HF 1853

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; public employees police and 
  1.3             fire plan and local police and fire consolidation 
  1.4             accounts; providing for the merger of local 
  1.5             consolidation accounts into the public employees 
  1.6             police and fire plan and fund; revising member and 
  1.7             employer contribution rates; transferring certain 
  1.8             assets to certain municipalities; authorizing new 
  1.9             benefit plan coverage elections; revising actuarial 
  1.10            valuation calculations; limiting certain state aid 
  1.11            amounts; amending Minnesota Statutes 1998, sections 
  1.12            3.85, subdivision 12; 69.021, subdivision 10; 69.031, 
  1.13            subdivision 5; 353.01, subdivisions 2b, 10, and 16; 
  1.14            353.64, subdivision 1; 353.65, subdivisions 2, 3, and 
  1.15            3a; 356.215, subdivision 4g; and 423A.02, by adding a 
  1.16            subdivision; proposing coding for new law in Minnesota 
  1.17            Statutes, chapter 353. 
  1.18  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.19     Section 1.  Minnesota Statutes 1998, section 3.85, 
  1.20  subdivision 12, is amended to read: 
  1.21     Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
  1.22  commission shall assess each retirement plan specified in 
  1.23  subdivision 11, paragraph (b), the compensation paid to the 
  1.24  actuary retained by the commission for the actuarial valuation 
  1.25  calculations, quadrennial projection valuations, and quadrennial 
  1.26  experience studies.  The assessment is 100 percent of the amount 
  1.27  of contract compensation for the actuarial consulting firm 
  1.28  retained by the commission for actuarial valuation calculations, 
  1.29  including the public employees police and fire plan 
  1.30  consolidation accounts of the public employees retirement 
  1.31  association established after March 1, 1999, annual experience 
  2.1   data collection and processing, and quadrennial experience 
  2.2   studies and quadrennial projection valuations.  
  2.3      The portion of the total assessment payable by each 
  2.4   retirement system or pension plan must be determined as follows: 
  2.5      (1) Each pension plan specified in subdivision 11, 
  2.6   paragraph (b), clauses (1) to (13), must pay the following 
  2.7   indexed amount based on its total active, deferred, inactive, 
  2.8   and benefit recipient membership: 
  2.9          up to 2,000 members, inclusive         $2.55 per member 
  2.10         2,001 through 10,000 members           $1.13 per member 
  2.11         over 10,000 members                    $0.11 per member  
  2.12     The amount specified is applicable for the assessment of 
  2.13  the July 1, 1991, to June 30, 1992, fiscal year actuarial 
  2.14  compensation amounts.  For the July 1, 1992, to June 30, 1993, 
  2.15  fiscal year and subsequent fiscal year actuarial compensation 
  2.16  amounts, the amount specified must be increased at the same 
  2.17  percentage increase rate as the implicit price deflator for 
  2.18  state and local government purchases of goods and services for 
  2.19  the 12-month period ending with the first quarter of the 
  2.20  calendar year following the completion date for the actuarial 
  2.21  valuation calculations, as published by the federal Department 
  2.22  of Commerce, and rounded upward to the nearest full cent. 
  2.23     (2) The total per-member portion of the allocation must be 
  2.24  determined, and that total per-member amount must be subtracted 
  2.25  from the total amount for allocation.  Of the remainder dollar 
  2.26  amount, the following per-retirement system and per-pension plan 
  2.27  charges must be determined and the charges must be paid by the 
  2.28  system or plan: 
  2.29     (i) 37.87 percent is the total additional per-retirement 
  2.30  system charge, of which one-seventh must be paid by each 
  2.31  retirement system specified in subdivision 11, paragraph (b), 
  2.32  clauses (1), (2), (6), (7), (9), (10), and (11). 
  2.33     (ii) 62.13 percent is the total additional per-pension plan 
  2.34  charge, of which one-thirteenth must be paid by each pension 
  2.35  plan specified in subdivision 11, paragraph (b), clauses (1) to 
  2.36  (13).  
  3.1      (b) The assessment must be made following the completion of 
  3.2   the actuarial valuation calculations and the experience 
  3.3   analysis.  The amount of the assessment is appropriated from the 
  3.4   retirement fund applicable to the retirement plan.  Receipts 
  3.5   from assessments must be deposited in the state treasury and 
  3.6   credited to the general fund. 
  3.7      Sec. 2.  Minnesota Statutes 1998, section 69.021, 
  3.8   subdivision 10, is amended to read: 
  3.9      Subd. 10.  [REDUCTION IN POLICE STATE AID APPORTIONMENT.] 
  3.10  (a) The commissioner of revenue shall reduce the apportionment 
  3.11  of police state aid under subdivisions 5, paragraph (b), 6, and 
  3.12  7a, for eligible employer units by any excess police state aid. 
  3.13     (b) "Excess police state aid" is: 
  3.14     (1) for counties and for municipalities in which police 
  3.15  retirement coverage is provided wholly by the public employees 
  3.16  police and fire fund and all police officers are members of the 
  3.17  plan governed by sections 353.63 to 353.657, the amount in 
  3.18  excess of the employer's total prior calendar year obligation as 
  3.19  defined in paragraph (c), as certified by the executive director 
  3.20  of the public employees retirement association; 
  3.21     (2) for municipalities in which police retirement coverage 
  3.22  is provided in part by the public employees police and fire fund 
  3.23  governed by sections 353.63 to 353.657 and in part by a local 
  3.24  police consolidation account governed by chapter 353A, and 
  3.25  established after March 1, 1999, the amount in excess of the 
  3.26  employer's total prior calendar year obligation as defined in 
  3.27  paragraph (c), plus the amount of the employer's total prior 
  3.28  calendar year obligation under section 353A.09, subdivision 5, 
  3.29  paragraphs (a) and (b), as certified by the executive director 
  3.30  of the public employees retirement association; 
  3.31     (3) for municipalities in which police retirement coverage 
  3.32  is provided by the public employees police and fire plan 
  3.33  governed by sections 353.63 to 353.657, in which police 
  3.34  retirement coverage was provided by a police consolidation 
  3.35  account under chapter 353A before July 1, 1999, and for which 
  3.36  the municipality has an additional municipal contribution under 
  4.1   section 353.665, subdivision 8, paragraph (b), the amount in 
  4.2   excess of the employer's total prior calendar year obligation as 
  4.3   defined in paragraph (c), plus the amount of any additional 
  4.4   municipal contribution under section 353.665, subdivision 8, 
  4.5   paragraph (b), until the year 2010, as certified by the 
  4.6   executive director of the public employees retirement 
  4.7   association; 
  4.8      (4) for municipalities in which police retirement coverage 
  4.9   is provided in part by the public employees police and fire fund 
  4.10  governed by sections 353.63 to 353.657 and in part by a local 
  4.11  police relief association governed by sections 69.77 and 
  4.12  423A.01, the amount in excess of the employer's total prior 
  4.13  calendar year obligation as defined in paragraph (c), as 
  4.14  certified by the executive director of the public employees 
  4.15  retirement association, plus the amount of the financial 
  4.16  requirements of the relief association certified to the 
  4.17  applicable municipality during the prior calendar year under 
  4.18  section 69.77, subdivisions 2b and 2c, reduced by the amount of 
  4.19  member contributions deducted from the covered salary of the 
  4.20  relief association during the prior calendar year under section 
  4.21  69.77, subdivision 2a, as certified by the chief administrative 
  4.22  officer of the applicable municipality; 
  4.23     (4) (5) for the metropolitan airports commission, if there 
  4.24  are police officers hired before July 1, 1978, with retirement 
  4.25  coverage by the Minneapolis employees retirement fund remaining, 
  4.26  the amount in excess of the commission's total prior calendar 
  4.27  year obligation as defined in paragraph (c), as certified by the 
  4.28  executive director of the public employees retirement 
  4.29  association, plus the amount determined by expressing the 
  4.30  commission's total prior calendar year contribution to the 
  4.31  Minneapolis employees retirement fund under section 422A.101, 
  4.32  subdivisions 2 and 2a, as a percentage of the commission's total 
  4.33  prior calendar year covered payroll for commission employees 
  4.34  covered by the Minneapolis employees retirement fund and 
  4.35  applying that percentage to the commission's total prior 
  4.36  calendar year covered payroll for commission police officers 
  5.1   covered by the Minneapolis employees retirement fund, as 
  5.2   certified by the chief administrative officer of the 
  5.3   metropolitan airports commission; and 
  5.4      (5) (6) for the department of natural resources and for the 
  5.5   department of public safety, the amount in excess of the 
  5.6   employer's total prior calendar year obligation under section 
  5.7   352B.02, subdivision 1c, for plan members who are peace officers 
  5.8   under section 69.011, subdivision 1, clause (g), as certified by 
  5.9   the executive director of the Minnesota state retirement system. 
  5.10     (c) The employer's total prior calendar year obligation 
  5.11  with respect to the public employees police and fire plan is the 
  5.12  total prior calendar year obligation under section 353.65, 
  5.13  subdivision 3, for police officers as defined in section 353.64, 
  5.14  subdivision 2, and the actual total prior calendar year 
  5.15  obligation under section 353.65, subdivision 3, for 
  5.16  firefighters, as defined in section 353.64, subdivision 3, but 
  5.17  not to exceed for those firefighters the applicable following 
  5.18  amounts: 
  5.19    Municipality                       Maximum Amount 
  5.20    Albert Lea                          $54,157.01
  5.21    Anoka                                10,399.31
  5.22    Apple Valley                          5,442.44 
  5.23    Austin                               49,864.73
  5.24    Bemidji                              27,671.38
  5.25    Brooklyn Center                       6,605.92
  5.26    Brooklyn Park                        24,002.26  
  5.27    Burnsville                           15,956.00 
  5.28    Cloquet                               4,260.49 
  5.29    Coon Rapids                          39,920.00 
  5.30    Cottage Grove                         8,588.48
  5.31    Crystal                               5,855.00
  5.32    East Grand Forks                     51,009.88
  5.33    Edina                                32,251.00
  5.34    Elk River                             5,216.55
  5.35    Ely                                  13,584.16
  5.36    Eveleth                              16,288.27
  6.1     Fergus Falls                          6,742.00
  6.2     Fridley                              33,420.64
  6.3     Golden Valley                        11,744.61 
  6.4     Hastings                             16,561.00 
  6.5     Hopkins                               4,324.23  
  6.6     International Falls                  14,400.69 
  6.7     Lakeville                               782.35 
  6.8     Lino Lakes                            5,324.00 
  6.9     Little Falls                          7,889.41 
  6.10    Maple Grove                           6,707.54 
  6.11    Maplewood                             8,476.69 
  6.12    Minnetonka                           10,403.00 
  6.13    Montevideo                            1,307.66 
  6.14    Moorhead                             68,069.26 
  6.15    New Hope                              6,739.72 
  6.16    North St. Paul                        4,241.14 
  6.17    Northfield                              770.63 
  6.18    Owatonna                             37,292.67 
  6.19    Plymouth                              6,754.71 
  6.20    Red Wing                              3,504.01 
  6.21    Richfield                            53,757.96 
  6.22    Rosemount                             1,712.55 
  6.23    Roseville                             9,854.51 
  6.24    St. Anthony                          33,055.00 
  6.25    St. Louis Park                       53,643.11 
  6.26    Thief River Falls                    28,365.04 
  6.27    Virginia                             31,164.46 
  6.28    Waseca                               11,135.17 
  6.29    West St. Paul                        15,707.20 
  6.30    White Bear Lake                       6,521.04 
  6.31    Woodbury                              3,613.00 
  6.32    any other municipality                    0.00 
  6.33     (d) The total amount of excess police state aid must be 
  6.34  deposited in the excess police state-aid account in the general 
  6.35  fund, administered and distributed as provided in subdivision 11.
  6.36     Sec. 3.  Minnesota Statutes 1998, section 69.031, 
  7.1   subdivision 5, is amended to read: 
  7.2      Subd. 5.  [DEPOSIT OF STATE AID.] (a) The municipal 
  7.3   treasurer shall, within 30 days after receipt, transmit the fire 
  7.4   state aid to the treasurer of the duly incorporated 
  7.5   firefighters' relief association if there is one organized and 
  7.6   the association has filed a financial report with the 
  7.7   municipality.  If the relief association has not filed a 
  7.8   financial report with the municipality, the municipal treasurer 
  7.9   shall delay transmission of the fire state aid to the relief 
  7.10  association until the complete financial report is filed.  If 
  7.11  there is no relief association organized, or if the association 
  7.12  has dissolved, or has been removed as trustees of state aid, 
  7.13  then the treasurer of the municipality shall deposit the money 
  7.14  in the municipal treasury as provided for in section 424A.08 and 
  7.15  the money may be disbursed only for the purposes and in the 
  7.16  manner set forth in that section. 
  7.17     (b) The municipal treasurer, upon receipt of the police 
  7.18  state aid, shall disburse the police state aid in the following 
  7.19  manner: 
  7.20     (1) For a municipality in which a local police relief 
  7.21  association exists and all peace officers are members of the 
  7.22  association, the total state aid must be transmitted to the 
  7.23  treasurer of the relief association within 30 days of the date 
  7.24  of receipt, and the treasurer of the relief association shall 
  7.25  immediately deposit the total state aid in the special fund of 
  7.26  the relief association; 
  7.27     (2) For a municipality in which police retirement coverage 
  7.28  is provided by the public employees police and fire fund and all 
  7.29  peace officers are members of the fund, including municipalities 
  7.30  covered by section 353.665, the total state aid must be applied 
  7.31  toward the municipality's employer contribution to the public 
  7.32  employees police and fire fund under section sections 353.65, 
  7.33  subdivision 3 and 353.665, subdivision 8, paragraph (b), if 
  7.34  applicable; or 
  7.35     (3) For a municipality other than a city of the first class 
  7.36  with a population of more than 300,000 in which both a police 
  8.1   relief association exists and police retirement coverage is 
  8.2   provided in part by the public employees police and fire fund, 
  8.3   the municipality may elect at its option to transmit the total 
  8.4   state aid to the treasurer of the relief association as provided 
  8.5   in clause (1), to use the total state aid to apply toward the 
  8.6   municipality's employer contribution to the public employees 
  8.7   police and fire fund subject to all the provisions set forth in 
  8.8   clause (2), or to allot the total state aid proportionately to 
  8.9   be transmitted to the police relief association as provided in 
  8.10  this subdivision and to apply toward the municipality's employer 
  8.11  contribution to the public employees police and fire fund 
  8.12  subject to the provisions of clause (2) on the basis of the 
  8.13  respective number of active full-time peace officers, as defined 
  8.14  in section 69.011, subdivision 1, clause (g). 
  8.15     For a city of the first class with a population of more 
  8.16  than 300,000, in addition, the city may elect to allot the 
  8.17  appropriate portion of the total police state aid to apply 
  8.18  toward the employer contribution of the city to the public 
  8.19  employees police and fire fund based on the covered salary of 
  8.20  police officers covered by the fund each payroll period and to 
  8.21  transmit the balance to the police relief association; or 
  8.22     (4) For a municipality in which police retirement coverage 
  8.23  is provided in part by the public employees police and fire fund 
  8.24  and in part by a local police consolidation account governed by 
  8.25  chapter 353A and established after March 1, 1999, the total 
  8.26  police state aid must be applied towards the municipality's 
  8.27  total employer contribution to the public employees police and 
  8.28  fire fund and to the local police consolidation account under 
  8.29  sections 353.65, subdivision 3, and 353A.09, subdivision 5. 
  8.30     (c) The county treasurer, upon receipt of the police state 
  8.31  aid for the county, shall apply the total state aid toward the 
  8.32  county's employer contribution to the public employees police 
  8.33  and fire fund under section 353.65, subdivision 3. 
  8.34     (d) The designated metropolitan airports commission 
  8.35  official, upon receipt of the police state aid for the 
  8.36  metropolitan airports commission, shall apply the total police 
  9.1   state aid first toward the commission's employer contribution 
  9.2   for police officers to the Minneapolis employees retirement fund 
  9.3   under section 422A.101, subdivision 2a, and, if there is any 
  9.4   amount of police state aid remaining, shall apply that remainder 
  9.5   toward the commission's employer contribution for police 
  9.6   officers to the public employees police and fire plan under 
  9.7   section 353.65, subdivision 3. 
  9.8      (e) The police state aid apportioned to the departments of 
  9.9   public safety and natural resources under section 69.021, 
  9.10  subdivision 7a, is appropriated to the commissioner of finance 
  9.11  for transfer to the funds and accounts from which the salaries 
  9.12  of peace officers certified under section 69.011, subdivision 
  9.13  2a, are paid.  The commissioner of revenue shall certify to the 
  9.14  commissioners of public safety, natural resources, and finance 
  9.15  the amounts to be transferred from the appropriation for police 
  9.16  state aid.  The commissioners of public safety and natural 
  9.17  resources shall certify to the commissioner of finance the 
  9.18  amounts to be credited to each of the funds and accounts from 
  9.19  which the peace officers employed by their respective 
  9.20  departments are paid.  Each commissioner must allocate the 
  9.21  police state aid first for employer contributions for employees 
  9.22  funded from the general fund and then for employer contributions 
  9.23  for employees funded from other funds.  For peace officers whose 
  9.24  salaries are paid from the general fund, the amounts transferred 
  9.25  from the appropriation for police state aid must be canceled to 
  9.26  the general fund. 
  9.27     Sec. 4.  Minnesota Statutes 1998, section 353.01, 
  9.28  subdivision 2b, is amended to read: 
  9.29     Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
  9.30  employees shall not participate as members of the association 
  9.31  with retirement coverage by the public employees retirement plan 
  9.32  or the public employees police and fire retirement plan: 
  9.33     (1) elected public officers, or persons appointed to fill a 
  9.34  vacancy in an elective office, who do not elect to participate 
  9.35  in the association by filing an application for membership; 
  9.36     (2) election officers; 
 10.1      (3) patient and inmate personnel who perform services in 
 10.2   charitable, penal, or correctional institutions of a 
 10.3   governmental subdivision; 
 10.4      (4) employees who are hired for a temporary position under 
 10.5   subdivision 12a, and employees who resign from a nontemporary 
 10.6   position and accept a temporary position within 30 days in the 
 10.7   same governmental subdivision, but not those employees who are 
 10.8   hired for an unlimited period but are serving a probationary 
 10.9   period.  If the period of employment extends beyond six 
 10.10  consecutive months and the employee earns more than $425 from 
 10.11  one governmental subdivision in any one calendar month, the 
 10.12  department head shall report the employee for membership and 
 10.13  require employee deductions be made on behalf of the employee 
 10.14  under section 353.27, subdivision 4. 
 10.15     Membership eligibility of an employee who resigns or is 
 10.16  dismissed from a temporary position and within 30 days accepts 
 10.17  another temporary position in the same governmental subdivision 
 10.18  is determined on the total length of employment rather than on 
 10.19  each separate position.  Membership eligibility of an employee 
 10.20  who holds concurrent temporary and nontemporary positions in one 
 10.21  governmental subdivision is determined by the length of 
 10.22  employment and salary of each separate position; 
 10.23     (5) employees whose actual salary from one governmental 
 10.24  subdivision does not exceed $425 per month, or whose annual 
 10.25  salary from one governmental subdivision does not exceed a 
 10.26  stipulation prepared in advance, in writing, that the salary 
 10.27  must not exceed $5,100 per calendar year or per school year for 
 10.28  school employees for employment expected to be of a full year's 
 10.29  duration or more than the prorated portion of $5,100 per 
 10.30  employment period for employment expected to be of less than a 
 10.31  full year's duration; 
 10.32     (6) employees who are employed by reason of work emergency 
 10.33  caused by fire, flood, storm, or similar disaster; 
 10.34     (7) employees who by virtue of their employment in one 
 10.35  governmental subdivision are required by law to be a member of 
 10.36  and to contribute to any of the plans or funds administered by 
 11.1   the Minnesota state retirement system, the teachers retirement 
 11.2   association, the Duluth teachers retirement fund association, 
 11.3   the Minneapolis teachers retirement association, the St. Paul 
 11.4   teachers retirement fund association, the Minneapolis employees 
 11.5   retirement fund, or any police or firefighters relief 
 11.6   association governed by section 69.77 that has not consolidated 
 11.7   with the public employees retirement association, or any local 
 11.8   police or firefighters relief association that has consolidated 
 11.9   with the public employees retirement association consolidation 
 11.10  account but whose members have not elected the type of benefit 
 11.11  coverage provided by the public employees police and fire fund 
 11.12  under sections 353A.01 to 353A.10, or any persons covered by 
 11.13  section 353.665, subdivision 4, 5, or 6, who have not elected 
 11.14  public employee police and fire plan benefit coverage.  This 
 11.15  clause must not be construed to prevent a person from being a 
 11.16  member of and contributing to the public employees retirement 
 11.17  association and also belonging to and contributing to another 
 11.18  public pension fund for other service occurring during the same 
 11.19  period of time.  A person who meets the definition of "public 
 11.20  employee" in subdivision 2 by virtue of other service occurring 
 11.21  during the same period of time becomes a member of the 
 11.22  association unless contributions are made to another public 
 11.23  retirement fund on the salary based on the other service or to 
 11.24  the teachers retirement association by a teacher as defined in 
 11.25  section 354.05, subdivision 2; 
 11.26     (8) persons who are excluded from coverage under the 
 11.27  federal Old Age, Survivors, Disability, and Health Insurance 
 11.28  Program for the performance of service as specified in United 
 11.29  States Code, title 42, section 410(a)(8)(A), as amended through 
 11.30  January 1, 1987, if no irrevocable election of coverage has been 
 11.31  made under section 3121(r) of the Internal Revenue Code of 1954, 
 11.32  as amended; 
 11.33     (9) full-time students who are enrolled and are regularly 
 11.34  attending classes at an accredited school, college, or 
 11.35  university and who are part-time employees as defined by a 
 11.36  governmental subdivision; 
 12.1      (10) resident physicians, medical interns, and pharmacist 
 12.2   residents and pharmacist interns who are serving in a degree or 
 12.3   residency program in public hospitals; 
 12.4      (11) students who are serving in an internship or residency 
 12.5   program sponsored by an accredited educational institution; 
 12.6      (12) persons who hold a part-time adult supplementary 
 12.7   technical college license who render part-time teaching service 
 12.8   in a technical college; 
 12.9      (13) foreign citizens working for a governmental 
 12.10  subdivision with a work permit of less than three years, or an 
 12.11  H-1b visa valid for less than three years of employment.  Upon 
 12.12  notice to the association that the work permit or visa extends 
 12.13  beyond the three-year period, the foreign citizens are eligible 
 12.14  for membership from the date of the extension; 
 12.15     (14) public hospital employees who elected not to 
 12.16  participate as members of the association before 1972 and who 
 12.17  did not elect to participate from July 1, 1988, to October 1, 
 12.18  1988; 
 12.19     (15) except as provided in section 353.86, volunteer 
 12.20  ambulance service personnel, as defined in subdivision 35, but 
 12.21  persons who serve as volunteer ambulance service personnel may 
 12.22  still qualify as public employees under subdivision 2 and may be 
 12.23  members of the public employees retirement association and 
 12.24  participants in the public employees retirement fund or the 
 12.25  public employees police and fire fund on the basis of 
 12.26  compensation received from public employment service other than 
 12.27  service as volunteer ambulance service personnel; 
 12.28     (16) except as provided in section 353.87, volunteer 
 12.29  firefighters, as defined in subdivision 36, engaging in 
 12.30  activities undertaken as part of volunteer firefighter duties; 
 12.31  provided that a person who is a volunteer firefighter may still 
 12.32  qualify as a public employee under subdivision 2 and may be a 
 12.33  member of the public employees retirement association and a 
 12.34  participant in the public employees retirement fund or the 
 12.35  public employees police and fire fund on the basis of 
 12.36  compensation received from public employment activities other 
 13.1   than those as a volunteer firefighter; and 
 13.2      (17) pipefitters and associated trades personnel employed 
 13.3   by independent school district No. 625, St. Paul, with coverage 
 13.4   by the pipefitters local 455 pension plan under a collective 
 13.5   bargaining agreement who were either first employed after May 1, 
 13.6   1997, or, if first employed before May 2, 1997, elected to be 
 13.7   excluded under Laws 1997, chapter 241, article 2, section 12. 
 13.8      Sec. 5.  Minnesota Statutes 1998, section 353.01, 
 13.9   subdivision 10, is amended to read: 
 13.10     Subd. 10.  [SALARY.] (a) "Salary" means:  
 13.11     (1) periodic compensation of a public employee, before 
 13.12  deductions for deferred compensation, supplemental retirement 
 13.13  plans, or other voluntary salary reduction programs, and also 
 13.14  means "wages" and includes net income from fees; and 
 13.15     (2) for a public employee who has prior service covered by 
 13.16  a local police or firefighters' relief association that has 
 13.17  consolidated with the public employees retirement association or 
 13.18  to which section 353.665 applies and who either has elected 
 13.19  coverage under the public employees police and fire fund benefit 
 13.20  plan under section 353A.08 following the consolidation or under 
 13.21  section 353.665, subdivision 4, "salary" means the rate of 
 13.22  salary upon which member contributions to the special fund of 
 13.23  the relief association were made prior to the effective date of 
 13.24  the consolidation as specified by law and by bylaw provisions 
 13.25  governing the relief association on the date of the initiation 
 13.26  of the consolidation procedure and the actual periodic 
 13.27  compensation of the public employee after the effective date of 
 13.28  consolidation. 
 13.29     (b) Salary does not mean: 
 13.30     (1) fees paid to district court reporters, unused annual or 
 13.31  sick leave payments, in lump-sum or periodic payments, severance 
 13.32  payments, reimbursement of expenses, lump-sum settlements not 
 13.33  attached to a specific earnings period, or workers' compensation 
 13.34  payments; 
 13.35     (2) employer-paid amounts used by an employee toward the 
 13.36  cost of insurance coverage, employer-paid fringe benefits, 
 14.1   flexible spending accounts, cafeteria plans, health care expense 
 14.2   accounts, day care expenses, or any payments in lieu of any 
 14.3   employer-paid group insurance coverage, including the difference 
 14.4   between single and family rates that may be paid to a member 
 14.5   with single coverage and certain amounts determined by the 
 14.6   executive director to be ineligible; 
 14.7      (3) the amount equal to that which the employing 
 14.8   governmental subdivision would otherwise pay toward single or 
 14.9   family insurance coverage for a covered employee when, through a 
 14.10  contract or agreement with some but not all employees, the 
 14.11  employer: 
 14.12     (i) discontinues, or for new hires does not provide, 
 14.13  payment toward the cost of the employee's selected insurance 
 14.14  coverages under a group plan offered by the employer; 
 14.15     (ii) makes the employee solely responsible for all 
 14.16  contributions toward the cost of the employee's selected 
 14.17  insurance coverages under a group plan offered by the employer, 
 14.18  including any amount the employer makes toward other employees' 
 14.19  selected insurance coverages under a group plan offered by the 
 14.20  employer; and 
 14.21     (iii) provides increased salary rates for employees who do 
 14.22  not have any employer-paid group insurance coverages; and 
 14.23     (4) except as provided in section 353.86 or 353.87, 
 14.24  compensation of any kind paid to volunteer ambulance service 
 14.25  personnel or volunteer firefighters, as defined in subdivisions 
 14.26  35 and 36.  
 14.27     Sec. 6.  Minnesota Statutes 1998, section 353.01, 
 14.28  subdivision 16, is amended to read: 
 14.29     Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
 14.30  means service during years of actual membership in the course of 
 14.31  which employee contributions were made, periods covered by 
 14.32  payments in lieu of salary deductions under section 353.35, and 
 14.33  service in years during which the public employee was not a 
 14.34  member but for which the member later elected, while a member, 
 14.35  to obtain credit by making payments to the fund as permitted by 
 14.36  any law then in effect. 
 15.1      (b) "Allowable service" also means a period of authorized 
 15.2   leave of absence with pay from which deductions for employee 
 15.3   contributions are made, deposited, and credited to the fund. 
 15.4      (c) "Allowable service" also means a period of authorized 
 15.5   leave of absence without pay that does not exceed one year, and 
 15.6   during or for which a member obtained credit by payments to the 
 15.7   fund made in place of salary deductions, provided that the 
 15.8   payments are made in an amount or amounts based on the member's 
 15.9   average salary on which deductions were paid for the last six 
 15.10  months of public service, or for that portion of the last six 
 15.11  months while the member was in public service, to apply to the 
 15.12  period in either case immediately preceding commencement of the 
 15.13  leave of absence.  If the employee elects to pay employee 
 15.14  contributions for the period of any leave of absence without 
 15.15  pay, or for any portion of the leave, the employee shall also, 
 15.16  as a condition to the exercise of the election, pay to the fund 
 15.17  an amount equivalent to both the required employer and 
 15.18  additional employer contributions for the employee.  The payment 
 15.19  must be made within one year from the expiration of the leave of 
 15.20  absence or within 20 days after termination of public service 
 15.21  under subdivision 11a.  The employer by appropriate action of 
 15.22  its governing body, made a part of its official records, before 
 15.23  the date of the first payment of the employee contribution, may 
 15.24  certify to the association in writing its commitment to pay the 
 15.25  employer and additional employer contributions from the proceeds 
 15.26  of a tax levy made under section 353.28.  Payments under this 
 15.27  paragraph must include interest at an annual rate of 8.5 percent 
 15.28  compounded annually from the date of the termination of the 
 15.29  leave of absence to the date payment is made.  An employee shall 
 15.30  return to public service and receive a minimum of three months 
 15.31  of allowable service to be eligible to pay employee and employer 
 15.32  contributions for a subsequent authorized leave of absence 
 15.33  without pay. 
 15.34     (d) "Allowable service" also means a periodic, repetitive 
 15.35  leave that is offered to all employees of a governmental 
 15.36  subdivision.  The leave program may not exceed 208 hours per 
 16.1   annual normal work cycle as certified to the association by the 
 16.2   employer.  A participating member obtains service credit by 
 16.3   making employee contributions in an amount or amounts based on 
 16.4   the member's average salary that would have been paid if the 
 16.5   leave had not been taken.  The employer shall pay the employer 
 16.6   and additional employer contributions on behalf of the 
 16.7   participating member.  The employee and the employer are 
 16.8   responsible to pay interest on their respective shares at the 
 16.9   rate of 8.5 percent a year, compounded annually, from the end of 
 16.10  the normal cycle until full payment is made.  An employer shall 
 16.11  also make the employer and additional employer contributions, 
 16.12  plus 8.5 percent interest, compounded annually, on behalf of an 
 16.13  employee who makes employee contributions but terminates public 
 16.14  service.  The employee contributions must be made within one 
 16.15  year after the end of the annual normal working cycle or within 
 16.16  20 days after termination of public service, whichever is 
 16.17  sooner.  The association shall prescribe the manner and forms to 
 16.18  be used by a governmental subdivision in administering a 
 16.19  periodic, repetitive leave. 
 16.20     (e) "Allowable service" also means a period during which a 
 16.21  member is on an authorized sick leave of absence, without pay, 
 16.22  limited to one year.  An employee who has received one year of 
 16.23  allowable service shall return to public service and receive a 
 16.24  minimum of three months of allowable service to receive 
 16.25  allowable service for a subsequent authorized sick leave of 
 16.26  absence. 
 16.27     (f) "Allowable service" also means an authorized temporary 
 16.28  layoff under subdivision 12, limited to three months allowable 
 16.29  service per authorized temporary layoff in one calendar year.  
 16.30  An employee who has received the maximum service allowed for an 
 16.31  authorized temporary layoff shall return to public service and 
 16.32  receive a minimum of three months of allowable service to 
 16.33  receive allowable service for a subsequent authorized temporary 
 16.34  layoff. 
 16.35     (g) Notwithstanding any law to the contrary, "allowable 
 16.36  service" also means a parental leave.  The association shall 
 17.1   grant a maximum of two months service credit for a parental 
 17.2   leave, within six months after the birth or adoption, upon 
 17.3   documentation from the member's governmental subdivision or 
 17.4   presentation of a birth certificate or other evidence of birth 
 17.5   or adoption to the association. 
 17.6      (h) "Allowable service" also means a period during which a 
 17.7   member is on an authorized leave of absence to enter military 
 17.8   service, provided that the member returns to public service upon 
 17.9   discharge from military service under section 192.262 and pays 
 17.10  into the fund employee contributions based upon the employee's 
 17.11  salary at the date of return from military service.  Payment 
 17.12  must be made within five years of the date of discharge from the 
 17.13  military service.  The amount of these contributions must be in 
 17.14  accord with the contribution rates and salary limitations, if 
 17.15  any, in effect during the leave, plus interest at an annual rate 
 17.16  of 8.5 percent compounded annually from the date of return to 
 17.17  public service to the date payment is made.  The matching 
 17.18  employer contribution and additional employer contribution under 
 17.19  section 353.27, subdivisions 3 and 3a, must be paid by the 
 17.20  governmental subdivision employing the member upon return to 
 17.21  public service if the member makes the employee contributions.  
 17.22  The governmental subdivision involved may appropriate money for 
 17.23  those payments.  A member may not receive credit for a voluntary 
 17.24  extension of military service at the instance of the member 
 17.25  beyond the initial period of enlistment, induction, or call to 
 17.26  active duty. 
 17.27     (i) For calculating benefits under sections 353.30, 353.31, 
 17.28  353.32, and 353.33 for state officers and employees displaced by 
 17.29  the Community Corrections Act, chapter 401, and transferred into 
 17.30  county service under section 401.04, "allowable service" means 
 17.31  combined years of allowable service as defined in paragraphs (a) 
 17.32  to (i) and section 352.01, subdivision 11.  
 17.33     (j) For a public employee who has prior service covered by 
 17.34  a local police or firefighters relief association that has 
 17.35  consolidated with the public employees retirement association or 
 17.36  to which section 353.665 applies, and who either has elected the 
 18.1   type of benefit coverage provided by the public employees police 
 18.2   and fire fund under section 353A.08 following the 
 18.3   consolidation or under section 353.665, subdivision 4, 
 18.4   "applicable service" is a period of service credited by the 
 18.5   local police or firefighters relief association as of the 
 18.6   effective date of the consolidation based on law and on bylaw 
 18.7   provisions governing the relief association on the date of the 
 18.8   initiation of the consolidation procedure. 
 18.9      Sec. 7.  Minnesota Statutes 1998, section 353.64, 
 18.10  subdivision 1, is amended to read: 
 18.11     Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
 18.12  person who prior to July 1, 1961, was a member of the police and 
 18.13  fire fund, by virtue of being a police officer or firefighter, 
 18.14  shall, as long as the person remains in either position, 
 18.15  continue membership in the fund.  
 18.16     (b) A person who was employed by a governmental subdivision 
 18.17  as a police officer and was a member of the police and fire fund 
 18.18  on July 1, 1978, by virtue of being a police officer as defined 
 18.19  by this section on that date, and if employed by the same 
 18.20  governmental subdivision in a position in the same department in 
 18.21  which the person was employed on that date, shall continue 
 18.22  membership in the fund whether or not that person has the power 
 18.23  of arrest by warrant after that date. 
 18.24     (c) A person who was employed by a governmental subdivision 
 18.25  as a police officer or a firefighter, whichever applies, was an 
 18.26  active member of the local police or salaried firefighters 
 18.27  relief association located in that governmental subdivision by 
 18.28  virtue of that employment as of the effective date of the 
 18.29  consolidation as authorized by sections 353A.01 to 353A.10, and 
 18.30  has elected coverage by the public employees police and fire 
 18.31  fund benefit plan, shall become a member of the police and fire 
 18.32  fund after that date if employed by the same governmental 
 18.33  subdivision in a position in the same department in which the 
 18.34  person was employed on that date. 
 18.35     (d) Any other employee serving on a full-time basis as a 
 18.36  police officer or firefighter on or after July 1, 1961, shall 
 19.1   become a member of the public employees police and fire fund.  
 19.2      (e) An employee serving on less than a full-time basis as a 
 19.3   police officer shall become a member of the public employees 
 19.4   police and fire fund only after a resolution stating that the 
 19.5   employee should be covered by the police and fire fund is 
 19.6   adopted by the governing body of the governmental subdivision 
 19.7   employing the person declaring that the position which the 
 19.8   person holds is that of a police officer. 
 19.9      (f) An employee serving on less than a full-time basis as a 
 19.10  firefighter shall become a member of the public employees police 
 19.11  and fire fund only after a resolution stating that the employee 
 19.12  should be covered by the police and fire fund is adopted by the 
 19.13  governing body of the governmental subdivision employing the 
 19.14  person declaring that the position which the person holds is 
 19.15  that of a firefighter. 
 19.16     (g) A police officer or firefighter employed by a 
 19.17  governmental subdivision who by virtue of that employment is 
 19.18  required by law to be a member of and to contribute to any 
 19.19  police or firefighter relief association governed by section 
 19.20  69.77 which has not consolidated with the public employees 
 19.21  police and fire fund and, any police officer or firefighter of a 
 19.22  relief association that has consolidated with the association 
 19.23  for which the employee has not elected coverage by the public 
 19.24  employees police and fire fund benefit plan as provided in 
 19.25  sections 353A.01 to 353A.10, or any police officer or 
 19.26  firefighter to whom section 353.665 applies who has not elected 
 19.27  coverage by the public employees police and fire fund benefit 
 19.28  plan as provided in section 353.665, subdivision 4, shall not 
 19.29  become a member of the public employees police and fire fund. 
 19.30     Sec. 8.  Minnesota Statutes 1998, section 353.65, 
 19.31  subdivision 2, is amended to read: 
 19.32     Subd. 2.  [EMPLOYEE CONTRIBUTION RATE.] The employee 
 19.33  contribution is an amount equal to 7.6 6.2 percent of the total 
 19.34  salary of the member.  This contribution must be made by 
 19.35  deduction from salary in the manner provided in subdivision 4.  
 19.36  Where any portion of a member's salary is paid from other than 
 20.1   public funds, the member's employee contribution is based on the 
 20.2   total salary received from all sources.  
 20.3      Sec. 9.  Minnesota Statutes 1998, section 353.65, 
 20.4   subdivision 3, is amended to read: 
 20.5      Subd. 3.  [EMPLOYER CONTRIBUTION RATE.] The employer 
 20.6   contribution shall be an amount equal to 11.4 9.3 percent of the 
 20.7   total salary of every member.  This contribution shall be made 
 20.8   from funds available to the employing subdivision by the means 
 20.9   and in the manner provided in section 353.28. 
 20.10     Sec. 10.  Minnesota Statutes 1998, section 353.65, 
 20.11  subdivision 3a, is amended to read: 
 20.12     Subd. 3a.  [CHANGE IN EMPLOYEE AND EMPLOYER CONTRIBUTIONS 
 20.13  IN CERTAIN INSTANCES.] (a) If, after four two consecutive fiscal 
 20.14  years beginning July 1, 1994 1999, the regular actuarial 
 20.15  valuation of the public employees police and fire fund under 
 20.16  section 356.215 indicates that the fund has no unfunded 
 20.17  actuarial accrued liability and that there is a sufficiency in 
 20.18  excess of 0.5 percent of covered payroll when the total 
 20.19  actuarial funding requirements of the fund are compared to the 
 20.20  total support, the employee and employer contribution rates must 
 20.21  be decreased as determined under paragraph (c) to a level such 
 20.22  that the sufficiency equals 0.5 percent of covered payroll based 
 20.23  on the most recent actuarial valuation. 
 20.24     (b) If, after four two consecutive fiscal years beginning 
 20.25  July 1, 1994 1999, the regular actuarial valuation of the public 
 20.26  employees police and fire fund under section 356.215 indicates 
 20.27  that the fund has an unfunded actuarial accrued liability and 
 20.28  that there is a deficiency in excess of 0.5 percent of covered 
 20.29  payroll when the total actuarial funding requirements of the 
 20.30  fund are compared to the total support, the employee and 
 20.31  employer contribution rates must be increased as determined 
 20.32  under paragraph (c) so that no deficiency exists based on the 
 20.33  most recent actuarial valuation. 
 20.34     (c) The increase or decrease in employee and employer 
 20.35  contribution rates required under paragraphs (a) and (b) must 
 20.36  maintain the current ratio in employer and employee contribution 
 21.1   rates of 40 percent employee contribution and 60 percent 
 21.2   employer contribution. 
 21.3      (d) The contribution rate increase or decrease must be 
 21.4   determined by the board of trustees and the executive director 
 21.5   of the public employees retirement association and must be 
 21.6   presented to the legislative commission on pensions and 
 21.7   retirement during the first legislative session following the 
 21.8   receipt of the actuarial valuation that indicates the need for 
 21.9   the contribution rate change. 
 21.10     (e) The contribution rate increase or decrease is effective 
 21.11  on the first full payroll period beginning after June 30 
 21.12  following receipt by the association of the fourth second 
 21.13  consecutive annual actuarial valuation disclosing the deficiency 
 21.14  or sufficiency specified in paragraph (a) or (b). 
 21.15     (f) A contribution rate increase or decrease under 
 21.16  paragraph (a) or (b) must not occur prior to receipt by the 
 21.17  association of the 1997 regular actuarial valuation of the 
 21.18  police and fire fund under section 356.215.  A contribution rate 
 21.19  increase or decrease under paragraph (a) or (b) must not occur 
 21.20  within four more frequently than every two years of a prior 
 21.21  increase or decrease under paragraph (a) or (b).  
 21.22     Sec. 11.  [353.665] [MERGER OF CERTAIN CONSOLIDATION 
 21.23  ACCOUNTS INTO PERA-P&F.] 
 21.24     Subdivision 1.  [MERGER REQUIRED.] Notwithstanding any 
 21.25  provision of law to the contrary, every local police and fire 
 21.26  consolidation account under chapter 353A in existence on March 
 21.27  1, 1999, becomes a part of the public employees police and fire 
 21.28  plan and fund governed by sections 353.63 to 353.659 on July 1, 
 21.29  1999. 
 21.30     Subd. 2.  [TRANSFER OF LIABILITIES.] All liabilities of a 
 21.31  former local police or fire consolidation account merged under 
 21.32  subdivision 1 are liabilities of the public employees police and 
 21.33  fire fund as of July 1, 1999. 
 21.34     Subd. 3.  [TRANSFER OF ASSETS.] All assets of a former 
 21.35  local police or fire consolidation account merged under 
 21.36  subdivision 1 are assets of the public employees police and fire 
 22.1   fund as of July 1, 1999.  The participation of a consolidation 
 22.2   account in the Minnesota postretirement investment fund becomes 
 22.3   part of the participation of the public employees police and 
 22.4   fire fund in the Minnesota postretirement investment fund.  The 
 22.5   remaining assets, excluding the amounts for distribution under 
 22.6   subdivision 7, paragraph (f), become an asset of the public 
 22.7   employees police and fire fund.  The public employees police and 
 22.8   fire fund also must be calculated with the amount of receivable 
 22.9   assets under subdivision 7, paragraph (e). 
 22.10     Subd. 4.  [BENEFIT COVERAGE FOR ACTIVE MEMBERS.] (a) A 
 22.11  person who is a police officer or a firefighter who, as such, is 
 22.12  an active member of a local police or fire consolidation account 
 22.13  on June 30, 1999, and who has not previously elected benefit 
 22.14  coverage under the relevant provisions of the public employees 
 22.15  police and fire fund benefit plan under section 353A.08, 
 22.16  subdivision 3, may elect benefit coverage under the relevant 
 22.17  provisions of the public employees police and fire fund benefit 
 22.18  plan or retention of benefit coverage provided by the relief 
 22.19  association benefit plan in effect on the effective date of the 
 22.20  consolidation of the local police or fire consolidation account 
 22.21  under chapter 353A.  This election must be in writing and must 
 22.22  be made before September 1, 1999. 
 22.23     (b) If an eligible person makes no affirmative election of 
 22.24  benefit coverage, the person retains the benefit coverage 
 22.25  provided by the relief association benefit plan in effect on the 
 22.26  effective date of the consolidation of the local police or fire 
 22.27  consolidation account as reflected in the applicable provisions 
 22.28  of chapter 353B.  The election or default election is 
 22.29  irrevocable. 
 22.30     (c) Notwithstanding any provision of section 353A.083 and 
 22.31  any municipal action under authority of that statute to the 
 22.32  contrary, the provisions of the public employees police and fire 
 22.33  fund benefit plan applicable to active members of the local 
 22.34  police or fire consolidation accounts who elect public employees 
 22.35  police and fire fund benefit plan under section 353A.08, 
 22.36  subdivision 3, or paragraph (a), are the applicable provisions 
 23.1   of sections 353.63 to 353.659. 
 23.2      Subd. 5.  [BENEFIT COVERAGE FOR RETIREES AND BENEFIT 
 23.3   RECIPIENTS.] (a) A person who received a service pension, a 
 23.4   disability pension or benefit, or a survivor benefit from a 
 23.5   local police or fire consolidation account for the month of June 
 23.6   1999, and who has not previously elected participation in the 
 23.7   Minnesota postretirement investment fund for any future 
 23.8   postretirement adjustments rather than the postretirement 
 23.9   adjustment mechanism or mechanisms of the relief association 
 23.10  benefit plan under section 353A.08, subdivision 1, may elect 
 23.11  participation in the Minnesota postretirement investment fund 
 23.12  for any future postretirement adjustments or retention of the 
 23.13  postretirement adjustment mechanism or mechanisms of the relief 
 23.14  association benefit plan in effect on the effective date of the 
 23.15  consolidation of the local police or fire consolidation account 
 23.16  as reflected in the applicable provisions of chapter 353B.  This 
 23.17  election must be in writing and must be made before September 1, 
 23.18  1999. 
 23.19     (b) If an eligible person is a minor, the election must be 
 23.20  made by the person's parent or legal guardian.  If the eligible 
 23.21  person makes no affirmative election under this subdivision, the 
 23.22  person retains the postretirement adjustment mechanism or 
 23.23  mechanisms of the relief association benefit plan in effect on 
 23.24  the effective date of the consolidation of the local police or 
 23.25  fire consolidation account as reflected in the applicable 
 23.26  provisions of chapter 353B. 
 23.27     (c) The survivor benefit payable on behalf of any service 
 23.28  pension or disability benefit recipient who elects participation 
 23.29  in the Minnesota postretirement investment fund must be 
 23.30  calculated under the relief association benefit plan in effect 
 23.31  on the effective date of consolidation under chapter 353A as 
 23.32  reflected in the applicable provisions of chapter 353B. 
 23.33     Subd. 6.  [BENEFIT COVERAGE FOR DEFERRED MEMBERS.] A person 
 23.34  who terminated active employment as a police officer or a 
 23.35  firefighter that gave rise to membership in a local relief 
 23.36  association that consolidated with the public employees police 
 24.1   and fire plan under chapter 353A before July 1, 1999, and had 
 24.2   sufficient service credit to entitle the person to an eventual 
 24.3   service pension retains the benefit plan in effect for the 
 24.4   applicable local police or paid fire relief association in 
 24.5   effect on the effective date of consolidation under chapter 353A 
 24.6   as reflected in the applicable provisions of chapter 353B, 
 24.7   except that the deferred member may elect before September 1, 
 24.8   1999, to participate, upon retirement, in the Minnesota 
 24.9   postretirement investment fund.  Any election to participate in 
 24.10  the Minnesota postretirement investment fund is applicable to 
 24.11  any survivor benefit attributable to a deferred member covered 
 24.12  by this subdivision. 
 24.13     Subd. 7.  [CALCULATION OF FINAL FUNDED STATUS.] (a) As of 
 24.14  June 30, 1999, the actuary retained by the legislative 
 24.15  commission on pensions and retirement shall determine the final 
 24.16  funded status of local police and fire consolidation accounts 
 24.17  under chapter 353A as provided in this subdivision. 
 24.18     (b) The final funded status calculation must be made using 
 24.19  the benefit plan provisions applicable to the consolidation 
 24.20  account and the actuarial assumptions used for the June 30, 
 24.21  1998, actuarial valuation of the account. 
 24.22     (c) The actuary must calculate the total actuarial accrued 
 24.23  liability of the consolidation account, which is the sum of the 
 24.24  actuarial accrued liability for all consolidation account 
 24.25  members who are not included in the participation of the account 
 24.26  in the Minnesota postretirement investment fund calculated by 
 24.27  the entry age normal actuarial cost method.  The actuary also 
 24.28  must calculate any account unfunded accrued liability or any 
 24.29  account funding surplus.  An account unfunded accrued liability 
 24.30  is the actuarial accrued liability reduced by the amount of the 
 24.31  current value of assets, if the resulting number is positive.  
 24.32  An account funding surplus is the actuarial accrued liability 
 24.33  reduced by the amount of the current value of assets, if the 
 24.34  resulting number is negative. 
 24.35     (d) The actuary also must calculate the amortizable base 
 24.36  for every consolidation account.  The amortizable base is the 
 25.1   present value of future benefits for all account members who are 
 25.2   not included in the participation of the account in the 
 25.3   Minnesota postretirement investment fund reduced by the present 
 25.4   value of 19 percent of future covered salary and further reduced 
 25.5   by the current value of account assets other than its 
 25.6   participation in the Minnesota postretirement investment fund, 
 25.7   after adjustment for fiscal year 1999 net mortality gains and 
 25.8   losses and for the net actuarial affect of the election of 
 25.9   postretirement adjustment coverage under subdivision 5. 
 25.10     (e) If the amortizable base under paragraph (d) is a 
 25.11  positive number, the receivable assets are an amount equal to 
 25.12  the amortizable base number. 
 25.13     (f) If the amortizable base under paragraph (d) is a 
 25.14  negative number, the actuary must calculate the residual asset 
 25.15  amount.  The residual asset amount is: 
 25.16     (1) one-half of the amount by which the current assets of 
 25.17  the account exceed 100 percent of the total actuarial accrued 
 25.18  liability up to that percentage of the total actuarial accrued 
 25.19  liability that equals the public employees police and fire fund 
 25.20  funded ratio on June 30, 1999; and 
 25.21     (2) the amount by which the current assets of the account 
 25.22  exceed that percentage of the total actuarial accrued liability 
 25.23  that equals the public employees police and fire fund funded 
 25.24  ratio on June 30, 1999.  Following the calculation of the 
 25.25  residual asset amount for each applicable municipality and the 
 25.26  verification of the amount by the legislative auditor, the 
 25.27  executive director of the public employees retirement 
 25.28  association shall pay the applicable residual asset amount to 
 25.29  each qualifying municipality.  The residual asset amount must be 
 25.30  used by the municipality to defray fire department expenditure 
 25.31  items if the residual asset amount was derived from a fire 
 25.32  consolidation account or to defray police department expenditure 
 25.33  items if the residual asset amount was derived from a police 
 25.34  consolidation account. 
 25.35     Subd. 8.  [MEMBER AND EMPLOYER CONTRIBUTIONS.] (a) 
 25.36  Effective for the first pay period following July 1, 1999, the 
 26.1   employee contribution rate for former consolidation account 
 26.2   active members is the rate specified in section 353.65, 
 26.3   subdivision 2, and the regular municipal contribution rate on 
 26.4   behalf of former consolidation account active members is the 
 26.5   rate specified in section 353.65, subdivision 3. 
 26.6      (b) The municipality associated with a former local 
 26.7   consolidation account that had a positive value amortizable base 
 26.8   calculation under subdivision 7, paragraph (d), must make an 
 26.9   additional municipal contribution to the public employees police 
 26.10  and fire plan for the period from January 1, 2000, to December 
 26.11  31, 2009.  The amount of the additional municipal contribution 
 26.12  is the amount calculated by the actuary retained by the 
 26.13  legislative commission on pensions and retirement and certified 
 26.14  by the executive director of the public employees retirement 
 26.15  association by which the amortizable base amount would be 
 26.16  amortized on a level dollar annual end-of-the-year contribution 
 26.17  basis, using an 8.5 percent interest rate assumption. 
 26.18     Subd. 9.  [BENEFIT PLAN COVERAGE.] Unless modified by an 
 26.19  election authorized under subdivision 4, 5, or 6, the benefit 
 26.20  plan election by any person or on behalf of any person under 
 26.21  section 353A.08 remains binding.  Former consolidation account 
 26.22  members who elected the entirety of the public employees police 
 26.23  and fire benefit plan are entitled to an applicable annuity or 
 26.24  benefit under the provisions of sections 353.63 to 353.68 in 
 26.25  effect on the day that the former consolidation account member 
 26.26  terminated active service as a police officer or firefighter, 
 26.27  whichever applies.  
 26.28     Subd. 10.  [CONSOLIDATION ACCOUNT DISSOLUTION.] Upon the 
 26.29  payment of all residual asset amounts under subdivision 7 and 
 26.30  the transfer of all liabilities and remaining assets under 
 26.31  subdivisions 2 and 3, the local consolidation accounts under 
 26.32  chapter 353A in existence on March 1, 1999, dissolve. 
 26.33     Sec. 12.  Minnesota Statutes 1998, section 356.215, 
 26.34  subdivision 4g, is amended to read: 
 26.35     Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
 26.36  the exhibit indicating the level normal cost, the actuarial 
 27.1   valuation must contain an exhibit indicating the additional 
 27.2   annual contribution sufficient to amortize the unfunded 
 27.3   actuarial accrued liability.  For funds governed by chapters 3A, 
 27.4   352, 352B, 352C, 353, 354, 354A, and 490, the additional 
 27.5   contribution must be calculated on a level percentage of covered 
 27.6   payroll basis by the established date for full funding in effect 
 27.7   when the valuation is prepared.  For funds governed by chapter 
 27.8   3A, sections 352.90 through 352.951, chapters 352B, 352C, 
 27.9   sections 353.63 through 353.68, and chapters 353C, 354A, and 
 27.10  490, the level percent additional contribution must be 
 27.11  calculated assuming annual payroll growth of 6.5 percent.  For 
 27.12  funds governed by sections 352.01 through 352.86 and chapter 
 27.13  354, the level percent additional contribution must be 
 27.14  calculated assuming an annual payroll growth of five percent.  
 27.15  For the fund governed by sections 353.01 through 353.46, the 
 27.16  level percent additional contribution must be calculated 
 27.17  assuming an annual payroll growth of six percent.  For all other 
 27.18  funds, the additional annual contribution must be calculated on 
 27.19  a level annual dollar amount basis. 
 27.20     (b) For any fund other than the Minneapolis employees 
 27.21  retirement fund, after the first actuarial valuation date 
 27.22  occurring after June 1, 1989, if there has not been a change in 
 27.23  the actuarial assumptions used for calculating the actuarial 
 27.24  accrued liability of the fund, a change in the benefit plan 
 27.25  governing annuities and benefits payable from the fund, a change 
 27.26  in the actuarial cost method used in calculating the actuarial 
 27.27  accrued liability of all or a portion of the fund, or a 
 27.28  combination of the three, which change or changes by themselves 
 27.29  without inclusion of any other items of increase or decrease 
 27.30  produce a net increase in the unfunded actuarial accrued 
 27.31  liability of the fund, the established date for full funding for 
 27.32  the first actuarial valuation made after June 1, 1989, and each 
 27.33  successive actuarial valuation is the first actuarial valuation 
 27.34  date occurring after June 1, 2020.  
 27.35     (c) For any fund or plan other than the Minneapolis 
 27.36  employees retirement fund, after the first actuarial valuation 
 28.1   date occurring after June 1, 1989, if there has been a change in 
 28.2   any or all of the actuarial assumptions used for calculating the 
 28.3   actuarial accrued liability of the fund, a change in the benefit 
 28.4   plan governing annuities and benefits payable from the fund, a 
 28.5   change in the actuarial cost method used in calculating the 
 28.6   actuarial accrued liability of all or a portion of the fund, or 
 28.7   a combination of the three, and the change or changes, by 
 28.8   themselves and without inclusion of any other items of increase 
 28.9   or decrease, produce a net increase in the unfunded actuarial 
 28.10  accrued liability in the fund, the established date for full 
 28.11  funding must be determined using the following procedure:  
 28.12     (i) the unfunded actuarial accrued liability of the fund 
 28.13  must be determined in accordance with the plan provisions 
 28.14  governing annuities and retirement benefits and the actuarial 
 28.15  assumptions in effect before an applicable change; 
 28.16     (ii) the level annual dollar contribution or level 
 28.17  percentage, whichever is applicable, needed to amortize the 
 28.18  unfunded actuarial accrued liability amount determined under 
 28.19  item (i) by the established date for full funding in effect 
 28.20  before the change must be calculated using the interest 
 28.21  assumption specified in subdivision 4d in effect before the 
 28.22  change; 
 28.23     (iii) the unfunded actuarial accrued liability of the fund 
 28.24  must be determined in accordance with any new plan provisions 
 28.25  governing annuities and benefits payable from the fund and any 
 28.26  new actuarial assumptions and the remaining plan provisions 
 28.27  governing annuities and benefits payable from the fund and 
 28.28  actuarial assumptions in effect before the change; 
 28.29     (iv) the level annual dollar contribution or level 
 28.30  percentage, whichever is applicable, needed to amortize the 
 28.31  difference between the unfunded actuarial accrued liability 
 28.32  amount calculated under item (i) and the unfunded actuarial 
 28.33  accrued liability amount calculated under item (iii) over a 
 28.34  period of 30 years from the end of the plan year in which the 
 28.35  applicable change is effective must be calculated using the 
 28.36  applicable interest assumption specified in subdivision 4d in 
 29.1   effect after any applicable change; 
 29.2      (v) the level annual dollar or level percentage 
 29.3   amortization contribution under item (iv) must be added to the 
 29.4   level annual dollar amortization contribution or level 
 29.5   percentage calculated under item (ii); 
 29.6      (vi) the period in which the unfunded actuarial accrued 
 29.7   liability amount determined in item (iii) is amortized by the 
 29.8   total level annual dollar or level percentage amortization 
 29.9   contribution computed under item (v) must be calculated using 
 29.10  the interest assumption specified in subdivision 4d in effect 
 29.11  after any applicable change, rounded to the nearest integral 
 29.12  number of years, but not to exceed 30 years from the end of the 
 29.13  plan year in which the determination of the established date for 
 29.14  full funding using the procedure set forth in this clause is 
 29.15  made and not to be less than the period of years beginning in 
 29.16  the plan year in which the determination of the established date 
 29.17  for full funding using the procedure set forth in this clause is 
 29.18  made and ending by the date for full funding in effect before 
 29.19  the change; and 
 29.20     (vii) the period determined under item (vi) must be added 
 29.21  to the date as of which the actuarial valuation was prepared and 
 29.22  the date obtained is the new established date for full funding.  
 29.23     (d) For the Minneapolis employees retirement fund, the 
 29.24  established date for full funding is June 30, 2020. 
 29.25     (e) For the following plans for which the annual actuarial 
 29.26  valuation indicates an excess of valuation assets over the 
 29.27  actuarial accrued liability, the valuation assets in excess of 
 29.28  the actuarial accrued liability must be recognized in the 
 29.29  following manner: 
 29.30     (1) the public employees retirement association police and 
 29.31  fire plan, the valuation assets in excess of the actuarial 
 29.32  accrued liability serve to reduce the current contribution 
 29.33  requirements by an amount equal to the amortization of the 
 29.34  excess expressed as a level percentage of pay over a 30-year 
 29.35  period beginning anew with each annual actuarial valuation of 
 29.36  the plan; and 
 30.1      (2) the correctional employees retirement plan of the 
 30.2   Minnesota state retirement system, and the state patrol 
 30.3   retirement plan, an excess of valuation assets over actuarial 
 30.4   accrued liability must be amortized in the same manner over the 
 30.5   same period as an unfunded actuarial accrued liability but must 
 30.6   serve to reduce the required contribution instead of increasing 
 30.7   it. 
 30.8      Sec. 13.  Minnesota Statutes 1998, section 423A.02, is 
 30.9   amended by adding a subdivision to read: 
 30.10     Subd. 4.  [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 
 30.11  total of amortization aid, supplemental amortization aid, and 
 30.12  additional amortization aid under this section to a municipality 
 30.13  to which section 353.665, subdivision 8, paragraph (b), applies, 
 30.14  may not exceed the amount of the additional municipal 
 30.15  contribution under section 353.665, subdivision 8, paragraph (b).
 30.16     (b) Any aid amount in excess of the limit under this 
 30.17  subdivision shall be redistributed to the municipalities to 
 30.18  which section 353.665, subdivision 8, paragraph (b), applies.  
 30.19  The excess aid shall be distributed in proportion to each 
 30.20  municipality's additional municipal contribution under section 
 30.21  353.665, subdivision 8, paragraph (b). 
 30.22     (c) The sum of any aid to a municipality listed under 
 30.23  paragraph (a) and aid distributed to a municipality under 
 30.24  paragraph (b) in excess of the limit provided by this 
 30.25  subdivision shall be distributed as provided in paragraph (b). 
 30.26     (d) When the total aid for each municipality under this 
 30.27  subdivision equals the limit under paragraph (a), any aid in 
 30.28  excess of the limit cancels to the general fund. 
 30.29     Sec. 14.  [1999 PERA-P&F ACTUARIAL VALUATION.] 
 30.30     (a) As of July 1, 1999, no actuarial valuations of the 
 30.31  local police and fire consolidation accounts in existence before 
 30.32  March 1, 1999, are required. 
 30.33     (b) The actuary retained by the legislative commission on 
 30.34  pensions and retirement shall prepare all calculations required 
 30.35  under Minnesota Statutes, section 353.655, and shall present 
 30.36  them to the commission in a separate report. 
 31.1      (c) The calculated actuarial accrued liability of the 
 31.2   public employees police and fire plan for July 1, 1999, must 
 31.3   contain all liabilities associated with the former local police 
 31.4   and fire consolidation accounts affected by Minnesota Statutes, 
 31.5   section 353.655. 
 31.6      (d) The asset value of the public employees police and fire 
 31.7   plan for July 1, 1999, is the sum of the following: 
 31.8      (1) the current assets of the public employees police and 
 31.9   fire plan as of June 30, 1999, without reference to any local 
 31.10  consolidation accounts in existence on March 1, 1999; 
 31.11     (2) the amount of assets transferred from the Minnesota 
 31.12  postretirement investment fund with respect to local 
 31.13  consolidation accounts under Minnesota Statutes, section 
 31.14  353.655, subdivision 3; 
 31.15     (3) that portion of the market value of assets of the local 
 31.16  consolidation accounts after subtracting the amount in clause (2)
 31.17  determined by multiplying the total by the ratio that the 
 31.18  current asset value of public employee police and fire fund 
 31.19  assets other than the participation in the Minnesota 
 31.20  postretirement investment fund as of June 30, 1999, without 
 31.21  reference to any local consolidation accounts in existence on 
 31.22  March 1, 1999, bears to the market value of the same assets; and 
 31.23     (4) a receivable amount equal to the present value of the 
 31.24  future additional municipal contributions required under 
 31.25  Minnesota Statutes, section 353.655, subdivision 8, paragraph 
 31.26  (b). 
 31.27     Sec. 15.  [EFFECTIVE DATE.] 
 31.28     Sections 1 to 14 are effective on the day following final 
 31.29  enactment.