1.1 	A bill for an act
1.2 	relating to state employees; modifying equitable compensation limits; modifying 
1.3 	caps on state commissioner salaries;amending Minnesota Statutes 2006, sections 
1.4 	15A.081, subdivision 8; 15A.0815; 43A.01, subdivision 3; 43A.17, subdivision 
1.5 	9; 119A.03, subdivision 1; 124D.385, subdivision 4; 349A.02, subdivision 1; 
1.6 	Minnesota Statutes 2007 Supplement, section 216C.052, subdivision 2.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2006, section 15A.081, subdivision 8, is amended to 
1.9 	read:
1.10 		Subd. 8.Expense allowance. Notwithstanding any law to the contrary, positions 
1.11 	listed in section 15A.0815, subdivisions 2 and 3, constitutional officers, the commissioner 
1.12 	of Iron Range resources and rehabilitation, and the director of the State Lottery are 
1.13 	authorized an annual expense allowance not to exceed $1,500 for necessary expenses in 
1.14 	the normal performance of their duties for which no other reimbursement is provided. 
1.15 	The expenditures under this subdivision are subject to any laws and rules relating to 
1.16 	budgeting, allotment and encumbrance, preaudit and postaudit. The commissioner of 
1.17 	finance may adopt rules to assure the proper expenditure of these funds and to provide 
1.18 	for reimbursement. 

1.19 	Sec. 2. Minnesota Statutes 2006, section 15A.0815, is amended to read:
1.20 	15A.0815 SALARY LIMITS FOR CERTAIN EMPLOYEES.
1.21 		Subdivision 1.Salary limits. The governor or other appropriate appointing 
1.22 	authority shall set the salary rates for positions listed in this sectionsubdivision 2 within 
1.23 	the salary limits listed in subdivisions subdivision 2 to 4 and section 43A.17, subdivision 
2.1 	9, subject to approval of the Legislative Coordinating Commission and the legislature as 
2.2 	provided by subdivision 5 and sections 3.855 and 15A.081, subdivision 7b. 
2.3 		Subd. 2.Group I salary limits Positions. The salaries for positions in this 
2.4 	subdivision may not exceed 95 percent of the salary of the governor:
2.5 	Commissioner of administration;
2.6 	Commissioner of agriculture;
2.7 	Commissioner of education;
2.8 	Commissioner of commerce;
2.9 	Commissioner of corrections;
2.10 	Commissioner of employee relations;
2.11 	Commissioner of employment and economic development;
2.12 	Commissioner of finance;
2.13 	Director, Gambling Control Board;
2.14 	Commissioner of health;
2.15 	Executive director, Minnesota Office of Higher Education;
2.16 	Commissioner, Housing Finance Agency;
2.17 	Commissioner of human rights;
2.18 	Commissioner of human services;
2.19 	Commissioner, Iron Range Resources and Rehabilitation Board;
2.20 	Commissioner of labor and industry;
2.21 	Commissioner, Bureau of Mediation Services;
2.22 	Ombudsman for Mental Health and Developmental Disabilities;
2.23 	Chair, Metropolitan Airports Commission;
2.24 	Chair, Metropolitan Council;
2.25 	Director, Minnesota State Lottery;
2.26 	Commissioner of natural resources;
2.27 	Director of Office of Strategic and Long-Range Planning;
2.28 	Commissioner, Pollution Control Agency;
2.29 	Executive director, Public Employees Retirement Association;
2.30 	Commissioner of public safety;
2.31 	Commissioner, Public Utilities Commission;
2.32 	Director, Minnesota Racing Commission;
2.33 	Commissioner of revenue;
2.34 	Commissioner of employment and economic development;
2.35 	Executive director, State Retirement System;
2.36 	Executive director, Teachers Retirement Association;
3.1 	Commissioner of transportation; and
3.2 	Commissioner of veterans affairs.
3.3 		Subd. 3.Group II salary limits. The salaries for positions in this subdivision may 
3.4 	not exceed 85 percent of the salary of the governor:
3.5 	Executive director of Gambling Control Board;
3.6 	Commissioner, Iron Range Resources and Rehabilitation Board;
3.7 	Commissioner, Bureau of Mediation Services;
3.8 	Ombudsman for Mental Health and Developmental Disabilities;
3.9 	Chair, Metropolitan Council;
3.10 	Executive director of pari-mutuel racing;
3.11 	Executive director, Public Employees Retirement Association;
3.12 	Commissioner, Public Utilities Commission;
3.13 	Executive director, State Retirement System; and
3.14 	Executive director, Teachers Retirement Association.
3.15 		Subd. 4.Group III salary limits. The salary for a position in this subdivision may 
3.16 	not exceed 25 percent of the salary of the governor:
3.17 	Chair, Metropolitan Airports Commission.
3.18 		Subd. 5.Appointing authorities to recommend certain salaries. (a) The 
3.19 	governor, or other appropriate appointing authority, may submit to the Legislative 
3.20 	Coordinating Commission recommendations for salaries within the salary limits for the 
3.21 	positions listed in subdivisions 2 to 4. An appointing authority may also propose additions 
3.22 	or deletions of positions from those listed.
3.23 	(b) Before submitting the recommendations, the appointing authority shall consult 
3.24 	with the commissioner of employee relations concerning the recommendations.
3.25 	(c) In making recommendations, the appointing authority shall consider the 
3.26 	criteria established in section 43A.18, subdivision 8, and the performance of individual 
3.27 	incumbents. The performance evaluation must include a review of an incumbent's progress 
3.28 	toward attainment of affirmative action goals. The appointing authority shall establish 
3.29 	an objective system for quantifying knowledge, abilities, duties, responsibilities, and 
3.30 	accountabilities, and in determining recommendations, rate each position by this system. 
3.31 	(d) Before the appointing authority's recommended salaries take effect, the 
3.32 	recommendations must be reviewed and approved, rejected, or modified by the Legislative 
3.33 	Coordinating Commission and the legislature under section 3.855, subdivisions 2 and 
3.34 	3. If, when the legislature is not in session, the commission fails to reject or modify 
3.35 	salary recommendations of the governor within 30 calendar days of their receipt, the 
3.36 	recommendations are deemed to be approved. 
4.1 	(e) The appointing authority shall set the initial salary of a head of a new agency 
4.2 	or a chair of a new metropolitan board or commission whose salary is not specifically 
4.3 	prescribed by law after consultation with the commissioner, whose recommendation is 
4.4 	advisory only. The amount of the new salary must be comparable to the salary of an 
4.5 	agency head or commission chair having similar duties and responsibilities.
4.6 	(f) The salary of a newly appointed head of an agency or chair of a metropolitan 
4.7 	agency listed in subdivisions subdivision 2 to 4, may be increased or decreased by the 
4.8 	appointing authority from the salary previously set for that position within 30 days 
4.9 	of the new appointment after consultation with the commissioner. If the appointing 
4.10 	authority increases a salary under this paragraph, the appointing authority shall submit 
4.11 	the new salary to the Legislative Coordinating Commission and the full legislature 
4.12 	for approval, modification, or rejection under section 3.855, subdivisions 2 and 3. 
4.13 	If, when the legislature is not in session, the commission fails to reject or modify 
4.14 	salary recommendations of the governor within 30 calendar days of their receipt, the 
4.15 	recommendations are deemed to be approved. 

4.16 	Sec. 3. Minnesota Statutes 2006, section 43A.01, subdivision 3, is amended to read:
4.17 		Subd. 3.Equitable compensation relationships. It is the policy of this state to 
4.18 	attempt to establish equitable compensation relationships between female-dominated, 
4.19 	male-dominated, and balanced classes of employees in the executive branch. 
4.20 	Compensation relationships are equitable within the meaning of this subdivision when the 
4.21 	primary consideration in negotiating, establishing, recommending, and approving total 
4.22 	compensation is comparability of the value of the work in relationship to other positions in 
4.23 	the executive branch. A recognized system for classification analysis and its concurrent 
4.24 	point allocation system must be used in order to attain compensation equity. Classification 
4.25 	range maximums must fall within the system's point allocation window. Market-driven 
4.26 	forces are recognized as acceptable in order to maintain employee recruitment and 
4.27 	retention efforts whenever the compensation rates exceed the allocated points. No contract 
4.28 	executed under chapter 179A may modify, waive, or abridge this section and sections 
4.29 	43A.07 to 43A.121, 43A.15, and 43A.17 to 43A.21, except to the extent expressly 
4.30 	permitted in those sections. Any compensation equity adjustments must be made from 
4.31 	agency appropriations. Fifty percent of the compensation governed by this system must be 
4.32 	adjusted in fiscal year 2009 and the remaining compensation in fiscal year 2010.

4.33 	Sec. 4. Minnesota Statutes 2006, section 43A.17, subdivision 9, is amended to read:
5.1 		Subd. 9.Political subdivision Compensation limit. (a) The salary and the value 
5.2 	of all other forms of compensation of the positions in section 15A.0815 and a person 
5.3 	employed by a political subdivision of this state, excluding a school district, or employed 
5.4 	under section 422A.03 may not exceed 110 percent of the salary of the governor as set 
5.5 	under section 15A.082, except as provided in this subdivision. For purposes of this 
5.6 	subdivision, "political subdivision of this state" includes a statutory or home rule charter 
5.7 	city, county, town, metropolitan or regional agency, or other political subdivision, but 
5.8 	does not include a hospital, clinic, or health maintenance organization owned by such a 
5.9 	governmental unit.
5.10 	(b) Beginning in 2006, the limit in paragraph (a) shall be adjusted annually in 
5.11 	January. The limit shall equal the limit for the prior year increased by the percentage 
5.12 	increase, if any, in the Consumer Price Index for all-urban consumers from October of the 
5.13 	second prior year to October of the immediately prior year.
5.14 	(c) Deferred compensation and payroll allocations to purchase an individual annuity 
5.15 	contract for an employee are included in determining the employee's salary. Other forms 
5.16 	of compensation which shall be included to determine an employee's total compensation 
5.17 	are all other direct and indirect items of compensation which are not specifically excluded 
5.18 	by this subdivision. Other forms of compensation which shall not be included in a 
5.19 	determination of an employee's total compensation for the purposes of this subdivision are:
5.20 	(1) employee benefits that are also provided for the majority of all other full-time 
5.21 	employees of the political subdivision, vacation and sick leave allowances, health and 
5.22 	dental insurance, disability insurance, term life insurance, and pension benefits or like 
5.23 	benefits the cost of which is borne by the employee or which is not subject to tax as 
5.24 	income under the Internal Revenue Code of 1986;
5.25 	(2) dues paid to organizations that are of a civic, professional, educational, or 
5.26 	governmental nature; and
5.27 	(3) reimbursement for actual expenses incurred by the employee which the 
5.28 	governing body determines to be directly related to the performance of job responsibilities, 
5.29 	including any relocation expenses paid during the initial year of employment.
5.30 	The value of other forms of compensation shall be the annual cost to the political 
5.31 	subdivision for the provision of the compensation.
5.32 	(d) The salary of a medical doctor or doctor of osteopathy occupying a position that 
5.33 	the governing body of the political subdivision has determined requires an M.D. or D.O. 
5.34 	degree is excluded from the limitation in this subdivision.
5.35 	(e) The commissioner may increase the limitation in this subdivision for a position 
5.36 	that the commissioner has determined requires special expertise necessitating a higher 
6.1 	salary to attract or retain a qualified person. The commissioner shall review each 
6.2 	proposed increase giving due consideration to salary rates paid to other persons with 
6.3 	similar responsibilities in the state and nation. The commissioner may not increase the 
6.4 	limitation until the commissioner has presented the proposed increase to the Legislative 
6.5 	Coordinating Commission and received the commission's recommendation on it. The 
6.6 	recommendation is advisory only. If the commission does not give its recommendation 
6.7 	on a proposed increase within 30 days from its receipt of the proposal, the commission 
6.8 	is deemed to have made no recommendation. If the commissioner grants or granted an 
6.9 	increase under this paragraph, the new limitation shall be adjusted beginning in August 
6.10 	2005 and in each subsequent calendar year in January by the percentage increase equal to 
6.11 	the percentage increase, if any, in the Consumer Price Index for all-urban consumers from 
6.12 	October of the second prior year to October of the immediately prior year.

6.13 	Sec. 5. Minnesota Statutes 2006, section 119A.03, subdivision 1, is amended to read:
6.14 		Subdivision 1.General. The department is under the administrative control of 
6.15 	the commissioner. The commissioner is appointed by the governor with the advice and 
6.16 	consent of the senate. The commissioner must possess broad knowledge and experience 
6.17 	in strengthening children and families. The commissioner has the general powers as 
6.18 	provided in section 15.06, subdivision 6. 
6.19 	The commissioner's salary must be established according to the procedure in section 
6.20 	15A.0815, in the same range as that specified for the commissioner of finance. 

6.21 	Sec. 6. Minnesota Statutes 2006, section 124D.385, subdivision 4, is amended to read:
6.22 		Subd. 4.Delegation to nonprofit. The commission may create a private nonprofit 
6.23 	corporation that is exempt from taxation under section 501(c)(3) of the federal Internal 
6.24 	Revenue Code of 1986. If the commission creates a private nonprofit corporation, the 
6.25 	commission must serve as the corporation's board of directors. The private nonprofit 
6.26 	corporation is not subject to laws governing state agencies or political subdivisions, 
6.27 	except the provisions of chapter 13, the Open Meeting Law under chapter 13D, salary 
6.28 	limits under section 15A.0815, subdivision 2, and audits by the legislative auditor under 
6.29 	chapter 3 apply. Further provided that the board of directors and the executive director 
6.30 	of the nonprofit corporation are each considered an "official" for purposes of section 
6.31 	10A.071. The commission may delegate any or all of its powers and duties under federal 
6.32 	law or under sections 124D.37 to 124D.45 to the corporation if the nonprofit corporation 
6.33 	is approved under federal law to administer the National and Community Service Trust 
6.34 	Act. The commission may revoke a delegation of powers and duties at any time, and must 
7.1 	revoke the delegation if the corporation is no longer approved under federal law as the 
7.2 	administrator in the state of Minnesota for the National and Community Service Trust Act. 

7.3 	Sec. 7. Minnesota Statutes 2007 Supplement, section 216C.052, subdivision 2, is 
7.4 	amended to read:
7.5 		Subd. 2.Administrative issues. (a) The commissioner may select the administrator. 
7.6 	The administrator must have at least five years of experience working as a power systems 
7.7 	engineer or transmission planner, or in a position dealing with power system reliability 
7.8 	issues, and may not have been a party or a participant in a commission energy proceeding 
7.9 	for at least one year prior to selection by the commissioner. The commissioner shall 
7.10 	oversee and direct the work of the administrator, annually review the expenses of the 
7.11 	administrator, and annually approve the budget of the administrator. The administrator 
7.12 	may hire staff and may contract for technical expertise in performing duties when existing 
7.13 	state resources are required for other state responsibilities or when special expertise is 
7.14 	required. The salary of the administrator is governed by section 15A.0815, subdivision 2.
7.15 	(b) Costs relating to a specific proceeding, analysis, or project are not general 
7.16 	administrative costs. For purposes of this section, "energy utility" means public utilities, 
7.17 	generation and transmission cooperative electric associations, and municipal power 
7.18 	agencies providing natural gas or electric service in the state.
7.19 	(c) The Department of Commerce shall pay:
7.20 	(1) the general administrative costs of the administrator, not to exceed $1,000,000 
7.21 	in a fiscal year, and shall assess energy utilities for those administrative costs. These 
7.22 	costs must be consistent with the budget approved by the commissioner under paragraph 
7.23 	(a). The department shall apportion the costs among all energy utilities in proportion to 
7.24 	their respective gross operating revenues from sales of gas or electric service within 
7.25 	the state during the last calendar year, and shall then render a bill to each utility on a 
7.26 	regular basis; and
7.27 	(2) costs relating to a specific proceeding analysis or project and shall render a bill to 
7.28 	the specific energy utility or utilities participating in the proceeding, analysis, or project 
7.29 	directly, either at the conclusion of a particular proceeding, analysis, or project, or from 
7.30 	time to time during the course of the proceeding, analysis, or project.
7.31 	(d) For purposes of administrative efficiency, the department shall assess energy 
7.32 	utilities and issue bills in accordance with the billing and assessment procedures provided 
7.33 	in section 216B.62, to the extent that these procedures do not conflict with this subdivision. 
7.34 	The amount of the bills rendered by the department under paragraph (c) must be paid by 
7.35 	the energy utility into an account in the special revenue fund in the state treasury within 
8.1 	30 days from the date of billing and is appropriated to the department for the purposes 
8.2 	provided in this section. The commission shall approve or approve as modified a rate 
8.3 	schedule providing for the automatic adjustment of charges to recover amounts paid by 
8.4 	utilities under this section. All amounts assessed under this section are in addition to 
8.5 	amounts appropriated to the commission and the department by other law.

8.6 	Sec. 8. Minnesota Statutes 2006, section 349A.02, subdivision 1, is amended to read:
8.7 		Subdivision 1.Director. A State Lottery is established under the supervision and 
8.8 	control of a director. The director of the State Lottery shall be appointed by the governor 
8.9 	with the advice and consent of the senate. The director serves in the unclassified service at 
8.10 	the pleasure of the governor. The annual salary rate authorized for the director is equal to 
8.11 	95 percent of the salary rate prescribed for the governor.