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

                             CHAPTER 97-S.F.No. 512 
                  An act relating to employment; making technical and 
                  administrative changes in the department of employee 
                  relations; modifying provisions governing state 
                  employment; modifying terms of certain pilot projects; 
                  requiring a study and report; amending Minnesota 
                  Statutes 1996, sections 13.67; 15.53, subdivision 2; 
                  43A.04, subdivision 1; 43A.07, subdivision 5; 43A.27, 
                  subdivision 3; and 43A.30, subdivisions 4 and 5; Laws 
                  1993, chapter 301, section 1, subdivision 4; and Laws 
                  1995, chapter 248, articles 12, section 2; and 13, 
                  sections 2, subdivisions 2, 5, and 6; and 3, 
                  subdivision 2; proposing coding for new law in 
                  Minnesota Statutes, chapters 15; and 43A; repealing 
                  Minnesota Statutes 1996, section 43A.182; and Laws 
                  1995, chapter 248, article 10, section 12. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1996, section 13.67, is 
        amended to read: 
           13.67 [EMPLOYEE RELATIONS DATA.] 
           The following data collected, created, or maintained by the 
        department of employee relations are classified as nonpublic 
        data pursuant to section 13.02, subdivision 9:  
           (a) The commissioner's plan prepared by the department, 
        pursuant to section 3.855, which governs the compensation and 
        terms and conditions of employment for employees not covered by 
        collective bargaining agreements until the plan is submitted to 
        the legislative commission on employee relations; 
           (b) Data pertaining to grievance or interest arbitration 
        that has not been presented to the arbitrator or other party 
        during the arbitration process; 
           (c) Notes and preliminary drafts of reports prepared during 
        personnel investigations and personnel management reviews of 
        state departments and agencies; 
           (d) The managerial plan prepared by the department pursuant 
        to section 43A.18 that governs the compensation and terms and 
        conditions of employment for employees in managerial positions, 
        as specified in section 43A.18, subdivision 3, until the plan is 
        submitted to the legislative commission on employee relations; 
        and 
           (e) Claims experience and all related information received 
        from carriers and claims administrators participating in either 
        the state group insurance plan, the Minnesota employee insurance 
        program, the state workers' compensation program, or the public 
        employees insurance program as defined in chapter 43A, and 
        survey information collected from employees and employers 
        participating in these plans and programs, except when the 
        department determines that release of the data will not be 
        detrimental to the plan or program. 
           Sec. 2.  Minnesota Statutes 1996, section 15.53, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PERIOD OF ASSIGNMENT.] The period of individual 
        assignment or detail under an interchange program shall not 
        exceed 24 months, nor shall any person be assigned or detailed 
        for more than 24 months during any 36-month period, except when 
        the assignment or detail is made to coincide with an 
        unclassified appointment under section 15.06.  However, the head 
        of an agency may extend the period of assignment for not more 
        than two additional years.  Details relating to any matter 
        covered in sections 15.51 to 15.57 may be the subject of an 
        agreement between the sending and receiving agencies.  Elected 
        officials shall not be assigned from a sending agency nor 
        detailed to a receiving agency. 
           Sec. 3.  [15.0594] [COMMISSIONER'S APPROVAL REQUIRED.] 
           No person may be employed or consultant retained by an 
        entity created under section 15.0593 without written approval of 
        the commissioner of the department of employee relations. 
           Sec. 4.  Minnesota Statutes 1996, section 43A.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATEWIDE LEADERSHIP.] (a) The 
        commissioner is the chief personnel and labor relations manager 
        of the civil service in the executive branch.  
           Whenever any power or responsibility is given to the 
        commissioner by any provision of Laws 1981, chapter 210, unless 
        otherwise expressly provided, the power or authority applies to 
        all employees of agencies in the executive branch and to 
        employees in classified positions in the office of the 
        legislative auditor, the Minnesota state retirement system, the 
        public employees retirement association, and the teacher's 
        retirement association.  Unless otherwise provided by law, the 
        power or authority does not apply to unclassified employees in 
        the legislative and judicial branches.  
           (b) The commissioner shall operate an information system 
        from which personnel data, as defined in section 13.43, 
        concerning employees and applicants for positions in the 
        classified service can be retrieved.  
           The commissioner has access to all public and private 
        personnel data kept by appointing authorities that will aid in 
        the discharge of the commissioner's duties.  
           (c) The commissioner may consider and investigate any 
        matters concerned with the administration of provisions of Laws 
        1981, chapter 210, and may order any remedial actions consistent 
        with law.  The commissioner, at the request of an agency, shall 
        provide assistance in employee misconduct investigations.  The 
        commissioner shall have the right to assess from the requesting 
        agency, any costs incurred while assisting the agency in the 
        employee misconduct investigation.  Money received by the 
        commissioner under this paragraph is appropriated to the 
        commissioner for purposes of this paragraph. 
           (d) The commissioner has sole authority to settle state 
        employee workers' compensation claims. 
           (e) The commissioner may assess or establish and collect 
        premiums from all state entities to cover the costs of programs 
        under sections 15.46 and 176.603. 
           Sec. 5.  [43A.044] [HAZARD IDENTIFICATION AND ACCIDENT 
        PREVENTION.] 
           (a) The commissioner of the department of employee 
        relations must operate a program of occupational hazard 
        identification and accident prevention for state agencies and 
        state employees, and shall provide the staff, equipment, and 
        facilities needed for the program.  The program must be offered 
        to all state agencies through the agency safety contact or other 
        designee; is consultative in nature; and must assist state 
        agencies with the goal of providing a safe work environment, 
        safe work methods, and hazard identification. 
           (b) The commissioner must cooperate with the department of 
        labor and industry, department of health, and department of 
        administration as well as other private and public community 
        agencies to assist in the objective of hazard identification and 
        accident prevention. 
           Sec. 6.  Minnesota Statutes 1996, section 43A.07, 
        subdivision 5, is amended to read: 
           Subd. 5.  [LEAVES TO ACCEPT UNCLASSIFIED APPOINTMENTS.] An 
        employee who is may be granted a leave of absence from a 
        position in the classified service to accept a position in the 
        unclassified service shall retain an inactive classified service 
        status.  Upon request, during the unclassified appointment or 
        within 60 days of the end of the unclassified appointment, the 
        employee shall be reappointed in the agency from which the 
        employee was granted the leave, to a classified position 
        comparable to that held immediately prior to being appointed to 
        the unclassified position.  
           Sec. 7.  Minnesota Statutes 1996, section 43A.27, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RETIRED EMPLOYEES.] A person may elect to 
        purchase at personal expense individual and dependent hospital, 
        medical, and dental coverages if the person is: 
           (1) a retired employee of the state or an organization 
        listed in subdivision 2 or section 43A.24, subdivision 2, who 
        receives, at separation of service: 
           (i) is immediately eligible to receive an annuity under a 
        state retirement program sponsored by the state or such 
        organization of the state and immediately meets the age and 
        service requirements in section 352.115, subdivision 1; and 
           (ii) has five years of service or meets the service 
        requirement of the collective bargaining agreement or plan, 
        whichever is greater; or 
           (2) a retired employee of the state who is at least 50 
        years of age and has at least 15 years of state service may 
        elect to purchase at personal expense individual and dependent 
        hospital, medical, and dental coverages that are.  
           The commissioner shall offer at least one plan which is 
        actuarially equivalent to those made available through 
        collective bargaining agreements or plans established pursuant 
        to section 43A.18 to employees in positions equivalent to that 
        from which retired.  A spouse of a deceased retired employee who 
        received an annuity under a state retirement program may 
        purchase the coverage listed in this subdivision if the spouse 
        was a dependent under the retired employee's coverage at the 
        time of the employee's death.  Coverages must be coordinated 
        with relevant health insurance benefits provided through the 
        federally sponsored Medicare program.  Until the retired 
        employee reaches age 65, the retired employee and dependents 
        must be pooled in the same group as active employees for 
        purposes of establishing premiums and coverage for hospital, 
        medical, and dental insurance.  Coverage for retired employees 
        and their dependents may not discriminate on the basis of 
        evidence of insurability or preexisting conditions unless 
        identical conditions are imposed on active employees in the 
        group that the employee left.  Appointing authorities shall 
        provide notice to employees no later than the effective date of 
        their retirement of the right to exercise the option provided in 
        this subdivision.  The retired employee must notify the 
        commissioner or designee of the commissioner within 30 days 
        after the effective date of the retirement of intent to exercise 
        this option. 
           Sec. 8.  Minnesota Statutes 1996, section 43A.30, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EMPLOYEE INSURANCE TRUST FUND.] The commissioner 
        of employee relations may direct that all or a part of the 
        amounts paid for life insurance, hospital, medical, and dental 
        benefits, and optional coverages authorized for eligible 
        employees and other eligible persons be deposited by the state 
        in an employee insurance trust fund in the state treasury, from 
        which the approved claims of eligibles are to be paid.  
        Investment income and investment losses attributable to the 
        investment of the fund shall be credited to the fund.  There is 
        appropriated from the fund to the commissioner amounts needed to 
        pay the approved claims of eligibles, related service charges, 
        insurance premiums, and refunds.  The commissioner shall not 
        market or self-insure life insurance or optional coverages.  The 
        commissioner may market and self-insure dental and optional 
        coverages.  Nothing in this subdivision precludes the 
        commissioner from determining plan design, providing 
        informational materials, or communicating with employees about 
        coverages. 
           Sec. 9.  Minnesota Statutes 1996, section 43A.30, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ADMINISTRATION.] The commissioner of employee 
        relations may administer the employee insurance program.  The 
        commissioner may assess agencies, and employers of persons 
        eligible for state-paid insurance and benefits under section 
        43A.24, the cost of these administrative services and include it 
        in the amounts billed for life insurance, hospital, medical, and 
        dental benefits, and optional coverages authorized.  Receipts 
        from the assessments must be deposited in the state treasury and 
        credited to a special account in the employee insurance trust 
        fund and are appropriated to the commissioner to pay these 
        administrative costs. 
           Sec. 10.  [43A.375] [DEDUCTION FOR EXPENSES; FRAUD OR 
        MISTAKE.] 
           If expenses are reimbursed to an employee by the employer 
        under circumstances of fraud or mistake, the expenses may be 
        deducted from wages earned by or due the employee. 
           Sec. 11.  Laws 1993, chapter 301, section 1, subdivision 4, 
        is amended to read: 
           Subd. 4.  [WAIVER.] (a) Upon receipt of the committee 
        report required by subdivision 3, each entity head shall submit 
        the list of recommended waivers to the commissioner of employee 
        relations.  The commissioner shall then grant the waivers 
        requested by each entity, effective for the requesting entity, 
        for a period ending June 30, 1997, subject to the restrictions 
        in paragraph (b) and to revision in accordance with subdivision 
        5.  These waivers are effective for the requesting entity, for a 
        period ending June 30, 1997, except the waivers granted for the 
        Minnesota housing finance agency shall extend to June 30, 1999.  
        The commissioner shall waive a rule by granting a variance under 
        Minnesota Statutes, section 14.05, subdivision 4.  
           (b) The commissioner may not grant a waiver if it would 
        result in the layoff of classified employees or unclassified 
        employees covered by a collective bargaining agreement except as 
        provided in a plan negotiated under Minnesota Statutes, chapter 
        179A, that provides options to layoff for employees who would be 
        affected.  If a proposed waiver would violate the terms of a 
        collective bargaining agreement reached under Minnesota 
        Statutes, chapter 179A, the waiver may not be granted without 
        the consent of the exclusive representative that is a party to 
        the agreement. 
           Sec. 12.  Laws 1995, chapter 248, article 12, section 2, is 
        amended to read: 
           Sec. 2.  [TERMINATION.] 
           Section 1 and the civil service pilot project in the 
        housing finance agency as authorized by Laws 1993, chapter 301, 
        terminate June 30, 1997 1999, or at any earlier time by a method 
        agreed upon by the commissioners of employee relations and 
        housing finance and the affected exclusive bargaining 
        representative of state employees. 
           Sec. 13.  Laws 1995, chapter 248, article 13, section 2, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PILOT PROJECT.] During the biennium ending June 
        30, 1997 2001, the governor shall designate an executive agency 
        that will conduct a pilot civil service project.  The pilot 
        program must adhere to the policies expressed in subdivision 1 
        and in Minnesota Statutes, section 43A.01.  For the purposes of 
        conducting the pilot project, the commissioner of the designated 
        agency is exempt from the provisions that relate to employment 
        in Minnesota Statutes, chapter 43A, Minnesota Rules, chapter 
        3900, and administrative procedures and policies of the 
        department of employee relations.  If a proposed exemption from 
        the provisions that relate to employment in Minnesota Statutes, 
        chapter 43A, Minnesota Rules, chapter 3900, and administrative 
        procedures and policies of the department of employee relations 
        would violate the terms of a collective bargaining agreement 
        effective under Minnesota Statutes, chapter 179A, the exemption 
        is not effective without the consent of the exclusive 
        representative that is a party to the agreement.  Upon request 
        of the commissioner carrying out the pilot project, the 
        commissioner of employee relations shall provide technical 
        assistance in support of the pilot project.  This section does 
        not exempt an agency from compliance with Minnesota Statutes, 
        sections 43A.19 and 43A.191, or from rules adopted to implement 
        those sections. 
           Sec. 14.  Laws 1995, chapter 248, article 13, section 2, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PILOT PROJECT.] During the biennium ending June 
        30, 1997, the human resources innovation committee established 
        under Laws 1993, chapter 301, section 1, subdivision 6, 1999, 
        the department of employee relations in conjunction with union 
        representatives shall designate state job classifications to be 
        included in a one or more pilot project projects.  Under this 
        pilot project:  (1) resumes of applicants for positions to be 
        filled through a competitive open this process will be evaluated 
        through an objective computerized system that will identify 
        which applicants have the required skills; and (2)  information 
        on applicants determined to have required skills will be 
        forwarded to the agency seeking to fill a vacancy, without 
        ranking these applicants, and without a limit on the number of 
        applicants that may be forwarded to the hiring agency.  Laws or 
        rules that govern examination, ranking of eligibles, and 
        certification of eligibles for competitive open positions do not 
        apply to those job classifications included in the pilot 
        project.  This process is in lieu of the procedures provided in 
        Minnesota Statutes, sections 43A.10 to 43A.13, and related rules 
        and procedures adopted under Minnesota Statutes, section 43A.04, 
        subdivision 4, except that applicants who are being referred and 
        who qualify for veterans preference under Minnesota Statutes, 
        section 43A.11, will be placed ahead of referrals who meet the 
        required skills of the vacant position and who do not qualify 
        for veterans preference.  Before designating a job 
        classification under this subdivision, the committee department 
        must assure that the hiring process for those job 
        classifications complies with the policies in subdivision 1.  
           Sec. 15.  Laws 1995, chapter 248, article 13, section 2, 
        subdivision 6, is amended to read: 
           Subd. 6.  [EVALUATION.] The commissioner of employee 
        relations, in consultation with the human resources innovation 
        committee union representatives, shall design and implement a 
        system for evaluating the success of the pilot project in 
        subdivision 5.  By October 1, 1996 1997, and October 1, 1997 
        1998, the commissioner must report to the legislature on the 
        pilot project.  The report must:  
           (1) list job classifications subject to the each pilot 
        project, and the number of positions filled under in these job 
        classes under the pilot; 
           (2) evaluate the extent to which the project has been 
        successful in maintaining a merit-based system in the absence of 
        traditional civil service laws and rules; 
           (3) quantify time and money saved in the hiring process 
        under the these pilot project projects, as compared to hiring 
        under the traditional laws and rules; 
           (4) document the extent of complaints or problems arising 
        under the new system; and 
           (5) recommend any changes in laws or rules needed to make 
        permanent the successes of the pilot project projects. 
           Sec. 16.  Laws 1995, chapter 248, article 13, section 3, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PILOT PROJECT.] During the biennium ending June 
        30, 1997, the department of employee relations must implement a 
        system of incentives including economic incentives for 
        unrepresented employees for or groups of unrepresented employees 
        in the department.  The system must be approved by the 
        commissioner of finance before being implemented.  The system 
        must have the following characteristics: 
           (1) it must provide nonmanagerial unrepresented employees 
        or groups of employees within the agency the possibility of 
        earning economic rewards by suggesting changes in operation of 
        the department's programs; 
           (2) it must provide nonmanagerial represented employees 
        within the agency the possibility of receiving individual or 
        group economic rewards, if provided in a collective bargaining 
        agreement, for suggesting changes in the operation of the 
        department's programs; 
           (3) it must provide groups of nonmanagerial represented 
        employees within the agency the possibility of receiving group 
        rewards in the form of training opportunities, filling of 
        unfilled employee complement, or other resources that benefit 
        overall group performance; 
           (4) any economic awards must be based on changes in 
        operations suggested by nonmanagerial employees or groups of 
        employees that result in objectively measurable cost savings of 
        at least $25,000 or significant and objectively measurable 
        efficiencies in services that the agency provides to its 
        customers or clients, without decreasing the quality of these 
        services; 
           (5) awards must be a minimum of $500 up to a maximum of 
        $2,500 per year to unrepresented nonmanagerial employees or 
        groups of employees who were instrumental in identifying and or 
        implementing the efficiency and cost-saving measures; 
           (6) an "efficiency savings account" must be created within 
        each fund that is used to provide money for department 
        services.  Each account consists of money saved directly as a 
        result of initiatives under this section.  Any awards under this 
        article must be paid from money in an efficiency savings 
        account.  One-half of the money in the account may be used for 
        awards under this section, and the remainder must be returned to 
        the fund from which the money was appropriated; 
           (7) no award shall be given except upon approval of a team 
        comprised of equal numbers of management and nonmanagement 
        employees selected by the commissioner of employee relations 
        from state employees outside of the department; and 
           (8) the economic awards granted to unrepresented employees 
        must be one-time awards in the form of a lump sum award, and 
        must not add to the base salary of employees. 
           Sec. 17.  [AMERICANS WITH DISABILITIES ACT COORDINATOR.] 
           The commissioner shall designate a state ADA coordinator 
        who will have primary responsibility for providing training and 
        technical assistance to agencies on the provisions of titles I 
        and II of the Americans with Disability Act, Public Law Number 
        101-336, and Minnesota Statutes, chapter 363.  The ADA 
        coordinator will establish monitoring procedures and reports of 
        progress to the governor's office on no less than a biennial 
        basis. 
           The ADA coordinator will work with the state director of 
        diversity and equal opportunity on the establishment of 
        affirmative action goals for persons with disabilities in 
        accordance with Minnesota Statutes, section 43A.19, subdivision 
        1, paragraph (b), and the review and approval of agency 
        affirmative action plans consistent with Minnesota Statutes, 
        sections 43A.04, subdivision 3, and 43A.191, subdivision 1. 
           Sec. 18.  [HUMAN RESOURCES SYSTEM.] 
           Subdivision 1.  [PILOT PROJECT.] The pilot program 
        established in the department of human services by Laws 1994, 
        chapter 453, section 1, is continued and amended as described in 
        this section.  The pilot program must adhere to the policies 
        expressed in subdivision 1 and in Minnesota Statutes, section 
        43A.01.  For the purposes of conducting the expanded pilot 
        project, the commissioner of human services is exempt from the 
        provisions that relate to employment in Minnesota Statutes, 
        chapter 43A, Minnesota Rules, chapter 3900, and administrative 
        procedures and policies of the department of employee 
        relations.  If a proposed exemption from the provisions that 
        relate to employment in Minnesota Statutes, chapter 43A, 
        Minnesota Rules, chapter 3900, and administrative procedures and 
        policies of the department of employee relations would violate 
        the terms of a collective bargaining agreement effective under 
        Minnesota Statutes, chapter 179A, the exemption is not effective 
        without the consent of the exclusive representative that is a 
        party to the agreement.  The labor-management committee 
        established by Laws 1994, chapter 453, section 1, shall 
        continue.  The committee membership may be expanded as long as 
        an equal number of labor and management representatives is 
        maintained.  A proposed exemption may not be implemented without 
        the approval of the labor-management committee unless it affects 
        only managerial or other unrepresented positions.  Upon request 
        of the commissioner of human services, and subject to the 
        availability of resources, the commissioner of employee 
        relations may provide technical assistance in support of the 
        pilot project and may request reimbursement for the reasonable 
        cost of any services provided.  This section does not exempt the 
        department of human services from compliance with Minnesota 
        Statutes, sections 43A.19 and 43A.191, or from rules adopted to 
        implement those sections. 
           Subd. 2.  [EVALUATION.] The department of human services 
        shall evaluate the pilot program.  The evaluation shall include 
        at least the following factors:  
           (1) the extent to which the department of human services 
        has been successful in maintaining a merit-based human resources 
        system in the absence of the traditional civil service rules and 
        procedures; 
           (2) the extent to which the project's projected outcomes 
        were achieved; 
           (3) the satisfaction of managers, supervisors, and 
        exclusive representatives of employees with the changes; and 
           (4) the extent of complaints or problems arising under the 
        new system.  
           The department of human services must report to the 
        legislature by January 15, 1999, January 15, 2000, and January 
        15, 2001, on the progress and results of the project. 
           Sec. 19.  [STUDY OF STATE HIRING OPTIONS.] 
           The commissioner of human services shall study and report 
        to the legislature by January 15, 1998, with recommendations to 
        expand employment opportunities for public assistance recipients 
        in state agencies and institutions of higher education.  The 
        report may include recommendations on: 
           (1) giving qualified applicants who are recipients of 
        public assistance preference in hiring; and 
           (2) other recommendations developed by the commissioner in 
        consultation with other state agencies and institutions of 
        higher education. 
           Sec. 20.  [REPEALER.] 
           Minnesota Statutes 1996, section 43A.182, and Laws 1995, 
        chapter 248, article 10, section 12, are repealed. 
           Presented to the governor May 5, 1997 
           Signed by the governor May 6, 1997, 2:35 p.m.

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