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SF 4069

1st Engrossment - 91st Legislature (2019 - 2020) Posted on 03/17/2020 10:58am

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

Current Version - 1st Engrossment

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A bill for an act
relating to state government; changing certain state government operations;
repealing state aid to PERA for MERF; modifying rulemaking process for
construction rules; establishing zero-based budgeting; adding constraints on
contracting with exclusive representatives of state employees; conditional
appropriation reductions; amending Minnesota Statutes 2018, sections 3.855,
subdivision 2, by adding a subdivision; 16A.103, subdivision 1a; 16A.11,
subdivision 3; 179A.20, by adding a subdivision; Minnesota Statutes 2019
Supplement, section 353.27, subdivision 3c; proposing coding for new law in
Minnesota Statutes, chapters 14; 16A; repealing Minnesota Statutes 2019
Supplement, section 353.505.

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

Section 1.

Minnesota Statutes 2018, section 3.855, subdivision 2, is amended to read:


Subd. 2.

State employee negotiations.

(a) The commissioner of management and budget
shall regularly advise the commission on the progress of collective bargaining activities
with state employees under the state Public Employment Labor Relations Act. During
negotiations, the commission may make recommendations to the commissioner as it deems
appropriate but no recommendation shall impose any obligation or grant any right or privilege
to the parties.

(b) The commissioner shall submit to the chair of the commission any negotiated
collective bargaining agreements, arbitration awards, compensation plans, or salaries for
legislative approval or disapproval. Negotiated agreements shall be submitted within five
days of the date of approval by the commissioner or the date of approval by the affected
state employees, whichever occurs later. Arbitration awards shall be submitted within five
days of their receipt by the commissioner. If the commission disapproves a collective
bargaining agreement, award, compensation plan, or salary, the commission shall specify
in writing to the parties those portions with which it disagrees and its reasons. If the
commission approves a collective bargaining agreement, award, compensation plan, or
salary, it shall submit the matter to the legislature to be accepted or rejected under this
section.

(c) When the legislature is not in session, the commission may give interim approval to
a negotiated collective bargaining agreement, salary, compensation plan, or arbitration
award. deleted text beginWhen the legislature is not in session, failure of the commission to disapprove a
collective bargaining agreement or arbitration award within 30 days constitutes approval.
deleted text end
The commission shall submit the negotiated collective bargaining agreements, salaries,
compensation plans, or arbitration awards for which it has provided approval to the entire
legislature for ratification at a special legislative session called to consider them or at its
next regular legislative session as provided in this section. Approval or disapproval by the
commission is not binding on the legislature.

(d) When the legislature is not in session, the proposed collective bargaining agreement,
arbitration decision, salary, or compensation plan must be implemented upon its approval
by the commission, and state employees covered by the proposed agreement or arbitration
decision do not have the right to strike while the interim approval is in effect. Wages and
economic fringe benefit increases provided for in the agreement or arbitration decision paid
in accordance with the interim approval by the commission are not affected, but the wages
or benefit increases must cease to be paid or provided effective upon the rejection of the
agreement, arbitration decision, salary, or compensation plan, or upon adjournment of the
legislature without acting on it.

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 3.855, is amended by adding a subdivision to
read:


new text begin Subd. 6. new text end

new text begin Information required. new text end

new text begin The commissioner of management and budget must
submit to the Legislative Coordinating Commission the following information with the
submission of a collective bargaining agreement or compensation plan under subdivisions
2 and 3:
new text end

new text begin (1) for each agency and for each proposed agreement or plan, a comparison of biennial
compensation costs under the current agreement or plan to the projected biennial
compensation costs under the proposed agreement or plan, paid with funds appropriated
from the general fund;
new text end

new text begin (2) for each agency and for each proposed agreement or plan, a comparison of biennial
compensation costs under the current agreement or plan to the projected biennial
compensation costs under the proposed agreement or plan, paid with funds appropriated
from each fund other than the general fund;
new text end

new text begin (3) for each agency and for each proposed agreement or plan, an identification of the
amount of the additional biennial compensation costs that are attributable to salary and
wages and to the cost of nonsalary and nonwage benefits; and
new text end

new text begin (4) for each agency, for clauses (1) to (3), the impact of the aggregate of all agreements
and plans being submitted to the commission.
new text end

Sec. 3.

new text begin [14.1275] RULES IMPACTING RESIDENTIAL CONSTRUCTION OR
REMODELING; LEGISLATIVE NOTICE AND REVIEW.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin As used in this section, "residential construction" means the
new construction or remodeling of any building subject to the Minnesota Residential Code.
new text end

new text begin Subd. 2. new text end

new text begin Impact on housing cost; agency determination. new text end

new text begin An agency must determine
if implementation of a proposed rule, or any portion of a proposed rule, will, on average,
increase the cost of residential construction or remodeling by $1,000 or more per unit. The
agency must make this determination before the close of the hearing record. Upon request
of a party affected by the proposed rule, an administrative law judge must review and
approve or disapprove an agency's determination that any portion of a proposed rule will
increase the cost of a dwelling unit by $1,000 or more.
new text end

new text begin Subd. 3. new text end

new text begin Notice to legislature; legislative approval. new text end

new text begin (a) If the agency determines that
the impact of a proposed rule meets or exceeds the cost threshold provided in subdivision
2, or if the administrative law judge separately confirms the cost of any portion of a rule
exceeds the cost threshold provided in subdivision 2, the agency must notify, in writing,
the chairs and ranking minority members of the policy committees of the house of
representatives and the senate with jurisdiction over the subject matter of the proposed rule
within ten days of the determination.
new text end

new text begin (b) If a committee of either the house of representatives or senate with jurisdiction over
the subject matter of the proposed rule or a portion of a rule that meets or exceeds the
threshold in subdivision 2 votes to advise an agency that the rule should not be adopted as
proposed, the agency may not adopt the rule unless the rule is approved by a law enacted
after the vote of the committee. Section 14.126, subdivision 2, applies to a vote of a
committee under this subdivision.
new text end

new text begin Subd. 4. new text end

new text begin Severability. new text end

new text begin If the agency or an administrative law judge determines that part
of a proposed rule meets or exceeds the threshold provided in subdivision 2, but that a
severable portion of the proposed rule does not meet or exceed that threshold, the agency
may proceed to adopt the severable portions of the proposed rule regardless of whether a
legislative committee has voted under subdivision 3 to advise an agency that the rule should
not be adopted as proposed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2020, and applies to
administrative rules proposed on or after that date.
new text end

Sec. 4.

Minnesota Statutes 2018, section 16A.103, subdivision 1a, is amended to read:


Subd. 1a.

Forecast parameters.

new text begin(a) Except as provided in paragraph (b), new text endthe forecast
must assume the continuation of current laws and reasonable estimates of projected growth
in the national and state economies and affected populations. Revenue must be estimated
for all sources provided for in current law. Expenditures must be estimated for all obligations
imposed by law and those projected to occur as a result of variables outside the control of
the legislature. Expenditure estimates must not include an allowance for inflation.

new text begin (b) Notwithstanding paragraph (a) and any appropriations established in law, all
expenditures for a department, institution, or agency of the executive branch estimated for
the November forecast must be zero if the scheduled year under section 16A.111, subdivision
3, for the department, institution, or agency coincides with the calendar year of the November
forecast. The forecasted expenditures in the February forecast must be zero for a department,
institution, or agency of the executive branch if they were zero in the preceding November
forecast as a result of the requirements of this paragraph. The commissioner shall not apply
this paragraph to forecasted expenditures for the current biennium but shall apply the
requirements of this paragraph to the forecasted expenditures for the next two bienniums.
new text end

Sec. 5.

Minnesota Statutes 2018, section 16A.11, subdivision 3, is amended to read:


Subd. 3.

Part two: detailed budget.

(a) Part two of the budget, the detailed budget
estimates both of expenditures and revenues, must contain any statements on the financial
plan which the governor believes desirable or which may be required by the legislature.
The detailed estimates shall include the governor's budget arranged in tabular form.

(b) Tables listing expenditures for the next biennium must show the appropriation base
for each year. The appropriation base is the amount appropriated for the second year of the
current biennium. The tables must separately show any adjustments to the base required by
current law or policies of the commissioner of management and budget. For forecasted
programs, the tables must also show the amount of the forecast adjustments, based on the
most recent forecast prepared by the commissioner of management and budget under section
16A.103. For all programs, the tables must show the amount of appropriation changes
recommended by the governor, after adjustments to the base and forecast adjustments, and
the total recommendation of the governor for that year.

(c) The detailed estimates must include a separate line listing the total cost of professional
and technical service contracts for the prior biennium and the projected costs of those
contracts for the current and upcoming biennium. They must also include a summary of the
personnel employed by the agency, reflected as full-time equivalent positions.

(d) The detailed estimates for internal service funds must include the number of full-time
equivalents by program; detail on any loans from the general fund, including dollar amounts
by program; proposed investments in technology or equipment of $100,000 or more; an
explanation of any operating losses or increases in retained earnings; and a history of the
rates that have been charged, with an explanation of any rate changes and the impact of the
rate changes on affected agencies.

new text begin (e) Notwithstanding paragraph (b) and any appropriation established in law, for any
department, institution, or agency in the executive branch that is in a scheduled year under
section 16A.111, subdivision 3, in the year prior to the year in which part two of the budget
must be submitted, the appropriation base for any appropriation made to that department,
institution, or agency for the next two biennia must be zero. The commissioner must display
the appropriation base established under this paragraph in the tables and narrative of part
two of the budget.
new text end

Sec. 6.

new text begin [16A.111] ZERO-BASED BUDGETING.
new text end

new text begin Subdivision 1. new text end

new text begin Zero-based budget. new text end

new text begin (a) By October 15 of a scheduled year, each
department, institution, and agency of the executive branch must submit to the commissioner
of management and budget a proposed detailed operating budget for the biennium beginning
July 1 of the following year using zero-based budgeting, including a zero-based budget
plan. The commissioner shall provide technical assistance to enable each department,
institution, or agency to complete its proposed detailed operating budget as specified by the
commissioner.
new text end

new text begin (b) The commissioner shall adopt policies and procedures for each department, institution,
and agency to implement the provisions of this section.
new text end

new text begin (c) As used in this section, "zero-based budgeting" means a method of determining the
budget of a department, institution, or agency for which the budget of the department,
institution, or agency:
new text end

new text begin (1) is deemed to be zero in the November forecast, the February forecast, and the
governor's budget recommendations that precede the establishment of a biennial budget;
and
new text end

new text begin (2) has justified each proposed expenditure for the biennium covered by the budget as
if it were a new expenditure.
new text end

new text begin (d) Each department, institution, and agency of the executive branch that is required to
prepare a detailed operating budget and a zero-based budget plan under this subdivision
must submit the detailed operating budget and zero-based budget plan to the legislature.
This information must be submitted to the legislature at the same time that part two of the
governor's budget is required to be submitted under section 16A.11, subdivision 1.
new text end

new text begin Subd. 2. new text end

new text begin Zero-based budget plan. new text end

new text begin A zero-based budget plan includes the following
information:
new text end

new text begin (1) a description of activities that comprise the agency and a justification for the existence
of each activity by reference to statute or other legal authority;
new text end

new text begin (2) for each activity, a quantitative estimate of any adverse impacts that could reasonably
be expected should the activity be discontinued and a full description of the methods by
which the adverse impact is estimated;
new text end

new text begin (3) a list of quantifiable program outcomes that measure the efficiency and effectiveness
of each program;
new text end

new text begin (4) for each activity, an itemized account of expenditures that would be required to
maintain the activity at the minimum level of service required by statutory authority and a
concise statement of the quantity and quality of services required at that minimum level;
new text end

new text begin (5) for each activity, an itemized account of expenditures required to maintain the quantity
and quality of services being provided and the number of personnel required to accomplish
each program; and
new text end

new text begin (6) a ranking of all activities that shows the relative contribution of each activity to the
overall goals and purposes of the agency at current service levels.
new text end

new text begin Subd. 3. new text end

new text begin Scheduled years. new text end

new text begin (a) The scheduled year is 2020 and every ten years thereafter
for the following agencies: Department of Administration, Department of Agriculture,
Department of Commerce, Department of Corrections, Department of Education, Department
of Human Rights, Department of Human Services, Department of Military Affairs,
Department of Natural Resources, Department of Transportation, Minnesota Racing
Commission, Office of Higher Education, and all advisory groups associated with these
agencies.
new text end

new text begin (b) The scheduled year is 2022 and every ten years thereafter for the following agencies:
Council for Minnesotans of African Heritage, Department of Employment and Economic
Development, Department of Health, Department of Management and Budget, Department
of Public Safety, Gambling Control Board, Metropolitan Council, Minnesota Council on
Latino Affairs, Pollution Control Agency, Science Museum, the Minnesota State Academies,
University of Minnesota, and all advisory groups associated with these agencies.
new text end

new text begin (c) The scheduled year is 2024 and every ten years thereafter for the following agencies:
Agriculture Utilization Research Institute, all health-related boards listed in section 214.01,
Council on Asian-Pacific Minnesotans, Department of Labor and Industry, Department of
Revenue, Explore Minnesota Tourism, Minnesota State Colleges and Universities, Minnesota
Indian Affairs Council, Peace Officer Standards and Training Board, Professional Educator
Licensing and Standards Board, the Minnesota Historical Society, the Perpich Center for
Arts Education, and all advisory groups associated with these agencies.
new text end

new text begin (d) The scheduled year is 2026 and every ten years thereafter for the following agencies:
all non-health-related boards listed in section 214.01 except as otherwise provided in this
section, Arts Board, Board of Animal Health, Board of School Administrators, Board of
Soil and Water Resources, Department of Veterans Affairs, Emergency Medical Services
Regulatory Board, Mayo Medical School, Office of Administrative Hearings, Public Utilities
Commission, Uniform Laws Commission, Workers' Compensation Board, and all advisory
groups associated with these agencies.
new text end

new text begin (e) The scheduled year is 2028 and every ten years thereafter for the following agencies:
Amateur Sports Commission, Capitol Area Architectural and Planning Board, Board of
Teaching, Bureau of Mediation Services, Campaign Finance and Public Disclosure Board,
Destination Medical Center, Higher Education Facilities Authority, Iron Range Resources
and Rehabilitation Board, Minnesota Conservation Corps, Minnesota Zoo, Private Detectives
Board, and all advisory groups associated with these agencies.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2020.
new text end

Sec. 7.

Minnesota Statutes 2018, section 179A.20, is amended by adding a subdivision to
read:


new text begin Subd. 2b. new text end

new text begin Limited by appropriation. new text end

new text begin The commissioner of management and budget
must not contract to pay more to employees of the state in compensation and benefits in
either year of the biennium than is permitted under the first spending plan submitted by July
31 in an odd-numbered year and approved by the commissioner under section 16A.14,
subdivisions 3 and 4.
new text end

Sec. 8.

Minnesota Statutes 2019 Supplement, section 353.27, subdivision 3c, is amended
to read:


Subd. 3c.

Former MERF members; member and employer contributions.

(a) For
the period July 1, 2019, through December 31, 2031, the member contributions for former
members of the Minneapolis Employees Retirement Fund and by the former Minneapolis
Employees Retirement Fund-covered employing units are governed by this subdivision.

(b) The member contribution for a public employee who was a member of the former
Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75 percent of the salary of
the employee.

(c) The employer regular contribution with respect to a public employee who was a
member of the former Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75
percent of the salary of the employee.

(d) The annual employer supplemental contribution is the employing unit's share of
deleted text begin $21,000,000deleted text endnew text begin $37,000,000new text end.

(e) Each employing unit's share under paragraph (d) is the amount determined from an
allocation between each employing unit in the portion equal to the unit's employer
supplemental contribution paid or payable under Minnesota Statutes 2012, section 353.50,
during calendar year 2014.

(f) The employer supplemental contribution amount under paragraph (d) for calendar
year 2019 must be invoiced by the executive director of the Public Employees Retirement
Association by July 1, 2019. For subsequent calendar years, the employer supplemental
contribution under paragraph (d) must be invoiced on January 31 of each year. The employer
supplemental contribution is payable in two parts, with the first half payable on or before
July 31 and with the second half payable on or before December 15. Late payments are
payable with interest, compounded annually, at the applicable rate or rates specified in
section 356.59, subdivision 3, per month for each month or portion of a month that has
elapsed after the due date.

(g) The employer supplemental contribution under paragraph (d) terminates on December
31, 2031.

Sec. 9. new text beginFULL-TIME EQUIVALENT FREEZE.
new text end

new text begin (a) The commissioner of management and budget shall determine the number of full-time
equivalent positions employed by each executive branch state agency as of June 30, 2020.
new text end

new text begin (b) Appropriations from any funds for fiscal year 2021 must not be used to pay salary
or benefits to employ more full-time equivalent positions than determined in paragraph (a).
new text end

new text begin (c) For purposes of this section, "executive branch state agency" has the meaning given
in Minnesota Statutes, section 16A.011, subdivision 12a, and does not include the Minnesota
State Colleges and Universities.
new text end

new text begin (d) This section does not apply to any law enforcement positions that involve the
investigation, enforcement, or prosecution of a crime or any position in a correctional facility.
new text end

Sec. 10. new text beginREDUCTION IN APPROPRIATIONS FOR UNFILLED POSITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Reduction required. new text end

new text begin The general fund and nongeneral fund appropriations
to an executive branch state agency for agency operations for the biennium ending June 30,
2021, are reduced by the amount of salary and benefits savings that result from any positions
that have not been filled within 180 days of the posting of the position. This section applies
to positions that are first posted in fiscal years 2020 and 2021. Reductions made under this
paragraph must be reflected as reductions in agency base budgets for fiscal years 2022 and
2023. This section does not apply to any law enforcement positions that involve the
investigation, enforcement, or prosecution of a crime or any position in a correctional facility.
new text end

new text begin Subd. 2. new text end

new text begin Reporting. new text end

new text begin The commissioner of management and budget must report by
September 1 of each year to the chairs and ranking minority members of the senate and the
house of representatives finance committees regarding the amount of reductions in spending
by each agency under this section.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin For purposes of this section, "executive branch state agency" has
the meaning given in Minnesota Statutes, section 16A.011, subdivision 12a, and does not
include the Minnesota State Colleges and Universities.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2020, and applies retroactively
to positions posted on or after July 1, 2019.
new text end

Sec. 11. new text beginREPEALER.
new text end

new text begin Minnesota Statutes 2019 Supplement, section 353.505, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: S4069-1

353.505 STATE CONTRIBUTIONS; FORMER MERF DIVISION.

(a) On September 15, 2019, and annually thereafter, the state shall pay to the general employees retirement plan of the Public Employees Retirement Association, with respect to the former MERF division, $16,000,000.

(b) State contributions under this section end on September 15, 2031.

(c) The commissioner of management and budget shall pay the contribution specified in this section. The amount required is appropriated annually from the general fund to the commissioner of management and budget.