1.1 	A bill for an act
1.2 	relating to state government; proposing the Reinventing Government 
1.3 	Employment Act; providing a public employee compensation freeze and a 
1.4 	method for determining future compensation; requiring a reduction in the 
1.5 	state workforce; establishing a state employee gainsharing system; removing 
1.6 	restrictions on state contracts with private vendors; proposing a constitutional 
1.7 	amendment providing a right to work;amending Minnesota Statutes 2010, 
1.8 	sections 16C.08, subdivision 2; 16C.09; proposing coding for new law in 
1.9 	Minnesota Statutes, chapters 15; 15A; 16A; 43A; 181; repealing Minnesota 
1.10 	Statutes 2010, sections 16C.085; 43A.047; 179A.23.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	ARTICLE 1
1.13 	REINVENTING GOVERNMENT EMPLOYMENT

1.14 	Section 1. CITATION.
 1.15 	This act may be known as the Reinventing Government Employment Act.

1.16 	ARTICLE 2
1.17 	EQUAL PAY AND BENEFITS

1.18 	Section 1. [15A.25] PUBLIC EMPLOYEE COMPENSATION.
1.19 		Subdivision 1.Compensation freeze. (a) From the effective date of this section 
1.20 	until implementation of compensation required under subdivision 2, a government 
1.21 	employer must not increase the compensation of any employee. This subdivision prohibits 
1.22 	any increase including, but not limited to, across-the-board increases; cost-of-living 
1.23 	adjustments; increases based on longevity; increases as a result of step and lane changes; 
1.24 	increases in the form of lump-sum payments; increases in employer contributions to 
2.1 	deferred compensation plans; and any increase in employer contributions toward the cost 
2.2 	of medical, dental, life, or other insurance.
2.3 	(b) This subdivision does not prohibit: 
2.4 	(1) an increase in the rate of salary and wages for an employee who is promoted or 
2.5 	transferred to a position with greater job responsibilities; or
2.6 	(2) an increase in the employer contribution to a public pension plan, if required 
2.7 	by other law.
2.8 		Subd. 2.Future compensation. (a) The commissioner of management and budget 
2.9 	must contract for a compensation study for government position descriptions. The study 
2.10 	must compare the total compensation, including salary and benefits, of each position 
2.11 	description with positions in the private sector in which the skill, effort, responsibilities, 
2.12 	and working conditions are similar. The commissioner must report the results of the 
2.13 	study by March 1, 2012.
2.14 	(b) By July 1, 2012, each government employer must implement compensation 
2.15 	for each position for its employees that, as nearly as practicable, is comparable to the 
2.16 	compensation of private sector positions with similar skill, effort, responsibilities, and 
2.17 	working conditions, as determined by the commissioner under paragraph (a).
2.18 		Subd. 3.Contracts in effect. This section does not prohibit a change in 
2.19 	compensation required by a contract or collective bargaining agreement in effect before 
2.20 	the effective date of this section. However, a government employer may not:
2.21 	(1) enter into a new contract or collective bargaining agreement that changes 
2.22 	compensation in a manner that conflicts with this section; or 
2.23 	(2) extend an expired contract or collective bargaining agreement or any other 
2.24 	arrangement that conflicts with this section.
2.25 		Subd. 4.Relation to other law. This section supersedes chapter 179A and any 
2.26 	other law to the contrary. It is not an unfair labor practice under chapter 179A for a 
2.27 	public employer to take any action required to comply with this section. Employees of a 
2.28 	government employer may not legally strike due to a government employer's action that is 
2.29 	required to comply with this section. Neither a government employer nor an exclusive 
2.30 	representative may request interest arbitration regarding any element of compensation 
2.31 	prescribed by this section, and an arbitrator may not issue an award that would conflict 
2.32 	with this section.
2.33 		Subd. 5.Government employer. For purposes of this section, "government 
2.34 	employer" means: (1) the state and all entities in the state executive, legislative, and 
2.35 	judicial branches, including, but not limited to, all constitutional officers and the 
2.36 	Minnesota state colleges and universities; (2) all regional boards, regional commissions, 
3.1 	and regional councils; (3) all statutory or home rule charter cities, towns, counties, school 
3.2 	districts, charter schools, and other political subdivisions. For purposes of this section 
3.3 	"employee" includes a state or local government elected official. The legislature strongly 
3.4 	recommends that the University of Minnesota comply with this section as if it were a 
3.5 	governmental employer under this section.

3.6 	EFFECTIVE DATE. This section is effective the day following final enactment.

3.7 	ARTICLE 3
3.8 	WORKFORCE REDUCTION; EARLY RETIREMENT

3.9 	Section 1. [43A.347] REDUCTION IN STATE WORK FORCE; EARLY 
3.10 	RETIREMENT PROGRAM.
3.11 		Subdivision 1.Required reduction. The state of Minnesota shall reduce the state 
3.12 	government workforce and associated costs by at least 15 percent by June 30, 2015, by 
3.13 	using any or all of the following: early retirement, furloughs, layoffs, a hard hiring freeze, 
3.14 	a wage freeze, and by restructuring  pension programs to defined contribution plans. The 
3.15 	early retirement program in this section is enacted to assist the state and its employees to 
3.16 	comply with the required 15 percent reduction.
3.17 		Subd. 2.Early retirement program; actuarial analysis. Following enactment of 
3.18 	this section and prior to implementation of the early retirement program in this section, the 
3.19 	Department of Management and Budget shall perform an actuarial analysis to determine: a 
3.20 	minimum and maximum number of retirees allowable under the early retirement program 
3.21 	specified in this section; the percentage of the early retirement program savings to be 
3.22 	returned to the pension fund over a prescribed period of time in order to cover the cost to 
3.23 	the pension fund of the early retirement program specified in this section.  The department 
3.24 	shall use the findings in implementing the early retirement program.
3.25 		Subd. 3.Early retirement program. Notwithstanding any law to the contrary, 
3.26 	a state employee who terminates state service before a date to be determined by the 
3.27 	commissioner of management and budget, not to be more than the number of employees 
3.28 	determined by the department, may apply for and receive a normal retirement annuity 
3.29 	without any reduction due to retirement before the normal retirement age from the public 
3.30 	pension plan of which the employee is a member, under the following conditions:
3.31 	(1) the employee must have at least eight years of service credit in the person's 
3.32 	public pension plan on the date of termination, and the employee's combination of age 
3.33 	and years of service in that pension plan on the date of termination must be equal to 
3.34 	or greater than 70;
4.1 	(2) the employee must be at least 50 years old on the date of termination; and
4.2 	(3) the employee must not have received a retirement annuity from a Minnesota 
4.3 	public pension plan before the date of terminating state service for purposes of this section.
4.4 		Subd. 4.Purchase of additional service credit. If an employee's combination of 
4.5 	age and years of service in the person's public pension plan is not equal to or greater 
4.6 	than 70, the person may purchase up to five years of service credit, in increments of 
4.7 	one month, by making an additional contribution to the pension plan.  For each month 
4.8 	of service credit purchased, the required contribution is the employee contribution rate 
4.9 	for the person's pension plan multiplied  by the employee's monthly salary at the time the 
4.10 	purchase is made.  A person may purchase service credit under this subdivision only if the 
4.11 	person terminates state service upon making the purchase.
4.12 		Subd. 5.Deferred annuity. A person who meets the conditions of subdivision 2 at 
4.13 	the time of termination but who is not at least 50 years old may terminate state service 
4.14 	and apply for and receive the unreduced annuity specified in subdivision 2 when the 
4.15 	person attains the age of 50.
4.16 		Subd. 6.Extension of deadline. To ensure that the efficient operation of state 
4.17 	government is not jeopardized  by  the simultaneous retirement of large numbers of key 
4.18 	personnel, an appointing authority may extend  the  June 30, 2015, deadline for terminating 
4.19 	state employment by notifying  the executive director of the Minnesota State Retirement 
4.20 	System  in  writing.
4.21 		Subd. 7.Best practices. In implementing this section, the commissioner of 
4.22 	management and budget and affected agencies shall utilize best practices as identified by 
4.23 	other states that have implemented early retirement programs.
4.24 		Subd. 8.Hiring freeze. To promote streamlined government and reduced costs, no 
4.25 	state appointing authority may fill a position vacated through state employee participation 
4.26 	in the early retirement program unless the existence of the specific position is mandated 
4.27 	by law. 
4.28 		Subd. 9.Reemployment prohibition. An employee who receives a higher annuity 
4.29 	as a result of retiring under this section, instead of retiring under law in effect before 
4.30 	enactment of this section, may not be reemployed with the state or receive payment from 
4.31 	the state as a consultant for five years after termination. 
4.32 		Subd. 10.Pension fund return. The commissioner of management and budget 
4.33 	must determine the annual savings realized by each state appointing authority as a result 
4.34 	of not paying compensation to employees who terminate service under this section. 
4.35 	The commissioner must transfer from the appropriation to the appointing authority to 
4.36 	the applicable pension fund the percent of the cost savings realized by the appointing 
5.1 	authority through the early retirement program under this section over the number of years 
5.2 	determined by the actuarial analysis in subdivision 2, to cover the increased cost to the 
5.3 	pension fund of the early retirement incentive.
5.4 		Subd. 11.Pension reform. Following implementation of the early retirement 
5.5 	program, the commissioner of management and budget shall establish a panel to study and 
5.6 	make recommendations for reforming the state employee retirement pension program. 
5.7 		Subd. 12.Not applicable to elected officials. A state elected official is not a state 
5.8 	employee for purposes of this section.

5.9 	ARTICLE 4
5.10 	GAINSHARING

5.11 	Section 1. [16A.90] EMPLOYEE GAINSHARING SYSTEM.
5.12 	The commissioner shall establish a program to provide onetime bonus compensation 
5.13 	to state employees for efforts made to reduce the costs of operating state government or for 
5.14 	ways of providing better or more efficient state services. The commissioner may make a 
5.15 	onetime award to an employee or group of employees whose suggestion or involvement in 
5.16 	a project is determined by the commissioner to have resulted in documented cost-savings 
5.17 	to the state. The maximum award is ten percent of the documented savings in the 
5.18 	first fiscal year in which the savings are realized. The award must be paid from the 
5.19 	appropriation to which the savings accrued.

5.20 	ARTICLE 5
5.21 	VALUE-ADDED SERVICE

5.22 	Section 1. [15.062] COST-EFFECTIVE PROVISION OF SERVICES.
5.23 	(a) The head or governing board of each state department or agency, including the 
5.24 	Minnesota state colleges and universities, must carry out the agency's powers and duties 
5.25 	in the most cost-effective manner possible. The agency head or governing board must 
5.26 	determine if the most cost-effective manner of carrying out each of the agency's powers 
5.27 	and duties is to hire state employees or to contract with outside sources.
5.28 	(b) If an agency decides to seek an outside vendor to perform work currently done 
5.29 	by state employees, the agency must permit groups of state employees to compete for the 
5.30 	business by submitting responses to the agency's solicitation documents. Notwithstanding 
5.31 	section 16A.127 or any other law to the contrary, no statewide or agency indirect costs 
5.32 	may be assessed to a group of agency employees with respect to work performed under 
5.33 	a contract awarded to a group of employees under this section. This section supersedes 
6.1 	any provision of law preventing a state agency from entering into a contract with a state 
6.2 	employee.

6.3 	Sec. 2. Minnesota Statutes 2010, section 16C.08, subdivision 2, is amended to read:
6.4 		Subd. 2.Duties of contracting agency. (a) Before an agency may seek approval of 
6.5 	a professional or technical services contract valued in excess of $5,000, it must provide 
6.6 	the following:
6.7 	(1) a description of how the proposed contract or amendment is necessary and 
6.8 	reasonable to advance the statutory mission of the agency;
6.9 	(2) a description of the agency's plan to notify firms or individuals who may be 
6.10 	available to perform the services called for in the solicitation;
6.11 	(3) a description of the performance measures or other tools, including accessibility 
6.12 	measures if applicable, that will be used to monitor and evaluate contract performance; and
6.13 	(4) an explanation detailing, if applicable, why this procurement is being pursued 
6.14 	unilaterally by the agency and not as an enterprise procurement.
6.15 	(b) In addition to paragraph (a), the agency must certify that:
6.16 	(1) no current state employee is able and available to perform the services called 
6.17 	for by the contract;
6.18 	(2)(1) the normal competitive bidding mechanisms will not provide for adequate 
6.19 	performance of the services;
6.20 	(3)(2) reasonable efforts will be made to publicize the availability of the contract 
6.21 	to the public;
6.22 	(4)(3) the agency will develop and implement a written plan providing for the 
6.23 	assignment of specific agency personnel to manage the contract, including a monitoring 
6.24 	and liaison function, the periodic review of interim reports or other indications of past 
6.25 	performance, and the ultimate utilization of the final product of the services;
6.26 	(5)(4) the agency will not allow the contractor to begin work before the contract is 
6.27 	fully executed unless an exception under section 16C.05, subdivision 2a, has been granted 
6.28 	by the commissioner and funds are fully encumbered;
6.29 	(6)(5) the contract will not establish an employment relationship between the state 
6.30 	or the agency and any persons performing under the contract; and
6.31 	(7)(6) in the event the results of the contract work will be carried out or continued 
6.32 	by state employees upon completion of the contract, the contractor is required to include 
6.33 	state employees in development and training, to the extent necessary to ensure that after 
6.34 	completion of the contract, state employees can perform any ongoing work related to the 
6.35 	same function; and
7.1 	(8) the agency will not contract out its previously eliminated jobs for four years 
7.2 	without first considering the same former employees who are on the seniority unit layoff 
7.3 	list who meet the minimum qualifications determined by the agency.
7.4 	(c) A contract establishes an employment relationship for purposes of paragraph (b), 
7.5 	clause (6) (5), if, under federal laws governing the distinction between an employee and 
7.6 	an independent contractor, a person would be considered an employee.

7.7 	Sec. 3. Minnesota Statutes 2010, section 16C.09, is amended to read:
7.8 	16C.09 PROCEDURE FOR SERVICE CONTRACTS.
7.9 	(a) Before entering into or approving a service contract, the commissioner must 
7.10 	determine, at least, that:
7.11 	(1) no current state employee is able and available to perform the services called 
7.12 	for by the contract;
7.13 	(2)(1) the work to be performed under the contract is necessary to the agency's 
7.14 	achievement of its statutory responsibilities and there is statutory authority to enter into 
7.15 	the contract;
7.16 	(3)(2) the contract will not establish an employment relationship between the state 
7.17 	or the agency and any persons performing under the contract;
7.18 	(4)(3)the contractor and agents are not employees of the state, except as authorized 
7.19 	in section 15.062;
7.20 	(5)(4) the contracting agency has specified a satisfactory method of evaluating and 
7.21 	using the results of the work to be performed; and
7.22 	(6)(5) the combined contract and amendments will not exceed five years without 
7.23 	specific, written approval by the commissioner according to established policy, procedures, 
7.24 	and standards, or unless otherwise provided for by law. The term of the original contract 
7.25 	must not exceed two years, unless the commissioner determines that a longer duration is 
7.26 	in the best interest of the state.
7.27 	(b) For purposes of paragraph (a), clause (1), employees are available if qualified 
7.28 	and:
7.29 	(1) are already doing the work in question; or
7.30 	(2) are on layoff status in classes that can do the work in question.
7.31 	An employee is not available if the employee is doing other work, is retired, or has decided 
7.32 	not to do the work in question.
7.33 	(c)(b) This section does not apply to an agency's use of inmates pursuant to sections 
7.34 	241.20 to 241.23 or to an agency's use of persons required by a court to provide:
7.35 	(1) community service; or
8.1 	(2) conservation or maintenance services on lands under the jurisdiction and control 
8.2 	of the state.

8.3 	Sec. 4.  REPEALER.
 8.4 	Minnesota Statutes 2010, sections 16C.085; 43A.047; and 179A.23, are repealed.

8.5 	ARTICLE 6
8.6 	RIGHT TO WORK

8.7 	Section 1. CONSTITUTIONAL AMENDMENT PROPOSED.
 8.8 	An amendment to the Minnesota Constitution is proposed to the people. If the 
8.9 	amendment is adopted, a section shall be added to article I, to read:

8.10 	Sec. 18. No person shall be required as a condition of obtaining or continuing 
8.11 	public sector or private sector employment to: (1) resign or refrain from membership 
8.12 	in, voluntary affiliation with, or voluntary financial support of a labor organization; (2) 
8.13 	become or remain a member of a labor organization; (3) pay any dues, fees, assessments, 
8.14 	or other charges of any kind or amount, or provide anything else of value, to a labor 
8.15 	organization; or (4) pay to any charity or other third party an amount equivalent to, or 
8.16 	a portion of, dues, fees, assessments, or other charges required of members of a labor 
8.17 	organization. If any part of this section is found to be in conflict with the United States 
8.18 	Constitution or federal law, the section shall be implemented to the maximum extent that 
8.19 	the United States Constitution and federal law permit. Any provision held invalid or 
8.20 	inoperative is severable from the remaining portions of this section.

8.21 	Sec. 2. SUBMISSION TO VOTERS.
 8.22 	The proposed amendment must be submitted to the people at the 2012 general 
8.23 	election. The question submitted must be:
8.24 	"Shall the Minnesota Constitution be amended to guarantee all citizens the 
8.25 	individual freedom to decide, without having it affect their employment status, to join or 
8.26 	not join a labor union; to remain with or leave a labor union; or to pay or not pay dues, 
8.27 	fees, assessments, or other charges of any kind to a labor organization unless voluntarily 
8.28 	joining that organization?

8.29		Yes 
........		
8.30		No ........"

8.31 	Sec. 3. [181.99] ENFORCEMENT OF RIGHT TO WORK.
9.1 	An agreement, contract, understanding, or practice between a labor organization 
9.2 	and an employer that takes force or is extended or renewed after adoption of the 
9.3 	Minnesota Constitution, article I, section 18, and that violates that section is unlawful and 
9.4 	unenforceable. A person who suffers an injury or a threatened injury under that section 
9.5 	may bring a civil action for damages, injunctive relief, or both. In addition, a court shall 
9.6 	award a prevailing plaintiff costs and reasonable attorney fees. As used in this section, 
9.7 	"labor organization" means any agency, union, employee representation committee, or 
9.8 	organization of any kind that exists for the purpose, in whole or in part, of dealing with 
9.9 	employers concerning wages, rates of pay, hours of work, other conditions of employment, 
9.10 	or other forms of compensation. 

9.11 	EFFECTIVE DATE. This section is effective upon adoption of the constitutional 
9.12 	amendment proposed in section 1.