1.1 	A bill for an act
1.2 	relating to local government; modifying the
1.3 	compensation limit for political subdivision
1.4 	employees; amending Minnesota Statutes 2004, sections
1.5 	43A.17, subdivision 9; 356.611, subdivision 1.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 43A.17,
1.8 	subdivision 9, is amended to read:
1.9 		Subd. 9.Political subdivision compensation limit.  (a)
1.10 	The salary and the value of all other forms of compensation of a
1.11 	person employed by a political subdivision of this state,
1.12 	excluding a school district, or employed under section 422A.03
1.13 	may not exceed 95 125 percent of the salary of the governor as
1.14 	set under section 15A.082, except as provided in this
1.15 	subdivision.  For purposes of this subdivision, "political
1.16 	subdivision of this state" includes a statutory or home rule
1.17 	charter city, county, town, metropolitan or regional agency, or
1.18 	other political subdivision, but does not include a hospital,
1.19 	clinic, or health maintenance organization owned by such a
1.20 	governmental unit.
1.21 	(b) Deferred compensation and payroll allocations to
1.22 	purchase an individual annuity contract for an employee are
1.23 	included in determining the employee's salary.  Other forms of
1.24 	compensation which shall be included to determine an employee's
1.25 	total compensation are all other direct and indirect items of
2.1 	compensation which are not specifically excluded by this
2.2 	subdivision.  Other forms of compensation which shall not be
2.3 	included in a determination of an employee's total compensation
2.4 	for the purposes of this subdivision are:
2.5 	(1) employee benefits that are also provided for the
2.6 	majority of all other full-time employees of the political
2.7 	subdivision, vacation and sick leave allowances, health and
2.8 	dental insurance, disability insurance, term life insurance, and
2.9 	pension benefits or like benefits the cost of which is borne by
2.10 	the employee or which is not subject to tax as income under the
2.11 	Internal Revenue Code of 1986;
2.12 	(2) dues paid to organizations that are of a civic,
2.13 	professional, educational, or governmental nature; and
2.14 	(3) reimbursement for actual expenses incurred by the
2.15 	employee which the governing body determines to be directly
2.16 	related to the performance of job responsibilities, including
2.17 	any relocation expenses paid during the initial year of
2.18 	employment.
2.19 	The value of other forms of compensation shall be the
2.20 	annual cost to the political subdivision for the provision of
2.21 	the compensation.
2.22 	(c) The salary of a medical doctor or doctor of osteopathy
2.23 	occupying a position that the governing body of the political
2.24 	subdivision has determined requires an M.D. or D.O. degree is
2.25 	excluded from the limitation in this subdivision.
2.26 	(d) The commissioner may increase the limitation in this
2.27 	subdivision for a position that the commissioner has determined
2.28 	requires special expertise necessitating a higher salary to
2.29 	attract or retain a qualified person.  The commissioner shall
2.30 	review each proposed increase giving due consideration to salary
2.31 	rates paid to other persons with similar responsibilities in the
2.32 	state and nation. The commissioner may not increase the
2.33 	limitation until the commissioner has presented the proposed
2.34 	increase to the Legislative Coordinating Commission and received
2.35 	the commission's recommendation on it.  The recommendation is
2.36 	advisory only.  If the commission does not give its
3.1 	recommendation on a proposed increase within 30 days from its
3.2 	receipt of the proposal, the commission is deemed to have made
3.3 	no recommendation.A political subdivision requesting an
3.4 	increase in the limitation must submit the request
3.5 	simultaneously to the commissioner and the Legislative
3.6 	Coordinating Commission.  The commissioner may not act on the
3.7 	increase before receiving the recommendation of the Legislative
3.8 	Coordinating Commission, unless the commission does not make a
3.9 	recommendation within 30 days of receiving the request.  The
3.10 	commissioner must act on the increase within 15 days after
3.11 	receiving a recommendation from the commission or 45 days after
3.12 	receiving the request from the political subdivision, whichever
3.13 	comes first.  If the commissioner does not act by the applicable
3.14 	deadline, the waiver is granted.

3.15 	Sec. 2. Minnesota Statutes 2004, section 356.611,
3.16 	subdivision 1, is amended to read:
3.17 		Subdivision 1.State salary limitations.  (a)
3.18 	Notwithstanding any provision of law, bylaws, articles of
3.19 	incorporation, retirement and disability allowance plan
3.20 	agreements, or retirement plan contracts to the contrary, the
3.21 	covered salary for pension purposes for a plan participant of a
3.22 	covered retirement fund enumerated in section 356.30,
3.23 	subdivision 3, may not exceed 95 125 percent of the salary
3.24 	established for the governor under section 15A.082 at the time
3.25 	the person received the salary.
3.26 	(b) This section does not apply to a salary paid:
3.27 	(1) to the governor or to a judge;
3.28 	(2) to an employee of a political subdivision in a position
3.29 	that is excluded from the limit as specified under section
3.30 	43A.17, subdivision 9;
3.31 	(3) to a state employee as defined under section 43A.02,
3.32 	subdivision 21;
3.33 	(4) to an employee of Gillette Hospital who is covered by
3.34 	the general state employees retirement plan of the Minnesota
3.35 	State Retirement System;
3.36 	(5) to an employee of the Minnesota Crop Improvement
4.1 	Council; or
4.2 	(6) to an employee of the Minnesota Historical Society.
4.3 	(c) The limited covered salary determined under this
4.4 	section must be used in determining employee and employer
4.5 	contributions and in determining retirement annuities and other
4.6 	benefits under the respective covered retirement fund and under
4.7 	this chapter.

4.8 	Sec. 3. EFFECTIVE DATE.
 4.9 	Sections 1 and 2 are effective the day following final
4.10 	enactment.  The provisions of section 1 establishing a revised
4.11 	process for considering increases to the compensation limit
4.12 	apply to proposals for increases submitted after the effective
4.13 	date of section 1.