1.1 	A bill for an act
1.2 	relating to state and local government; establishing the Commission on Service 
1.3 	Innovation; authorizing contiguous counties to establish a home rule charter 
1.4 	commission; reestablishing the Board of Innovation; imposing powers and duties 
1.5 	on the board; appropriating money;amending Minnesota Statutes 2008, section 
1.6 	3.971, by adding a subdivision; proposing coding for new law in Minnesota 
1.7 	Statutes, chapters 3; 465; proposing coding for new law as Minnesota Statutes, 
1.8 	chapter 372A; repealing Minnesota Statutes 2008, section 6.80.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	Section 1. [3.9280] COMMISSION ON SERVICE INNOVATION.
1.11 		Subdivision 1.Establishment. The Commission on Service Innovation is 
1.12 	established to provide the legislature and the Board of Innovation with a strategic plan to 
1.13 	reengineer the delivery of state and local government services, including the realignment 
1.14 	of service delivery by region and proximity, the use of new technologies, shared facilities, 
1.15 	centralized information technologies, and other means of improving efficiency.
1.16 		Subd. 2.Membership. (a) The commission consists of 18 members, appointed 
1.17 	as follows:
1.18 	(1) one representative of the Minnesota Chamber of Commerce;
1.19 	(2) one representative of the Minnesota Business Partnership;
1.20 	(3) one representative of the McKnight Foundation;
1.21 	(4) one representative of the Wilder Foundation;
1.22 	(5) one representative of the Bush Foundation;
1.23 	(6) one representative of the Minnesota Council of Nonprofits;
1.24 	(7) one representative of the Minnesota Association of Townships;
1.25 	(8) one representative of the Association of Minnesota Counties;
1.26 	(9) one representative of the League of Minnesota Cities;
2.1 	(10) one representative of the University of Minnesota;
2.2 	(11) one representative of the Minnesota State Colleges and Universities;
2.3 	(12) one representative of the Minnesota Association of School Administrators;
2.4 	(13) two representatives of the American Federation of State, County, and Municipal 
2.5 	Employees, including one from council 5 and one from council 65;
2.6 	(14) one representative of the Minnesota Association of Professional Employees;
2.7 	(15) one representative of the Service Employees International Union; 
2.8 	(16) one representative of the Minnesota High Tech Association; and
2.9 	(17) the state chief information officer.
2.10 	(b) The appointments required by this section must be completed by June 30, 
2.11 	2010. Appointing authorities shall notify the state chief information officer when making 
2.12 	their appointments. The members of the commission shall serve at the pleasure of the 
2.13 	appointing authorities.
2.14 		Subd. 3.Organization. (a) Within two weeks after completion of the appointments 
2.15 	under subdivision 2, the state chief information officer shall convene the first meeting of 
2.16 	the commission. The state chief information officer shall provide meeting space for the 
2.17 	commission. The commission shall select co-chairpersons from its appointed membership 
2.18 	at the first meeting. Members of the legislature may attend the meetings of the commission 
2.19 	and participate as nonvoting members of the commission.
2.20 	(b) The commission shall provide notice of its meetings to the public and to 
2.21 	interested members of the legislature. Meetings of the commission are subject to chapter 
2.22 	13D. The commission shall post all reports required under this section on the Legislative 
2.23 	Coordinating Commission Web site.
2.24 	(c) The commission may solicit and receive private contributions. Money received 
2.25 	under this paragraph is deposited in a special revenue account and appropriated to the 
2.26 	commission for the purposes of this section. The commission may provide per diem 
2.27 	payments to voting members as determined by the commission from the appropriation 
2.28 	in this paragraph. No public money may be used to provide payment of per diems or 
2.29 	expenses for members of the commission. The commission may hire staff to assist the 
2.30 	commission in its work.
2.31 	(d) The commission shall solicit and coordinate public input. The commission 
2.32 	must use its best efforts to maximize public involvement in the work of the commission, 
2.33 	including the use of best practices in social media. The commission may retain an expert 
2.34 	in the use of social media to assist in public outreach and involvement.
3.1 		Subd. 4.Reporting. (a) Beginning August 1, 2010, the commission shall publish 
3.2 	electronic monthly reports on its progress, including a description of upcoming agenda 
3.3 	items.
3.4 	(b) By January 15 of each year, beginning in 2011, the commission shall report to 
3.5 	the chairs and ranking minority members of the legislative committees and divisions with 
3.6 	jurisdiction over state government policy and finance regarding its work under this section 
3.7 	and to the Board of Innovation established under section 465.7902, with a strategic plan 
3.8 	containing findings and recommendations to improve state and local government delivery 
3.9 	of public services. The strategic plan must address:
3.10 	(1) how to enhance the public involvement and input as the public uses state and 
3.11 	local government services and public schools;
3.12 	(2) how technology can be leveraged to reduce costs and enhance quality;
3.13 	(3) how service innovation will conserve substantial financial resources; 
3.14 	(4) a transition plan and governance structure that will facilitate high-quality 
3.15 	innovation and change in the future;
3.16 	(5) how to improve public sector employee productivity;
3.17 	(6) the security of individual data and government programs;
3.18 	(7) data transparency and accountability;
3.19 	(8) centralized and shared services; and
3.20 	(9) data interoperability across jurisdictions.
3.21 	The strategic plan shall also provide a process to review and modify 
3.22 	recommendations at regular intervals in the future based on specific results measured 
3.23 	at regular intervals.
3.24 	The strategic plan shall also include any proposed legislation necessary to implement 
3.25 	the commission's recommendations.
3.26 		Subd. 5.Expiration. This section expires June 30, 2012.

3.27 	Sec. 2. Minnesota Statutes 2008, section 3.971, is amended by adding a subdivision to 
3.28 	read:
3.29 		Subd. 9.Recommendations to the Board of Innovation. The legislative auditor 
3.30 	may make recommendations to the Board of Innovation established under section 
3.31 	465.7902 that will assist the board in accomplishing its duties.

3.32 	Sec. 3. [372A.01] HOME RULE CHARTER FOR CONTIGUOUS COUNTIES.
3.33 	Any two or more contiguous counties in the state may propose a county home rule 
3.34 	charter commission as provided in this chapter.
4.1 	The county board of each contiguous county shall adopt a resolution to establish a 
4.2 	home rule charter commission for the counties. The resolution must name the contiguous 
4.3 	counties proposing to establish the charter commission.

4.4 	Sec. 4. [372A.02] CHARTER COMMISSION; NOMINATIONS AND 
4.5 	APPOINTMENTS.
4.6 		Subdivision 1.Publication. Within 30 days after the date of the resolution in section 
4.7 	372A.01, the county board of each county shall publish the resolution and a notice inviting 
4.8 	interested persons to apply to the county board of commissioners for consideration by the 
4.9 	county board and the joint legislative delegation for nomination to the charter commission. 
4.10 	The resolution and notice must be published at least once a week for two successive weeks 
4.11 	in a qualified newspaper of general circulation within each county. If one newspaper is a 
4.12 	qualified newspaper of general circulation for more than one county, those counties may 
4.13 	publish jointly. The county boards shall furnish copies of the applications to the members 
4.14 	of the joint legislative delegation.
4.15 		Subd. 2.Nomination. (a) Within 60 days after the date of the resolution in section 
4.16 	372A.01, the county board of each county shall nominate 15 persons as candidates for 
4.17 	appointment to a charter commission to propose a charter to provide for the form of 
4.18 	county government for the counties. Three persons who reside in the district must be 
4.19 	nominated for each of the county commissioner districts in each county. Immediately 
4.20 	following selection of the nominees, the county board of each county shall submit the 
4.21 	nominations, together with the county board resolution, to the chief judge of the district 
4.22 	court with jurisdiction in the county.
4.23 	(b) Within 75 days after the date of the resolution in section 372A.01, the joint 
4.24 	legislative delegation of each county shall nominate six persons who reside in the county 
4.25 	as candidates for appointment to a charter commission to propose a charter to provide for 
4.26 	the form of county government for the counties. The six persons must be nominated 
4.27 	without regard to county commissioner districts. Immediately following selection of the 
4.28 	nominees, the delegation shall submit the nominations to the chief judge of the district 
4.29 	court with jurisdiction in the county. For purposes of this section, "joint legislative 
4.30 	delegation" means all elected members of the house of representatives and senate 
4.31 	whose legislative district includes a portion of a county proposing a home rule charter 
4.32 	commission under section 372A.01.
4.33 		Subd. 3.Appointment. Within 30 days after the last submission of nominations, the 
4.34 	chief judge shall appoint to the charter commission seven members for each county, one 
4.35 	appointee for each county commissioner district in each county, selected from those who 
5.1 	were nominated by county commissioner district, and two appointees from each county 
5.2 	who were nominated to serve from the county without regard to county commissioner 
5.3 	districts. The commission members must be qualified voters in the county from which 
5.4 	they are appointed. A person is not disqualified from serving on the charter commission 
5.5 	because the person holds an elective or appointive office. The appointing authority shall 
5.6 	fill any vacancies. Appointments must be filed with the board of county commissioners 
5.7 	of the county in which the appointee resides. An appointee must file an acceptance with 
5.8 	the board within ten days after notification of the appointment or be considered to have 
5.9 	declined the appointment.

5.10 	Sec. 5. [372A.03] CHARTER COMMISSION; TERMS; ADMINISTRATION.
5.11 		Subdivision 1.Chair; rules. The charter commission shall meet within 30 days 
5.12 	after the initial appointment, elect a chair from among the members, and establish rules, 
5.13 	including quorum requirements, for its operation and procedures.
5.14 		Subd. 2.Expenses and administration. The members of the charter commission 
5.15 	receive no compensation except reimbursement for expenses actually incurred in the 
5.16 	course of  their duties. The board of county commissioners of each county may make 
5.17 	appropriations to the charter commission to be used to employ research and clerical 
5.18 	assistance, for supplies, and to meet expenses considered necessary by the charter 
5.19 	commission. The charter commission may request and receive assistance from any county 
5.20 	official. If requested, a personnel director shall assist the  charter commission to test and 
5.21 	hire employees. If requested, a county attorney shall provide legal services.
5.22 		Subd. 3.Terms. Members of the charter commission hold office until a final report 
5.23 	has been made under section 372A.04.

5.24 	Sec. 6. [372A.04] CHARTER COMMISSION; POWERS AND DUTIES.
5.25 		Subdivision 1.Report to county boards. The charter commission shall deliver 
5.26 	to the board of county commissioners of each contiguous county either (1) its report 
5.27 	determining that the present form of county government is adequate for the county and 
5.28 	that a charter is not necessary or desirable, or (2) a draft of a proposed charter. The report 
5.29 	must be signed by a majority of the members of the charter commission.
5.30 		Subd. 2.Contents of report.  The proposed charter may provide for any form of 
5.31 	government consistent with the Constitution of the state of Minnesota. It may provide for 
5.32 	the establishment and administration of all departments of a county government and for 
5.33 	the regulation of all local county functions. It may abolish or consolidate any department 
5.34 	or agency. It must provide for present functions to be assumed by new elective or 
6.1 	appointive officers as provided in the charter and may provide for other powers consistent 
6.2 	with other law. It must provide methods of procedure in respect to the operation of the 
6.3 	government created and the duties of all officers. It must provide for a home rule charter 
6.4 	commission consistent with article XII, section 5, of the Constitution of the state of 
6.5 	Minnesota and may provide for alternative methods for amending or abandoning the 
6.6 	charter consistent with the Constitution. A county may be authorized to acquire by 
6.7 	gift, devise, purchase, or condemnation or sell or lease any property needed for the full 
6.8 	discharge of its duties and powers.
6.9 		Subd. 3.Public hearings.  The charter commission must hold at least one public 
6.10 	hearing on the report in each of the county commissioner districts. Based upon the 
6.11 	public hearings, the charter commission may revise the report. The revised report must 
6.12 	be signed by a majority of the members of the charter commission, and delivered to 
6.13 	the county boards.

6.14 	Sec. 7. [372A.05] ELECTION; BALLOT.
6.15 		Subdivision 1.Procedure; notice. Upon delivery of the final proposed charter to the 
6.16 	board of county commissioners in each county, each board shall submit it to the voters in 
6.17 	that county at a general election. The notice of election must contain the complete charter 
6.18 	and must be published once a week for two successive weeks in a qualified newspaper 
6.19 	of general circulation within each county.
6.20 		Subd. 2.Ballot form. The ballot must at least contain the following question 
6.21 	with additional descriptive language, approved by the secretary of state, that the charter 
6.22 	commission may include:
6.23 	"Shall the proposed county charter be adopted?

6.24		Yes 
........		
6.25		No ........"
		
6.26 	The voter shall place an "X" after one of the last two words to express the voter's choice.

6.27 	Sec. 8. [372A.06] ADOPTION OF CHARTER.
6.28 	If a majority of the votes cast in a county on the proposition are in favor of the 
6.29 	proposed charter, it must be considered adopted for that county. The charter takes effect 
6.30 	two years after the election.

6.31 	Sec. 9. [372A.07] HOME RULE CHARTER COUNTY POWERS AND DUTIES.
6.32 		Subdivision 1.General rule. Unless specifically provided otherwise in general laws 
6.33 	or statutes, the term "county" when used in Minnesota Statutes or any general legislative 
7.1 	act includes home rule charter counties organized under this chapter. In addition to powers 
7.2 	and duties granted or imposed under its charter, a home rule charter county has all the 
7.3 	powers granted a county by law and all of the duties imposed upon it by law. If a charter 
7.4 	provision conflicts with a general law, the requirements of the law prevail.
7.5 		Subd. 2.County bonds and indebtedness. All general and special laws authorizing 
7.6 	a county to incur indebtedness or issue bonds are subject to the charter if the charter 
7.7 	provisions are not in conflict with general laws relating to indebtedness.
7.8 		Subd. 3.Personnel exception. A home rule charter does not apply to personnel 
7.9 	matters relating to employees of a county, which continue to be governed by law.

7.10 	Sec. 10. [465.7901] DEFINITIONS.
7.11 		Subdivision 1.Agency. "Agency" means a department, agency, board, or other 
7.12 	instrumentality of state government that has jurisdiction over an administrative rule or 
7.13 	law from which a waiver is sought under section 465.7903. If no specific agency has 
7.14 	jurisdiction over such a law, "agency" refers to the attorney general.
7.15 		Subd. 2.Board. "Board" means the Board of Innovation established by section 
7.16 	465.7902.
7.17 		Subd. 3.Council or Metropolitan Council. "Council" or "Metropolitan Council" 
7.18 	means the Metropolitan Council established by section 473.123.
7.19 		Subd. 4.Local government unit. "Local government unit" means a county, home 
7.20 	rule charter or statutory city, school district, town, or special taxing district, except for 
7.21 	purposes of sections 465.81 to 465.86.
7.22 		Subd. 5.Metropolitan agency. "Metropolitan agency" has the meaning given in 
7.23 	section 473.121, subdivision 5a.
7.24 		Subd. 6.Metropolitan area. "Metropolitan area" has the meaning given in section 
7.25 	473.121, subdivision 2.
7.26 		Subd. 7.Scope. As used in sections 465.7901 to 465.7905 and 465.805 to 465.86, 
7.27 	the terms defined in this section have the meanings given them.

7.28 	Sec. 11. [465.7902] BOARD OF INNOVATION.
7.29 		Subdivision 1.Membership. (a) The Board of Innovation consists of 16 members, 
7.30 	appointed as follows:
7.31 	(1) two members of the senate, appointed by the Subcommittee on Committees of 
7.32 	the Senate Committee on Rules and Administration;
7.33 	(2) two members of the house of representatives, appointed by the speaker of the 
7.34 	house;
8.1 	(3) the commissioner of management and budget;
8.2 	(4) the commissioner of administration;
8.3 	(5) the state chief information officer;
8.4 	(6) two members with a background in academic research concerning system 
8.5 	redesign and delivery, including one member appointed by the chancellor of the Minnesota 
8.6 	State Colleges and Universities and one member appointed by the president of the 
8.7 	University of Minnesota;
8.8 	(7) two members with experience in the leadership of nonprofit organizations, 
8.9 	appointed by the Minnesota Council of Nonprofits, including one member from an 
8.10 	organization with statewide membership, and one member from a human services 
8.11 	organization;
8.12 	(8) two members with experience in foundation leadership, including one member 
8.13 	from a foundation making statewide grants appointed by the Minnesota Council on 
8.14 	Foundations;
8.15 	(9) one member with experience as a leader of a for-profit corporation, appointed by 
8.16 	the Minnesota Chamber of Commerce; and
8.17 	(10) two members appointed by the American Federation of State, County, and 
8.18 	Municipal Employees, including one from council 5 and one from council 65.
8.19 	All members must have experience or interest in the work of system redesign or public 
8.20 	sector innovation. The legislative members serve as nonvoting members. A commissioner 
8.21 	serving on the board may designate an employee from the commissioner's agency to 
8.22 	serve as the commissioner's designee. A person registered as a lobbyist under chapter 
8.23 	10A may not be a member of the board.
8.24 	(b) A board member may not vote on a determination under sections 465.7903 to 
8.25 	465.7905 if the members of the appointing authority for the member has a direct interest 
8.26 	in the determination.
8.27 		Subd. 2.Duties of board. The board shall:
8.28 	(1) accept applications from local government units and nonprofit organizations for 
8.29 	waivers of administrative rules and temporary, limited exemptions from enforcement of 
8.30 	procedural requirements in state law as provided in section 465.7903, and determine 
8.31 	whether to approve, modify, or reject the application;
8.32 	(2) accept applications for grants to local government units and related organizations 
8.33 	proposing to design models or plans for innovative service delivery and management 
8.34 	as provided in section 465.7905 and determine whether to approve, modify, or reject 
8.35 	the application;
9.1 	(3) accept applications from eligible local government units for service-sharing 
9.2 	grants as provided in section 465.805, and determine whether to approve, modify, or 
9.3 	reject the application;
9.4 	(4) make recommendations to the chairs and ranking minority members of 
9.5 	the appropriate legislative committees for the authorization of pilot projects for 
9.6 	the implementation of innovative service delivery activities that require statutory 
9.7 	authorization;
9.8 	(5) make recommendations to the chairs and ranking minority members of the 
9.9 	appropriate legislative committees regarding the elimination of state mandates that inhibit 
9.10 	local government efficiency, innovation, and cooperation by prescribing specific processes 
9.11 	for achieving a desired outcome;
9.12 	(6) investigate and review the role of unfunded state mandates in intergovernmental 
9.13 	relations and assess their impact on state and local government objectives and 
9.14 	responsibilities;
9.15 	(7) make recommendations to the governor and the chairs and ranking minority 
9.16 	members of the appropriate legislative committees regarding:
9.17 	(i) allowing flexibility for local units of government in complying with specific 
9.18 	unfunded state mandates for which terms of compliance are unnecessarily rigid or 
9.19 	complex;
9.20 	(ii) reconciling any two or more unfunded state mandates that impose contradictory 
9.21 	or inconsistent requirements;
9.22 	(iii) terminating unfunded state mandates that are duplicative, obsolete, or lacking 
9.23 	in practical utility;
9.24 	(iv) suspending, on a temporary basis, unfunded state mandates that are not vital 
9.25 	to public health and safety and that compound the fiscal difficulties of local units of 
9.26 	government, including recommendations for initiating the suspensions;
9.27 	(v) consolidating or simplifying unfunded state mandates or the planning or 
9.28 	reporting requirements of the mandates, in order to reduce duplication and facilitate 
9.29 	compliance by local units of government with those mandates; and
9.30 	(vi) establishing common state definitions or standards to be used by local units of 
9.31 	government in complying with unfunded state mandates that use different definitions or 
9.32 	standards for the same terms or principles; 
9.33 	(8) identify relevant unfunded state mandates;
9.34 	(9) facilitate proposals for grants made by eligible applicants; 
10.1 	(10) make recommendations on topics to the Legislative Audit Commission for 
10.2 	program evaluations that are likely to result in recommendations that will improve the 
10.3 	cost-effective delivery of government services; and
10.4 	(11) review recommendations received from the Commission on Service Innovation.
10.5 	The duties imposed under clauses (6) to (10) must be performed to the extent possible 
10.6 	given existing resources. Each recommendation under clause (7) must, to the extent 
10.7 	practicable, identify the specific unfunded state mandates to which the recommendation 
10.8 	applies. The commissioners or directors of state agencies responsible for the promulgation 
10.9 	or enforcement of the unfunded mandates addressed in clauses (5) to (10) shall assign staff 
10.10 	to assist the board in carrying out the board's duties under this section.
10.11 		Subd. 3.Additional coordinating functions. The board may also:
10.12 	(1) serve as a clearinghouse for existing ideas and information from community 
10.13 	leaders;
10.14 	(2) provide a Web site where interested parties may share information and practices;
10.15 	(3) receive recommendations from the legislative auditor concerning waivers and 
10.16 	other initiatives within the board's jurisdiction;
10.17 	(4) conduct research concerning innovation in service delivery and local government 
10.18 	efficiency, innovation, and cooperation;
10.19 	(5) facilitate regional dialogue concerning successful innovation and collaboration; 
10.20 	and
10.21 	(6) use its best efforts to maximize public involvement in its work, including the use 
10.22 	of best practices in social media.
10.23 		Subd. 4.Staff. The board shall hire an executive director, who serves as the state's 
10.24 	chief innovation officer. The board may hire other staff or consultants as necessary to 
10.25 	perform its duties.
10.26 		Subd. 5.Terms, compensation, and removal. The terms, compensation, and 
10.27 	removal of members is governed by section 15.0575, unless otherwise provided. The 
10.28 	terms of legislative members of the board correspond with the term of the office held by 
10.29 	the member at the time of appointment.

10.30 	Sec. 12. [465.7903] RULE AND LAW WAIVER REQUESTS.
10.31 		Subdivision 1.Generally. (a) Except as provided in paragraph (b), a local 
10.32 	government unit or a nonprofit organization may request the Board of Innovation to 
10.33 	grant a waiver from one or more administrative rules or a temporary, limited exemption 
10.34 	from enforcement of state procedural laws governing delivery of services by the local 
10.35 	government unit or nonprofit organization. Two or more local government units may 
11.1 	submit a joint application for a waiver or exemption under this section if they propose to 
11.2 	cooperate in providing a service or program that is subject to the rule or law. Before a 
11.3 	local unit of government may submit an application to the board, the governing body of 
11.4 	the local government unit must approve, in concept, the proposed waiver or exemption 
11.5 	at a meeting required to be public under chapter 13D. A waiver or exemption granted 
11.6 	to a nonprofit organization under this section applies to services provided to all of the 
11.7 	organization's clients.
11.8 	(b) A school district that is granted a variance from rules of the commissioner of 
11.9 	education under section 122A.163 need not apply to the board for a waiver of those rules 
11.10 	under this section. A school district may not seek a waiver of rules under this section if 
11.11 	the commissioner of education has authority to grant a variance to the rules under section 
11.12 	122A.163. This paragraph does not preclude a school district from being included in a 
11.13 	cooperative effort with another local government unit under this section.
11.14 		Subd. 2.Application. (a) A local government unit or nonprofit organization 
11.15 	requesting a waiver of a rule or exemption from enforcement of a law under this section 
11.16 	shall present a written application to the board. The application must include:
11.17 	(1) identification of the service or program at issue;
11.18 	(2) identification of the administrative rule or the law imposing a procedural 
11.19 	requirement with respect to which the waiver or exemption is sought; and
11.20 	(3) a description of the improved service outcome sought, including an explanation 
11.21 	of the effect of the waiver or exemption in accomplishing that outcome.
11.22 	(b) A local government unit submitting an application must provide a copy to the 
11.23 	exclusive representative certified under section 179A.12 to represent employees who 
11.24 	provide the service or program affected by the requested waiver or exemption.
11.25 		Subd. 3.Review process. (a) Upon receipt of an application, the board shall 
11.26 	commence review of the application, as provided in this subdivision. The board shall 
11.27 	dismiss an application if it finds that the application proposes a waiver of rules or 
11.28 	exemption from enforcement of laws that would result in due process violations, violations 
11.29 	of federal law or the state or federal constitution, or the loss of services to people who 
11.30 	are entitled to them.
11.31 	(b) The board shall determine whether a law from which an exemption for 
11.32 	enforcement is sought is a procedural law, specifying how a local government unit or 
11.33 	nonprofit organization is to achieve an outcome, rather than a substantive law prescribing 
11.34 	the outcome or otherwise establishing policy. In making its determination, the board shall 
11.35 	consider whether the law specifies such requirements as:
11.36 	(1) who must deliver a service;
12.1 	(2) where the service must be delivered;
12.2 	(3) to whom and in what form reports regarding the service must be made; and
12.3 	(4) how long or how often the service must be made available to a given recipient.
12.4 	(c) If a member of the board also is a commissioner, a commissioner's designee, or 
12.5 	the state auditor, or is employed by an agency with jurisdiction over a rule or law affected 
12.6 	by an application, the member must not participate in the decision on the particular waiver 
12.7 	or exemption.
12.8 	(d) If the application is submitted by a local government unit or a nonprofit 
12.9 	organization in the metropolitan area or the unit or nonprofit organization requests a 
12.10 	waiver of a rule or temporary, limited exemptions from enforcement of a procedural law 
12.11 	over which the Metropolitan Council or a metropolitan agency has jurisdiction, the board 
12.12 	shall also transmit a copy of the application to the council for review and comment. The 
12.13 	council shall report its comments to the board within 60 days of the date the application 
12.14 	was transmitted to the council. The council may point out any resources or technical 
12.15 	assistance it may be able to provide a local government unit or nonprofit organization 
12.16 	submitting a request under this section.
12.17 	(e) Within 15 days after receipt of the application, the board shall transmit a copy of 
12.18 	it to the commissioner of each agency having jurisdiction over a rule or law from which 
12.19 	a waiver or exemption is sought. The agency may mail a notice that it has received an 
12.20 	application for a waiver or exemption to all persons who have registered with the agency 
12.21 	under section 14.14, subdivision 1a, identifying the rule or law from which a waiver or 
12.22 	exemption is requested. If no agency has jurisdiction over the rule or law, the board 
12.23 	shall transmit a copy of the application to the attorney general. The agency shall inform 
12.24 	the board of its agreement with or objection to and grounds for objection to the waiver 
12.25 	or exemption request within 60 days of the date when the application was transmitted to 
12.26 	it. An agency's failure to respond under this paragraph is considered agreement to the 
12.27 	waiver or exemption. The board shall decide whether to grant a waiver or exemption at 
12.28 	its next regularly scheduled meeting following its receipt of an agency's response or the 
12.29 	end of the 60-day response period. If consideration of an application is not concluded at 
12.30 	that meeting, the matter may be carried over to the next meeting of the board. Interested 
12.31 	persons may submit written comments to the board on the waiver or exemption request up 
12.32 	to the time of its vote on the application.
12.33 	(f) If the exclusive representative of the affected employees of the requesting local 
12.34 	government unit objects to the waiver or exemption request, it may inform the board of the 
12.35 	objection to and the grounds for the objection to the waiver or exemption request within 
12.36 	60 days of the receipt of the application.
13.1 		Subd. 4.Hearing. If the agency or the exclusive representative does not agree with 
13.2 	the waiver or exemption request, the board shall set a date for a hearing on the application. 
13.3 	The hearing must be conducted informally at a meeting of the board. Persons representing 
13.4 	the local government unit shall present their request for the waiver or exemption, and 
13.5 	a representative from the agency shall explain the agency's  objection to the waiver or 
13.6 	exemption. Members of the board may request additional   information from either party. 
13.7 	The board may also request, either before or at the hearing, information or comments 
13.8 	from representatives of business, labor, local governments, state agencies, consultants, 
13.9 	and members of the public. If necessary, the hearing may be continued at a subsequent 
13.10 	board meeting. A waiver or exemption requires a majority vote of the board members. 
13.11 	The board may modify the terms of the waiver or exemption request in arriving at the 
13.12 	agreement required under subdivision 5.
13.13 		Subd. 5.Conditions of agreements. (a) If the board grants a request for a waiver 
13.14 	or exemption, the board and the entity making the request shall enter into an agreement 
13.15 	providing for the delivery of the service or program that is the subject of the application. 
13.16 	The agreement must specify desired outcomes and the means of measurement by which 
13.17 	the board will determine whether the outcomes specified in the agreement have been met. 
13.18 	The agreement must specify the duration of the waiver or exemption. The duration of a 
13.19 	waiver from an administrative rule may be for no less than two years and no more than 
13.20 	four years, subject to renewal if both parties agree. An exemption from enforcement of a 
13.21 	law terminates ten days after adjournment of the regular legislative session held during the 
13.22 	calendar year following the year when the exemption is granted, unless the legislature has 
13.23 	acted to extend or make permanent the exemption.
13.24 	(b) If the board grants a waiver or exemption, it must report the waiver or exemption 
13.25 	to the legislature, including the chairs of the governmental operations and appropriate 
13.26 	policy committees in the house of representatives and senate, and the governor within 
13.27 	30 days.
13.28 	(c) The board may reconsider or renegotiate the agreement if the rule or law affected 
13.29 	by the waiver or exemption is amended or repealed during the term of the original 
13.30 	agreement. A waiver of a rule under this section has the effect of a variance granted 
13.31 	by an agency under section 14.055, subdivision 4. The recipient of an exemption from 
13.32 	enforcement of a procedural requirement in state law under this section is exempt from 
13.33 	that law for the duration of the exemption. The board may require periodic reports from 
13.34 	the recipient, or conduct investigations of the service or program.
13.35 		Subd. 6.Enforcement. If the board finds that the recipient of a waiver or an 
13.36 	exemption has failed to comply with the terms of the agreement under subdivision 5, it 
14.1 	may rescind the agreement. After an agreement is rescinded, the recipient is subject to the 
14.2 	rules and laws covered by the agreement.
14.3 		Subd. 7.Access to data. If the recipient of a waiver or an exemption through a 
14.4 	cooperative program under this section gains access to data that is classified as not public, 
14.5 	the access to and use of the data for the recipient is governed by the same restrictions on 
14.6 	access to and use of the data that apply to the unit that collected, created, received, or 
14.7 	maintained the data.

14.8 	Sec. 13. [465.7904] WAIVERS OF STATE RULES; POLICIES.
14.9 		Subdivision 1.Application. A state agency may apply to the board for a waiver 
14.10 	from: (1) an administrative rule or policy adopted by the commissioner of management 
14.11 	and budget that deals with the state personnel system; (2) an administrative rule or policy 
14.12 	of the commissioner of administration that deals with the state procurement system; or 
14.13 	(3) a policy of the commissioner of management and budget that deals with the state 
14.14 	accounting system. Two or more state agencies may submit a joint application. A waiver 
14.15 	application must identify the rule or policy at issue, and must describe the improved 
14.16 	outcome sought through the waiver.
14.17 		Subd. 2.Review process. (a) The board shall review all applications submitted 
14.18 	under this section. The board shall dismiss an application if it finds that the application 
14.19 	proposes a waiver that would result in due process violations, violations of federal law 
14.20 	or the state or federal constitution, or the loss of services to people who are entitled to 
14.21 	them. If a proposed waiver would violate the terms of a collective bargaining agreement 
14.22 	effective under chapter 179A, the waiver is not effective without the consent of the 
14.23 	exclusive representative that is a party to the agreement. The board may approve a waiver 
14.24 	only if the board determines that if the waiver is granted: (1) services can be provided in a 
14.25 	more efficient or effective manner; and (2) services related to human resources must be 
14.26 	provided in a manner consistent with section 43A.01. In the case of a waiver from a policy 
14.27 	of the commissioner of management and budget, the board may approve the waiver only if 
14.28 	it determines that services will be provided in a more efficient or effective manner and that 
14.29 	state funds will be adequately accounted for and safeguarded in a manner that complies 
14.30 	with generally accepted government accounting principles.
14.31 	(b) Within 15 days of receipt of the application, the board shall send a copy of the 
14.32 	application to: (1) the agency whose rule or policy is involved; and (2) all exclusive 
14.33 	representatives who represent employees of the agency requesting the waiver. The agency 
14.34 	whose rule or policy is involved may mail a copy of the application to all persons who 
14.35 	have registered with the agency under section 14.14, subdivision 1a.
15.1 	(c) The agency whose rule or policy is involved or an exclusive representative shall 
15.2 	notify the board of its agreement with or objection to and grounds for objection to the 
15.3 	waiver within 60 days of the date when the application was transmitted to the agency or 
15.4 	the exclusive representative. An agency's or exclusive representative's failure to respond 
15.5 	under this paragraph is considered agreement to the waiver.
15.6 	(d) If the agency or the exclusive representative objects to the waiver, the board 
15.7 	shall schedule a meeting at which the agency requesting the waiver may present its case 
15.8 	for the waiver and the objecting party may respond. The board shall decide whether 
15.9 	to grant a waiver at its next regularly scheduled meeting following its receipt of an 
15.10 	agency's response, or the end of the 60-day response period, whichever occurs first. If 
15.11 	consideration of an application is not concluded at the meeting, the matter may be carried 
15.12 	over to the next meeting of the board. Interested persons may submit written comments to 
15.13 	the board on the waiver request.
15.14 	(e) If the board grants a request for a waiver, the board and the agency requesting the 
15.15 	waiver shall enter into an agreement relating to the outcomes desired as a result of the 
15.16 	waiver and the means of measurement to determine whether those outcomes have been 
15.17 	achieved with the waiver. The agreement must specify the duration of the waiver, which 
15.18 	must be for at least two years and not more than four years. If the board determines that an 
15.19 	agency that has received a waiver is failing to comply with the terms of the agreement, the 
15.20 	board may rescind the agreement.
15.21 		Subd. 3.Board. For purposes of evaluating waiver requests involving rules or 
15.22 	policies of the commissioner of administration, the commissioner of administration may 
15.23 	not participate in the evaluation.

15.24 	Sec. 14. [465.7905] SERVICE BUDGET MANAGEMENT MODEL GRANTS.
15.25 		Subdivision 1.Application. One or more local units of government, an association 
15.26 	of local governments, the Metropolitan Council, a local unit of government acting in 
15.27 	conjunction with an organization or a state agency, an organization established by two 
15.28 	or more local units of government under a joint powers agreement, or a not-for-profit 
15.29 	organization may apply to the Board of Innovation for a grant to be used to develop 
15.30 	models for innovative service budget management. The application must specify a 
15.31 	nonstate funding source for 25 percent of the total cost of the proposal. The application to 
15.32 	the board must state what other sources of funding have been considered by the local units 
15.33 	of government to implement the project and explain why it is not possible to complete 
15.34 	the project without assistance from the board. The board may not award a grant if it 
15.35 	determines that the local units of government could complete the project without board 
16.1 	assistance or if it determines the applicant has not specified a nonstate funding source for 
16.2 	25 percent of the total cost. A copy of the application must be provided by the units to 
16.3 	the exclusive representatives certified under section 179A.12 to represent employees who 
16.4 	provide the service or program affected by the application.
16.5 		Subd. 2.Proposals. Proposed models may provide options to local governments, 
16.6 	neighborhood or community organizations, other not-for-profit organizations, or 
16.7 	individuals to redesign and deliver services. In awarding grants under this section, the 
16.8 	board must consider whether the proposal:
16.9 	(1) expands consumer choices and opportunities;
16.10 	(2) shifts government toward an expanded role as a purchaser, rather than a provider, 
16.11 	of services;
16.12 	(3) reduces administrative costs through statewide or regional contracting, or related 
16.13 	administrative efficiencies;
16.14 	(4) reduces administrative costs through the accumulation of multiple related 
16.15 	services into a single contract with one provider, or related administrative efficiencies; and
16.16 	(5) fosters entrepreneurial leadership in the public sector.
16.17 		Subd. 3.Requirements. A copy of the work product for which the grant was 
16.18 	provided must be furnished to the board upon completion, and the board may disseminate 
16.19 	it to other local units of government or interested groups. If the board finds that the model 
16.20 	was not completed or implemented according to the terms of the grant agreement, it may 
16.21 	require the grantee to repay all or a portion of the grant. The board shall award grants on 
16.22 	the basis of each qualified applicant's score under the scoring system in section 465.806. 
16.23 	The amount of a grant under this section may not exceed $250,000.

16.24 	Sec. 15. [465.805] INNOVATION CHALLENGE GRANTS.
16.25 	Two or more local units of government; an association of local governments; a local 
16.26 	unit of government acting in conjunction with the Metropolitan Council, an organization, 
16.27 	or a state agency; or an organization established by two or more local units of government 
16.28 	under a joint powers agreement may apply to the Board of Innovation for a grant to be 
16.29 	used to meet the start-up costs of providing shared services or functions. Agreements 
16.30 	solely to make joint purchases are not sufficient to qualify under this section. The 
16.31 	application to the board must state what other sources of funding have been considered by 
16.32 	the local units of government to implement the project and explain why it is not possible 
16.33 	to complete the project without assistance from the board. The board may not award a 
16.34 	grant if it determines that the local units of government could complete the project without 
16.35 	board assistance. A copy of the application must be provided by the applicants to the 
17.1 	exclusive representatives certified under section 179A.12 to represent employees who 
17.2 	provide the service or program affected by the application.
17.3 	The proposal must include plans fully to integrate a service or function provided 
17.4 	by two or more local government units. A copy of the work product for which the grant 
17.5 	was provided must be furnished to the board upon completion, and the board may 
17.6 	disseminate it to other local units of government or interested groups. If the board finds 
17.7 	that the grantee has failed to implement the plan according to the terms of the agreement, 
17.8 	it may require the grantee to repay all or a portion of the grant. The board shall award 
17.9 	grants on the basis of each qualified applicant's score under the scoring system in section 
17.10 	465.806. The amount of a grant under this section may not exceed $100,000. A grant may 
17.11 	be made under this section only if an amount equal to 25 percent of the grant amount 
17.12 	is provided by nonstate sources.

17.13 	Sec. 16. [465.806] SCORING SYSTEM.
17.14 	In deciding whether to award a grant under section 465.7905 or 465.805, the board 
17.15 	shall use the following scoring system:
17.16 	(1) Up to 15 points must be awarded to reflect the extent to which the application 
17.17 	demonstrates creative thinking, careful planning, cooperation, involvement of the clients 
17.18 	of the affected service, and commitment to assume risk.
17.19 	(2) Up to 20 points must be awarded to reflect the extent to which the proposed 
17.20 	project is likely to improve the quality of the service and to have benefits for other local 
17.21 	governments.
17.22 	(3) Up to 15 points must be awarded to reflect the extent to which the application's 
17.23 	budget provides sufficient detail, maximizes the use of state funds, documents the need 
17.24 	for financial assistance, commits to local financial support, and limits expenditures to 
17.25 	essential activities.
17.26 	(4) Up to 20 points must be awarded to reflect the extent to which the application 
17.27 	reflects the statutory goal of the grant program.
17.28 	(5) Up to 15 points must be awarded to reflect the merit of the proposed project and 
17.29 	the extent to which it warrants the state's financial participation.
17.30 	(6) Up to five points must be awarded to reflect the cost to benefit ratio projected 
17.31 	for the proposed project.
17.32 	(7) Up to five points must be awarded to reflect the number of government units 
17.33 	participating in the proposal.
17.34 	(8) Up to five points must be awarded to reflect the minimum length of time the 
17.35 	application commits to implementation.

18.1 	Sec. 17. [465.807] REPAYMENT OF GRANTS.
18.2 		Subdivision 1.Repayment procedures. Without regard to whether a grant recipient 
18.3 	offered to repay the grant in its original application, as part of a grant awarded under 
18.4 	section 465.7905 or 465.805, the board may require the grant recipient to repay all or part 
18.5 	of the grant if the board determines the project funded by the grant resulted in an actual 
18.6 	savings for the participating local units of government. The grant agreement must specify 
18.7 	how the savings are to be determined and the period of time over which the savings will 
18.8 	be used to calculate a repayment requirement. The repayment of grant money under 
18.9 	this section must not exceed an amount equal to the total savings achieved through the 
18.10 	implementation of the project multiplied by the total amount of the grant divided by the 
18.11 	total budget for the project and may not exceed the total amount of the original grant.
18.12 		Subd. 2.Bonus points. In addition to the points awarded to competitive grant 
18.13 	applications under section 465.806, the board shall award additional points to any 
18.14 	applicant that projects a potential cost savings through the implementation of its project 
18.15 	and offers to repay part or all of the grant under the formula in subdivision 1.
18.16 		Subd. 3.Use of repayment revenue. All grant money repaid to the board under this 
18.17 	section is appropriated to the board for additional grants authorized by sections 465.7905 
18.18 	and 465.805.

18.19 	Sec. 18. [465.808] RECEIPTS; APPROPRIATION.
18.20 	(a) The board may charge a fee for the use of services provided by the board's 
18.21 	staff. The receipts from fees charged under this section are deposited in a special revenue 
18.22 	account and appropriated to the board for services provided under sections 465.7901 to 
18.23 	465.808.
18.24 	(b) The board may accept gifts and grants. Money received under this paragraph is 
18.25 	deposited in a special revenue account and appropriated to the board for services provided 
18.26 	under sections 465.7901 to 465.808.

18.27 	Sec. 19.  REPEALER.
 18.28 	Minnesota Statutes 2008, section 6.80, is repealed.

18.29 	Sec. 20. EFFECTIVE DATE.
 18.30 	Sections 1 to 19 are effective July 1, 2010, except that duties of the board under 
18.31 	Minnesota Statutes, section 465.7902, subdivision 2, clause (3), are effective July 1, 2011.