1.1 	A bill for an act
1.2 	relating to state government; appropriating money for
1.3 	the general legislative and administrative expenses of
1.4 	state government; modifying provisions related to
1.5 	state and local government operations; amending
1.6 	Minnesota Statutes 2004, sections 11A.04; 11A.07,
1.7 	subdivisions 4, 5; 15B.17, subdivision 1; 16A.1286,
1.8 	subdivisions 2, 3; 16A.152, subdivision 2; 16A.1522,
1.9 	subdivision 1; repealing Minnesota Statutes 2004,
1.10 	sections 16A.1522, subdivision 4; 16A.30.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	ARTICLE 1
1.13 	STATE GOVERNMENT APPROPRIATIONS

1.14 	Section 1. STATE GOVERNMENT APPROPRIATIONS.
 1.15 	The sums shown in the columns marked "APPROPRIATIONS" are
1.16 	appropriated from the general fund, or another fund named, to
1.17 	the agencies and for the purposes specified in this act, to be
1.18 	available for the fiscal years indicated for each purpose.  The
1.19 	figures "2006" and "2007," where used in this act, mean that the
1.20 	appropriation or appropriations listed under them are available
1.21 	for the year ending June 30, 2006, or June 30, 2007,
1.22 	respectively.
1.23 	SUMMARY BY FUND
1.24 	2006          2007           TOTAL
1.25 	General            $  288,451,000 $  290,288,000 $  578,739,000
1.26 	Health Care
1.27 	Access                  1,782,000      1,782,000      3,564,000
1.28 	State Government
1.29 	Special Revenue         2,178,000      2,194,000      4,372,000
2.1 	Environmental             436,000        436,000        872,000
2.2 	Remediation               484,000        484,000        968,000
2.3 	Special Revenue         3,221,000      3,221,000      6,442,000
2.4 	Highway User Tax
2.5 	Distribution            2,097,000      2,097,000      4,194,000
2.6 	Workers'
2.7 	Compensation            7,552,000      7,458,000     15,010,000
2.8 	TOTAL              $  306,201,000 $  307,960,000 $  614,161,000
2.9 	APPROPRIATIONS
2.10 	                                       Available for the Year
2.11 	                                           Ending June 30
2.12 	                                          2006         2007

2.13 	Sec. 2. LEGISLATURE
 2.14 		Subdivision 1.Total
2.15 	Appropriation                        $56,725,000    $56,725,000
2.16 	Summary by Fund
2.17 	General              56,597,000    56,597,000
2.18 	Health Care Access      128,000       128,000
2.19 	The amounts that may be spent from this
2.20 	appropriation for each program are
2.21 	specified in the following subdivisions.
2.22 		Subd. 2.Senate
2.23 	18,836,000    18,836,000
2.24 		Subd. 3.House of Representatives
2.25 	25,343,000    25,343,000
2.26 		Subd. 4.Legislative
2.27 	Coordinating Commission
2.28 	12,546,000    12,546,000
2.29 	Summary by Fund
2.30 	General              12,418,000    12,418,000
2.31 	Health Care Access      128,000       128,000
2.32 	$360,000 the first year and $360,000
2.33 	the second year are for public
2.34 	information television, Internet,
2.35 	Intranet, and other transmission of
2.36 	legislative activities.
2.37 	The Legislative Coordinating
2.38 	Commission, in consultation with the
2.39 	house and senate, shall recommend the
2.40 	allocation of funds within this
2.41 	subdivision.
2.42 	On July 1, 2005, the commissioner of
2.43 	finance shall transfer $1,764,000 of
2.44 	unspent fees from the special revenue
2.45 	fund dedicated for the Electronic Real
2.46 	Estate Recording Task Force to the
3.1 	general fund.
3.2 	On July 1, 2005, the commissioner of
3.3 	finance shall transfer $9,577,000 of
3.4 	the legislature's accumulated
3.5 	carryforward account balances to the
3.6 	general fund.

3.7 	Sec. 3. GOVERNOR AND
3.8 	LIEUTENANT GOVERNOR                    3,497,000      3,496,000
3.9 	This appropriation is to fund the
3.10 	offices of the governor and lieutenant
3.11 	governor.
3.12 	$19,000 the first year and $19,000 the
3.13 	second year are for necessary expenses
3.14 	in the normal performance of the
3.15 	governor's and lieutenant governor's
3.16 	duties for which no other reimbursement
3.17 	is provided.

3.18 	Sec. 4. STATE AUDITOR                 8,256,000      8,256,000

3.19 	Sec. 5. ATTORNEY GENERAL             24,677,000     24,718,000
3.20 	Summary by Fund
3.21 	General              22,270,000    22,295,000
3.22 	State Government
3.23 	Special Revenue       1,778,000     1,794,000
3.24 	Environmental           145,000       145,000
3.25 	Remediation             484,000       484,000

3.26 	Sec. 6. SECRETARY OF STATE            5,867,000      6,038,000

3.27 	Sec. 7. CAMPAIGN FINANCE AND
3.28 	PUBLIC DISCLOSURE BOARD                  694,000        694,000

3.29 	Sec. 8. INVESTMENT BOARD                217,000        217,000

3.30 	Sec. 9. ADMINISTRATIVE HEARINGS       7,452,000      7,358,000
3.31 	This appropriation is from the workers'
3.32 	compensation fund.

3.33 	Sec. 10. ADMINISTRATION
 3.34 		Subdivision 1.Total
3.35 	Appropriation                         21,941,000     21,941,000
3.36 	The amounts that may be spent from this
3.37 	appropriation for each program are
3.38 	specified in the following subdivisions.
3.39 		Subd. 2.Technology Services
3.40 	1,803,000      1,803,000
3.41 		Subd. 3.State Facilities Services
3.42 	3,058,000      3,058,000
3.43 		Subd. 4.State and Community Services
3.44 	2,727,000     2,727,000
3.45 		Subd. 5.Administrative Management Services
4.1 	4,562,000      4,562,000
4.2 		Subd. 6.Fiscal Agent
4.3 	9,791,000     9,791,000
4.4 	$7,888,000 the first year and
4.5 	$7,888,000 the second year are for
4.6 	office space costs of the legislature
4.7 	and veterans organizations, for
4.8 	ceremonial space, and for statutorily
4.9 	free space.
4.10 	$1,175,000 the first year and
4.11 	$1,175,000 the second year are for
4.12 	matching grants for public television.
4.13 	$203,000 the first year and $203,000
4.14 	the second year are for public
4.15 	television equipment grants.
4.16 	Equipment or matching grant allocations
4.17 	shall be made after considering the
4.18 	recommendations of the Minnesota Public
4.19 	Television Association.
4.20 	$17,000 the first year and $17,000 the
4.21 	second year are for grants to the Twin
4.22 	Cities regional cable channel.
4.23 	$313,000 the first year and $313,000
4.24 	the second year are for community
4.25 	service grants to public educational
4.26 	radio stations.  The grants must be
4.27 	allocated after considering the
4.28 	recommendations of the Association of
4.29 	Minnesota Public Educational Radio
4.30 	Stations under Minnesota Statutes,
4.31 	section 129D.14.
4.32 	$195,000 the first year and $195,000
4.33 	the second year are for equipment
4.34 	grants to Minnesota Public Radio, Inc.
4.35 	Any unencumbered balance remaining in
4.36 	the first year for grants to public
4.37 	television or radio stations does not
4.38 	cancel and is available for the second
4.39 	year.

4.40 	Sec. 11. CAPITOL AREA ARCHITECTURAL
4.41 	AND PLANNING BOARD                       262,000        262,000
4.42 	During the biennium ending June 30,
4.43 	2007, money received by the board from
4.44 	public agencies, as provided by
4.45 	Minnesota Statutes, section 15B.17,
4.46 	subdivision 1, is appropriated to the
4.47 	board.

4.48 	Sec. 12. FINANCE
 4.49 		Subdivision 1.Total
4.50 	Appropriation                         14,808,000     14,808,000
4.51 	The amounts that may be spent from this
4.52 	appropriation for each program are
4.53 	specified in the following subdivisions.
4.54 		Subd. 2.State Financial Management
5.1 	8,447,000      8,447,000
5.2 		Subd. 3.Information and
5.3 	Management Services
5.4 	6,361,000      6,361,000

5.5 	Sec. 13. EMPLOYEE RELATIONS           5,667,000      5,556,000

5.6 	Sec. 14. REVENUE
 5.7 		Subdivision 1.Total
5.8 	Appropriation                         99,911,000    102,635,000
5.9 	Summary by Fund
5.10 	General              95,869,000    98,593,000
5.11 	Health Care Access    1,654,000     1,654,000
5.12 	Highway User
5.13 	Tax Distribution      2,097,000     2,097,000
5.14 	Environmental           291,000       291,000
5.15 	The amounts that may be spent from this
5.16 	appropriation for each program are
5.17 	specified in the following subdivisions.
5.18 		Subd. 2.Tax System Management
5.19 	83,497,000     85,591,000
5.20 	Summary by Fund
5.21 	General              79,455,000    81,549,000
5.22 	Health Care Access    1,654,000     1,654,000
5.23 	Highway User
5.24 	Tax Distribution      2,097,000     2,097,000
5.25 	Environmental           291,000       291,000
5.26 	$5,096,000 the first year and
5.27 	$6,190,000 the second year are for
5.28 	additional activities to identify and
5.29 	collect tax liabilities from
5.30 	individuals and businesses that
5.31 	currently do not pay all taxes owed.
5.32 	This initiative is expected to result
5.33 	in new general fund revenues of
5.34 	$42,800,000 for the biennium ending
5.35 	June 30, 2007.
5.36 	The department must report to the
5.37 	chairs of the house Ways and Means and
5.38 	senate Finance Committees by March 1,
5.39 	2006, and January 15, 2007, on the
5.40 	following performance indicators:
5.41 	(1) the number of corporations
5.42 	noncompliant with the corporate tax
5.43 	system each year and the percentage and
5.44 	dollar amounts of valid tax liabilities
5.45 	collected;
5.46 	(2) the number of businesses
5.47 	noncompliant with the sales and use tax
5.48 	system and the percentage and dollar
5.49 	amount of the valid tax liabilities
6.1 	collected; and
6.2 	(3) the number of individual
6.3 	noncompliant cases resolved and the
6.4 	percentage and dollar amounts of valid
6.5 	tax liabilities collected.
6.6 	The reports must also identify base
6.7 	level expenditures and staff positions
6.8 	related to compliance and audit
6.9 	activities, including baseline
6.10 	information as of January 1, 2004.  The
6.11 	information must be provided at the
6.12 	budget activity level.
6.13 		Subd. 3.Accounts Receivable Management
6.14 	16,414,000     17,044,000
6.15 	$690,000 the first year and $1,320,000
6.16 	the second year are for additional
6.17 	activities to identify and collect tax
6.18 	liabilities from individuals and
6.19 	businesses that currently do not pay
6.20 	all taxes owed.  This initiative is
6.21 	expected to result in new general
6.22 	revenues of $25,200,000 for the
6.23 	biennium ending June 30,2007.

6.24 	Sec. 15. MILITARY AFFAIRS
 6.25 		Subdivision 1.Total
6.26 	Appropriation                         17,554,000     17,554,000
6.27 	The amounts that may be spent from this
6.28 	appropriation for each program are
6.29 	specified in the following subdivisions.
6.30 		Subd. 2.Maintenance of Training
6.31 	Facilities
6.32 	5,590,000      5,590,000
6.33 		Subd. 3.General Support
6.34 	1,757,000      1,757,000
6.35 		Subd. 4.Enlistment Incentives
6.36 	10,207,000     10,207,000
6.37 	If appropriations for either year of
6.38 	the biennium are insufficient, the
6.39 	appropriation from the other year is
6.40 	available.  The appropriations for
6.41 	enlistment incentives are available
6.42 	until expended.

6.43 	Sec. 16. VETERANS AFFAIRS             4,038,000      4,038,000

6.44 	Sec. 17. VETERANS OF FOREIGN
6.45 	WARS                                      85,000         85,000
6.46 	For carrying out the provisions of Laws
6.47 	1945, chapter 455.

6.48 	Sec. 18. MILITARY ORDER OF
6.49 	THE PURPLE HEART                          25,000         25,000

6.50 	Sec. 19. DISABLED AMERICAN VETERANS      53,000         53,000
7.1 	For carrying out the provisions of Laws
7.2 	1941, chapter 425.

7.3 	Sec. 20. GAMBLING CONTROL             2,800,000      2,800,000
7.4 	This appropriation is from the special
7.5 	revenue fund and is made from the
7.6 	lawful gambling regulation account.

7.7 	Sec. 21. RACING COMMISSION              421,000        421,000
7.8 	This appropriation is from the special
7.9 	revenue fund and is made from the
7.10 	racing and card playing regulation
7.11 	account.

7.12 	Sec. 22. STATE LOTTERY
 7.13 	Notwithstanding Minnesota Statutes,
7.14 	section 349A.10, the operating budget
7.15 	must not exceed $26,800,000 in fiscal
7.16 	year 2006 and $27,400,000 in fiscal
7.17 	year 2007 and thereafter.
7.18 	On July 1, 2005, the director of the
7.19 	State Lottery shall transfer unclaimed
7.20 	prize funds in the amount of $2,187,000
7.21 	accumulated prior to July 1, 2003, to
7.22 	the state treasury.  The prize funds,
7.23 	that had not otherwise been
7.24 	transferred, will be credited
7.25 	$1,312,000, or 60 percent, to the
7.26 	general fund and $875,000, or 40
7.27 	percent, to the environment and natural
7.28 	resources trust fund.

7.29 	Sec. 23. AMATEUR SPORTS
7.30 	COMMISSION                               300,000        300,000

7.31 	Sec. 24. TORT CLAIMS                    161,000        161,000
7.32 	To be spent by the commissioner of
7.33 	finance.
7.34 	If the appropriation for either year is
7.35 	insufficient, the appropriation for the
7.36 	other year is available for it.

7.37 	Sec. 25. MINNESOTA STATE
7.38 	RETIREMENT SYSTEM                      1,176,000      1,176,000
7.39 	The amounts estimated to be needed for
7.40 	each program are as follows:
7.41 	(a) Legislators
7.42 	783,000        802,000
7.43 	Under Minnesota Statutes, sections
7.44 	3A.03, subdivision 2; 3A.04,
7.45 	subdivisions 3 and 4; and 3A.115.
7.46 	(b) Constitutional Officers
7.47 	393,000        403,000
7.48 	Under Minnesota Statutes, sections
7.49 	352C.031, subdivision 5; 352C.04,
7.50 	subdivision 3; and 352C.09, subdivision
7.51 	2.
8.1 	If an appropriation in this section for
8.2 	either year is insufficient, the
8.3 	appropriation for the other year is
8.4 	available for it.

8.5 	Sec. 26. MINNEAPOLIS EMPLOYEES
8.6 	RETIREMENT FUND                        8,065,000      8,065,000
8.7 	The amounts estimated to be needed
8.8 	under Minnesota Statutes, section
8.9 	422A.101, subdivision 3.

8.10 	Sec. 27. MINNEAPOLIS TEACHERS
8.11 	RETIREMENT FUND                       15,800,000     15,800,000
8.12 	The amounts estimated to be needed are
8.13 	as follows:
8.14 	(a) Special Direct State Aid to First
8.15 	Class City Teachers Retirement Funds
8.16 	13,300,000     13,300,000
8.17 	Authorized under Minnesota Statutes,
8.18 	section 354A.12, subdivisions 3a and 3c.
8.19 	(b) Special Direct State Matching Aid
8.20 	to Minneapolis Teachers Retirement Fund
8.21 	2,500,000      2,500,000
8.22 	Authorized under Minnesota Statutes,
8.23 	section 354A.12, subdivision 3b.

8.24 	Sec. 28. ST. PAUL TEACHERS
8.25 	RETIREMENT FUND                        2,967,000      2,967,000
8.26 	The amounts estimated to be needed for
8.27 	special direct state aid to first class
8.28 	city teachers retirement funds
8.29 	authorized under Minnesota Statutes,
8.30 	section 354A.12, subdivisions 3a and 3c.

8.31 	Sec. 29. COUNCIL ON BLACK
8.32 	MINNESOTANS                              282,000        282,000

8.33 	Sec. 30. COUNCIL ON
8.34 	CHICANO-LATINO AFFAIRS                   275,000        275,000

8.35 	Sec. 31. COUNCIL ON
8.36 	ASIAN-PACIFIC MINNESOTANS                243,000        243,000

8.37 	Sec. 32. INDIAN AFFAIRS
8.38 	COUNCIL                                  482,000        482,000

8.39 	Sec. 33. GENERAL CONTINGENT
8.40 	ACCOUNTS                               1,500,000        500,000
8.41 	Summary by Fund
8.42 	General               1,000,000       -0-
8.43 	State Government
8.44 	Special Revenue         400,000       400,000
8.45 	Workers'
8.46 	Compensation            100,000       100,000
8.47 	The appropriations in this section may
8.48 	only be spent with the approval of the
8.49 	governor after consultation with the
9.1 	Legislative Advisory Commission
9.2 	pursuant to Minnesota Statutes, section
9.3 	3.30.
9.4 	If an appropriation in this section for
9.5 	either year is insufficient, the
9.6 	appropriation for the other year is
9.7 	available for it.
9.8 	If a contingent account appropriation
9.9 	is made in one fiscal year, it should
9.10 	be considered a biennial appropriation.

9.11 	ARTICLE 2
9.12 	STATE GOVERNMENT OPERATIONS

9.13 	Section 1. Minnesota Statutes 2004, section 11A.04, is
9.14 	amended to read:
9.15 	11A.04 DUTIES AND POWERS.
9.16 	The state board shall:
9.17 	(1) Act as trustees for each fund for which it invests or
9.18 	manages money in accordance with the standard of care set forth
9.19 	in section 11A.09 if state assets are involved and in accordance
9.20 	with chapter 356A if pension assets are involved.
9.21 	(2) Formulate policies and procedures deemed necessary and
9.22 	appropriate to carry out its functions.  Procedures adopted by
9.23 	the board must allow fund beneficiaries and members of the
9.24 	public to become informed of proposed board actions.  Procedures
9.25 	and policies of the board are not subject to the Administrative
9.26 	Procedure Act.
9.27 	(3) Employ an executive director as provided in section
9.28 	11A.07.
9.29 	(4) Employ investment advisors and consultants as it deems
9.30 	necessary.
9.31 	(5) Prescribe policies concerning personal investments of
9.32 	all employees of the board to prevent conflicts of interest.
9.33 	(6) Maintain a record of its proceedings.
9.34 	(7) As it deems necessary, establish advisory committees
9.35 	subject to section 15.059 to assist the board in carrying out
9.36 	its duties.
9.37 	(8) Not permit state funds to be used for the underwriting
9.38 	or direct purchase of municipal securities from the issuer or
9.39 	the issuer's agent.
10.1 	(9) Direct the commissioner of finance to sell property
10.2 	other than money that has escheated to the state when the board
10.3 	determines that sale of the property is in the best interest of
10.4 	the state.  Escheated property must be sold to the highest
10.5 	bidder in the manner and upon terms and conditions prescribed by
10.6 	the board.
10.7 	(10) Undertake any other activities necessary to implement
10.8 	the duties and powers set forth in this section.
10.9 	(11) Establish a formula or formulas to measure management
10.10 	performance and return on investment.  Public pension funds in
10.11 	the state shall utilize the formula or formulas developed by the
10.12 	state board.
10.13 	(12) Except as otherwise provided in article XI, section 8,
10.14 	of the Constitution of the state of Minnesota, employ, at its
10.15 	discretion, qualified private firms to invest and manage the
10.16 	assets of funds over which the state board has investment
10.17 	management responsibility.  There is annually appropriated to
10.18 	the state board, from the assets of the funds for which the
10.19 	state board utilizes a private investment manager, sums
10.20 	sufficient to pay the costs of employing private firms.  Each
10.21 	year, by January 15, the board shall report to the governor and
10.22 	legislature on the cost and the investment performance of each
10.23 	investment manager employed by the board.
10.24 	(13) Adopt an investment policy statement that includes
10.25 	investment objectives, asset allocation, and the investment
10.26 	management structure for the retirement fund assets under its
10.27 	control.  The statement may be revised at the discretion of the
10.28 	state board.  The state board shall seek the advice of the
10.29 	council regarding its investment policy statement.  Adoption of
10.30 	the statement is not subject to chapter 14.
10.31 	There is annually appropriated to the state board, from the
10.32 	assets of the funds for which the state board provides
10.33 	investment services, sums sufficient to pay the costs of all
10.34 	necessary expenses for the administration of the board.  These
10.35 	sums will be deposited in the State Board of Investment
10.36 	operating account, which must be established by the commissioner
11.1 	of finance.

11.2 	Sec. 2. Minnesota Statutes 2004, section 11A.07,
11.3 	subdivision 4, is amended to read:
11.4 		Subd. 4.Duties and powers.  The director, at the
11.5 	direction of the state board, shall:
11.6 	(1) plan, direct, coordinate, and execute administrative
11.7 	and investment functions in conformity with the policies and
11.8 	directives of the state board and the requirements of this
11.9 	chapter and of chapter 356A;
11.10 	(2) prepare and submit biennial and annual budgets to the
11.11 	board and with the approval of the board submit the budgets to
11.12 	the Department of Finance;
11.13 	(3) employ professional and clerical staff as is necessary
11.14 	within the complement limits established by the legislature.
11.15 	Employees whose primary responsibility is to invest or manage
11.16 	money or employees who hold positions designated as unclassified
11.17 	under section 43A.08, subdivision 1a, are in the unclassified
11.18 	service of the state.  Other employees are in the classified
11.19 	service;
11.20 	(3) (4) report to the state board on all operations under
11.21 	the director's control and supervision;
11.22 	(4) (5) maintain accurate and complete records of
11.23 	securities transactions and official activities;
11.24 	(5) (6) establish a policy relating to the purchase and
11.25 	sale of securities on the basis of competitive offerings or
11.26 	bids.  The policy is subject to board approval;
11.27 	(6) (7) cause securities acquired to be kept in the custody
11.28 	of the commissioner of finance or other depositories consistent
11.29 	with chapter 356A, as the state board deems appropriate;
11.30 	(7) (8) prepare and file with the director of the
11.31 	Legislative Reference Library, by December 31 of each year, a
11.32 	report summarizing the activities of the state board, the
11.33 	council, and the director during the preceding fiscal year.  The
11.34 	report must be prepared so as to provide the legislature and the
11.35 	people of the state with a clear, comprehensive summary of the
11.36 	portfolio composition, the transactions, the total annual rate
12.1 	of return, and the yield to the state treasury and to each of
12.2 	the funds whose assets are invested by the state board, and the
12.3 	recipients of business placed or commissions allocated among the
12.4 	various commercial banks, investment bankers, and brokerage
12.5 	organizations.  The report must contain financial statements for
12.6 	funds managed by the board prepared in accordance with generally
12.7 	accepted accounting principles;
12.8 	(8) (9) require state officials from any department or
12.9 	agency to produce and provide access to any financial documents
12.10 	the state board deems necessary in the conduct of its investment
12.11 	activities;
12.12 	(9) (10) receive and expend legislative appropriations; and 
12.13 	(10) (11) undertake any other activities necessary to
12.14 	implement the duties and powers set forth in this subdivision
12.15 	consistent with chapter 356A.

12.16 	Sec. 3. Minnesota Statutes 2004, section 11A.07,
12.17 	subdivision 5, is amended to read:
12.18 		Subd. 5.Apportionment of expenses. The executive
12.19 	director shall apportion the actual expenses incurred by the
12.20 	board on an accrual basis among the several funds whose assets
12.21 	are invested by the board based on the weighted average assets
12.22 	under management during each quarter.  The charge to each fund
12.23 	must be calculated, billed, and paid on a quarterly basis in
12.24 	accordance with procedures for interdepartmental payments
12.25 	established by the commissioner of finance.  The amounts
12.26 	necessary to pay these charges are appropriated from the
12.27 	investment earnings of each fund.  Receipts must be credited to
12.28 	the general fund as nondedicated receipts.The annual expenses
12.29 	incurred by the state board will be apportioned among the state
12.30 	general fund, the retirement funds administered by the Minnesota
12.31 	State Retirement System, Public Employees Retirement
12.32 	Association, and Teachers Retirement Association, and all other
12.33 	funds as follows:
12.34 	(1) on a biennial basis, the state board, in accordance
12.35 	with biennial budget procedures established by the commissioner
12.36 	of finance, may request a direct appropriation that represents
13.1 	the portion of the state board's expenses necessary to provide
13.2 	investment services to the state general fund.  This
13.3 	appropriation must be deposited in the State Board of Investment
13.4 	operating account;
13.5 	(2) the executive director shall apportion the actual
13.6 	expenses incurred by the state board, less the charge to the
13.7 	state general fund, among the funds whose assets are invested by
13.8 	the state board, with the exception of the state general fund,
13.9 	based on the weighted average assets under management during the
13.10 	fiscal year.  The amounts necessary to pay these charges are
13.11 	apportioned from the investment earnings of each fund.  Receipts
13.12 	must be credited to the State Board of Investment operating
13.13 	account;
13.14 	(3) the actual expenses apportioned and charged to the
13.15 	funds, with the exception of the state general fund and the
13.16 	retirement funds administered by the Minnesota State Retirement
13.17 	System, Public Employees Retirement Association, and Teachers
13.18 	Retirement Association, must be calculated, billed, and paid on
13.19 	a quarterly basis in accordance with procedures for
13.20 	interdepartmental payments established by the commissioner of
13.21 	finance; and 
13.22 	(4) the annual estimated expenses to be incurred by the
13.23 	state board that will be payable by the retirement funds
13.24 	administered by the Minnesota State Retirement System, Public
13.25 	Employees Retirement Association, and Teachers Retirement
13.26 	Association must be deposited in the State Board of Investment
13.27 	operating account on the first business day of each fiscal
13.28 	year.  A reconciliation of the actual expenses compared to the
13.29 	estimated costs must occur at the end of each fiscal year with
13.30 	any surplus or deficit being credited or debited to each of the
13.31 	respective funds.  The state board will present a statement of
13.32 	accrued actual expenses to each fund at the end of each quarter
13.33 	during each fiscal year.

13.34 	Sec. 4. Minnesota Statutes 2004, section 15B.17,
13.35 	subdivision 1, is amended to read:
13.36 		Subdivision 1.Public bodies with proposals.  (a) Before
14.1 	a state agency or other public body develops, to submit to the
14.2 	legislature and the governor, a budget proposal or plans for
14.3 	capital improvements within the Capitol Area, it must consult
14.4 	with the board.
14.5 	(b) The public body must provide enough money for the
14.6 	board's review and planning if the board decides its review and
14.7 	planning services are necessary. Money received by the board
14.8 	under this subdivision and under section 15B.13, paragraph (e),
14.9 	is appropriated to the board and does not cancel.

14.10 	Sec. 5. Minnesota Statutes 2004, section 16A.1286,
14.11 	subdivision 2, is amended to read:
14.12 		Subd. 2.Billing procedures.  The commissioner may bill
14.13 	up to $7,520,000 in each fiscal year for statewide systems
14.14 	services provided to state agencies, judicial branch agencies,
14.15 	the University of Minnesota, the Minnesota State Colleges and
14.16 	Universities, and other entities.  Billing must be based only on
14.17 	usage of services relating to statewide systems provided by the
14.18 	Intertechnologies Division.  Each agency shall transfer from
14.19 	agency operating appropriations to the statewide systems account
14.20 	the amount billed by the commissioner.  Billing policies and
14.21 	procedures related to statewide systems services must be
14.22 	developed by the commissioner in consultation with the
14.23 	commissioners of employee relations and administration, the
14.24 	University of Minnesota, and the Minnesota State Colleges and
14.25 	Universities.

14.26 	Sec. 6. Minnesota Statutes 2004, section 16A.1286,
14.27 	subdivision 3, is amended to read:
14.28 		Subd. 3.Appropriation.  Money transferred into the
14.29 	account is appropriated to the commissioner to pay for statewide
14.30 	systems services during the biennium in which it is appropriated.

14.31 	Sec. 7. Minnesota Statutes 2004, section 16A.152,
14.32 	subdivision 2, is amended to read:
14.33 		Subd. 2.Additional revenues; priority.  (a) If on the
14.34 	basis of a November forecast of general fund revenues and
14.35 	expenditures, the commissioner of finance determines that there
14.36 	will be a positive unrestricted budgetary general fund balance
15.1 	at the close of the biennium, the commissioner of finance must
15.2 	allocate money to the following accounts and purposes in
15.3 	priority order:
15.4 	(1) the cash flow account established in subdivision 1
15.5 	until that account reaches $350,000,000;
15.6 	(2) the budget reserve account established in subdivision
15.7 	1a until that account reaches $653,000,000;
15.8 	(3) the amount necessary to increase the aid payment
15.9 	schedule for school district aids and credits payments in
15.10 	section 127A.45 to not more than 90 percent rounded to the
15.11 	nearest tenth of a percent; and
15.12 	(4) the amount necessary to restore all or a portion of the
15.13 	net aid reductions under section 127A.441 and to reduce the
15.14 	property tax revenue recognition shift under section 123B.75,
15.15 	subdivision 5, paragraph (c), and Laws 2003, First Special
15.16 	Session chapter 9, article 5, section 34, as amended by Laws
15.17 	2003, First Special Session chapter 23, section 20, by the same
15.18 	amount.
15.19 	(b) The amounts necessary to meet the requirements of this
15.20 	section are appropriated from the general fund within two weeks
15.21 	after the forecast is released or, in the case of transfers
15.22 	under paragraph (a), clauses (3) and (4), as necessary to meet
15.23 	the appropriations schedules otherwise established in statute.
15.24 	(c) To the extent that a positive unrestricted budgetary
15.25 	general fund balance is projected, appropriations under this
15.26 	section must be made before any transfer is made under section
15.27 	16A.1522 takes effect.
15.28 	(d) The commissioner of finance shall certify the total
15.29 	dollar amount of the reductions under paragraph (a), clauses (3)
15.30 	and (4), to the commissioner of education.  The commissioner of
15.31 	education shall increase the aid payment percentage and reduce
15.32 	the property tax shift percentage by these amounts and apply
15.33 	those reductions to the current fiscal year and thereafter.

15.34 	Sec. 8. Minnesota Statutes 2004, section 16A.1522,
15.35 	subdivision 1, is amended to read:
15.36 		Subdivision 1.Forecast.  If, on the basis of a forecast
16.1 	of general fund revenues and expenditures in November of an
16.2 	even-numbered year or February of an odd-numbered year, the
16.3 	commissioner projects a positive unrestricted budgetary general
16.4 	fund balance at the close of the biennium that exceeds one-half
16.5 	of one percent of total general fund biennial revenues, the
16.6 	commissioner shall designate the entire balance as available for
16.7 	rebate to the taxpayers of this state. In forecasting,
16.8 	projecting, or designating the unrestricted budgetary general
16.9 	fund balance or general fund biennial revenue under this
16.10 	section, the commissioner shall not include any balance or
16.11 	revenue attributable to settlement payments received after July
16.12 	1, 1998, and before July 1, 2001, as defined in Section IIB of
16.13 	the settlement document, filed May 18, 1998, in State v. Philip
16.14 	Morris, Inc., No. C1-94-8565 (Minnesota District Court, Second
16.15 	Judicial District).

16.16 	Sec. 9. VOLUNTARY UNPAID LEAVE OF ABSENCE.
 16.17 	(a) Appointing authorities in state government may allow
16.18 	each employee to take unpaid leaves of absence for up to 1,040
16.19 	hours between July 1, 2005, and June 30, 2007.  The 1,040-hour
16.20 	limit replaces, and is not in addition to, limits set in prior
16.21 	laws.  Each appointing authority approving such a leave shall
16.22 	allow the employee to continue accruing vacation and sick leave,
16.23 	be eligible for paid holidays and insurance benefits, accrue
16.24 	seniority, and accrue service credit and credited salary in the
16.25 	state retirement plans as if the employee had actually been
16.26 	employed during the time of leave.  An employee covered by the
16.27 	unclassified plan may voluntarily make the employee
16.28 	contributions to the unclassified plan during the leave of
16.29 	absence.  If the employee makes these contributions, the
16.30 	appointing authority must make the employer contribution.  If
16.31 	the leave of absence is for one full pay period or longer, any
16.32 	holiday pay shall be included in the first payroll warrant after
16.33 	return from the leave of absence.  The appointing authority
16.34 	shall attempt to grant requests for the unpaid leaves of absence
16.35 	consistent with the need to continue efficient operation of the
16.36 	agency.  However, each appointing authority shall retain
17.1 	discretion to grant or refuse to grant requests for leaves of
17.2 	absence and to schedule and cancel leaves, subject to the
17.3 	applicable provisions of collective bargaining agreements and
17.4 	compensation plans.
17.5 	(b) To receive eligible service credit and credited salary
17.6 	in a defined benefit plan, the member shall pay an amount equal
17.7 	to the applicable employee contribution rates.  If an employee
17.8 	pays the employee contribution for the period of the leave under
17.9 	this section, the appointing authority must pay the employer
17.10 	contribution.  The appointing authority may, at its discretion,
17.11 	pay the employee contributions.  Contributions must be made in a
17.12 	time and manner prescribed by the executive director of the
17.13 	Minnesota State Retirement Association.

17.14 	EFFECTIVE DATE. This section is effective the day
17.15 	following final enactment.

17.16 	Sec. 10. REPEALER.
 17.17 	Minnesota Statutes 2004, sections 16A.1522, subdivision 4;
17.18 	and 16A.30, are repealed.