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Minnesota Legislature

Office of the Revisor of Statutes

SF 1651

1st Engrossment - 91st Legislature (2019 - 2020) Posted on 03/27/2019 09:30am

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

Current Version - 1st Engrossment

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A bill for an act
relating to local government; modifying the political subdivision compensation
limit; making a conforming change; amending Minnesota Statutes 2018, section
43A.17, subdivisions 9, 11.


Section 1.

Minnesota Statutes 2018, section 43A.17, subdivision 9, is amended to read:

Subd. 9.

Political subdivision compensation limit.

(a) The salary and the value of all
other forms of compensation of a person employed by a political subdivision of this state,
excluding a school district, may not exceed deleted text begin110 percent of the salary of the governor as set
under section 15A.082
deleted text endnew text begin $200,000new text end, except as provided in this subdivision. For purposes of
this subdivision, "political subdivision of this state" includes a statutory or home rule charter
city, county, town, metropolitan or regional agency, or other political subdivision, but does
not include a hospital, clinic, or health maintenance organization owned by such a
governmental unit.

(b) Beginning in deleted text begin2006deleted text endnew text begin 2020new text end, the limit in paragraph (a) must be adjusted annually in
January. The limit must equal the limit for the prior year increased by the percentage increase,
if any, in the Consumer Price Index for all-urban consumers from October of the second
prior year to October of the immediately prior year.

(c) Deferred compensation and payroll allocations to purchase an individual annuity
contract for an employee are included in determining the employee's salary. Other forms
of compensation which must be included to determine an employee's total compensation
are all other direct and indirect items of compensation which are not specifically excluded
by this subdivision. Other forms of compensation which must not be included in a
determination of an employee's total compensation for the purposes of this subdivision are:

(1) employee benefits that are also provided for the majority of all other full-time
employees of the political subdivision, vacation and sick leave allowances, health and dental
insurance, disability insurance, term life insurance, and pension benefits or like benefits the
cost of which is borne by the employee or which is not subject to tax as income under the
Internal Revenue Code of 1986;

(2) dues paid to organizations that are of a civic, professional, educational, or
governmental nature; and

(3) reimbursement for actual expenses incurred by the employee which the governing
body determines to be directly related to the performance of job responsibilities, including
any relocation expenses paid during the initial year of employment.

The value of other forms of compensation is the annual cost to the political subdivision
for the provision of the compensation.

(d) The salary of a medical doctor or doctor of osteopathic medicine occupying a position
that the governing body of the political subdivision has determined requires an M.D. or
D.O. degree is excluded from the limitation in this subdivision.

(e) The commissioner may increase the limitation in this subdivision for a position that
the commissioner has determined requires special expertise necessitating a higher salary to
attract or retain a qualified person. The commissioner shall review each proposed increase
giving due consideration to salary rates paid to other persons with similar responsibilities
in the state and nation. The commissioner may not increase the limitation until the
commissioner has presented the proposed increase to the Legislative Coordinating
Commission and received the commission's recommendation on it. The recommendation
is advisory only. If the commission does not give its recommendation on a proposed increase
within 30 days from its receipt of the proposal, the commission is deemed to have made no
recommendation. If the commissioner grants or granted an increase under this paragraph,
the new limitation must be adjusted beginning in August 2005 and in each subsequent
calendar year in January by the percentage increase equal to the percentage increase, if any,
in the Consumer Price Index for all-urban consumers from October of the second prior year
to October of the immediately prior year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2018, section 43A.17, subdivision 11, is amended to read:

Subd. 11.

Severance pay for certain employees.

(a) For purposes of this subdivision,
"highly compensated employee" means an employee of the state whose estimated annual
compensation is greater than 60 percent of the governor's annual salary, and who is not
covered by a collective bargaining agreement negotiated under chapter 179A or a
compensation plan authorized under section 43A.18, subdivision 3a.

(b) Severance pay for a highly compensated employee includes benefits or compensation
with a quantifiable monetary value, that are provided for an employee upon termination of
employment and are not part of the employee's annual wages and benefits and are not
specifically excluded by this subdivision. Severance pay does not include payments for
accumulated vacation, accumulated sick leave, and accumulated sick leave liquidated to
cover the cost of group term insurance. Severance pay for a highly compensated employee
does not include payments of periodic contributions by an employer toward premiums for
group insurance policies. The severance pay for a highly compensated employee must be
excluded from retirement deductions and from any calculations of retirement benefits.
Severance pay for a highly compensated employee must be paid in a manner mutually
agreeable to the employee and the employee's appointing authority over a period not to
exceed five years from retirement or termination of employment. If a retired or terminated
employee dies before all or a portion of the severance pay has been disbursed, the balance
due must be paid to a named beneficiary or, lacking one, to the deceased's estate. Except
as provided in paragraph (c), severance pay provided for a highly compensated employee
leaving employment may not exceed the lesser of:

(1) deleted text beginsixdeleted text endnew text begin threenew text end months pay; or

(2) the highly compensated employee's regular rate of pay multiplied by 35 percent of
the highly compensated employee's accumulated but unused sick leave hours.

(c) Severance pay for a highly compensated employee may exceed the limit prescribed
in paragraph (b) if the severance pay is part of an early retirement incentive offer approved
by the state and the same early retirement incentive offer is also made available to all other
employees of the appointing authority who meet generally defined criteria relative to age
or length of service.

(d) An appointing authority may make severance payments to a highly compensated
employee, up to the limits prescribed in this subdivision, only if doing so is authorized by
a compensation plan under section 43A.18 that governs the employee, provided that the
following highly compensated employees are not eligible for severance pay:

(1) a commissioner, deputy commissioner, or assistant commissioner of any state
department or agency as listed in section 15.01 or 15.06, including the state chief information
officer; and

(2) any unclassified employee who is also a public official, as defined in section 10A.01,
subdivision 35.

(e) Severance pay shall not be paid to a highly compensated employee who has been
employed by the appointing authority for less than six months or who voluntarily terminates