HF 3744

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; amending local police and firefighters relief association
amortization provisions; allocating state aid; amending Minnesota Statutes 2006,
section 423A.02, subdivision 1b.

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

Section 1.

Minnesota Statutes 2006, section 423A.02, subdivision 1b, is amended to
read:

Subd. 1b.

Additional amortization state aid.

(a) Annually, on October 1, the
commissioner of revenue shall allocate the additional amortization state aid transferred
under section 69.021, subdivision 11, to:

(1) all police or salaried firefighters relief associations governed by and in full
compliance with the requirements of section 69.77, that had an unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31;

(2) all local police or salaried firefighter consolidation accounts governed by chapter
353A that are certified by the executive director of the public employees retirement
association as having for the current fiscal year an additional municipal contribution
amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented
section 353A.083, subdivision 1, if the effective date of the consolidation preceded May
24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date
of the consolidation preceded June 1, 1995; and

(3) the municipalities that are required to make an additional municipal contribution
under section 353.665, subdivision 8, for the duration of the required additional
contribution.

(b) The commissioner shall allocate the state aid on the basis of the proportional share
of the relief association or consolidation account of the total unfunded actuarial accrued
liability of all recipient relief associations and consolidation accounts as of December 31,
1993, for relief associations, and as of June 30, 1994, for consolidation accounts.

(c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
allocate the state aid, including any state aid in excess of the limitation in subdivision
4, on the following basis:

(1) 64.5 percent to the municipalities to which section 353.665, subdivision
8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in
accordance with paragraph (b) and subject to the limitation in subdivision 4;

(2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Fire Department Relief Association; and

(3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding
December 31 for the Virginia Fire Department Relief Association.

If there is no unfunded actuarial accrued liability in both the Minneapolis Police
Relief Association and the Minneapolis Fire Department Relief Association as disclosed
in the most recent actuarial valuations for the relief associations prepared under sections
356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded
actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed
in the most recent actuarial valuation for the relief association prepared under sections
356.215 and 356.216, the commissioner shall allocate that 1.3 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. new text begin Upon the final payment
to municipalities required by section 353.665, subdivision 8, paragraph (b), or 353A.09,
subdivision 5, paragraph (b), the commissioner shall allocate that 64.5 percent of the aid
as follows: 25 percent to the St. Paul Teachers Retirement Fund Association, 25 percent to
the city of Minneapolis to fund any unfunded actuarial accrued liability in the actuarial
valuation proposed under sections 356.215 and 356.216 as of the preceding December
31 for the Minneapolis Police Relief Association or the Minneapolis Fire Fighters Relief
Association, 25 percent for the city of Duluth to pay for any costs associated with the
police and firefighters relief associations, and 25 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. new text end The allocation must be
made by the commissioner at the same time and under the same procedures as specified
in subdivision 3. With respect to the St. Paul Teachers Retirement Fund Association,
annually, beginning on July 1, 2005, if the applicable teacher's association five-year
average time-weighted rate of investment return does not equal or exceed the performance
of a composite portfolio assumed passively managed (indexed) invested ten percent in
cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent in
domestic stock calculated using the formula under section 11A.04, clause (11), the aid
allocation to that retirement fund under this section ceases until the five-year annual rate
of investment return equals or exceeds the performance of that composite portfolio.

(d) The amounts required under this subdivision are annually appropriated to the
commissioner of revenue.