1.1 	A bill for an act
1.2 	relating to local government; increasing and indexing
1.3 	the compensation limit for local government employees;
1.4 	amending Minnesota Statutes 2004, section 43A.17,
1.5 	subdivision 9; repealing Minnesota Statutes 2004,
1.6 	section 356.611, subdivision 1.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 43A.17,
1.9 	subdivision 9, is amended to read:
1.10 		Subd. 9.Political subdivision compensation limit.  (a)
1.11 	The salary and the value of all other forms of compensation of a
1.12 	person employed by a political subdivision of this state,
1.13 	excluding a school district, or employed under section 422A.03
1.14 	may not exceed 95 110 percent of the salary of the governor as
1.15 	set under section 15A.082, except as provided in this
1.16 	subdivision.  For purposes of this subdivision, "political
1.17 	subdivision of this state" includes a statutory or home rule
1.18 	charter city, county, town, metropolitan or regional agency, or
1.19 	other political subdivision, but does not include a hospital,
1.20 	clinic, or health maintenance organization owned by such a
1.21 	governmental unit.
1.22 	(b) Beginning in 2006, the limit in paragraph (a) shall be
1.23 	adjusted annually in January.  The limit shall equal the limit
1.24 	for the prior year increased by the percentage increase, if any,
1.25 	in the Consumer Price Index for all-urban consumers from October
1.26 	of the second prior year to October of the immediately prior
2.1 	year.
2.2 	(c) Deferred compensation and payroll allocations to
2.3 	purchase an individual annuity contract for an employee are
2.4 	included in determining the employee's salary.  Other forms of
2.5 	compensation which shall be included to determine an employee's
2.6 	total compensation are all other direct and indirect items of
2.7 	compensation which are not specifically excluded by this
2.8 	subdivision.  Other forms of compensation which shall not be
2.9 	included in a determination of an employee's total compensation
2.10 	for the purposes of this subdivision are:
2.11 	(1) employee benefits that are also provided for the
2.12 	majority of all other full-time employees of the political
2.13 	subdivision, vacation and sick leave allowances, health and
2.14 	dental insurance, disability insurance, term life insurance, and
2.15 	pension benefits or like benefits the cost of which is borne by
2.16 	the employee or which is not subject to tax as income under the
2.17 	Internal Revenue Code of 1986;
2.18 	(2) dues paid to organizations that are of a civic,
2.19 	professional, educational, or governmental nature; and
2.20 	(3) reimbursement for actual expenses incurred by the
2.21 	employee which the governing body determines to be directly
2.22 	related to the performance of job responsibilities, including
2.23 	any relocation expenses paid during the initial year of
2.24 	employment.
2.25 	The value of other forms of compensation shall be the
2.26 	annual cost to the political subdivision for the provision of
2.27 	the compensation.
2.28 	(c) (d) The salary of a medical doctor or doctor of
2.29 	osteopathy occupying a position that the governing body of the
2.30 	political subdivision has determined requires an M.D. or D.O.
2.31 	degree is excluded from the limitation in this subdivision.
2.32 	(d) (e) The commissioner may increase the limitation in
2.33 	this subdivision for a position that the commissioner has
2.34 	determined requires special expertise necessitating a higher
2.35 	salary to attract or retain a qualified person.  The
2.36 	commissioner shall review each proposed increase giving due
3.1 	consideration to salary rates paid to other persons with similar
3.2 	responsibilities in the state and nation.  The commissioner may
3.3 	not increase the limitation until the commissioner has presented
3.4 	the proposed increase to the Legislative Coordinating Commission
3.5 	and received the commission's recommendation on it.  The
3.6 	recommendation is advisory only.  If the commission does not
3.7 	give its recommendation on a proposed increase within 30 days
3.8 	from its receipt of the proposal, the commission is deemed to
3.9 	have made no recommendation. If the commissioner grants or
3.10 	granted an increase under this paragraph, the new limitation
3.11 	shall be adjusted beginning in August 2005 and in each
3.12 	subsequent calendar year in January by the percentage increase
3.13 	equal to the percentage increase, if any, in the Consumer Price
3.14 	Index for all-urban consumers from October of the second prior
3.15 	year to October of the immediately prior year.

3.16 	Sec. 2. REPEALER.
 3.17 	Minnesota Statutes 2004, section 356.611, subdivision 1, is
3.18 	repealed.