HF 758

1st Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to local government; regulating the 
  1.3             development, imposition, and management of state 
  1.4             mandates upon local political subdivisions; amending 
  1.5             Minnesota Statutes 1996, section 477A.014, subdivision 
  1.6             4; proposing coding for new law in Minnesota Statutes, 
  1.7             chapters 3; and 14; repealing Minnesota Statutes 1996, 
  1.8             section 3.982. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  [3.986] [DEFINITIONS.] 
  1.11     Subdivision 1.  [SCOPE.] The terms used in sections 3.986 
  1.12  to 3.989 have the meanings given them in this section. 
  1.13     Subd. 2.  [COSTS MANDATED BY THE STATE.] (a) "Costs 
  1.14  mandated by the state" means increased costs that a political 
  1.15  subdivision is required to incur as a result of: 
  1.16     (1) a law enacted after June 30, 1997, that mandates a new 
  1.17  program or an increased level of service of an existing program; 
  1.18     (2) an executive order issued after June 30, 1997, that 
  1.19  mandates a new program; 
  1.20     (3) an executive order issued after June 30, 1997, that 
  1.21  implements or interprets a state law and, by its implementation 
  1.22  or interpretation, increases program levels above the levels 
  1.23  required before July 1, 1997; 
  1.24     (4) a law enacted after June 30, 1997, or executive order 
  1.25  issued after June 30, 1997, that implements or interprets 
  1.26  federal law and, by its implementation or interpretation, 
  1.27  increases program or service levels above the levels required by 
  2.1   the federal law; 
  2.2      (5) a law enacted after June 30, 1997, or executive order 
  2.3   issued after June 30, 1997, that implements or interprets a 
  2.4   statute or amendment adopted or enacted pursuant to the approval 
  2.5   of a statewide ballot measure by the voters and, by its 
  2.6   implementation or interpretation, increases program or service 
  2.7   levels above the levels required by the ballot measure; 
  2.8      (6) a law enacted after June 30, 1997, or executive order 
  2.9   issued after June 30, 1997, that removes an option previously 
  2.10  available to political subdivisions and thus increases program 
  2.11  or service levels or prohibits a specific activity and so forces 
  2.12  political subdivisions to use a more costly alternative to 
  2.13  provide a mandated program or service; 
  2.14     (7) a law enacted after June 30, 1997, or executive order 
  2.15  issued after June 30, 1997, that requires that an existing 
  2.16  program or service be provided in a shorter time period and thus 
  2.17  increases the cost of the program or service; 
  2.18     (8) a law enacted after June 30, 1997, or executive order 
  2.19  issued after June 30, 1997, that adds new requirements to an 
  2.20  existing optional program or service and thus increases the cost 
  2.21  of the program or service because the political subdivisions 
  2.22  have no reasonable alternative other than to continue the 
  2.23  optional program; 
  2.24     (9) a law enacted after June 30, 1997, or executive order 
  2.25  issued after June 30, 1997, that creates new revenue losses by 
  2.26  new property or sales and use tax exemptions; 
  2.27     (10) a law enacted after June 30, 1997, or executive order 
  2.28  issued after June 30, 1997, that requires costs previously 
  2.29  incurred at local option that have subsequently been mandated by 
  2.30  the state; or 
  2.31     (11) a law enacted or an executive order issued after June 
  2.32  30, 1997, that requires payment of a new fee or increases the 
  2.33  amount of an existing fee. 
  2.34     (b) When state law or executive actions are intended to 
  2.35  achieve compliance with federal law or court orders, state 
  2.36  mandates shall be determined as follows:  
  3.1      (1) if the federal law or court order is discretionary, the 
  3.2   state law or executive action is a state mandate; 
  3.3      (2) if the state law or executive action exceeds what is 
  3.4   required by the federal law or court order, only the provisions 
  3.5   of the state action that exceed the federal requirements are a 
  3.6   state mandate; and 
  3.7      (3) if the state statutory or executive action does not 
  3.8   exceed what is required by the federal statute or regulation or 
  3.9   court order, the state action is not a state mandate.  
  3.10     (c) Costs mandated by the state include the costs of:  
  3.11     (1) a rule issued after June 30, 1997, that mandates a new 
  3.12  responsibility; and 
  3.13     (2) a rule issued after June 30, 1997, that implements or 
  3.14  interprets a state statute, and by doing so increases program 
  3.15  levels above the levels required before June 30, 1997. 
  3.16     Subd. 3.  [EXECUTIVE ORDER.] "Executive order" means an 
  3.17  order, plan, requirement, or rule issued by the governor, an 
  3.18  official serving at the pleasure of the governor, or an agency, 
  3.19  department, board, or commission of state government.  Executive 
  3.20  order does not include an order, plan, requirement, or rule 
  3.21  issued by a regional water quality control board.  
  3.22     Subd. 4.  [MANDATE.] A "mandate" is a requirement imposed 
  3.23  upon a political subdivision in a law by a state agency or by 
  3.24  judicial authority that, if not complied with, results in (1) 
  3.25  civil liability, (2) criminal penalty, or (3) administrative 
  3.26  sanctions such as reduction or loss of funding. 
  3.27     Subd. 5.  [POLITICAL SUBDIVISION.] A "political 
  3.28  subdivision" is a county, home rule charter or statutory city, 
  3.29  town, or other taxing district or municipal corporation.  
  3.30     Subd. 6.  [REQUIRING AN INCREASED LEVEL OF 
  3.31  SERVICE.] "Requiring an increased level of service" includes 
  3.32  requiring that an existing service be provided in a shorter time.
  3.33     Subd. 7.  [RULE.] "Rule" means a rule, order, or standard 
  3.34  of general application adopted by a state agency to implement, 
  3.35  interpret, or make specific the law it enforces or administers 
  3.36  or to govern its procedure.  Rule includes an amendment to a 
  4.1   rule.  Rule does not include a rule that relates only to the 
  4.2   internal management of a state agency.  
  4.3      Subd. 8.  [SAVINGS.] "Savings" includes budget reductions 
  4.4   and the freeing of staff or resources to be reassigned to a 
  4.5   political subdivision's other areas of concern.  
  4.6      Sec. 2.  [3.987] [FISCAL NOTES FOR STATE-MANDATED ACTIONS.] 
  4.7      Subdivision 1.  [STATE AND LOCAL MANDATES OFFICE.] When the 
  4.8   state proposes to mandate that a political subdivision take an 
  4.9   action, and when reasonable compliance with that action would 
  4.10  force the political subdivision to incur costs mandated by the 
  4.11  state, a fiscal note must be prepared as provided in section 
  4.12  3.98, subdivision 2, and made available to the public upon 
  4.13  request.  If the action is among the exceptions listed in 
  4.14  section 3.988, a fiscal note need not be prepared.  
  4.15     An office of state and local mandates in the department of 
  4.16  finance is created.  The commissioner shall make a reasonable 
  4.17  and timely determination of the estimated and actual financial 
  4.18  effects on each political subdivision of each program mandated 
  4.19  by law including each rulemaking proposed by an administrative 
  4.20  agency.  The commissioner of finance may require the 
  4.21  commissioner of the appropriate administrative agency of the 
  4.22  state to supply in a timely manner any information determined by 
  4.23  the division to be necessary to determine local financial 
  4.24  effects.  The commissioner shall convey the requested 
  4.25  information to the commissioner of finance with a signed 
  4.26  statement to the effect that the information is accurate and 
  4.27  complete to the best of the commissioner's ability.  
  4.28     The commissioner, when requested, shall update its 
  4.29  determination of financial effects based on either actual cost 
  4.30  figures or improved estimates or both.  
  4.31     Subd. 2.  [MANDATE EXPLANATIONS.] Any bill introduced in 
  4.32  the legislature after June 30, 1997, that seeks to impose 
  4.33  program or financial mandates on political subdivisions must 
  4.34  include an attachment that gives appropriate responses to the 
  4.35  following guidelines.  It must state and list:  
  4.36     (1) the policy goals that are sought to be attained, the 
  5.1   performance standards that are to be imposed, and an explanation 
  5.2   why the goals and standards will best be served by requiring 
  5.3   compliance by political subdivisions; 
  5.4      (2) performance standards that will allow political 
  5.5   subdivisions flexibility and innovation of method in achieving 
  5.6   these goals; 
  5.7      (3) the reasons for each prescribed standard and the 
  5.8   process by which each standard governs inputs such as staffing 
  5.9   and other administrative aspects of the program; 
  5.10     (4) the sources of additional revenue, in addition to 
  5.11  existing funding for similar programs, that are directly linked 
  5.12  to imposition of the mandates that will provide adequate and 
  5.13  stable funding for their requirements; 
  5.14     (5) what input has been obtained to ensure that the 
  5.15  implementing agencies have the capacity to carry out the 
  5.16  delegated responsibilities; and 
  5.17     (6) the reasons why less intrusive measures such as 
  5.18  financial incentives or voluntary compliance would not yield the 
  5.19  equity, efficiency, or desired level of statewide uniformity in 
  5.20  the proposed program.  
  5.21     Subd. 3.  [LOCAL INVOLVEMENT; LAWS.] Any bill introduced in 
  5.22  the legislature after June 30, 1997, that seeks to impose a 
  5.23  program or financial mandate on political subdivisions must 
  5.24  include as an attachment a description of the efforts put forth, 
  5.25  if any, to involve political subdivisions in the creation or 
  5.26  development of the proposed mandate.  
  5.27     Subd. 4.  [NO MANDATE RESTRICTION.] Except as specifically 
  5.28  provided by this act, nothing in this act restricts or 
  5.29  eliminates the authority of the state to create or impose 
  5.30  programs by law upon political subdivisions. 
  5.31     Sec. 3.  [3.988] [EXCEPTIONS TO FISCAL NOTES.] 
  5.32     Subdivision 1.  [COSTS RESULTING FROM INFLATION.] A fiscal 
  5.33  note need not be prepared for increases in the cost of providing 
  5.34  an existing service if the increases result directly from 
  5.35  inflation.  "Resulting directly from inflation" means 
  5.36  attributable to maintaining an existing level of service rather 
  6.1   than increasing the level of service.  A cost-of-living increase 
  6.2   in welfare benefits is an example of a cost resulting directly 
  6.3   from inflation.  
  6.4      Subd. 2.  [COSTS NOT THE RESULT OF A NEW PROGRAM OR 
  6.5   INCREASED SERVICE.] A fiscal note need not be prepared for 
  6.6   increased local costs that do not result from a new program or 
  6.7   an increased level of service. 
  6.8      Subd. 3.  [MISCELLANEOUS EXCEPTIONS.] A fiscal note or an 
  6.9   attachment as provided in section 3.987, subdivision 2, need not 
  6.10  be prepared for the cost of a mandated action if the law, 
  6.11  including a rulemaking, containing the mandate:  
  6.12     (1) accommodates a specific local request; 
  6.13     (2) results in no new local government duties; 
  6.14     (3) leads to revenue losses from exemptions to taxes; 
  6.15     (4) provided only clarifying or conforming, nonsubstantive 
  6.16  charges on local government; 
  6.17     (5) imposes additional net local costs that are minor (less 
  6.18  than $200 for any single local government if the mandate does 
  6.19  not apply statewide or less than one-tenth of a mill times the 
  6.20  entire value of taxable property in the state if the mandate is 
  6.21  statewide) and do not cause a financial burden on local 
  6.22  government; 
  6.23     (6) is a law or executive order enacted before July 1, 
  6.24  1997, or a rule initially implementing a law enacted before July 
  6.25  1, 1997; 
  6.26     (7) implements something other than a law or executive 
  6.27  order, such as a federal, court, or voter-approved mandate; 
  6.28     (8) defines a new crime or redefines an existing crime or 
  6.29  infraction; 
  6.30     (9) results in savings that equal or exceed costs; 
  6.31     (10) requires the holding of elections; 
  6.32     (11) insures due process or equal protection; 
  6.33     (12) provides for the notification and conduct of public 
  6.34  meetings; 
  6.35     (13) establishes the procedures for administrative and 
  6.36  judicial review of actions taken by political subdivisions; 
  7.1      (14) protects the public from malfeasance, misfeasance, or 
  7.2   nonfeasance by officials of political subdivisions; 
  7.3      (15) relates directly to financial administration, 
  7.4   including the levy, assessment, and collection of taxes; 
  7.5      (16) relates directly to the preparation and submission of 
  7.6   financial audits necessary to the administration of state laws; 
  7.7   or 
  7.8      (17) requires uniform standards to apply to public and 
  7.9   private institutions without differentiation. 
  7.10     Sec. 4.  [3.989] [REIMBURSEMENT TO LOCAL POLITICAL 
  7.11  SUBDIVISIONS FOR COSTS OF STATE MANDATES.] 
  7.12     Subdivision 1.  [DEFINITIONS.] In this section: 
  7.13     (1) "Class A state mandates" means those laws under which 
  7.14  the state mandates to political subdivisions, their 
  7.15  participation, the organizational structure of the program, and 
  7.16  the procedural regulations under which the law must be 
  7.17  administered; and 
  7.18     (2) "Class B state mandates" means those mandates that 
  7.19  allow the political subdivisions to opt for administration of a 
  7.20  law with program elements mandated beforehand and with an 
  7.21  assured revenue level from the state of 90 percent of full 
  7.22  program and administrative costs.  
  7.23     Subd. 2.  [REPORT.] The commissioner of finance shall 
  7.24  prepare by September 1, 1998, and by September 1 of each year 
  7.25  thereafter, a report by political subdivisions of the costs of 
  7.26  class A state mandates established after June 30, 1997.  
  7.27     The commissioner shall annually include the statewide total 
  7.28  of the statement of costs of class A mandates as a notation in 
  7.29  the state budget for the next fiscal year.  
  7.30     Subd. 3.  [CERTAIN POLITICAL SUBDIVISIONS; REPORT.] The 
  7.31  political subdivisions that have opted to administer class B 
  7.32  state mandates shall report to the commissioner of finance by 
  7.33  September 1, 1998, and by September 1 of each year thereafter, 
  7.34  identifying each instance when revenue for a class B state 
  7.35  mandate has fallen below 85 percent of the total cost of the 
  7.36  program and the political subdivision intends to cease 
  8.1   administration of the program.  
  8.2      The commissioner shall forward a copy of the report to the 
  8.3   chairs of the senate finance committee and the house 
  8.4   appropriations committee for proposed inclusion of the shortfall 
  8.5   as a line item appropriation in the state budget for the next 
  8.6   fiscal year.  
  8.7      The political subdivision may exercise its option to cease 
  8.8   administration only if the legislature has failed to include the 
  8.9   shortfall as an appropriation in the state budget for the next 
  8.10  fiscal year.  
  8.11     Subd. 4.  [EXEMPTIONS.] Laws and executive orders 
  8.12  enumerated in section 3.988 are exempted from this section. 
  8.13     Sec. 5.  [14.401] [PERIODIC REVIEW OF ADMINISTRATIVE 
  8.14  RULES.] 
  8.15     Subdivision 1.  [DEFINITIONS.] The terms defined in section 
  8.16  3.986, subdivision 1, apply to this section. 
  8.17     Subd. 2.  [SIGNIFICANT FINANCIAL IMPACT.] The commissioner 
  8.18  of finance shall review, every five years, rules adopted after 
  8.19  June 30, 1997, that have significant financial impact upon 
  8.20  political subdivisions.  In this section, "significant financial 
  8.21  impact" means requiring local political subdivisions to expand 
  8.22  existing services, employ additional personnel, or increase 
  8.23  local expenditures.  The commissioner shall determine the costs 
  8.24  and benefits of each rulemaking and submit a report to the 
  8.25  legislative coordinating commission with its opinion, if any, 
  8.26  for the continuation, modification, or elimination of the rules 
  8.27  in the rulemaking.  
  8.28     Sec. 6.  Minnesota Statutes 1996, section 477A.014, 
  8.29  subdivision 4, is amended to read: 
  8.30     Subd. 4.  [COSTS.] The director of the office of strategic 
  8.31  and long-range planning shall annually bill the commissioner of 
  8.32  revenue for one-half of the costs incurred by the state 
  8.33  demographer in the preparation of materials required by section 
  8.34  4A.02.  The state auditor shall bill the commissioner of revenue 
  8.35  for the costs of the services provided by the government 
  8.36  information division and the parts of the constitutional office 
  9.1   that are related to the government information function, not to 
  9.2   exceed $217,000 in fiscal year 1992 and $217,000 in fiscal year 
  9.3   1993 and thereafter.  The commissioner of administration shall 
  9.4   bill the commissioner of revenue for the costs of the local 
  9.5   government records program and the intergovernmental information 
  9.6   systems activity, not to exceed $201,100 in fiscal year 1992 and 
  9.7   $205,800 in fiscal year 1993 and thereafter.  The commissioner 
  9.8   of employee relations shall bill the commissioner of revenue for 
  9.9   the costs of administering the local government pay equity 
  9.10  function, not to exceed $56,000 in fiscal year 1992 and $55,000 
  9.11  in fiscal year 1993 and thereafter.  The commissioner of finance 
  9.12  shall bill the commissioner of revenue for the cost of 
  9.13  preparation of fiscal notes as required by section 3.897 only to 
  9.14  the extent to which those costs exceed those costs incurred in 
  9.15  fiscal year 1997 and for any other new costs attributable to the 
  9.16  operation of the state and local mandates office required by 
  9.17  section 3.897, not to exceed $....... in fiscal year 1998 and 
  9.18  thereafter. 
  9.19     Sec. 7.  [REPEALER.] 
  9.20     Minnesota Statutes 1996, section 3.982, is repealed.