1.1CONFERENCE COMMITTEE REPORT ON S.F. No. 10471.2A bill for an act1.3relating to state government financing; establishing the Sunset Advisory 1.4Commission; prohibiting legislative liaison positions in state agencies and 1.5departments; eliminating assistant commissioner positions and reducing deputy 1.6commissioner positions; changing provisions of performance data required 1.7in the budget proposal; requiring specific funding information for forecasted 1.8programs; implementing zero-based budgeting principles; implementing federal 1.9offset program for collection of debts owed to state agencies; providing a state 1.10employee salary freeze; providing an HSA-eligible high-deductible health plan 1.11for state employees; requiring a 15 percent reduction in the state workforce; 1.12requiring a verification audit for dependent eligibility for state employee health 1.13insurance; requiring a request for proposals for recommendations on state 1.14building efficiency, state vehicle management, tax fraud prevention, and strategic 1.15sourcing; requiring reports; appropriating money;amending Minnesota Statutes 1.162010, sections 15.057; 15.06, subdivision 8; 16A.10, subdivisions 1a, 1b, 1c; 1.1716A.103, subdivision 1a; 16A.11, subdivision 3; 16B.03; 43A.08, subdivision 1.181; 43A.23, subdivision 1; 45.013; 84.01, subdivision 3; 116.03, subdivision 1; 1.19116J.01, subdivision 5; 116J.035, subdivision 4; 174.02, subdivision 2; 241.01, 1.20subdivision 2; 270C.41; Laws 2010, chapter 215, article 6, section 4; proposing 1.21coding for new law in Minnesota Statutes, chapters 16A; 16D; 43A; proposing 1.22coding for new law as Minnesota Statutes, chapter 3D; repealing Minnesota 1.23Statutes 2010, section 197.585, subdivision 5.1.24May 17, 20111.25The Honorable Michelle L. Fischbach1.26President of the Senate1.27The Honorable Kurt Zellers1.28Speaker of the House of Representatives1.29We, the undersigned conferees for S.F. No. 1047 report that we have agreed upon 1.30the items in dispute and recommend as follows:1.31That the House recede from its amendments and that S.F. No. 1047 be further 1.32amended as follows:1.33Delete everything after the enacting clause and insert:2.1"ARTICLE 12.2STATE GOVERNMENT APPROPRIATIONS

2.3Section 1. STATE GOVERNMENT APPROPRIATIONS.

2.4    The sums shown in the columns marked "Appropriations" are appropriated to the 2.5agencies and for the purposes specified in this article. The appropriations are from the 2.6general fund, or another named fund, and are available for the fiscal years indicated 2.7for each purpose. The figures "2012" and "2013" used in this article mean that the 2.8appropriations listed under them are available for the fiscal year ending June 30, 2012, or 2.9June 30, 2013, respectively. "The first year" is fiscal year 2012. "The second year" is fiscal 2.10year 2013. "The biennium" is fiscal years 2012 and 2013. 

2.11APPROPRIATIONS2.12Available for the Year2.13Ending June 302.1420122013

2.15Sec. 2. LEGISLATURE

2.16Subdivision 1.Total Appropriation$63,070,000$63,070,000

2.17Appropriations by Fund2.18201220132.19General62,942,00062,942,0002.20Health Care Access128,000128,000

2.21The amounts that may be spent for each 2.22purpose are specified in the following 2.23subdivisions.

2.24Subd. 2.Senate20,733,00020,733,000

2.25Subd. 3.House of Representatives27,874,00027,874,000

2.26During the biennium ending June 30, 2013, 2.27any revenues received by the house of 2.28representatives from voluntary donations 2.29to support broadcast or print media are 2.30appropriated to the house of representatives.

2.31Subd. 4.Legislative Coordinating Commission14,463,00014,463,000

2.32Appropriations by Fund2.33General14,335,00014,335,0002.34Health Care Access 128,000128,000

3.1From its funds, $10,000 each year is for 3.2purposes of the legislators' forum, through 3.3which Minnesota legislators meet with 3.4counterparts from South Dakota, North 3.5Dakota, and Manitoba to discuss issues of 3.6mutual concern.

3.73.8Sec. 3. GOVERNOR AND LIEUTENANT GOVERNOR$3,027,000$3,027,000

3.9(a) This appropriation is to fund the Office of 3.10the Governor and Lieutenant Governor.3.11(b) By September 1 of each year, the 3.12commissioner of management and budget 3.13shall report to the chairs and ranking 3.14minority members of the senate State 3.15Government Innovation and Veterans Affairs 3.16Committee and the house of representatives 3.17State Government Finance Committee any 3.18personnel costs incurred by the Offices of the 3.19Governor and Lieutenant Governor that were 3.20supported by appropriations to other agencies 3.21during the previous fiscal year. The Office 3.22of the Governor shall inform the chairs and 3.23ranking minority members of the committees 3.24before initiating any interagency agreements.3.25(c) During the biennium ending June 30, 3.262013, the Office of the Governor may not 3.27receive payments of more than $670,000 each 3.28fiscal year from other executive agencies 3.29under Minnesota Statutes, section 15.53, to 3.30support office costs incurred by the office. 3.31Payments received under this paragraph must 3.32be deposited in a special revenue account. 3.33Money in the account is appropriated to the 3.34Office of the Governor. The authority in 3.35this paragraph supersedes other law enacted 4.1in 2011 that limits the ability of the office 4.2to enter into agreements relating to office 4.3costs with other executive branch agencies 4.4or prevents the use of appropriations made to 4.5other agencies for agreements with the office 4.6under Minnesota Statutes, section 15.53.

4.7Sec. 4. STATE AUDITOR$8,008,000$8,008,000

4.8Sec. 5. ATTORNEY GENERAL$21,819,000$21,819,000

4.9Appropriations by Fund4.10201220134.11General19,540,00019,540,0004.124.13State Government Special Revenue1,884,0001,884,0004.14Environmental145,000145,0004.15Remediation250,000250,000

4.16Of this appropriation, $65,000 in the first 4.17year and $65,000 in the second year are 4.18from the general fund for transfer to the 4.19commissioner of public safety for a grant to 4.20the Minnesota County Attorneys Association 4.21for prosecutor and law enforcement training.

4.22Sec. 6. SECRETARY OF STATE$5,206,000$5,206,000

4.23Any funds available in the account 4.24established in Minnesota Statutes, section 4.255.30, pursuant to the Help America Vote 4.26Act, after funds appropriated in other laws 4.27enacted during the 2011 regular session are 4.28allotted for purposes specified in those laws, 4.29are appropriated for the purposes and uses 4.30authorized by federal law.

4.314.32Sec. 7. CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD$689,000$689,000

4.33Sec. 8. INVESTMENT BOARD$139,000$139,000

5.1Sec. 9. ADMINISTRATIVE HEARINGS$7,627,000$7,504,000

5.2Appropriations by Fund5.3201220135.4General377,000254,0005.55.6Workers' Compensation7,250,0007,250,000

5.7$130,000 in the first year is for the cost 5.8of considering complaints filed under 5.9Minnesota Statutes, section 211B.32. Until 5.10June 30, 2013, the chief administrative 5.11law judge may not make any assessment 5.12against a county or counties under Minnesota 5.13Statutes, section 211B.37. Any amount of 5.14this appropriation that remains unspent at 5.15the end of the biennium must be canceled 5.16to the general account of the state elections 5.17campaign fund. The base for fiscal year 2014 5.18is $130,000, to be available for the biennium, 5.19under the same terms.

5.205.21Sec. 10. OFFICE OF ENTERPRISE TECHNOLOGY$4,636,000$4,636,000

5.22During the biennium ending June 30, 2013, 5.23the office must not charge fees to a public 5.24noncommercial educational television 5.25broadcast station for access to the state 5.26information infrastructure.

5.27Sec. 11. ADMINISTRATION

5.28Subdivision 1.Total Appropriation$17,789,000$17,789,000

5.29The amounts that may be spent for each 5.30purpose are specified in the following 5.31subdivisions.

5.32Subd. 2.Government and Citizen Services14,670,00014,670,000

6.1$74,000 the first year and $74,000 the second 6.2year are for the Council on Developmental 6.3Disabilities.6.4$8,158,000 the first year and $8,158,000 6.5the second year are for office space costs of 6.6the legislature and veterans organizations, 6.7ceremonial space, and statutorily free space.

6.8Subd. 3.Administrative Management Support1,494,0001,494,000

6.9Subd. 4.Public Broadcasting1,625,0001,625,000

6.10(a) The appropriations under this section are 6.11to the commissioner of administration for the 6.12purposes specified.6.13(b) $1,002,000 the first year and $1,002,000 6.14the second year are for matching grants for 6.15public television.6.16(c) $190,000 the first year and $190,000 6.17the second year are for public television 6.18equipment grants. Equipment or matching 6.19grant allocations shall be made after 6.20considering the recommendations of the 6.21Minnesota Public Television Association.6.22(d) $264,000 the first year and $264,000 the 6.23second year are for community service grants 6.24to public educational radio stations.6.25(e) $92,000 the first year and $92,000 the 6.26second year are for equipment grants to 6.27public educational radio stations.6.28(f) The grants in paragraphs (d) and (e) 6.29must be allocated after considering the 6.30recommendations of the Association of 6.31Minnesota Public Educational Radio Stations 6.32under Minnesota Statutes, section 129D.14.7.1(g) $77,000 the first year and $77,000 the 7.2second year are for grants to Minnesota 7.3Public Radio, Inc., for upgrades to 7.4Minnesota's Emergency Alert and AMBER 7.5Alert Systems.7.6(h) Any unencumbered balance remaining 7.7the first year for grants to public television or 7.8radio stations does not cancel and is available 7.9for the second year.

7.107.117.12Sec. 12. CAPITOL AREA ARCHITECTURAL AND PLANNING BOARD$325,000$325,000

7.137.14Sec. 13. MINNESOTA MANAGEMENT AND BUDGET$17,225,000$17,225,000

7.15Sec. 14. REVENUE

7.16Subdivision 1.Total Appropriation$129,963,000$130,013,000

7.17Appropriations by Fund7.18201220137.19General125,728,000125,778,0007.20Health Care Access1,749,0001,749,0007.217.22Highway User Tax Distribution2,183,0002,183,0007.23Environmental303,000303,000

7.24The amounts that may be spent for each 7.25purpose are specified in subdivisions 2 and 3.7.26The commissioner must implement 7.27any reduction in funding by reducing 7.28administrative support functions before any 7.29reduction to compliance and enforcement 7.30programs.

7.31Subd. 2.Tax System Management103,992,000104,042,000

7.32Appropriations by Fund7.33General99,757,00099,807,0007.34Health Care Access1,749,0001,749,0008.18.2Highway User Tax Distribution2,183,0002,183,0008.3Environmental303,000303,000

8.4Subd. 3.Debt Collection Management25,971,00025,971,000

8.5Sec. 15. GAMBLING CONTROL$2,740,000$2,740,000

8.6These appropriations are from the lawful 8.7gambling regulation account in the special 8.8revenue fund.

8.9Sec. 16. RACING COMMISSION$899,000$899,000

8.10These appropriations are from the racing 8.11and card playing regulation accounts in the 8.12special revenue fund.

8.13Sec. 17. AMATEUR SPORTS COMMISSION$248,000$248,000

8.14Sec. 18. EXPLORE MINNESOTA TOURISM$8,369,000$8,269,000

8.15(a) Of this amount, $12,000 each year is for a 8.16grant to the Upper Minnesota Film Office.8.17(b)(1) To develop maximum private sector 8.18involvement in tourism, $500,000 the first 8.19year and $500,000 the second year must 8.20be matched by Explore Minnesota Tourism 8.21from nonstate sources. Each $1 of state 8.22incentive must be matched with $3 of private 8.23sector funding. Cash match is defined as 8.24revenue to the state or documented cash 8.25expenditures directly expended to support 8.26Explore Minnesota Tourism programs. Up 8.27to one-half of the private sector contribution 8.28may be in-kind or soft match. The incentive 8.29in the first year shall be based on fiscal 8.30year 2011 private sector contributions. The 8.31incentive in the second year will be based on 9.1fiscal year 2012 private sector contributions. 9.2This incentive is ongoing.9.3(2) Funding for the marketing grants is 9.4available either year of the biennium. 9.5Unexpended grant funds from the first year 9.6are available in the second year.9.7(3) Unexpended money from the general 9.8fund appropriations made under this section 9.9does not cancel but must be placed in a 9.10special marketing account for use by Explore 9.11Minnesota Tourism for additional marketing 9.12activities.9.13(c) $325,000 the first year and $325,000 the 9.14second year are for the Minnesota Film and 9.15TV Board. The appropriation in each year 9.16is available only upon receipt by the board 9.17of $1 in matching contributions of money or 9.18in-kind contributions from nonstate sources 9.19for every $3 provided by this appropriation, 9.20except that each year up to $50,000 is 9.21available on July 1 even if the required 9.22matching contribution has not been received 9.23by that date.9.24(d) $100,000 the first year is for a grant to the 9.25Minnesota Film and TV Board for the film 9.26jobs production program under Minnesota 9.27Statutes, section 116U.26. This appropriation 9.28is available until expended.

9.299.30Sec. 19. MINNESOTA HISTORICAL SOCIETY

9.31Subdivision 1.Total Appropriation$20,141,000$20,037,000

9.32The amounts that may be spent for each 9.33purpose are specified in the following 9.34subdivisions.

10.1Subd. 2.Education and Outreach11,336,00011,336,000

10.2Notwithstanding Minnesota Statutes, section 10.3138.668, the Minnesota Historical Society 10.4may not charge a fee for its general tours at 10.5the Capitol, but may charge fees for special 10.6programs other than general tours.

10.7Subd. 3.Preservation and Access8,479,0008,479,000

10.8Subd. 4.Fiscal Agent

10.9(a) Minnesota International Center39,00039,000

10.10(b) Minnesota Air National Guard Museum14,000-0-

10.11(c) Minnesota Military Museum90,000-0-

10.12(d) Farmamerica115,000115,000

10.13(e) Hockey Hall of Fame68,00068,000

10.14(f) Balances Forward

10.15Any unencumbered balance remaining in 10.16this subdivision the first year does not cancel 10.17but is available for the second year of the 10.18biennium.

10.19Subd. 5.Fund Transfer

10.20The Minnesota Historical Society may 10.21reallocate funds appropriated in and between 10.22subdivisions 2 and 3 for any program 10.23purposes and the appropriations are available 10.24in either year of the biennium.

10.25Sec. 20. BOARD OF THE ARTS

10.26Subdivision 1.Total Appropriation$7,089,000$7,089,000

10.27The amounts that may be spent for each 10.28purpose are specified in the following 10.29subdivisions.

10.30Subd. 2.Operations and Services536,000536,000

11.1Subd. 3.Grants Program 4,533,0004,533,000

11.2Subd. 4.Regional Arts Councils 2,020,0002,020,000

11.3Subd. 5.Unencumbered balance available

11.4Any unencumbered balance remaining in this 11.5section the first year does not cancel, but is 11.6available for the second year of the biennium.

11.711.8Sec. 21. MINNESOTA HUMANITIES CENTER$225,000$225,000

11.911.10Sec. 22. COUNCIL ON BLACK MINNESOTANS$246,000$246,000

11.1111.12Sec. 23. COUNCIL ON ASIAN-PACIFIC MINNESOTANS$214,000$214,000

11.1311.14Sec. 24. COUNCIL ON AFFAIRS OF CHICANO/LATINO PEOPLE$231,000$231,000

11.15Sec. 25. INDIAN AFFAIRS COUNCIL$422,000$422,000

11.16Of this appropriation $167,000 each year is 11.17for a cultural resources specialist to assist the 11.18council with the duties assigned to it relating 11.19to Indian burial grounds under Minnesota 11.20Statutes, section 307.08.

11.2111.22Sec. 26. SCIENCE MUSEUM OF MINNESOTA$1,009,000$1,009,000

11.23Sec. 27. TORT CLAIMS$161,000$161,000

11.24These appropriations are to be spent by the 11.25commissioner of management and budget 11.26according to Minnesota Statutes, section 11.273.736, subdivision 7. If the appropriation for 11.28either year is insufficient, the appropriation 11.29for the other year is available for it.

12.112.2Sec. 28. MINNESOTA STATE RETIREMENT SYSTEM

12.3Subdivision 1.Total Appropriation$472,000$481,000

12.4The amounts that may be spent for each 12.5purpose are specified in the following 12.6subdivisions.12.7During the biennium ending June 30, 2013, 12.8payments for retirement allowances for 12.9former legislators and surviving spouses 12.10must be made from the legislators retirement 12.11fund created under Minnesota Statutes, 12.12section 3A.03, subdivision 3, and not from 12.13the general fund.

12.14Subd. 2. Constitutional Officers472,000481,000

12.15Under Minnesota Statutes, section 352C.001, 12.16if an appropriation in this section for either 12.17year is insufficient, the appropriation for the 12.18other year is available for it.

12.19Sec. 29. MERF DIVISION ACCOUNT$22,750,000$22,750,000

12.20These amounts are estimated to be needed 12.21under Minnesota Statutes, section 353.505.

12.2212.23Sec. 30. TEACHERS RETIREMENT ASSOCIATION$15,454,000$15,454,000

12.24The amounts estimated to be needed are as 12.25follows:12.26(a) Special direct state aid. $12,954,000 the 12.27first year and $12,954,000 the second year 12.28are for special direct state aid authorized 12.29under Minnesota Statutes, section 354A.12, 12.30subdivisions 3a and 3c.12.31(b) Special direct state matching aid.12.32$2,500,000 the first year and $2,500,000 13.1the second year are for special direct state 13.2matching aid authorized under Minnesota 13.3Statutes, section 354A.12, subdivision 3b.

13.413.5Sec. 31. ST. PAUL TEACHERS RETIREMENT FUND$2,827,000$2,827,000

13.6The amounts estimated to be needed for 13.7special direct state aid to first class city 13.8teachers retirement funds authorized under 13.9Minnesota Statutes, section 354A.12, 13.10subdivisions 3a and 3c.

13.1113.12Sec. 32. DULUTH TEACHERS RETIREMENT FUND$346,000$346,000

13.13The amounts estimated to be needed for 13.14special direct state aid to first class city 13.15teachers retirement funds authorized under 13.16Minnesota Statutes, section 354A.12, 13.17subdivisions 3a and 3c.

13.18Sec. 33. STATE LOTTERY

13.19Notwithstanding Minnesota Statutes, section 13.20349A.10, subdivision 3, the operating budget 13.21must not exceed $29,000,000 in fiscal year 13.222012 and $29,000,000 in fiscal year 2013.

13.2313.24Sec. 34. GENERAL CONTINGENT ACCOUNTS$600,000$500,000

13.25Appropriations by Fund13.262012201313.27General100,000-0-13.2813.29State Government Special Revenue400,000400,00013.3013.31Workers' Compensation100,000100,000

13.32(a) The appropriations in this section 13.33may only be spent with the approval of 13.34the governor after consultation with the 14.1Legislative Advisory Commission pursuant 14.2to Minnesota Statutes, section 3.30.14.3(b) If an appropriation in this section for 14.4either year is insufficient, the appropriation 14.5for the other year is available for it.14.6(c) If a contingent account appropriation 14.7is made in one fiscal year, it should be 14.8considered a biennial appropriation.14.9    Sec. 35. Laws 2009, chapter 101, article 2, section 106, is amended to read:14.10    Sec. 106. ENTERPRISE REAL PROPERTY CONTRIBUTIONS.14.11On or before June 1, 2009, the commissioner of administration shall determine the 14.12amount to be contributed by each executive agency to maintain the enterprise real property 14.13technology system for the fiscal year 2010 and fiscal year 2011 biennium. On or before 14.14June 15, 2009, each executive agency shall enter into an agreement with the commissioner 14.15of administration setting forth the manner in which the executive agency shall make its 14.16contribution to the enterprise real property system, either from uncommitted fiscal year 14.172009 funds or by contributing from fiscal year 2010 and fiscal year 2011 funds to the real 14.18property enterprise system and services account to fund the total amount of $399,000 for 14.19the biennium. Funds will be available for the enterprise real property technology project 14.20until June 30, 2013. Funds contributed under this section must be credited to the enterprise 14.21real property technology system and services account.14.22EFFECTIVE DATE.This section is effective the day following final enactment.14.23    Sec. 36. PROBLEM GAMBLING APPROPRIATION.14.24$225,000 in fiscal year 2012 and $225,000 in fiscal year 2013 are appropriated from 14.25the lottery prize fund to the Gambling Control Board for a grant to the state affiliate 14.26recognized by the National Council on Problem Gambling. The affiliate must provide 14.27services to increase public awareness of problem gambling, education and training for 14.28individuals and organizations providing effective treatment services to problem gamblers 14.29and their families, and research relating to problem gambling. These services must be 14.30complementary to and not duplicative of the services provided through the problem 14.31gambling program administered by the commissioner of human services. Of this 14.32appropriation, $50,000 in fiscal year 2012 and $50,000 in fiscal year 2013 are contingent 14.33on the contribution of nonstate matching funds. Matching funds may be either cash or 15.1qualifying in-kind contributions. The commissioner of management and budget may 15.2disburse the state portion of the matching funds in increments of $25,000 upon receipt 15.3of a commitment for an equal amount of matching nonstate funds. These are onetime 15.4appropriations.15.5    Sec. 37. APPROPRIATION; REIMBURSEMENT OF RECOUNT COSTS.15.6$322,000 is appropriated from the general fund to the secretary of state in fiscal year 15.72011 for the reimbursement of costs of recounts during the 2010 general election, to be 15.8paid to counties consistent with the cost survey of the counties previously conducted 15.9by the secretary of state and for reimbursement to the secretary of state costs in those 15.10recounts already paid by the secretary of state to the counties. This appropriation remains 15.11available until December 31, 2011.15.12EFFECTIVE DATE.This section is effective the day following final enactment.15.13    Sec. 38. APPROPRIATION; PAYMENT OF LEGAL FEES.15.14$148,375 is appropriated from the general fund to the secretary of state in fiscal 15.15year 2011 for the payment of legal fees imposed by the United States District Court, 15.16District of Minnesota, in the case of American Broadcasting Companies, Inc. et al v. 15.17Mark Ritchie et al. (Case 08-cv-5285-MJD-AJB). This appropriation remains available 15.18until June 30, 2013.15.19EFFECTIVE DATE.This section is effective the day following final enactment.15.20    Sec. 39. SAVINGS; APPROPRIATION REDUCTION FOR EXECUTIVE 15.21AGENCIES.15.22The commissioner of management and budget must reduce general fund 15.23appropriations to executive agencies, including constitutional offices, for agency 15.24operations for the biennium ending June 30, 2013, by $94,875,000. The Minnesota State 15.25Colleges and Universities is not an executive agency for purposes of this section. The 15.26commissioner must not reduce appropriations to the Department of Veterans Affairs or the 15.27Department of Military Affairs except to the extent the commissioner determines there 15.28are savings directly attributable to items specified in clauses (2), (4), (5), and (6). To 15.29the greatest extent possible, these reductions must come from savings provided by the 15.30reforms, efficiencies, and cost-savings measures contained in this act, including:15.31(1) reduction in the number of full-time equivalent employees;15.32(2) salary and benefit changes;16.1(3) elimination of deputy and assistant commissioner positions;16.2(4) consolidation of responsibilities for executive branch information technology 16.3systems;16.4(5) operational efficiencies and cost savings obtained under contracts with vendors; 16.5and16.6(6) verification of dependent eligibility for state employee group insurance coverage.16.7If operational efficiencies and cost savings obtained under contracts with vendors 16.8yield savings in dedicated funds other than those established in the state constitution or 16.9protected by federal law, the commissioner of management and budget may transfer 16.10the amount of savings to the general fund. Reductions made in 2013 must be reflected 16.11as reductions in agency base budgets for fiscal years 2014 and 2015. The commissioner 16.12of management and budget must report to the chairs and ranking minority members of 16.13the senate Finance Committee and the house of representatives Ways and Means and 16.14Finance Committees regarding the amount of reductions in spending by each agency 16.15under this section.16.16    Sec. 40. REPORTS.16.17By January 15, 2012, and January 15, 2013, the Minnesota Humanities Commission, 16.18Council on Black Minnesotans, Council on Asian-Pacific Minnesotans, Council on Affairs 16.19of Chicano/Latino People, and Indian Affairs Council must each report to the chairs 16.20and ranking minority members of the legislative committees with jurisdiction over the 16.21groups. The reports must describe the results obtained with the appropriations in this act, 16.22including a description and evaluation of how the groups accomplished their statutory 16.23duties in the preceding year.16.24ARTICLE 216.25MILITARY AFFAIRS AND VETERANS AFFAIRS

16.26Section 1. APPROPRIATIONS.

16.27The sums shown in the columns marked "Appropriations" are appropriated to the 16.28agencies and for the purposes specified in this article. The appropriations are from the 16.29general fund and are available for the fiscal years indicated for each purpose. The figures 16.30"2012" and "2013" used in this article mean that the appropriations listed under them are 16.31available for the fiscal year ending June 30, 2012, or June 30, 2013, respectively. "The 16.32first year" is fiscal year 2012. "The second year" is fiscal year 2013. "The biennium" is 16.33fiscal years 2012 and 2013.

17.1APPROPRIATIONS17.2Available for the Year17.3Ending June 3017.420122013

17.5Sec. 2. MILITARY AFFAIRS

17.6Subdivision 1.Total Appropriation$22,371,000$19,371,000

17.7The amounts that may be spent for each 17.8purpose are specified in the following 17.9subdivisions.

17.10Subd. 2.Maintenance of Training Facilities6,660,0006,660,000

17.11Subd. 3.General Support2,363,0002,363,000

17.12Subd. 4.Enlistment Incentives13,348,00010,348,000

17.13$3,000,000 the first year is for additional 17.14costs of enlistment incentives. 17.15If appropriations for either year of the 17.16biennium are insufficient, the appropriation 17.17from the other year is available. The 17.18appropriations for enlistment incentives are 17.19available until expended.

17.20Sec. 3. VETERANS AFFAIRS

17.21Subdivision 1.Total Appropriation$57,795,000$58,595,000

17.22Appropriations by Fund17.232012201317.24General57,695,00058,595,00017.25Special Revenue100,000-0-

17.26The amounts that may be spent for each 17.27purpose are specified in the following 17.28subdivisions.

17.29Subd. 2.Veterans Services13,879,00013,779,000

17.30Appropriations by Fund17.312012201317.32General13,779,00013,779,00017.33Special Revenue100,000-0-

18.1$100,000 in the first year is from the 18.2"Support Our Troops" account established 18.3under Minnesota Statutes, section 190.19, 18.4subdivision 2a, for a grant to the Minnesota 18.5Assistance Council for Veterans. This is a 18.6onetime appropriation.18.7$945,000 each year is for the higher 18.8education veterans assistance program under 18.9Minnesota Statutes, section 197.585.18.10$100,000 each year is for the costs of 18.11administering the Minnesota GI Bill program 18.12under Minnesota Statutes, section 197.791.18.13$353,000 each year is for grants to the 18.14following congressionally chartered veterans 18.15service organizations, as designated by the 18.16commissioner: Disabled American Veterans, 18.17Military Order of the Purple Heart, the 18.18American Legion, Veterans of Foreign Wars, 18.19Vietnam Veterans of America, AMVETS, 18.20and Paralyzed Veterans of America. This 18.21funding must be allocated in direct proportion 18.22to the funding currently being provided by 18.23the commissioner to these organizations.

18.24Subd. 3.Veterans Homes43,916,00044,816,000

18.25Veterans Homes Special Revenue Account.18.26The general fund appropriations made to 18.27the department may be transferred to a 18.28veterans homes special revenue account in 18.29the special revenue fund in the same manner 18.30as other receipts are deposited according 18.31to Minnesota Statutes, section 198.34, and 18.32are appropriated to the department for the 18.33operation of veterans homes facilities and 18.34programs.19.1Fergus Falls Veterans Home. Of the 19.2general fund appropriation, $738,000 in 19.3fiscal year 2013 is for operation of a new 19.421-bed specialty care/Alzheimer's unit at the 19.5Minnesota Veterans Home in Fergus Falls. 19.6Base funding for this program is $842,000 in 19.7fiscal years 2014 and 2015.19.8Minneapolis Veterans Home. Of the 19.9general fund appropriation, $162,000 in 19.10fiscal year 2013 is for operation of a new 19.11adult day care program at the Minnesota 19.12Veterans Home in Minneapolis. Base 19.13funding for this program is $232,000 in fiscal 19.14years 2014 and 2015.19.15Veterans Homes Service Redesign.19.16$551,000 in fiscal year 2012 and $801,000 in 19.17fiscal year 2013, generated from additional 19.18nongeneral fund revenue and cost savings 19.19from operating efficiencies, are to be used to 19.20support the operational needs of the five state 19.21veterans homes.19.22    Sec. 4. Laws 2010, chapter 215, article 6, section 4, is amended to read:

19.23Sec. 4. VETERANS HOMES

19.24Of the appropriation in Laws 2009, chapter 19.2594, article 3, section 2, subdivision 3, or from 19.26funds carried forward from fiscal year 2009:19.27(1) $1,000,000 $800,000 in fiscal year 2011 19.28is for operational expenses related to the 19.2921-bed addition at the Fergus Falls Veterans 19.30Home; and19.31(2) $113,000 $313,000 in fiscal year 2011 is 19.32for start-up expenses related to the opening of 20.1an adult daycare facility at the Minneapolis 20.2Veterans Home.20.3An appropriation in this section that is 20.4unspent at the end of fiscal year 2011 carries 20.5forward and is available in fiscal year 2012.20.6EFFECTIVE DATE.This section is effective the day following final enactment.20.7    Sec. 5.  REPEALER.20.8Minnesota Statutes 2010, section 197.585, subdivision 5, is repealed.20.9EFFECTIVE DATE.This section is effective the day following final enactment.20.10ARTICLE 320.11STATE GOVERNMENT OPERATIONS20.12    Section 1. Minnesota Statutes 2010, section 3.85, subdivision 3, is amended to read:20.13    Subd. 3. Membership. The commission consists of five seven  members of the 20.14senate appointed by the Subcommittee on Committees of the Committee on Rules and 20.15Administration and five seven  members of the house of representatives appointed by 20.16the speaker. No more than five members from each chamber may be from the majority 20.17caucus in that chamber. Members shall be appointed at the commencement of each regular 20.18session of the legislature for a two-year term beginning January 16 of the first year of the 20.19regular session. Members continue to serve until their successors are appointed. Vacancies 20.20that occur while the legislature is in session shall be filled like regular appointments. If the 20.21legislature is not in session, senate vacancies shall be filled by the last Subcommittee on 20.22Committees of the senate Committee on Rules and Administration or other appointing 20.23authority designated by the senate rules, and house of representatives vacancies shall be 20.24filled by the last speaker of the house, or if the speaker is not available, by the last chair of 20.25the house of representatives Rules Committee.20.26EFFECTIVE DATE.This section is effective January 16, 2013.20.27    Sec. 2. [3D.01] SHORT TITLE.20.28This chapter may be cited as the "Minnesota Sunset Act."20.29    Sec. 3. [3D.02] DEFINITIONS.20.30    Subdivision 1.Scope.The definitions in this section apply to this chapter.21.1    Subd. 2.Advisory committee."Advisory committee" means a committee, council, 21.2commission, or other entity created under state law whose primary function is to advise 21.3a state agency.21.4    Subd. 3.Commission."Commission" means the Sunset Advisory Commission.21.5    Subd. 4.State agency."State agency" means an agency expressly made subject 21.6to this chapter. 21.7    Sec. 4. [3D.03] SUNSET ADVISORY COMMISSION.21.8    Subdivision 1.Membership.(a) The Sunset Advisory Commission consists of 12 21.9members appointed as follows:21.10(1) five senators and one public member, appointed according to the rules of the 21.11senate, with no more than three senators from the majority caucus; and21.12(2) five members of the house of representatives and one public member, appointed 21.13by the speaker of the house, with no more than three of the house of representatives 21.14members from the majority caucus.21.15(b) The first members of the Sunset Advisory Commission must be appointed before 21.16September 1, 2011, for terms ending the first Monday in January 2013.21.17    Subd. 2.Public member restrictions.An individual is not eligible for appointment 21.18as a public member if the individual or the individual's spouse is:21.19(1) regulated by a state agency that the commission will review during the term for 21.20which the individual would serve;  21.21(2) employed by, participates in the management of, or directly or indirectly has 21.22more than a ten percent interest in a business entity or other organization regulated by a 21.23state agency the commission will review during the term for which the individual would 21.24serve; or 21.25(3) required to register as a lobbyist under chapter 10A because of the person's 21.26activities for compensation on behalf of a profession or entity related to the operation of 21.27an agency under review.21.28    Subd. 3.Removal.(a) It is a ground for removal of a public member from the 21.29commission if the member does not have the qualifications required by subdivision 2 21.30for appointment to the commission at the time of appointment or does not maintain the 21.31qualifications while serving on the commission. The validity of the commission's action is 21.32not affected by the fact that it was taken when a ground for removal of a public member 21.33from the commission existed.21.34(b) Except as provided in paragraph (a), a public member may be removed only as 21.35provided in section 15.0575, subdivision 4.22.1    Subd. 4.Terms.Legislative members serve at the pleasure of the appointing 22.2authority. Public members serve two-year terms expiring the first Monday in January of 22.3each odd-numbered year.22.4    Subd. 5.Limits.Members are subject to the following restrictions:22.5(1) after an individual serves four years on the commission, the individual is not 22.6eligible for appointment to another term or part of a term;22.7(2) a legislative member who serves a full term may not be appointed to an 22.8immediately succeeding term; and22.9(3) a public member may not serve consecutive terms, and, for purposes of this 22.10prohibition, a member is considered to have served a term only if the member has served 22.11more than one-half of the term.22.12    Subd. 6.Appointments.Appointments must be made before the second Monday of 22.13January of each odd-numbered year.22.14    Subd. 7.Legislative members.If a legislative member ceases to be a member 22.15of the legislative body from which the member was appointed, the member vacates 22.16membership on the commission.22.17    Subd. 8.Vacancies.If a vacancy occurs, the appointing authority shall appoint a 22.18person to serve for the remainder of the unexpired term in the same manner as the original 22.19appointment.22.20    Subd. 9.Officers.The commission shall have a chair and vice-chair as presiding 22.21officers.22.22    Subd. 10.Quorum; voting.Seven members of the commission constitute a 22.23quorum. A final action or recommendation may not be made unless approved by a 22.24recorded vote of at least seven members. All other actions by the commission shall be 22.25decided by a majority of the members present and voting.22.26    Subd. 11.Compensation.Each public member shall be reimbursed for expenses 22.27as provided in section 15.0575. Compensation for legislators is as determined by the 22.28members' legislative chamber.22.29    Sec. 5. [3D.04] STAFF.22.30The Legislative Coordinating Commission shall provide staff and administrative 22.31services for the commission.22.32    Sec. 6. [3D.05] RULES.22.33The commission may adopt rules necessary to carry out this chapter.23.1    Sec. 7. [3D.06] AGENCY REPORT TO COMMISSION.23.2Before September 1 of the odd-numbered year before the year in which a state 23.3agency is sunset, the agency commissioner shall report to the commission:23.4(1) information regarding the application to the agency of the criteria in section 23.53D.10;23.6(2) a priority-based budget for the agency;23.7(3) an inventory of all boards, commissions, committees, and other entities related 23.8to the agency; and23.9(4) any other information that the agency commissioner considers appropriate or that 23.10is requested by the commission.23.11    Sec. 8. [3D.07] COMMISSION DUTIES.23.12Before January 1 of the year in which a state agency subject to this chapter and its 23.13advisory committees are sunset, the commission shall:23.14(1) review and take action necessary to verify the reports submitted by the agency; 23.15and23.16(2) conduct a review of the agency based on the criteria provided in section 3D.10 23.17and prepare a written report.23.18    Sec. 9. [3D.08] PUBLIC HEARINGS.23.19Before February 1 of the year a state agency subject to this chapter and its advisory 23.20committees are sunset, the commission shall conduct public hearings concerning but not 23.21limited to the application to the agency of the criteria provided in section 3D.10.23.22    Sec. 10. [3D.09] COMMISSION REPORT.23.23By February 1 of each even-numbered year, the commission shall present to the 23.24legislature and the governor a report on the agencies and advisory committees reviewed. 23.25In the report the commission shall include:23.26(1) its findings regarding the criteria prescribed by section 3D.10;23.27(2) its recommendations based on the matters prescribed by section 3D.11; and23.28(3) other information the commission considers necessary for a complete review 23.29of the agency. 23.30    Sec. 11. [3D.10] CRITERIA FOR REVIEW.23.31The commission and its staff shall consider the following criteria in determining 23.32whether a public need exists for the continuation of a state agency or its advisory 24.1committees or for the performance of the functions of the agency or its advisory 24.2committees:24.3(1) the efficiency and effectiveness with which the agency or the advisory committee 24.4operates; 24.5(2) an identification of the mission, goals, and objectives intended for the agency or 24.6advisory committee and of the problem or need that the agency or advisory committee 24.7was intended to address and the extent to which the mission, goals, and objectives have 24.8been achieved and the problem or need has been addressed;24.9(3) an identification of any activities of the agency in addition to those granted by 24.10statute and of the authority for those activities and the extent to which those activities 24.11are needed;24.12(4) an assessment of authority of the agency relating to fees, inspections, 24.13enforcement, and penalties;24.14(5) whether less restrictive or alternative methods of performing any function that 24.15the agency performs could adequately protect or provide service to the public; 24.16(6) the extent to which the jurisdiction of the agency and the programs administered 24.17by the agency overlap or duplicate those of other agencies, the extent to which the agency 24.18coordinates with those agencies, and the extent to which the programs administered by the 24.19agency can be consolidated with the programs of other state agencies; 24.20(7) the promptness and effectiveness with which the agency addresses complaints 24.21concerning entities or other persons affected by the agency, including an assessment of the 24.22agency's administrative hearings process; 24.23(8) an assessment of the agency's rulemaking process and the extent to which the 24.24agency has encouraged participation by the public in making its rules and decisions and 24.25the extent to which the public participation has resulted in rules that benefit the public; 24.26(9) the extent to which the agency has complied with federal and state laws and 24.27applicable rules regarding equality of employment opportunity and the rights and privacy 24.28of individuals, and state law and applicable rules of any state agency regarding purchasing 24.29guidelines and programs for historically underutilized businesses;24.30(10) the extent to which the agency issues and enforces rules relating to potential 24.31conflicts of interest of its employees;24.32(11) the extent to which the agency complies with chapter 13 and follows records 24.33management practices that enable the agency to respond efficiently to requests for public 24.34information; and24.35(12) the effect of federal intervention or loss of federal funds if the agency is 24.36abolished. 25.1    Sec. 12. [3D.11] RECOMMENDATIONS.25.2(a) In its report on a state agency, the commission shall: 25.3(1) make recommendations on the abolition, continuation, or reorganization of each 25.4affected state agency and its advisory committees and on the need for the performance of 25.5the functions of the agency and its advisory committees; 25.6(2) make recommendations on the consolidation, transfer, or reorganization of 25.7programs within state agencies not under review when the programs duplicate functions 25.8performed in agencies under review; and 25.9(3) make recommendations to improve the operations of the agency, its policy body, 25.10and its advisory committees, including management recommendations that do not require 25.11a change in the agency's enabling statute. 25.12(b) The commission shall include the estimated fiscal impact of its recommendations 25.13and may recommend appropriation levels for certain programs to improve the operations 25.14of the state agency. 25.15(c) The commission shall have drafts of legislation prepared to carry out the 25.16commission's recommendations under this section, including legislation necessary 25.17to continue the existence of agencies that would otherwise sunset if the commission 25.18recommends continuation of an agency.25.19(d) After the legislature acts on the report under section 3D.09, the commission shall 25.20present to the legislative auditor the commission's recommendations that do not require 25.21a statutory change to be put into effect. Subject to the legislative audit commission's 25.22approval, the legislative auditor may examine the recommendations and include as part 25.23of the next audit of the agency a report on whether the agency has implemented the 25.24recommendations and, if so, in what manner.25.25    Sec. 13. [3D.12] MONITORING OF RECOMMENDATIONS.25.26During each legislative session, the staff of the commission shall monitor legislation 25.27affecting agencies that have undergone sunset review and shall periodically report 25.28to the members of the commission on proposed changes that would modify prior 25.29recommendations of the commission.25.30    Sec. 14. [3D.13] REVIEW OF ADVISORY COMMITTEES.25.31An advisory committee, the primary function of which is to advise a particular state 25.32agency, is subject to sunset on the date set for sunset of the agency unless the advisory 25.33committee is expressly continued by law.26.1    Sec. 15. [3D.14] CONTINUATION BY LAW.26.2During the regular session immediately before the sunset of a state agency or an 26.3advisory committee that is subject to this chapter, the legislature may enact legislation 26.4to continue the agency or advisory committee for a period not to exceed 12 years. This 26.5chapter does not prohibit the legislature from:26.6(1) terminating a state agency or advisory committee subject to this chapter at a date 26.7earlier than that provided in this chapter; or26.8(2) considering any other legislation relative to a state agency or advisory committee 26.9subject to this chapter.26.10    Sec. 16. [3D.15] PROCEDURE AFTER TERMINATION.26.11    Subdivision 1.Termination.Unless otherwise provided by law: 26.12(1) if after sunset review a state agency is abolished, the agency may continue in 26.13existence until June 30 of the following year to conclude its business; 26.14(2) abolishment does not reduce or otherwise limit the powers and authority of the 26.15state agency during the concluding year; 26.16(3) a state agency is terminated and shall cease all activities at the expiration of 26.17the one-year period; and26.18(4) all rules that have been adopted by the state agency expire at the expiration of 26.19the one-year period.26.20    Subd. 2.Funds of abolished agency or advisory committee.(a) Any unobligated 26.21and unexpended appropriations of an abolished agency or advisory committee lapse on 26.22June 30 of the year after abolishment.26.23(b) Except as provided by subdivision 4 or as otherwise provided by law, all money 26.24in a dedicated fund of an abolished state agency or advisory committee on June 30 of the 26.25year after abolishment is transferred to the general fund. The part of the law dedicating 26.26the money to a specific fund of an abolished agency becomes void on June 30 of the year 26.27after abolishment.26.28    Subd. 3.Property and records of abolished agency or advisory committee.26.29Unless the governor designates an appropriate state agency as prescribed by subdivision 4, 26.30property and records in the custody of an abolished state agency or advisory committee 26.31on June 30 of the year after abolishment must be transferred to the commissioner of 26.32administration. If the governor designates an appropriate state agency, the property and 26.33records must be transferred to the designated state agency.26.34    Subd. 4.Continuing obligations.(a) The legislature recognizes the state's 26.35continuing obligation to pay bonded indebtedness and all other obligations, including 27.1lease, contract, and other written obligations, incurred by a state agency or advisory 27.2committee abolished under this chapter, and this chapter does not impair or impede the 27.3payment of bonded indebtedness and all other obligations, including lease, contract, and 27.4other written obligations, in accordance with their terms. If an abolished state agency or 27.5advisory committee has outstanding bonded indebtedness or other outstanding obligations, 27.6including lease, contract, and other written obligations, the bonds and all other obligations, 27.7including lease, contract, and other written obligations, remain valid and enforceable in 27.8accordance with their terms and subject to all applicable terms and conditions of the laws 27.9and proceedings authorizing the bonds and all other obligations, including lease, contract, 27.10and other written obligations.27.11(b) The governor shall designate an appropriate state agency that shall continue to 27.12carry out all covenants contained in the bonds and in all other obligations, including lease, 27.13contract, and other written obligations, and the proceedings authorizing them, including 27.14the issuance of bonds, and the performance of all other obligations, including lease, 27.15contract, and other written obligations, to complete the construction of projects or the 27.16performance of other obligations, including lease, contract, and other written obligations.27.17(c) The designated state agency shall provide payment from the sources of payment 27.18of the bonds in accordance with the terms of the bonds and shall provide payment from 27.19the sources of payment of all other obligations, including lease, contract, and other written 27.20obligations, in accordance with their terms, whether from taxes, revenues, or otherwise, 27.21until the bonds and interest on the bonds are paid in full and all other obligations, 27.22including lease, contract, and other written obligations, are performed and paid in full. 27.23If the proceedings so provide, all funds established by laws or proceedings authorizing 27.24the bonds or authorizing other obligations, including lease, contract, and other written 27.25obligations, must remain with the comptroller or the previously designated trustees. If the 27.26proceedings do not provide that the funds remain with the comptroller or the previously 27.27designated trustees, the funds must be transferred to the designated state agency.27.28    Sec. 17. [3D.16] ASSISTANCE OF AND ACCESS TO STATE AGENCIES.27.29The commission may request the assistance of state agencies and officers. When 27.30assistance is requested, a state agency or officer shall assist the commission. In carrying 27.31out its functions under this chapter, the commission or its designated staff member may 27.32inspect the records, documents, and files of any state agency. 27.33    Sec. 18. [3D.17] RELOCATION OF EMPLOYEES.28.1If an employee is displaced because a state agency or its advisory committee is 28.2abolished or reorganized, the state agency shall make a reasonable effort to relocate the 28.3displaced employee.28.4    Sec. 19. [3D.18] SAVING PROVISION.28.5Except as otherwise expressly provided, abolition of a state agency does not affect 28.6rights and duties that matured, penalties that were incurred, civil or criminal liabilities that 28.7arose, or proceedings that were begun before the effective date of the abolition.28.8    Sec. 20. [3D.19] REVIEW OF PROPOSED LEGISLATION CREATING AN 28.9AGENCY.28.10Each bill filed in a house of the legislature that would create a new state agency or 28.11a new advisory committee to a state agency shall be reviewed by the commission. The 28.12commission shall review the bill to determine if:28.13(1) the proposed functions of the agency or committee could be administered by one 28.14or more existing state agencies or advisory committees; 28.15(2) the form of regulation, if any, proposed by the bill is the least restrictive form of 28.16regulation that will adequately protect the public; 28.17(3) the bill provides for adequate public input regarding any regulatory function 28.18proposed by the bill; and 28.19(4) the bill provides for adequate protection against conflicts of interest within 28.20the agency or committee.28.21    Sec. 21. [3D.20] GIFTS AND GRANTS.28.22The commission may accept gifts, grants, and donations from any organization 28.23described in section 501(c)(3) of the Internal Revenue Code for the purpose of funding 28.24any activity under this chapter. All gifts, grants, and donations must be accepted in an 28.25open meeting by a majority of the voting members of the commission and reported in the 28.26public record of the commission with the name of the donor and purpose of the gift, grant, 28.27or donation. Money received under this section is appropriated to the commission.28.28    Sec. 22. [3D.21] EXPIRATION.28.29    Subdivision 1.Group 1.The following agencies are sunset and expire on June 28.3030, 2012: Department of Health, Department of Human Rights, Department of Human 28.31Services, all health-related licensing boards listed in section 214.01, Council on Affairs 28.32of Chicano/Latino People, Council on Black Minnesotans, Council on Asian-Pacific 29.1Minnesotans, Indian Affairs Council, Council on Disabilities, and all advisory groups 29.2associated with these agencies.29.3    Subd. 2.Group 2.The following agencies are sunset and expire on June 30, 2014: 29.4Department of Education, Board of Teaching, Minnesota Office of Higher Education, and 29.5all advisory groups associated with these agencies.29.6    Subd. 3.Group 3.The following agencies are sunset and expire on June 30, 2016: 29.7Department of Commerce, Department of Employment and Economic Development, 29.8Department of Labor and Industry, all non-health-related licensing boards listed in 29.9section 214.01 except as otherwise provided in this section, Explore Minnesota Tourism, 29.10Public Utilities Commission, Iron Range Resources and Rehabilitation Board, Bureau of 29.11Mediation Services, Combative Sports Commission, Amateur Sports Commission, and all 29.12advisory groups associated with these agencies.29.13    Subd. 4.Group 4.The following agencies are sunset and expire on June 30, 2018: 29.14Department of Corrections, Department of Public Safety, Department of Transportation, 29.15Peace Officer Standards and Training Board, Corrections Ombudsman, and all advisory 29.16groups associated with these agencies.29.17    Subd. 5.Group 5.The following agencies are sunset and expire on June 30, 2020: 29.18Department of Agriculture, Department of Natural Resources, Pollution Control Agency, 29.19Board of Animal Health, Board of Water and Soil Resources, and all advisory groups 29.20associated with these agencies.29.21    Subd. 6.Group 6.The following agencies are sunset and expire on June 30, 2022: 29.22Department of Administration, Department of Management and Budget, Department of 29.23Military Affairs, Department of Revenue, Department of Veterans Affairs, Arts Board, 29.24Minnesota Zoo, Office of Administrative Hearings, Campaign Finance and Public 29.25Disclosure Board, Capitol Area Architectural and Planning Board, Office of Enterprise 29.26Technology, Minnesota Racing Commission, and all advisory groups associated with 29.27these agencies.29.28    Subd. 7.Continuation.Following sunset review of an agency, the legislature may 29.29act within the same legislative session in which the sunset report was received on Sunset 29.30Advisory Commission recommendations to continue or reorganize the agency.29.31    Subd. 8.Other groups.The commission may review, under the criteria in 29.32section 3D.10, and propose to the legislature an expiration date for any agency, board, 29.33commission, or program not listed in this section.29.34    Sec. 23. Minnesota Statutes 2010, section 6.48, is amended to read:29.356.48 EXAMINATION OF COUNTIES; COST, FEES.30.1(a) All the powers and duties conferred and imposed upon the state auditor shall 30.2be exercised and performed by the state auditor in respect to the offices, institutions, 30.3public property, and improvements of several counties of the state. At least once in each 30.4year, if funds and personnel permit, the state auditor may visit, without previous notice, 30.5each county and make a thorough examination of all accounts and records relating to the 30.6receipt and disbursement of the public funds and the custody of the public funds and 30.7other property. If the audit is performed by a private certified public accountant, the state 30.8auditor may require additional information from the private certified public accountant as 30.9the state auditor deems in the public interest. The state auditor may accept the audit or 30.10make additional examinations as the state auditor deems to be in the public interest. The 30.11state auditor shall prescribe and install systems of accounts and financial reports that shall 30.12be uniform, so far as practicable, for the same class of offices. A copy of the report of 30.13such examination shall be filed and be subject to public inspection in the office of the state 30.14auditor and another copy in the office of the auditor of the county thus examined. The state 30.15auditor may accept the records and audit, or any part thereof, of the Department of Human 30.16Services in lieu of examination of the county social welfare funds, if such audit has been 30.17made within any period covered by the state auditor's audit of the other records of the 30.18county. If any such examination shall disclose malfeasance, misfeasance, or nonfeasance 30.19in any office of such county, such report shall be filed with the county attorney of the 30.20county, and the county attorney shall institute such civil and criminal proceedings as the 30.21law and the protection of the public interests shall require.30.22(b) The county receiving any examination shall pay to the state general fund, 30.23notwithstanding the provisions of section 
         16A.125, the total cost and expenses of such 30.24examinations, including the salaries paid to the examiners while actually engaged in 30.25making such examination. The state auditor on deeming it advisable may bill counties, 30.26having a population of 200,000 or over, monthly for services rendered and the officials 30.27responsible for approving and paying claims shall cause said bill to be promptly paid. The 30.28general fund shall be credited with all collections made for any such examinations. 30.29(c) Notwithstanding paragraph (a), a county may provide for an audit to be performed 30.30by a certified public accountant firm meeting the requirements of section 326A.05. 30.31A county must notify the state auditor before August 1 of the even-numbered year 30.32immediately preceding the year in which the county intends to have an audit performed by 30.33a certified public accounting firm. A county currently using a certified public accounting 30.34firm must notify the state auditor before August 1 of the even-numbered year immediately 30.35preceding the year in which the county intends for the state auditor to audit the county. 30.36The audit performed under this paragraph must meet the standards and be in the form 31.1required by the state auditor. The state auditor may require additional information from 31.2the certified public accountant firm as the state auditor deems in the public interest, but the 31.3state auditor must accept the audit unless the state auditor determines that it does not meet 31.4recognized industry auditing standards or is not in the form required by the state auditor.31.5    Sec. 24. Minnesota Statutes 2010, section 15.057, is amended to read:31.615.057 PUBLICITY REPRESENTATIVES AND LEGISLATIVE LIAISONS.31.7    Subdivision 1.Publicity representatives.  No state department, bureau, or division, 31.8whether the same operates on funds appropriated or receipts or fees of any nature 31.9whatsoever, except the Department of Transportation, the Department of Employment 31.10and Economic Development, the Game and Fish Division, State Agricultural Society, and 31.11Explore Minnesota Tourism shall use any of such funds for the payment of the salary or 31.12expenses of a publicity representative. The head of any such department, bureau, or 31.13division shall be personally liable for funds used contrary to this provision. This section31.14subdivision  shall not be construed, however, as preventing any such department, bureau, 31.15or division from sending out any bulletins or other publicity required by any state law or 31.16necessary for the satisfactory conduct of the business for which such department, bureau, 31.17or division was created.31.18    Subd. 2.Legislative liaisons.No state agency may use any money appropriated to 31.19it for the salary or expenses of an individual serving as a liaison for the legislative affairs 31.20of the agency. This subdivision does not prevent any employee of a state agency from 31.21providing information requested by legislators and providing testimony at legislative 31.22hearings.31.23    Sec. 25. Minnesota Statutes 2010, section 15.06, subdivision 8, is amended to read:31.24    Subd. 8. Number of deputy commissioners; no assistant commissioners.Unless 31.25specifically authorized by statute, other than section 43A.08, subdivision 2 Except for the 31.26Department of Veterans Affairs, no department or agency specified in subdivision 1 shall 31.27have more than one deputy commissioner. Except for the Department of Veterans Affairs, 31.28no department or agency specified in subdivision 1 may employ an assistant commissioner.31.29    Sec. 26. [15.062] EMPLOYEE COMPETITION FOR STATE BUSINESS.31.30If an agency decides to seek an outside vendor to perform work currently done by 31.31state employees, the agency must permit groups of state employees to compete for the 31.32business by submitting responses to the agency's solicitation documents. Notwithstanding 31.33section 16A.127 or any other law to the contrary, no statewide or agency indirect costs 32.1may be assessed to a group of agency employees with respect to work performed under 32.2a contract awarded to a group of employees under this section. This section supersedes 32.3any provision of law preventing a state agency from entering into a contract with a state 32.4employee.32.5    Sec. 27. [15.76] SAVI PROGRAM.32.6    Subdivision 1.Program established.The state agency value initiative (SAVI) 32.7program is established to encourage state agencies to identify cost-effective and efficiency 32.8measures in agency programs and operations that result in cost savings for the state. All 32.9state agencies, including Minnesota State Colleges and Universities, may participate in 32.10this program.32.11    Subd. 2.Retained savings.(a) In order to encourage innovation and creative 32.12cost savings by state employees, upon approval of the commissioner of management 32.13and budget, 50 percent of any appropriations for agency operations that remain unspent 32.14at the end of a biennium because of unanticipated innovation, efficiencies, or creative 32.15cost-savings may be carried forward and retained by the agency to fund specific agency 32.16proposals or projects. Agencies choosing to spend retained savings funds must ensure that 32.17project expenditures do not create future obligations beyond the amounts available from 32.18the retained savings. The retained savings must be used only to fund projects that directly 32.19support the agency's mission. This section does not restrict authority granted by other law 32.20to carry forward money for a different period or for different purposes.32.21(b) This section supersedes any contrary provision of section 16A.28.32.22    Subd. 3.Special peer review panel; review process.(a) Each participating agency 32.23must organize a peer review panel that will determine which proposal or project receives 32.24funding from the SAVI program. The peer review panel must be comprised of department 32.25employees who are credited with cost-savings initiatives and department managers. The 32.26ratio between managers and department employees must be balanced.32.27(b) An agency may spend money for a project recommended for funding by the 32.28peer review panel after: 32.29(1) the agency has posted notice of spending for the proposed project on the agency 32.30Web site for at least 30 days; and32.31(2) the commissioner of management and budget has approved spending money 32.32from the SAVI account for the project.32.33(c) Before approving a project, the commissioner of management and budget 32.34must submit the request to the Legislative Advisory Commission for its review and 32.35recommendation. Upon receiving a request from the commissioner, the Legislative 33.1Advisory Commission shall post notice of the request on a legislative Web site for at least 33.230 days. Failure of the commission to make a recommendation within this 30-day period 33.3is considered a negative recommendation. A recommendation of the commission must be 33.4made at a meeting of the commission unless a written recommendation is signed by all 33.5the members entitled to vote on the item.33.6    Subd. 4.SAVI-dedicated account.Each agency that participates in the SAVI 33.7program shall have a SAVI-dedicated account in the special revenue fund, or other 33.8appropriate fund as determined by the commissioner of management and budget, into 33.9which the agency's savings are deposited. The agency will manage and review projects 33.10that are funded from this account. Money in the account is appropriated to the participating 33.11agency for purposes authorized by this section.33.12    Subd. 5.Expiration.This section expires June 30, 2018.33.13EFFECTIVE DATE.This section is effective June 30, 2013, and first applies to 33.14funds to be carried forward from the biennium ending June 30, 2013, to the biennium 33.15beginning July 1, 2013.33.16    Sec. 28. Minnesota Statutes 2010, section 16A.10, subdivision 1a, is amended to read:33.17    Subd. 1a. Purpose of performance data. Performance data shall be presented in 33.18the budget proposal to:33.19(1) provide information so that the legislature can determine the extent to which 33.20state programs and activities are successful;33.21(2) encourage agencies to develop clear and measurable goals and objectives for 33.22their programs and activities; and33.23(3) strengthen accountability to Minnesotans by providing a record of state 33.24government's performance in providing effective and efficient services.33.25    Sec. 29. Minnesota Statutes 2010, section 16A.10, subdivision 1b, is amended to read:33.26    Subd. 1b. Performance data format.(a) As part of the budget proposal, agencies 33.27shall:33.28(1) describe the goals and objectives of each agency program and activity; and33.29(2) present performance data that measures the performance of programs and 33.30activities in meeting program goals and objectives.33.31(b) Measures reported must be outcome-based and objective, and may include 33.32indicators of outputs, efficiency, outcomes, and other measures relevant to understanding 33.33each program and activity.34.1(c) Agencies shall present as much historical information as needed to understand 34.2major trends and shall set targets for future performance issues where feasible and 34.3appropriate. The information shall appropriately highlight agency performance issues that 34.4would assist legislative review and decision making.34.5(d) For purposes of this subdivision, subdivision 1a, and section 16A.106, the terms 34.6"program" and "activity" are used in the same manner as the terms are used in state 34.7budgeting. However, the commissioner may authorize an agency to define these terms in a 34.8different manner if that allows for a more effective presentation of performance data.34.9    Sec. 30. Minnesota Statutes 2010, section 16A.10, subdivision 1c, is amended to read:34.10    Subd. 1c. Performance measures for change items. For each change item in the 34.11budget proposal requesting new or increased funding, the budget document must present 34.12proposed performance measures that can be used to determine if the new or increased 34.13funding is accomplishing its goals. To the extent possible, each budget change item 34.14must identify relevant Minnesota Milestones and other statewide goals and indicators 34.15related to the proposed initiative. The commissioner must report to the Subcommittee on 34.16Government Accountability established under section 3.885, subdivision 10, regarding the 34.17format to be used for the presentation and selection of Minnesota Milestones and other 34.18statewide goals and indicators.34.19    Sec. 31. Minnesota Statutes 2010, section 16A.103, subdivision 1a, is amended to read:34.20    Subd. 1a. Forecast parameters. The forecast must assume the continuation of 34.21current laws and reasonable estimates of projected growth in the national and state 34.22economies and affected populations. Revenue must be estimated for all sources provided 34.23for in current law. Expenditures must be estimated for all obligations imposed by law and 34.24those projected to occur as a result of variables outside the control of the legislature. 34.25Expenditures for the current biennium must be based on actual appropriations or, for 34.26forecasted programs, the amount needed to fund the formula in law. The base for 34.27expenditures projections for the next biennium is the amount appropriated in the second 34.28year of the current biennium, except as provided by other law, or, for forecasted programs, 34.29the amount needed to fund the formula in law. Expenditure estimates must not include an 34.30allowance for inflation.34.31    Sec. 32. [16A.106] ZERO-BASED BUDGETING PRINCIPLES.34.32(a) The detailed budget presented to the legislature must include:35.1(1) a description of each budget activity for which the agency or entity receives 35.2an appropriation in the current biennium or for which the agency or entity requests an 35.3appropriation in the next biennium;35.4(2) for each budget activity, three alternative funding levels or alternative ways of 35.5performing the budget activity, at least one of which is less than the previous biennium's 35.6actual expenditures for that budget activity, a summary of the priorities that would be 35.7accomplished within each level compared to a zero budget, and the additional increments 35.8of value that would be added by the higher funding levels compared to what would be 35.9accomplished if there were no funding for the activity; and35.10(3) for each budget activity, performance data as specified in section 16A.10, 35.11subdivision 1b, the predicted effect of the three alternative funding levels on future 35.12performance, and also one or more measures of cost efficiency and effectiveness of 35.13program delivery, which must include comparisons to other states or entities with similar 35.14programs.35.15(b) The commissioner's budget preparation guidelines and instructions must contain 35.16requirements, deadlines, and technical assistance to facilitate implementation of this 35.17section. After consultation with the legislative commission on planning and fiscal policy, 35.18the commissioner's instructions may establish parameters for the three alternative funding 35.19levels required in paragraph (a), clause (3).35.20(c) The governor's recommendations must prioritize the budget activities within an 35.21agency or program area. To the extent activities in more than one agency or program area 35.22are meeting the same goals, the recommendations must prioritize budget activities across 35.23agencies or programs with the same goals, and this prioritization must include agencies or 35.24programs not subject to zero-based budgeting principles that biennium.35.25(d) Expenditures for debt service under section 16A.641, subdivision 10, are not 35.26subject to zero-based budgeting principles.35.27EFFECTIVE DATE.(a) The zero-based budgeting principles in this section first 35.28apply to the following budget proposals for the biennium beginning July 1, 2013:35.29(1) legislative branch;35.30(2) judicial branch;35.31(3) Minnesota State Colleges and Universities system; and35.32(4) approximately half of expenditure programs in the executive branch, designated 35.33by the governor, in consultation with the chairs and lead minority members of the senate 35.34Finance Committee and the house of representatives Ways and Means Committee.35.35(b) The zero-based budgeting principles in this section apply to all budget proposals 35.36for the biennium beginning July 1, 2015, and after.36.1    Sec. 33. Minnesota Statutes 2010, section 16A.11, subdivision 3, is amended to read:36.2    Subd. 3. Part two: detailed budget. (a) Part two of the budget, the detailed budget 36.3estimates both of expenditures and revenues, must contain any statements on the financial 36.4plan which the governor believes desirable or which may be required by the legislature. 36.5The detailed estimates shall include the governor's budget arranged in tabular form.36.6(b) For programs designated for the zero-based budgeting principles under section 36.716A.106, the budget must be prepared according to the requirements of that section.36.8(c) For programs not designated for zero-based budgeting principles under section 36.916A.106, tables listing expenditures for the next biennium must show the appropriation 36.10base for each year as defined in section 16A.103, subdivision 1c. The appropriation base 36.11is the amount appropriated for the second year of the current biennium. The tables must 36.12separately show any adjustments to the base required by current law or policies of the 36.13commissioner of management and budget. For forecasted programs, the tables must also 36.14show the amount of the forecast adjustments, based on the most recent forecast prepared 36.15by the commissioner of management and budget under section 
         16A.103. For all programs, 36.16the tables must show the amount of appropriation changes recommended by the governor, 36.17after adjustments to the base and forecast adjustments, and the total recommendation of 36.18the governor for that year.36.19(c) (d) The detailed estimates must include a separate line listing the total cost of 36.20professional and technical service contracts for the prior biennium and the projected costs 36.21of those contracts for the current and upcoming biennium. They must also include a 36.22summary of the personnel employed by the agency, reflected as full-time equivalent 36.23positions.36.24(d) (e) The detailed estimates for internal service funds must include the number of 36.25full-time equivalents by program; detail on any loans from the general fund, including 36.26dollar amounts by program; proposed investments in technology or equipment of $100,000 36.27or more; an explanation of any operating losses or increases in retained earnings; and a 36.28history of the rates that have been charged, with an explanation of any rate changes and 36.29the impact of the rate changes on affected agencies.36.30    Sec. 34. Minnesota Statutes 2010, section 16A.28, subdivision 3, is amended to read:36.31    Subd. 3. Lapse. Any portion of any appropriation not carried forward and remaining 36.32unexpended and unencumbered at the close of a fiscal year lapses to the fund from which 36.33it was originally appropriated. Except as provided in section 15.76, any appropriation 36.34amounts not carried forward and remaining unexpended and unencumbered at the close of 36.35a biennium lapse to the fund from which the appropriation was made.37.1EFFECTIVE DATE.This section is effective June 30, 2013.37.2    Sec. 35. [16A.90] EMPLOYEE GAINSHARING SYSTEM.37.3The commissioner shall establish a program to provide onetime bonus compensation 37.4to state employees for efforts made to reduce the costs of operating state government or for 37.5ways of providing better or more efficient state services. The commissioner may make a 37.6onetime award to an employee or group of employees whose suggestion or involvement in 37.7a project is determined by the commissioner to have resulted in documented cost-savings 37.8to the state. The maximum award is ten percent of the documented savings in the 37.9first fiscal year in which the savings are realized. The award must be paid from the 37.10appropriation to which the savings accrued.37.11    Sec. 36. [16A.93] MINNESOTA PAY FOR PERFORMANCE ACT.37.12Sections 16A.93 to 16A.96 may be cited as the "Minnesota Pay for Performance 37.13Act of 2011."37.14EFFECTIVE DATE.This section is effective the day following final enactment.37.15    Sec. 37. [16A.94] PROGRAM.37.16    Subdivision 1.Pilot program established.The commissioner shall implement a 37.17pilot program to demonstrate the feasibility and desirability of using state appropriation 37.18bonds to pay for certain services based on performance and outcomes for the people served.37.19    Subd. 2.Oversight committee.(a) The commissioner shall appoint an oversight 37.20committee to:37.21(1) identify criteria to select one or more services to be included in the pilot program;37.22(2) identify the conditions of performance and desired outcomes for the people 37.23served by each service selected;37.24(3) identify criteria to evaluate whether a service has met the performance 37.25conditions; and37.26(4) provide any other advice or assistance requested by the commissioner.37.27(b) The oversight committee must include the commissioners of the Departments 37.28of Human Services, Employment and Economic Development, and Administration, or 37.29their designees; a representative of a nonprofit organization that has participated in a 37.30pay-for-performance program; and any other person or organization that the commissioner 37.31determines would be of assistance in developing and implementing the pilot program.37.32    Subd. 3.Contracts.The commissioner and the commissioner of the agency with 37.33a service to be provided through the pilot program shall enter into a contract with the 38.1selected provider. The contract must specify the service to be provided, the time frame in 38.2which it is to be provided, the outcome required for payment, and any other terms deemed 38.3necessary or convenient for implementation of the pilot program. The commissioner 38.4shall pay a provider that has met the terms and conditions of a contract with money 38.5appropriated to the commissioner from the special appropriation bond proceeds account 38.6established in section 16A.96. At a minimum, before the commissioner pays a provider, 38.7the commissioner must determine that the state's return on investment is positive.38.8    Subd. 4.Return on investment calculation. The commissioner, in consultation 38.9with the oversight committee, must establish the method and data required for calculating 38.10the state's return on investment. The data at a minimum must include:38.11(1) state income taxes and any other revenues collected in the year after the service 38.12was provided that would not have been collected without the service; and38.13(2) costs avoided by the state by providing the service.38.14A positive return on investment for the state will cover the state's costs in financing 38.15and administering the pilot program through documented increased state tax revenue 38.16or cost avoidance.38.17    Subd. 5.Report to governor and legislature.The commissioner must report to the 38.18governor and legislative committees with jurisdiction over capital investment, finance, and 38.19ways and means, and the services included in the pilot program, by January 15 of each 38.20year following a year in which the pilot program is operating. The report must describe 38.21and discuss the criteria for selection and evaluation of services to be provided through 38.22the program, the net benefits to the state of the program, the state's return on investment, 38.23the cost of the services provided by other means in the most recent past, the time frame 38.24for payment for the services, and the timing and costs for sale and issuance of the bonds 38.25authorized in section 16A.96.38.26EFFECTIVE DATE.This section is effective the day following final enactment.38.27    Sec. 38. [16A.96] MINNESOTA PAY FOR PERFORMANCE PROGRAM; 38.28APPROPRIATION BONDS.38.29    Subdivision 1.Definitions.(a) The definitions in this subdivision apply to this 38.30section.38.31(b) "Appropriation bond" means a bond, note, or other similar instrument of the state 38.32payable during a biennium from one or more of the following sources:38.33(1) money appropriated by law in any biennium for debt service due with respect 38.34to obligations described in subdivision 2, paragraph (b);38.35(2) proceeds of the sale of obligations described in subdivision 2, paragraph (b);39.1(3) payments received for that purpose under agreements and ancillary arrangements 39.2described in subdivision 2, paragraph (d); and39.3(4) investment earnings on amounts in clauses (1) to (3).39.4(c) "Debt service" means the amount payable in any biennium of principal, premium, 39.5if any, and interest on appropriation bonds.39.6    Subd. 2.Authority.(a) Subject to the limitations of this subdivision, the 39.7commissioner of management and budget may sell and issue appropriation bonds of the 39.8state under this section for the purposes of the Minnesota pay for performance program 39.9established in sections 16A.93 to 16A.96. Proceeds of the bonds must be credited to 39.10a special appropriation bond proceeds account in the state treasury. Net income from 39.11investment of the proceeds, as estimated by the commissioner, must be credited to the 39.12special appropriation bond proceeds account.39.13(b) Appropriation bonds may be sold and issued in amounts that, in the opinion of 39.14the commissioner, are necessary to provide sufficient funds for achieving the purposes 39.15authorized as provided under paragraph (a), and pay debt service, pay costs of issuance, 39.16make deposits to reserve funds, pay the costs of credit enhancement, or make payments 39.17under other agreements entered into under paragraph (d); provided, however, that bonds 39.18issued and unpaid shall not exceed $20,000,000 in principal amount, excluding refunding 39.19bonds sold and issued under subdivision 4. During the biennium ending June 30, 2013, 39.20the commissioner may sell and issue bonds only in an amount that the commissioner 39.21determines will result in principal and interest payments less than the amount of savings to 39.22be generated through pay-for-performance contracts under section 16A.94. For programs 39.23achieving savings under a pay-for-performance contract, the commissioner must reduce 39.24general fund appropriations by at least the amount of principal and interest payments on 39.25bonds issued under this section.39.26(c) Appropriation bonds may be issued in one or more series on the terms and 39.27conditions the commissioner determines to be in the best interests of the state, but the term 39.28on any series of bonds may not exceed 20 years.39.29(d) At the time of, or in anticipation of, issuing the appropriation bonds, and at any 39.30time thereafter, so long as the appropriation bonds are outstanding, the commissioner 39.31may enter into agreements and ancillary arrangements relating to the appropriation 39.32bonds, including but not limited to trust indentures, liquidity facilities, remarketing or 39.33dealer agreements, letter of credit agreements, insurance policies, guaranty agreements, 39.34reimbursement agreements, indexing agreements, or interest exchange agreements. Any 39.35payments made or received according to the agreement or ancillary arrangement shall be 39.36made from or deposited as provided in the agreement or ancillary arrangement. The 40.1determination of the commissioner included in an interest exchange agreement that the 40.2agreement relates to an appropriation bond shall be conclusive.40.3    Subd. 3.Form; procedure.(a) Appropriation bonds may be issued in the form 40.4of bonds, notes, or other similar instruments, and in the manner provided in section 40.516A.672. In the event that any provision of section 16A.672 conflicts with this section, 40.6this section shall control.40.7(b) Every appropriation bond shall include a conspicuous statement of the limitation 40.8established in subdivision 6.40.9(c) Appropriation bonds may be sold at either public or private sale upon such terms 40.10as the commissioner shall determine are not inconsistent with this section and may be sold 40.11at any price or percentage of par value. Any bid received may be rejected.40.12(d) Appropriation bonds may bear interest at a fixed or variable rate.40.13    Subd. 4.Refunding bonds.The commissioner from time to time may issue 40.14appropriation bonds for the purpose of refunding any appropriation bonds then 40.15outstanding, including the payment of any redemption premiums on the bonds, any 40.16interest accrued or to accrue to the redemption date, and costs related to the issuance 40.17and sale of the refunding bonds. The proceeds of any refunding bonds may, in the 40.18discretion of the commissioner, be applied to the purchase or payment at maturity of the 40.19appropriation bonds to be refunded, to the redemption of the outstanding bonds on any 40.20redemption date, or to pay interest on the refunding bonds and may, pending application, 40.21be placed in escrow to be applied to the purchase, payment, retirement, or redemption. 40.22Any escrowed proceeds, pending such use, may be invested and reinvested in obligations 40.23that are authorized investments under section 11A.24. The income earned or realized on 40.24the investment may also be applied to the payment of the bonds to be refunded or interest 40.25or premiums on the refunded bonds, or to pay interest on the refunding bonds. After 40.26the terms of the escrow have been fully satisfied, any balance of the proceeds and any 40.27investment income may be returned to the general fund or, if applicable, the appropriation 40.28bond proceeds account for use in any lawful manner. All refunding bonds issued under 40.29this subdivision must be prepared, executed, delivered, and secured by appropriations in 40.30the same manner as the bonds to be refunded.40.31    Subd. 5.Appropriation bonds as legal investments.Any of the following entities 40.32may legally invest any sinking funds, money, or other funds belonging to them or under 40.33their control in any appropriation bonds issued under this section:40.34(1) the state, the investment board, public officers, municipal corporations, political 40.35subdivisions, and public bodies;41.1(2) banks and bankers, savings and loan associations, credit unions, trust companies, 41.2savings banks and institutions, investment companies, insurance companies, insurance 41.3associations, and other persons carrying on a banking or insurance business; and41.4(3) personal representatives, guardians, trustees, and other fiduciaries.41.5    Subd. 6.No full faith and credit; state not required to make appropriations.41.6The appropriation bonds are not public debt of the state, and the full faith, credit, and 41.7taxing powers of the state are not pledged to the payment of the appropriation bonds or to 41.8any payment that the state agrees to make under this section. Appropriation bonds shall 41.9not be obligations paid directly, in whole or in part, from a tax of statewide application 41.10on any class of property, income, transaction, or privilege. Appropriation bonds shall be 41.11payable in each fiscal year only from amounts that the legislature may appropriate for debt 41.12service for any fiscal year, provided that nothing in this section shall be construed to 41.13require the state to appropriate funds sufficient to make debt service payments with respect 41.14to the bonds in any fiscal year.41.15    Subd. 7.Appropriation of proceeds.The proceeds of appropriation bonds and 41.16interest credited to the special appropriation bond proceeds account are appropriated to the 41.17commissioner for payment of contract obligations under the pay for performance program, 41.18as permitted by state and federal law, and nonsalary expenses incurred in conjunction 41.19with the sale of the appropriation bonds.41.20    Subd. 8.Appropriation for debt service.The amount needed to pay principal and 41.21interest on appropriation bonds issued under this section is appropriated each year to the 41.22commissioner from the general fund subject to the repeal, unallotment under section 41.2316A.152, or cancellation otherwise pursuant to subdivision 6.41.24EFFECTIVE DATE.This section is effective the day following final enactment.41.25    Sec. 39. Minnesota Statutes 2010, section 16B.03, is amended to read:41.2616B.03 APPOINTMENTS.41.27The commissioner is authorized to appoint staff, including twoone deputy 41.28commissioners commissioner, in accordance with chapter 43A.41.29    Sec. 40. [16C.075] E-VERIFY.41.30A contract for services valued in excess of $50,000 must require certification from 41.31the vendor and any subcontractors that, as of the date services on behalf of the state of 41.32Minnesota will be performed, the vendor and all subcontractors have implemented or are 41.33in the process of implementing the federal E-Verify program for all newly hired employees 42.1in the United States who will perform work on behalf of the state of Minnesota. This 42.2section does not apply to contracts entered into by the State Board of Investment.42.3EFFECTIVE DATE.This section is effective July 1, 2011, and applies to contracts 42.4entered into on or after that date.42.5    Sec. 41. Minnesota Statutes 2010, section 16C.08, subdivision 2, is amended to read:42.6    Subd. 2. Duties of contracting agency. (a) Before an agency may seek approval of 42.7a professional or technical services contract valued in excess of $5,000, it must provide 42.8the following:42.9    (1) a description of how the proposed contract or amendment is necessary and 42.10reasonable to advance the statutory mission of the agency;42.11    (2) a description of the agency's plan to notify firms or individuals who may be 42.12available to perform the services called for in the solicitation;42.13    (3) a description of the performance measures or other tools, including accessibility 42.14measures if applicable, that will be used to monitor and evaluate contract performance; and42.15    (4) an explanation detailing, if applicable, why this procurement is being pursued 42.16unilaterally by the agency and not as an enterprise procurement.42.17    (b) In addition to paragraph (a), the agency must certify that:42.18    (1) no current state employee is able and available to perform the services called 42.19for by the contract;42.20    (2)(1) the normal competitive bidding mechanisms will not provide for adequate 42.21performance of the services;42.22    (3)(2) reasonable efforts will be made to publicize the availability of the contract 42.23to the public;42.24    (4)(3) the agency will develop and implement a written plan providing for the 42.25assignment of specific agency personnel to manage the contract, including a monitoring 42.26and liaison function, the periodic review of interim reports or other indications of past 42.27performance, and the ultimate utilization of the final product of the services;42.28    (5)(4) the agency will not allow the contractor to begin work before the contract is 42.29fully executed unless an exception under section 
         16C.05, subdivision 2a, has been granted 42.30by the commissioner and funds are fully encumbered;42.31    (6)(5) the contract will not establish an employment relationship between the state 42.32or the agency and any persons performing under the contract; and42.33    (7)(6) in the event the results of the contract work will be carried out or continued 42.34by state employees upon completion of the contract, the contractor is required to include 42.35state employees in development and training, to the extent necessary to ensure that after 43.1completion of the contract, state employees can perform any ongoing work related to the 43.2same function; and43.3    (8) the agency will not contract out its previously eliminated jobs for four years 43.4without first considering the same former employees who are on the seniority unit layoff 43.5list who meet the minimum qualifications determined by the agency.43.6    (c) A contract establishes an employment relationship for purposes of paragraph (b), 43.7clause (6) (5), if, under federal laws governing the distinction between an employee and 43.8an independent contractor, a person would be considered an employee.43.9    Sec. 42. [16C.082] CONTRACTS FOR TAX-RELATED ACTIVITIES.43.10An agency may not enter into a contract for tax fraud prevention or detection, or 43.11tax audit-related activities, that compensates a vendor based on a percentage of taxes 43.12assessed or collected.43.13EFFECTIVE DATE.This section is effective the day following final enactment 43.14and applies to contracts entered into on or after that date.43.15    Sec. 43. Minnesota Statutes 2010, section 16C.09, is amended to read:43.1616C.09 PROCEDURE FOR SERVICE CONTRACTS.43.17(a) Before entering into or approving a service contract, the commissioner must 43.18determine, at least, that:43.19(1) no current state employee is able and available to perform the services called 43.20for by the contract;43.21(2)(1) the work to be performed under the contract is necessary to the agency's 43.22achievement of its statutory responsibilities and there is statutory authority to enter into 43.23the contract;43.24(3)(2) the contract will not establish an employment relationship between the state 43.25or the agency and any persons performing under the contract;43.26(4)(3) the contractor and agents are not employees of the state, except as authorized 43.27in section 15.062;43.28(5)(4) the contracting agency has specified a satisfactory method of evaluating and 43.29using the results of the work to be performed; and43.30(6)(5) the combined contract and amendments will not exceed five years without 43.31specific, written approval by the commissioner according to established policy, procedures, 43.32and standards, or unless otherwise provided for by law. The term of the original contract 44.1must not exceed two years, unless the commissioner determines that a longer duration is 44.2in the best interest of the state.44.3(b) For purposes of paragraph (a), clause (1), employees are available if qualified 44.4and:44.5(1) are already doing the work in question; or44.6(2) are on layoff status in classes that can do the work in question.44.7An employee is not available if the employee is doing other work, is retired, or has decided 44.8not to do the work in question.44.9(c)(b) This section does not apply to an agency's use of inmates pursuant to sections 44.10241.20
          to 
         241.23 or to an agency's use of persons required by a court to provide:44.11(1) community service; or44.12(2) conservation or maintenance services on lands under the jurisdiction and control 44.13of the state.44.14    Sec. 44. [16D.18] RECIPROCAL AGREEMENT.44.15(a) The commissioner is authorized to enter into agreements with the federal 44.16Department of the Treasury that provide for offsetting state payments against federal 44.17nontax obligations. Except as provided in paragraph (d), the commissioner may charge a 44.18fee of $20 per transaction for such offsets and may collect this offset fee from the debtor 44.19by deducting it from the state payment. The agreement may provide for offsetting federal 44.20payments, as authorized by federal law, against state tax and nontax obligations, and 44.21collecting the offset cost from the debtor. The agreement shall provide that the federal 44.22Department of the Treasury may deduct a fee from each administrative offset and state 44.23payment offset. Setoffs to collect state and other entity obligations under chapters 16D, 44.24270A, 270C, and any other provision of Minnesota Statutes occur before a state payment 44.25offset. For purposes of this paragraph "administrative offset" is any offset of federal 44.26payments to collect state debts and "state payment offset" is any offset of state payments 44.27to collect federal nontax debts. 44.28(b) A debt is eligible for offset under this program if notice of intent to offset the 44.29debt is sent at least 60 days prior to filing an offset claim or a shorter period of time, if 44.30required by federal law or an agreement with the federal Department of the Treasury. 44.31When there is an agreement for scheduled payments on an account, the debtor must be 44.32sent this notice each time an additional debt is claimed.44.33(c) The debtor shall have the time period required for notice under paragraph (b) to 44.34contest the offset. An agreement under this section must not allow for offset of payments 44.35if the debt that would be subject to the offset is being contested or if the time for appealing 45.1the determination of the debt has not yet expired. The treasury offset program agreement 45.2entered into by the state must not require federal agencies to provide different due process 45.3than the requirements under Code of Federal Regulations, title 31, section 285.6.45.4(d) Notwithstanding the fee authorized under paragraph (a), if the commissioner 45.5enters into a contingency fee agreement with a nonstate vendor to provide assistance 45.6under this section, the commissioner may charge a debtor a fee for the processing of state 45.7payment offsets for the recovery of federal nontax debts or the processing of federal 45.8payment offsets for the recovery of state tax and nontax debt. The fee is a separate debt 45.9and may be withheld from any refund, reimbursement, or other money held for the debtor. 45.10The fee may not exceed 15 percent of the original debt. Section 16A.1283 does not apply 45.11to fees charged under this paragraph.45.12EFFECTIVE DATE.This section is effective the day following final enactment. As 45.13soon as possible after that date, the commissioner must discuss an agreement authorized 45.14under this section with appropriate federal officials, and if an agreement is entered into, 45.15the commissioner must begin to implement it to collect debts owed to the state as soon as 45.16possible.45.17    Sec. 45. Minnesota Statutes 2010, section 37.06, is amended to read:45.1837.06 SECRETARY; LEGISLATIVE AUDITOR; DUTIES; REPORT.45.19The secretary shall keep a complete record of the proceedings of the annual meetings 45.20of the State Agricultural Society and all meetings of the board of managers and any 45.21committee of the board, keep all accounts of the society other than those kept by the 45.22treasurer of the society, and perform other duties as directed by the board of managers. On 45.23or before December 31 each year, the secretary shall report to the governor for the fiscal 45.24year ending October 31 all the proceedings of the society during the current year and its 45.25financial condition as appears from its books. This report must contain a full, detailed 45.26statement of all receipts and expenditures during the year.45.27The books and accounts of the society for the fiscal year must be examined and 45.28audited annually by an independent auditor, either a private auditor or the legislative 45.29auditor.  If the audit is conducted by the legislative auditor, the cost of the examination 45.30must be paid by the society to the state and credited to the general fund.45.31A summary of this examination, certified by the legislative auditor, must be 45.32appended to the secretary's report, along with the legislative auditor's recommendations 45.33and the proceedings of the first annual meeting of the society held following the secretary's 45.34report, including addresses made at the meeting as directed by the board of managers. The 46.1summary, recommendations, and proceedings must be printed in the same manner as the 46.2reports of state officers. Copies of the report must be printed annually and distributed as 46.3follows: to each society or association entitled to membership in the society, to each 46.4newspaper in the state, and the remaining copies as directed by the board of managers.46.5    Sec. 46. Minnesota Statutes 2010, section 43A.08, subdivision 1, is amended to read:46.6     Subdivision 1. Unclassified positions.  Unclassified positions are held by employees 46.7who are:46.8     (1) chosen by election or appointed to fill an elective office;46.9     (2) heads of agencies required by law to be appointed by the governor or other 46.10elective officers, and the executive or administrative heads of departments, bureaus, 46.11divisions, and institutions specifically established by law in the unclassified service;46.12     (3) deputy and assistant agency heads and one confidential secretary in the agencies 46.13listed in subdivision 1a and in the Office of Strategic and Long-Range Planning section 46.1415.06, subdivision 1;46.15     (4) the confidential secretary to each of the elective officers of this state and, for the 46.16secretary of state and state auditor, an additional deputy, clerk, or employee;46.17     (5) intermittent help employed by the commissioner of public safety to assist in 46.18the issuance of vehicle licenses;46.19     (6) employees in the offices of the governor and of the lieutenant governor and one 46.20confidential employee for the governor in the Office of the Adjutant General;46.21     (7) employees of the Washington, D.C., office of the state of Minnesota;46.22     (8) employees of the legislature and of legislative committees or commissions; 46.23provided that employees of the Legislative Audit Commission, except for the legislative 46.24auditor, the deputy legislative auditors, and their confidential secretaries, shall be 46.25employees in the classified service;46.26     (9) presidents, vice-presidents, deans, other managers and professionals in 46.27academic and academic support programs, administrative or service faculty, teachers, 46.28research assistants, and student employees eligible under terms of the federal Economic 46.29Opportunity Act work study program in the Perpich Center for Arts Education and the 46.30Minnesota State Colleges and Universities, but not the custodial, clerical, or maintenance 46.31employees, or any professional or managerial employee performing duties in connection 46.32with the business administration of these institutions;46.33     (10) officers and enlisted persons in the National Guard;46.34     (11) attorneys, legal assistants, and three confidential employees appointed by the 46.35attorney general or employed with the attorney general's authorization;47.1     (12) judges and all employees of the judicial branch, referees, receivers, jurors, and 47.2notaries public, except referees and adjusters employed by the Department of Labor 47.3and Industry;47.4     (13) members of the State Patrol; provided that selection and appointment of State 47.5Patrol troopers must be made in accordance with applicable laws governing the classified 47.6service;47.7     (14) examination monitors and intermittent training instructors employed by the 47.8Departments of Management and Budget and Commerce and by professional examining 47.9boards and intermittent staff employed by the technical colleges for the administration of 47.10practical skills tests and for the staging of instructional demonstrations;47.11    (15) student workers;47.12    (16) executive directors or executive secretaries appointed by and reporting to any 47.13policy-making board or commission established by statute;47.14    (17) employees unclassified pursuant to other statutory authority;47.15    (18) intermittent help employed by the commissioner of agriculture to perform 47.16duties relating to pesticides, fertilizer, and seed regulation;47.17    (19) the administrators and the deputy administrators at the State Academies for the 47.18Deaf and the Blind; and47.19    (20) chief executive officers in the Department of Human Services.47.20    Sec. 47. Minnesota Statutes 2010, section 43A.20, is amended to read:47.2143A.20 PERFORMANCE APPRAISAL AND PAY.47.22(a) The commissioner shall design and maintain a performance appraisal system 47.23under which each employee in the civil service in the executive branch shall be evaluated 47.24and counseled on work performance at least once a year. The performance appraisal 47.25system must include three components:47.26(1) evaluation of the individual employee's performance relative to goals for that 47.27individual, which must constitute a majority of the overall determination of an employee's 47.28performance;47.29(2) evaluation of the performance of the individual employee's program, defined by 47.30the agency head, toward meeting  targeted outcomes for the program; and47.31(3) evaluation of the performance of the  entire agency toward meeting targeted 47.32outcomes for the agency.47.33(b) Individual pay increases for all employees not represented by an exclusive 47.34representative certified pursuant to chapter 179A shall be based on the evaluation47.35evaluations required by paragraph (a) and other factors consistent with paragraph (a) 48.1that the commissioner negotiates in collective bargaining agreements or includes in the 48.2plans developed pursuant to section 
         43A.18. Collective bargaining agreements entered 48.3into pursuant to chapter 179A may, and are encouraged to, provide for pay increases 48.4based on employee work performance.An employee in the executive branch may not 48.5receive an increase in salary or wages based on cost of living or progression to another 48.6step or lane unless the employee's supervisor certifies that the employee's performance 48.7has been satisfactory.48.8(c) This section does not apply to faculty and administrators in the Minnesota State 48.9Colleges and University system.48.10(d) This section supersedes any conflicting provision of other law.48.11EFFECTIVE DATE.This section is effective July 1, 2011. For employees covered 48.12by a collective bargaining agreement, this section applies to collective bargaining 48.13agreements entered into on or after that date.48.14    Sec. 48. [43A.347] REDUCTION IN STATE WORK FORCE.48.15    Subdivision 1.Required reduction.(a) The number of full-time equivalent 48.16employees employed in the executive branch, and the costs directly associated with 48.17employing those persons, must be reduced by at least 15 percent by June 30, 2015, and 48.18thereafter, compared to the number of full-time equivalent positions and the costs directly 48.19associated with those positions on January 1, 2011.48.20(b) An appointing authority may use any or all of the following to achieve this 48.21requirement: attrition, a hard hiring freeze, furloughs, and layoffs.48.22(c) For purposes of this section:48.23(1) "costs directly associated" with employing people means the cost of salaries and 48.24benefits, including the costs of employer contributions to public pension plans; and48.25(2) "executive branch" does not include the Minnesota State Colleges and 48.26Universities, the Department of Military Affairs, or the Department of Veterans Affairs.48.27    Subd. 2.Savings.Savings resulting from implementation of this section must 48.28cancel back to the fund in which the savings occurred.48.29    Subd. 3.Application of Public Employment Labor Relations Act.Unilateral 48.30implementation of this section is not an unfair labor practice under chapter 179A.48.31    Sec. 49. Minnesota Statutes 2010, section 45.013, is amended to read:48.3245.013 POWER TO APPOINT STAFF.49.1The commissioner of commerce may appoint fourone deputy commissioners, four 49.2assistant commissioners, and an assistant to the commissioner. Those positions, as well as 49.3that ofand a confidential secretary, arein the unclassified service. The commissioner may 49.4appoint other employees necessary to carry out the duties and responsibilities entrusted to 49.5the commissioner.49.6    Sec. 50. Minnesota Statutes 2010, section 84.01, subdivision 3, is amended to read:49.7    Subd. 3. Employees; delegation.Subject to the provisions of Laws 1969, chapter 49.81129, and to other applicable laws The commissioner shall organize the department and 49.9employ up to three assistant commissioners, each of whom shall serve at the pleasure of 49.10the commissioner in the unclassified service, one of whom shall have responsibility for 49.11coordinating and directing the planning of every division within the agency, and such other49.12officers, employees, and agents as the commissioner may deem necessary to discharge the 49.13functions of the department, define the duties of such officers, employees, and agents and 49.14to delegate to them any of the commissioner's powers, duties, and responsibilities subject 49.15to the control of, and under the conditions prescribed by, the commissioner. Appointments 49.16to exercise delegated power shall be by written order filed with the secretary of state.49.17    Sec. 51. Minnesota Statutes 2010, section 116.03, subdivision 1, is amended to read:49.18    Subdivision 1. Office. (a) The office of commissioner of the Pollution Control 49.19Agency is created and is under the supervision and control of the commissioner, who is 49.20appointed by the governor under the provisions of section 
         15.06.  49.21(b) The commissioner may appoint a deputy commissioner and assistant 49.22commissioners who shall be in the unclassified service.49.23(c) The commissioner shall make all decisions on behalf of the agency that are not 49.24required to be made by the agency under section 
         116.02.  49.25    Sec. 52. Minnesota Statutes 2010, section 116J.01, subdivision 5, is amended to read:49.26    Subd. 5. Departmental organization. (a) The commissioner shall organize the 49.27department as provided in section 
         15.06. 49.28(b) The commissioner may establish divisions and offices within the department. 49.29The commissioner may employ four deputy commissioners in the unclassified service.49.30(c) The commissioner shall:49.31(1) employ assistants and other officers, employees, and agents that the commissioner 49.32considers necessary to discharge the functions of the commissioner's office;50.1(2) define the duties of the officers, employees, and agents, and delegate to them any 50.2of the commissioner's powers, duties, and responsibilities, subject to the commissioner's 50.3control and under conditions prescribed by the commissioner.50.4(d) The commissioner shall ensure that there are at least three employment and 50.5economic development officers in state offices in nonmetropolitan areas of the state who 50.6will work with local units of government on developing local employment and economic 50.7development.50.8    Sec. 53. Minnesota Statutes 2010, section 116J.035, subdivision 4, is amended to read:50.9    Subd. 4. Delegation of powers. The commissioner may delegate, in written orders 50.10filed with the secretary of state, any powers or duties subject to the commissioner's 50.11control to officers and employees in the department. Regardless of any other law, the 50.12commissioner may delegate the execution of specific contracts or specific types of 50.13contracts to the commissioner's deputies, an assistant commissioner, deputy or a program 50.14director if the delegation has been approved by the commissioner of administration and 50.15filed with the secretary of state.50.16    Sec. 54. Minnesota Statutes 2010, section 161.1419, subdivision 8, is amended to read:50.17    Subd. 8. Expiration. The commission expires on June 30, 2012 2016.50.18    Sec. 55. Minnesota Statutes 2010, section 174.02, subdivision 2, is amended to read:50.19    Subd. 2. Unclassified positions. The commissioner may establish four positions 50.20in the unclassified service at theappoint a deputy and assistant commissioner, assistant 50.21to commissioner orand a personal secretary levels. No more than two of these positions 50.22shall be at the deputy commissioner level in the unclassified service.50.23    Sec. 56. Minnesota Statutes 2010, section 241.01, subdivision 2, is amended to read:50.24    Subd. 2. Deputies Deputy. The commissioner of corrections may appoint and 50.25employ no more than twoa deputy commissioners commissioner. The commissioner may 50.26also appoint a personal secretary, who shall serve at the commissioner's pleasure in the 50.27unclassified civil service.50.28    Sec. 57. Minnesota Statutes 2010, section 270C.41, is amended to read:50.29270C.41 AGREEMENT WITH INTERNAL REVENUE SERVICE50.30AGREEMENTS WITH FEDERAL GOVERNMENT.51.1    Subdivision 1.Agreement with Internal Revenue Service. Pursuant to section 51.2270B.12
         , the commissioner may enter into an agreement with the Internal Revenue 51.3Service to identify taxpayers who have refunds due from the department and liabilities 51.4owing to the Internal Revenue Service. In accordance with the procedures established in 51.5the agreement, the Internal Revenue Service may levy against the refunds to be paid by 51.6the department. For each refund levied upon, the commissioner shall first deduct from 51.7the refund a fee of $20, and then remit the refund or the amount of the levy, whichever 51.8is less, to the Internal Revenue Service. The proceeds of fees shall be deposited into the 51.9Department of Revenue recapture revolving fund under section 
         270A.07, subdivision 1.51.10    Subd. 2.Reciprocal offset agreements.(a) The commissioner is authorized 51.11to enter into agreements with the federal Department of the Treasury that provide for 51.12offsetting state payments against federal nontax obligations. Except as provided in 51.13paragraph (d), the commissioner may charge a fee of $20 per transaction for such offsets 51.14and may collect this offset fee from the debtor by deducting it from the state payment. 51.15The agreement may provide for offsetting federal payments, as authorized by federal law, 51.16against state tax and nontax obligations, and collecting the offset cost from the debtor. 51.17The agreement shall provide that the federal Department of the Treasury may deduct a 51.18fee from each administrative offset and state payment offset. Setoffs to collect state and 51.19other entity obligations under chapters 16D,  270A, 270C, and any other provision of 51.20Minnesota Statutes, occur before a state payment offset. For purposes of this paragraph 51.21"administrative offset" is any offset of federal payments to collect state debts and "state 51.22payment offset" is any offset of state payments to collect federal nontax debts.51.23(b) A debt is eligible for offset under this program if notice of intent to offset the 51.24debt is sent at least 60 days prior to filing an offset claim or a shorter period of time, if 51.25required by federal law or an agreement with the federal Department of the Treasury. 51.26When there is an agreement for scheduled payments on an account, the debtor must be 51.27sent this notice each time an additional debt is claimed.51.28(c) The debtor shall have the time period required for notice under paragraph (b) to 51.29contest the offset. An agreement under this section must not allow for offset of payments 51.30if the debt that would be subject to the offset is being contested or if the time for appealing 51.31the determination of the debt has not yet expired. The treasury offset program agreement 51.32entered into by the state must not require federal agencies to provide different due process 51.33than the requirements under Code of Federal Regulations, title 31, section 285.6.51.34(d) Notwithstanding the fee authorized under paragraph (a), if the commissioner 51.35enters into a contingency fee agreement with a nonstate vendor to provide assistance 51.36under this section, the commissioner may charge a debtor a fee for the processing of state 52.1payment offsets for the recovery of federal nontax debts or the processing of federal 52.2payment offsets for the recovery of state tax and nontax debt. The fee is a separate debt 52.3and may be withheld from any refund, reimbursement, or other money held for the debtor. 52.4The fee may not exceed 15 percent of the original debt. Section 16A.1283 does not apply 52.5to fees charged under this paragraph.52.6EFFECTIVE DATE.This section is effective the day following final enactment. As 52.7soon as possible after that date, the commissioner must discuss an agreement authorized 52.8under this section with appropriate federal officials, and if an agreement is entered into, 52.9the commissioner must begin to implement it to collect debts owed to the state as soon as 52.10possible.52.11    Sec. 58. Minnesota Statutes 2010, section 270C.545, is amended to read:52.12270C.545 FEDERAL TAX REFUND OFFSET FEES; TIME LIMIT FOR 52.13SUBMITTING CLAIMS FOR OFFSET.52.14For If fees are charged by the Department of the Treasury of the United States for 52.15the offset of federal tax refunds that or the offset of federal payments and these fees are 52.16deducted from the refund or the federal payment amounts remitted to the commissioner, 52.17then the unpaid debts of the taxpayers whose refunds or federal payments are being 52.18offset to satisfy the debts are reduced only by the actual amount of the refund payments 52.19or federal payments received by the commissioner. Notwithstanding any other provision 52.20of law to the contrary, a claim for the offset of a federal tax refund must be submitted to 52.21the Department of the Treasury of the United States within ten years after the date of the 52.22assessment of the tax owed by the taxpayer whose refund is to be offset to satisfy the 52.23debt. For court debts referred to the commissioner under section 
         16D.04, subdivision 2, 52.24paragraph (a), the federal refund offset fees are deducted as provided in this section, but 52.25the ten-year time limit prescribed in this section for tax debts does not apply.52.26    Sec. 59. Minnesota Statutes 2010, section 471.697, subdivision 2, is amended to read:52.27    Subd. 2. First class city audits.The state auditor shall continue to audit cities of the 52.28first class pursuant to Notwithstanding section 
         6.49, a city of the first class may provide for 52.29an audit to be performed by a certified public accountant firm meeting the requirements 52.30of section 326A.05. The audit performed by a certified public accountant must meet the 52.31standards and be in the form required by the state auditor. The state auditor may require 52.32additional information from the certified public accountant firm as the state auditor deems 53.1in the public interest, but the state auditor must accept the audit unless the state auditor 53.2determines that it does not meet recognized industry auditing standards.53.3    Sec. 60. Laws 2010, chapter 361, article 3, section 8, is amended to read:53.4    Sec. 8. USE OF CARRYFORWARD.53.5The restrictions in Minnesota Statutes, section 
         16A.281, on the use of money carried 53.6forward from one biennium to another shall not apply to money the legislative auditor 53.7carried forward from the previous biennium for use in fiscal years 2010 and 2011 ending 53.8June 30, 2009, or the biennium ending June 30, 2011. The legislative auditor may use the 53.9carry forward money for costs related to the conduct of audits related to funds authorized 53.10in the Minnesota Constitution, Article XI, section 15, and audits related to the institutions, 53.11offices, and functions of the Minnesota State Colleges and Universities.53.12EFFECTIVE DATE.This section is effective the day following final enactment. 53.13    Sec. 61. STATE BUILDING EFFICIENCY.53.14    Subdivision 1.Request for proposals.By July 1, 2011, the commissioner 53.15of administration shall issue a request for proposals for a contract to provide 53.16recommendations for efficiencies in state building management to the commissioner. The 53.17request for proposals shall require the vendor to provide a system that will overlay existing 53.18building controls and instrumentation that influence energy consumption, including space, 53.19equipment and system performance, facility operations, and facility maintenance. The 53.20request for proposals shall require the vendor to provide a system that provides concurrent 53.21building monitoring, energy consumption optimization, space utilization, and equipment 53.22performance information.53.23    Subd. 2.Standards-based platform system with data analytics.The request for 53.24proposals must require the vendor to provide: (1) a standards-based platform system with 53.25the capability to integrate and coordinate a variety of control systems, including their data, 53.26and the ability to manage all state buildings and their control systems; and (2) a system that 53.27uses data analytics to integrate corrective action notification and work order management.53.28    Subd. 3.Proof of concept phase.The request for proposals shall require the 53.29selected vendor, at no cost to the state, to begin work on the contract by implementing 53.30its proposed system on one to three instrumented state buildings to demonstrate the 53.31savings provided by the system. The system provided by the vendor must be capable of 53.32application to all instrumented state-owned buildings. During this proof of concept phase, 54.1the vendor and the state must agree on how savings during the full implementation phase 54.2will be defined, measured, and verified, to ensure that the contract will provide the highest 54.3possible return on investment to the state.54.4    Subd. 4.Full implementation and payment.The request for proposal must 54.5require the state to implement the system  provided by the vendor in all instrumented 54.6buildings owned by the state if the state and the vendor have agreed on how savings 54.7will be defined, measured, and verified, and the work done under the requirements of 54.8subdivision 3 provides material savings to the state. After the full implementation of the 54.9system provided by the vendor, the vendor shall be paid by the state from the savings 54.10attributable to the work done by the vendor, according to the terms and performance 54.11measures negotiated in the contract.54.12    Subd. 5.Selection of vendor.The commissioner of administration shall select a 54.13vendor from the responses to the request for proposal by September 1, 2011.54.14    Subd. 6.Progress report.The commissioner shall provide a report describing the 54.15progress made under this section to the governor and the chairs and ranking minority 54.16members of the legislative committees with jurisdiction over the commissioner of 54.17administration by January 15, 2012. The report shall provide a dynamic scoring analysis 54.18of the work described in the report.54.19    Sec. 62. FLEET MANAGEMENT IMPROVEMENTS.54.20    Subdivision 1.Request for proposals.By July 1, 2011, the commissioner of 54.21administration shall issue a request for proposals to improve the procurement, allocation, 54.22control, energy efficiency, maintenance, and in-service life of state vehicles. The request 54.23for proposal shall require the vendor to provide a system for:54.24(1) a life-cycle solution for vehicle management, covering all stages from 54.25procurement through disposal of state vehicles; and54.26(2) the integration of data analytics to provide vehicle tracking, usage, and proactive 54.27maintenance management.54.28    Subd. 2.Proof of concept phase.The request for proposals must specify that the 54.29vendor, at no cost to the state, must implement its system in one vehicle maintenance 54.30facility on a sample group of vehicles to demonstrate the cost-savings potential of the 54.31recommendations. During this proof of concept phase, the vendor and the state must 54.32agree on how savings during the full implementation phase will be defined, measured, 55.1and verified, to ensure that the contract will provide the highest possible return on 55.2investment to the state.55.3    Subd. 3.Full implementation and payment.The request for proposal must require 55.4the state to implement the recommendations provided by the vendor if the state and the 55.5vendor have agreed on how savings will be defined, measured, and verified, and the work 55.6done under the requirements of subdivision 2 provides material savings to the state. After 55.7the full implementation of the system provided by the vendor, the vendor shall be paid by 55.8the state from the savings attributable to the work done by the vendor, according to the 55.9terms and performance measures negotiated in the contract.55.10    Subd. 4.Selection of vendor.The commissioner of administration shall select a 55.11vendor from the responses to the request for proposal by September 1, 2011.55.12    Subd. 5.Progress report.The commissioner shall provide a report describing the 55.13progress made under this section to the governor and the chairs and ranking minority 55.14members of the legislative committees with jurisdiction over the commissioner of 55.15administration by January 15, 2012. The report shall provide a dynamic scoring analysis 55.16of the work described in the report.55.17    Sec. 63. SALARY FREEZE.55.18(a) Effective July 1, 2011, and until June 30, 2013, a state employee may not receive 55.19a salary or wage increase. This section prohibits any increases, including but not limited 55.20to: across-the-board increases; cost-of-living adjustments; increases based on longevity; 55.21step increases; increases in the form of lump-sum payments; increases in employer 55.22contributions to deferred compensation plans; or any other pay grade adjustments of 55.23any kind. For purposes of this section, "salary or wage" does not include employer 55.24contributions toward the cost of medical or dental insurance premiums, provided that 55.25employee contributions to the costs of medical or dental insurance premiums are not 55.26decreased. This section does not prohibit an increase in the rate of salary and wages for an 55.27employee who is promoted or transferred to a position with greater responsibilities and 55.28with a higher salary or wage rate. For purposes of this section, state employee means an 55.29employee as defined in Minnesota Statutes, section 43A.02, subdivision 21, but does not 55.30include faculty or administrators in the Minnesota State Colleges and Universities system.55.31(b) A state appointing authority may not enter into a collective bargaining agreement 55.32or implement a compensation plan that increases salary or wages in a manner prohibited 55.33by this section. Neither a state appointing authority nor an exclusive representative of state 55.34employees may request interest arbitration in relation to an increase in salary or wages that 56.1is prohibited by this section, and an arbitrator may not issue an award that would increase 56.2salary or wages in a manner prohibited by this section.56.3(c) This section supersedes Minnesota Statutes, section 179A.20, subdivision 6, or 56.4other law, to the extent those laws would authorize an increase prohibited by this section.56.5EFFECTIVE DATE.Paragraph (b) is effective the day following final enactment. 56.6Paragraphs (a) and (c) are effective June 30, 2011.56.7    Sec. 64. STATE EMPLOYEE EFFICIENT USE OF HEALTH CARE 56.8INCENTIVE PROGRAM.56.9The commissioner of management and budget may develop and implement a 56.10program that creates an incentive for efficient use by state employees of State Employee 56.11Group Insurance Program (SEGIP). The program may reward employees covered by 56.12SEGIP as a group if per capita employee health care costs paid by SEGIP for a calendar 56.13year prove to be less than estimated by the commissioner prior to the beginning of the 56.14calendar year. The reward may consist of payments of one-half of the cost-savings into 56.15the employees' health reimbursement accounts, to be made no later than June 30 of the 56.16following calendar year.56.17    Sec. 65. STATE EMPLOYEE GROUP INSURANCE PLAN DEPENDENT 56.18ELIGIBILITY VERIFICATION AUDIT SERVICES.56.19    Subdivision 1.Request for proposals.By August 1, 2011, the commissioner of 56.20management and budget shall issue a request for proposals for a contract to provide 56.21dependent eligibility verification audit services for state-paid hospital, medical, and dental 56.22benefits provided to participants in the state employee group insurance program and their 56.23dependents. The request for proposals must require that the vendor will:56.24(1) conduct a document-model dependent eligibility verification audit of all plans 56.25offered under Minnesota Statutes, sections 43A.22 to 43A.31;56.26(2) identify ineligible dependents covered by the plans and report those findings to 56.27the commissioner and third-party administrators of the state's employee health plans, as 56.28directed by the commissioner; and56.29(3) implement a process for ongoing eligibility verification following the conclusion 56.30of the dependent eligibility verification audit required by this section.56.31    Subd. 2.Additional vendor criteria.The request for proposals required by 56.32subdivision 1 must require the vendor to provide the following minimum capabilities and 56.33experience in performing the services described in subdivision 1:57.1(1) a rules-based process for making objective eligibility determinations;57.2(2) assigned eligibility advocates to assist employees through the verification 57.3process;57.4(3) a formal claims and appeals process; and57.5(4) experience in the performance of dependent eligibility verification audits.57.6    Subd. 3.Contract required.By November 1, 2011, the commissioner must enter 57.7into a contract for the services specified in subdivision 1. The contract must incorporate 57.8a performance-based vendor financing option that compensates the vendor based on the 57.9amount of savings generated by the work performed under the contract.57.10    Sec. 66. SEGIP SAVINGS.57.11The commissioner of management and budget must negotiate and implement 57.12changes to the state employee group insurance program that will result in reduced general 57.13fund contributions from state employers subject to appropriation reductions under article 57.141, section 39, of at least $90,009,000 during the biennium ending June 30, 2013.57.15    Sec. 67. TAX FRAUD PREVENTION AND DETECTION.57.16    Subdivision 1.Request for proposals.By July 1, 2011, the commissioner of 57.17revenue shall issue a request for proposals to prevent and detect tax fraud and increase 57.18delinquent tax revenue collection. The request for proposals shall require the vendor to 57.19provide data analytics capabilities, including, but not limited to, predictive modeling 57.20techniques and other forms of advanced analytics that will integrate into the current tax 57.21processing system to detect compliance issues before tax return processing is completed, 57.22and optimization algorithms that will assist the commissioner in maximizing revenues 57.23collected with current levels of compliance staff.57.24    Subd. 2.Proof of concept phase.The selected vendor, at no cost to the state, shall 57.25implement its recommendations on a subset of data provided by the commissioner to 57.26demonstrate the cost-savings potential of the recommendations.57.27    Subd. 3.Data.Data provided to the vendor by the commissioner for the proof of 57.28concept phase must not include not public data, as defined in section 13.02, subdivision 8a.57.29    Subd. 4.Full implementation phase.The request for proposal must require the 57.30state to implement the recommendations provided by the vendor if the work done under 57.31the requirements of subdivision 2 provides material savings to the state. After the full 57.32implementation of the system provided by the vendor, the vendor shall be paid by the state 58.1from the savings attributable to the work done by the vendor, according to the terms and 58.2performance measures negotiated in the contract. The contract shall not compensate the 58.3vendor based on a percentage of taxes assessed or collected.58.4    Subd. 5.Selection of vendor.The commissioner of administration shall select a 58.5vendor from the responses to the request for proposal by September 1, 2011.58.6    Subd. 6.Progress report.The commissioner shall provide a report describing the 58.7progress made under this section to the governor and the chairs and ranking minority 58.8members of the legislative committees with jurisdiction over the commissioner of revenue 58.9and data practices by January 15, 2012. The report shall provide a dynamic scoring 58.10analysis of the work described in the report and address data access and privacy issues 58.11involved in implementation of the system.58.12EFFECTIVE DATE.This section is effective the day following final enactment.58.13    Sec. 68. STRATEGIC SOURCING REQUEST FOR PROPOSALS.58.14    Subdivision 1.Request for proposals.By July 1, 2011, the commissioner 58.15of administration shall issue a request for proposals for a contract to provide 58.16recommendations for efficiencies in strategic sourcing to the commissioner. For the 58.17purposes of this section, "strategic sourcing" has the meaning given in Minnesota Statutes, 58.18section 16C.02, subdivision 20. The request for proposals shall require the vendor to 58.19provide recommendations for improvements to methods used by the commissioner 58.20to analyze and reduce spending on goods and services, including, but not limited to, 58.21spend analysis, product standardization, contract consolidation, negotiations, multiple 58.22jurisdiction purchasing alliances, reverse and forward auctions, life-cycle costing, and 58.23other techniques.58.24    Subd. 2.Proof of concept phase.The request for proposal shall require the selected 58.25vendor, at no cost to the state, to begin work on the contract by assisting the commissioner 58.26in implementing its proposed solution on selected state procurement processes to 58.27demonstrate the savings provided by the recommendations. The system provided by the 58.28vendor must be capable of application to the state procurement system.58.29    Subd. 3.Full implementation and payment.The request for proposal must require 58.30the state to implement the recommendations provided by the vendor in the entire state 58.31procurement system if the work done under the requirements of subdivision 2 provides 58.32material savings to the state. After the full implementation of the system provided by the 59.1vendor, the vendor shall be paid by the state from the savings attributable to the work done 59.2by the vendor, according to the terms and performance measures negotiated in the contract.59.3    Subd. 4.Selection of vendor.The commissioner of administration shall select, 59.4from qualified respondents, a vendor from the responses to the request for proposal by 59.5September 1, 2011.59.6    Subd. 5.Progress report.The commissioner shall provide a report describing the 59.7progress made under this section to the governor and the chairs and ranking minority 59.8members of the legislative committees with jurisdiction over the commissioner of 59.9administration by January 15, 2012.59.10    Sec. 69. STATE JOB CLASSIFICATIONS.59.11The commissioner of management and budget shall report to the legislature by 59.12January 15, 2012, on a process to redesign and consolidate the job classification plan for 59.13executive branch employees, with a goal of assigning all classified positions to no more 59.14than 50 job families. The process must lead to development of a new job classification 59.15plan designed to enhance the ability of state agencies to flexibly manage their workforces 59.16to meet changing needs and demands of the agency, and to enhance the ability of state 59.17employees to transfer to other positions for which they are qualified. In developing this 59.18process, the commissioner must meet and confer with the exclusive representatives of each 59.19affected bargaining unit. The report to the legislature must identify implementation issues.59.20    Sec. 70. HELP AMERICA VOTE ACT.59.21(a) If the secretary of state determines that this state is otherwise eligible to receive 59.22an additional requirements payment of federal money under the Help America Vote Act, 59.23Public Law 107-252, the secretary must certify to the commissioner of management and 59.24budget the amount, if any, needed to meet the matching requirement of section 253(b)(5) 59.25of the Help America Vote Act. In the certification, the secretary shall specify the portion 59.26of the match that should be taken from an unencumbered general fund appropriation to 59.27the Office of the Secretary of State not designated for a different purpose. Upon receipt 59.28of that certification, or as soon as an unencumbered general fund appropriation becomes 59.29available, whichever occurs later, the commissioner must transfer the specified amount 59.30to the Help America Vote Act account. Funds under the Help America Vote Act may be 59.31spent only following legislative approval.59.32(b) This section expires on June 30, 2013.59.33EFFECTIVE DATE.This section is effective the day following final enactment.60.1    Sec. 71. ESTIMATED REVENUE.60.2The initiatives in sections 44, 57, 58, and 67 are expected to result in new general 60.3fund revenues of $169,900,000 for the biennium ending June 30, 2013.60.4    Sec. 72.  REPEALER.60.5Minnesota Statutes 2010, sections 16C.085; 43A.047; and 179A.23, are repealed.60.6ARTICLE 460.7CONSOLIDATION OF INFORMATION TECHNOLOGY SERVICES60.8    Section 1. Minnesota Statutes 2010, section 16B.99, is amended to read:60.916B.99 GEOSPATIAL INFORMATION OFFICE.60.10    Subdivision 1. Creation. The Minnesota Geospatial Information Office is created 60.11under the supervision of the commissioner of administration chief geospatial information 60.12officer, who is appointed by the chief information officer.60.13    Subd. 2. Responsibilities; authority. The office has authority to provide 60.14coordination, guidance, and leadership, and to plan the implementation of Minnesota's 60.15geospatial information technology. The office must identify, coordinate, and guide 60.16strategic investments in geospatial information technology systems, data, and services to 60.17ensure effective implementation and use of Geospatial Information Systems (GIS) by state 60.18agencies to maximize benefits for state government as an enterprise.60.19    Subd. 3. Duties. The office must:60.20(1) coordinate and guide the efficient and effective use of available federal, 60.21state, local, and public-private resources to develop statewide geospatial information 60.22technology, data, and services;60.23(2) provide leadership and outreach, and ensure cooperation and coordination for all 60.24Geospatial Information Systems (GIS) functions in state and local government, including 60.25coordination between state agencies, intergovernment coordination between state and local 60.26units of government, and extragovernment coordination, which includes coordination with 60.27academic and other private and nonprofit sector GIS stakeholders;60.28(3) review state agency and intergovernment geospatial technology, data, and 60.29services development efforts involving state or intergovernment funding, including federal 60.30funding;60.31(4) provide information to the legislature regarding projects reviewed, and 60.32recommend projects for inclusion in the governor's budget under section 
         16A.11;60.33(5) coordinate management of geospatial technology, data, and services between 60.34state and local governments;61.1(6) provide coordination, leadership, and consultation to integrate government 61.2technology services with GIS infrastructure and GIS programs;61.3(7) work to avoid or eliminate unnecessary duplication of existing GIS technology 61.4services and systems, including services provided by other public and private organizations 61.5while building on existing governmental infrastructures;61.6(8) promote and coordinate consolidated geospatial technology, data, and services 61.7and shared geospatial Web services for state and local governments; and61.8(9) promote and coordinate geospatial technology training, technical guidance, and 61.9project support for state and local governments.61.10    Subd. 4. Duties of chief geospatial information officer. (a) In consultation with the 61.11state geospatial advisory council, the commissioner of administration, the commissioner 61.12of management and budget, and the Minnesota chief geospatial information officer, the 61.13chief geospatial information officer must identify when it is cost-effective for agencies to 61.14develop and use shared information and geospatial technology systems, data, and services. 61.15The chief geospatial information officer may require agencies to use shared information 61.16and geospatial technology systems, data, and services.61.17(b) The chief geospatial information officer, in consultation with the state 61.18geospatial advisory council, must establish reimbursement rates in cooperation with the 61.19commissioner of management and budget to bill agencies and other governmental entities 61.20sufficient to cover the actual development, operation, maintenance, and administrative 61.21costs of the shared systems. The methodology for billing may include the use of 61.22interagency agreements, or other means as allowed by law.61.23    Subd. 5. Fees. (a) The chief geospatial information officer must set fees under 61.24section 
         16A.1285 that reflect the actual cost of providing information products and 61.25services to clients. Fees collected must be deposited in the state treasury and credited to 61.26the Minnesota Geospatial Information Office revolving account. Money in the account 61.27is appropriated to the chief geospatial information officer for providing Geospatial 61.28Information Systems (GIS) consulting services, software, data, Web services, and map 61.29products on a cost-recovery basis, including the cost of services, supplies, material, labor, 61.30and equipment as well as the portion of the general support costs and statewide indirect 61.31costs of the office that is attributable to the delivery of these products and services. Money 61.32in the account must not be used for the general operation of the Minnesota Geospatial 61.33Information Office.61.34(b) The chief geospatial information officer may require a state agency to make an 61.35advance payment to the revolving account sufficient to cover the agency's estimated 61.36obligation for a period of 60 days or more. If the revolving account is abolished or 62.1liquidated, the total net profit from the operation of the account must be distributed to the 62.2various funds from which purchases were made. For a given period of time, the amount of 62.3total net profit to be distributed to each fund must reflect the same ratio of total purchases 62.4attributable to each fund divided by the total purchases from all funds.62.5    Subd. 6. Accountability. The chief geospatial information officer is appointed by 62.6the commissioner of administration and must work closely with the Minnesota chief 62.7information officer who shall advise on technology projects, standards, and services.62.8    Subd. 7. Discretionary powers. The office may:62.9(1) enter into contracts for goods or services with public or private organizations 62.10and charge fees for services it provides;62.11(2) apply for, receive, and expend money from public agencies;62.12(3) apply for, accept, and disburse grants and other aids from the federal government 62.13and other public or private sources;62.14(4) enter into contracts with agencies of the federal government, local government 62.15units, the University of Minnesota and other educational institutions, and private persons 62.16and other nongovernment organizations as necessary to perform its statutory duties;62.17(5) appoint committees and task forces to assist the office in carrying out its duties;62.18(6) sponsor and conduct conferences and studies, collect and disseminate 62.19information, and issue reports relating to geospatial information and technology issues;62.20(7) participate in the activities and conferences related to geospatial information 62.21and communications technology issues;62.22(8) review the Geospatial Information Systems (GIS) technology infrastructure 62.23of regions of the state and cooperate with and make recommendations to the governor, 62.24legislature, state agencies, local governments, local technology development agencies, 62.25the federal government, private businesses, and individuals for the realization of GIS 62.26information and technology infrastructure development potential;62.27(9) sponsor, support, and facilitate innovative and collaborative geospatial systems 62.28technology, data, and services projects; and62.29(10) review and recommend alternative sourcing strategies for state geospatial 62.30information systems technology, data, and services.62.31    Subd. 8. Geospatial advisory councils created. The chief geospatial information 62.32officer must establish a governance structure that includes advisory councils to provide 62.33recommendations for improving the operations and management of geospatial technology 62.34within state government and also on issues of importance to users of geospatial technology 62.35throughout the state.63.1(a) A statewide geospatial advisory council must advise the Minnesota Geospatial 63.2Information Office regarding the improvement of services statewide through the 63.3coordinated, affordable, reliable, and effective use of geospatial technology. The 63.4commissioner of administration chief information officer must appoint the members of the 63.5council. The members must represent a cross-section of organizations including counties, 63.6cities, universities, business, nonprofit organizations, federal agencies, and state agencies. 63.7No more than 20 percent of the members may be employees of a state agency. In addition, 63.8the chief geospatial information officer must be a nonvoting member.63.9(b) A state government geospatial advisory council must advise the Minnesota 63.10Geospatial Information Office on issues concerning improving state government services 63.11through the coordinated, affordable, reliable, and effective use of geospatial technology. 63.12The commissioner of administration chief information officer must appoint the members 63.13of the council. The members must represent up to 15 state government agencies and 63.14constitutional offices, including the Office of Enterprise Technology and the Minnesota 63.15Geospatial Information Office. The council must be chaired by the chief geographic 63.16information officer. A representative of the statewide geospatial advisory council must 63.17serve as a nonvoting member.63.18(c) Members of both the statewide geospatial advisory council and the state 63.19government advisory council must be recommended by a process that ensures that each 63.20member is designated to represent a clearly identified agency or interested party category 63.21and that complies with the state's open appointment process. Members shall serve a 63.22term of two years.63.23(d) The Minnesota Geospatial Information Office must provide administrative 63.24support for both geospatial advisory councils.63.25(e) This subdivision expires June 30, 2011.63.26    Subd. 9.Report to legislature.By January 15, 2010, the chief geospatial 63.27information officer must provide a report to the chairs and ranking minority members of 63.28the legislative committees with jurisdiction over the policy and budget for the office. The 63.29report must address all statutes that refer to the Minnesota Geospatial Information Office 63.30or land management information system and provide any necessary draft legislation to 63.31implement any recommendations.63.32    Sec. 2. [16E.0151] RESPONSIBILITY FOR INFORMATION TECHNOLOGY 63.33SERVICES AND EQUIPMENT.64.1(a) The chief information officer is responsible for providing or entering into 64.2managed services contracts for the provision of the following information technology 64.3systems and services to state agencies:64.4(1) state data centers;64.5(2) mainframes including system software;64.6(3) servers including system software;64.7(4) desktops including system software;64.8(5) laptop computers including system software;64.9(6) a data network including system software;64.10(7) database, electronic mail, office systems, reporting, and other standard software 64.11tools;64.12(8) business application software and related technical support services;64.13(9) help desk for the components listed in clauses (1) to (8);64.14(10) maintenance, problem resolution, and break-fix for the components listed in 64.15clauses (1) to (8);64.16(11) regular upgrades and replacement for the components listed in clauses (1) 64.17to (8); and64.18(12) network-connected output devices.64.19(b) All state agency employees whose work primarily involves functions specified 64.20in paragraph (a) are employees of the Office of Enterprise Technology. This includes 64.21employees who directly perform the functions in paragraph (a), as well as employees 64.22whose work primarily involves managing, supervising, or providing administrative 64.23services or support services to employees who directly perform these functions. The 64.24chief information officer may assign employees of the office to perform work exclusively 64.25for another state agency.64.26(c) The chief information officer may allow a state agency to obtain services 64.27specified in paragraph (a) through a contract with an outside vendor when the chief 64.28information officer and the agency head agree that a contract would provide best value, 64.29as defined in section 16C.02, under the service-level agreement. The chief information 64.30officer must require that agency contracts with outside vendors ensure that systems and 64.31services are compatible with standards established by the Office of Enterprise Technology.64.32(d) In exercising authority under this section, the chief information officer 64.33must cooperate with the commissioner of administration on contracts for acquisition 64.34of information technology systems and services. The authority granted to the chief 64.35information officer does not limit the procurement, contract management, and contract 64.36review authority of the commissioner of administration under chapter 16C, including 65.1authority of the commissioner to enter into and manage cooperative purchasing 65.2agreements with other states.65.3(e) The Minnesota State Retirement System, the Public Employees Retirement 65.4Association, the Teachers Retirement Association, the State Board of Investment, the 65.5Campaign Finance and Public Disclosure Board, the State Lottery, and the Statewide 65.6Radio Board are not state agencies for purposes of this section.65.7    Sec. 3. [16E.036] ADVISORY COMMITTEE.65.8(a) The Technology Advisory Committee is created to advise the chief information 65.9officer. The committee consists of six members appointed by the governor who are 65.10individuals actively involved in business planning for state executive branch agencies, 65.11one county member designated by the Association of Minnesota Counties, one member 65.12appointed by the governor as a representative of a union that represents state information 65.13technology employees, and one member appointed by the governor to represent private 65.14businesses.65.15(b) Membership terms, removal of members, and filling of vacancies are as provided 65.16in section 15.059. Members do not receive compensation or reimbursement for expenses. 65.17(c) The committee shall select a chair from its members. The chief information 65.18officer shall provide administrative support to the committee.65.19(d) The committee shall advise the chief information officer on:65.20(1) development and implementation of the state information technology strategic 65.21plan;65.22(2) critical information technology initiatives for the state;65.23(3) standards for state information architecture;65.24(4) identification of business and technical needs of state agencies;65.25(5) strategic information technology portfolio management, project prioritization, 65.26and investment decisions;65.27(6) the office's performance measures and fees for service agreements with executive 65.28branch agencies; 65.29(7) management of the state enterprise technology revolving fund; and65.30(8) the efficient and effective operation of the office.65.31    Sec. 4. Minnesota Statutes 2010, section 16E.14, is amended by adding a subdivision 65.32to read:65.33    Subd. 6.Technology improvement account.The technology improvement account 65.34is established as an account in the enterprise technology fund. Money in the account is 66.1appropriated to the chief information officer for the purpose of funding a project that will 66.2result in improvements in state information and telecommunications technology. The 66.3chief information officer may spend money from the account on behalf of a state agency 66.4or group of agencies or may transfer money in the account to a state agency or group of 66.5agencies only according to an agreement under which: (1) the chief information officer 66.6has determined that savings generated by the project to be funded from the account will 66.7exceed the cost of the project; and (2) the agency or agencies sponsoring the project have 66.8developed a plan for recouping the project costs to the fund.66.9    Sec. 5. [16E.145] INFORMATION TECHNOLOGY APPROPRIATION.66.10An appropriation for a state agency information and telecommunications technology 66.11project must be made to the chief information officer. The chief information officer must 66.12manage and disburse the appropriation on behalf of the sponsoring state agency. Any 66.13appropriation for an information and telecommunications technology project made to a 66.14state agency other than the Office of Enterprise Technology is transferred to the chief 66.15information officer.66.16EFFECTIVE DATE.This section is effective July 1, 2011, and applies to 66.17appropriations made before or after that date. The remainder of any appropriation subject 66.18to this section made before July 1, 2011, is transferred to the chief information officer on 66.19July 1, 2011. Ten percent of the unspent and unencumbered appropriations made before 66.20June 30, 2011, that would not otherwise cancel on June 30, 2011, that are transferred to 66.21the chief information officer, may be used for expenses relating to the transfer of functions 66.22under sections 1 to 8.66.23    Sec. 6. TRANSFERS; TRANSITION.66.24(a) Powers, duties, responsibilities, assets, personnel, and unexpended appropriations 66.25relating to functions assigned to the chief information officer in Minnesota Statutes, 66.26section 16E.0151, are transferred to the Office of Enterprise Technology from all other 66.27state agencies, as defined in Minnesota Statutes, section 16E.03, subdivision 1, paragraph 66.28(e), effective July 1, 2011. All reporting relationships associated with the transferred 66.29powers, duties, responsibilities, assets, personnel, and unexpended appropriations are also 66.30transferred to the Office of Enterprise Technology on July 1, 2011. By January 15, 2012, 66.31the chief information officer shall submit to the legislature any statutory changes needed 66.32to complete implementation of the transfer in this section.66.33(b) Prior to the transfer mandated by paragraph (a), the chief information officer 66.34must enter into a service-level agreement with each state agency governing the provision 67.1of information technology systems and services in Minnesota Statutes, section 16E.0151. 67.2The agreements must specify the services to be provided and the charges for these 67.3services. As specified in Minnesota Statutes, section 16E.0151, an agency may choose to 67.4obtain these services from an outside vendor, rather than from the Office of Enterprise 67.5Technology. Authority to enter into agreements under this paragraph is effective the day 67.6following final enactment, with the resulting agreements effective July 1, 2011.67.7(c) Powers, duties, responsibilities, assets, personnel, and unexpended appropriations 67.8relating to geospatial information systems are transferred from the commissioner of 67.9administration to the Office of Enterprise Technology.67.10(d) Minnesota Statutes, section 15.039, applies to transfers in this section. Executive 67.11branch officials may use authority under Minnesota Statutes, section 16B.37, as necessary 67.12to implement this section. 67.13(e) The transfer of authority to the Office of Enterprise Technology in this article 67.14does not require expansion or consolidation of office space, data centers, help desks, 67.15or other systems. The chief information officer may implement expansion, relocation, 67.16or consolidation to the extent feasible and desirable with existing resources, or to the 67.17extent that savings resulting from the expansions or consolidations will pay for the costs 67.18associated with these activities during the biennium ending June 30, 2013.67.19(f) Expenses relating to transfer of functions and other implementation of sections 1 67.20to 8 must be paid from the enterprise technology revolving fund.67.21(g) The chief information officer must reduce the number of agency chief 67.22information officer positions to 15 by December 31, 2011. The chief information officer, 67.23in consultation with the commissioner of management and budget, must determine the 67.24general fund savings resulting from elimination of each chief information officer position, 67.25and the amount determined is transferred from the general fund appropriation to the 67.26agency to the enterprise technology revolving fund.67.27    Sec. 7. STUDY.67.28The chief information officer in the Office of Enterprise Technology shall report 67.29to the chairs and ranking minority members of the house of representatives and senate 67.30committees with jurisdiction over state government finance by January 15, 2012, on 67.31the feasibility and desirability of the office entering into service-level agreements with 67.32the State Lottery and the Statewide Radio Board regarding provision of information 67.33technology systems and services to those entities.67.34    Sec. 8. REVISOR'S INSTRUCTION.68.1The revisor of statutes shall recodify Minnesota Statutes, section 16B.99, into 68.2Minnesota Statutes, chapter 16E.68.3    Sec. 9. EFFECTIVE DATE.68.4Sections 1 to 8 are effective July 1, 2011. However, the chief information officer 68.5may phase in the transfer of functions required by sections 1 to 8 between July 1, 2011, 68.6and July 1, 2012."68.7Delete the title and insert:68.8"A bill for an act68.9relating to state government operations; reducing general fund appropriations 68.10to executive agencies; requiring contributions to enterprise real property 68.11technology system; establishing the Sunset Advisory Commission; allowing 68.12counties and cities to use a certified public accountant for audits; prohibiting 68.13legislative liaisons; eliminating assistant commissioner positions and reducing 68.14deputy commissioner positions; allowing state employees to compete for state 68.15business; establishing the SAVI program; changing provisions of performance 68.16data required in the budget proposal; requiring specific funding information for 68.17forecasted programs; implementing zero-based budgeting principles; establishing 68.18employee gainsharing program; establishing the Minnesota Pay for Performance 68.19Act; permitting selling and issuing appropriations bonds; establishing e-verify 68.20program for vendors and subcontractors; placing limitation on contracts for 68.21tax-related activities; changing procedures for service contracts; extending 68.22expiration date for Mississippi River Parkway Commission; implementing 68.23federal offset program for collection of debts owed to state agencies; changing 68.24provisions for performance appraisal system; requiring reduction in state work 68.25force; allowing reciprocal offset agreements with the federal government; 68.26requiring a request for proposals for recommendations on state building 68.27efficiency, state vehicle management, tax fraud prevention, and strategic 68.28sourcing; continuing state employee salary freeze; implementing state employee 68.29efficient use of health care incentive program; requiring a verification audit 68.30for dependent eligibility for state employee health insurance; requiring state 68.31job classification redesign; determining funds for Help America Vote Act; 68.32estimating new general fund revenues; consolidating information technology 68.33services; requiring reports; appropriating money;amending Minnesota Statutes 68.342010, sections 3.85, subdivision 3; 6.48; 15.057; 15.06, subdivision 8; 16A.10, 68.35subdivisions 1a, 1b, 1c; 16A.103, subdivision 1a; 16A.11, subdivision 3; 68.3616A.28, subdivision 3; 16B.03; 16B.99; 16C.08, subdivision 2; 16C.09; 68.3716E.14, by adding a subdivision; 37.06; 43A.08, subdivision 1; 43A.20; 68.3845.013; 84.01, subdivision 3; 116.03, subdivision 1; 116J.01, subdivision 68.395; 116J.035, subdivision 4; 161.1419, subdivision 8; 174.02, subdivision 2; 68.40241.01, subdivision 2; 270C.41; 270C.545; 471.697, subdivision 2; Laws 2009, 68.41chapter 101, article 2, section 106; Laws 2010, chapter 215, article 6, section 4; 68.42Laws 2010, chapter 361, article 3, section 8; proposing coding for new law in 68.43Minnesota Statutes, chapters 15; 16A; 16C; 16D; 16E; 43A; proposing coding 68.44for new law as Minnesota Statutes, chapter 3D; repealing Minnesota Statutes 68.452010, sections 16C.085; 43A.047; 179A.23; 197.585, subdivision 5."

69.1We request the adoption of this report and repassage of the bill.69.2Senate Conferees:69.3
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                     						69.4Mike ParryPaul Gazelka69.5
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                     						69.6Dave A. ThompsonTheodore J. "Ted" Daley69.7
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                     						69.8Ray Vandeveer69.9House Conferees:69.10
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                     						69.11Morrie LanningBruce Anderson69.12
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                     						69.13Mike BensonKeith Downey69.14
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                     						69.15Kirk Stensrud