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SF 1047

1st Unofficial Engrossment - 87th Legislature (2011 - 2012) Posted on 04/05/2011 03:07pm

KEY: stricken = removed, old language.
underscored = added, new language.
1.1A bill for an act
1.2relating to state government finance; establishing the Sunset Advisory
1.3Commission; allowing counties to provide an audit performed by a certified
1.4public accountant firm; requiring state agencies to carry out agency duties in most
1.5cost-effective manner whether by employing state workers or contracting with
1.6outside sources; establishing the SAVI program for retained savings; increasing
1.7public parking in front of Capitol building; changing provision of performance
1.8data required in the budget proposal; implementing zero-based budgeting
1.9principles; implementing employee gainsharing system to suggest ways to
1.10reduce cost of government; implementing pay for performance pilot program
1.11and allowing bond sale for programs proposed; implementing federal offset
1.12program for collection of debts owed to state agencies; allowing for independent
1.13or private audit for the State Agriculture Society; removing assistant agency head
1.14positions; changing provisions for performance appraisal and pay; reducing state
1.15workforce; providing early retirement incentives; reducing deputy positions;
1.16modifying use of carryforward by the legislative auditor; continuing the
1.17employee salary freeze; requiring a job classification consolidation and report;
1.18requiring a request for proposals for system to enhance the state's audit and
1.19collection activities; requiring dependent eligibility verification audit services for
1.20state hospital, medical, and dental services; consolidating information technology
1.21services; implementing the federal E-Verify program; requiring request for
1.22proposals for recommendations for efficiencies in strategic sourcing; requiring
1.23studies; appropriating money;amending Minnesota Statutes 2010, sections 3.85,
1.24subdivision 3; 6.48; 15.06, subdivision 8; 16A.10, subdivisions 1a, 1b, 1c;
1.2516A.103, subdivision 1a; 16A.11, subdivision 3; 16A.28, subdivision 3; 16B.03;
1.2616B.99; 16C.08, subdivision 2; 16C.09; 16E.14, by adding a subdivision; 37.06;
1.2743A.08, subdivision 1; 43A.20; 45.013; 84.01, subdivision 3; 116.03, subdivision
1.281; 116J.01, subdivision 5; 116J.035, subdivision 4; 174.02, subdivision 2; 241.01,
1.29subdivision 2; Laws 2010, chapter 215, article 6, section 4; Laws 2010, chapter
1.30361, article 3, section 8; proposing coding for new law in Minnesota Statutes,
1.31chapters 15; 15B; 16A; 16C; 16D; 16E; 43A; proposing coding for new law as
1.32Minnesota Statutes, chapter 3D; repealing Minnesota Statutes 2010, sections
1.3316C.085; 43A.047; 179A.23; 197.585, subdivision 5.
1.34BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.1ARTICLE 1
2.2STATE GOVERNMENT APPROPRIATIONS

2.3
Section 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.
2.11
APPROPRIATIONS
2.12
Available for the Year
2.13
Ending June 30
2.14
2012
2013

2.15
Sec. 2. LEGISLATURE
2.16
Subdivision 1.Total Appropriation
$
61,651,000
$
61,651,000
2.17
Appropriations by Fund
2.18
2012
2013
2.19
General
61,523,000
61,523,000
2.20
Health Care Access
128,000
128,000
2.21The amounts that may be spent for each
2.22purpose are specified in the following
2.23subdivisions.
2.24
Subd. 2.Senate
20,068,000
20,068,000
2.25
Subd. 3.House of Representatives
27,874,000
27,874,000
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.
2.31
Subd. 4.Legislative Coordinating Commission
13,709,000
13,709,000
2.32
Appropriations by Fund
2.33
General
13,581,000
13,581,000
2.34
Health Care Access
128,000
128,000
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.

3.7
3.8
Sec. 3. GOVERNOR AND LIEUTENANT
GOVERNOR
$
3,097,000
$
3,097,000
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 Budget Division and the
3.16house of representatives State Government
3.17Finance Division any personnel costs
3.18incurred by the Office of the Governor and
3.19Lieutenant Governor that were supported
3.20by appropriations to other agencies during
3.21the previous fiscal year. The Office of the
3.22Governor shall inform the chairs and ranking
3.23minority members of the divisions before
3.24initiating 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
3.28each fiscal year from other executive
3.29agencies under Minnesota Statutes, section
3.3015.53, to support personnel costs incurred
3.31by the office. Payments received under this
3.32paragraph must be deposited in a special
3.33revenue account. Money in the account is
3.34appropriated to the Office of the Governor.
3.35The authority in this paragraph supersedes
4.1other law enacted in 2011 that limits the
4.2ability of the office to enter into agreements
4.3relating to personnel costs with other
4.4executive branch agencies or prevents the use
4.5of appropriations made to other agencies for
4.6agreements with the office under Minnesota
4.7Statutes, section 15.53.

4.8
Sec. 4. STATE AUDITOR
$
7,964,000
$
7,964,000

4.9
Sec. 5. ATTORNEY GENERAL
$
21,712,000
$
21,712,000
4.10
Appropriations by Fund
4.11
2012
2013
4.12
General
19,433,000
19,433,000
4.13
4.14
State Government
Special Revenue
1,884,000
1,884,000
4.15
Environmental
145,000
145,000
4.16
Remediation
250,000
250,000
4.17Of this appropriation, $65,000 in the first
4.18year and $65,000 in the second year are
4.19from the general fund for transfer to the
4.20commissioner of public safety for a grant to
4.21the Minnesota County Attorneys Association
4.22for prosecutor and law enforcement training.

4.23
Sec. 6. SECRETARY OF STATE
$
5,193,000
$
5,193,000

4.24
4.25
Sec. 7. CAMPAIGN FINANCE AND PUBLIC
DISCLOSURE BOARD
$
653,000
$
653,000

4.26
Sec. 8. INVESTMENT BOARD
$
132,000
$
132,000

4.27
Sec. 9. ADMINISTRATIVE HEARINGS
$
7,614,000
$
7,484,000
4.28
Appropriations by Fund
4.29
2012
2013
4.30
General
364,000
234,000
4.31
4.32
Workers'
Compensation
7,250,000
7,250,000
5.1$130,000 in the first year is for the cost
5.2of considering complaints filed under
5.3Minnesota Statutes, section 211B.32. Until
5.4June 30, 2013, the chief administrative
5.5law judge may not make any assessment
5.6against a county or counties under Minnesota
5.7Statutes, section 211B.37. Any amount of
5.8this appropriation that remains unspent at
5.9the end of the biennium must be canceled
5.10to the general account of the state elections
5.11campaign fund. The base for fiscal year 2014
5.12is $130,000, to be available for the biennium,
5.13under the same terms.

5.14
5.15
Sec. 10. OFFICE OF ENTERPRISE
TECHNOLOGY
$
4,636,000
$
4,636,000
5.16During the biennium ending June 30, 2013,
5.17the office must not charge fees to a public
5.18noncommercial educational television
5.19broadcast station for access to the state
5.20information infrastructure.

5.21
Sec. 11. ADMINISTRATION
5.22
Subdivision 1.Total Appropriation
$
18,023,000
$
18,023,000
5.23The amounts that may be spent for each
5.24purpose are specified in the following
5.25subdivisions.
5.26
Subd. 2.Government and Citizen Services
14,736,000
14,736,000
5.27
Subd. 3.Administrative Management Support
1,502,000
1,502,000
5.28
Subd. 4.Public Broadcasting
1,785,000
1,785,000
5.29(a) The appropriations under this section are
5.30to the commissioner of administration for the
5.31purposes specified.
6.1(b) $1,002,000 the first year and $1,002,000
6.2the second year are for matching grants for
6.3public television.
6.4(c) $190,000 the first year and $190,000
6.5the second year are for public television
6.6equipment grants. Equipment or matching
6.7grant allocations shall be made after
6.8considering the recommendations of the
6.9Minnesota Public Television Association.
6.10(d) $16,000 the first year and $16,000 the
6.11second year are for grants to the Twin Cities
6.12regional cable channel.
6.13(e) $278,000 the first year and $278,000 the
6.14second year are for community service grants
6.15to public educational radio stations.
6.16(f) $97,000 the first year and $97,000 the
6.17second year are for equipment grants to
6.18public educational radio stations.
6.19(g) The grants in paragraphs (e) and (f)
6.20must be allocated after considering the
6.21recommendations of the Association of
6.22Minnesota Public Educational Radio Stations
6.23under Minnesota Statutes, section 129D.14.
6.24(h) $202,000 the first year and $202,000
6.25the second year are for equipment grants to
6.26Minnesota Public Radio, Inc.
6.27(i) Any unencumbered balance remaining the
6.28first year for grants to public television or
6.29radio stations does not cancel and is available
6.30for the second year.

6.31
6.32
6.33
Sec. 12. CAPITOL AREA
ARCHITECTURAL AND PLANNING
BOARD
$
308,000
$
308,000

7.1
7.2
Sec. 13. MINNESOTA MANAGEMENT AND
BUDGET
$
16,727,000
$
16,727,000

7.3
Sec. 14. REVENUE
7.4
Subdivision 1.Total Appropriation
$
128,231,000
$
140,046,000
7.5
Appropriations by Fund
7.6
2012
2013
7.7
General
123,996,000
135,811,000
7.8
Health Care Access
1,749,000
1,749,000
7.9
7.10
Highway User Tax
Distribution
2,183,000
2,183,000
7.11
Environmental
303,000
303,000
7.12The amounts that may be spent for each
7.13purpose are specified in subdivisions 2 and 3.
7.14To the greatest extent possible, the
7.15commissioner must avoid making budget
7.16reductions to compliance activities.
7.17
Subd. 2.Tax System Management
104,991,000
116,806,000
7.18
Appropriations by Fund
7.19
General
100,756,000
112,571,000
7.20
Health Care Access
1,749,000
1,749,000
7.21
7.22
Highway User Tax
Distribution
2,183,000
2,183,000
7.23
Environmental
303,000
303,000
7.24
Subd. 3.Debt Collection Management
23,240,000
23,240,000

7.25
Sec. 15. GAMBLING CONTROL
$
2,740,000
$
2,740,000
7.26These appropriations are from the lawful
7.27gambling regulation account in the special
7.28revenue fund.

7.29
Sec. 16. RACING COMMISSION
$
899,000
$
899,000
7.30These appropriations are from the racing
7.31and card playing regulation accounts in the
7.32special revenue fund.

7.33
Sec. 17. AMATEUR SPORTS COMMISSION
$
235,000
$
235,000

8.1
8.2
Sec. 18. COUNCIL ON BLACK
MINNESOTANS
$
261,000
$
261,000

8.3
8.4
Sec. 19. COUNCIL ON CHICANO/LATINO
AFFAIRS
$
246,000
$
246,000

8.5
8.6
Sec. 20. COUNCIL ON ASIAN-PACIFIC
MINNESOTANS
$
227,000
$
227,000

8.7
Sec. 21. INDIAN AFFAIRS COUNCIL
$
413,000
$
413,000

8.8
Sec. 22. EXPLORE MINNESOTA TOURISM
$
8,269,000
$
8,269,000
8.9(a) Of this amount, $12,000 each year is for a
8.10grant to the Upper Minnesota Film Office.
8.11(b)(1) To develop maximum private sector
8.12involvement in tourism, $500,000 the first
8.13year and $500,000 the second year must
8.14be matched by Explore Minnesota Tourism
8.15from nonstate sources. Each $1 of state
8.16incentive must be matched with $3 of private
8.17sector funding. Cash match is defined as
8.18revenue to the state or documented cash
8.19expenditures directly expended to support
8.20Explore Minnesota Tourism programs. Up
8.21to one-half of the private sector contribution
8.22may be in-kind or soft match. The incentive
8.23in the first year shall be based on fiscal
8.24year 2011 private sector contributions. The
8.25incentive in the second year will be based on
8.26fiscal year 2012 private sector contributions.
8.27This incentive is ongoing.
8.28(2) Funding for the marketing grants is
8.29available either year of the biennium.
8.30Unexpended grant funds from the first year
8.31are available in the second year.
8.32(3) Unexpended money from the general
8.33fund appropriations made under this section
9.1does not cancel but must be placed in a
9.2special marketing account for use by Explore
9.3Minnesota Tourism for additional marketing
9.4activities.
9.5(c) $325,000 the first year and $325,000 the
9.6second year are for the Minnesota Film and
9.7TV Board. The appropriation in each year
9.8is available only upon receipt by the board
9.9of $1 in matching contributions of money or
9.10in-kind contributions from nonstate sources
9.11for every $3 provided by this appropriation,
9.12except that each year up to $50,000 is
9.13available on July 1 even if the required
9.14matching contribution has not been received
9.15by that date.
9.16(d) A portion of the appropriation in this
9.17section may be used for the film production
9.18jobs program under Minnesota Statutes,
9.19section 116U.26.

9.20
9.21
Sec. 23. MINNESOTA HISTORICAL
SOCIETY
9.22
Subdivision 1.Total Appropriation
$
19,764,000
$
19,662,000
9.23The amounts that may be spent for each
9.24purpose are specified in the following
9.25subdivisions.
9.26
Subd. 2.Education and Outreach
11,109,000
11,109,000
9.27Notwithstanding Minnesota Statutes, section
9.28138.668, the Minnesota Historical Society
9.29may not charge a fee for its general tours at
9.30the Capitol, but may charge fees for special
9.31programs other than general tours.
9.32
Subd. 3.Preservation and Access
8,337,000
8,337,000
9.33
Subd. 4.Fiscal Agent
10.1
(a) Minnesota International Center
38,000
38,000
10.2
(b) Minnesota Air National Guard Museum
14,000
-0-
10.3
(c) Minnesota Military Museum
88,000
-0-
10.4
(d) Farmamerica
112,000
112,000
10.5(e) $66,000 the first year and $66,000 the
10.6second year are for a grant to the city of
10.7Eveleth to be used for the support of the
10.8Hockey Hall of Fame Museum provided
10.9that it continues to operate in the city. This
10.10grant is in addition to and must not be
10.11used to supplant funding under Minnesota
10.12Statutes, section 298.28, subdivision 9c. This
10.13appropriation is added to the society's budget
10.14base.
10.15
(f) Balances Forward
10.16Any unencumbered balance remaining in
10.17this subdivision the first year does not cancel
10.18but is available for the second year of the
10.19biennium.
10.20
Subd. 5.Fund Transfer
10.21The Minnesota Historical Society may
10.22reallocate funds appropriated in and between
10.23subdivisions 2 and 3 for any program
10.24purposes and the appropriations are available
10.25in either year of the biennium.

10.26
Sec. 24. BOARD OF THE ARTS
10.27
Subdivision 1.Total Appropriation
$
6,672,000
$
6,672,000
10.28The amounts that may be spent for each
10.29purpose are specified in the following
10.30subdivisions.
10.31
Subd. 2.Operations and Services
504,000
504,000
10.32
Subd. 3.Grants Program
4,266,000
4,266,000
11.1
Subd. 4.Regional Arts Councils
1,902,000
1,902,000

11.2
11.3
Sec. 25. MINNESOTA HUMANITIES
CENTER
$
225,000
$
225,000

11.4
11.5
Sec. 26. SCIENCE MUSEUM OF
MINNESOTA
$
1,009,000
$
1,009,000

11.6
Sec. 27. TORT CLAIMS
$
161,000
$
161,000
11.7These appropriations are to be spent by the
11.8commissioner of management and budget
11.9according to Minnesota Statutes, section
11.103.736, subdivision 7. If the appropriation for
11.11either year is insufficient, the appropriation
11.12for the other year is available for it.

11.13
11.14
Sec. 28. MINNESOTA STATE RETIREMENT
SYSTEM
11.15
Subdivision 1.Total Appropriation
$
472,000
$
481,000
11.16The amounts that may be spent for each
11.17purpose are specified in the following
11.18subdivisions.
11.19During the biennium ending June 30, 2013,
11.20payments for retirement allowances for
11.21former legislators and surviving spouses
11.22must be made from the legislators retirement
11.23fund created under Minnesota Statutes,
11.24section 3A.03, subdivision 3, and not from
11.25the general fund.
11.26
Subd. 2. Constitutional Officers
472,000
481,000
11.27Under Minnesota Statutes, section 352C.001,
11.28if an appropriation in this section for either
11.29year is insufficient, the appropriation for the
11.30other year is available for it.

11.31
Sec. 29. MERF DIVISION ACCOUNT
$
22,750,000
$
22,750,000
12.1These amounts are estimated to be needed
12.2under Minnesota Statutes, section 353.505.

12.3
12.4
Sec. 30. TEACHERS RETIREMENT
ASSOCIATION
$
15,454,000
$
15,454,000
12.5The amounts estimated to be needed are as
12.6follows:
12.7(a) Special direct state aid. $12,954,000 the
12.8first year and $12,954,000 the second year
12.9are for special direct state aid authorized
12.10under Minnesota Statutes, section 354A.12,
12.11subdivisions 3a and 3c.
12.12(b) Special direct state matching aid.
12.13$2,500,000 the first year and $2,500,000
12.14the second year are for special direct state
12.15matching aid authorized under Minnesota
12.16Statutes, section 354A.12, subdivision 3b.

12.17
12.18
Sec. 31. ST. PAUL TEACHERS
RETIREMENT FUND
$
2,827,000
$
2,827,000
12.19The amounts estimated to be needed for
12.20special direct state aid to first class city
12.21teachers retirement funds authorized under
12.22Minnesota Statutes, section 354A.12,
12.23subdivisions 3a and 3c.

12.24
12.25
Sec. 32. DULUTH TEACHERS
RETIREMENT FUND
$
346,000
$
346,000
12.26The amounts estimated to be needed for
12.27special direct state aid to first class city
12.28teachers retirement funds authorized under
12.29Minnesota Statutes, section 354A.12,
12.30subdivisions 3a and 3c.

12.31
Sec. 33. STATE LOTTERY
12.32Notwithstanding Minnesota Statutes, section
12.33349A.10, subdivision 3, the operating budget
13.1must not exceed $29,000,000 in fiscal year
13.22012 and $29,000,000 in fiscal year 2013.

13.3
13.4
Sec. 34. GENERAL CONTINGENT
ACCOUNTS
$
600,000
$
500,000
13.5
Appropriations by Fund
13.6
2012
2013
13.7
General
100,000
-0-
13.8
13.9
State Government
Special Revenue
400,000
400,000
13.10
13.11
Workers'
Compensation
100,000
100,000
13.12(a) The appropriations in this section
13.13may only be spent with the approval of
13.14the governor after consultation with the
13.15Legislative Advisory Commission pursuant
13.16to Minnesota Statutes, section 3.30.
13.17(b) If an appropriation in this section for
13.18either year is insufficient, the appropriation
13.19for the other year is available for it.
13.20(c) If a contingent account appropriation
13.21is made in one fiscal year, it should be
13.22considered a biennial appropriation.

13.23    Sec. 35. PROBLEM GAMBLING APPROPRIATION.
13.24$225,000 in fiscal year 2012 and $225,000 in fiscal year 2013 are appropriated from
13.25the lottery prize fund to the Gambling Control Board for a grant to the state affiliate
13.26recognized by the National Council on Problem Gambling. The affiliate must provide
13.27services to increase public awareness of problem gambling, education and training for
13.28individuals and organizations providing effective treatment services to problem gamblers
13.29and their families, and research relating to problem gambling. These services must be
13.30complementary to and not duplicative of the services provided through the problem
13.31gambling program administered by the commissioner of human services. Of this
13.32appropriation, $50,000 in fiscal year 2012 and $50,000 in fiscal year 2013 are contingent
13.33on the contribution of nonstate matching funds. Matching funds may be either cash or
13.34qualifying in-kind contributions. The commissioner of management and budget may
13.35disburse the state portion of the matching funds in increments of $25,000 upon receipt
14.1of a commitment for an equal amount of matching nonstate funds. These are onetime
14.2appropriations.

14.3    Sec. 36. APPROPRIATION; REIMBURSEMENT OF RECOUNT COSTS.
14.4$322,000 is appropriated from the general fund to the secretary of state in fiscal year
14.52011 for the reimbursement of costs of recounts during the 2010 general election, to be
14.6paid to counties consistent with the cost survey of the counties previously conducted
14.7by the secretary of state and for reimbursement to the secretary of state costs in those
14.8recounts already paid by the secretary of state to the counties. This appropriation remains
14.9available until December 31, 2011.
14.10EFFECTIVE DATE.This section is effective the day following final enactment.

14.11    Sec. 37. SAVINGS; APPROPRIATION REDUCTIONS.
14.12(a) The commissioner of management and budget must reduce general fund
14.13appropriations to executive agencies for agency operations for the biennium ending
14.14June 30, 2013, by $94,875,000. The Minnesota State Colleges and Universities is not
14.15an executive agency for purposes of this section. To the greatest extent possible, these
14.16savings must come from the reforms, efficiencies, and cost-savings measures contained in
14.17this act, including:
14.18(1) reduction in the number of full-time equivalent employees;
14.19(2) salary freeze;
14.20(3) elimination of deputy and assistant commissioner positions;
14.21(4) consolidation of responsibilities for executive branch information technology
14.22systems;
14.23(5) efficiencies and cost savings in contracting; and
14.24(6) verification of dependent eligibility for state group insurance coverage.
14.25(b) The commissioner of management and budget must determine savings to funds
14.26other than the general funds resulting from the reforms, efficiencies, and cost-savings
14.27measures in this act. To the extent permitted by law, the commissioner must reduce
14.28appropriations from those other funds by the amount of those savings, and transfer the
14.29amount of the reductions to the general fund.

14.30    Sec. 38. ENTERPRISE REAL PROPERTY CONTRIBUTIONS.
14.31On or before June 1, 2011, the commissioner of administration shall determine
14.32the amount to be contributed by each executive agency to maintain the enterprise real
14.33property technology system for the fiscal years 2012 and 2013. On or before June 15,
15.12011, each executive agency shall enter into an agreement with the commissioner of
15.2administration setting forth the manner in which the executive agency shall make its
15.3contribution to the enterprise real property system, either from uncommitted fiscal year
15.42011 funds or by contributing from fiscal year 2012 and fiscal year 2013 funds to the real
15.5property enterprise system and services account to fund the total amount of $399,000 for
15.6the biennium. Funds contributed under this section must be credited to the enterprise real
15.7property technology system and services account.
15.8EFFECTIVE DATE.This section is effective the day following final enactment.

15.9ARTICLE 2
15.10MILITARY AFFAIRS AND VETERANS AFFAIRS

15.11
Section 1. APPROPRIATIONS.
15.12The sums shown in the columns marked "Appropriations" are appropriated to the
15.13agencies and for the purposes specified in this article. The appropriations are from the
15.14general fund and are available for the fiscal years indicated for each purpose. The figures
15.15"2012" and "2013" used in this article mean that the appropriations listed under them are
15.16available for the fiscal year ending June 30, 2012, or June 30, 2013, respectively. "The
15.17first year" is fiscal year 2012. "The second year" is fiscal year 2013. "The biennium" is
15.18fiscal years 2012 and 2013.
15.19
APPROPRIATIONS
15.20
Available for the Year
15.21
Ending June 30
15.22
2012
2013

15.23
Sec. 2. MILITARY AFFAIRS
15.24
Subdivision 1.Total Appropriation
$
22,371,000
$
19,371,000
15.25The amounts that may be spent for each
15.26purpose are specified in the following
15.27subdivisions.
15.28
Subd. 2.Maintenance of Training Facilities
6,660,000
6,660,000
15.29
Subd. 3.General Support
2,363,000
2,363,000
15.30
Subd. 4.Enlistment Incentives
13,348,000
10,348,000
15.31$3,000,000 the first year is for additional
15.32costs of enlistment incentives.
16.1If appropriations for either year of the
16.2biennium are insufficient, the appropriation
16.3from the other year is available. The
16.4appropriations for enlistment incentives are
16.5available until expended.

16.6
Sec. 3. VETERANS AFFAIRS
16.7
Subdivision 1.Total Appropriation
$
57,795,000
$
58,595,000
16.8
Appropriations by Fund
16.9
2012
2013
16.10
General
57,695,000
58,595,000
16.11
Special Revenue
100,000
-0-
16.12The amounts that may be spent for each
16.13purpose are specified in the following
16.14subdivisions.
16.15
Subd. 2.Veterans Services
13,879,000
13,779,000
16.16$100,000 in the first year is from the
16.17"Support Our Troops" account established
16.18under Minnesota Statutes, section 190.19,
16.19subdivision 2a, for a grant to the Minnesota
16.20Assistance Council for Veterans. This is a
16.21onetime appropriation.
16.22$100,000 each year is for the costs of
16.23administering the Minnesota GI Bill program
16.24under Minnesota Statutes, section 197.791.
16.25$353,000 each year is for grants to the
16.26following congressionally chartered veterans
16.27service organizations, as designated by the
16.28commissioner: Disabled American Veterans,
16.29Military Order of the Purple Heart, the
16.30American Legion, Veterans of Foreign Wars,
16.31Vietnam Veterans of America, AMVETS,
16.32and Paralyzed Veterans of America. This
16.33funding must be allocated in direct proportion
17.1to the funding currently being provided by
17.2the commissioner to these organizations.
17.3
Subd. 3.Veterans Homes
43,916,000
44,816,000
17.4Veterans Homes Special Revenue Account.
17.5The general fund appropriations made to
17.6the department may be transferred to a
17.7veterans homes special revenue account in
17.8the special revenue fund in the same manner
17.9as other receipts are deposited according
17.10to Minnesota Statutes, section 198.34, and
17.11are appropriated to the department for the
17.12operation of veterans homes facilities and
17.13programs.
17.14Fergus Falls Veterans Home. Of the
17.15general fund appropriation, $738,000 in
17.16fiscal year 2013 is for operation of a new
17.1721-bed specialty care/Alzheimer's unit at the
17.18Minnesota Veterans Home in Fergus Falls.
17.19Base funding for this program is $842,000 in
17.20fiscal years 2014 and 2015.
17.21Minneapolis Veterans Home. Of the
17.22general fund appropriation, $162,000 in
17.23fiscal year 2013 is for operation of a new
17.24adult day care program at the Minnesota
17.25Veterans Home in Minneapolis. Base
17.26funding for this program is $232,000 in fiscal
17.27years 2014 and 2015.
17.28Veterans Homes Service Redesign.
17.29$551,000 in fiscal year 2012 and $801,000 in
17.30fiscal year 2013, generated from additional
17.31nongeneral fund revenue and cost savings
17.32from operating efficiencies, are to be used to
17.33support the operational needs of the five state
17.34veterans homes.

18.1    Sec. 4. Laws 2010, chapter 215, article 6, section 4, is amended to read:
18.2
Sec. 4. VETERANS HOMES
18.3Of the appropriation in Laws 2009, chapter
18.494, article 3, section 2, subdivision 3, or from
18.5funds carried forward from fiscal year 2009:
18.6(1) $1,000,000 $800,000 in fiscal year 2011
18.7is for operational expenses related to the
18.821-bed addition at the Fergus Falls Veterans
18.9Home; and
18.10(2) $113,000 $313,000 in fiscal year 2011 is
18.11for start-up expenses related to the opening of
18.12an adult daycare facility at the Minneapolis
18.13Veterans Home.
18.14An appropriation in this section that is
18.15unspent at the end of fiscal year 2011 carries
18.16forward and is available in fiscal year 2012.
18.17EFFECTIVE DATE.This section is effective the day following final enactment.

18.18    Sec. 5. REPEALER.
18.19Minnesota Statutes 2010, section 197.585, subdivision 5, is repealed.
18.20EFFECTIVE DATE.This section is effective the day following final enactment.

18.21ARTICLE 3
18.22STATE GOVERNMENT OPERATIONS

18.23    Section 1. Minnesota Statutes 2010, section 3.85, subdivision 3, is amended to read:
18.24    Subd. 3. Membership. The commission consists of five seven members of the
18.25senate appointed by the Subcommittee on Committees of the Committee on Rules and
18.26Administration and five seven members of the house of representatives appointed by
18.27the speaker. No more than five members from each chamber may be from the majority
18.28caucus in that chamber. Members shall be appointed at the commencement of each regular
18.29session of the legislature for a two-year term beginning January 16 of the first year of the
18.30regular session. Members continue to serve until their successors are appointed. Vacancies
18.31that occur while the legislature is in session shall be filled like regular appointments. If the
19.1legislature is not in session, senate vacancies shall be filled by the last Subcommittee on
19.2Committees of the senate Committee on Rules and Administration or other appointing
19.3authority designated by the senate rules, and house of representatives vacancies shall be
19.4filled by the last speaker of the house, or if the speaker is not available, by the last chair of
19.5the house of representatives Rules Committee.
19.6EFFECTIVE DATE.This section is effective the day following final enactment.
19.7Within ten days of the effective date of this section, the appointing authorities must
19.8appoint additional members to the commission, as required by this section.

19.9    Sec. 2. [3D.01] SHORT TITLE.
19.10This chapter may be cited as the "Minnesota Sunset Act."

19.11    Sec. 3. [3D.02] DEFINITIONS.
19.12    Subdivision 1. Scope. The definitions in this section apply to this chapter.
19.13    Subd. 2. Advisory committee. "Advisory committee" means a committee, council,
19.14commission, or other entity created under state law whose primary function is to advise
19.15a state agency.
19.16    Subd. 3. Commission. "Commission" means the Sunset Advisory Commission.
19.17    Subd. 4. State agency. "State agency" means an agency expressly made subject
19.18to this chapter.

19.19    Sec. 4. [3D.03] SUNSET ADVISORY COMMISSION.
19.20    Subdivision 1. Membership. (a) The Sunset Advisory Commission consists of 12
19.21members appointed as follows:
19.22(1) five senators and one public member, appointed according to the rules of the
19.23senate, with no more than three senators from the majority caucus; and
19.24(2) five members of the house of representatives and one public member, appointed
19.25by the speaker of the house, with no more than three of the house members from the
19.26majority caucus.
19.27(b) The first members of the Sunset Advisory Commission must be appointed before
19.28September 1, 2011, for terms ending the first Monday in January 2013.
19.29    Subd. 2. Public member restrictions. An individual is not eligible for appointment
19.30as a public member if the individual or the individual's spouse is:
19.31(1) regulated by a state agency that the commission will review during the term for
19.32which the individual would serve;
20.1(2) employed by, participates in the management of, or directly or indirectly has
20.2more than a ten percent interest in a business entity or other organization regulated by a
20.3state agency the commission will review during the term for which the individual would
20.4serve; or
20.5(3) required to register as a lobbyist under chapter 10A because of the person's
20.6activities for compensation on behalf of a profession or entity related to the operation of
20.7an agency under review.
20.8    Subd. 3. Removal. (a) It is a ground for removal of a public member from the
20.9commission if the member does not have the qualifications required by subdivision 2
20.10for appointment to the commission at the time of appointment or does not maintain the
20.11qualifications while serving on the commission. The validity of the commission's action is
20.12not affected by the fact that it was taken when a ground for removal of a public member
20.13from the commission existed.
20.14(b) Except as provided in paragraph (a), a public member may be removed only as
20.15provided in section 15.0575, subdivision 4.
20.16    Subd. 4. Terms. Legislative members serve at the pleasure of the appointing
20.17authority. Public members serve two-year terms expiring the first Monday in January of
20.18each odd-numbered year.
20.19    Subd. 5. Limits. Members are subject to the following restrictions:
20.20(1) after an individual serves four years on the commission, the individual is not
20.21eligible for appointment to another term or part of a term;
20.22(2) a legislative member who serves a full term may not be appointed to an
20.23immediately succeeding term; and
20.24(3) a public member may not serve consecutive terms, and, for purposes of this
20.25prohibition, a member is considered to have served a term only if the member has served
20.26more than one-half of the term.
20.27    Subd. 6. Appointments. Appointments must be made before the second Monday of
20.28January of each odd-numbered year.
20.29    Subd. 7. Legislative members. If a legislative member ceases to be a member
20.30of the legislative body from which the member was appointed, the member vacates
20.31membership on the commission.
20.32    Subd. 8. Vacancies. If a vacancy occurs, the appointing authority shall appoint a
20.33person to serve for the remainder of the unexpired term in the same manner as the original
20.34appointment.
20.35    Subd. 9. Officers. The commission shall have a chair and vice-chair as presiding
20.36officers.
21.1    Subd. 10. Quorum; voting. Seven members of the commission constitute a
21.2quorum. A final action or recommendation may not be made unless approved by a
21.3recorded vote of at least seven members. All other actions by the commission shall be
21.4decided by a majority of the members present and voting.
21.5    Subd. 11. Compensation. Each public member shall be reimbursed for expenses
21.6as provided in section 15.0575. Compensation for legislators is as determined by the
21.7members' legislative chamber.

21.8    Sec. 5. [3D.04] STAFF.
21.9The Legislative Coordinating Commission shall provide staff and administrative
21.10services for the commission.

21.11    Sec. 6. [3D.05] RULES.
21.12The commission may adopt rules necessary to carry out this chapter.

21.13    Sec. 7. [3D.06] AGENCY REPORT TO COMMISSION.
21.14Before September 1 of the odd-numbered year before the year in which a state
21.15agency is sunset, the agency commissioner shall report to the commission:
21.16(1) information regarding the application to the agency of the criteria in section
21.173D.10;
21.18(2) a priority-based budget for the agency;
21.19(3) an inventory of all boards, commissions, committees, and other entities related
21.20to the agency; and
21.21(4) any other information that the agency commissioner considers appropriate or that
21.22is requested by the commission.

21.23    Sec. 8. [3D.07] COMMISSION DUTIES.
21.24Before January 1 of the year in which a state agency subject to this chapter and its
21.25advisory committees are sunset, the commission shall:
21.26(1) review and take action necessary to verify the reports submitted by the agency;
21.27and
21.28(2) conduct a review of the agency based on the criteria provided in section 3D.10
21.29and prepare a written report.

21.30    Sec. 9. [3D.08] PUBLIC HEARINGS.
22.1Before February 1 of the year a state agency subject to this chapter and its advisory
22.2committees are sunset, the commission shall conduct public hearings concerning but not
22.3limited to the application to the agency of the criteria provided in section 3D.10.

22.4    Sec. 10. [3D.09] COMMISSION REPORT.
22.5By February 1 of each even-numbered year, the commission shall present to the
22.6legislature and the governor a report on the agencies and advisory committees reviewed.
22.7In the report the commission shall include:
22.8(1) its findings regarding the criteria prescribed by section 3D.10;
22.9(2) its recommendations based on the matters prescribed by section 3D.11; and
22.10(3) other information the commission considers necessary for a complete review
22.11of the agency.

22.12    Sec. 11. [3D.10] CRITERIA FOR REVIEW.
22.13The commission and its staff shall consider the following criteria in determining
22.14whether a public need exists for the continuation of a state agency or its advisory
22.15committees or for the performance of the functions of the agency or its advisory
22.16committees:
22.17(1) the efficiency and effectiveness with which the agency or the advisory committee
22.18operates;
22.19(2) an identification of the mission, goals, and objectives intended for the agency or
22.20advisory committee and of the problem or need that the agency or advisory committee
22.21was intended to address and the extent to which the mission, goals, and objectives have
22.22been achieved and the problem or need has been addressed;
22.23(3) an identification of any activities of the agency in addition to those granted by
22.24statute and of the authority for those activities and the extent to which those activities
22.25are needed;
22.26(4) an assessment of authority of the agency relating to fees, inspections,
22.27enforcement, and penalties;
22.28(5) whether less restrictive or alternative methods of performing any function that
22.29the agency performs could adequately protect or provide service to the public;
22.30(6) the extent to which the jurisdiction of the agency and the programs administered
22.31by the agency overlap or duplicate those of other agencies, the extent to which the agency
22.32coordinates with those agencies, and the extent to which the programs administered by the
22.33agency can be consolidated with the programs of other state agencies;
23.1(7) the promptness and effectiveness with which the agency addresses complaints
23.2concerning entities or other persons affected by the agency, including an assessment of the
23.3agency's administrative hearings process;
23.4(8) an assessment of the agency's rulemaking process and the extent to which the
23.5agency has encouraged participation by the public in making its rules and decisions and
23.6the extent to which the public participation has resulted in rules that benefit the public;
23.7(9) the extent to which the agency has complied with federal and state laws and
23.8applicable rules regarding equality of employment opportunity and the rights and privacy
23.9of individuals, and state law and applicable rules of any state agency regarding purchasing
23.10guidelines and programs for historically underutilized businesses;
23.11(10) the extent to which the agency issues and enforces rules relating to potential
23.12conflicts of interest of its employees;
23.13(11) the extent to which the agency complies with chapter 13 and follows records
23.14management practices that enable the agency to respond efficiently to requests for public
23.15information; and
23.16(12) the effect of federal intervention or loss of federal funds if the agency is
23.17abolished.

23.18    Sec. 12. [3D.11] RECOMMENDATIONS.
23.19(a) In its report on a state agency, the commission shall:
23.20(1) make recommendations on the abolition, continuation, or reorganization of each
23.21affected state agency and its advisory committees and on the need for the performance of
23.22the functions of the agency and its advisory committees;
23.23(2) make recommendations on the consolidation, transfer, or reorganization of
23.24programs within state agencies not under review when the programs duplicate functions
23.25performed in agencies under review; and
23.26(3) make recommendations to improve the operations of the agency, its policy body,
23.27and its advisory committees, including management recommendations that do not require
23.28a change in the agency's enabling statute.
23.29(b) The commission shall include the estimated fiscal impact of its recommendations
23.30and may recommend appropriation levels for certain programs to improve the operations
23.31of the state agency.
23.32(c) The commission shall have drafts of legislation prepared to carry out the
23.33commission's recommendations under this section, including legislation necessary
23.34to continue the existence of agencies that would otherwise sunset if the commission
23.35recommends continuation of an agency.
24.1(d) After the legislature acts on the report under section 3D.09, the commission shall
24.2present to the legislative auditor the commission's recommendations that do not require
24.3a statutory change to be put into effect. Subject to the legislative audit commission's
24.4approval, the legislative auditor may examine the recommendations and include as part
24.5of the next audit of the agency a report on whether the agency has implemented the
24.6recommendations and, if so, in what manner.

24.7    Sec. 13. [3D.12] MONITORING OF RECOMMENDATIONS.
24.8During each legislative session, the staff of the commission shall monitor legislation
24.9affecting agencies that have undergone sunset review and shall periodically report
24.10to the members of the commission on proposed changes that would modify prior
24.11recommendations of the commission.

24.12    Sec. 14. [3D.13] REVIEW OF ADVISORY COMMITTEES.
24.13An advisory committee, the primary function of which is to advise a particular state
24.14agency, is subject to sunset on the date set for sunset of the agency unless the advisory
24.15committee is expressly continued by law.

24.16    Sec. 15. [3D.14] CONTINUATION BY LAW.
24.17During the regular session immediately before the sunset of a state agency or an
24.18advisory committee that is subject to this chapter, the legislature may enact legislation
24.19to continue the agency or advisory committee for a period not to exceed 12 years. This
24.20chapter does not prohibit the legislature from:
24.21(1) terminating a state agency or advisory committee subject to this chapter at a date
24.22earlier than that provided in this chapter; or
24.23(2) considering any other legislation relative to a state agency or advisory committee
24.24subject to this chapter.

24.25    Sec. 16. [3D.15] PROCEDURE AFTER TERMINATION.
24.26    Subdivision 1. Termination. Unless otherwise provided by law:
24.27(1) if after sunset review a state agency is abolished, the agency may continue in
24.28existence until June 30 of the following year to conclude its business;
24.29(2) abolishment does not reduce or otherwise limit the powers and authority of the
24.30state agency during the concluding year;
24.31(3) a state agency is terminated and shall cease all activities at the expiration of
24.32the one-year period; and
25.1(4) all rules that have been adopted by the state agency expire at the expiration of
25.2the one-year period.
25.3    Subd. 2. Funds of abolished agency or advisory committee. (a) Any unobligated
25.4and unexpended appropriations of an abolished agency or advisory committee lapse on
25.5June 30 of the year after abolishment.
25.6(b) Except as provided by subdivision 4 or as otherwise provided by law, all money
25.7in a dedicated fund of an abolished state agency or advisory committee on June 30 of the
25.8year after abolishment is transferred to the general fund. The part of the law dedicating
25.9the money to a specific fund of an abolished agency becomes void on June 30 of the year
25.10after abolishment.
25.11    Subd. 3. Property and records of abolished agency or advisory committee.
25.12Unless the governor designates an appropriate state agency as prescribed by subdivision 4,
25.13property and records in the custody of an abolished state agency or advisory committee
25.14on June 30 of the year after abolishment must be transferred to the commissioner of
25.15administration. If the governor designates an appropriate state agency, the property and
25.16records must be transferred to the designated state agency.
25.17    Subd. 4. Continuing obligations. (a) The legislature recognizes the state's
25.18continuing obligation to pay bonded indebtedness and all other obligations, including
25.19lease, contract, and other written obligations, incurred by a state agency or advisory
25.20committee abolished under this chapter, and this chapter does not impair or impede the
25.21payment of bonded indebtedness and all other obligations, including lease, contract, and
25.22other written obligations, in accordance with their terms. If an abolished state agency or
25.23advisory committee has outstanding bonded indebtedness or other outstanding obligations,
25.24including lease, contract, and other written obligations, the bonds and all other obligations,
25.25including lease, contract, and other written obligations, remain valid and enforceable in
25.26accordance with their terms and subject to all applicable terms and conditions of the laws
25.27and proceedings authorizing the bonds and all other obligations, including lease, contract,
25.28and other written obligations.
25.29(b) The governor shall designate an appropriate state agency that shall continue to
25.30carry out all covenants contained in the bonds and in all other obligations, including lease,
25.31contract, and other written obligations, and the proceedings authorizing them, including
25.32the issuance of bonds, and the performance of all other obligations, including lease,
25.33contract, and other written obligations, to complete the construction of projects or the
25.34performance of other obligations, including lease, contract, and other written obligations.
25.35(c) The designated state agency shall provide payment from the sources of payment
25.36of the bonds in accordance with the terms of the bonds and shall provide payment from
26.1the sources of payment of all other obligations, including lease, contract, and other written
26.2obligations, in accordance with their terms, whether from taxes, revenues, or otherwise,
26.3until the bonds and interest on the bonds are paid in full and all other obligations,
26.4including lease, contract, and other written obligations, are performed and paid in full.
26.5If the proceedings so provide, all funds established by laws or proceedings authorizing
26.6the bonds or authorizing other obligations, including lease, contract, and other written
26.7obligations, must remain with the comptroller or the previously designated trustees. If the
26.8proceedings do not provide that the funds remain with the comptroller or the previously
26.9designated trustees, the funds must be transferred to the designated state agency.

26.10    Sec. 17. [3D.16] ASSISTANCE OF AND ACCESS TO STATE AGENCIES.
26.11The commission may request the assistance of state agencies and officers. When
26.12assistance is requested, a state agency or officer shall assist the commission. In carrying
26.13out its functions under this chapter, the commission or its designated staff member may
26.14inspect the records, documents, and files of any state agency.

26.15    Sec. 18. [3D.17] RELOCATION OF EMPLOYEES.
26.16If an employee is displaced because a state agency or its advisory committee is
26.17abolished or reorganized, the state agency shall make a reasonable effort to relocate the
26.18displaced employee.

26.19    Sec. 19. [3D.18] SAVING PROVISION.
26.20Except as otherwise expressly provided, abolition of a state agency does not affect
26.21rights and duties that matured, penalties that were incurred, civil or criminal liabilities that
26.22arose, or proceedings that were begun before the effective date of the abolition.

26.23    Sec. 20. [3D.19] REVIEW OF PROPOSED LEGISLATION CREATING AN
26.24AGENCY.
26.25Each bill filed in a house of the legislature that would create a new state agency or
26.26a new advisory committee to a state agency shall be reviewed by the commission. The
26.27commission shall review the bill to determine if:
26.28(1) the proposed functions of the agency or committee could be administered by one
26.29or more existing state agencies or advisory committees;
26.30(2) the form of regulation, if any, proposed by the bill is the least restrictive form of
26.31regulation that will adequately protect the public;
27.1(3) the bill provides for adequate public input regarding any regulatory function
27.2proposed by the bill; and
27.3(4) the bill provides for adequate protection against conflicts of interest within
27.4the agency or committee.

27.5    Sec. 21. [3D.20] GIFTS AND GRANTS.
27.6The commission may accept gifts, grants, and donations from any organization
27.7described in section 501(c)(3) of the Internal Revenue Code for the purpose of funding
27.8any activity under this chapter. All gifts, grants, and donations must be accepted in an
27.9open meeting by a majority of the voting members of the commission and reported in the
27.10public record of the commission with the name of the donor and purpose of the gift, grant,
27.11or donation. Money received under this section is appropriated to the commission.

27.12    Sec. 22. [3D.21] EXPIRATION.
27.13    Subdivision 1. Group 1. The following agencies are sunset and expire on June
27.1430, 2012: Department of Health, Department of Human Rights, Department of Human
27.15Services, all health-related licensing boards listed in section 214.01, Council on Affairs
27.16of Chicano/Latino People, Council on Black Minnesotans, Council on Asian-Pacific
27.17Minnesotans, Indian Affairs Council, Council on Disabilities, and all advisory groups
27.18associated with these agencies.
27.19    Subd. 2. Group 2. The following agencies are sunset and expire on June 30, 2014:
27.20Department of Education, Board of Teaching, Minnesota Office of Higher Education, and
27.21all advisory groups associated with these agencies.
27.22    Subd. 3. Group 3. The following agencies are sunset and expire on June 30, 2016:
27.23Department of Commerce, Department of Employment and Economic Development,
27.24Department of Labor and Industry, all non-health-related licensing boards listed in
27.25section 214.01 except as otherwise provided in this section, Explore Minnesota Tourism,
27.26Public Utilities Commission, Iron Range Resources and Rehabilitation Board, Bureau of
27.27Mediation Services, Combative Sports Commission, Amateur Sports Commission, and all
27.28advisory groups associated with these agencies.
27.29    Subd. 4. Group 4. The following agencies are sunset and expire on June 30, 2018:
27.30Department of Corrections, Department of Public Safety, Department of Transportation,
27.31Peace Officer Standards and Training Board, Corrections Ombudsman, and all advisory
27.32groups associated with these agencies.
27.33    Subd. 5. Group 5. The following agencies are sunset and expire on June 30, 2020:
27.34Department of Agriculture, Department of Natural Resources, Pollution Control Agency,
28.1Board of Animal Health, Board of Water and Soil Resources, and all advisory groups
28.2associated with these agencies.
28.3    Subd. 6. Group 6. The following agencies are sunset and expire on June 30, 2022:
28.4Department of Administration, Department of Management and Budget, Department of
28.5Military Affairs, Department of Revenue, Department of Veterans Affairs, Arts Board,
28.6Minnesota Zoo, Office of Administrative Hearings, Campaign Finance and Public
28.7Disclosure Board, Capitol Area Architectural and Planning Board, Office of Enterprise
28.8Technology, Minnesota Racing Commission, and all advisory groups associated with
28.9these agencies.
28.10    Subd. 7. Continuation. Following sunset review of an agency, the legislature may
28.11act within the same legislative session in which the sunset report was received on Sunset
28.12Advisory Commission recommendations to continue or reorganize the agency.
28.13    Subd. 8. Other groups. The commission may review, under the criteria in
28.14section 3D.10, and propose to the legislature an expiration date for any agency, board,
28.15commission, or program not listed in this section.

28.16    Sec. 23. Minnesota Statutes 2010, section 6.48, is amended to read:
28.176.48 EXAMINATION OF COUNTIES; COST, FEES.
28.18(a) All the powers and duties conferred and imposed upon the state auditor shall
28.19be exercised and performed by the state auditor in respect to the offices, institutions,
28.20public property, and improvements of several counties of the state. At least once in each
28.21year, if funds and personnel permit, the state auditor may visit, without previous notice,
28.22each county and make a thorough examination of all accounts and records relating to the
28.23receipt and disbursement of the public funds and the custody of the public funds and
28.24other property. If the audit is performed by a private certified public accountant, the state
28.25auditor may require additional information from the private certified public accountant as
28.26the state auditor deems in the public interest. The state auditor may accept the audit or
28.27make additional examinations as the state auditor deems to be in the public interest. The
28.28state auditor shall prescribe and install systems of accounts and financial reports that shall
28.29be uniform, so far as practicable, for the same class of offices. A copy of the report of
28.30such examination shall be filed and be subject to public inspection in the office of the state
28.31auditor and another copy in the office of the auditor of the county thus examined. The state
28.32auditor may accept the records and audit, or any part thereof, of the Department of Human
28.33Services in lieu of examination of the county social welfare funds, if such audit has been
28.34made within any period covered by the state auditor's audit of the other records of the
28.35county. If any such examination shall disclose malfeasance, misfeasance, or nonfeasance
29.1in any office of such county, such report shall be filed with the county attorney of the
29.2county, and the county attorney shall institute such civil and criminal proceedings as the
29.3law and the protection of the public interests shall require.
29.4(b) The county receiving any examination shall pay to the state general fund,
29.5notwithstanding the provisions of section 16A.125, the total cost and expenses of such
29.6examinations, including the salaries paid to the examiners while actually engaged in
29.7making such examination. The state auditor on deeming it advisable may bill counties,
29.8having a population of 200,000 or over, monthly for services rendered and the officials
29.9responsible for approving and paying claims shall cause said bill to be promptly paid. The
29.10general fund shall be credited with all collections made for any such examinations.
29.11(c) Notwithstanding paragraph (a), a county may provide for an audit to be
29.12performed by a certified public accountant firm meeting the requirements of section
29.13326A.05. A county must notify the state auditor before January 1 of a year in which the
29.14county intends to have an audit performed by a certified public accounting firm. A county
29.15currently using a certified public accounting firm must notify the state auditor before
29.16January 1 of a year in which the county intends for the state auditor to audit the county.
29.17The audit performed under this paragraph must meet the standards and be in the form
29.18required by the state auditor. The state auditor may require additional information from
29.19the certified public accountant firm as the state auditor deems in the public interest, but the
29.20state auditor must accept the audit unless the state auditor determines that it does not meet
29.21recognized industry auditing standards or is not in the form required by the state auditor.

29.22    Sec. 24. Minnesota Statutes 2010, section 15.06, subdivision 8, is amended to read:
29.23    Subd. 8. Number of deputy commissioners; no assistant commissioners. Unless
29.24specifically authorized by statute, other than section 43A.08, subdivision 2 Except for
29.25the Department of Veterans Affairs, no department or agency specified in subdivision 1
29.26shall have more than one deputy commissioner. No department or agency specified in
29.27subdivision 1 may employ an assistant commissioner.

29.28    Sec. 25. [15.062] COST-EFFECTIVE PROVISION OF SERVICES.
29.29(a) The head or governing board of each state department or agency, including the
29.30Minnesota state colleges and universities, must carry out the agency's powers and duties
29.31in the most cost-effective manner possible. The agency head or governing board must
29.32determine if the most cost-effective manner of carrying out each of the agency's powers
29.33and duties is to hire state employees or to contract with outside sources.
30.1(b) If an agency decides to seek an outside vendor to perform work currently done
30.2by state employees, the agency must permit groups of state employees to compete for the
30.3business by submitting responses to the agency's solicitation documents. Notwithstanding
30.4section 16A.127 or any other law to the contrary, no statewide or agency indirect costs
30.5may be assessed to a group of agency employees with respect to work performed under
30.6a contract awarded to a group of employees under this section. This section supersedes
30.7any provision of law preventing a state agency from entering into a contract with a state
30.8employee.

30.9    Sec. 26. [15.76] SAVI PROGRAM.
30.10    Subdivision 1. Program established. The state agency value initiative (SAVI)
30.11program is established to encourage state agencies to identify cost-effective and efficiency
30.12measures in agency programs and operations that result in cost savings for the state. All
30.13state agencies, including Minnesota State Colleges and Universities, may participate in
30.14this program.
30.15    Subd. 2. Retained savings. (a) In order to encourage innovation and creative
30.16cost savings by state employees, upon approval of the commissioner of management
30.17and budget, 50 percent of any appropriations for agency operations that remain unspent
30.18at the end of a biennium because of unanticipated innovation, efficiencies, or creative
30.19cost-savings may be carried forward and retained by the agency to fund specific agency
30.20proposals or projects. Agencies choosing to spend retained savings funds must ensure that
30.21project expenditures do not create future obligations beyond the amounts available from
30.22the retained savings. The retained savings must be used only to fund projects that directly
30.23support the agency's mission. This section does not restrict authority granted by other law
30.24to carry forward money for a different period or for different purposes.
30.25(b) This section supersedes any contrary provision of section 16A.28.
30.26    Subd. 3. Special peer review panel; review process. (a) Each participating agency
30.27must organize a peer review panel that will determine which proposal or project receives
30.28funding from the SAVI program. The peer review panel must be comprised of department
30.29employees who are credited with cost-savings initiatives and department managers. The
30.30ratio between managers and department employees must be balanced.
30.31(b) An agency may spend money for a project recommended for funding by the
30.32peer review panel after:
30.33(1) the agency has posted notice of spending for the proposed project on the agency
30.34Web site for at least 30 days; and
31.1(2) the commissioner of management and budget has approved spending money
31.2from the SAVI account for the project.
31.3(c) Before approving a project, the commissioner of management and budget
31.4must submit the request to the Legislative Advisory Commission for its review and
31.5recommendation. Upon receiving a request from the commissioner, the Legislative
31.6Advisory Commission shall post notice of the request on a legislative Web site for at least
31.730 days. Failure of the commission to make a recommendation within this 30-day period
31.8is considered a negative recommendation. A recommendation of the commission must be
31.9made at a meeting of the commission unless a written recommendation is signed by all
31.10the members entitled to vote on the item.
31.11    Subd. 4. SAVI-dedicated account. Each agency that participates in the SAVI
31.12program shall have a SAVI-dedicated account in the special revenue fund, or other
31.13appropriate fund as determined by the commissioner of management and budget, into
31.14which the agency's savings are deposited. The agency will manage and review projects
31.15that are funded from this account. Money in the account is appropriated to the participating
31.16agency for purposes authorized by this section.
31.17    Subd. 5. Expiration. This section expires June 30, 2018.
31.18EFFECTIVE DATE.This section is effective June 30, 2013, and first applies to
31.19funds to be carried forward from the biennium ending June 30, 2013, to the biennium
31.20beginning July 1, 2013.

31.21    Sec. 27. [15B.055] PUBLIC ACCESS TO PARKING SPACES.
31.22To provide the public with greater access to legislative proceedings, all parking
31.23spaces on Aurora Avenue in front of the Capitol building must be reserved for the public.
31.24Revenue derived from public parking in these spaces must be deposited in the general fund.

31.25    Sec. 28. Minnesota Statutes 2010, section 16A.10, subdivision 1a, is amended to read:
31.26    Subd. 1a. Purpose of performance data. Performance data shall be presented in
31.27the budget proposal to:
31.28(1) provide information so that the legislature can determine the extent to which
31.29state programs and activities are successful;
31.30(2) encourage agencies to develop clear and measurable goals and objectives for
31.31their programs and activities; and
31.32(3) strengthen accountability to Minnesotans by providing a record of state
31.33government's performance in providing effective and efficient services.

32.1    Sec. 29. Minnesota Statutes 2010, section 16A.10, subdivision 1b, is amended to read:
32.2    Subd. 1b. Performance data format. (a) As part of the budget proposal, agencies
32.3shall:
32.4(1) describe the goals and objectives of each agency program and activity; and
32.5(2) present performance data that measures the performance of programs and
32.6activities in meeting program goals and objectives.
32.7(b) Measures reported must be outcome-based and objective, and may include
32.8indicators of outputs, efficiency, outcomes, and other measures relevant to understanding
32.9each program and activity.
32.10(c) Agencies shall present as much historical information as needed to understand
32.11major trends and shall set targets for future performance issues where feasible and
32.12appropriate. The information shall appropriately highlight agency performance issues that
32.13would assist legislative review and decision making.
32.14(d) For purposes of this subdivision, subdivision 1a, and section 16A.106, the terms
32.15"program" and "activity" are used in the same manner as the terms are used in state
32.16budgeting. However, the commissioner may authorize an agency to define these terms in a
32.17different manner if that allows for a more effective presentation of performance data.

32.18    Sec. 30. Minnesota Statutes 2010, section 16A.10, subdivision 1c, is amended to read:
32.19    Subd. 1c. Performance measures for change items. For each change item in the
32.20budget proposal requesting new or increased funding, the budget document must present
32.21proposed performance measures that can be used to determine if the new or increased
32.22funding is accomplishing its goals. To the extent possible, each budget change item
32.23must identify relevant Minnesota Milestones and other statewide goals and indicators
32.24related to the proposed initiative. The commissioner must report to the Subcommittee on
32.25Government Accountability established under section 3.885, subdivision 10, regarding the
32.26format to be used for the presentation and selection of Minnesota Milestones and other
32.27statewide goals and indicators.

32.28    Sec. 31. Minnesota Statutes 2010, section 16A.103, subdivision 1a, is amended to read:
32.29    Subd. 1a. Forecast parameters. The forecast must assume the continuation of
32.30current laws and reasonable estimates of projected growth in the national and state
32.31economies and affected populations. Revenue must be estimated for all sources provided
32.32for in current law. Expenditures must be estimated for all obligations imposed by law and
32.33those projected to occur as a result of variables outside the control of the legislature.
32.34Expenditures for the current biennium must be based on actual appropriations or, for
33.1forecasted programs, the amount needed to fund the formula in law. The base for
33.2expenditures projections for the next biennium is the amount appropriated in the second
33.3year of the current biennium, except as provided by other law, or, for forecasted programs,
33.4the amount needed to fund the formula in law. Expenditure estimates must not include an
33.5allowance for inflation.

33.6    Sec. 32. [16A.106] ZERO-BASED BUDGETING PRINCIPLES.
33.7(a) The detailed budget presented to the legislature must include:
33.8(1) a description of each budget activity for which the agency or entity receives
33.9an appropriation in the current biennium or for which the agency or entity requests an
33.10appropriation in the next biennium;
33.11(2) for each budget activity, three alternative funding levels or alternative ways of
33.12performing the budget activity, at least one of which is less than the previous biennium's
33.13actual expenditures for that budget activity, a summary of the priorities that would be
33.14accomplished within each level compared to a zero budget, and the additional increments
33.15of value that would be added by the higher funding levels compared to what would be
33.16accomplished if there were no funding for the activity; and
33.17(3) for each budget activity, performance data as specified in section 16A.10,
33.18subdivision 1b, the predicted effect of the three alternative funding levels on future
33.19performance, and also one or more measures of cost efficiency and effectiveness of
33.20program delivery, which must include comparisons to other states or entities with similar
33.21programs.
33.22(b) The commissioner's budget preparation guidelines and instructions must contain
33.23requirements, deadlines, and technical assistance to facilitate implementation of this
33.24section. After consultation with the legislative commission on planning and fiscal policy,
33.25the commissioner's instructions may establish parameters for the three alternative funding
33.26levels required in clause (3).
33.27(c) The governor's recommendations must prioritize the budget activities within an
33.28agency or program area. To the extent activities in more than one agency or program area
33.29are meeting the same goals, the recommendations must prioritize budget activities across
33.30agencies or programs with the same goals, and this prioritization must include agencies or
33.31programs not subject to zero-based budgeting principles that biennium.
33.32(d) Expenditures for debt service under section 16A.642, subdivision 10, are not
33.33subject to zero-based budgeting principles.
33.34EFFECTIVE DATE.(a) The zero-based budgeting principles in this section first
33.35apply to the following budget proposals for the biennium beginning July 1, 2013:
34.1(1) legislative branch;
34.2(2) judicial branch;
34.3(3) Minnesota State Colleges and Universities system; and
34.4(4) approximately half of expenditure programs in the executive branch, designated
34.5by the governor, in consultation with the chairs and lead minority members of the senate
34.6Finance Committee and the house of representatives Ways and Means Committee.
34.7(b) The zero-based budgeting principles in this section apply to all budget proposals
34.8for the biennium beginning July 1, 2015, and after.

34.9    Sec. 33. Minnesota Statutes 2010, section 16A.11, subdivision 3, is amended to read:
34.10    Subd. 3. Part two: detailed budget. (a) Part two of the budget, the detailed budget
34.11estimates both of expenditures and revenues, must contain any statements on the financial
34.12plan which the governor believes desirable or which may be required by the legislature.
34.13The detailed estimates shall include the governor's budget arranged in tabular form.
34.14(b) For programs designated for the zero-based budgeting principles under section
34.1516A.106, the budget must be prepared according to the requirements of that section.
34.16(c) For programs not designated for zero-based budgeting principles under section
34.1716A.106, tables listing expenditures for the next biennium must show the appropriation
34.18base for each year as defined in section 16A.103, subdivision 1c. The appropriation base
34.19is the amount appropriated for the second year of the current biennium. The tables must
34.20separately show any adjustments to the base required by current law or policies of the
34.21commissioner of management and budget. For forecasted programs, the tables must also
34.22show the amount of the forecast adjustments, based on the most recent forecast prepared
34.23by the commissioner of management and budget under section 16A.103. For all programs,
34.24the tables must show the amount of appropriation changes recommended by the governor,
34.25after adjustments to the base and forecast adjustments, and the total recommendation of
34.26the governor for that year.
34.27(c) (d) The detailed estimates must include a separate line listing the total cost of
34.28professional and technical service contracts for the prior biennium and the projected costs
34.29of those contracts for the current and upcoming biennium. They must also include a
34.30summary of the personnel employed by the agency, reflected as full-time equivalent
34.31positions.
34.32(d) (e) The detailed estimates for internal service funds must include the number of
34.33full-time equivalents by program; detail on any loans from the general fund, including
34.34dollar amounts by program; proposed investments in technology or equipment of $100,000
34.35or more; an explanation of any operating losses or increases in retained earnings; and a
35.1history of the rates that have been charged, with an explanation of any rate changes and
35.2the impact of the rate changes on affected agencies.

35.3    Sec. 34. Minnesota Statutes 2010, section 16A.28, subdivision 3, is amended to read:
35.4    Subd. 3. Lapse. Any portion of any appropriation not carried forward and remaining
35.5unexpended and unencumbered at the close of a fiscal year lapses to the fund from which
35.6it was originally appropriated. Except as provided in section 15.76, any appropriation
35.7amounts not carried forward and remaining unexpended and unencumbered at the close of
35.8a biennium lapse to the fund from which the appropriation was made.
35.9EFFECTIVE DATE.This section is effective June 30, 2013.

35.10    Sec. 35. [16A.90] EMPLOYEE GAINSHARING SYSTEM.
35.11The commissioner shall establish a program to provide onetime bonus compensation
35.12to state employees for efforts made to reduce the costs of operating state government or for
35.13ways of providing better or more efficient state services. The commissioner may make a
35.14onetime award to an employee or group of employees whose suggestion or involvement in
35.15a project is determined by the commissioner to have resulted in documented cost-savings
35.16to the state. The maximum award is ten percent of the documented savings in the
35.17first fiscal year in which the savings are realized. The award must be paid from the
35.18appropriation to which the savings accrued.

35.19    Sec. 36. [16A.93] MINNESOTA PAY FOR PERFORMANCE ACT.
35.20Sections 16A.93 to 16A.96 may be cited as the "Minnesota Pay for Performance
35.21Act of 2011."
35.22EFFECTIVE DATE.This section is effective the day following final enactment.

35.23    Sec. 37. [16A.94] PROGRAM.
35.24    Subdivision 1. Pilot program established. The commissioner shall implement a
35.25pilot program to demonstrate the feasibility and desirability of using state appropriation
35.26bonds to pay for certain services based on performance and outcomes for the people served.
35.27    Subd. 2. Oversight committee. (a) The commissioner shall appoint an oversight
35.28committee to:
35.29(1) identify criteria to select one or more services to be included in the pilot program;
35.30(2) identify the conditions of performance and desired outcomes for the people
35.31served by each service selected;
36.1(3) identify criteria to evaluate whether a service has met the performance
36.2conditions; and
36.3(4) provide any other advice or assistance requested by the commissioner.
36.4(b) The oversight committee must include the commissioners of the Departments
36.5of Human Services, Employment and Economic Development, and Administration, or
36.6their designees; a representative of a nonprofit organization that has participated in a
36.7pay-for-performance program; and any other person or organization that the commissioner
36.8determines would be of assistance in developing and implementing the pilot program.
36.9    Subd. 3. Contracts. The commissioner and the commissioner of the agency with
36.10a service to be provided through the pilot program shall enter into a contract with the
36.11selected provider. The contract must specify the service to be provided, the time frame in
36.12which it is to be provided, the outcome required for payment, and any other terms deemed
36.13necessary or convenient for implementation of the pilot program. The commissioner
36.14shall pay a provider that has met the terms and conditions of a contract with money
36.15appropriated to the commissioner from the special appropriation bond proceeds account
36.16established in section 16A.96. At a minimum, before the commissioner pays a provider,
36.17the commissioner must determine that the state's return on investment is positive.
36.18    Subd. 4. Return on investment calculation. The commissioner, in consultation
36.19with the oversight committee, must establish the method and data required for calculating
36.20the state's return on investment. The data at a minimum must include:
36.21(1) state income taxes and any other revenues collected in the year after the service
36.22was provided that would not have been collected without the service; and
36.23(2) costs avoided by the state by providing the service.
36.24A positive return on investment for the state will cover the state's costs in financing
36.25and administering the pilot program through documented increased state tax revenue
36.26or cost avoidance.
36.27    Subd. 5. Report to governor and legislature. The commissioner must report to the
36.28governor and legislative committees with jurisdiction over capital investment, finance, and
36.29ways and means, and the services included in the pilot program, by January 15 of each
36.30year following a year in which the pilot program is operating. The report must describe
36.31and discuss the criteria for selection and evaluation of services to be provided through
36.32the program, the net benefits to the state of the program, the state's return on investment,
36.33the cost of the services provided by other means in the most recent past, the time frame
36.34for payment for the services, and the timing and costs for sale and issuance of the bonds
36.35authorized in section 16A.96.
36.36EFFECTIVE DATE.This section is effective the day following final enactment.

37.1    Sec. 38. [16A.96] MINNESOTA PAY FOR PERFORMANCE PROGRAM;
37.2APPROPRIATION BONDS.
37.3    Subdivision 1. Definitions. (a) The definitions in this subdivision apply to this
37.4section.
37.5(b) "Appropriation bond" means a bond, note, or other similar instrument of the state
37.6payable during a biennium from one or more of the following sources:
37.7(1) money appropriated by law in any biennium for debt service due with respect
37.8to obligations described in subdivision 2, paragraph (b);
37.9(2) proceeds of the sale of obligations described in subdivision 2, paragraph (b);
37.10(3) payments received for that purpose under agreements and ancillary arrangements
37.11described in subdivision 2, paragraph (d); and
37.12(4) investment earnings on amounts in clauses (1) to (3).
37.13(c) "Debt service" means the amount payable in any biennium of principal, premium,
37.14if any, and interest on appropriation bonds.
37.15    Subd. 2. Authority. (a) Subject to the limitations of this subdivision, the
37.16commissioner of management and budget may sell and issue appropriation bonds of the
37.17state under this section for the purposes of the Minnesota pay for performance program
37.18established in sections 16A.93 to 16A.96. Proceeds of the bonds must be credited to
37.19a special appropriation bond proceeds account in the state treasury. Net income from
37.20investment of the proceeds, as estimated by the commissioner, must be credited to the
37.21special appropriation bond proceeds account.
37.22(b) Appropriation bonds may be sold and issued in amounts that, in the opinion of
37.23the commissioner, are necessary to provide sufficient funds for achieving the purposes
37.24authorized as provided under paragraph (a), and pay debt service, pay costs of issuance,
37.25make deposits to reserve funds, pay the costs of credit enhancement, or make payments
37.26under other agreements entered into under paragraph (d); provided, however, that bonds
37.27issued and unpaid shall not exceed $20,000,000 in principal amount, excluding refunding
37.28bonds sold and issued under subdivision 4. During the biennium ending June 30, 2013,
37.29the commissioner may sell and issue bonds only in an amount that the commissioner
37.30determines will result in principal and interest payments less than the amount of savings to
37.31be generated through pay-for-performance contracts under section 16A.94. For programs
37.32achieving savings under a pay-for-performance contract, the commissioner must reduce
37.33general fund appropriations by at least the amount of principal and interest payments on
37.34bonds issued under this section.
38.1(c) Appropriation bonds may be issued in one or more series on the terms and
38.2conditions the commissioner determines to be in the best interests of the state, but the term
38.3on any series of bonds may not exceed 20 years.
38.4(d) At the time of, or in anticipation of, issuing the appropriation bonds, and at any
38.5time thereafter, so long as the appropriation bonds are outstanding, the commissioner
38.6may enter into agreements and ancillary arrangements relating to the appropriation
38.7bonds, including but not limited to trust indentures, liquidity facilities, remarketing or
38.8dealer agreements, letter of credit agreements, insurance policies, guaranty agreements,
38.9reimbursement agreements, indexing agreements, or interest exchange agreements. Any
38.10payments made or received according to the agreement or ancillary arrangement shall be
38.11made from or deposited as provided in the agreement or ancillary arrangement. The
38.12determination of the commissioner included in an interest exchange agreement that the
38.13agreement relates to an appropriation bond shall be conclusive.
38.14    Subd. 3. Form; procedure. (a) Appropriation bonds may be issued in the form
38.15of bonds, notes, or other similar instruments, and in the manner provided in section
38.1616A.672. In the event that any provision of section 16A.672 conflicts with this section,
38.17this section shall control.
38.18(b) Every appropriation bond shall include a conspicuous statement of the limitation
38.19established in subdivision 6.
38.20(c) Appropriation bonds may be sold at either public or private sale upon such terms
38.21as the commissioner shall determine are not inconsistent with this section and may be sold
38.22at any price or percentage of par value. Any bid received may be rejected.
38.23(d) Appropriation bonds may bear interest at a fixed or variable rate.
38.24    Subd. 4. Refunding bonds. The commissioner from time to time may issue
38.25appropriation bonds for the purpose of refunding any appropriation bonds then
38.26outstanding, including the payment of any redemption premiums on the bonds, any
38.27interest accrued or to accrue to the redemption date, and costs related to the issuance
38.28and sale of the refunding bonds. The proceeds of any refunding bonds may, in the
38.29discretion of the commissioner, be applied to the purchase or payment at maturity of the
38.30appropriation bonds to be refunded, to the redemption of the outstanding bonds on any
38.31redemption date, or to pay interest on the refunding bonds and may, pending application,
38.32be placed in escrow to be applied to the purchase, payment, retirement, or redemption.
38.33Any escrowed proceeds, pending such use, may be invested and reinvested in obligations
38.34that are authorized investments under section 11A.24. The income earned or realized on
38.35the investment may also be applied to the payment of the bonds to be refunded or interest
38.36or premiums on the refunded bonds, or to pay interest on the refunding bonds. After
39.1the terms of the escrow have been fully satisfied, any balance of the proceeds and any
39.2investment income may be returned to the general fund or, if applicable, the appropriation
39.3bond proceeds account for use in any lawful manner. All refunding bonds issued under
39.4this subdivision must be prepared, executed, delivered, and secured by appropriations in
39.5the same manner as the bonds to be refunded.
39.6    Subd. 5. Appropriation bonds as legal investments. Any of the following entities
39.7may legally invest any sinking funds, money, or other funds belonging to them or under
39.8their control in any appropriation bonds issued under this section:
39.9(1) the state, the investment board, public officers, municipal corporations, political
39.10subdivisions, and public bodies;
39.11(2) banks and bankers, savings and loan associations, credit unions, trust companies,
39.12savings banks and institutions, investment companies, insurance companies, insurance
39.13associations, and other persons carrying on a banking or insurance business; and
39.14(3) personal representatives, guardians, trustees, and other fiduciaries.
39.15    Subd. 6. No full faith and credit; state not required to make appropriations.
39.16The appropriation bonds are not public debt of the state, and the full faith, credit, and
39.17taxing powers of the state are not pledged to the payment of the appropriation bonds or to
39.18any payment that the state agrees to make under this section. Appropriation bonds shall
39.19not be obligations paid directly, in whole or in part, from a tax of statewide application
39.20on any class of property, income, transaction, or privilege. Appropriation bonds shall be
39.21payable in each fiscal year only from amounts that the legislature may appropriate for debt
39.22service for any fiscal year, provided that nothing in this section shall be construed to
39.23require the state to appropriate funds sufficient to make debt service payments with respect
39.24to the bonds in any fiscal year.
39.25    Subd. 7. Appropriation of proceeds. The proceeds of appropriation bonds and
39.26interest credited to the special appropriation bond proceeds account are appropriated to the
39.27commissioner for payment of contract obligations under the pay for performance program,
39.28as permitted by state and federal law, and nonsalary expenses incurred in conjunction
39.29with the sale of the appropriation bonds.
39.30    Subd. 8. Appropriation for debt service. The amount needed to pay principal and
39.31interest on appropriation bonds issued under this section is appropriated each year to the
39.32commissioner from the general fund subject to the repeal, unallotment under section
39.3316A.152, or cancellation otherwise pursuant to subdivision 6.
39.34EFFECTIVE DATE.This section is effective the day following final enactment.

40.1    Sec. 39. Minnesota Statutes 2010, section 16B.03, is amended to read:
40.216B.03 APPOINTMENTS.
40.3The commissioner is authorized to appoint staff, including two one deputy
40.4commissioners commissioner, in accordance with chapter 43A.

40.5    Sec. 40. [16C.075] E-VERIFY.
40.6A contract for services valued in excess of $50,000 must require certification from
40.7the vendor and any subcontractors that, as of the date services on behalf of the state of
40.8Minnesota will be performed, the vendor and all subcontractors have implemented or are
40.9in the process of implementing the federal E-Verify program for all newly hired employees
40.10in the United States who will perform work on behalf of the state of Minnesota.
40.11EFFECTIVE DATE.This section is effective July 1, 2011, and applies to contracts
40.12entered into on or after that date.

40.13    Sec. 41. Minnesota Statutes 2010, section 16C.08, subdivision 2, is amended to read:
40.14    Subd. 2. Duties of contracting agency. (a) Before an agency may seek approval of
40.15a professional or technical services contract valued in excess of $5,000, it must provide
40.16the following:
40.17    (1) a description of how the proposed contract or amendment is necessary and
40.18reasonable to advance the statutory mission of the agency;
40.19    (2) a description of the agency's plan to notify firms or individuals who may be
40.20available to perform the services called for in the solicitation;
40.21    (3) a description of the performance measures or other tools, including accessibility
40.22measures if applicable, that will be used to monitor and evaluate contract performance; and
40.23    (4) an explanation detailing, if applicable, why this procurement is being pursued
40.24unilaterally by the agency and not as an enterprise procurement.
40.25    (b) In addition to paragraph (a), the agency must certify that:
40.26    (1) no current state employee is able and available to perform the services called
40.27for by the contract;
40.28    (2) (1) the normal competitive bidding mechanisms will not provide for adequate
40.29performance of the services;
40.30    (3) (2) reasonable efforts will be made to publicize the availability of the contract
40.31to the public;
40.32    (4) (3) the agency will develop and implement a written plan providing for the
40.33assignment of specific agency personnel to manage the contract, including a monitoring
41.1and liaison function, the periodic review of interim reports or other indications of past
41.2performance, and the ultimate utilization of the final product of the services;
41.3    (5) (4) the agency will not allow the contractor to begin work before the contract is
41.4fully executed unless an exception under section 16C.05, subdivision 2a, has been granted
41.5by the commissioner and funds are fully encumbered;
41.6    (6) (5) the contract will not establish an employment relationship between the state
41.7or the agency and any persons performing under the contract; and
41.8    (7) (6) in the event the results of the contract work will be carried out or continued
41.9by state employees upon completion of the contract, the contractor is required to include
41.10state employees in development and training, to the extent necessary to ensure that after
41.11completion of the contract, state employees can perform any ongoing work related to the
41.12same function; and
41.13    (8) the agency will not contract out its previously eliminated jobs for four years
41.14without first considering the same former employees who are on the seniority unit layoff
41.15list who meet the minimum qualifications determined by the agency.
41.16    (c) A contract establishes an employment relationship for purposes of paragraph (b),
41.17clause (6) (5), if, under federal laws governing the distinction between an employee and
41.18an independent contractor, a person would be considered an employee.

41.19    Sec. 42. Minnesota Statutes 2010, section 16C.09, is amended to read:
41.2016C.09 PROCEDURE FOR SERVICE CONTRACTS.
41.21(a) Before entering into or approving a service contract, the commissioner must
41.22determine, at least, that:
41.23(1) no current state employee is able and available to perform the services called
41.24for by the contract;
41.25(2) (1) the work to be performed under the contract is necessary to the agency's
41.26achievement of its statutory responsibilities and there is statutory authority to enter into
41.27the contract;
41.28(3) (2) the contract will not establish an employment relationship between the state
41.29or the agency and any persons performing under the contract;
41.30(4) (3) the contractor and agents are not employees of the state, except as authorized
41.31in section 15.062;
41.32(5) (4) the contracting agency has specified a satisfactory method of evaluating and
41.33using the results of the work to be performed; and
41.34(6) (5) the combined contract and amendments will not exceed five years without
41.35specific, written approval by the commissioner according to established policy, procedures,
42.1and standards, or unless otherwise provided for by law. The term of the original contract
42.2must not exceed two years, unless the commissioner determines that a longer duration is
42.3in the best interest of the state.
42.4(b) For purposes of paragraph (a), clause (1), employees are available if qualified
42.5and:
42.6(1) are already doing the work in question; or
42.7(2) are on layoff status in classes that can do the work in question.
42.8An employee is not available if the employee is doing other work, is retired, or has decided
42.9not to do the work in question.
42.10(c) (b) This section does not apply to an agency's use of inmates pursuant to sections
42.11241.20 to 241.23 or to an agency's use of persons required by a court to provide:
42.12(1) community service; or
42.13(2) conservation or maintenance services on lands under the jurisdiction and control
42.14of the state.

42.15    Sec. 43. [16D.20] FEDERAL OFFSET PROGRAM.
42.16(a) The commissioner may enter into an agreement with the United States Secretary
42.17of the Treasury to participate in an offset program authorized under United States Code,
42.18title 31, section 3716, for the collection of debts owed to state agencies. The agreement
42.19may provide for the United States to submit debts owed to federal agencies for offset
42.20against state payments, similar to the procedures for offsetting debts owed to state
42.21agencies from federal payments.
42.22(b) The commissioner shall reduce any state payment by the amount of any federal
42.23debt submitted in accordance with the agreement authorized by this section, and pay such
42.24amount to the appropriate federal official in accordance with the procedures specified
42.25in such agreement.
42.26(c) The commissioner may, by rule, establish a reasonable administrative fee to be
42.27charged to the debtor for the contingency fee-based processing of state payment offsets for
42.28the recovery of federal nontax debts or the contingency fee-based processing of federal
42.29payment offsets for the recovery of state tax and nontax debt. The fee is a separate debt
42.30and may be withheld from any refund, reimbursement, or other money held for the debtor.
42.31(d) An agreement under this section must not allow for offset of payments if the
42.32debt that would be subject to the offset is being contested or if the time for appealing the
42.33determination of the debt has not yet expired.
43.1EFFECTIVE DATE.This section is effective the day following final enactment. As
43.2soon as possible after that date, the commissioner must discuss an agreement authorized
43.3under this section with appropriate federal officials, and if an agreement is entered into,
43.4the commissioner must begin to implement it to collect debts owed to the state as soon as
43.5possible.

43.6    Sec. 44. Minnesota Statutes 2010, section 37.06, is amended to read:
43.737.06 SECRETARY; LEGISLATIVE AUDITOR; DUTIES; REPORT.
43.8The secretary shall keep a complete record of the proceedings of the annual meetings
43.9of the State Agricultural Society and all meetings of the board of managers and any
43.10committee of the board, keep all accounts of the society other than those kept by the
43.11treasurer of the society, and perform other duties as directed by the board of managers. On
43.12or before December 31 each year, the secretary shall report to the governor for the fiscal
43.13year ending October 31 all the proceedings of the society during the current year and its
43.14financial condition as appears from its books. This report must contain a full, detailed
43.15statement of all receipts and expenditures during the year.
43.16The books and accounts of the society for the fiscal year must be examined and
43.17audited annually by an independent auditor, either a private auditor or the legislative
43.18auditor. If the audit is conducted by the legislative auditor, the cost of the examination
43.19must be paid by the society to the state and credited to the general fund.
43.20A summary of this examination, certified by the legislative auditor, must be
43.21appended to the secretary's report, along with the legislative auditor's recommendations
43.22and the proceedings of the first annual meeting of the society held following the secretary's
43.23report, including addresses made at the meeting as directed by the board of managers. The
43.24summary, recommendations, and proceedings must be printed in the same manner as the
43.25reports of state officers. Copies of the report must be printed annually and distributed as
43.26follows: to each society or association entitled to membership in the society, to each
43.27newspaper in the state, and the remaining copies as directed by the board of managers.

43.28    Sec. 45. Minnesota Statutes 2010, section 43A.08, subdivision 1, is amended to read:
43.29     Subdivision 1. Unclassified positions. Unclassified positions are held by employees
43.30who are:
43.31     (1) chosen by election or appointed to fill an elective office;
43.32     (2) heads of agencies required by law to be appointed by the governor or other
43.33elective officers, and the executive or administrative heads of departments, bureaus,
43.34divisions, and institutions specifically established by law in the unclassified service;
44.1     (3) deputy and assistant agency heads and one confidential secretary in the agencies
44.2listed in subdivision 1a and in the Office of Strategic and Long-Range Planning section
44.315.06, subdivision 1;
44.4     (4) the confidential secretary to each of the elective officers of this state and, for the
44.5secretary of state and state auditor, an additional deputy, clerk, or employee;
44.6     (5) intermittent help employed by the commissioner of public safety to assist in
44.7the issuance of vehicle licenses;
44.8     (6) employees in the offices of the governor and of the lieutenant governor and one
44.9confidential employee for the governor in the Office of the Adjutant General;
44.10     (7) employees of the Washington, D.C., office of the state of Minnesota;
44.11     (8) employees of the legislature and of legislative committees or commissions;
44.12provided that employees of the Legislative Audit Commission, except for the legislative
44.13auditor, the deputy legislative auditors, and their confidential secretaries, shall be
44.14employees in the classified service;
44.15     (9) presidents, vice-presidents, deans, other managers and professionals in
44.16academic and academic support programs, administrative or service faculty, teachers,
44.17research assistants, and student employees eligible under terms of the federal Economic
44.18Opportunity Act work study program in the Perpich Center for Arts Education and the
44.19Minnesota State Colleges and Universities, but not the custodial, clerical, or maintenance
44.20employees, or any professional or managerial employee performing duties in connection
44.21with the business administration of these institutions;
44.22     (10) officers and enlisted persons in the National Guard;
44.23     (11) attorneys, legal assistants, and three confidential employees appointed by the
44.24attorney general or employed with the attorney general's authorization;
44.25     (12) judges and all employees of the judicial branch, referees, receivers, jurors, and
44.26notaries public, except referees and adjusters employed by the Department of Labor
44.27and Industry;
44.28     (13) members of the State Patrol; provided that selection and appointment of State
44.29Patrol troopers must be made in accordance with applicable laws governing the classified
44.30service;
44.31     (14) examination monitors and intermittent training instructors employed by the
44.32Departments of Management and Budget and Commerce and by professional examining
44.33boards and intermittent staff employed by the technical colleges for the administration of
44.34practical skills tests and for the staging of instructional demonstrations;
44.35    (15) student workers;
45.1    (16) executive directors or executive secretaries appointed by and reporting to any
45.2policy-making board or commission established by statute;
45.3    (17) employees unclassified pursuant to other statutory authority;
45.4    (18) intermittent help employed by the commissioner of agriculture to perform
45.5duties relating to pesticides, fertilizer, and seed regulation;
45.6    (19) the administrators and the deputy administrators at the State Academies for the
45.7Deaf and the Blind; and
45.8    (20) chief executive officers in the Department of Human Services.

45.9    Sec. 46. Minnesota Statutes 2010, section 43A.20, is amended to read:
45.1043A.20 PERFORMANCE APPRAISAL AND PAY.
45.11(a) The commissioner shall design and maintain a performance appraisal system
45.12under which each employee in the civil service in the executive branch shall be evaluated
45.13and counseled on work performance at least once a year. The performance appraisal
45.14system must include three components:
45.15(1) evaluation of the individual employee's performance relative to goals for that
45.16individual, which must constitute a majority of the overall determination of an employee's
45.17performance;
45.18(2) evaluation of the performance of the individual employee's program, defined by
45.19the agency head, toward meeting targeted outcomes for the program; and
45.20(3) evaluation of the performance of the entire agency toward meeting targeted
45.21outcomes for the agency.
45.22(b) Individual pay increases for all employees not represented by an exclusive
45.23representative certified pursuant to chapter 179A shall be based on the evaluation
45.24evaluations required by paragraph (a) and other factors consistent with paragraph (a)
45.25that the commissioner negotiates in collective bargaining agreements or includes in the
45.26plans developed pursuant to section 43A.18. Collective bargaining agreements entered
45.27into pursuant to chapter 179A may, and are encouraged to, provide for pay increases
45.28based on employee work performance. An employee in the executive branch may not
45.29receive an increase in salary or wages based on cost of living or progression to another
45.30step or lane unless the employee's supervisor certifies that the employee's performance
45.31has been satisfactory.
45.32(c) This section does not apply to faculty and administrators in the Minnesota State
45.33Colleges and University system.
45.34(d) This section supersedes any conflicting provision of other law.
46.1EFFECTIVE DATE.This section is effective July 1, 2011. For employees covered
46.2by a collective bargaining agreement, this section applies to collective bargaining
46.3agreements entered into on or after that date.

46.4    Sec. 47. [43A.347] REDUCTION IN STATE WORK FORCE; EARLY
46.5RETIREMENT PROGRAM.
46.6    Subdivision 1. Required reduction. (a) The number of full-time equivalent
46.7employees employed in the executive branch, and the costs directly associated with
46.8employing those persons, must be reduced by at least 12 percent by June 30, 2013, and 15
46.9percent by June 30, 2015, and thereafter, compared to the number of full-time equivalent
46.10positions and the costs directly associated with those positions on January 1, 2011.
46.11(b) An appointing authority may use any or all of the following to achieve this
46.12requirement: attrition, a hard hiring freeze, early retirement incentives authorized in this
46.13section, restructuring of benefit or pension programs as authorized by other law, furloughs,
46.14and layoffs. The early retirement program in this section is enacted as a tool to assist in
46.15complying with the required 15 percent reduction.
46.16(c) For purposes of this section:
46.17(1) "costs directly associated" with employing people means the cost of salaries and
46.18benefits, including the costs of employer contributions to public pension plans; and
46.19(2) "executive branch" does not include the Minnesota State Colleges and
46.20Universities.
46.21    Subd. 2. Analysis. Before authorizing an early retirement under subdivision 3 or
46.224, the commissioner must perform analysis, including actuarial analysis, as necessary to
46.23determine the maximum number of employees to whom incentives will be offered, and the
46.24percentage of resulting savings estimated to be needed to pay pension funds to cover costs
46.25to the funds of the incentive in this section. The commissioner must use this analysis in
46.26determining how to best implement this section.
46.27    Subd. 3. Pension early retirement incentive. (a) The commissioner of management
46.28and budget may authorize an executive branch appointing authority to offer an early
46.29retirement incentive under this subdivision to an employee who upon retirement would be
46.30immediately eligible to receive an annuity from the public pension plan under which the
46.31employee is covered immediately before separation from state service. The commissioner
46.32may establish time periods during which the incentive may be offered and during which
46.33the incentive must be accepted, may establish limits on the number of employees to whom
46.34an appointing authority, or all appointing authorities collectively, may offer the incentive,
46.35and may establish other conditions for the incentive.
47.1(b) For an employee offered an incentive under this subdivision, for each full
47.2year of service credit that the employee has in a plan administered by the Minnesota
47.3State Retirement System, the Public Employees Retirement Association, or the Teachers
47.4Retirement Association, the employee must be granted an additional month of service
47.5credit in the plan under which the employee is covered immediately before separation
47.6from state service under this subdivision.
47.7(c) Upon request of an appointing authority considering offering an incentive under
47.8this subdivision, the executive director of the public pension plan in which an employee
47.9would be granted additional service credit under this subdivision must prepare an estimate
47.10of the present value of the additional service credit that would be granted to an employee
47.11under this subdivision. For each employee accepting an incentive under this subdivision,
47.12the appointing authority offering the incentive must pay the applicable public pension
47.13plan, from the first dollars of savings achieved through offering the incentive, the present
47.14value of the additional service credit granted to the employee, taking into account the date
47.15payment will be received from the appointing authority. The appointing authority must
47.16make this payment to the pension plan within one year of the date the employee accepting
47.17the incentive leaves state service.
47.18    Subd. 4. Insurance early retirement incentive. The commissioner of management
47.19and budget may authorize an executive appointing authority to offer the incentive
47.20originally offered under Laws 2010, chapter 337, to employees who retire from state
47.21service during periods that the commissioner specifies before June 30, 2015. The terms and
47.22conditions specified in Laws 2010, chapter 337, apply to an incentive offered under this
47.23subdivision, except for the dates specified in that law for accepting the incentive and for
47.24retiring, and except that the prohibition on reemployment or contracting is for the period
47.25specified in this section, instead of the shorter period specified in Laws 2010, chapter 337.
47.26    Subd. 5. Best practices. In implementing this section, the commissioner of
47.27management and budget and affected agencies shall utilize best practices as identified by
47.28other states that have implemented early retirement programs.
47.29    Subd. 6. Hiring freeze. To promote streamlined government and reduced costs,
47.30no state appointing authority may fill by outside hire a position vacated through state
47.31employee participation in an early retirement incentive under this section.
47.32    Subd. 7. Reemployment prohibition. An employee who receives an early
47.33retirement incentive under this section may not be reemployed with the state or enter into
47.34a contract with the state as a consultant for five years after termination.
48.1    Subd. 8. Savings. Savings resulting from implementation of this section, after
48.2any payments made under subdivisions 3 and 4, must cancel back to the fund in which
48.3the savings occurred.
48.4    Subd. 9. Not applicable to elected officials. A state elected official is not a state
48.5employee for purposes of this section.

48.6    Sec. 48. Minnesota Statutes 2010, section 45.013, is amended to read:
48.745.013 POWER TO APPOINT STAFF.
48.8The commissioner of commerce may appoint four one deputy commissioners, four
48.9assistant commissioners, and an assistant to the commissioner. Those positions, as well as
48.10that of and a confidential secretary, are in the unclassified service. The commissioner may
48.11appoint other employees necessary to carry out the duties and responsibilities entrusted to
48.12the commissioner.

48.13    Sec. 49. Minnesota Statutes 2010, section 84.01, subdivision 3, is amended to read:
48.14    Subd. 3. Employees; delegation. Subject to the provisions of Laws 1969, chapter
48.151129, and to other applicable laws The commissioner shall organize the department and
48.16employ up to three assistant commissioners, each of whom shall serve at the pleasure of
48.17the commissioner in the unclassified service, one of whom shall have responsibility for
48.18coordinating and directing the planning of every division within the agency, and such other
48.19officers, employees, and agents as the commissioner may deem necessary to discharge the
48.20functions of the department, define the duties of such officers, employees, and agents and
48.21to delegate to them any of the commissioner's powers, duties, and responsibilities subject
48.22to the control of, and under the conditions prescribed by, the commissioner. Appointments
48.23to exercise delegated power shall be by written order filed with the secretary of state.

48.24    Sec. 50. Minnesota Statutes 2010, section 116.03, subdivision 1, is amended to read:
48.25    Subdivision 1. Office. (a) The office of commissioner of the Pollution Control
48.26Agency is created and is under the supervision and control of the commissioner, who is
48.27appointed by the governor under the provisions of section 15.06.
48.28(b) The commissioner may appoint a deputy commissioner and assistant
48.29commissioners who shall be in the unclassified service.
48.30(c) The commissioner shall make all decisions on behalf of the agency that are not
48.31required to be made by the agency under section 116.02.

48.32    Sec. 51. Minnesota Statutes 2010, section 116J.01, subdivision 5, is amended to read:
49.1    Subd. 5. Departmental organization. (a) The commissioner shall organize the
49.2department as provided in section 15.06.
49.3(b) The commissioner may establish divisions and offices within the department.
49.4The commissioner may employ four deputy commissioners in the unclassified service.
49.5(c) The commissioner shall:
49.6(1) employ assistants and other officers, employees, and agents that the commissioner
49.7considers necessary to discharge the functions of the commissioner's office;
49.8(2) define the duties of the officers, employees, and agents, and delegate to them any
49.9of the commissioner's powers, duties, and responsibilities, subject to the commissioner's
49.10control and under conditions prescribed by the commissioner.
49.11(d) The commissioner shall ensure that there are at least three employment and
49.12economic development officers in state offices in nonmetropolitan areas of the state who
49.13will work with local units of government on developing local employment and economic
49.14development.

49.15    Sec. 52. Minnesota Statutes 2010, section 116J.035, subdivision 4, is amended to read:
49.16    Subd. 4. Delegation of powers. The commissioner may delegate, in written orders
49.17filed with the secretary of state, any powers or duties subject to the commissioner's
49.18control to officers and employees in the department. Regardless of any other law, the
49.19commissioner may delegate the execution of specific contracts or specific types of
49.20contracts to the commissioner's deputies, an assistant commissioner, deputy or a program
49.21director if the delegation has been approved by the commissioner of administration and
49.22filed with the secretary of state.

49.23    Sec. 53. Minnesota Statutes 2010, section 174.02, subdivision 2, is amended to read:
49.24    Subd. 2. Unclassified positions. The commissioner may establish four positions
49.25in the unclassified service at the appoint a deputy and assistant commissioner, assistant
49.26to commissioner or and a personal secretary levels. No more than two of these positions
49.27shall be at the deputy commissioner level in the unclassified service.

49.28    Sec. 54. Minnesota Statutes 2010, section 241.01, subdivision 2, is amended to read:
49.29    Subd. 2. Deputies Deputy. The commissioner of corrections may appoint and
49.30employ no more than two a deputy commissioners commissioner. The commissioner may
49.31also appoint a personal secretary, who shall serve at the commissioner's pleasure in the
49.32unclassified civil service.

50.1    Sec. 55. Laws 2010, chapter 361, article 3, section 8, is amended to read:
50.2    Sec. 8. USE OF CARRYFORWARD.
50.3The restrictions in Minnesota Statutes, section 16A.281, on the use of money carried
50.4forward from one biennium to another shall not apply to money the legislative auditor
50.5carried forward from the previous biennium for use in fiscal years 2010 and 2011 ending
50.6June 30, 2009, or the biennium ending June 30, 2011. The legislative auditor may use the
50.7carry forward money for costs related to the conduct of audits related to funds authorized
50.8in the Minnesota Constitution, Article XI, section 15, and audits related to the institutions,
50.9offices, and functions of Minnesota State Colleges and Universities.
50.10EFFECTIVE DATE.This section is effective the day following final enactment.

50.11    Sec. 56. SALARY FREEZE.
50.12(a) Effective July 1, 2011, a state employee may not receive a salary or wage increase
50.13before July 1, 2013. This section prohibits any increases, including but not limited to:
50.14across-the-board increases; cost-of-living adjustments; increases based on longevity;
50.15step increases; increases in the form of lump-sum payments; increases in employer
50.16contributions to deferred compensation plans; or any other pay grade adjustments of any
50.17kind. This section does not prohibit an increase in the rate of salary and wages for an
50.18employee who is promoted or transferred to a position with greater responsibilities and
50.19with a higher salary or wage rate. For purposes of this section, "state employee" means an
50.20"employee" as defined in Minnesota Statutes, section 43A.02, subdivision 21, but does not
50.21include faculty or administrators in the Minnesota State Colleges and Universities.
50.22(b) A state appointing authority may not enter into a collective bargaining agreement
50.23or implement a compensation plan that increases salary or wages in a manner prohibited
50.24by this section. Neither a state appointing authority nor an exclusive representative of state
50.25employees may request interest arbitration in relation to an increase in salary or wages that
50.26is prohibited by this section, and an arbitrator may not issue an award that would increase
50.27salary or wages in a manner prohibited by this section.
50.28EFFECTIVE DATE.Paragraph (b) is effective the day following final enactment.
50.29Paragraph (a) is effective June 30, 2011.

50.30    Sec. 57. STATE JOB CLASSIFICATIONS.
50.31The commissioner of management and budget shall report to the legislature by
50.32January 15, 2012, on a process to redesign and consolidate the job classification plan for
50.33executive branch employees, with a goal of assigning all classified positions to no more
51.1than 50 job families. The process must lead to development of a new job classification
51.2plan designed to enhance the ability of state agencies to flexibly manage their workforces
51.3to meet changing needs and demands of the agency, and to enhance the ability of state
51.4employees to transfer to other positions for which they are qualified. In developing this
51.5process, the commissioner must meet and confer with the exclusive representatives of each
51.6affected bargaining unit. The report to the legislature must identify implementation issues.

51.7    Sec. 58. DEPARTMENT OF REVENUE; REQUEST FOR PROPOSALS.
51.8(a) The commissioner of revenue shall issue a request for proposals for a contract to
51.9implement a system of tax analytics and business intelligence tools to enhance the state's
51.10tax collection process and revenues by improving the means of identifying candidates
51.11for audit and collection activities and prioritizing those activities to provide the highest
51.12returns on auditors' and collection agents' time. The request for proposals must require
51.13that the system recommended and implemented by the contractor:
51.14(1) leverage the Department of Revenue's existing data and other available data
51.15sources to build models that more effectively and efficiently identify accounts for audit
51.16review and collections;
51.17(2) leverage advanced analytical techniques and technology such as pattern
51.18detection, predictive modeling, clustering, outlier detection and link analysis to identify
51.19suspect accounts for audit review and collections;
51.20(3) leverage a variety of approaches and analytical techniques to rank accounts and
51.21improve the success rate and the return on investment of department employees engaged
51.22in audit activities;
51.23(4) leverage technology to make the audit process more sustainable and stable, even
51.24with turnover of department auditing staff;
51.25(5) provide optimization capabilities to more effectively prioritize collections and
51.26increase the efficiency of employees engaged in collections activities; and
51.27(6) incorporate mechanisms to decrease wrongful auditing and reduce interference
51.28with Minnesota taxpayers who are fully complying with the laws.
51.29(b) Based on reasonable responses to the request for proposals, the commissioner
51.30shall enter into a contract for the services specified in paragraph (a) by October 1, 2011.
51.31(c) Incorporating the system of tax analytics and business intelligence tools under
51.32the contract in this section, the commissioner of revenue shall identify and collect tax
51.33liabilities from individuals and businesses that currently do not pay all taxes owed.
51.34The commissioner may enter into additional contracts and retain up to five percent
51.35administrative costs as necessary to implement this section. A contract may incorporate a
52.1vendor financing option. This financing option may not make the vendor's compensation
52.2contingent on the amount collected as a result of an audit or an assessment determined
52.3by the vendor.
52.4(d) $11,504,000 for the fiscal year ending June 30, 2012, and $23,269,000 for
52.5the fiscal year ending June 30, 2013, are appropriated from the general fund to the
52.6commissioner of revenue for purposes of this section. This initiative is expected to result
52.7in new general fund revenues of $133,000,000 for the biennium ending June 30, 2013.
52.8(e) The commissioner of revenue must report to the chairs of the house of
52.9representatives Ways and Means and senate Finance Committees by March 1, 2012, and
52.10January 15, 2013, on collection of additional revenue under this section.
52.11(f)(1) If the commissioner of revenue determines that the initiative under this section
52.12will result in new general fund revenues of less than $133,000,000 for the biennium
52.13ending June 30, 2013, the commissioner must notify the commissioner of management
52.14and budget of the amount of new general fund revenues anticipated under this section.
52.15(2) Upon receiving a notice from the commissioner of revenue under clause (1), the
52.16commissioner of management and budget must reduce general fund appropriations to
52.17executive agencies for agency operations for the biennium ending June 30, 2013, by an
52.18amount equal to the difference between $133,000,000 and the amount of new general fund
52.19revenues anticipated by the commissioner of revenue under the notice in clause (1).
52.20EFFECTIVE DATE.This section is effective the day following final enactment.

52.21    Sec. 59. REVENUE FROM FEDERAL OFFSET PROGRAM.
52.22(a) It is expected that implementation of authority under Minnesota Statutes, section
52.2316D.20, will result in increased revenues to the general fund of at least $36,600,000
52.24during the biennium ending June 30, 2013. If the commissioner of revenue determines
52.25that implementation of Minnesota Statutes, section 16D.20, will result in new general
52.26fund revenues of less than $36,600,000 for the biennium ending June 30, 2013, the
52.27commissioner must notify the commissioner of management and budget of the amount of
52.28new general fund revenues anticipated under Minnesota Statutes, section 16D.20.
52.29(b) Upon receiving a notice from the commissioner of revenue under paragraph (a),
52.30the commissioner of management and budget must reduce general fund appropriations to
52.31executive agencies for agency operations for the biennium ending June 30, 2013, by an
52.32amount equal to the difference between $36,600,000 and the amount of new general fund
52.33revenues anticipated by the commissioner of revenue under the notice in paragraph (a).

53.1    Sec. 60. STATE EMPLOYEE GROUP INSURANCE PLAN DEPENDENT
53.2ELIGIBILITY VERIFICATION AUDIT SERVICES.
53.3    Subdivision 1. Request for proposals. By September 1, 2011, the commissioner
53.4of management and budget shall issue a request for proposals for a contract to provide
53.5dependent eligibility verification audit services for state-paid hospital, medical, and dental
53.6benefits provided to participants in the state employee group insurance program and their
53.7dependents. The request for proposals must require that the vendor will:
53.8(1) conduct a document-model dependent eligibility verification audit of all plans
53.9offered under Minnesota Statutes, sections 43A.22 to 43A.31;
53.10(2) identify ineligible dependents covered by the plans and report those findings to
53.11the commissioner and third-party administrators of the state's employee health plans, as
53.12directed by the commissioner; and
53.13(3) implement a process for ongoing eligibility verification following the conclusion
53.14of the dependent eligibility verification audit required by this section.
53.15    Subd. 2. Additional vendor criteria. The request for proposals required by
53.16subdivision 1 must require the vendor to provide the following minimum capabilities and
53.17experience in performing the services described in subdivision 1:
53.18(1) a rules-based platform employing auto-adjudication for making objective
53.19eligibility determinations;
53.20(2) assigned eligibility advocates to assist employees through the verification
53.21process;
53.22(3) a formal claims and appeals process; and
53.23(4) experience in the performance of dependent eligibility verification audits for
53.24other states.
53.25    Subd. 3. Contract required. By January 1, 2012, the commissioner must enter
53.26into a contract for the services specified in subdivision 1. The contract must incorporate
53.27a performance-based vendor financing option that compensates the vendor based on the
53.28amount of savings generated by the work performed under the contract.

53.29    Sec. 61. STRATEGIC SOURCING REQUEST FOR PROPOSALS.
53.30    Subdivision 1. Request for proposals. By July 1, 2011, the commissioner
53.31of administration shall issue a request for proposals for a contract to provide
53.32recommendations for efficiencies in strategic sourcing to the commissioner. For the
53.33purposes of this section, "strategic sourcing" has the meaning given in Minnesota Statutes,
53.34section 16C.02, subdivision 20. The request for proposals shall require the vendor to
53.35provide recommendations for improvements to methods used by the commissioner
54.1to analyze and reduce spending on goods and services, including, but not limited to,
54.2spend analysis, product standardization, contract consolidation, negotiations, multiple
54.3jurisdiction purchasing alliances, reverse and forward auctions, life-cycle costing, and
54.4other techniques.
54.5    Subd. 2. Proof of concept phase. The request for proposal shall require the selected
54.6vendor, at no cost to the state, to begin work on the contract by assisting the commissioner
54.7in implementing its proposed solution on selected state procurement processes to
54.8demonstrate the savings provided by the recommendations. The system provided by the
54.9vendor must be capable of application to the state procurement system.
54.10    Subd. 3. Full implementation and payment. The request for proposal must require
54.11the state to implement the recommendations provided by the vendor in the entire state
54.12procurement system if the work done under the requirements of subdivision 2 provides
54.13material savings to the state. After the full implementation of the system provided by the
54.14vendor, the vendor shall be paid by the state from the savings attributable to the work done
54.15by the vendor, according to the terms and performance measures negotiated in the contract.
54.16    Subd. 4. Selection of vendor. The commissioner of administration shall select a
54.17vendor from the responses to the request for proposal by September 1, 2011.
54.18    Subd. 5. Progress report. The commissioner shall provide a report describing the
54.19progress made under this section to the governor and the chairs and ranking minority
54.20members of the legislative committees with jurisdiction over the commissioner of
54.21administration by January 15, 2012.

54.22    Sec. 62. REPEALER.
54.23Minnesota Statutes 2010, sections 16C.085; 43A.047; and 179A.23, are repealed.

54.24ARTICLE 4
54.25CONSOLIDATION OF INFORMATION TECHNOLOGY SERVICES

54.26    Section 1. Minnesota Statutes 2010, section 16B.99, is amended to read:
54.2716B.99 GEOSPATIAL INFORMATION OFFICE.
54.28    Subdivision 1. Creation. The Minnesota Geospatial Information Office is created
54.29under the supervision of the commissioner of administration chief geospatial information
54.30officer, who is appointed by the chief information officer.
54.31    Subd. 2. Responsibilities; authority. The office has authority to provide
54.32coordination, guidance, and leadership, and to plan the implementation of Minnesota's
54.33geospatial information technology. The office must identify, coordinate, and guide
55.1strategic investments in geospatial information technology systems, data, and services to
55.2ensure effective implementation and use of Geospatial Information Systems (GIS) by state
55.3agencies to maximize benefits for state government as an enterprise.
55.4    Subd. 3. Duties. The office must:
55.5(1) coordinate and guide the efficient and effective use of available federal,
55.6state, local, and public-private resources to develop statewide geospatial information
55.7technology, data, and services;
55.8(2) provide leadership and outreach, and ensure cooperation and coordination for all
55.9Geospatial Information Systems (GIS) functions in state and local government, including
55.10coordination between state agencies, intergovernment coordination between state and local
55.11units of government, and extragovernment coordination, which includes coordination with
55.12academic and other private and nonprofit sector GIS stakeholders;
55.13(3) review state agency and intergovernment geospatial technology, data, and
55.14services development efforts involving state or intergovernment funding, including federal
55.15funding;
55.16(4) provide information to the legislature regarding projects reviewed, and
55.17recommend projects for inclusion in the governor's budget under section 16A.11;
55.18(5) coordinate management of geospatial technology, data, and services between
55.19state and local governments;
55.20(6) provide coordination, leadership, and consultation to integrate government
55.21technology services with GIS infrastructure and GIS programs;
55.22(7) work to avoid or eliminate unnecessary duplication of existing GIS technology
55.23services and systems, including services provided by other public and private organizations
55.24while building on existing governmental infrastructures;
55.25(8) promote and coordinate consolidated geospatial technology, data, and services
55.26and shared geospatial Web services for state and local governments; and
55.27(9) promote and coordinate geospatial technology training, technical guidance, and
55.28project support for state and local governments.
55.29    Subd. 4. Duties of chief geospatial information officer. (a) In consultation with the
55.30state geospatial advisory council, the commissioner of administration, the commissioner
55.31of management and budget, and the Minnesota chief geospatial information officer, the
55.32chief geospatial information officer must identify when it is cost-effective for agencies to
55.33develop and use shared information and geospatial technology systems, data, and services.
55.34The chief geospatial information officer may require agencies to use shared information
55.35and geospatial technology systems, data, and services.
56.1(b) The chief geospatial information officer, in consultation with the state
56.2geospatial advisory council, must establish reimbursement rates in cooperation with the
56.3commissioner of management and budget to bill agencies and other governmental entities
56.4sufficient to cover the actual development, operation, maintenance, and administrative
56.5costs of the shared systems. The methodology for billing may include the use of
56.6interagency agreements, or other means as allowed by law.
56.7    Subd. 5. Fees. (a) The chief geospatial information officer must set fees under
56.8section 16A.1285 that reflect the actual cost of providing information products and
56.9services to clients. Fees collected must be deposited in the state treasury and credited to
56.10the Minnesota Geospatial Information Office revolving account. Money in the account
56.11is appropriated to the chief geospatial information officer for providing Geospatial
56.12Information Systems (GIS) consulting services, software, data, Web services, and map
56.13products on a cost-recovery basis, including the cost of services, supplies, material, labor,
56.14and equipment as well as the portion of the general support costs and statewide indirect
56.15costs of the office that is attributable to the delivery of these products and services. Money
56.16in the account must not be used for the general operation of the Minnesota Geospatial
56.17Information Office.
56.18(b) The chief geospatial information officer may require a state agency to make an
56.19advance payment to the revolving account sufficient to cover the agency's estimated
56.20obligation for a period of 60 days or more. If the revolving account is abolished or
56.21liquidated, the total net profit from the operation of the account must be distributed to the
56.22various funds from which purchases were made. For a given period of time, the amount of
56.23total net profit to be distributed to each fund must reflect the same ratio of total purchases
56.24attributable to each fund divided by the total purchases from all funds.
56.25    Subd. 6. Accountability. The chief geospatial information officer is appointed by
56.26the commissioner of administration and must work closely with the Minnesota chief
56.27information officer who shall advise on technology projects, standards, and services.
56.28    Subd. 7. Discretionary powers. The office may:
56.29(1) enter into contracts for goods or services with public or private organizations
56.30and charge fees for services it provides;
56.31(2) apply for, receive, and expend money from public agencies;
56.32(3) apply for, accept, and disburse grants and other aids from the federal government
56.33and other public or private sources;
56.34(4) enter into contracts with agencies of the federal government, local government
56.35units, the University of Minnesota and other educational institutions, and private persons
56.36and other nongovernment organizations as necessary to perform its statutory duties;
57.1(5) appoint committees and task forces to assist the office in carrying out its duties;
57.2(6) sponsor and conduct conferences and studies, collect and disseminate
57.3information, and issue reports relating to geospatial information and technology issues;
57.4(7) participate in the activities and conferences related to geospatial information
57.5and communications technology issues;
57.6(8) review the Geospatial Information Systems (GIS) technology infrastructure
57.7of regions of the state and cooperate with and make recommendations to the governor,
57.8legislature, state agencies, local governments, local technology development agencies,
57.9the federal government, private businesses, and individuals for the realization of GIS
57.10information and technology infrastructure development potential;
57.11(9) sponsor, support, and facilitate innovative and collaborative geospatial systems
57.12technology, data, and services projects; and
57.13(10) review and recommend alternative sourcing strategies for state geospatial
57.14information systems technology, data, and services.
57.15    Subd. 8. Geospatial advisory councils created. The chief geospatial information
57.16officer must establish a governance structure that includes advisory councils to provide
57.17recommendations for improving the operations and management of geospatial technology
57.18within state government and also on issues of importance to users of geospatial technology
57.19throughout the state.
57.20(a) A statewide geospatial advisory council must advise the Minnesota Geospatial
57.21Information Office regarding the improvement of services statewide through the
57.22coordinated, affordable, reliable, and effective use of geospatial technology. The
57.23commissioner of administration chief information officer must appoint the members of the
57.24council. The members must represent a cross-section of organizations including counties,
57.25cities, universities, business, nonprofit organizations, federal agencies, and state agencies.
57.26No more than 20 percent of the members may be employees of a state agency. In addition,
57.27the chief geospatial information officer must be a nonvoting member.
57.28(b) A state government geospatial advisory council must advise the Minnesota
57.29Geospatial Information Office on issues concerning improving state government services
57.30through the coordinated, affordable, reliable, and effective use of geospatial technology.
57.31The commissioner of administration chief information officer must appoint the members
57.32of the council. The members must represent up to 15 state government agencies and
57.33constitutional offices, including the Office of Enterprise Technology and the Minnesota
57.34Geospatial Information Office. The council must be chaired by the chief geographic
57.35information officer. A representative of the statewide geospatial advisory council must
57.36serve as a nonvoting member.
58.1(c) Members of both the statewide geospatial advisory council and the state
58.2government advisory council must be recommended by a process that ensures that each
58.3member is designated to represent a clearly identified agency or interested party category
58.4and that complies with the state's open appointment process. Members shall serve a
58.5term of two years.
58.6(d) The Minnesota Geospatial Information Office must provide administrative
58.7support for both geospatial advisory councils.
58.8(e) This subdivision expires June 30, 2011.
58.9    Subd. 9. Report to legislature. By January 15, 2010, the chief geospatial
58.10information officer must provide a report to the chairs and ranking minority members of
58.11the legislative committees with jurisdiction over the policy and budget for the office. The
58.12report must address all statutes that refer to the Minnesota Geospatial Information Office
58.13or land management information system and provide any necessary draft legislation to
58.14implement any recommendations.

58.15    Sec. 2. [16E.0151] RESPONSIBILITY FOR INFORMATION TECHNOLOGY
58.16SERVICES AND EQUIPMENT.
58.17(a) The chief information officer is responsible for providing or entering into
58.18managed services contracts for the provision of the following information technology
58.19systems and services to state agencies:
58.20(1) state data centers;
58.21(2) mainframes including system software;
58.22(3) servers including system software;
58.23(4) desktops including system software;
58.24(5) laptop computers including system software;
58.25(6) a data network including system software;
58.26(7) database, electronic mail, office systems, reporting, and other standard software
58.27tools;
58.28(8) business application software and related technical support services;
58.29(9) help desk for the components listed in clauses (1) to (8);
58.30(10) maintenance, problem resolution, and break-fix for the components listed in
58.31clauses (1) to (8); and
58.32(11) regular upgrades and replacement for the components listed in clauses (1) to (8).
58.33(b) All state agency employees whose work primarily involves functions specified in
58.34paragraph (a) are employees of the Office of Enterprise Technology. The chief information
59.1officer may assign employees of the office to perform work exclusively for another
59.2executive agency.
59.3(c) The chief information officer may allow a state agency to obtain services
59.4specified in paragraph (a) through a contract with an outside vendor when the value of an
59.5outside vendor contract can be demonstrated. Sections 16C.08, subdivision 2, paragraph
59.6(b), clause (1); 16C.09, paragraph (a), clause (1); and 43A.047 do not apply to these
59.7contracts with outside vendors. The chief information officer must require that agency
59.8contracts with outside vendors ensure that systems and services are compatible with
59.9standards established by the Office of Enterprise Technology.
59.10(d) In exercising authority under this section, the chief information officer
59.11must cooperate with the commissioner of administration on contracts for acquisition
59.12of information technology systems and services. The authority granted to the chief
59.13information officer does not limit the procurement, contract management, and contract
59.14review authority of the commissioner of administration under chapter 16C, including
59.15authority of the commissioner to enter into and manage cooperative purchasing
59.16agreements with other states.
59.17(e) The State Lottery and Statewide Radio Board are not state agencies for purposes
59.18of this section.

59.19    Sec. 3. [16E.036] ADVISORY COMMITTEE.
59.20(a) The Technology Advisory Committee is created to advise the chief information
59.21officer. The committee consists of six members appointed by the governor who are
59.22individuals actively involved in business planning for state executive branch agencies, one
59.23county member designated by the Association of Minnesota Counties, and one member
59.24appointed by the governor to represent private businesses.
59.25(b) Membership terms, removal of members, and filling of vacancies are as provided
59.26in section 15.059. Members do not receive compensation or reimbursement for expenses.
59.27(c) The committee shall select a chair from its members. The chief information
59.28officer shall provide administrative support to the committee.
59.29(d) The committee shall advise the chief information officer on:
59.30(1) development and implementation of the state information technology strategic
59.31plan;
59.32(2) critical information technology initiatives for the state;
59.33(3) standards for state information architecture;
59.34(4) identification of business and technical needs of state agencies;
60.1(5) strategic information technology portfolio management, project prioritization,
60.2and investment decisions;
60.3(6) the office's performance measures and fees for service agreements with executive
60.4branch agencies;
60.5(7) management of the state enterprise technology revolving fund; and
60.6(8) the efficient and effective operation of the office.

60.7    Sec. 4. Minnesota Statutes 2010, section 16E.14, is amended by adding a subdivision
60.8to read:
60.9    Subd. 6. Technology improvement account. The technology improvement account
60.10is established as an account in the enterprise technology fund. Money in the account is
60.11appropriated to the chief information officer for the purpose of funding a project that will
60.12result in improvements in state information and telecommunications technology. The
60.13chief information officer may spend money from the account on behalf of a state agency
60.14or group of agencies or may transfer money in the account to a state agency or group of
60.15agencies only according to an agreement under which: (1) the chief information officer
60.16has determined that savings generated by the project to be funded from the account will
60.17exceed the cost of the project; and (2) the agency or agencies sponsoring the project have
60.18developed a plan for recouping the project costs to the fund.

60.19    Sec. 5. TRANSFERS.
60.20(a) Powers, duties, responsibilities, assets, personnel, and unexpended appropriations
60.21relating to functions assigned to the chief information officer in Minnesota Statutes,
60.22section 16E.0151, are transferred to the Office of Enterprise Technology from all other
60.23state agencies, as defined in Minnesota Statutes, section 16E.03, subdivision 1, paragraph
60.24(e), effective July 1, 2011. By January 15, 2012, the chief information officer shall submit
60.25to the legislature any statutory changes needed to complete implementation of the transfer
60.26in this section.
60.27(b) Prior to the transfer mandated by paragraph (a), the chief information officer must
60.28enter into a service-level agreement with each state agency governing the provision of
60.29information technology systems and services in Minnesota Statutes, section 16E.0151. The
60.30agreements must specify the services to be provided and the charges for these services. As
60.31specified in Minnesota Statutes, section 16E.0151, an agency may choose to obtain these
60.32services from an outside vendor, rather than from the Office of Enterprise Technology.
61.1(c) Powers, duties, responsibilities, assets, personnel, and unexpended appropriations
61.2relating to geospatial information systems are transferred from the commissioner of
61.3administration to the Office of Enterprise Technology.
61.4(d) Minnesota Statutes, section 15.039, applies to transfers in this section. Executive
61.5branch officials may use authority under Minnesota Statutes, section 16B.37, as necessary
61.6to implement this section.

61.7    Sec. 6. STUDY.
61.8The chief information officer in the Office of Enterprise Technology shall report
61.9to the chairs and ranking minority members of the house of representatives and senate
61.10committees with jurisdiction over state government finance by January 15, 2012, on
61.11the feasibility and desirability of the office entering into service-level agreements with
61.12the State Lottery and the Statewide Radio Board regarding provision of information
61.13technology systems and services to those entities.

61.14    Sec. 7. REVISOR'S INSTRUCTION.
61.15The revisor of statutes shall recodify Minnesota Statutes, section 16B.99, into
61.16Minnesota Statutes, chapter 16E.