HF 192

as introduced - 87th Legislature (2011 - 2012) Posted on 01/24/2011 09:30am

A bill for an act
relating to state government; proposing the Reinventing Government
Employment Act; providing a public employee compensation freeze and a
method for determining future compensation; requiring a reduction in the
state workforce; establishing a state employee gainsharing system; removing
restrictions on state contracts with private vendors; proposing a constitutional
amendment providing a right to work; amending Minnesota Statutes 2010,
sections 16C.08, subdivision 2; 16C.09; proposing coding for new law in
Minnesota Statutes, chapters 15; 15A; 16A; 43A; 181; repealing Minnesota
Statutes 2010, sections 16C.085; 43A.047; 179A.23.

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

ARTICLE 1

REINVENTING GOVERNMENT EMPLOYMENT

Section 1. new text begin CITATION.
new text end

new text begin This act may be known as the Reinventing Government Employment Act.
new text end

ARTICLE 2

EQUAL PAY AND BENEFITS

Section 1.

new text begin [15A.25] PUBLIC EMPLOYEE COMPENSATION.
new text end

new text begin Subdivision 1. new text end

new text begin Compensation freeze. new text end

new text begin (a) From the effective date of this section
until implementation of compensation required under subdivision 2, a government
employer must not increase the compensation of any employee. This subdivision prohibits
any increase including, but not limited to, across-the-board increases; cost-of-living
adjustments; increases based on longevity; increases as a result of step and lane changes;
increases in the form of lump-sum payments; increases in employer contributions to
deferred compensation plans; and any increase in employer contributions toward the cost
of medical, dental, life, or other insurance.
new text end

new text begin (b) This subdivision does not prohibit:
new text end

new text begin (1) an increase in the rate of salary and wages for an employee who is promoted or
transferred to a position with greater job responsibilities; or
new text end

new text begin (2) an increase in the employer contribution to a public pension plan, if required
by other law.
new text end

new text begin Subd. 2. new text end

new text begin Future compensation. new text end

new text begin (a) The commissioner of management and budget
must contract for a compensation study for government position descriptions. The study
must compare the total compensation, including salary and benefits, of each position
description with positions in the private sector in which the skill, effort, responsibilities,
and working conditions are similar. The commissioner must report the results of the
study by March 1, 2012.
new text end

new text begin (b) By July 1, 2012, each government employer must implement compensation
for each position for its employees that, as nearly as practicable, is comparable to the
compensation of private sector positions with similar skill, effort, responsibilities, and
working conditions, as determined by the commissioner under paragraph (a).
new text end

new text begin Subd. 3. new text end

new text begin Contracts in effect. new text end

new text begin This section does not prohibit a change in
compensation required by a contract or collective bargaining agreement in effect before
the effective date of this section. However, a government employer may not:
new text end

new text begin (1) enter into a new contract or collective bargaining agreement that changes
compensation in a manner that conflicts with this section; or
new text end

new text begin (2) extend an expired contract or collective bargaining agreement or any other
arrangement that conflicts with this section.
new text end

new text begin Subd. 4. new text end

new text begin Relation to other law. new text end

new text begin This section supersedes chapter 179A and any
other law to the contrary. It is not an unfair labor practice under chapter 179A for a
public employer to take any action required to comply with this section. Employees of a
government employer may not legally strike due to a government employer's action that is
required to comply with this section. Neither a government employer nor an exclusive
representative may request interest arbitration regarding any element of compensation
prescribed by this section, and an arbitrator may not issue an award that would conflict
with this section.
new text end

new text begin Subd. 5. new text end

new text begin Government employer. new text end

new text begin For purposes of this section, "government
employer" means: (1) the state and all entities in the state executive, legislative, and
judicial branches, including, but not limited to, all constitutional officers and the
Minnesota state colleges and universities; (2) all regional boards, regional commissions,
and regional councils; (3) all statutory or home rule charter cities, towns, counties, school
districts, charter schools, and other political subdivisions. For purposes of this section
"employee" includes a state or local government elected official. The legislature strongly
recommends that the University of Minnesota comply with this section as if it were a
governmental employer under this section.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 3

WORKFORCE REDUCTION; EARLY RETIREMENT

Section 1.

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

new text begin Subdivision 1. new text end

new text begin Required reduction. new text end

new text begin The state of Minnesota shall reduce the state
government workforce and associated costs by at least 15 percent by June 30, 2015, by
using any or all of the following: early retirement, furloughs, layoffs, a hard hiring freeze,
a wage freeze, and by restructuring pension programs to defined contribution plans. The
early retirement program in this section is enacted to assist the state and its employees to
comply with the required 15 percent reduction.
new text end

new text begin Subd. 2. new text end

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

new text begin Following enactment of
this section and prior to implementation of the early retirement program in this section, the
Department of Management and Budget shall perform an actuarial analysis to determine: a
minimum and maximum number of retirees allowable under the early retirement program
specified in this section; the percentage of the early retirement program savings to be
returned to the pension fund over a prescribed period of time in order to cover the cost to
the pension fund of the early retirement program specified in this section. The department
shall use the findings in implementing the early retirement program.
new text end

new text begin Subd. 3. new text end

new text begin Early retirement program. new text end

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

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

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

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

new text begin Subd. 4. new text end

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

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

new text begin Subd. 5. new text end

new text begin Deferred annuity. new text end

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

new text begin Subd. 6. new text end

new text begin Extension of deadline. new text end

new text begin To ensure that the efficient operation of state
government is not jeopardized by the simultaneous retirement of large numbers of key
personnel, an appointing authority may extend the June 30, 2015, deadline for terminating
state employment by notifying the executive director of the Minnesota State Retirement
System in writing.
new text end

new text begin Subd. 7. new text end

new text begin Best practices. new text end

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

new text begin Subd. 8. new text end

new text begin Hiring freeze. new text end

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

new text begin Subd. 9. new text end

new text begin Reemployment prohibition. new text end

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

new text begin Subd. 10. new text end

new text begin Pension fund return. new text end

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

new text begin Subd. 11. new text end

new text begin Pension reform. new text end

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

new text begin Subd. 12. new text end

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

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

ARTICLE 4

GAINSHARING

Section 1.

new text begin [16A.90] EMPLOYEE GAINSHARING SYSTEM.
new text end

new text begin The commissioner shall establish a program to provide onetime bonus compensation
to state employees for efforts made to reduce the costs of operating state government or for
ways of providing better or more efficient state services. The commissioner may make a
onetime award to an employee or group of employees whose suggestion or involvement in
a project is determined by the commissioner to have resulted in documented cost-savings
to the state. The maximum award is ten percent of the documented savings in the
first fiscal year in which the savings are realized. The award must be paid from the
appropriation to which the savings accrued.
new text end

ARTICLE 5

VALUE-ADDED SERVICE

Section 1.

new text begin [15.062] COST-EFFECTIVE PROVISION OF SERVICES.
new text end

new text begin (a) The head or governing board of each state department or agency, including the
Minnesota state colleges and universities, must carry out the agency's powers and duties
in the most cost-effective manner possible. The agency head or governing board must
determine if the most cost-effective manner of carrying out each of the agency's powers
and duties is to hire state employees or to contract with outside sources.
new text end

new text begin (b) If an agency decides to seek an outside vendor to perform work currently done
by state employees, the agency must permit groups of state employees to compete for the
business by submitting responses to the agency's solicitation documents. Notwithstanding
section 16A.127 or any other law to the contrary, no statewide or agency indirect costs
may be assessed to a group of agency employees with respect to work performed under
a contract awarded to a group of employees under this section. This section supersedes
any provision of law preventing a state agency from entering into a contract with a state
employee.
new text end

Sec. 2.

Minnesota Statutes 2010, section 16C.08, subdivision 2, is amended to read:

Subd. 2.

Duties of contracting agency.

(a) Before an agency may seek approval of
a professional or technical services contract valued in excess of $5,000, it must provide
the following:

(1) a description of how the proposed contract or amendment is necessary and
reasonable to advance the statutory mission of the agency;

(2) a description of the agency's plan to notify firms or individuals who may be
available to perform the services called for in the solicitation;

(3) a description of the performance measures or other tools, including accessibility
measures if applicable, that will be used to monitor and evaluate contract performance; and

(4) an explanation detailing, if applicable, why this procurement is being pursued
unilaterally by the agency and not as an enterprise procurement.

(b) In addition to paragraph (a), the agency must certify that:

deleted text begin (1) no current state employee is able and available to perform the services called
for by the contract;
deleted text end

deleted text begin (2) deleted text end new text begin (1) new text end the normal competitive bidding mechanisms will not provide for adequate
performance of the services;

deleted text begin (3) deleted text end new text begin (2) new text end reasonable efforts will be made to publicize the availability of the contract
to the public;

deleted text begin (4) deleted text end new text begin (3) new text end the agency will develop and implement a written plan providing for the
assignment of specific agency personnel to manage the contract, including a monitoring
and liaison function, the periodic review of interim reports or other indications of past
performance, and the ultimate utilization of the final product of the services;

deleted text begin (5) deleted text end new text begin (4) new text end the agency will not allow the contractor to begin work before the contract is
fully executed unless an exception under section 16C.05, subdivision 2a, has been granted
by the commissioner and funds are fully encumbered;

deleted text begin (6) deleted text end new text begin (5) new text end the contract will not establish an employment relationship between the state
or the agency and any persons performing under the contract; new text begin and
new text end

deleted text begin (7) deleted text end new text begin (6) new text end in the event the results of the contract work will be carried out or continued
by state employees upon completion of the contract, the contractor is required to include
state employees in development and training, to the extent necessary to ensure that after
completion of the contract, state employees can perform any ongoing work related to the
same function deleted text begin ; and
deleted text end

deleted text begin (8) the agency will not contract out its previously eliminated jobs for four years
without first considering the same former employees who are on the seniority unit layoff
list who meet the minimum qualifications determined by the agency deleted text end .

(c) A contract establishes an employment relationship for purposes of paragraph (b),
clause deleted text begin (6) deleted text end new text begin (5) new text end , if, under federal laws governing the distinction between an employee and
an independent contractor, a person would be considered an employee.

Sec. 3.

Minnesota Statutes 2010, section 16C.09, is amended to read:

16C.09 PROCEDURE FOR SERVICE CONTRACTS.

(a) Before entering into or approving a service contract, the commissioner must
determine, at least, that:

deleted text begin (1) no current state employee is able and available to perform the services called
for by the contract;
deleted text end

deleted text begin (2) deleted text end new text begin (1) new text end the work to be performed under the contract is necessary to the agency's
achievement of its statutory responsibilities and there is statutory authority to enter into
the contract;

deleted text begin (3) deleted text end new text begin (2) new text end the contract will not establish an employment relationship between the state
or the agency and any persons performing under the contract;

deleted text begin (4) deleted text end new text begin (3) new text end new text begin new text end the contractor and agents are not employees of the state new text begin , except as authorized
in section 15.062 new text end ;

deleted text begin (5) deleted text end new text begin (4) new text end the contracting agency has specified a satisfactory method of evaluating and
using the results of the work to be performed; and

deleted text begin (6) deleted text end new text begin (5) new text end the combined contract and amendments will not exceed five years without
specific, written approval by the commissioner according to established policy, procedures,
and standards, or unless otherwise provided for by law. The term of the original contract
must not exceed two years, unless the commissioner determines that a longer duration is
in the best interest of the state.

deleted text begin (b) For purposes of paragraph (a), clause (1), employees are available if qualified
and:
deleted text end

deleted text begin (1) are already doing the work in question; or
deleted text end

deleted text begin (2) are on layoff status in classes that can do the work in question.
deleted text end

deleted text begin An employee is not available if the employee is doing other work, is retired, or has decided
not to do the work in question.
deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end This section does not apply to an agency's use of inmates pursuant to sections
241.20 to 241.23 or to an agency's use of persons required by a court to provide:

(1) community service; or

(2) conservation or maintenance services on lands under the jurisdiction and control
of the state.

Sec. 4. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, sections 16C.085; 43A.047; and 179A.23, new text end new text begin are repealed.
new text end

ARTICLE 6

RIGHT TO WORK

Section 1. new text begin CONSTITUTIONAL AMENDMENT PROPOSED.
new text end

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

new text begin Sec. 18. new text end

new text begin No person shall be required as a condition of obtaining or continuing
public sector or private sector employment to: (1) resign or refrain from membership
in, voluntary affiliation with, or voluntary financial support of a labor organization; (2)
become or remain a member of a labor organization; (3) pay any dues, fees, assessments,
or other charges of any kind or amount, or provide anything else of value, to a labor
organization; or (4) pay to any charity or other third party an amount equivalent to, or
a portion of, dues, fees, assessments, or other charges required of members of a labor
organization. If any part of this section is found to be in conflict with the United States
Constitution or federal law, the section shall be implemented to the maximum extent that
the United States Constitution and federal law permit. Any provision held invalid or
inoperative is severable from the remaining portions of this section.
new text end

Sec. 2. new text begin SUBMISSION TO VOTERS.
new text end

new text begin The proposed amendment must be submitted to the people at the 2012 general
election. The question submitted must be:
new text end

new text begin "Shall the Minnesota Constitution be amended to guarantee all citizens the
individual freedom to decide, without having it affect their employment status, to join or
not join a labor union; to remain with or leave a labor union; or to pay or not pay dues,
fees, assessments, or other charges of any kind to a labor organization unless voluntarily
joining that organization?
new text end

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

Sec. 3.

new text begin [181.99] ENFORCEMENT OF RIGHT TO WORK.
new text end

new text begin An agreement, contract, understanding, or practice between a labor organization
and an employer that takes force or is extended or renewed after adoption of the
Minnesota Constitution, article I, section 18, and that violates that section is unlawful and
unenforceable. A person who suffers an injury or a threatened injury under that section
may bring a civil action for damages, injunctive relief, or both. In addition, a court shall
award a prevailing plaintiff costs and reasonable attorney fees. As used in this section,
"labor organization" means any agency, union, employee representation committee, or
organization of any kind that exists for the purpose, in whole or in part, of dealing with
employers concerning wages, rates of pay, hours of work, other conditions of employment,
or other forms of compensation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon adoption of the constitutional
amendment proposed in section 1.
new text end