HF 4036

as introduced - 90th Legislature (2017 - 2018) Posted on 03/19/2018 03:13pm

A bill for an act
relating to state government; requiring a reduction in the state workforce; creating
an early retirement program; proposing an amendment to the Minnesota
Constitution; limiting the level of budgeted spending to the amount collected in
the prior biennium; prohibiting bonus payments for public employees; reducing
salaries of state employees and elected officials; amending Minnesota Statutes
2016, section 15A.086; proposing coding for new law in Minnesota Statutes,
chapter 43A.

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

Section 1.

Minnesota Statutes 2016, section 15A.086, is amended to read:

15A.086 LIMITS ON BONUS PAYMENTS.

new text begin Subdivision 1. new text end

new text begin Limits on bonuses for nonprofit corporation employees.
new text end

Notwithstanding any law to the contrary, an employee of the state lottery or of a public
corporation or nonprofit corporation created by law may not receive bonus payments in any
year that exceed ten percent of the employee's base salary for that year. For purposes of this
deleted text begin section deleted text end new text begin subdivision new text end , bonus payments include any combination of merit pay, achievement
awards, or any other cash payments in addition to base salary, other than severance pay or
overtime or holiday pay. Groups covered by this section include, but are not limited to, the
Workers' Compensation Reinsurance Association, the Minnesota Insurance Guaranty
Association, the Fair plan, the Joint Underwriters Association, the Minnesota Joint
Underwriters Association, the Life and Health Guaranty Association, the Minnesota
Comprehensive Health Association, the Minnesota State High School League, Enterprise
Minnesota, Inc., Agricultural Utilization Research Institute, Minnesota Project Outreach
Corporation, and the State Agricultural Society. This section does not give any entity
authority to grant a bonus not otherwise authorized by law.

new text begin Subd. 2. new text end

new text begin No bonuses for state employees. new text end

new text begin Notwithstanding any law to the contrary, an
employee of the state, including the executive, legislative, and judicial branch, Minnesota
State Colleges and Universities, and an employee of a county, city, school district, or other
political subdivision may not receive bonus payments. For purposes of this subdivision,
bonus payments mean any onetime cash payments that do not become part of base salary
or wages. Bonus payments do not include severance or overtime or holiday pay. This
subdivision does not apply to payments to volunteer firefighters, volunteer rescue workers,
or members of the Minnesota National Guard for compensation for duties as volunteer
firefighters, volunteer rescue workers, or members of the Minnesota National Guard.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
that this section shall not be construed to invalidate any collective bargaining agreement or
other contract entered into before the day following final enactment.
new text end

Sec. 2.

new text begin [43A.347] REDUCTION IN STATE WORK FORCE; EARLY RETIREMENT
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Required reduction. new text end

new text begin The state of Minnesota shall reduce the state
government workforce and associated costs by at least 15 percent by June 30, 2021, by
using any or all of the following: early retirement, furloughs, layoffs, a hard hiring freeze,
a wage freeze, and by restructuring pension programs to defined contribution plans. The
early retirement program in this section shall assist the state and its employees to comply
with the required 15 percent reduction.
new text end

new text begin Subd. 2. new text end

new text begin Early retirement program; actuarial analysis. new text end

new text begin Following enactment of this
section and prior to implementation of the early retirement program in this section, the
Department of Management and Budget shall perform an actuarial analysis to determine:
new text end

new text begin (1) a minimum and maximum number of retirees allowable under the early retirement
program specified in this section; and
new text end

new text begin (2) the percentage of the early retirement program savings to be returned to the pension
fund over a prescribed period of time in order to cover the cost to the pension fund of the
early retirement program specified in this section. The department shall use the findings in
implementing the early retirement program.
new text end

new text begin Subd. 3. new text end

new text begin Early retirement program. new text end

new text begin Notwithstanding any law to the contrary, a state
employee who terminates state service before a date to be determined by the commissioner
of management and budget, not to be more than the number of allowable employees
determined by the department, may apply for and receive a normal retirement annuity
without any reduction due to retirement before the normal retirement age from the public
pension plan of which the employee is a member, if the following conditions are met:
new text end

new text begin (1) the employee must have at least eight years of service credit in the person's public
pension plan on the date of termination, and the employee's combination of age and years
of service in that pension plan on the date of termination must be equal to or greater than
70;
new text end

new text begin (2) the employee must be at least 50 years old on the date of termination; and
new text end

new text begin (3) for purposes of this section, the employee must not have received a retirement annuity
from a Minnesota public pension plan before the date of terminating state service.
new text end

new text begin Subd. 4. new text end

new text begin Purchase of additional service credit. new text end

new text begin If an employee's combination of age
and years of service in the person's public pension plan is not equal to or greater than 70,
the person may purchase up to five years of service credit, in increments of one month, by
making an additional contribution to the pension plan. For each month of service credit
purchased, the required contribution is the employee contribution rate for the person's
pension plan multiplied by the employee's monthly salary at the time the purchase is made.
A person may purchase service credit under this subdivision only if the person terminates
state service upon making the purchase.
new text end

new text begin Subd. 5. new text end

new text begin Deferred annuity. new text end

new text begin A person who meets the conditions of subdivision 2 at the
time of termination but who is not at least 50 years old may terminate state service and
apply for and receive the unreduced annuity specified in subdivision 2 when the person
attains the age of 50.
new text end

new text begin Subd. 6. new text end

new text begin Extension of deadline. new text end

new text begin To ensure that the efficient operation of state government
is not jeopardized by the simultaneous retirement of large numbers of key personnel, an
appointing authority may extend the June 30, 2021, deadline for terminating state employment
by notifying the executive director of the Minnesota State Retirement System in writing.
new text end

new text begin Subd. 7. new text end

new text begin Best practices. new text end

new text begin In implementing this section, the commissioner of management
and budget and affected agencies shall utilize best practices as identified by other states that
have implemented early retirement programs.
new text end

new text begin Subd. 8. new text end

new text begin Hiring freeze. new text end

new text begin To promote streamlined government and reduced costs, no state
appointing authority may fill a position vacated through state employee participation in the
early retirement program unless the existence of the specific position is mandated by law.
new text end

new text begin Subd. 9. new text end

new text begin Reemployment prohibition. new text end

new text begin An employee who receives a higher annuity as
a result of retiring under this section, instead of retiring under law in effect before enactment
of this section may not be reemployed with the state or receive payment from the state as
a consultant for five years after termination.
new text end

new text begin Subd. 10. new text end

new text begin Pension fund return. new text end

new text begin The commissioner of management and budget must
determine the annual savings realized by each state appointing authority as a result of not
paying compensation to employees who terminate service under this section. The
commissioner must transfer from the appropriation to the appointing authority the percentage
of the cost savings realized by the appointing authority through the early retirement program
under this section over the number of years determined by the actuarial analysis in subdivision
2 to the applicable pension fund to cover the increased cost to the pension fund of the early
retirement incentive.
new text end

new text begin Subd. 11. new text end

new text begin Pension reform. new text end

new text begin Following implementation of the early retirement program,
the commissioner of management and budget shall establish a panel to study and make
recommendations for reforming the state employee retirement pension program.
new text end

new text begin Subd. 12. new text end

new text begin Not applicable to elected officials. new text end

new text begin A state elected official is not a state
employee for purposes of this section.
new text end

Sec. 3. new text begin CONSTITUTIONAL AMENDMENT PROPOSED.
new text end

new text begin An amendment to the Minnesota Constitution is proposed to the people. If the amendment
is adopted, a section shall be added to article XI, to read:
new text end

new text begin Sec. 16. new text end

new text begin Planned expenditures for all funds for the biennium shall be limited to the
amount of actual revenues received in the previous two-year budget period. Onetime
repayment of payment shifts or other state financial obligations is exempt from this
expenditures limitation. Any additional expenditures may only be budgeted to provide for
the public peace, safety, or health as a result of a declared national security or peacetime
emergency.
new text end

Sec. 4. new text begin SUBMISSION TO VOTERS.
new text end

new text begin The proposed amendment must be submitted to the people at the 2018 general election.
The question submitted must be:
new text end

new text begin "Shall the Minnesota Constitution be amended to require that state government
expenditures for all funds be limited to the amount of actual revenues received by the state
in the previous two-year budget period and any additional expenditures may only be made
to provide for the public peace, safety, or health as a result of a declared national security
or peacetime emergency?
new text end

	new text begin Yes . new text end
	new text begin No . " new text end

Sec. 5. new text begin SALARY REDUCTION; STATE EMPLOYEES AND ELECTED
OFFICIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Reduce salary six percent; state employees, elected officials. new text end

new text begin The
salaries of all employees in the executive branch, the judicial branch, and the legislative
branch are decreased by six percent. The salaries of the governor and all constitutional
officers, legislators, and judges, except as prohibited by the Minnesota Constitution, article
VI, section 5, are decreased by six percent. This section applies to employees or elected
officials receiving salary from the state without regard to whether they are in the classified
or unclassified service or whether they are elected or appointed, and to Minnesota State
Colleges and Universities and all departments, agencies, boards, commissions, councils,
and such. The University of Minnesota is strongly encouraged to comply with this section
as if it were subject to it.
new text end

new text begin Subd. 2. new text end

new text begin Contracts in effect. new text end

new text begin This section does not apply to compensation required by
a contract or collective bargaining agreement in effect before the effective date of this
section, however:
new text end

new text begin (1) all contracts or collective bargaining agreements entered into after the effective date
of this section must comply with this section; and
new text end

new text begin (2) no provision of an expired contract or collective bargaining agreement may be
extended in any manner that conflicts with this section.
new text end

new text begin Subd. 3. new text end

new text begin Relation to other law. new text end

new text begin This section supersedes any other law to the contrary.
It is not an unfair labor practice under Minnesota Statutes, chapter 179A, to take any action
required to comply with this section. Employees may not legally strike due to an action that
is required to comply with this section. No party may request interest arbitration regarding
any element of salary reduction prescribed by this section, and an arbitrator may not issue
an award that would conflict with this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
salaries must be reduced effective at the start of the first payroll period beginning after the
date of final enactment.
new text end