1.1                          A bill for an act 
  1.2             relating to public employment; establishing financial 
  1.3             parameters for public employment contracts; amending 
  1.4             Minnesota Statutes 2002, sections 179A.01; 179A.03, by 
  1.5             adding subdivisions; 179A.07, subdivision 1; 179A.16, 
  1.6             subdivision 9; 179A.18, subdivision 1; 179A.20, by 
  1.7             adding a subdivision; repealing Minnesota Statutes 
  1.8             2002, sections 123B.749; 179A.03, subdivision 19.  
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2002, section 179A.01, is 
  1.11  amended to read: 
  1.12     179A.01 [PUBLIC POLICY.] 
  1.13     It is the public policy of this state and the purpose of 
  1.14  sections 179A.01 to 179A.25 to promote orderly and constructive 
  1.15  relationships between all public employers and their employees. 
  1.16  This policy is subject to the paramount right of the citizens of 
  1.17  this state to keep inviolate the guarantees for their health, 
  1.18  education, safety, and welfare and is bounded by the financial 
  1.19  limitations of the state and its political subdivisions.  
  1.20     The relationships between the public, public employees, and 
  1.21  employer governing bodies involve responsibilities to the public 
  1.22  and a need for cooperation and employment protection which are 
  1.23  different from those found in the private sector.  The 
  1.24  importance or necessity of some services to the public can 
  1.25  create imbalances in the relative bargaining power between 
  1.26  public employees and employers.  As a result, unique approaches 
  1.27  to negotiations and resolutions of disputes between public 
  2.1   employees and employers are necessary within and bounded by the 
  2.2   financial limitations of the state and its political 
  2.3   subdivisions.  
  2.4      Unresolved disputes between the public employer and its 
  2.5   employees are injurious to the public as well as to the parties. 
  2.6   Adequate means must be established for minimizing them and 
  2.7   providing for their resolution.  Within these limitations and 
  2.8   considerations, the legislature has determined that overall 
  2.9   policy is best accomplished by:  
  2.10     (1) granting public employees certain rights to organize 
  2.11  and choose freely their representatives; 
  2.12     (2) requiring public employers to meet and negotiate with 
  2.13  public employees in an appropriate bargaining unit and providing 
  2.14  that the result of bargaining be in written agreements; and 
  2.15     (3) establishing special rights, responsibilities, 
  2.16  procedures, and limitations regarding public employment 
  2.17  relationships which will provide for the protection of the 
  2.18  rights of the public employee, the public employer, and the 
  2.19  public at large.  
  2.20     Nothing in sections 179A.01 to 179A.25 impairs, modifies, 
  2.21  or alters the authority of the legislature to establish rates of 
  2.22  pay, or retirement or other benefits for its employees.  
  2.23     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  2.24  following final enactment and applies to any proposal or 
  2.25  agreement made or modified after that date.  
  2.26     Sec. 2.  Minnesota Statutes 2002, section 179A.03, is 
  2.27  amended by adding a subdivision to read: 
  2.28     Subd. 16a.  [STRUCTURAL BALANCE CALCULATION.] (a) 
  2.29  "Structural balance calculation" means that, under the uniform 
  2.30  costing methodology, estimated operating expenditures, including 
  2.31  those operating expenditures resulting from a contract under 
  2.32  this chapter during the contract term and one additional fiscal 
  2.33  year, must not exceed estimated ongoing available funds over 
  2.34  that time period.  The employer must incorporate into its 
  2.35  budgeting process projections and calculations based at least 
  2.36  upon the reasonable assumptions in paragraphs (b) to (d).  
  3.1      (b) Onetime sources of revenue and any fund balances are 
  3.2   not available funds for ongoing expenditures. 
  3.3      (c) Projections and calculations of ongoing revenues and 
  3.4   expenditures for the contract period plus one additional fiscal 
  3.5   year must include applicable state aid formulas at current 
  3.6   rates, pupil units for a school district, and employee costs, 
  3.7   including the terms of labor agreements, fringe benefits, 
  3.8   severance pay, and actual retirements approved by the employer. 
  3.9      (d) Expenditure cuts that will diminish the amount or the 
  3.10  quality of service may not be included in the calculations as a 
  3.11  specific budget line item before or after a contract under this 
  3.12  chapter is settled in order to achieve structural balance. 
  3.13     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  3.14  following final enactment and applies to any proposal or 
  3.15  agreement made or modified after that date.  
  3.16     Sec. 3.  Minnesota Statutes 2002, section 179A.03, is 
  3.17  amended by adding a subdivision to read: 
  3.18     Subd. 19a.  [TERMS AND CONDITIONS OF EMPLOYMENT.] (a) 
  3.19  "Terms and conditions of employment" means: 
  3.20     (1) the hours of employment and hourly wages for nonexempt 
  3.21  employees under the federal Fair Labor Standards Act (FLSA); 
  3.22     (2) the salary for exempt employees under the federal Fair 
  3.23  Labor Standards Act; 
  3.24     (3) employer payment of, or contributions to, premiums for 
  3.25  a group insurance plan, but not the design, terms, or selection 
  3.26  of the plan; 
  3.27     (4) sick leave; 
  3.28     (5) vacation plan; 
  3.29     (6) probationary period not otherwise specified by law; and 
  3.30     (7) the term of the contract. 
  3.31     (b) In the case of professional employees, educational 
  3.32  policies of a school district are not included in the terms and 
  3.33  conditions of employment. 
  3.34     (c) "Terms and conditions of employment" does not include 
  3.35  retirement contributions or benefits, other than employer 
  3.36  payment of, or contribution to, premiums for a group insurance 
  4.1   plan, but not the design, terms, or selection of the plan.  
  4.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  4.3   following final enactment and applies to any proposal or 
  4.4   agreement made or modified after that date.  
  4.5      Sec. 4.  Minnesota Statutes 2002, section 179A.03, is 
  4.6   amended by adding a subdivision to read: 
  4.7      Subd. 19b.  [UNIFORM COSTING METHODOLOGY.] (a) "Uniform 
  4.8   costing methodology" means combining the categories of 
  4.9   expenditures under this paragraph for the employer's fiscal year 
  4.10  (base year) that precedes the time period for which the parties 
  4.11  are meeting and negotiating (base year) and projecting the costs 
  4.12  for those same expenditures into the time period of the contract 
  4.13  being negotiated.  The bargaining unit employees used in the 
  4.14  base year remain unchanged for all years into which the 
  4.15  categories of expenditures are projected.  The categories of 
  4.16  expenditures must include at least the following:  
  4.17     (1) across-the-board or general wage increases; 
  4.18     (2) longevity increases of any type, including at least 
  4.19  step increases; 
  4.20     (3) educational attainment increases of any type, including 
  4.21  at least lane changes; 
  4.22     (4) pay differentials; 
  4.23     (5) performance compensation; 
  4.24     (6) additional compensation of any type for additional work 
  4.25  performed; 
  4.26     (7) severance pay; 
  4.27     (8) early retirement incentives; 
  4.28     (9) employer contributions to state pension plans; 
  4.29     (10) employer contributions to supplemental pension plans; 
  4.30     (11) employer contributions to FICA; 
  4.31     (12) cash in lieu of or in exchange for benefits, including 
  4.32  at least sick leave, personal leave, or vacation; 
  4.33     (13) payments to substitute employees for incumbents on 
  4.34  leaves of absences, paid or unpaid; 
  4.35     (14) vacation pay; and 
  4.36     (15) employer contributions toward the cost of group 
  5.1   insurance plan premiums including the following: 
  5.2      (i) health insurance changes or increases; 
  5.3      (ii) dental insurance changes or increases; 
  5.4      (iii) life insurance changes or increases; 
  5.5      (iv) disability insurance changes or increases; 
  5.6      (v) long-term care insurance changes or increases; and 
  5.7      (vi) other insurance changes or increases.  
  5.8      (b) The parties may mutually agree upon additional 
  5.9   expenditure categories.  
  5.10     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  5.11  following final enactment and applies to any proposal or 
  5.12  agreement made or modified after that date.  
  5.13     Sec. 5.  Minnesota Statutes 2002, section 179A.07, 
  5.14  subdivision 1, is amended to read: 
  5.15     Subdivision 1.  [INHERENT MANAGERIAL POLICY.] A public 
  5.16  employer is not required to may not meet and negotiate on 
  5.17  matters of inherent managerial policy.  Matters of inherent 
  5.18  managerial policy include, but are not limited to, such areas of 
  5.19  discretion or policy as the functions and programs of the 
  5.20  employer, its overall budget,; calculations of structural 
  5.21  balance; the design, terms, or selection of a group insurance 
  5.22  plan; utilization of technology,; the organizational structure 
  5.23  ,; selection of personnel,; and direction and the number of 
  5.24  personnel.  No public employer shall sign an agreement which 
  5.25  limits its right to select persons to serve as supervisory 
  5.26  employees or state managers under section 43A.18, subdivision 3, 
  5.27  or requires the use of seniority in their selection.  
  5.28     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  5.29  following final enactment and applies to any proposal or 
  5.30  agreement made or modified after that date.  
  5.31     Sec. 6.  Minnesota Statutes 2002, section 179A.16, 
  5.32  subdivision 9, is amended to read: 
  5.33     Subd. 9.  [NO ARBITRATION.] Failure to reach agreement on 
  5.34  employer payment of, or contributions toward, premiums for group 
  5.35  insurance coverage of retired employees is not subject to 
  5.36  interest arbitration procedures under this section, except for 
  6.1   units of essential employees. 
  6.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  6.3   following final enactment and applies to any proposal or 
  6.4   agreement made or modified after that date.  
  6.5      Sec. 7.  Minnesota Statutes 2002, section 179A.18, 
  6.6   subdivision 1, is amended to read: 
  6.7      Subdivision 1.  [WHEN AUTHORIZED.] Essential employees may 
  6.8   not strike.  Except as otherwise provided by subdivision 2 and 
  6.9   section 179A.17, subdivision 2, other public employees may 
  6.10  strike only under the following circumstances:  
  6.11     (1)(a) the collective bargaining agreement between their 
  6.12  exclusive representative and their employer has expired or, if 
  6.13  there is no agreement, impasse under section 179A.17, 
  6.14  subdivision 2, has occurred; and 
  6.15     (b) the exclusive representative and the employer have 
  6.16  participated in mediation over a period of at least 45 days, 
  6.17  provided that the mediation period established by section 
  6.18  179A.17, subdivision 2, governs negotiations under that section, 
  6.19  and provided that for the purposes of this subclause the 
  6.20  mediation period commences on the day following receipt by the 
  6.21  commissioner of a request for mediation; or and 
  6.22     (c) the final offer of the exclusive representative based 
  6.23  on the uniform costing methodology under section 179A.03, 
  6.24  subdivision 19b, both individually and in aggregate with other 
  6.25  settlement, arbitration award, or recent offers of the exclusive 
  6.26  representative for contracts required under this chapter equals 
  6.27  or is less than the structural balance calculation under section 
  6.28  179A.03, subdivision 16a; or 
  6.29     (2) the employer violates section 179A.13, subdivision 2, 
  6.30  clause (9); or 
  6.31     (3) in the case of state employees, 
  6.32     (a) the legislative coordinating commission has rejected a 
  6.33  negotiated agreement or arbitration decision during a 
  6.34  legislative interim; or 
  6.35     (b) the entire legislature rejects or fails to ratify a 
  6.36  negotiated agreement or arbitration decision, which has been 
  7.1   approved during a legislative interim by the legislative 
  7.2   coordinating commission, at a special legislative session called 
  7.3   to consider it, or at its next regular legislative session, 
  7.4   whichever occurs first.  
  7.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  7.6   following final enactment and applies to any proposal or 
  7.7   agreement made or modified after that date.  
  7.8      Sec. 8.  Minnesota Statutes 2002, section 179A.20, is 
  7.9   amended by adding a subdivision to read: 
  7.10     Subd. 1a.  [STRUCTURAL BALANCE REQUIREMENT.] (a) Before a 
  7.11  public employer enters into a collective bargaining contract, 
  7.12  and before an arbitrator or arbitration panel issues an interest 
  7.13  arbitration award, the public employer or the arbitrator must 
  7.14  make a structural balance calculation based on the uniform 
  7.15  costing methodology.  The arbitrator's calculation must be based 
  7.16  on information submitted by the employer using the uniform 
  7.17  costing methodology. 
  7.18     (b) A public employer may not enter into a collective 
  7.19  bargaining contract, and an arbitrator or arbitration panel may 
  7.20  not issue an interest arbitration award, if the contract or the 
  7.21  interest arbitration award, as determined by the structural 
  7.22  balance calculation would: 
  7.23     (1) cause estimated operating expenditures to exceed 
  7.24  estimated ongoing available funds during the contract term or 
  7.25  during one additional fiscal year; or 
  7.26     (2) increase the amount by which estimated ongoing 
  7.27  operating expenditures exceed estimated ongoing available funds, 
  7.28  if estimated ongoing operating expenditures already exceed 
  7.29  estimated ongoing available funds during the contract term or 
  7.30  during one additional fiscal year. 
  7.31     Sec. 9.  [REPEALER.] 
  7.32     Minnesota Statutes 2002, sections 123B.749; and 179A.03, 
  7.33  subdivision 19, are repealed.  
  7.34     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  7.35  following final enactment.