SF 884

as introduced - 89th Legislature (2015 - 2016) Posted on 08/26/2015 02:35pm

A bill for an act
relating to retirement; volunteer firefighter relief associations; implementing
the recommendations of the state auditor's volunteer firefighter working group;
addressing various disbursement and accounting issues; addressing various
benefit issues; updating volunteer fire state aid references; addressing various
relief association establishment and membership issues; amending Minnesota
Statutes 2014, sections 69.051, subdivision 1a; 69.80; 424A.001, by adding
a subdivision; 424A.002, subdivision 1; 424A.016, subdivision 4; 424A.02,
subdivisions 3, 3a, 9a; 424A.05, subdivisions 2, 3; 424A.092, subdivisions 3, 6;
424A.093, subdivisions 5, 6.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

DISBURSEMENT AND ACCOUNTING ISSUES

Section 1.

Minnesota Statutes 2014, section 69.051, subdivision 1a, is amended to read:

Subd. 1a.

Financial statement.

(a) The board of each volunteer firefighters relief
association, as defined in section 424A.001, subdivision 4, that is not required to file a
financial report and audit under subdivision 1 must prepare a detailed statement of the
financial affairs for the preceding fiscal year of the relief association's special and general
funds in the style and form prescribed by the state auditor. The detailed statement must
show:

(1) the sources and amounts of all money received;

(2) all disbursements, accounts payable and accounts receivable;

(3) the amount of money remaining in the treasury;

(4) total assets, including a listing of all investments;

(5) the accrued liabilities; and

(6) all other items necessary to show accurately the revenues and expenditures and
financial position of the relief association.

(b) The detailed financial statement new text begin of the special and general funds new text end required under
paragraph (a) must be certified by a certified public accountant or by the state auditor deleted text begin . In
addition to certifying the financial condition of the special and general funds of the relief
association, the accountant or auditor conducting the examination shall give an opinion
as to the condition of the special and general funds of the relief association, and shall
comment upon any exceptions to the report deleted text end new text begin in accordance with agreed-upon procedures
and forms prescribed by the state auditor new text end . The accountant must have at least five years of
public accounting, auditing, or similar experience, and must not be an active, inactive, or
retired member of the relief association or the fire department.

(c) The detailed new text begin financial new text end statement required under paragraph (a) must be
countersigned by:

(1) the municipal clerk or clerk-treasurer of the municipality; or

(2) where applicable, by the municipal clerk or clerk-treasurer of the largest
municipality in population which contracts with the independent nonprofit firefighting
corporation if the relief association is a subsidiary of an independent nonprofit firefighting
corporation and by the secretary of the independent nonprofit firefighting corporation; or

(3) by the chief financial official of the county in which the volunteer firefighter
relief association is located or primarily located if the relief association is associated with
a fire department that is not located in or associated with an organized municipality.

(d) The volunteer firefighters' relief association board must file the detailed new text begin financial
new text end statement required under paragraph (a) in the relief association office for public inspection
and present it to the governing body of the municipality within 45 days after the close of
the fiscal year, and must submit a copy of the new text begin certified new text end detailed new text begin financial new text end statement to the
state auditor within 90 days of the close of the fiscal year.

new text begin (e) A certified public accountant or auditor who performs the agreed-upon
procedures under paragraph (b) is subject to the reporting requirements of section 6.67.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015, and applies to financial
statements prepared for calendar year 2015 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2014, section 69.80, is amended to read:

69.80 AUTHORIZED ADMINISTRATIVE EXPENSES.

(a) Notwithstanding any provision of law to the contrary, the payment of the
following necessary, reasonable and direct expenses of maintaining, protecting and
administering the special fund, when provided for in the bylaws of the association and
approved by the board of trustees, constitutes authorized administrative expenses of a
volunteer firefighters' relief association organized under any law of this state or the
Bloomington Fire Department Relief Association:

(1) office expense, including, but not limited to, rent, utilities, equipment, supplies,
postage, periodical subscriptions, furniture, fixtures, and salaries of administrative
personnel;

(2) salaries of the officers of the association, or their designees, and salaries of the
members of the board of trustees of the association if the salary amounts are approved by
the governing body of the entity that is responsible for meeting any minimum obligation
under section 424A.092 or 424A.093, or Laws 2013, chapter 111, article 5, sections 31 to
42, and the itemized expenses of relief association officers and board members that are
incurred as a result of fulfilling their responsibilities as administrators of the special fund;

(3) tuition, registration fees, organizational dues, and other authorized expenses
of the officers or members of the board of trustees incurred in attending educational
conferences, seminars, or classes relating to the administration of the relief association;

(4) audit deleted text begin , deleted text end new text begin and audit-related services, and accounting and accounting-related services,
new text end actuarial, medical, legal, and investment and performance evaluation expenses;

(5) filing and application fees payable by the relief association to federal or other
governmental entities;

(6) reimbursement to the officers and members of the board of trustees, or their
designees, for reasonable and necessary expenses actually paid and incurred in the
performance of their duties as officers or members of the board; and

(7) premiums on fiduciary liability insurance and official bonds for the officers,
members of the board of trustees, and employees of the relief association.

(b) Any other expenses of the relief association must be paid from the general fund
of the association, if one exists. If a relief association has only one fund, that fund is the
special fund for purposes of this section. If a relief association has a special fund and
a general fund, and any expense of the relief association that is directly related to the
purposes for which both funds were established, the payment of that expense must be
apportioned between the two funds on the basis of the benefits derived by each fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2014, section 424A.05, subdivision 3, is amended to read:

Subd. 3.

Authorized disbursements from special fund.

new text begin (a) new text end Disbursements from
the special fund may not be made for any purpose other than one of the following:

(1) for the payment of service pensions to retired members of the relief association if
authorized and paid under law and the bylaws governing the relief association;

(2) for the purchase of an annuity for the applicable person under section 424A.015,
subdivision 3, for the transfer of service pension or benefit amounts to the applicable
person's individual retirement account under section 424A.015, subdivision 4, or to the
applicable person's account in the Minnesota deferred compensation plan under section
424A.015, subdivision 5;

(3) for the payment of temporary or permanent disability benefits to disabled
members of the relief association if authorized and paid under law and specified in amount
in the bylaws governing the relief association;

(4) for the payment of survivor benefits or for the payment of a death benefit to the
estate of the deceased active or deferred firefighter, if authorized and paid under law and
specified in amount in the bylaws governing the relief association;

(5) for the payment of the fees, dues and assessments to the Minnesota State Fire
Department Association and to the Minnesota State Fire Chiefs Association in order to
entitle relief association members to membership in and the benefits of these associations
or organizations;

(6) for the payment of insurance premiums to the state Volunteer Firefighters Benefit
Association, or an insurance company licensed by the state of Minnesota offering casualty
insurance, in order to entitle relief association members to membership in and the benefits
of the association or organization; and

(7) for the payment of administrative expenses of the relief association as authorized
under section 69.80.

new text begin (b) Checks or authorizations for electronic fund transfers for disbursements
authorized by this section must be signed by the relief association treasurer and at least one
other elected trustee who has been designated by the board of trustees to sign the checks or
authorizations. A relief association may make disbursements authorized by this subdivision
by electronic funds transfers only if the specific method of payment and internal control
policies and procedures regarding the method are approved by the board of trustees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

ARTICLE 2

BENEFIT ISSUES

Section 1.

Minnesota Statutes 2014, section 424A.02, subdivision 3a, is amended to
read:

Subd. 3a.

Penalty for paying pension greater than applicable maximum.

(a)
If a defined benefit relief association pays a service pension greater than the maximum
service pension associated with the applicable average amount of available financing per
active covered firefighter under the table in subdivision 3, paragraph (c) or (d), whichever
applies, the maximum service pension under subdivision 3, paragraph (f), or the applicable
maximum service pension amount specified in subdivision 3, paragraph (g), whichever is
less, the state auditor shall:

(1) disqualify the municipality or the nonprofit firefighting corporation associated
with the relief association from receiving fire state aid by making the appropriate
notification to the municipality and the commissioner of revenue, with the disqualification
applicable for the next apportionment and payment of fire state aid; and

(2) order the treasurer of the applicable relief association to recover the amount of
the overpaid service pension or pensions from any retired firefighter who received an
overpayment.

(b) Fire state aid amounts from disqualified municipalities for the period of
disqualifications under paragraph (a), clause (1), must be credited to the amount of
fire insurance premium tax proceeds available for the next subsequent fire state aid
apportionment.

(c) The amount of any overpaid service pension recovered under paragraph (a),
clause (2), must be credited to the amount of fire insurance premium tax proceeds
available for the next subsequent fire state aid apportionment.

(d) The determination of the state auditor that a relief association has paid a service
pension greater than the applicable maximum must be made on the basis of the information
filed by the relief association and the municipality with the state auditor under sections
69.011, subdivision 2, and 69.051, subdivision 1 or 1a, whichever applies, and any other
relevant information that comes to the attention of the state auditor. The determination
of the state auditor is final. An aggrieved municipality, relief association, or person may
appeal the determination under section 480A.06.

new text begin (e) The state auditor may certify, upon learning that a relief association overpaid
a service pension based on an error in the maximum service pension calculation, the
municipality or nonprofit firefighting corporation associated with the relief association
for fire state aid if (1) there is evidence that the error occurred in good faith, and (2) the
relief association has initiated recovery of any overpayment amount. Notwithstanding
paragraph (c), all overpayments recovered under this paragraph must be credited to the
relief association's special fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2014, section 424A.02, subdivision 9a, is amended to read:

Subd. 9a.

Postretirement increases.

Notwithstanding any provision of general or
special law to the contrary, a defined benefit relief association paying a monthly service
pension may provide a postretirement increase to retired members and ancillary benefit
recipients of the relief association if (1) the relief association adopts an appropriate
bylaw amendment; and (2) the bylaw amendment is approved by the municipality
pursuant to subdivision 10 and section 424A.093, subdivision 6. The postretirement
increase is applicable only to retired members and ancillary benefit recipients receiving a
new text begin monthly new text end service pension or new text begin monthly new text end ancillary benefit as of the effective date of the bylaw
amendment. The authority to provide a postretirement increase to retired members and
ancillary benefit recipients of a relief association contained in this subdivision supersedes
any prior special law authorization relating to the provision of postretirement increases.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 3

STATE AID REFERENCES

Section 1.

Minnesota Statutes 2014, section 424A.016, subdivision 4, is amended to
read:

Subd. 4.

Individual accounts.

(a) An individual account must be established for
each firefighter who is a member of the relief association.

(b) To each individual active member account must be credited an equal share of:

(1) any amounts of fire state aid new text begin and police and firefighter retirement supplemental
state aid new text end received by the relief association;

(2) any amounts of municipal contributions to the relief association raised from
levies on real estate or from other available municipal revenue sources exclusive of fire
state aid; and

(3) any amounts equal to the share of the assets of the special fund to the credit of:

(i) any former member who terminated active service with the fire department to
which the relief association is associated before meeting the minimum service requirement
provided for in subdivision 2, paragraph (b), and has not returned to active service with
the fire department for a period no shorter than five years; or

(ii) any retired member who retired before obtaining a full nonforfeitable interest in
the amounts credited to the individual member account under subdivision 2, paragraph
(b), and any applicable provision of the bylaws of the relief association. In addition, any
investment return on the assets of the special fund must be credited in proportion to the
share of the assets of the special fund to the credit of each individual active member
account. Administrative expenses of the relief association payable from the special
fund may be deducted from individual accounts in a manner specified in the bylaws of
the relief association.

(c) If the bylaws so permit and as the bylaws define, the relief association may credit
any investment return on the assets of the special fund to the accounts of inactive members.

(d) Amounts to be credited to individual accounts must be allocated uniformly
for all years of active service and allocations must be made for all years of service,
except for caps on service credit if so provided in the bylaws of the relief association.
Amounts forfeited under paragraph (b), clause (3), before a resumption of active service
and membership under section 424A.01, subdivision 6, remain forfeited and may not be
reinstated upon the resumption of active service and membership. The allocation method
may utilize monthly proration for fractional years of service, as the bylaws or articles of
incorporation of the relief association so provide. The bylaws or articles of incorporation
may define a "month," but the definition must require a calendar month to have at least 16
days of active service. If the bylaws or articles of incorporation do not define a "month," a
"month" is a completed calendar month of active service measured from the member's
date of entry to the same date in the subsequent month.

(e) At the time of retirement under subdivision 2 and any applicable provision of the
bylaws of the relief association, a retiring member is entitled to that portion of the assets
of the special fund to the credit of the member in the individual member account which is
nonforfeitable under subdivision 3 and any applicable provision of the bylaws of the relief
association based on the number of years of service to the credit of the retiring member.

(f) Annually, the secretary of the relief association shall certify the individual
account allocations to the state auditor at the same time that the annual financial statement
or financial report and audit of the relief association, whichever applies, is due under
section 69.051.

Sec. 2.

Minnesota Statutes 2014, section 424A.02, subdivision 3, is amended to read:

Subd. 3.

Flexible service pension maximums.

(a) Annually on or before August
1 as part of the certification of the financial requirements and minimum municipal
obligation determined under section 424A.092, subdivision 4, or 424A.093, subdivision 5,
as applicable, the secretary or some other official of the relief association designated in the
bylaws of each defined benefit relief association shall calculate and certify to the governing
body of the applicable municipality the average amount of available financing per active
covered firefighter for the most recent three-year period. The amount of available financing
includes any amounts of fire state aid new text begin and police and firefighter retirement supplemental
state aid new text end received or receivable by the relief association, any amounts of municipal
contributions to the relief association raised from levies on real estate or from other
available revenue sources exclusive of fire state aid, and one-tenth of the amount of assets in
excess of the accrued liabilities of the relief association calculated under section 424A.092,
subdivision 2; 424A.093, subdivisions 2 and 4; or 424A.094, subdivision 2, if any.

(b) The maximum service pension which the defined benefit relief association has
authority to provide for in its bylaws for payment to a member retiring after the calculation
date when the minimum age and service requirements specified in subdivision 1 are met
must be determined using the table in paragraph (c) or (d), whichever applies.

(c) For a defined benefit relief association where the governing bylaws provide for
a monthly service pension to a retiring member, the maximum monthly service pension
amount per month for each year of service credited that may be provided for in the bylaws
is the greater of the service pension amount provided for in the bylaws on the date of the
calculation of the average amount of the available financing per active covered firefighter
or the maximum service pension figure corresponding to the average amount of available
financing per active covered firefighter:

Minimum Average Amount of Available Financing per Firefighter		Maximum Service Pension Amount Payable per Month for Each Year of Service
$ ...		$ .25
41		.50
81		1.00
122		1.50
162		2.00
203		2.50
243		3.00
284		3.50
324		4.00
365		4.50
405		5.00
486		6.00
567		7.00
648		8.00
729		9.00
810		10.00
891		11.00
972		12.00
1053		13.00
1134		14.00
1215		15.00
1296		16.00
1377		17.00
1458		18.00
1539		19.00
1620		20.00
1701		21.00
1782		22.00
1823		22.50
1863		23.00
1944		24.00
2025		25.00
2106		26.00
2187		27.00
2268		28.00
2349		29.00
2430		30.00
2511		31.00
2592		32.00
2673		33.00
2754		34.00
2834		35.00
2916		36.00
2997		37.00
3078		38.00
3159		39.00
3240		40.00
3321		41.00
3402		42.00
3483		43.00
3564		44.00
3645		45.00
3726		46.00
3807		47.00
3888		48.00
3969		49.00
4050		50.00
4131		51.00
4212		52.00
4293		53.00
4374		54.00
4455		55.00
4536		56.00
4617		57.00
4698		58.00
4779		59.00
4860		60.00
4941		61.00
5022		62.00
5103		63.00
5184		64.00
5265		65.00
5346		66.00
5427		67.00
5508		68.00
5589		69.00
5670		70.00
5751		71.00
5832		72.00
5913		73.00
5994		74.00
6075		75.00
6156		76.00
6237		77.00
6318		78.00
6399		79.00
6480		80.00
6561		81.00
6642		82.00
6723		83.00
6804		84.00
6885		85.00
6966		86.00
7047		87.00
7128		88.00
7209		89.00
7290		90.00
7371		91.00
7452		92.00
7533		93.00
7614		94.00
7695		95.00
7776		96.00
7857		97.00
7938		98.00
8019		99.00
8100		100.00
any amount in excess of
8100		100.00

(d) For a defined benefit relief association in which the governing bylaws provide
for a lump-sum service pension to a retiring member, the maximum lump-sum service
pension amount for each year of service credited that may be provided for in the bylaws is
the greater of the service pension amount provided for in the bylaws on the date of the
calculation of the average amount of the available financing per active covered firefighter
or the maximum service pension figure corresponding to the average amount of available
financing per active covered firefighter for the applicable specified period:

Minimum Average Amount of Available Financing per Firefighter		Maximum Lump-Sum Service Pension Amount Payable for Each Year of Service
$ ...		$ 10
11		20
16		30
23		40
27		50
32		60
43		80
54		100
65		120
77		140
86		160
97		180
108		200
131		240
151		280
173		320
194		360
216		400
239		440
259		480
281		520
302		560
324		600
347		640
367		680
389		720
410		760
432		800
486		900
540		1000
594		1100
648		1200
702		1300
756		1400
810		1500
864		1600
918		1700
972		1800
1026		1900
1080		2000
1134		2100
1188		2200
1242		2300
1296		2400
1350		2500
1404		2600
1458		2700
1512		2800
1566		2900
1620		3000
1672		3100
1726		3200
1753		3250
1780		3300
1820		3375
1834		3400
1888		3500
1942		3600
1996		3700
2023		3750
2050		3800
2104		3900
2158		4000
2212		4100
2265		4200
2319		4300
2373		4400
2427		4500
2481		4600
2535		4700
2589		4800
2643		4900
2697		5000
2751		5100
2805		5200
2859		5300
2913		5400
2967		5500
3021		5600
3075		5700
3129		5800
3183		5900
3237		6000
3291		6100
3345		6200
3399		6300
3453		6400
3507		6500
3561		6600
3615		6700
3669		6800
3723		6900
3777		7000
3831		7100
3885		7200
3939		7300
3993		7400
4047		7500
4101		7600
4155		7700
4209		7800
4263		7900
4317		8000
4371		8100
4425		8200
4479		8300
4533		8400
4587		8500
4641		8600
4695		8700
4749		8800
4803		8900
4857		9000
4911		9100
4965		9200
5019		9300
5073		9400
5127		9500
5181		9600
5235		9700
5289		9800
5343		9900
5397		10,000
any amount in excess of
5397		10,000

(e) For a defined benefit relief association in which the governing bylaws provide
for a monthly benefit service pension as an alternative form of service pension payment
to a lump-sum service pension, the maximum service pension amount for each pension
payment type must be determined using the applicable table contained in this subdivision.

(f) If a defined benefit relief association establishes a service pension in compliance
with the applicable maximum contained in paragraph (c) or (d) and the minimum average
amount of available financing per active covered firefighter is subsequently reduced
because of a reduction in fire state aid or because of an increase in the number of active
firefighters, the relief association may continue to provide the prior service pension
amount specified in its bylaws, but may not increase the service pension amount until
the minimum average amount of available financing per firefighter under the table in
paragraph (c) or (d), whichever applies, permits.

(g) No defined benefit relief association is authorized to provide a service pension in
an amount greater than the largest applicable flexible service pension maximum amount
even if the amount of available financing per firefighter is greater than the financing
amount associated with the largest applicable flexible service pension maximum.

(h) The method of calculating service pensions must be applied uniformly for all
years of active service. Credit must be given for all years of active service except for caps
on service credit if so provided in the bylaws of the relief association.

Sec. 3.

Minnesota Statutes 2014, section 424A.05, subdivision 2, is amended to read:

Subd. 2.

Special fund assets and revenues.

The special fund must be credited
with all fire state aid deleted text begin moneys deleted text end new text begin and police and firefighter retirement supplemental state
aid new text end received under sections 69.011 to 69.051 new text begin and 423A.022 new text end , all taxes levied by or other
revenues received from the municipality under sections 424A.091 to 424A.096 or any
applicable special law requiring municipal support for the relief association, any deleted text begin moneys deleted text end new text begin
funds new text end or property donated, given, granted or devised by any person which is specified for
use for the support of the special fund and any interest or investment return earned upon
the assets of the special fund. The treasurer of the relief association is the custodian of
the assets of the special fund and must be the recipient on behalf of the special fund of
all revenues payable to the special fund. The treasurer shall maintain adequate records
documenting any transaction involving the assets or the revenues of the special fund.
These records and the bylaws of the relief association are public and must be open for
inspection by any member of the relief association, any officer or employee of the state or
of the municipality, or any member of the public, at reasonable times and places.

Sec. 4.

Minnesota Statutes 2014, section 424A.092, subdivision 3, is amended to read:

Subd. 3.

Financial requirements of relief association; minimum obligation of
municipality.

(a) During the month of July, the officers of the relief association shall
determine the overall funding balance of the special fund for the current calendar year,
the financial requirements of the special fund for the following calendar year and the
minimum obligation of the municipality with respect to the special fund for the following
calendar year in accordance with the requirements of this subdivision.

(b) The overall funding balance of the special fund for the current calendar year must
be determined in the following manner:

(1) The total accrued liability of the special fund for all active and deferred members
of the relief association as of December 31 of the current year must be calculated under
subdivisions 2 and 2a, if applicable.

(2) The total present assets of the special fund projected to December 31 of the
current year, including receipts by and disbursements from the special fund anticipated to
occur on or before December 31, must be calculated. To the extent possible, for those
assets for which a market value is readily ascertainable, the current market value as of the
date of the calculation for those assets must be utilized in making this calculation. For any
asset for which no market value is readily ascertainable, the cost value or the book value,
whichever is applicable, must be utilized in making this calculation.

(3) The amount of the total present assets of the special fund calculated under clause
(2) must be subtracted from the amount of the total accrued liability of the special fund
calculated under clause (1). If the amount of total present assets exceeds the amount of
the total accrued liability, then the special fund is considered to have a surplus over full
funding. If the amount of the total present assets is less than the amount of the total
accrued liability, then the special fund is considered to have a deficit from full funding. If
the amount of total present assets is equal to the amount of the total accrued liability, then
the special fund is considered to be fully funded.

(c) The financial requirements of the special fund for the following calendar year
must be determined in the following manner:

(1) The total accrued liability of the special fund for all active and deferred members
of the relief association as of December 31 of the calendar year next following the current
calendar year must be calculated under subdivisions 2 and 2a, if applicable.

(2) The increase in the total accrued liability of the special fund for the following
calendar year over the total accrued liability of the special fund for the current year must
be calculated.

(3) The amount of anticipated future administrative expenses of the special fund
must be calculated by multiplying the dollar amount of the administrative expenses of the
special fund for the most recent prior calendar year by the factor of 1.035.

(4) If the special fund is fully funded, the financial requirements of the special fund for
the following calendar year are the total of the amounts calculated under clauses (2) and (3).

(5) If the special fund has a deficit from full funding, the financial requirements of
the special fund for the following calendar year are the financial requirements of the
special fund calculated as though the special fund were fully funded under clause (4) plus
an amount equal to one-tenth of the original amount of the deficit from full funding of the
special fund as determined under clause (2) resulting either from an increase in the amount
of the service pension occurring in the last ten years or from a net annual investment loss
occurring during the last ten years until each increase in the deficit from full funding is
fully retired. The annual amortization contribution under this clause may not exceed the
amount of the deficit from full funding.

(6) If the special fund has a surplus over full funding, the financial requirements of
the special fund for the following calendar year are the financial requirements of the special
fund calculated as though the special fund were fully funded under clause (4) reduced by an
amount equal to one-tenth of the amount of the surplus over full funding of the special fund.

(d) The minimum obligation of the municipality with respect to the special fund is
the financial requirements of the special fund reduced by the amount of any fire state aid
new text begin and police and firefighter retirement supplemental state aid new text end payable under sections 69.011
to 69.051 new text begin and 423A.022 new text end reasonably anticipated to be received by the municipality for
transmittal to the special fund during the following calendar year, an amount of interest on
the assets of the special fund projected to the beginning of the following calendar year
calculated at the rate of five percent per annum, and the amount of any contributions to
the special fund required by the relief association bylaws from the active members of the
relief association reasonably anticipated to be received during the following calendar year.
A reasonable amount of anticipated fire state aid is an amount that does not exceed the fire
state aid actually received in the prior year multiplied by the factor 1.035.

Sec. 5.

Minnesota Statutes 2014, section 424A.092, subdivision 6, is amended to read:

Subd. 6.

Municipal ratification for plan amendments.

If the special fund of the
relief association does not have a surplus over full funding under subdivision 3, paragraph
(c), clause (5), and if the municipality is required to provide financial support to the special
fund of the relief association under this section, the adoption of or any amendment to the
articles of incorporation or bylaws of a relief association which increases or otherwise
affects the retirement coverage provided by or the service pensions or retirement benefits
payable from the special fund of any relief association to which this section applies is not
effective until it is ratified by the governing body of the municipality served by the fire
department to which the relief association is directly associated or by the independent
nonprofit firefighting corporation, as applicable, and the officers of a relief association
shall not seek municipal ratification prior to preparing and certifying an estimate of
the expected increase in the accrued liability and annual accruing liability of the relief
association attributable to the amendment. If the special fund of the relief association
has a surplus over full funding under subdivision 3, paragraph (c), clause (5), and if the
municipality is not required to provide financial support to the special fund of the relief
association under this section, the relief association may adopt or amend its articles of
incorporation or bylaws which increase or otherwise affect the retirement coverage
provided by or the service pensions or retirement benefits payable from the special fund
of the relief association which are effective without municipal ratification so long as this
does not cause the amount of the resulting increase in the accrued liability of the special
fund of the relief association to exceed 90 percent of the amount of the surplus over full
funding reported in the prior year and this does not result in the financial requirements
of the special fund of the relief association exceeding the expected amount of the future
fire state aid new text begin and police and firefighter retirement supplemental state aid new text end to be received
by the relief association as determined by the board of trustees following the preparation
of an estimate of the expected increase in the accrued liability and annual accruing
liability of the relief association attributable to the change. If a relief association adopts or
amends its articles of incorporation or bylaws without municipal ratification under this
subdivision, and, subsequent to the amendment or adoption, the financial requirements
of the special fund of the relief association under this section are such so as to require
financial support from the municipality, the provision which was implemented without
municipal ratification is no longer effective without municipal ratification and any service
pensions or retirement benefits payable after that date may be paid only in accordance with
the articles of incorporation or bylaws as amended or adopted with municipal ratification.

Sec. 6.

Minnesota Statutes 2014, section 424A.093, subdivision 5, is amended to read:

Subd. 5.

Minimum municipal obligation.

(a) The officers of the relief association
shall determine the minimum obligation of the municipality with respect to the special
fund of the relief association for the following calendar year on or before August 1 of each
year in accordance with the requirements of this subdivision.

(b) The minimum obligation of the municipality with respect to the special fund is
an amount equal to the financial requirements of the special fund of the relief association
determined under subdivision 4, reduced by the estimated amount of any fire state
aid new text begin and police and firefighter retirement supplemental state aid new text end payable under sections
69.011 to 69.051 new text begin and 423A.022 new text end reasonably anticipated to be received by the municipality
for transmittal to the special fund of the relief association during the following year
and the amount of any anticipated contributions to the special fund required by the
relief association bylaws from the active members of the relief association reasonably
anticipated to be received during the following calendar year. A reasonable amount of
anticipated fire state aid is an amount that does not exceed the fire state aid actually
received in the prior year multiplied by the factor 1.035.

(c) The officers of the relief association shall certify the financial requirements of the
special fund of the relief association and the minimum obligation of the municipality with
respect to the special fund of the relief association as determined under subdivision 4 and
this subdivision by August 1 of each year. The certification must be made to the entity that
is responsible for satisfying the minimum obligation with respect to the special fund of the
relief association. If the responsible entity is a joint powers entity, the certification must be
made in the manner specified in the joint powers agreement, or if the joint powers agreement
is silent on this point, the certification must be made to the chair of the joint powers board.

(d) The financial requirements of the relief association and the minimum municipal
obligation must be included in the financial report or financial statement under section
69.051.

(e) The municipality shall provide for at least the minimum obligation of the
municipality with respect to the special fund of the relief association by tax levy or from
any other source of public revenue. The municipality may levy taxes for the payment of the
minimum municipal obligation without any limitation as to rate or amount and irrespective
of any limitations imposed by other provisions of law or charter upon the rate or amount
of taxation until the balance of the special fund or any fund of the relief association has
attained a specified level. In addition, any taxes levied under this section must not cause
the amount or rate of any other taxes levied in that year or to be levied in a subsequent year
by the municipality which are subject to a limitation as to rate or amount to be reduced.

(f) If the municipality does not include the full amount of the minimum municipal
obligation in its levy for any year, the officers of the relief association shall certify that
amount to the county auditor, who shall spread a levy in the amount of the minimum
municipal obligation on the taxable property of the municipality.

(g) If the state auditor determines that a municipal contribution actually made in a
plan year was insufficient under section 424A.091, subdivision 3, paragraph (c), clause
(5), the state auditor may request from the relief association or from the city a copy of
the certifications under this subdivision. The relief association or the city, whichever
applies, must provide the certifications within 14 days of the date of the request from
the state auditor.

Sec. 7.

Minnesota Statutes 2014, section 424A.093, subdivision 6, is amended to read:

Subd. 6.

Municipal ratification for plan amendments.

If the special fund of the
relief association does not have a surplus over full funding under subdivision 4, and
if the municipality is required to provide financial support to the special fund of the
relief association under this section, the adoption of or any amendment to the articles of
incorporation or bylaws of a relief association which increases or otherwise affects the
retirement coverage provided by or the service pensions or retirement benefits payable from
the special fund of any relief association to which this section applies is not effective until it
is ratified by the governing body of the municipality served by the fire department to which
the relief association is directly associated or by the independent nonprofit firefighting
corporation, as applicable. If the special fund of the relief association has a surplus
over full funding under subdivision 4, and if the municipality is not required to provide
financial support to the special fund of the relief association under this section, the relief
association may adopt or amend its articles of incorporation or bylaws which increase or
otherwise affect the retirement coverage provided by or the service pensions or retirement
benefits payable from the special fund of the relief association which are effective without
municipal ratification so long as this does not cause the amount of the resulting increase in
the accrued liability of the special fund of the relief association to exceed 90 percent of
the amount of the surplus over full funding reported in the prior year and this does not
result in the financial requirements of the special fund of the relief association exceeding
the expected amount of the future fire state aid new text begin and police and firefighter retirement
supplemental state aid new text end to be received by the relief association as determined by the
board of trustees following the preparation of an updated actuarial valuation including
the proposed change or an estimate of the expected actuarial impact of the proposed
change prepared by the actuary of the relief association. If a relief association adopts or
amends its articles of incorporation or bylaws without municipal ratification pursuant to
this subdivision, and, subsequent to the amendment or adoption, the financial requirements
of the special fund of the relief association under this section are such so as to require
financial support from the municipality, the provision which was implemented without
municipal ratification is no longer effective without municipal ratification and any service
pensions or retirement benefits payable after that date may be paid only in accordance with
the articles of incorporation or bylaws as amended or adopted with municipal ratification.

Sec. 8. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 7 are effective the day following final enactment.
new text end

ARTICLE 4

RELIEF ASSOCIATION ESTABLISHMENT AND MEMBERSHIP ISSUES

Section 1.

Minnesota Statutes 2014, section 424A.001, is amended by adding a
subdivision to read:

new text begin Subd. 12. new text end

new text begin Membership start date. new text end

new text begin Membership in a volunteer firefighters relief
association begins upon the date of hire by a municipality, a joint powers board, or an
independent nonprofit firefighting corporation with which the relief association is directly
associated, unless otherwise specified in the relief association bylaws.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2016.
new text end

Sec. 2.

Minnesota Statutes 2014, section 424A.002, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

A municipal fire department or an independent
nonprofit firefighting corporation, with approval by the applicable municipality or
municipalities, may establish a new volunteer firefighters relief association or may retain
an existing volunteer firefighters relief association. new text begin A municipal fire department or an
independent nonprofit firefighting corporation may be associated with only one volunteer
firefighters relief association at one time.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end