 	inform the state auditor of its agreement with or objection to
4.25 	and grounds for objection to the waiver or exemption request
4.26 	within 60 days of the date when the application was transmitted
4.27 	to it.  An agency's failure to do so is considered agreement to
4.28 	the waiver or exemption.  The state auditor shall decide whether
4.29 	to grant a waiver or exemption at the end of the 60-day response
4.30 	period.  Interested persons may submit written comments to the
4.31 	state auditor on the waiver or exemption request up to the end
4.32 	of the 60-day response period.
4.33 	(e) If the exclusive representative of the affected
4.34 	employees of the requesting local government unit objects to the
4.35 	waiver or exemption request it may inform the state auditor of
4.36 	the objection to and the grounds for the objection to the waiver
5.1 	or exemption request within 60 days of the receipt of the
5.2 	application.
5.3 		Subd. 4.Hearing. If a state agency under subdivision 3,
5.4 	paragraph (d), or the exclusive representative of the affected
5.5 	employees under subdivision 3, paragraph (e), has objected to a
5.6 	waiver or exemption request, the State Auditor's Office shall
5.7 	set a date for a hearing on the applications.  The hearing must
5.8 	be conducted informally at a time and place determined by all
5.9 	parties.  Persons representing the local government unit shall
5.10 	present their case for the waiver or exemption, and persons
5.11 	representing the agency or the exclusive representative of the
5.12 	affected employees shall explain their objection to it.  The
5.13 	state auditor may request additional information from the local
5.14 	government unit or either objecting party.  The state auditor
5.15 	may also request, either before or at the hearing, information
5.16 	or comments from representatives of business, labor, local
5.17 	governments, state agencies, consultants, and members of the
5.18 	public.  If necessary, the hearing may be continued for a later
5.19 	date.  The state auditor may modify the terms of the waiver or
5.20 	exemption request in arriving at the agreement required under
5.21 	subdivision 5.
5.22 		Subd. 5.Conditions of agreements. (a) In determining
5.23 	whether to grant a petition for a waiver of a rule or exemption
5.24 	from enforcement of a law, the state auditor should consider the
5.25 	following factors:
5.26 	(1) whether there is a true and unique impediment under
5.27 	current law to accomplishing the goal of the local government
5.28 	unit;
5.29 	(2) granting the waiver of a rule or exemption from
5.30 	enforcement of law will only change procedural requirements of a
5.31 	local government unit;
5.32 	(3) the purpose of any rule or law that is waived is still
5.33 	being met in another manner;
5.34 	(4) granting the proposed waiver of a rule or exemption
5.35 	from enforcement of a law would result in a more efficient means
5.36 	of providing government services; and 
6.1 	(5) granting the proposed waiver will not have a
6.2 	significant negative impact on other state government, local
6.3 	government units, businesses, or citizens.
6.4 	(b) If the state auditor grants a request for a waiver or
6.5 	exemption, the state auditor and the local government unit shall
6.6 	enter into an agreement providing for the delivery of the
6.7 	service or program that is the subject of the application.  The
6.8 	agreement must specify desired outcomes, the reasons why the
6.9 	desired outcomes cannot be met under current laws or rules, and
6.10 	the means of measurement by which the state auditor will
6.11 	determine whether the outcomes specified in the agreement have
6.12 	been met.  The agreement must specify the duration of the waiver
6.13 	or exemption.  The duration of a waiver from an administrative
6.14 	rule may be for no less than two years and no more than four
6.15 	years, subject to renewal if both parties agree.  An exemption
6.16 	from enforcement of a law terminates ten days after adjournment
6.17 	of the regular legislative session held during the calendar year
6.18 	following the year when the exemption is granted, unless the
6.19 	legislature has acted to extend or make permanent the exemption.
6.20 	(c) The state auditor must report any grants of waivers or
6.21 	exemptions to the legislature, including the chairs of the
6.22 	governmental operations and appropriate policy committees in the
6.23 	house and senate, and the governor within 30 days.
6.24 	(d) The state auditor may reconsider or renegotiate the
6.25 	agreement if the rule or law affected by the waiver or exemption
6.26 	is amended or repealed during the term of the original
6.27 	agreement.  A waiver of a rule under this section has the effect
6.28 	of a variance granted by an agency under section 14.055.  A
6.29 	local unit of government that is granted an exemption from
6.30 	enforcement of a procedural requirement in state law under this
6.31 	section is exempt from that law for the duration of the
6.32 	exemption.  The state auditor may require periodic reports from
6.33 	the local government unit, or conduct investigations of the
6.34 	service or program.
6.35 		Subd. 6.Enforcement. If the state auditor finds that
6.36 	the local government unit is failing to comply with the terms of
7.1 	the agreement under subdivision 5, the state auditor may rescind
7.2 	the agreement.  Upon the rescission, the local unit of
7.3 	government becomes subject to the rules and laws covered by the
7.4 	agreement.
7.5 		Subd. 7.Access to data. If a local government unit,
7.6 	through a cooperative program under this section, gains access
7.7 	to data collected, created, received, or maintained by another
7.8 	local government that is classified as not public, the unit
7.9 	gaining access is governed by the same restrictions on access to
7.10 	and use of the data as the unit that collected, created,
7.11 	received, or maintained the data.

7.12 	Sec. 3. [6.81] GRANTS PROMOTING COOPERATIVE EFFORTS IN
7.13 	PUBLIC SERVICE DELIVERY.
7.14 		Subdivision 1.Board. A cooperative grants board chaired
7.15 	by the state auditor, and made up of two members of the
7.16 	Minnesota house of representatives and two members of the
7.17 	Minnesota senate shall review applications for cooperative
7.18 	efforts in public service delivery made by local units of
7.19 	government for years in which funds have been appropriated for
7.20 	such a purpose.  The state auditor, with the advice of the
7.21 	board, shall approve the applications.
7.22 	The speaker of the house of representatives and the house
7.23 	of representatives minority leader shall each appoint a member
7.24 	to the board.  The senate majority leader and the senate
7.25 	minority leader shall each appoint a member to the board.
7.26 		Subd. 2.Grants. Two or more local government units; an
7.27 	association of local governments; a local unit of government
7.28 	acting in conjunction with the Metropolitan Council, an
7.29 	organization, or a state agency; or an organization formed by
7.30 	two or more local units of government under a joint powers
7.31 	agreement may apply to the board for a grant to be used to
7.32 	develop a plan for intergovernmental cooperation in providing
7.33 	services.
7.34 	The purpose of the grants is to promote cooperative efforts
7.35 	in public service delivery by local units of government and
7.36 	include, but are not limited to, covering the initial start-up
8.1 	costs of a cooperative effort and costs associated with planning
8.2 	and integrating a service or function provided by two or more
8.3 	local government units.  Agreements solely to make joint
8.4 	purchases are not sufficient to qualify under this section.
8.5 	The application to the board must state what other sources
8.6 	of funding have been considered by the local units of government
8.7 	to implement the project and explain why it is not possible to
8.8 	complete the project without assistance from the board.  The
8.9 	state auditor may not award a grant if it determines that the
8.10 	local units of government could complete the project without
8.11 	board assistance.  A copy of the application must be submitted
8.12 	by the applicants to the exclusive representatives certified
8.13 	under section 179A.12 to represent employees who provide the
8.14 	service or program affected by the application.
8.15 	The state auditor shall award grants on the basis of each
8.16 	qualified applicant's score under the scoring system in
8.17 	subdivision 4.  The amount of a grant under this section may not
8.18 	exceed $50,000.
8.19 		Subd. 3.Repayment of grants. If the state auditor finds
8.20 	that the grantee has failed to implement the plan according to
8.21 	the terms of the grant agreement, it may require the grantee to
8.22 	repay all or a portion of the grant.  All grant money repaid to
8.23 	the state under this section is appropriated to the board for
8.24 	additional grants.
8.25 		Subd. 4.Cooperative grants scoring system. In deciding
8.26 	whether to award a grant promoting cooperative efforts in public
8.27 	service delivery, the board shall use the following scoring
8.28 	system:
8.29 	(1) up to 15 points shall be awarded to reflect the extent
8.30 	to which the application demonstrates creative thinking, careful
8.31 	planning, cooperation, involvement of the clients of the
8.32 	affected service, and commitment to assume risk;
8.33 	(2) up to 20 points shall be awarded to reflect the extent
8.34 	to which the proposed project is likely to improve the quality
8.35 	of the service and to have benefits for other local governments;
8.36 	(3) up to 15 points shall be awarded to reflect the extent
9.1 	to which the application's budget provides sufficient detail,
9.2 	maximizes the use of state funds, documents the need for
9.3 	financial assistance, commits to local financial support, and
9.4 	limits expenditures to essential activities;
9.5 	(4) up to 20 points shall be awarded to reflect the extent
9.6 	to which the application reflects the statutory goal of the
9.7 	grant program;
9.8 	(5) up to 15 points shall be awarded to reflect the merit
9.9 	of the proposed project and the extent to which it warrants the
9.10 	state's financial participation;
9.11 	(6) up to five points shall be awarded to reflect the
9.12 	cost/benefit ratio projected for the proposed project;
9.13 	(7) up to five points shall be awarded to reflect the
9.14 	number of government units participating in the proposal; and 
9.15 	(8) up to five points shall be awarded to reflect the
9.16 	minimum length of time the application commits to implementation.