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Key: (1) language to be deleted (2) new language

                            CHAPTER 169-S.F.No. 953 
                  An act relating to local government; increasing and 
                  indexing the compensation limit for local government 
                  employees; amending Minnesota Statutes 2004, section 
                  43A.17, subdivision 9; repealing Minnesota Statutes 
                  2004, section 356.611, subdivision 1. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2004, 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, or employed under section 422A.03 
        may not exceed 95 110 percent of the salary of the governor as 
        set under section 15A.082, 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 2006, the limit in paragraph (a) shall be 
        adjusted annually in January.  The limit shall 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 shall 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 shall 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 shall be the 
        annual cost to the political subdivision for the provision of 
        the compensation.  
           (c) (d) The salary of a medical doctor or doctor of 
        osteopathy 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.  
           (d) (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 
        shall 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. 
           Sec. 2.  [REPEALER.] 
           Minnesota Statutes 2004, section 356.611, subdivision 1, is 
        repealed. 
           Presented to the governor May 31, 2005 
           Signed by the governor June 2, 2005, 2:40 p.m.