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S.F. No. 605 - Omnibus State Government Appropriations Bill (Minnesota Laws 2017, Chapter 44)
Author: Senator Mary Kiffmeyer
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
Date: May 10, 2017



Article 1 appropriates money to state agencies in fiscal years 2018 and 2019 from specified funds.  This summary will note riders that differ from perennial riders.

Section 2 appropriates money to the senate, house of representatives, and the Legislative Coordinating Commission (LCC). This section includes riders that:

  • list specific LCC entities that may be supported by designated staff; others must be supported by central LCC administrative staff;
  • require the Legislative Auditor to review the small business investment tax credit program;
  • require the Office of Legislative Auditor (OLA) to review the adequacy of county audits conducted by the State Auditor;
  • appropriate funds for upgrades and repairs to IT facilities; and
  • appropriate funds for preservation of legislative recordings.


Section 3 appropriates money to the Governor and Lieutenant Governor, and includes the following riders:

  • Permits use of a portion of the appropriation to the Governor to be used for necessary expenses
  • Cancels amounts appropriated from the general fund for transfer from agencies to the Governor’s office
  • Prohibits expansion of personnel in Governor's office

Section 4 appropriates money to the State Auditor and requires that the State Auditor rates for FY 2018 and FY 2019 must not exceed rates for calendar year 2016.

Section 5 appropriates money to the Attorney General.

Section 6 appropriates money to the Secretary of State.

Section 7 appropriates money to the Campaign Finance and Public Disclosure Board.

Section 8 appropriates money to the State Board of Investment

Section 9 appropriates money to the Office of Administrative Hearings.

Section 10 appropriates money to the Office of MN.IT Services, and includes the following riders:

  • Appropriates $110,000 to MN.IT services for cash flow assistance
  • Permits MN.IT Services to charge a fee to public noncommercial educational television for access fees that exceed $400,000

Section 11 appropriates money to the commissioner of administration, and includes the following riders:

  • Requires the commissioner of administration to enter service level agreements with MN.IT
  • Prohibits the commissioner of administration from using funds to support continuous improvement initiatives
  • Appropriates money to the commissioner of administration in lieu of rent for space in the Capitol complex for the legislature, veterans organizations, ceremonial space, and statutory free space
  • Permits equipment grants for public educational radio stations only to stations that were members of the Association of Minnesota Public Educational Radio Stations as of July 1, 2017 

Section 12 appropriates money to the Capitol Area Architectural and Planning Board.

Section 13 appropriates money to the commissioner of management and budget, and includes the following riders:

  • Prohibits executive recruiting program
  • Requires capture of savings from gainsharing

Section 14 appropriates money to the commissioner of revenue, and includes the following riders:

  • Requires the commissioner of revenue to enter service level agreements with MN.IT
  • Requires tax compliance activities funded at 2017 levels

Section 15 appropriates money to commissioner of human rights.

Section 16 appropriate money to the Gambling Control Board.

Section 17 appropriates money to the Racing Commission.

Section 18 caps the State Lottery’s operating budget.

Section 19 appropriates money to the Amateur Sports Commission.

Section 20 appropriates money to the Council on Minnesotans of African Heritage.

Section 21 appropriates money to the Council on Latino Affairs.

Section 22 appropriates money to the Council on Asian-Pacific Minnesotans.

Section 23 appropriates money to the Indian Affairs Council.

Section 24 appropriates money to the Minnesota Historical Society.

Section 25 appropriates money to the Board of the Arts. Precludes a grant recipient from using more than five percent of a grant on travel outside the state.

Section 26 appropriates money to the Minnesota Humanities Center, with specified amounts for the Healthy Eating Here at Home program, and for the Veterans Defense Project.

Section 27 appropriates money to the Board of Accountancy.

Section 28 appropriates money to the Board of Architecture, Engineering, Land Surveying, Landscape Architecture, Geoscience, and Interior Design.

Section 29 appropriates money to the Board of Cosmetologist Examiners and requires a quarterly report to the legislature on inspections.

Section 30 appropriates money to the Board of Barber Examiners.

Section 31 appropriates money to the General Contingent Accounts.  This appropriation may only be spent with approval of the Governor after consultation with the Legislative Advisory Commission.

Section 32 appropriates money to the commissioner of management and budget for tort claims.

Section 33 appropriates money for the Combined Legislators and Constitutional Officers Retirement Plan and the Judges Retirement Plan.

Section 34 appropriates money to the Public Employee Retirement Association for the merged former MERF division.

Section 35 appropriates money to the Teachers Retirement Association.

Section 36 appropriates money to the St. Paul Teachers Retirement Association.

Section 37 appropriates money to the Department of Military Affairs. This section:

  • Authorizes Military Affairs to transfer funds appropriated in 2015 for maintenance of training facilities to support shortfall in enlistment incentives program in FY 2017
  • Cancels appropriation to general fund if federal funds are received for enlistment incentives for military affairs
  • Authorizes transfer between fiscal years for enlistment incentives only for military affairs

Section 38 appropriates money to the commissioner of veterans affairs.  This section:

  • Requires legislative report on Veterans Affairs reserves and utilization of veterans homes
  • Requires the commissioner of veterans affairs to maximize federal reimbursements for Medicare-eligible expenses
  • Appropriates funds for planning, design, and construction of new veterans homes

Section 39 [Preservation of Programs and Services] requires agencies and constitutional offices to absorb reductions through central administration and operation activities, and preserve programs and services provided directly to the public.

Section 40 [Appropriation Cancellations] cancels an unused appropriation from 2016 to the Mighty Ducks program.

Section 41 [Savings from Insurance Opt Out] captures savings from permitting state employees to opt out of the State Employee Group Insurance Program insurance coverage.

Section 42 [Savings; Appropriation Reductions for Information Technology Consolidation] captures savings resulting from IT consolidation.  Savings are absorbed across all impacted agencies.

Section 43 [Reduction in Professional and Technical Services Contract Expenditures] reduces the amount that may be spent on professional/technical services.

Section 44 [Base Budget Report] requires base budget legislative reports from MMB, Veterans Affairs, and Department of Revenue.


Section 1 [Districting Principles] establishes statutory principles for use in establishing voting districts.

Section 5 [Legislative Budget Office] establishes a new Legislative Budget Office to prepare fiscal notes and local impact notes. Sections 2, and 9-11 are related and conforming changes.

Section 3 [State employee negotiations] changes the effect of the failure of the Subcommittee on Employee Relations to approve a collective bargaining agreement during legislative interim.  Under current law, a failure to disapprove constitutes approval. Under this section, a failure to disapprove will not constitute approval.

Section 4 [Expiration] extends the Legislative Commission on Data practices to June 30, 2019.

Sections 6 [Staff; compensation], 7 [Financial Audits] and 8 [Certain transit financial activity reporting] requires the Legislative Auditor to perform transit financial activity reviews of financial information for the Metropolitan Council’s Transportation Division and the joint powers board for the metropolitan region. Section 47 [Initial Transit Financial Activity Reporting] provides for the first of these transit financial activity reviews.

Section 12 [CPA firm audit] specifies that county audits prepared by a CPA firm must meet industry standards.

Sections 13 [Payments to state auditor] and 14 [Billings by state auditor] are conforming changes to the repeal, in Section 58, subd. 1, of the State Auditor Enterprise Fund. Section 15 [Reports to legislature] includes conforming changes and adds specificity to a reporting requirement. Section 49 [Transition; State Auditor Enterprise Fund] provides for transition from the Enterprise Fund to the general fund.

Section 16 [Litigation Expenses] requires the State Auditor to pay certain litigation costs from allocations made to the auditor's constitutional office division.  Requires annual reports to the legislature on litigation expenses.

Section 17 [Interagency Agreements and Intra-Agency Transfers] requires agencies to report quarterly to the legislature on interagency agreements and intra-agency transfers.

Section 18 [Transfers to the Governor] precludes agencies from transferring money to the Governor for services.

Section 19 [Employee Gainsharing System] requires biannual legislative reports on the status of the gainsharing program for state employees, and requires the program be in addition to other performance-based employee recognition programs. 

Section 20 [Powers and duties, generally] prohibits a state contract with a vendor that discriminates on the basis of national origin.

Section 21 [Federal Assistive Technology Act] specifies representation on the Assistive Technology Advisory Council.

Section 22 [Construction and major remodeling] expands Chapter 16B reporting requirements regarding capital projects.

Section 23 [Assistance to Small Agencies] requires the commissioner of administration to charge for Small Agency Resource Team services; changes requirement to a permission for ethnic councils to use SMART services.

Section 24 [Reimbursement for making reasonable accommodations] limits accommodation grants to state agencies to 50 percent and Section 25 [Administration costs] caps the amount that the commissioner of administration receives for administering the grant program at $5,000.

Sections 26 [Commerce grants] and 27 [Termination of Grant] provides additional monitoring of grants made by the Department of Commerce, and provides procedures for terminating a state grant if the recipient is convicted of a criminal offense or is under investigation for matters relating to administration of a grant.

Section 28 [Responsibility for Information Technology Services and Equipment] requires the Campaign Finance and Public Disclosure Board, State Lottery, and the Statewide Radio Board to use MN.IT to provide IT systems services.

Section 29 [State Agency Technology Projects] requires MN.IT Services to report to the legislature on state agency technology projects.

Section 30 [Limit on Number of Full-Time Equivalent Employees; Use of Agency Savings] caps the number of FTEs in executive branch agencies at 31,691 and restricts an agency's use of savings resulting from vacant positions.

Section 31 [Severance pay for certain employees] limits severance pay for certain highly compensated employees. Permits payment only when authorized under a compensation plan. Employees in certain positions cannot receive severance pay.  Precludes severance for those employed fewer than six months or who terminate voluntarily.

Section 32 [Opt out] permits public employees to opt out of SEGIP insurance.  Requires annual legislative report on employee opt-outs, by agency.

Section 33 [Additional Long-Term Equity Investment Authority] permits a local government to invest certain money held for long-term obligations in index mutual funds and with the Minnesota Board of Investment, with the Public Employees Retirement Association acting as account administrator.

Section 34 [Public Areas of the Capitol] codifies a provision that is typically a rider that precludes the Historical Society from charging a fee for Capitol tours.

Section 35 [Conditions precedent to issuance] changes the bond requirements for the state or a political subdivision operating a cosmetology school.

Section 36 [Limited by appropriation] precludes the commissioner of management and budget from negotiating compensation and benefits for employees that is more than in an approved spending plan.

Section 37 [Biennial report] expands the current tax incidence report requirements to include federal tax burdens.

Sections 38 [Former MERF members; member and employer contributions] and 39 [State Contributions; Former MERF Division] increase the employer's annual contribution to the Minneapolis Employees Retirement Fund from $21 million to $31 million and reduces the state obligation for the Minneapolis Employees Retirement Fund from $16 million to $6 million.

Sections 40 [School districts; group health insurance coverage] and 41 [Jointly] modify the process school districts use to receive proposals for group health insurance for their employees and under what circumstances a school district is considered self-insured.

Section 42 [Examiner and deputy examiner] modifies the compensation structure for the Sherburne County Examiner of Titles.

Section 43 [Open meetings] subjects the Child Support Task Force to the Open Meetings Law.

Section 44 [Effective Date; Application] modifies the enforcement date from a law enacted in 2016 to begin licensing the practice of eyelash extensions. 

Section 45 [Commissioner of Revenue to Determine Adequacy of Current Rules and Valuation Practices for State-Assessed Pipelines] requires review of administrative rules related to the valuation of state-assessed pipeline companies.

Section 46 [Office of MN.IT Services; Performance Outcomes Required] requires MN.IT Services to accomplish the following by December 31, 2018: complete consolidation of executive branch information technology; host a specified percentage of agency servers and data on a public cloud solution; and reduce the state’s data centers to six.

Section 48 [Limit on Expenditures for Advertising] restricts executive branch agency spending in FY 2018 and 2019 on advertising and promotions at no more than 90 percent of the amount spent in FY 2016.

Section 50 [Reimbursement of Legal Costs for Wright, Becker, and Ramsey Counties] requires the State Auditor to reimburse Wright, Becker, and Ramsey Counties for their litigation expenses after choosing to use a private CPA.

Section 51 [Limit on Increase in Managerial Compensation] restricts pay increases to certain state employees covered by the managerial compensation plan to a rate based on the lesser of the percentage increase in Minnesota's median household income or the percentage increase in the Consumer Price Index.

Section 52 [Salary limit] limits the aggregate amount that may be spent by all executive branch agencies on employee salaries in fiscal year 2017, and in fiscal year 2017. For this section, “agency” includes MNSCU but not constitutional offices.

Section 53 [Ice Palace on Capitol Grounds Authorized] permits construction of an ice palace on the Capitol grounds, with costs paid by the St. Paul Festival and Heritage Foundation.

Section 54 [Waite Park; Hotel Inspections] permits the city of Waite Park to require hotels to be licensed.

Sections 55 [Eyelash Technician Grandfathering], 56 [Eyelash Technician Rulemaking], and 57 [Eyelash Technician Licensing] establish criteria and a process for obtaining a grandfathering license for eyelash technicians; authorizes the Board of Cosmetologist Examiners to make rules governing the eyelash technicians; and sets dates for start of licensing and enforcement.

Section 58, subd. 1 [State auditor enterprise fund] repeals the State Auditor enterprise fund.

Section 58, subd. 2 [Washington, D.C. office] repeals a statute authorizing the Governor to staff a Washington D.C. office for Minnesota.


Section 1-80 are technical changes to state budgeting terminology, permitting advance deposits to achieve discounts, and changes to procedures for collecting debts owed to the state.


Sections 1-15, 17-20, 22-26, 28-31, 33-35 make various substantive and technical amendments to administrative rulemaking procedure, including expansion of legislative oversight and opportunity to object; creation of peer review advisory panels to conduct impact analysis of rules; required legislative approval of rules with a substantial economic impact; restriction on enforcement of certain policies, guidelines, and other interpretive statements not adopted by rule; and additional reporting related to environmental assessment worksheets and impact statements.

Section 16 [Rules Impacting Residential Construction or Remodeling; Legislative Notice and Review] requires an agency to determine the effect of a rule on the cost of residential construction and to report to the legislature on rules that meet or exceed a cost threshold; permits a legislative committee to advise the agency should not be adopted until approved by law.

Sections 21 [Generally], 27 [Publication of Adopted Rule], and 32 [Adoption] require legislative approval for adoption of a rule if any of the following applies:  (i) the rule is enacted without specific authorization of rulemaking; (ii) a sanction or penalty can be imposed for failure to comply; or (iii) the regulating agency has the authority to adjudicate a dispute with a regulated entity about enforcement of or violation of a rule.

Section 36 [Initiation; Decision; Agreement to Arbitrate] makes the decision by an administrative law judge final in a contested case.  Under current law, the decision by the agency is a final decision in certain circumstances.

Section 37 [Affirmative Defense] creates an affirmative defense in actions to enforce a rule based on cost to comply. Section 39 [Revisor’s Instructions] directs conforming changes.

Section 38 [Minnesota Administrative Rules Status System (MARSS) Working Group] creates a working group to determine requirements and funding sources for the Minnesota Administrative Rules Status System.

Section 40 [Repealer] repeals a subdivision codified elsewhere in this bill.

Section 41 [Effective Date; Application] sets the effective date for this article.


Section 1 [Uses] clarifies eligibility and increases maximum grant from $2,000 to $4,000 for Support Our Troops grants from the commissioner of military affairs.

Sections 2 [Uses; veterans] and 4 [Burial fees] permit use of the Support Our Troops account by the commissioner of veterans affairs for certain burial costs.

Sections 3 [General duties] and 5 [Veterans Benefits Services; Disclosure Requirements] require disclosure when providing or advertising veterans benefits services.

Sections 6-10 expand the GI bill program to include apprenticeship and on-the-job training benefits and other professional and educations benefits.


Sections 1, 2, 4-9, 12-14, 18, 23-25, 27, and 31, subd. 2, codify certain rules promulgated by the Campaign Finance and Disclosure Board.

Sections 3, 10, 11, 15-17, 19-21, 26, 28, 29 and 31, subd. 1, repeal the public subsidy program; establish a voluntary pledge to comply with current subsidy restrictions.

Section 22 [Contribution from the sale of goods and services] requires political committees that sell goods and services to report proceeds as contributions and provide disclosures to buyers.  Use of proceeds is restricted.

Section 30 [Voting Equipment Grant] establishes a grant program for voting equipment.

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