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HF 1692

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to state government; regulating compensation
plans of the State Board of Investment; amending
Minnesota Statutes 2004, sections 11A.04; 11A.07,
subdivision 4; 15A.0815, subdivision 2; 43A.18, by
adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 11A.04, is
amended to read:


11A.04 DUTIES AND POWERS.

The state board shall:

(1) Act as trustees for each fund for which it invests or
manages money in accordance with the standard of care set forth
in section 11A.09 if state assets are involved and in accordance
with chapter 356A if pension assets are involved.

(2) Formulate policies and procedures deemed necessary and
appropriate to carry out its functions. Procedures adopted by
the board must allow fund beneficiaries and members of the
public to become informed of proposed board actions. Procedures
and policies of the board are not subject to the Administrative
Procedure Act.

(3) Employ an executive director as provided in section
11A.07.

(4) Employ investment advisors and consultants as it deems
necessary.

(5) Prescribe policies concerning personal investments of
all employees of the board to prevent conflicts of interest.

(6) Maintain a record of its proceedings.

(7) As it deems necessary, establish advisory committees
subject to section 15.059 to assist the board in carrying out
its duties.

(8) Not permit state funds to be used for the underwriting
or direct purchase of municipal securities from the issuer or
the issuer's agent.

(9) Direct the commissioner of finance to sell property
other than money that has escheated to the state when the board
determines that sale of the property is in the best interest of
the state. Escheated property must be sold to the highest
bidder in the manner and upon terms and conditions prescribed by
the board.

(10) Undertake any other activities necessary to implement
the duties and powers set forth in this section.

(11) Establish a formula or formulas to measure management
performance and return on investment. Public pension funds in
the state shall utilize the formula or formulas developed by the
state board.

(12) Except as otherwise provided in article XI, section 8,
of the Constitution of the state of Minnesota, employ, at its
discretion, qualified private firms to invest and manage the
assets of funds over which the state board has investment
management responsibility. There is annually appropriated to
the state board, from the assets of the funds for which the
state board utilizes a private investment manager, sums
sufficient to pay the costs of employing private firms. Each
year, by January 15, the board shall report to the governor and
legislature on the cost and the investment performance of each
investment manager employed by the board.

(13) Adopt an investment policy statement that includes
investment objectives, asset allocation, and the investment
management structure for the retirement fund assets under its
control. The statement may be revised at the discretion of the
state board. The state board shall seek the advice of the
council regarding its investment policy statement. Adoption of
the statement is not subject to chapter 14.

new text begin (14) Adopt a compensation plan setting the terms and
conditions of employment for unclassified board employees who
are not covered by a collective bargaining agreement.
new text end

Sec. 2.

Minnesota Statutes 2004, section 11A.07,
subdivision 4, is amended to read:


Subd. 4.

Duties and powers.

The director, at the
direction of the state board, shall:

(1) plan, direct, coordinate, and execute administrative
and investment functions in conformity with the policies and
directives of the state board and the requirements of this
chapter and of chapter 356A;

(2) employ professional and clerical staff as deleted text begin is deleted text end necessary
deleted text begin within the complement limits established by the legislaturedeleted text end .
Employees whose primary responsibility is to invest or manage
money or employees who hold positions designated as unclassified
under section 43A.08, subdivision 1a, are in the unclassified
service of the state. Other employees are in the classified
servicenew text begin . Unclassified employees who are not covered by a
collective bargaining agreement are employed under the terms and
conditions of the compensation plan approved under section
43A.18, subdivision 3b
new text end ;

(3) report to the state board on all operations under the
director's control and supervision;

(4) maintain accurate and complete records of securities
transactions and official activities;

(5) establish a policy relating to the purchase and sale of
securities on the basis of competitive offerings or bids. The
policy is subject to board approval;

(6) cause securities acquired to be kept in the custody of
the commissioner of finance or other depositories consistent
with chapter 356A, as the state board deems appropriate;

(7) prepare and file with the director of the Legislative
Reference Library, by December 31 of each year, a report
summarizing the activities of the state board, the council, and
the director during the preceding fiscal year. The report must
be prepared so as to provide the legislature and the people of
the state with a clear, comprehensive summary of the portfolio
composition, the transactions, the total annual rate of return,
and the yield to the state treasury and to each of the funds
whose assets are invested by the state board, and the recipients
of business placed or commissions allocated among the various
commercial banks, investment bankers, and brokerage
organizations. The report must contain financial statements for
funds managed by the board prepared in accordance with generally
accepted accounting principles;

(8) require state officials from any department or agency
to produce and provide access to any financial documents the
state board deems necessary in the conduct of its investment
activities;

(9) receive and expend legislative appropriations;

(10) undertake any other activities necessary to implement
the duties and powers set forth in this subdivision consistent
with chapter 356A.

Sec. 3.

Minnesota Statutes 2004, section 15A.0815,
subdivision 2, is amended to read:


Subd. 2.

Group i salary limits.

The salaries for
positions in this subdivision may not exceed 95 percent of the
salary of the governor:

Commissioner of administration;

Commissioner of agriculture;

Commissioner of education;

Commissioner of commerce;

Commissioner of corrections;

Commissioner of employee relations;

Commissioner of finance;

Commissioner of health;

Executive director, Higher Education Services Office;

Commissioner, Housing Finance Agency;

Commissioner of human rights;

Commissioner of human services;

deleted text begin Executive director, State Board of Investment;
deleted text end

Commissioner of labor and industry;

Commissioner of natural resources;

Director of Office of Strategic and Long-Range Planning;

Commissioner, Pollution Control Agency;

Commissioner of public safety;

Commissioner of revenue;

Commissioner of employment and economic development;

Commissioner of transportation; and

Commissioner of veterans affairs.

Sec. 4.

Minnesota Statutes 2004, section 43A.18, is
amended by adding a subdivision to read:


new text begin Subd. 3b. new text end

new text begin State board of investment plan. new text end

new text begin Total
compensation for unclassified positions not covered by a
collective bargaining agreement under section 11A.04 in the
State Board of Investment must be determined by the State Board
of Investment. Before submitting a compensation plan to the
legislature and the Legislative Coordinating Commission, the
State Board of Investment must submit the plan to the
commissioner of employee relations for review and comment. The
commissioner must complete the review within 14 days of its
receipt. Compensation plans established under this subdivision
must be approved by the legislature and the Legislative
Coordinating Commission under section 3.855, before becoming
effective.
new text end

Sec. 5. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 4 are effective July 1, 2005. An employee
who is covered by a compensation plan or whose salary is
established under Minnesota Statutes, section 15A.0815, on July
1, 2005, continues to be covered by the compensation plan or
salary until the compensation plan adopted under Minnesota
Statutes, section 43A.18, subdivision 3b, is first implemented.
new text end