Section 1 [State Employee Negotiations] requires affirmative approval of a collective bargaining agreement or arbitration award by the Legislative Coordinating Commission to be approved when the legislature is not in session, instead of treating a failure to disapprove as approval.  This section is effective the day after enactment.

Section 2 [Information required] specifies information that the Commissioner of Management and Budget is required to submit to the Legislative Coordinating Commission with the submission of a collective bargaining agreement or compensation plan.  The required information includes the following, for each agency and for each proposed collective bargaining agreement and compensation plan:

(1) a comparison of the biennial compensation costs under the current agreement or plan to the costs projected under the proposed agreement or plan, paid for by funds appropriated from the general fund;

(2) a comparison of the biennial compensation costs under the current agreement or plan to the costs projected under the proposed agreement or plan, paid for by funds appropriated from each fund other than the general fund; and

(3) an identification of the amount of added biennial compensation costs attributable to salary, wages, and nonsalary and nonwage benefits.

The commissioner is also required to provide the aggregate impact of all proposed agreements and plans being submitted to the commission, for each agency, and for each of the items in clauses (1) to (3).

Section 3 [Rules Impacting Residential Construction or Remodeling; Legislative Notice and Review] establishes steps in the rulemaking process for rules that apply to residential construction or remodeling.

Subdivision 1 [Definition] defines “residential construction.”

Subdivision 2 [Impact on housing cost; agency determination] requires an agency to determine, during a specified period, if a proposed rule will increase the cost of residential construction or remodeling by $1,000 or more per unit. The agency’s determination is subject to review by an administrative law judge.

Subdivision 3 [Notice to legislature; legislative approval] requires an agency to notify the legislature if the costs of a proposed rule exceed $1,000, as determined by the agency or by the administrative law judge.  The agency may not adopt the rule, if a legislative committee with jurisdiction over the subject matter of the rule advises the agency that the rule should not be adopted as proposed. By cross-reference to existing statute, the committee’s vote must be by majority, occur between publication of the rulemaking notice and before the notice of adoption is published in the State Register, and the committee must notify the agency, revisor of statutes, and the chief administrative law judge.

Subdivision 4 [Severability] permits an agency to adopt a severable portion of a proposed rule that does not exceed the cost threshold, even though a legislative committee has voted to advise the agency not to adopt the proposed rule that does exceed the cost threshold.

Section 4 [Forecast Parameters] sets the estimated expenditures in the November forecast at zero dollars for certain executive branch agencies, excluding appropriations in statute. The agencies subject to this are determined by a schedule in a later section of the bill. This section sets the estimated expenditures in the February forecast at zero dollars for agencies if the estimate was set at zero for the preceding November forecast under this section. These requirements do not apply to forecasted expenditures in the current biennium, but do apply to the forecasted expenditures in the next two biennia.

Section 5 [Part Two: Detailed Budget] sets the base at zero dollars for purposes of the governor’s detailed budget recommendations for certain agencies, determined by a schedule in a later section of the bill, for appropriations that are not statutory. Requires the Commissioner of Management and Budget to display the base in tables and the narrative of the governor’s detailed budget recommendations.

Section 6 [Zero-Based Budgeting]

Subdivision 1 [Zero-based budget] requires an agency to use zero-based budgeting in preparing the proposed budget in October of the “scheduled year” for that agency.  Requires the Commissioner of Management and Budget to provide technical assistance and to adopt policies and procedures for implementing zero-based budgeting. This section defines “zero-based budgeting” as a method of determining the budget of an agency for which the budget is deemed to have been zero and each proposed expenditure must be justified as if it were a new expenditure.

Subdivision 2 [Zero-based budget plan] lists information an agency must include in a zero-based budget plan.

Subdivision 3 [Scheduled year] sets the “scheduled year” for each agency to conduct zero-based budgeting. 

Section 7 [Limited by Appropriation] precludes the Commissioner of Management and Budget from contracting to pay more to employees in compensation and benefits in a biennium than is permitted under the first spending plan approved by the Commissioner of Management and Budget after a biennial appropriation. Under current law, each agency submits a spending plan to the Commissioner of Management and Budget (MMB) that details how the agency will use appropriations.  The plan is submitted by July 1 and applies to an allotment period specified by the Commissioner of MMB.

Section 8 [Former MERF members; member and employer contributions] increases the employer contribution to PERA for the former Minneapolis Employees Retirement Fund (MERF) plan to $37,000,000. (A later section of the bill eliminates state contributions to PERA for MERF.)

Section 9 [Full-time Equivalent Freeze] precludes use of appropriations for fiscal year 2021 to pay salary and benefits for full-time equivalent positions (“FTE”) beyond the number of FTEs employed as of June 30, 2020.  This section does not apply to certain positions in law enforcement and corrections.

Section 10 [Reduction in Appropriations for Unfilled Positions]

Subdivision 1 [Reduction required] reduces appropriations from any fund for the biennium ending June 30, 2021, by an amount equal to the salary and benefits for a position that is posted and goes unfilled for 180 days. This reduction applies for positions posted in fiscal years 2019, 2020, and 2021. Reductions must be reflected in the agency’s base budget for the next biennium. Certain positions in law enforcement and corrections are exempt.

Subdivision 2 [Reporting] requires the Commissioner of Management and Budget to report to the legislature on the amount of reductions.

Subdivision 3 [Application] defines “agency.” Excludes Minnesota State Colleges and Universities.

Section 11 [Repealer] repeals annual state contributions (currently $6,000,000 per year) to PERA for MERF.