1.1                          A bill for an act 
  1.2             relating to employment; modifying provisions relating 
  1.3             to data classification; workers' compensation premium 
  1.4             collection; employment classifications and procedures; 
  1.5             and benefits; providing penalties; amending Minnesota 
  1.6             Statutes 1994, sections 13.67; 43A.04, subdivision 1; 
  1.7             43A.08, subdivision 1; 43A.10, subdivision 8; 43A.13, 
  1.8             subdivision 6; 43A.15, by adding a subdivision; 
  1.9             43A.18, subdivision 4; 43A.19, subdivision 1; 43A.191, 
  1.10            subdivisions 1, 2, and 3; 43A.24, subdivision 2; 
  1.11            43A.27, subdivision 3; 43A.316; 62J.45, subdivision 8; 
  1.12            256B.0644; and 356.87; repealing Laws 1987, chapter 
  1.13            186, section 11; and Laws 1994, chapter 560, article 
  1.14            2, section 15. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 1994, section 13.67, is 
  1.17  amended to read: 
  1.18     13.67 [EMPLOYEE RELATIONS DATA.] 
  1.19     The following data collected, created, or maintained by the 
  1.20  department of employee relations are classified as nonpublic 
  1.21  data pursuant to section 13.02, subdivision 9:  
  1.22     (a) The commissioner's plan prepared by the department, 
  1.23  pursuant to section 3.855, which governs the compensation and 
  1.24  terms and conditions of employment for employees not covered by 
  1.25  collective bargaining agreements until the plan is submitted to 
  1.26  the legislative commission on employee relations; 
  1.27     (b) Data pertaining to grievance or interest arbitration 
  1.28  that has not been presented to the arbitrator or other party 
  1.29  during the arbitration process; 
  1.30     (c) Notes and preliminary drafts of reports prepared during 
  2.1   personnel investigations and personnel management reviews of 
  2.2   state departments and agencies; 
  2.3      (d) The managerial plan prepared by the department pursuant 
  2.4   to section 43A.18 that governs the compensation and terms and 
  2.5   conditions of employment for employees in managerial positions, 
  2.6   as specified in section 43A.18, subdivision 3, until the plan is 
  2.7   submitted to the legislative commission on employee relations; 
  2.8   and 
  2.9      (e) Claims experience and all related information received 
  2.10  from carriers and claims administrators participating in either 
  2.11  the state group insurance plan or the public employees insurance 
  2.12  plan program as defined in chapter 43A, and survey information 
  2.13  collected from employees and employers participating in these 
  2.14  plans and programs, except when the department determines that 
  2.15  release of the data will not be detrimental to the plan or 
  2.16  program. 
  2.17     Sec. 2.  Minnesota Statutes 1994, section 43A.04, 
  2.18  subdivision 1, is amended to read: 
  2.19     Subdivision 1.  [STATEWIDE LEADERSHIP.] (a) The 
  2.20  commissioner is the chief personnel and labor relations manager 
  2.21  of the civil service in the executive branch.  
  2.22     Whenever any power or responsibility is given to the 
  2.23  commissioner by any provision of Laws 1981, chapter 210, unless 
  2.24  otherwise expressly provided, the power or authority applies to 
  2.25  all employees of agencies in the executive branch and to 
  2.26  employees in classified positions in the office of the 
  2.27  legislative auditor, the Minnesota state retirement system, the 
  2.28  public employees retirement association, and the teacher's 
  2.29  retirement association.  Unless otherwise provided by law, the 
  2.30  power or authority does not apply to unclassified employees in 
  2.31  the legislative and judicial branches.  
  2.32     (b) The commissioner shall operate an information system 
  2.33  from which personnel data, as defined in section 13.43, 
  2.34  concerning employees and applicants for positions in the 
  2.35  classified service can be retrieved.  
  2.36     The commissioner has access to all public and private 
  3.1   personnel data kept by appointing authorities that will aid in 
  3.2   the discharge of the commissioner's duties.  
  3.3      (c) The commissioner may consider and investigate any 
  3.4   matters concerned with the administration of provisions of Laws 
  3.5   1981, chapter 210, and may order any remedial actions consistent 
  3.6   with law. 
  3.7      (d) The commissioner has sole authority to settle state 
  3.8   employee workers' compensation claims. 
  3.9      (e) The commissioner may assess or establish and collect 
  3.10  premiums from all state entities for to cover the costs of 
  3.11  programs under sections 15.46 and 176.603. 
  3.12     Sec. 3.  Minnesota Statutes 1994, section 43A.08, 
  3.13  subdivision 1, is amended to read: 
  3.14     Subdivision 1.  [UNCLASSIFIED POSITIONS.] Unclassified 
  3.15  positions are held by employees who are: 
  3.16     (1) chosen by election or appointed to fill an elective 
  3.17  office; 
  3.18     (2) heads of agencies required by law to be appointed by 
  3.19  the governor or other elective officers, and the executive or 
  3.20  administrative heads of departments, bureaus, divisions, and 
  3.21  institutions specifically established by law in the unclassified 
  3.22  service; 
  3.23     (3) deputy and assistant agency heads and one confidential 
  3.24  secretary in the agencies listed in subdivision 1a and in the 
  3.25  office of strategic and long-range planning; 
  3.26     (4) the confidential secretary to each of the elective 
  3.27  officers of this state and, for the secretary of state, state 
  3.28  auditor, and state treasurer, an additional deputy, clerk, or 
  3.29  employee; 
  3.30     (5) intermittent help employed by the commissioner of 
  3.31  public safety to assist in the issuance of vehicle licenses; 
  3.32     (6) employees in the offices of the governor and of the 
  3.33  lieutenant governor and one confidential employee for the 
  3.34  governor in the office of the adjutant general; 
  3.35     (7) employees of the Washington, D.C., office of the state 
  3.36  of Minnesota; 
  4.1      (8) employees of the legislature and of legislative 
  4.2   committees or commissions; provided that employees of the 
  4.3   legislative audit commission, except for the legislative 
  4.4   auditor, the deputy legislative auditors, and their confidential 
  4.5   secretaries, shall be employees in the classified service; 
  4.6      (9) presidents, vice-presidents, deans, other managers and 
  4.7   professionals in academic and academic support programs, 
  4.8   administrative or service faculty, teachers, research 
  4.9   assistants, and student employees eligible under terms of the 
  4.10  federal economic opportunity act work study program in the 
  4.11  school and resource center for the arts, state universities and 
  4.12  community colleges, and the higher education board, but not the 
  4.13  custodial, clerical, or maintenance employees, or any 
  4.14  professional or managerial employee performing duties in 
  4.15  connection with the business administration of these 
  4.16  institutions; 
  4.17     (10) officers and enlisted persons in the national guard; 
  4.18     (11) attorneys, legal assistants, and three confidential 
  4.19  employees appointed by the attorney general or employed with the 
  4.20  attorney general's authorization; 
  4.21     (12) judges and all employees of the judicial branch, 
  4.22  referees, receivers, jurors, and notaries public, except 
  4.23  referees and adjusters employed by the department of labor and 
  4.24  industry; 
  4.25     (13) members of the state patrol; provided that selection 
  4.26  and appointment of state patrol troopers must be made in 
  4.27  accordance with applicable laws governing the classified 
  4.28  service; 
  4.29     (14) chaplains employed by the state; 
  4.30     (15) examination monitors and intermittent training 
  4.31  instructors employed by the departments of employee relations 
  4.32  and commerce and by professional examining boards and 
  4.33  intermittent staff employed by the technical colleges for the 
  4.34  administration of practical skills tests and for the staging of 
  4.35  instructional demonstrations; 
  4.36     (16) student workers; 
  5.1      (17) executive directors or executive secretaries appointed 
  5.2   by and reporting to any policy-making board or commission 
  5.3   established by statute; 
  5.4      (18) employees unclassified pursuant to other statutory 
  5.5   authority; 
  5.6      (19) intermittent help employed by the commissioner of 
  5.7   agriculture to perform duties relating to pesticides, 
  5.8   fertilizer, and seed regulation; and 
  5.9      (20) the administrators and the deputy administrators at 
  5.10  the state academies for the deaf and the blind. 
  5.11     Sec. 4.  Minnesota Statutes 1994, section 43A.10, 
  5.12  subdivision 8, is amended to read: 
  5.13     Subd. 8.  [ELIGIBILITY FOR QUALIFIED DISABLED 
  5.14  EXAMINATIONS.] The commissioner shall establish examination 
  5.15  procedures for candidates whose disabilities are of such a 
  5.16  severe nature that the candidates are unable to demonstrate 
  5.17  their abilities in competitive examination processes.  The 
  5.18  examination procedures must consist of up to 700 hours 
  5.19  on-the-job trial work experience which will be in lieu of a 
  5.20  competitive examination and for which the disabled person has 
  5.21  the option of being paid or unpaid.  Up to three persons with 
  5.22  severe disabilities and their job coach may be allowed to 
  5.23  demonstrate their job competence as a unit through the 
  5.24  on-the-job trial work experience examination procedure.  This 
  5.25  work experience must be limited to candidates for appointment, 
  5.26  promotion, or transfer who have a physical or mental impairment 
  5.27  for which there is no reasonable accommodation in the 
  5.28  examination process.  Implementation of provisions of this 
  5.29  subdivision may not be deemed a violation of other provisions of 
  5.30  Laws 1981, chapter 210 or 363.  The commissioner shall establish 
  5.31  alternative examination methods to assess the qualifications of 
  5.32  applicants for a competitive open or competitive promotional 
  5.33  examination who have a disability that does not prevent 
  5.34  performance of the duties of the class but that cannot be 
  5.35  accommodated in the regular examination process.  Alternative 
  5.36  examination methods offered must allow candidates for 
  6.1   competitive open and competitive promotional exams to 
  6.2   demonstrate possession of the same knowledge, skills, and 
  6.3   abilities essential to satisfactory performance in the job class 
  6.4   without compromising inferences about other candidates' 
  6.5   qualifications. 
  6.6      Sec. 5.  Minnesota Statutes 1994, section 43A.13, 
  6.7   subdivision 6, is amended to read: 
  6.8      Subd. 6.  [QUALIFIED DISABLED.] For a position to be filled 
  6.9   by qualified disabled examination, The commissioner shall 
  6.10  certify only the one eligible who has successfully completed the 
  6.11  examination processes provided in section 43A.10, subdivision 8, 
  6.12  for the position refer qualified disabled candidates in 
  6.13  alphabetical order, with eligibles from the competitive open or 
  6.14  competitive promotional list established from the same 
  6.15  examination announcement. 
  6.16     Sec. 6.  Minnesota Statutes 1994, section 43A.15, is 
  6.17  amended by adding a subdivision to read: 
  6.18     Subd. 14.  [ON-THE-JOB DEMONSTRATION EXAMINATION AND 
  6.19  APPOINTMENT.] The commissioner shall establish qualifying 
  6.20  procedures for candidates whose disabilities are of such a 
  6.21  severe nature that the candidates are unable to demonstrate 
  6.22  their abilities in competitive and qualified disabled 
  6.23  examination processes.  The qualifying procedures must consist 
  6.24  of up to 700 hours on-the-job trial work experience which will 
  6.25  be in lieu of a competitive examination and for which the 
  6.26  disabled person has the option of being paid or unpaid.  Up to 
  6.27  three persons with severe disabilities and their job coach may 
  6.28  be allowed to demonstrate their job competence as a unit through 
  6.29  the on-the-job trial work experience examination procedure.  
  6.30  This work experience must be limited to candidates for 
  6.31  appointment, promotion, or transfer for which there is no 
  6.32  reasonable accommodation in the examination process. 
  6.33     The commissioner may authorize the probationary appointment 
  6.34  of a candidate based on the request of the appointing authority 
  6.35  that documents that the candidate has successfully demonstrated 
  6.36  qualifications for the position through completion of an 
  7.1   on-the-job trial work experience.  The implementation of this 
  7.2   subdivision may not be deemed a violation of chapter 43A or 363. 
  7.3      Sec. 7.  Minnesota Statutes 1994, section 43A.18, 
  7.4   subdivision 4, is amended to read: 
  7.5      Subd. 4.  [PLANS NOT ESTABLISHED BUT APPROVED BY 
  7.6   COMMISSIONER.] (a) Notwithstanding any other law to the 
  7.7   contrary, terms and conditions of employment for employees 
  7.8   listed in this subdivision must be set by appointing authorities 
  7.9   within the limits of compensation plans that have been approved 
  7.10  by the commissioner before becoming effective.  Compensation 
  7.11  plans established under paragraphs (c) and (d), must be reviewed 
  7.12  and approved, modified, or rejected by the legislature and the 
  7.13  legislative commission on employee relations under section 
  7.14  3.855, subdivision 2, before becoming effective. 
  7.15     (b) Total compensation for employees who are not covered by 
  7.16  a collective bargaining agreement in the offices of the 
  7.17  governor, lieutenant governor, attorney general, secretary of 
  7.18  state, state auditor, and state treasurer must be determined by 
  7.19  the governor, lieutenant governor, attorney general, secretary 
  7.20  of state, state auditor, and state treasurer, respectively.  
  7.21     (c) Total compensation for classified administrative law 
  7.22  judges in the office of administrative hearings must be 
  7.23  determined by the chief administrative law judge.  
  7.24     (d) Total compensation for unclassified positions not 
  7.25  covered by a collective bargaining agreement in the higher 
  7.26  education coordinating board must be determined by the higher 
  7.27  education coordinating board. 
  7.28     Sec. 8.  Minnesota Statutes 1994, section 43A.19, 
  7.29  subdivision 1, is amended to read: 
  7.30     Subdivision 1.  [STATEWIDE AFFIRMATIVE ACTION PROGRAM.] (a) 
  7.31  To assure that positions in the executive branch of the civil 
  7.32  service are equally accessible to all qualified persons, and to 
  7.33  eliminate the underutilization of qualified members of protected 
  7.34  groups, the commissioner shall adopt and periodically revise, if 
  7.35  necessary, a statewide affirmative action program.  The 
  7.36  statewide affirmative action program must consist of at least 
  8.1   the following: 
  8.2      (1) objectives, goals, and policies; 
  8.3      (2) procedures, standards, and assumptions to be used by 
  8.4   agencies in the preparation of agency affirmative action plans, 
  8.5   including methods by which goals and timetables are established; 
  8.6   and 
  8.7      (3) requirements for annual objectives and submission of 
  8.8   affirmative action progress reports from heads of agencies. 
  8.9      (b) The commissioner shall base affirmative action goals on 
  8.10  at least the following factors: 
  8.11     (1) the percentage of members of each protected class in 
  8.12  the recruiting area population who have the necessary skills; 
  8.13     (2) the availability for promotion or transfer of members 
  8.14  of protected classes in the recruiting area population; 
  8.15     (3) the extent of unemployment of members of protected 
  8.16  classes in the recruiting area population; 
  8.17     (4) the existence of training programs in needed skill 
  8.18  areas offered by employing agencies and other institutions; and 
  8.19     (5) the expected number of available positions to be 
  8.20  filled; and 
  8.21     (6) the analysis of separation patterns to determine the 
  8.22  impact on protected group members. 
  8.23     (c) The commissioner shall designate a state director of 
  8.24  equal employment opportunity diversity who may be delegated the 
  8.25  preparation, revision, implementation, and administration of the 
  8.26  program.  The commissioner of employee relations may place the 
  8.27  director's position in the unclassified service if the position 
  8.28  meets the criteria established in section 43A.08, subdivision 1a.
  8.29     Sec. 9.  Minnesota Statutes 1994, section 43A.191, 
  8.30  subdivision 1, is amended to read: 
  8.31     Subdivision 1.  [AFFIRMATIVE ACTION OFFICERS.] (a) Each 
  8.32  agency with an approved complement over 1,000 800 employees or 
  8.33  more, shall have at least one full-time affirmative action 
  8.34  officer, who shall have primary responsibility for developing 
  8.35  and maintaining the agency's affirmative action plan.  The 
  8.36  officer shall devote full time to affirmative action 
  9.1   activities.  The affirmative action officer shall report 
  9.2   administratively and on policy issues directly to the agency 
  9.3   head. 
  9.4      (b) The commissioner agency heads shall assign affirmative 
  9.5   action officers for agencies with approved complements of less 
  9.6   fewer than 1,000 800 employees.  
  9.7      Sec. 10.  Minnesota Statutes 1994, section 43A.191, 
  9.8   subdivision 2, is amended to read: 
  9.9      Subd. 2.  [AGENCY AFFIRMATIVE ACTION PLANS.] (a) The head 
  9.10  of each agency in the executive branch shall prepare and 
  9.11  implement an agency affirmative action plan consistent with this 
  9.12  section and rules issued under section 43A.04, subdivision 3. 
  9.13     (b) The agency plan must include a plan for the provision 
  9.14  of reasonable accommodation in the hiring and promotion of 
  9.15  qualified disabled persons.  The reasonable accommodation plan 
  9.16  must consist of at least the following: 
  9.17     (1) procedures for compliance with section 363.03 and, 
  9.18  where appropriate, regulations implementing United States Code, 
  9.19  title 29, section 794, as amended through December 31, 1984, 
  9.20  which is section 504 of the Rehabilitation Act of 1973, as 
  9.21  amended and the Americans with Disabilities Act, United States 
  9.22  Code, title 42, sections 101 to 108, 201 to 231, 241 to 246, 
  9.23  401, 402, and 501 to 514; 
  9.24     (2) methods and procedures for providing reasonable 
  9.25  accommodation for disabled job applicants, current employees, 
  9.26  and employees seeking promotion; and 
  9.27     (3) provisions for funding reasonable accommodations. 
  9.28     (c) The agency plan must be prepared by the agency head 
  9.29  with the assistance of the agency affirmative action officer and 
  9.30  the director of equal employment opportunity diversity.  The 
  9.31  council on disability shall provide assistance with the agency 
  9.32  reasonable accommodation plan. 
  9.33     (d) The agency plan must identify, annually biennially, any 
  9.34  positions in the agency that can be used for supported 
  9.35  employment as defined in section 268A.01, subdivision 13, of 
  9.36  persons with severe disabilities.  The agency shall report this 
 10.1   information to the commissioner.  An agency that hires more than 
 10.2   one supported worker in the identified positions must receive 
 10.3   recognition for each supported worker toward meeting the 
 10.4   agency's affirmative action goals and objectives. 
 10.5      (e) An agency affirmative action plan may not be 
 10.6   implemented without the commissioner's approval. 
 10.7      Sec. 11.  Minnesota Statutes 1994, section 43A.191, 
 10.8   subdivision 3, is amended to read: 
 10.9      Subd. 3.  [AUDITS; SANCTIONS AND INCENTIVES.] (a) The 
 10.10  director of equal employment opportunity shall annually audit 
 10.11  the record of each agency to determine the rate of compliance 
 10.12  with annual hiring goals of each goal unit and to evaluate the 
 10.13  agency's overall progress toward its affirmative action goals 
 10.14  and objectives.  The commissioner shall audit biennially the 
 10.15  record of each agency to determine the rate of compliance with 
 10.16  biennial affirmative action requirements. 
 10.17     (b) By March 1 of each odd-numbered year, the commissioner 
 10.18  shall submit a report on affirmative action progress of each 
 10.19  agency and the state as a whole to the governor and to the 
 10.20  finance committee of the senate, the appropriations committee of 
 10.21  the house of representatives, the governmental operations 
 10.22  committees of both houses of the legislature, and the 
 10.23  legislative commission on employee relations.  The report must 
 10.24  include noncompetitive appointments made under section 43A.08, 
 10.25  subdivision 2a, or 43A.15, subdivisions 3 to 13, and cover each 
 10.26  agency's rate of compliance with annual hiring goals affirmative 
 10.27  action requirements.  In addition, any agency that has not met 
 10.28  its affirmative action hiring goals, that fails to make an 
 10.29  affirmative action hire, or fails to justify its nonaffirmative 
 10.30  action hire in 25 percent or more of the appointments made in 
 10.31  the previous calendar year must be designated in the report as 
 10.32  an agency not in compliance with affirmative action requirements.
 10.33     (c) The commissioner shall study methods to improve the 
 10.34  performance of agencies not in compliance with affirmative 
 10.35  action requirements. 
 10.36     (d) The commissioner shall establish a program to recognize 
 11.1   agencies that have made significant and measurable progress 
 11.2   toward achieving affirmative action objectives. 
 11.3      (c) An agency must comply with clauses (1) to (4): 
 11.4      (1) an agency that does not meet its biennial hiring goals 
 11.5   must justify its nonaffirmative action hires in competitive and 
 11.6   noncompetitive appointments according to criteria issued by the 
 11.7   department of employee relations.  Failure to justify a 
 11.8   nonaffirmative action hire is a "missed opportunity."  During 
 11.9   the previous two calendar years, an agency must have 25 percent 
 11.10  or less missed opportunities in competitive appointments and 25 
 11.11  percent or less missed opportunities in appointments made under 
 11.12  sections 43A.08, subdivision 1, clauses (9), (11), and (16); and 
 11.13  43A.15, subdivisions 3, 10, and 12; 
 11.14     (2) an agency must demonstrate a good faith effort to 
 11.15  recruit protected group members by following an active 
 11.16  recruitment plan; 
 11.17     (3) an agency must implement a coordinated retention plan; 
 11.18  and 
 11.19     (4) an agency must have an established complaint resolution 
 11.20  procedure. 
 11.21     (d) The commissioner shall develop reporting standards and 
 11.22  procedures for measuring compliance. 
 11.23     (e) An agency is encouraged to develop other innovative 
 11.24  ways to promote awareness, acceptance, and appreciation for 
 11.25  diversity and affirmative action.  These innovations will be 
 11.26  considered when evaluating an agency's compliance with this 
 11.27  section. 
 11.28     (f) An agency not in compliance with affirmative action 
 11.29  requirements of this section must identify methods and programs 
 11.30  to improve performance, to reallocate resources internally, to 
 11.31  increase support for affirmative action programs, and to submit 
 11.32  program and resource reallocation proposals to the commissioner 
 11.33  for approval.  An agency must submit these proposals within 120 
 11.34  days of being notified by the commissioner that it is out of 
 11.35  compliance with affirmative action requirements.  The 
 11.36  commissioner shall monitor quarterly the affirmative action 
 12.1   programs of an agency found to be out of compliance. 
 12.2      (g) The commissioner shall establish a program to recognize 
 12.3   an agency that has made significant and measurable progress in 
 12.4   implementing an affirmative action plan. 
 12.5      Sec. 12.  Minnesota Statutes 1994, section 43A.24, 
 12.6   subdivision 2, is amended to read: 
 12.7      Subd. 2.  [OTHER ELIGIBLE PERSONS.] The following persons 
 12.8   are eligible for state paid life insurance and hospital, 
 12.9   medical, and dental benefits as determined in applicable 
 12.10  collective bargaining agreements or by the commissioner or by 
 12.11  plans pursuant to section 43A.18, subdivision 6, or by the board 
 12.12  of regents for employees of the University of Minnesota not 
 12.13  covered by collective bargaining agreements.  Coverages made 
 12.14  available, including optional coverages, are as contained in the 
 12.15  plan established pursuant to section 43A.18, subdivision 2: 
 12.16     (a) a member of the state legislature, provided that 
 12.17  changes in benefits resulting in increased costs to the state 
 12.18  shall not be effective until expiration of the term of the 
 12.19  members of the existing house of representatives.  An eligible 
 12.20  member of the state legislature may decline to be enrolled for 
 12.21  state paid coverages by filing a written waiver with the 
 12.22  commissioner.  The waiver shall not prohibit the member from 
 12.23  enrolling the member or dependents for optional coverages, 
 12.24  without cost to the state, as provided for in section 43A.26.  A 
 12.25  member of the state legislature who returns from a leave of 
 12.26  absence to a position previously occupied in the civil service 
 12.27  shall be eligible to receive the life insurance and hospital, 
 12.28  medical, and dental benefits to which the position is entitled; 
 12.29     (b) a permanent employee of the legislature or a permanent 
 12.30  employee of a permanent study or interim committee or commission 
 12.31  or a state employee on leave of absence to work for the 
 12.32  legislature, during a regular or special legislative session; 
 12.33     (c) a judge of the appellate courts or an officer or 
 12.34  employee of these courts; a judge of the district court, a judge 
 12.35  of county court, a judge of county municipal court, or a judge 
 12.36  of probate court; a district court referee, judicial officer, 
 13.1   court reporter, or law clerk; a district administrator; an 
 13.2   employee of the office of the district administrator that is not 
 13.3   in the second or fourth judicial district; a court administrator 
 13.4   or employee of the court administrator in the eighth judicial 
 13.5   district, and a guardian ad litem program administrator in the 
 13.6   eighth judicial district; 
 13.7      (d) a salaried employee of the public employees retirement 
 13.8   association; 
 13.9      (e) a full-time military or civilian officer or employee in 
 13.10  the unclassified service of the department of military affairs 
 13.11  whose salary is paid from state funds; 
 13.12     (f) a salaried employee of the Minnesota historical 
 13.13  society, whether paid from state funds or otherwise, who is not 
 13.14  a member of the governing board; 
 13.15     (g) an employee of the regents of the University of 
 13.16  Minnesota; 
 13.17     (h) notwithstanding section 43A.27, subdivision 3, an 
 13.18  employee of the state of Minnesota or the regents of the 
 13.19  University of Minnesota who is at least 60 and not yet 65 years 
 13.20  of age on July 1, 1982, who is otherwise eligible for employee 
 13.21  and dependent insurance and benefits pursuant to section 43A.18 
 13.22  or other law, who has at least 20 years of service and retires, 
 13.23  earlier than required, within 60 days of March 23, 1982; or an 
 13.24  employee who is at least 60 and not yet 65 years of age on July 
 13.25  1, 1982, who has at least 20 years of state service and retires, 
 13.26  earlier than required, from employment at Rochester state 
 13.27  hospital after July 1, 1981; or an employee who is at least 55 
 13.28  and not yet 65 years of age on July 1, 1982, and is covered by 
 13.29  the Minnesota state retirement system correctional employee 
 13.30  retirement plan or the state patrol retirement fund, who has at 
 13.31  least 20 years of state service and retires, earlier than 
 13.32  required, within 60 days of March 23, 1982.  For purposes of 
 13.33  this clause, a person retires when the person terminates active 
 13.34  employment in state or University of Minnesota service and 
 13.35  applies for a retirement annuity.  Eligibility shall cease when 
 13.36  the retired employee attains the age of 65, or when the employee 
 14.1   chooses not to receive the annuity that the employee has applied 
 14.2   for.  The retired employee shall be eligible for coverages to 
 14.3   which the employee was entitled at the time of retirement, 
 14.4   subject to any changes in coverage through collective bargaining 
 14.5   or plans established pursuant to section 43A.18, for employees 
 14.6   in positions equivalent to that from which retired, provided 
 14.7   that the retired employee shall not be eligible for state-paid 
 14.8   life insurance.  Coverages shall be coordinated with relevant 
 14.9   health insurance benefits provided through the federally 
 14.10  sponsored Medicare program; 
 14.11     (i) an employee of an agency of the state of Minnesota 
 14.12  identified through the process provided in this paragraph who is 
 14.13  eligible to retire prior to age 65.  The commissioner and the 
 14.14  exclusive representative of state employees shall enter into 
 14.15  agreements under section 179A.22 to identify employees whose 
 14.16  positions are in programs that are being permanently eliminated 
 14.17  or reduced due to federal or state policies or practices.  
 14.18  Failure to reach agreement identifying these employees is not 
 14.19  subject to impasse procedures provided in chapter 179A.  The 
 14.20  commissioner must prepare a plan identifying eligible employees 
 14.21  not covered by a collective bargaining agreement in accordance 
 14.22  with the process outlined in section 43A.18, subdivisions 2 and 
 14.23  3.  For purposes of this paragraph, a person retires when the 
 14.24  person terminates active employment in state service and applies 
 14.25  for a retirement annuity.  Eligibility ends as provided in the 
 14.26  agreement or plan, but must cease at the end of the month in 
 14.27  which the retired employee chooses not to receive an annuity, or 
 14.28  the employee is eligible for employer-paid health insurance from 
 14.29  a new employer.  The retired employees shall be eligible for 
 14.30  coverages to which they were entitled at the time of retirement, 
 14.31  subject to any changes in coverage through collective bargaining 
 14.32  or plans established under section 43A.18 for employees in 
 14.33  positions equivalent to that from which they retired, provided 
 14.34  that the retired employees shall not be eligible for state-paid 
 14.35  life insurance; and 
 14.36     (j) employees of the state public defender's office, and 
 15.1   district public defenders and their employees other than in the 
 15.2   second and fourth judicial districts, with eligibility 
 15.3   determined by the state board of public defense in consultation 
 15.4   with the commissioner of employee relations; and 
 15.5      (k) employees of the data institute under section 62J.45, 
 15.6   subdivision 8. 
 15.7      Sec. 13.  Minnesota Statutes 1994, section 43A.27, 
 15.8   subdivision 3, is amended to read: 
 15.9      Subd. 3.  [RETIRED EMPLOYEES.] A retired employee of the 
 15.10  state or an organization listed in subdivision 2 or section 
 15.11  43A.24, subdivision 2, who receives, at separation of service: 
 15.12     (1) is immediately eligible to receive an annuity under a 
 15.13  state retirement program or organization of the state and 
 15.14  immediately meets the age and service requirements in section 
 15.15  352.115, subdivision 1; and 
 15.16     (2) has five years of service or meets the service 
 15.17  requirement of the collective bargaining agreement or plan, 
 15.18  whichever is greater; 
 15.19  may elect to purchase at personal expense individual and 
 15.20  dependent hospital, medical, and dental coverages that are.  The 
 15.21  commissioner shall offer at least one plan which is actuarially 
 15.22  equivalent to those made available through collective bargaining 
 15.23  agreements or plans established pursuant to section 43A.18 to 
 15.24  employees in positions equivalent to that from which retired.  A 
 15.25  spouse of a deceased retired employee who received an annuity 
 15.26  under a state retirement program may purchase the coverage 
 15.27  listed in this subdivision if the spouse was a dependent under 
 15.28  the retired employee's coverage at the time of the employee's 
 15.29  death.  Coverages must be coordinated with relevant health 
 15.30  insurance benefits provided through the federally sponsored 
 15.31  Medicare program.  Until the retired employee reaches age 65, 
 15.32  the retired employee and dependents must be pooled in the same 
 15.33  group as active employees for purposes of establishing premiums 
 15.34  and coverage for hospital, medical, and dental insurance.  
 15.35  Coverage for retired employees and their dependents may not 
 15.36  discriminate on the basis of evidence of insurability or 
 16.1   preexisting conditions unless identical conditions are imposed 
 16.2   on active employees in the group that the employee left.  
 16.3   Appointing authorities shall provide notice to employees no 
 16.4   later than the effective date of their retirement of the right 
 16.5   to exercise the option provided in this subdivision.  The 
 16.6   retired employee must notify the commissioner or designee of the 
 16.7   commissioner within 30 days after the effective date of the 
 16.8   retirement of intent to exercise this option. 
 16.9      Sec. 14.  Minnesota Statutes 1994, section 43A.316, is 
 16.10  amended to read: 
 16.11     43A.316 [PUBLIC EMPLOYEES INSURANCE PLAN PROGRAM.] 
 16.12     Subdivision 1.  [INTENT.] The legislature finds that the 
 16.13  creation of a statewide plan program to provide public employees 
 16.14  and other eligible persons with life insurance and hospital, 
 16.15  medical, and dental benefit coverage through provider 
 16.16  organizations would result in a greater utilization of 
 16.17  government resources and would advance the health and welfare of 
 16.18  the citizens of the state.  
 16.19     Subd. 2.  [DEFINITIONS.] For the purpose of this section, 
 16.20  the terms defined in this subdivision have the meaning given 
 16.21  them.  
 16.22     (a)  [COMMISSIONER.] "Commissioner" means the commissioner 
 16.23  of employee relations.  
 16.24     (b)  [EMPLOYEE.] "Employee" means: 
 16.25     (1) a person who is a public employee within the definition 
 16.26  of section 179A.03, subdivision 14, who is insurance eligible 
 16.27  and is employed by an eligible employer; 
 16.28     (2) an elected public official of an eligible employer who 
 16.29  is insurance eligible; or 
 16.30     (3) a person employed by a labor organization or employee 
 16.31  association certified as an exclusive representative of 
 16.32  employees of an eligible employer or by another public employer 
 16.33  approved by the commissioner, so long as the plan meets the 
 16.34  requirements of a governmental plan under United States Code, 
 16.35  title 29, section 1002(32).  
 16.36     (c)  [ELIGIBLE EMPLOYER.] "Eligible employer" means: 
 17.1      (1) a public employer within the definition of section 
 17.2   179A.03, subdivision 15, that is a town, county, city, school 
 17.3   district as defined in section 120.02, educational cooperative 
 17.4   service unit as defined in section 123.58, intermediate district 
 17.5   as defined in section 136C.02, subdivision 7, cooperative center 
 17.6   for vocational education as defined in section 123.351, regional 
 17.7   management information center as defined in section 121.935, or 
 17.8   an education unit organized under the joint powers action, 
 17.9   section 471.59; or 
 17.10     (2) an exclusive representative of employees, as defined in 
 17.11  paragraph (b); or 
 17.12     (3) another public employer approved by the commissioner. 
 17.13     (d)  [EXCLUSIVE REPRESENTATIVE.] "Exclusive representative" 
 17.14  means an exclusive representative as defined in section 179A.03, 
 17.15  subdivision 8.  
 17.16     (e)  [LABOR-MANAGEMENT COMMITTEE.] "Labor-management 
 17.17  committee" means the committee established by subdivision 4.  
 17.18     (f)  [PLAN PROGRAM.] "Plan Program" means the statewide 
 17.19  public employees insurance plan program created by subdivision 3.
 17.20     Subd. 3.  [PUBLIC EMPLOYEE INSURANCE PLAN PROGRAM.] The 
 17.21  commissioner shall be the administrator of the public employee 
 17.22  insurance plan program and may determine its funding 
 17.23  arrangements.  The commissioner shall model the plan program 
 17.24  after the plan established in section 43A.18, subdivision 2, but 
 17.25  may modify that plan, in consultation with the labor-management 
 17.26  committee.  
 17.27     Subd. 4.  [LABOR-MANAGEMENT COMMITTEE.] The 
 17.28  labor-management committee consists of ten members appointed by 
 17.29  the commissioner.  The labor-management committee must comprise 
 17.30  five members who represent employees, including at least one 
 17.31  retired employee, and five members who represent eligible 
 17.32  employers.  Committee members are eligible for expense 
 17.33  reimbursement in the same manner and amount as authorized by the 
 17.34  commissioner's plan adopted under section 43A.18, subdivision 
 17.35  2.  The commissioner shall consult with the labor-management 
 17.36  committee in major decisions that affect the plan program.  The 
 18.1   committee shall study issues relating to the insurance plan 
 18.2   program including, but not limited to, flexible benefits, 
 18.3   utilization review, quality assessment, and cost efficiency.  
 18.4      Subd. 5.  [PUBLIC EMPLOYEE PARTICIPATION.] (a) 
 18.5   Participation in the plan program is subject to the conditions 
 18.6   in this subdivision.  
 18.7      (b) Each exclusive representative for an eligible employer 
 18.8   determines whether the employees it represents will participate 
 18.9   in the plan program.  The exclusive representative shall give 
 18.10  the employer notice of intent to participate at least 90 30 days 
 18.11  before the expiration date of the collective bargaining 
 18.12  agreement preceding the collective bargaining agreement that 
 18.13  covers the date of entry into the plan program.  The exclusive 
 18.14  representative and the eligible employer shall give notice to 
 18.15  the commissioner of the determination to participate in the plan 
 18.16  program at least 90 30 days before entry into the plan 
 18.17  program.  Entry into the plan program is governed by a schedule 
 18.18  established by the commissioner. 
 18.19     (c) Employees not represented by exclusive representatives 
 18.20  may become members of the plan program upon a determination of 
 18.21  an eligible employer to include these employees in the plan 
 18.22  program.  Either all or none of the employer's unrepresented 
 18.23  employees must participate.  The eligible employer shall give at 
 18.24  least 90 30 days' notice to the commissioner before entering the 
 18.25  plan program.  Entry into the plan program is governed by a 
 18.26  schedule established by the commissioner.  
 18.27     (d) Participation in the plan program is for a two-year 
 18.28  term.  Participation is automatically renewed for an additional 
 18.29  two-year term unless the exclusive representative, or the 
 18.30  employer for unrepresented employees, gives the commissioner 
 18.31  notice of withdrawal at least 90 30 days before expiration of 
 18.32  the participation period.  A group that withdraws must wait two 
 18.33  years before rejoining.  An exclusive representative, or 
 18.34  employer for unrepresented employees, may also withdraw if 
 18.35  premiums increase 50 percent or more from one insurance year to 
 18.36  the next. 
 19.1      (e) The exclusive representative shall give the employer 
 19.2   notice of intent to withdraw to the commissioner at least 90 30 
 19.3   days before the expiration date of a collective bargaining 
 19.4   agreement that includes the date on which the term of 
 19.5   participation expires. 
 19.6      (f) Each participating eligible employer shall notify the 
 19.7   commissioner of names of individuals who will be participating 
 19.8   within two weeks of the commissioner receiving notice of the 
 19.9   parties' intent to participate.  The employer shall also submit 
 19.10  other information as required by the commissioner for 
 19.11  administration of the plan program.  
 19.12     Subd. 6.  [COVERAGE.] (a) By January 1, 1989, the 
 19.13  commissioner shall announce the benefits of the plan program.  
 19.14  The plan program shall include employee hospital, medical, 
 19.15  dental, and life insurance for employees and hospital and 
 19.16  medical benefits for dependents.  Health maintenance 
 19.17  organization options and other delivery system options may be 
 19.18  provided if they are available, cost-effective, and capable of 
 19.19  servicing the number of people covered in the plan program.  
 19.20  Participation in optional coverages may be provided by 
 19.21  collective bargaining agreements.  For employees not represented 
 19.22  by an exclusive representative, the employer may offer the 
 19.23  optional coverages to eligible employees and their dependents 
 19.24  provided in the plan program. 
 19.25     (b) The commissioner, with the assistance of the 
 19.26  labor-management committee, shall periodically assess whether it 
 19.27  is financially feasible for the plan program to offer or to 
 19.28  continue an individual retiree program that has competitive 
 19.29  premium rates and benefits.  If the commissioner determines it 
 19.30  to be feasible to offer an individual retiree program, the 
 19.31  commissioner shall announce the applicable benefits, premium 
 19.32  rates, and terms of participation.  Eligibility to participate 
 19.33  in the individual retiree program is governed by subdivision 8, 
 19.34  but applies to retirees of eligible employers that do not 
 19.35  participate in the plan program and to those retirees' 
 19.36  dependents and surviving spouses. 
 20.1      Subd. 6a.  [CHIROPRACTIC SERVICES.] All benefits provided 
 20.2   by the plan program or a successor plan program relating to 
 20.3   expenses incurred for medical treatment or services of a 
 20.4   physician must also include chiropractic treatment and services 
 20.5   of a chiropractor to the extent that the chiropractic services 
 20.6   and treatment are within the scope of chiropractic licensure. 
 20.7      This subdivision is intended to provide equal access to 
 20.8   benefits for plan program members who choose to obtain treatment 
 20.9   for illness or injury from a doctor of chiropractic, as long as 
 20.10  the treatment falls within the chiropractor's scope of practice. 
 20.11  This subdivision is not intended to change or add to the 
 20.12  benefits provided for in the plan program. 
 20.13     Subd. 7.  [PREMIUMS.] The proportion of premium paid by the 
 20.14  employer and employee is subject to collective bargaining or 
 20.15  personnel policies.  If, at the beginning of the coverage 
 20.16  period, no collective bargaining agreement has been finalized, 
 20.17  the increased dollar costs, if any, from the previous year is 
 20.18  the sole responsibility of the individual participant until a 
 20.19  collective bargaining agreement states otherwise.  Premiums, 
 20.20  including an administration fee, shall be established by the 
 20.21  commissioner.  Each employer shall pay monthly the amounts due 
 20.22  for employee benefits including the amounts under subdivision 8 
 20.23  to the commissioner no later than the dates established by the 
 20.24  commissioner.  If an employer fails to make the payments as 
 20.25  required, the commissioner may cancel plan program benefits and 
 20.26  pursue other civil remedies.  
 20.27     Subd. 8.  [CONTINUATION OF COVERAGE.] (a) A former employee 
 20.28  of an employer participating in the plan program who is 
 20.29  receiving a public pension disability benefit or an annuity or 
 20.30  has met the age and service requirements necessary to receive an 
 20.31  annuity under chapter 353, 353C, 354, 354A, 356, 422A, 423, 
 20.32  423A, or 424, and the former employee's dependents, are eligible 
 20.33  to participate in the plan program.  This participation is at 
 20.34  the person's expense unless a collective bargaining agreement or 
 20.35  personnel policy provides otherwise.  Premiums for these 
 20.36  participants must be established by the commissioner.  
 21.1      The commissioner may provide policy exclusions for 
 21.2   preexisting conditions only when there is a break in coverage 
 21.3   between a participant's coverage under the employment-based 
 21.4   group insurance plan program and the participant's coverage 
 21.5   under this section.  An employer shall notify an employee of the 
 21.6   option to participate under this paragraph no later than the 
 21.7   effective date of retirement.  The retired employee or the 
 21.8   employer of a participating group on behalf of a current or 
 21.9   retired employee shall notify the commissioner within 30 days of 
 21.10  the effective date of retirement of intent to participate in the 
 21.11  plan program according to the rules established by the 
 21.12  commissioner. 
 21.13     (b) The spouse of a deceased employee or former employee 
 21.14  may purchase the benefits provided at premiums established by 
 21.15  the commissioner if the spouse was a dependent under the 
 21.16  employee's or former employee's coverage under this section at 
 21.17  the time of the death.  The spouse remains eligible to 
 21.18  participate in the plan program as long as the group that 
 21.19  included the deceased employee or former employee participates 
 21.20  in the plan program.  Coverage under this clause must be 
 21.21  coordinated with relevant insurance benefits provided through 
 21.22  the federally sponsored Medicare program.  
 21.23     (c) The plan program benefits must continue in the event of 
 21.24  strike permitted by section 179A.18, if the exclusive 
 21.25  representative chooses to have coverage continue and the 
 21.26  employee pays the total monthly premiums when due.  
 21.27     (d) A participant who discontinues coverage may not 
 21.28  reenroll. 
 21.29     Persons participating under these paragraphs shall make 
 21.30  appropriate premium payments in the time and manner established 
 21.31  by the commissioner. 
 21.32     Subd. 9.  [INSURANCE TRUST FUND.] The insurance trust fund 
 21.33  in the state treasury consists of deposits of the premiums 
 21.34  received from employers participating in the plan program and 
 21.35  transfers before July 1, 1994, from the excess contributions 
 21.36  holding account established by section 353.65, subdivision 7.  
 22.1   All money in the fund is appropriated to the commissioner to pay 
 22.2   insurance premiums, approved claims, refunds, administrative 
 22.3   costs, and other related service costs.  Premiums paid by 
 22.4   employers to the fund are exempt from the tax imposed by 
 22.5   sections 60A.15 and 60A.198.  The commissioner shall reserve an 
 22.6   amount of money to cover the estimated costs of claims incurred 
 22.7   but unpaid.  The state board of investment shall invest the 
 22.8   money according to section 11A.24.  Investment income and losses 
 22.9   attributable to the fund must be credited to the fund. 
 22.10     Subd. 10.  [EXEMPTION.] The public employee insurance 
 22.11  plan program and, where applicable, the employers participating 
 22.12  in it are exempt from chapters 60A, 62A, 62C, 62D, 62E, and 62H, 
 22.13  section 471.617, subdivisions 2 and 3, and the bidding 
 22.14  requirements of section 471.6161. 
 22.15     Sec. 15.  Minnesota Statutes 1994, section 62J.45, 
 22.16  subdivision 8, is amended to read: 
 22.17     Subd. 8.  [STAFF.] The board may hire an executive 
 22.18  director. The executive director is not a state employee but is 
 22.19  covered by section 3.736.  The executive director and staff may 
 22.20  participate in the following plans for employees in the 
 22.21  unclassified service:  the state retirement plan, the state 
 22.22  deferred compensation plan, and the health insurance and life 
 22.23  insurance plans coverages in section 43A.24, subdivision 2.  The 
 22.24  attorney general shall provide legal services to the board. 
 22.25     Sec. 16.  Minnesota Statutes 1994, section 256B.0644, is 
 22.26  amended to read: 
 22.27     256B.0644 [PARTICIPATION REQUIRED FOR REIMBURSEMENT UNDER 
 22.28  OTHER STATE HEALTH CARE PROGRAMS.] 
 22.29     A vendor of medical care, as defined in section 256B.02, 
 22.30  subdivision 7, and a health maintenance organization, as defined 
 22.31  in chapter 62D, must participate as a provider or contractor in 
 22.32  the medical assistance program, general assistance medical care 
 22.33  program, and MinnesotaCare as a condition of participating as a 
 22.34  provider in health insurance plans and programs or contractor 
 22.35  for state employees established under section 43A.18, the public 
 22.36  employees insurance plan program under section 43A.316, for 
 23.1   health insurance plans offered to local statutory or home rule 
 23.2   charter city, county, and school district employees, the 
 23.3   workers' compensation system under section 176.135, and 
 23.4   insurance plans provided through the Minnesota comprehensive 
 23.5   health association under sections 62E.01 to 62E.16.  The 
 23.6   limitations on insurance plans offered to local government 
 23.7   employees shall not be applicable in geographic areas where 
 23.8   provider participation is limited by managed care contracts with 
 23.9   the department of human services.  For providers other than 
 23.10  health maintenance organizations, participation in the medical 
 23.11  assistance program means that (1) the provider accepts new 
 23.12  medical assistance, general assistance medical care, and 
 23.13  MinnesotaCare patients or (2) at least 20 percent of the 
 23.14  provider's patients are covered by medical assistance, general 
 23.15  assistance medical care, and MinnesotaCare as their primary 
 23.16  source of coverage.  The commissioner shall establish 
 23.17  participation requirements for health maintenance 
 23.18  organizations.  The commissioner shall provide lists of 
 23.19  participating medical assistance providers on a quarterly basis 
 23.20  to the commissioner of employee relations, the commissioner of 
 23.21  labor and industry, and the commissioner of commerce.  Each of 
 23.22  the commissioners shall develop and implement procedures to 
 23.23  exclude as participating providers in the program or programs 
 23.24  under their jurisdiction those providers who do not participate 
 23.25  in the medical assistance program.  The commissioner of employee 
 23.26  relations shall implement this section through contracts with 
 23.27  participating health and dental carriers. 
 23.28     Sec. 17.  Minnesota Statutes 1994, section 356.87, is 
 23.29  amended to read: 
 23.30     356.87 [HEALTH INSURANCE WITHHOLDING.] 
 23.31     Upon authorization of a person entitled to receive a 
 23.32  retirement annuity, disability benefit or survivor benefit, the 
 23.33  executive director of a public pension fund listed in section 
 23.34  356.20, subdivision 2, shall withhold health insurance premium 
 23.35  amounts from the retirement annuity, disability benefit or 
 23.36  survivor benefit, and pay the premium amounts to the public 
 24.1   employees insurance plan program.  The public employees 
 24.2   insurance plan program shall reimburse a public pension fund for 
 24.3   the administrative expense of withholding the premium amounts 
 24.4   and shall assume liability for the failure of a public pension 
 24.5   fund to properly withhold the premium amounts. 
 24.6      Sec. 18.  [REPEALER.] 
 24.7      Laws 1987, chapter 186, section 11; and Laws 1994, chapter 
 24.8   560, article 2, section 15, are repealed.