1.1                          A bill for an act 
  1.2             relating to retirement; various Minnesota public 
  1.3             pension plans; making various benefit and coverage 
  1.4             modifications; redirecting various state pension aids 
  1.5             to certain first class city teachers retirement fund 
  1.6             associations; requiring certain school district 
  1.7             employer contribution increases; making various 
  1.8             administrative modifications; establishing a special 
  1.9             task force to evaluate potential modifications in 
  1.10            various investment performance reporting programs; 
  1.11            amending Minnesota Statutes 1994, sections 3A.04, 
  1.12            subdivision 4; 16A.06, by adding a subdivision; 
  1.13            69.021, subdivision 7; 124.916, subdivision 3; 
  1.14            144C.06; 352.04, subdivision 8; 352.95, subdivision 2; 
  1.15            352B.10, subdivision 2; 352B.11, subdivision 1; 
  1.16            352C.09, by adding a subdivision; 353D.01, subdivision 
  1.17            2; 353D.02; 353D.03; 353D.04; 354.44, subdivisions 3 
  1.18            and 4; 354A.12, subdivisions 2 and 3c; 356A.06, 
  1.19            subdivisions 4 and 7; 423A.02, subdivision 1, and by 
  1.20            adding a subdivision; 423B.01, subdivision 9; 423B.15, 
  1.21            subdivision 3; 424A.001, by adding subdivisions; 
  1.22            424A.01, by adding a subdivision; 424A.02, subdivision 
  1.23            1; and 490.124, by adding a subdivision; Minnesota 
  1.24            Statutes 1995 Supplement, sections 144C.07, 
  1.25            subdivision 2; 144C.08; 354D.02, subdivision 2; 
  1.26            354D.03; 354D.04; 354D.06; and 356.219, subdivision 2; 
  1.27            Laws 1989, chapter 319, article 19, section 7, 
  1.28            subdivisions 1, as amended, and 4, as amended; and 
  1.29            Laws 1995, chapter 252, article 1, section 16; 
  1.30            proposing coding for new law in Minnesota Statutes, 
  1.31            chapters 354A; and 354D; repealing Minnesota Statutes 
  1.32            1994, section 353D.11; Laws 1990, chapter 570, article 
  1.33            13, section 1, subdivision 5. 
  1.34  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.35                             ARTICLE 1
  1.36          DESIGNATION OF BENEFICIARY FOR REFUND UPON DEATH
  1.37     Section 1.  Minnesota Statutes 1994, section 3A.04, 
  1.38  subdivision 4, is amended to read: 
  1.39     Subd. 4.  [DEATH REFUNDS TO ESTATE.] Upon the death of a 
  2.1   member of the legislature or former legislator who was not 
  2.2   receiving a retirement allowance, without either a surviving 
  2.3   spouse and without any or dependent children, regardless of when 
  2.4   the death occurred, the last designated beneficiary named on a 
  2.5   form filed with the director before the death of the legislator, 
  2.6   or if no designation is filed, the estate of the member or 
  2.7   former legislator, upon application of the representative of the 
  2.8   estate, shall be entitled to a refund of contributions of the 
  2.9   deceased member of the legislature or former legislator plus 
  2.10  interest as provided in section 3A.03, subdivision 2, clause (2).
  2.11     Sec. 2.  Minnesota Statutes 1994, section 352B.11, 
  2.12  subdivision 1, is amended to read: 
  2.13     Subdivision 1.  [REFUND OF PAYMENTS.] A member who has not 
  2.14  received other benefits under this chapter is entitled to a 
  2.15  refund of payments made by salary deduction, plus interest, if 
  2.16  the member is separated, either voluntarily or involuntarily, 
  2.17  from state service that entitled the member to membership.  In 
  2.18  the event of the member's death, if there are no survivor 
  2.19  benefits payable under this chapter, a refund is payable to the 
  2.20  last designated beneficiary on a form filed with the director 
  2.21  before death, or if no designation is filed, the refund is 
  2.22  payable to the member's estate is entitled to the refund.  
  2.23  Interest must be computed at the rate of six percent a year, 
  2.24  compounded annually.  To receive a refund, the member must apply 
  2.25  application must be made on a form prescribed by the executive 
  2.26  director. 
  2.27     Sec. 3.  Minnesota Statutes 1994, section 352C.09, is 
  2.28  amended by adding a subdivision to read: 
  2.29     Subd. 3.  [DEATH REFUND.] If a constitutional officer who 
  2.30  has not received other benefits under this chapter dies and 
  2.31  there are no survivor benefits payable under this chapter, a 
  2.32  refund plus interest as provided in section 352C.09, subdivision 
  2.33  2, clause (1), is payable to the last designated beneficiary 
  2.34  named on a form filed with the director before the death of the 
  2.35  constitutional officer, or if no designation is on file, the 
  2.36  refund is payable to the estate of the deceased constitutional 
  3.1   officer. 
  3.2      Sec. 4.  Minnesota Statutes 1994, section 490.124, is 
  3.3   amended by adding a subdivision to read: 
  3.4      Subd. 13.  [DEATH REFUND.] If a judge who has not received 
  3.5   other benefits under this chapter dies and there are no survivor 
  3.6   benefits payable under this chapter, a refund plus interest as 
  3.7   provided in section 490.124, subdivision 12, is payable to the 
  3.8   last designated beneficiary named on a form filed with the 
  3.9   director before the death of the judge, or if no designation is 
  3.10  on file, the refund is payable to the estate of the deceased 
  3.11  judge. 
  3.12     Sec. 5.  [EFFECTIVE DATE.] 
  3.13     Sections 1 to 4 are effective July 1, 1996. 
  3.14                             ARTICLE 2
  3.15             ADMINISTRATIVE PROVISIONS RELATING TO THE
  3.16                 MINNESOTA STATE RETIREMENT SYSTEM
  3.17     Section 1.  Minnesota Statutes 1994, section 352.04, 
  3.18  subdivision 8, is amended to read: 
  3.19     Subd. 8.  [DEPARTMENT REQUIRED TO PAY OMITTED SALARY 
  3.20  DEDUCTIONS.] (a) If a department fails to take deductions past 
  3.21  due for a period of 60 days or less from an employee's salary as 
  3.22  provided in this section, those deductions must be taken on 
  3.23  later payroll abstracts.  
  3.24     (b) If a department fails to take deductions past due for a 
  3.25  period in excess of 60 days from an employee's salary as 
  3.26  provided in this section, the department, and not the employee, 
  3.27  shall must pay on later payroll abstracts the employee and 
  3.28  employer contributions and an amount equivalent to 8.5 percent 
  3.29  of the total amount due in lieu of interest, or if the delay in 
  3.30  payment exceeds one year, 8.5 percent compound annual interest.  
  3.31     (c) If a department fails to take deductions past due for a 
  3.32  period of 60 days or less and the employee is no longer in state 
  3.33  service so that the required deductions cannot be taken from the 
  3.34  salary of the employee, the department shall must nevertheless 
  3.35  pay the required employer contributions.  If any department 
  3.36  fails to take deductions past due for a period in excess of 60 
  4.1   days and the employee is no longer in state service, the omitted 
  4.2   contributions shall must be recovered under paragraph (b).  
  4.3      (d) If an employee from whose salary required deductions 
  4.4   were past due for a period of 60 days or less leaves state 
  4.5   service before the payment of the omitted deductions and 
  4.6   subsequently returns to state service, the unpaid amount is 
  4.7   considered the equivalent of a refund.  The employee accrues no 
  4.8   right by reason of the unpaid amount, except that the employee 
  4.9   may pay the amount of omitted deductions as provided in section 
  4.10  352.23. 
  4.11     Sec. 2.  Minnesota Statutes 1994, section 352.95, 
  4.12  subdivision 2, is amended to read: 
  4.13     Subd. 2.  [NON-JOB-RELATED DISABILITY.] Any covered 
  4.14  correctional employee who, after at least one year of covered 
  4.15  correctional service, becomes disabled and physically or 
  4.16  mentally unfit to perform the duties of the position because of 
  4.17  sickness or injury occurring while not engaged in covered 
  4.18  employment, is entitled to a disability benefit based on covered 
  4.19  correctional service only.  The disability benefit must be 
  4.20  computed as provided in section 352.93, subdivisions 1 and 2, 
  4.21  and computed as though the employee had at least 15 years of 
  4.22  covered correctional service. 
  4.23     Sec. 3.  Minnesota Statutes 1994, section 352B.10, 
  4.24  subdivision 2, is amended to read: 
  4.25     Subd. 2.  [DISABLED WHILE NOT ON DUTY.] If a member 
  4.26  terminates employment after at least one year of service because 
  4.27  of sickness or injury occurring while not on duty and not 
  4.28  engaged in state work entitling the member to membership, and 
  4.29  the termination is necessary because the member cannot perform 
  4.30  duties, the member is entitled to receive a disability 
  4.31  benefit member becomes disabled and physically or mentally unfit 
  4.32  to perform the duties of the position because of sickness or 
  4.33  injury occurring while not engaged in covered employment, the 
  4.34  member is entitled to disability benefits.  The benefit must be 
  4.35  in the same amount and computed in the same way as if the member 
  4.36  were 55 years old at the date of disability and the annuity were 
  5.1   paid under section 352B.08.  If disability under this clause 
  5.2   occurs after one but before 15 years service, the disability 
  5.3   benefit must be computed as though the member had 15 years 
  5.4   service. 
  5.5      Sec. 4.  [EFFECTIVE DATE.] 
  5.6      Sections 1 to 3 are effective July 1, 1996. 
  5.7                              ARTICLE 3
  5.8                ADMINISTRATIVE PROVISIONS RELATING TO
  5.9                 THE TEACHERS RETIREMENT ASSOCIATION
  5.10     Section 1.  Minnesota Statutes 1994, section 354.44, 
  5.11  subdivision 3, is amended to read: 
  5.12     Subd. 3.  [APPLICATION FOR RETIREMENT.] Application for 
  5.13  retirement must be made by the member or by someone authorized 
  5.14  to act in the member's behalf.  A member or a person authorized 
  5.15  to act on behalf of the member may make application for 
  5.16  retirement provided the age and service requirements under 
  5.17  subdivision 1 are satisfied on or before the member's retirement 
  5.18  annuity accrual date under subdivision 4.  The application may 
  5.19  be made no earlier than 120 days before the termination of 
  5.20  teaching service.  The application must be made on a form 
  5.21  prescribed by the executive director and is not complete until 
  5.22  all necessary supporting documents are received by the executive 
  5.23  director. 
  5.24     Sec. 2.  Minnesota Statutes 1994, section 354.44, 
  5.25  subdivision 4, is amended to read: 
  5.26     Subd. 4.  [TIME AND MANNER OF PAYMENTS RETIREMENT ANNUITY 
  5.27  ACCRUAL DATE.] A member may make application to the board for a 
  5.28  retirement annuity any time after the member has satisfied the 
  5.29  age and service requirements of this chapter for retirement 
  5.30  except that an application for retirement must not be made more 
  5.31  than 60 days before termination of teaching service.  The (a) An 
  5.32  annuity payment begins to accrue, providing that the age and 
  5.33  service requirements under subdivision 1 are satisfied, after 
  5.34  the termination of teaching service, or after the application 
  5.35  for retirement has been filed with the board, whichever is 
  5.36  later, as follows: 
  6.1      (a) (1) on the 16th day of the month of termination or 
  6.2   filing if the termination or filing occurs on or before the 15th 
  6.3   day of the month,; 
  6.4      (b) (2) on the first day of the month following the month 
  6.5   of termination or filing if the termination or filing occurs on 
  6.6   or after the 16th day of the month, or; 
  6.7      (c) (3) on July 1 for all school principals and other 
  6.8   administrators who receive a full annual contract salary during 
  6.9   the fiscal year for performance of a full year's contract 
  6.10  duties; or 
  6.11     (4) a later date to be the first or 16th day of a month 
  6.12  within the six-month period immediately following the 
  6.13  termination of teaching service as specified under paragraph (b) 
  6.14  by the member. 
  6.15     (b) If an application for retirement is filed with the 
  6.16  board during the six-month period immediately following the 
  6.17  termination of teaching service, the annuity may begin to accrue 
  6.18  as if the application for retirement had been filed with the 
  6.19  board on the date teaching service terminated or a later date 
  6.20  occurring within the six-month period as specified by the member 
  6.21  under paragraph (a), clause (4).  An annuity must not begin to 
  6.22  accrue more than one month before the date of final salary 
  6.23  receipt. 
  6.24     Sec. 3.  [EFFECTIVE DATE.] 
  6.25     Sections 1 and 2 are effective the day following final 
  6.26  enactment. 
  6.27                             ARTICLE 4
  6.28             INCREASED FUNDING FOR THE MINNEAPOLIS AND
  6.29           ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATIONS
  6.30     Section 1.  Minnesota Statutes 1994, section 16A.06, is 
  6.31  amended by adding a subdivision to read: 
  6.32     Subd. 9.  [FIRST CLASS CITY TEACHER RETIREMENT FUNDS AIDS 
  6.33  REPORTING.] Each year, on or before April 15, the commissioner 
  6.34  of finance shall report to the chairs of the senate finance 
  6.35  committee and the house ways and means committee on expenditures 
  6.36  for state aids to the Minneapolis and Saint Paul teacher 
  7.1   retirement fund associations under sections 354A.12 and 423A.02, 
  7.2   subdivision 3.  This report shall include the amounts expended 
  7.3   in the most recent fiscal year and estimates of expected 
  7.4   expenditures for the current and next fiscal year. 
  7.5      Sec. 2.  Minnesota Statutes 1994, section 69.021, 
  7.6   subdivision 7, is amended to read: 
  7.7      Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
  7.8   MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (1) (a) The 
  7.9   commissioner shall apportion the fire state aid relative to the 
  7.10  premiums reported on the Minnesota Firetown Premium Reports 
  7.11  filed under this chapter to each municipality and/or 
  7.12  firefighters' relief association,.  
  7.13     (b) The commissioner shall calculate an initial fire state 
  7.14  aid allocation amount for each municipality or fire department 
  7.15  under paragraph (c) and a minimum fire state aid allocation 
  7.16  amount for each municipality or fire department under paragraph 
  7.17  (d).  The municipality or fire department must receive the 
  7.18  larger fire state aid amount. 
  7.19     (c) The initial fire state aid allocation amount is the 
  7.20  amount available for apportionment as fire state aid under 
  7.21  subdivision 5, without inclusion of any additional funding 
  7.22  amount to support a minimum fire state aid amount under section 
  7.23  423A.02, subdivision 3, allocated one-half in proportion to the 
  7.24  population as shown in the last official statewide federal 
  7.25  census for each fire town and one-half in proportion to the 
  7.26  market value of each fire town, including the market value of 
  7.27  tax exempt property, but excluding the market value of 
  7.28  minerals.  In the case of incorporated or municipal fire 
  7.29  departments furnishing fire protection to other cities, towns, 
  7.30  or townships as evidenced by valid fire service contracts filed 
  7.31  with the commissioner, the distribution shall must be adjusted 
  7.32  proportionately to take into consideration the crossover fire 
  7.33  protection service.  Necessary adjustments shall be made to 
  7.34  subsequent apportionments.  In the case of municipalities or 
  7.35  independent fire departments qualifying for the aid, the 
  7.36  commissioner shall calculate the state aid for the municipality 
  8.1   or relief association on the basis of the population and the 
  8.2   market value of the area furnished fire protection service by 
  8.3   the fire department as evidenced by duly executed and valid fire 
  8.4   service agreements filed with the commissioner.  If one or more 
  8.5   fire departments are furnishing contracted fire service to a 
  8.6   city, town, or township, only the population and market value of 
  8.7   the area served by each fire department shall may be considered 
  8.8   in calculating the state aid and the fire departments furnishing 
  8.9   service shall enter into an agreement apportioning among 
  8.10  themselves the percent of the population and the market value of 
  8.11  each service area.  The agreement shall must be in writing and 
  8.12  must be filed with the commissioner. 
  8.13     (d) The minimum fire state aid allocation amount is the 
  8.14  amount in addition to the initial fire state allocation amount 
  8.15  that is derived from any additional funding amount to support a 
  8.16  minimum fire state aid amount under section 423A.02, subdivision 
  8.17  3, and allocated to municipalities with volunteer firefighter 
  8.18  relief associations based on the number of active volunteer 
  8.19  firefighters who are members of the relief association as 
  8.20  reported in the annual financial reporting for the calendar year 
  8.21  1993 to the office of the state auditor, but not to exceed 30 
  8.22  active volunteer firefighters, so that all municipalities or 
  8.23  fire departments with volunteer firefighter relief associations 
  8.24  receive in total at least a minimum fire state aid amount per 
  8.25  1993 active volunteer firefighter to a maximum of 30 
  8.26  firefighters. 
  8.27     (e) The fire state aid shall must be paid to the treasurer 
  8.28  of the municipality where the fire department is located and the 
  8.29  treasurer of the municipality shall, within 30 days of receipt 
  8.30  of the fire state aid, transmit the aid to the relief 
  8.31  association if the relief association has filed a financial 
  8.32  report with the treasurer of the municipality and has met all 
  8.33  other statutory provisions pertaining to the aid apportionment. 
  8.34     (f) The commissioner may make rules to permit the 
  8.35  administration of the provisions of this section.  Any 
  8.36  adjustments needed to correct prior misallocations must be made 
  9.1   to subsequent apportionments. 
  9.2      (2) Subd. 7a.  [APPORTIONMENT OF POLICE STATE AID.] (a) The 
  9.3   commissioner shall apportion the state peace officer aid to each 
  9.4   municipality and to the county in the following manner: 
  9.5      (a) (1) For all municipalities maintaining police 
  9.6   departments and the county, the state aid shall must be 
  9.7   distributed in proportion to the total number of peace officers, 
  9.8   as determined under section 69.011, subdivision 1, clause (g), 
  9.9   and subdivision 2, clause (b), employed by each municipality and 
  9.10  by the county for 12 calendar months and the proportional or 
  9.11  fractional number who were employed less than 12 months; 
  9.12     (b) (2) For each municipality which contracts with the 
  9.13  county for police service, a proportionate amount of the state 
  9.14  aid distributed to the county based on the full-time equivalent 
  9.15  number of peace officers providing contract service shall must 
  9.16  be credited against the municipality's contract obligation; and 
  9.17     (c) (3) For each municipality which contracts with another 
  9.18  municipality for police service, a proportionate amount of the 
  9.19  state aid distributed to the municipality providing contract 
  9.20  service based on the full-time equivalent number of peace 
  9.21  officers providing contract service on a full-time equivalent 
  9.22  basis shall must be credited against the contract obligation of 
  9.23  the municipality receiving contract service;. 
  9.24     (d) (b) No municipality entitled to receive state peace 
  9.25  officer aid shall may be apportioned less state peace officer 
  9.26  aid for any year under Laws 1976, chapter 315, than the amount 
  9.27  which was apportioned to it for calendar year 1975 based on 
  9.28  premiums reported to the commissioner for calendar year 1974; 
  9.29  provided, the amount of state peace officer aid to other 
  9.30  municipalities within the county and to the county shall must be 
  9.31  adjusted in proportion to the total number of peace officers in 
  9.32  the municipalities and the county, so that the amount of state 
  9.33  peace officer aid apportioned shall does not exceed the amount 
  9.34  of state peace officer aid available for apportionment. 
  9.35     Sec. 3.  Minnesota Statutes 1994, section 124.916, 
  9.36  subdivision 3, is amended to read: 
 10.1      Subd. 3.  [RETIREMENT LEVIES.] (1) In addition to the 
 10.2   excess levy authorized in 1976 any district within a city of the 
 10.3   first class which was authorized in 1975 to make a retirement 
 10.4   levy under Minnesota Statutes 1974, section 275.127 and chapter 
 10.5   422A may levy an amount per pupil unit which is equal to the 
 10.6   amount levied in 1975 payable 1976, under Minnesota Statutes 
 10.7   1974, section 275.127 and chapter 422A, divided by the number of 
 10.8   pupil units in the district in 1976-1977. 
 10.9      (2) In 1979 and each year thereafter, any district which 
 10.10  qualified in 1976 for an extra levy under clause (1) shall be 
 10.11  allowed to levy the same amount as levied for retirement in 1978 
 10.12  under this clause reduced each year by ten percent of the 
 10.13  difference between the amount levied for retirement in 1971 
 10.14  under Minnesota Statutes 1971, sections 275.127 and 422.01 to 
 10.15  422.54 and the amount levied for retirement in 1975 under 
 10.16  Minnesota Statutes 1974, section 275.127 and chapter 422A. 
 10.17     (3) In 1991 and each year thereafter, a district to which 
 10.18  this subdivision applies may levy an additional amount required 
 10.19  for contributions to the Minneapolis employees retirement fund 
 10.20  as a result of the maximum dollar amount limitation on state 
 10.21  contributions to the fund imposed under section 422A.101, 
 10.22  subdivision 3.  The additional levy shall not exceed the most 
 10.23  recent amount certified by the board of the Minneapolis 
 10.24  employees retirement fund as the district's share of the 
 10.25  contribution requirement in excess of the maximum state 
 10.26  contribution under section 422A.101, subdivision 3.  
 10.27     (4) For taxes payable in 1994 and thereafter, special 
 10.28  school district No. 1, Minneapolis, and independent school 
 10.29  district No. 625, St. Paul, may levy for the increase in the 
 10.30  employer retirement fund contributions, under Laws 1992, chapter 
 10.31  598, article 5, section 1.  Notwithstanding section 121.904, the 
 10.32  entire amount of this levy may be recognized as revenue for the 
 10.33  fiscal year in which the levy is certified.  This levy shall not 
 10.34  be considered in computing the aid reduction under section 
 10.35  124.155. 
 10.36     (5) If the employer retirement fund contributions under 
 11.1   section 354A.12, subdivision 2a, are increased for fiscal year 
 11.2   1994 or later fiscal years, special school district No. 1, 
 11.3   Minneapolis, and independent school district No. 625, St. Paul, 
 11.4   may levy in payable 1994 or later an amount equal to the amount 
 11.5   derived by applying the net increase in the employer retirement 
 11.6   fund contribution rate of the respective teacher retirement fund 
 11.7   association between fiscal year 1993 and the fiscal year 
 11.8   beginning in the year after the levy is certified to the total 
 11.9   covered payroll of the applicable teacher retirement fund 
 11.10  association.  Notwithstanding section 121.904, the entire amount 
 11.11  of this levy may be recognized as revenue for the fiscal year in 
 11.12  which the levy is certified.  This levy shall not be considered 
 11.13  in computing the aid reduction under section 124.155.  If an 
 11.14  applicable school district levies under this paragraph, they may 
 11.15  not levy under paragraph (4). 
 11.16     (6) In addition to the levy authorized under paragraph (5), 
 11.17  special school district No. 1, Minneapolis, may also levy 
 11.18  payable in 1997 or later an amount equal to the contributions 
 11.19  under section 423A.02, subdivision 3, and may also levy in 
 11.20  payable 1994 or later an amount equal to the state aid 
 11.21  contribution under section 354A.12, subdivision 3b.  Independent 
 11.22  school district No. 625, St. Paul, may levy payable in 1997 or 
 11.23  later an amount equal to the supplemental contributions under 
 11.24  section 423A.02, subdivision 3.  Notwithstanding section 
 11.25  121.904, the entire amount of this levy these levies may be 
 11.26  recognized as revenue for the fiscal year in which the levy is 
 11.27  certified.  This levy These levies shall not be considered in 
 11.28  computing the aid reduction under section 124.155. 
 11.29     Sec. 4.  [354A.105] [MINNEAPOLIS TEACHERS RETIREMENT FUND 
 11.30  ASSOCIATION; PURCHASE OF ALLOWABLE SERVICE CREDIT FOR TEACHING 
 11.31  SERVICE OUTSIDE MINNESOTA.] 
 11.32     (a) Notwithstanding any law, article of incorporation, or 
 11.33  bylaw provision of the Minneapolis teachers retirement fund 
 11.34  association to the contrary, an active member who has engaged in 
 11.35  other elementary or secondary public school teaching employment 
 11.36  either outside the state of Minnesota, but rendered in the 
 12.1   United States, or for the federal government before first 
 12.2   becoming a member of the association and who has met the 
 12.3   qualifications of paragraph (b) may elect to purchase and 
 12.4   receive allowable service credit in the applicable program of 
 12.5   the association for qualified prior service in other elementary 
 12.6   or secondary public school teaching employment that satisfies 
 12.7   the requirements of paragraph (c) by making the required payment 
 12.8   under paragraph (d). 
 12.9      (b) A member may elect to purchase allowable service credit 
 12.10  for other elementary or secondary public school teaching 
 12.11  employment under this subdivision if: 
 12.12     (1) the member has at least three years of allowable 
 12.13  service credit in the applicable program of the association; and 
 12.14     (2) the member did not and could not receive accrued 
 12.15  benefits by leaving the person's accumulated member 
 12.16  contributions with any other retirement system under the 
 12.17  applicable law in effect at the termination of the other public 
 12.18  employment. 
 12.19     (c) Service in other elementary or secondary public school 
 12.20  teaching employment rendered in the United States qualifies for 
 12.21  purchase under this subdivision if the service to be credited: 
 12.22     (1) does not exceed the lesser of ten years or the member's 
 12.23  total years of allowable teaching service in the Minneapolis 
 12.24  public schools at the time of the purchase; 
 12.25     (2) is equivalent to full-time allowable service as 
 12.26  determined in accordance with the statutes and rules applicable 
 12.27  to the association at the time of the purchase; 
 12.28     (3) is purchased in full year increments; 
 12.29     (4) is not for a period of service that has been used by 
 12.30  the member to qualify for an annuity from any other public 
 12.31  school retirement fund or system, as certified by the chief 
 12.32  administrative officer of the applicable retirement system; and 
 12.33     (5) is not available to be used for the purpose of 
 12.34  qualifying the member for a disability benefit from the 
 12.35  association. 
 12.36     (d) For a person eligible to purchase credit for qualifying 
 13.1   service under this subdivision, there must be paid to the 
 13.2   association an amount equal to the present value, on the date of 
 13.3   payment, of the amount of the additional retirement annuity that 
 13.4   would be obtained by virtue of the purchase of the additional 
 13.5   service credit, using the applicable preretirement interest rate 
 13.6   specified in section 356.215, subdivision 4d, and the mortality 
 13.7   table adopted for the retirement fund association and assuming 
 13.8   continuous future service in the retirement fund association 
 13.9   until the age at which the minimum requirements are met for 
 13.10  normal retirement with an annuity unreduced for retirement 
 13.11  before the normal retirement age, including the provisions of 
 13.12  section 356.30, and also assuming a future salary history that 
 13.13  includes increases at the applicable rate assumed under section 
 13.14  356.215, subdivision 4d. 
 13.15     (e) Payments under this section must be made only by the 
 13.16  member.  The employer unit may not make any payment to or on 
 13.17  behalf of any member for the purpose of purchasing service 
 13.18  credit under this section. 
 13.19     (f) This section is repealed effective July 1, 2005.  On or 
 13.20  before January 1, 2006, special school district No. 1 and the 
 13.21  Minneapolis teachers retirement fund association shall jointly 
 13.22  report to the legislature and the governor on the effects of the 
 13.23  provisions under this section on the district, fund, and 
 13.24  members.  The report shall include information on use of the 
 13.25  service credit purchase provisions, the usefulness of this 
 13.26  section in promoting the recruitment and retention objectives of 
 13.27  the district, and the portability of pension benefits for 
 13.28  teachers and school administrative personnel. 
 13.29     Sec. 5.  Minnesota Statutes 1994, section 354A.12, 
 13.30  subdivision 2, is amended to read: 
 13.31     Subd. 2.  [RETIREMENT CONTRIBUTION LEVY DISALLOWED.] Except 
 13.32  as provided in subdivision 3b, paragraph (d) and in section 
 13.33  423A.02, subdivision 3, with respect to the city of Minneapolis 
 13.34  and special school district No. 1 and in section 423A.02, 
 13.35  subdivision 3, with respect to independent school district No. 
 13.36  625, notwithstanding any law to the contrary, levies for 
 14.1   teachers retirement fund associations in cities of the first 
 14.2   class, including levies for any employer social security taxes 
 14.3   for teachers covered by the Duluth teachers retirement fund 
 14.4   association or the Minneapolis teachers retirement fund 
 14.5   association or the St. Paul teachers retirement fund 
 14.6   association, are disallowed. 
 14.7      Sec. 6.  Minnesota Statutes 1994, section 354A.12, 
 14.8   subdivision 3c, is amended to read: 
 14.9      Subd. 3c.  [TERMINATION OF SUPPLEMENTAL CONTRIBUTIONS AND 
 14.10  DIRECT STATE MATCHING AND STATE AID.] (a) The supplemental 
 14.11  contributions payable to the Minneapolis teachers retirement 
 14.12  fund association by special school district No. 1 and the city 
 14.13  of Minneapolis under section 423A.02, subdivision 3, or to the 
 14.14  St. Paul teachers retirement fund association by independent 
 14.15  school district No. 625 under section 423A.02, subdivision 3, 
 14.16  the direct state aid under subdivision 3a to the St. Paul 
 14.17  teachers retirement association, and the direct matching and 
 14.18  state aid under subdivision 3b to the Minneapolis teachers 
 14.19  retirement fund association terminates for the respective fund 
 14.20  at the end of the fiscal year in which the accrued liability 
 14.21  funding ratio for that fund, as determined in the most recent 
 14.22  actuarial report for that fund by the actuary retained by the 
 14.23  legislative commission on pensions and retirement, equals or 
 14.24  exceeds the accrued liability funding ratio for the teachers 
 14.25  retirement association, as determined in the most recent 
 14.26  actuarial report for the teachers retirement association by the 
 14.27  actuary retained by the legislative commission on pensions and 
 14.28  retirement. 
 14.29     (b) If the direct matching, supplemental, or state aid is 
 14.30  terminated for the St. Paul teachers retirement fund association 
 14.31  or the Minneapolis teachers retirement fund association under 
 14.32  paragraph (a), it may not again be received by that fund. 
 14.33     (c) If either the Minneapolis teachers retirement fund 
 14.34  association or the St. Paul teachers retirement fund association 
 14.35  remain funded at less than the funding ratio applicable to the 
 14.36  teachers retirement association when the provisions of paragraph 
 15.1   (b) become effective, then any state aid not distributed to that 
 15.2   association must be immediately transferred to the other 
 15.3   association. 
 15.4      Sec. 7.  Minnesota Statutes 1994, section 356A.06, 
 15.5   subdivision 7, is amended to read: 
 15.6      Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
 15.7   SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
 15.8   authorized by law or bylaws, a covered pension plan not 
 15.9   described by subdivision 6, paragraph (a), may invest its assets 
 15.10  only in accordance with this subdivision. 
 15.11     (b)  [SECURITIES GENERALLY.] The covered pension plan has 
 15.12  the authority to purchase, sell, lend, or exchange the 
 15.13  securities specified in paragraphs (c) to (g), including puts 
 15.14  and call options and future contracts traded on a contract 
 15.15  market regulated by a governmental agency or by a financial 
 15.16  institution regulated by a governmental agency.  These 
 15.17  securities may be owned as units in commingled trusts that own 
 15.18  the securities described in paragraphs (c) to (g).  
 15.19     (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
 15.20  invest funds in governmental bonds, notes, bills, mortgages, and 
 15.21  other evidences of indebtedness provided the issue is backed by 
 15.22  the full faith and credit of the issuer or the issue is rated 
 15.23  among the top four quality rating categories by a nationally 
 15.24  recognized rating agency.  The obligations in which funds may be 
 15.25  invested under this paragraph include guaranteed or insured 
 15.26  issues of (1) the United States, its agencies, its 
 15.27  instrumentalities, or organizations created and regulated by an 
 15.28  act of Congress; (2) Canada and its provinces, provided the 
 15.29  principal and interest is payable in United States dollars; (3) 
 15.30  the states and their municipalities, political subdivisions, 
 15.31  agencies, or instrumentalities; (4) the International Bank for 
 15.32  Reconstruction and Development, the Inter-American Development 
 15.33  Bank, the Asian Development Bank, the African Development Bank, 
 15.34  or any other United States government sponsored organization of 
 15.35  which the United States is a member, provided the principal and 
 15.36  interest is payable in United States dollars. 
 16.1      (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
 16.2   invest funds in bonds, notes, debentures, transportation 
 16.3   equipment obligations, or any other longer term evidences of 
 16.4   indebtedness issued or guaranteed by a corporation organized 
 16.5   under the laws of the United States or any state thereof, or the 
 16.6   Dominion of Canada or any province thereof if they conform to 
 16.7   the following provisions: 
 16.8      (1) the principal and interest of obligations of 
 16.9   corporations incorporated or organized under the laws of the 
 16.10  Dominion of Canada or any province thereof must be payable in 
 16.11  United States dollars; and 
 16.12     (2) obligations must be rated among the top four quality 
 16.13  categories by a nationally recognized rating agency. 
 16.14     (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
 16.15  invest funds in bankers acceptances, certificates of deposit, 
 16.16  deposit notes, commercial paper, mortgage participation 
 16.17  certificates and pools, asset backed securities, repurchase 
 16.18  agreements and reverse repurchase agreements, guaranteed 
 16.19  investment contracts, savings accounts, and guaranty fund 
 16.20  certificates, surplus notes, or debentures of domestic mutual 
 16.21  insurance companies if they conform to the following provisions: 
 16.22     (i) bankers acceptances and deposit notes of United States 
 16.23  banks are limited to those issued by banks rated in the highest 
 16.24  four quality categories by a nationally recognized rating 
 16.25  agency; 
 16.26     (ii) certificates of deposit are limited to those issued by 
 16.27  (A) United States banks and savings institutions that are rated 
 16.28  in the highest four quality categories by a nationally 
 16.29  recognized rating agency or whose certificates of deposit are 
 16.30  fully insured by federal agencies; or (B) credit unions in 
 16.31  amounts up to the limit of insurance coverage provided by the 
 16.32  National Credit Union Administration; 
 16.33     (iii) commercial paper is limited to those issued by United 
 16.34  States corporations or their Canadian subsidiaries and rated in 
 16.35  the highest two quality categories by a nationally recognized 
 16.36  rating agency; 
 17.1      (iv) mortgage participation or pass through certificates 
 17.2   evidencing interests in pools of first mortgages or trust deeds 
 17.3   on improved real estate located in the United States where the 
 17.4   loan to value ratio for each loan as calculated in accordance 
 17.5   with section 61A.28, subdivision 3, does not exceed 80 percent 
 17.6   for fully amortizable residential properties and in all other 
 17.7   respects meets the requirements of section 61A.28, subdivision 
 17.8   3; 
 17.9      (v) collateral for repurchase agreements and reverse 
 17.10  repurchase agreements is limited to letters of credit and 
 17.11  securities authorized in this section; 
 17.12     (vi) guaranteed investment contracts are limited to those 
 17.13  issued by insurance companies or banks rated in the top four 
 17.14  quality categories by a nationally recognized rating agency or 
 17.15  to alternative guaranteed investment contracts where the 
 17.16  underlying assets comply with the requirements of this 
 17.17  subdivision; and 
 17.18     (vii) savings accounts are limited to those fully insured 
 17.19  by federal agencies; and 
 17.20     (viii) asset backed securities must be rated in the top 
 17.21  four quality categories by a nationally recognized rating agency.
 17.22     (2) Sections 16A.58 and 16B.06 do not apply to certificates 
 17.23  of deposit and collateralization agreements executed by the 
 17.24  covered pension plan under clause (1), item (ii). 
 17.25     (3) In addition to investments authorized by clause (1), 
 17.26  item (iv), the covered pension plan may purchase from the 
 17.27  Minnesota housing finance agency all or any part of a pool of 
 17.28  residential mortgages, not in default, that has previously been 
 17.29  financed by the issuance of bonds or notes of the agency.  The 
 17.30  covered pension plan may also enter into a commitment with the 
 17.31  agency, at the time of any issue of bonds or notes, to purchase 
 17.32  at a specified future date, not exceeding 12 years from the date 
 17.33  of the issue, the amount of mortgage loans then outstanding and 
 17.34  not in default that have been made or purchased from the 
 17.35  proceeds of the bonds or notes.  The covered pension plan may 
 17.36  charge reasonable fees for any such commitment and may agree to 
 18.1   purchase the mortgage loans at a price sufficient to produce a 
 18.2   yield to the covered pension plan comparable, in its judgment, 
 18.3   to the yield available on similar mortgage loans at the date of 
 18.4   the bonds or notes.  The covered pension plan may also enter 
 18.5   into agreements with the agency for the investment of any 
 18.6   portion of the funds of the agency.  The agreement must cover 
 18.7   the period of the investment, withdrawal privileges, and any 
 18.8   guaranteed rate of return. 
 18.9      (f)  [CORPORATE STOCKS.] The covered pension plan may 
 18.10  invest funds in stocks or convertible issues of any corporation 
 18.11  organized under the laws of the United States or the states 
 18.12  thereof, the Dominion of Canada or its provinces, or any 
 18.13  corporation listed on the New York Stock Exchange or the 
 18.14  American Stock Exchange, if they conform to the following 
 18.15  provisions: 
 18.16     (1) The aggregate value of corporate stock investments, as 
 18.17  adjusted for realized profits and losses, must not exceed 85 
 18.18  percent of the market or book value, whichever is less, of a 
 18.19  fund, less the aggregate value of investments according to 
 18.20  subdivision 6; 
 18.21     (2) Investments must not exceed five percent of the total 
 18.22  outstanding shares of any one corporation. 
 18.23     (g)  [OTHER INVESTMENTS.] (1) In addition to the 
 18.24  investments authorized in paragraphs (b) to (f), and subject to 
 18.25  the provisions in clause (2), the covered pension plan may 
 18.26  invest funds in:  
 18.27     (i) venture capital investment businesses through 
 18.28  participation in limited partnerships and corporations; 
 18.29     (ii) real estate ownership interests or loans secured by 
 18.30  mortgages or deeds of trust through investment in limited 
 18.31  partnerships, bank sponsored collective funds, trusts, and 
 18.32  insurance company commingled accounts, including separate 
 18.33  accounts; 
 18.34     (iii) regional and mutual funds through bank sponsored 
 18.35  collective funds and open-end investment companies registered 
 18.36  under the Federal Investment Company Act of 1940; 
 19.1      (iv) resource investments through limited partnerships, 
 19.2   private placements, and corporations; and 
 19.3      (v) international securities. 
 19.4      (2) The investments authorized in clause (1) must conform 
 19.5   to the following provisions:  
 19.6      (i) the aggregate value of all investments made according 
 19.7   to clause (1) may not exceed 35 percent of the market value of 
 19.8   the fund for which the covered pension plan is investing; 
 19.9      (ii) there must be at least four unrelated owners of the 
 19.10  investment other than the state board for investments made under 
 19.11  clause (1), item (i), (ii), (iii), or (iv); 
 19.12     (iii) covered pension plan participation in an investment 
 19.13  vehicle is limited to 20 percent thereof for investments made 
 19.14  under clause (1), item (i), (ii), (iii), or (iv); and 
 19.15     (iv) covered pension plan participation in a limited 
 19.16  partnership does not include a general partnership interest or 
 19.17  other interest involving general liability.  The covered pension 
 19.18  plan may not engage in any activity as a limited partner which 
 19.19  creates general liability. 
 19.20     Sec. 8.  Minnesota Statutes 1994, section 423A.02, 
 19.21  subdivision 1, is amended to read: 
 19.22     Subdivision 1.  [AMORTIZATION STATE AID.] (a) A 
 19.23  municipality in which is located a local police or salaried 
 19.24  firefighters' relief association to which the provisions of 
 19.25  section 69.77, apply, that had an unfunded actuarial accrued 
 19.26  liability in the most recent relief association actuarial 
 19.27  valuation, is entitled, upon application as required by the 
 19.28  commissioner of revenue, to receive local police and salaried 
 19.29  firefighters' relief association amortization state aid if the 
 19.30  municipality and the appropriate relief association both comply 
 19.31  with the applicable provisions of sections 69.031, subdivision 
 19.32  5, 69.051, subdivisions 1 and 3, and 69.77.  If a municipality 
 19.33  loses entitlement for amortization state aid in any year because 
 19.34  its local relief association no longer has an unfunded actuarial 
 19.35  accrued liability, the municipality is not entitled to 
 19.36  amortization state aid in any subsequent year.  
 20.1      (b) The total amount of amortization state aid to all 
 20.2   entitled municipalities must not exceed $5,055,000. 
 20.3      (c) Subject to the adjustment for the city of Minneapolis 
 20.4   provided in this paragraph, the amount of amortization state aid 
 20.5   to which a municipality is entitled annually is an amount equal 
 20.6   to the level annual dollar amount required to amortize, by 
 20.7   December 31, 2010, the unfunded actuarial accrued liability of 
 20.8   the special fund of the appropriate relief association as 
 20.9   reported in the December 31, 1978, actuarial valuation of the 
 20.10  relief association prepared under sections 356.215 and 356.216, 
 20.11  reduced by the dollar amount required to pay the interest on the 
 20.12  unfunded actuarial accrued liability of the special fund of the 
 20.13  relief association for calendar year 1981 set at the rate 
 20.14  specified in Minnesota Statutes 1978, section 356.215, 
 20.15  subdivision 4, clause (4).  For the city of Minneapolis, the 
 20.16  amortization state aid amount thus determined must be reduced by 
 20.17  $747,232 on account of the Minneapolis police relief association 
 20.18  and by $772,768 on account of the Minneapolis fire department 
 20.19  relief association.  If the amortization state aid amounts 
 20.20  determined under this paragraph exceed the amount appropriated 
 20.21  for this purpose, the amortization state aid for actual 
 20.22  allocation must be reduced pro rata. 
 20.23     (d) Payment of amortization state aid to municipalities 
 20.24  must be made directly to the municipalities involved in four 
 20.25  three equal installments on March 15, July 15, September 15, and 
 20.26  November 15 annually.  Upon receipt of amortization state aid, 
 20.27  the municipal treasurer shall transmit the aid amount to the 
 20.28  treasurer of the local relief association for immediate deposit 
 20.29  in the special fund of the relief association. 
 20.30     (e) The commissioner of revenue shall prescribe and 
 20.31  periodically revise the form for and content of the application 
 20.32  for the amortization state aid. 
 20.33     Sec. 9.  Minnesota Statutes 1994, section 423A.02, is 
 20.34  amended by adding a subdivision to read: 
 20.35     Subd. 3.  [REALLOCATION OF AMORTIZATION OR SUPPLEMENTARY 
 20.36  AMORTIZATION STATE AID.] (a) Seventy percent of the difference 
 21.1   between $5,720,000 and the current year amortization aid or 
 21.2   supplemental amortization aid distributed under subdivisions 1 
 21.3   and 1a that is not distributed for any reason to a municipality 
 21.4   for use by a local police or salaried fire relief association 
 21.5   must be distributed by the commissioner of revenue according to 
 21.6   this paragraph.  The commissioner shall distribute 70 percent of 
 21.7   the amounts derived under this paragraph to the Minneapolis 
 21.8   teachers retirement fund association and 30 percent to the St. 
 21.9   Paul teachers retirement fund association to fund the unfunded 
 21.10  actuarial accrued liabilities of the respective funds.  These 
 21.11  payments shall be made on or before June 30 each fiscal year.  
 21.12  The amount required under this paragraph is appropriated 
 21.13  annually from the general fund to the commissioner of revenue.  
 21.14  If either the Minneapolis teachers retirement fund association 
 21.15  or the St. Paul teachers retirement fund association becomes 
 21.16  funded at the funding ratio applicable to the teachers 
 21.17  retirement association based on the actuarial reports prepared 
 21.18  by the actuary for the legislative commission on pensions and 
 21.19  retirement, then the commissioner shall distribute that fund's 
 21.20  share under this paragraph to the other fund.  The appropriation 
 21.21  under this paragraph terminates when both funds become fully 
 21.22  funded.  Amounts remaining in the undistributed balance account 
 21.23  at the end of the biennium cancel to the general fund. 
 21.24     (b) In order to receive amortization and supplementary 
 21.25  amortization aid under paragraph (a), independent school 
 21.26  district No. 625, St. Paul, must make contributions to the St. 
 21.27  Paul teachers retirement fund association in accordance with the 
 21.28  following schedule: 
 21.29             Fiscal Year                Amount 
 21.30               1996                       $0 
 21.31               1997                       $0 
 21.32               1998                    $200,000 
 21.33               1999                    $400,000 
 21.34               2000                    $600,000 
 21.35               2001 and thereafter     $800,000 
 21.36     (c) In order to receive amortization and supplementary 
 22.1   amortization aid under paragraph (a), special school district No.
 22.2   1, Minneapolis, and the city of Minneapolis must each make 
 22.3   contributions to the Minneapolis teachers retirement fund 
 22.4   association in accordance with the following schedule: 
 22.5        Fiscal Year       City           School district 
 22.6                         amount              amount
 22.7            1996           $0                  $0
 22.8            1997           $0                  $0 
 22.9            1998        $250,000            $250,000 
 22.10           1999        $400,000            $400,000 
 22.11           2000        $550,000            $550,000 
 22.12           2001        $700,000            $700,000 
 22.13           2002        $850,000            $850,000 
 22.14           2003 and  $1,000,000          $1,000,000 
 22.15           thereafter                                
 22.16     (d) Money contributed under paragraph (a) and either 
 22.17  paragraph (b) or (c), as applicable, must be credited to a 
 22.18  separate account in the applicable teachers retirement fund and 
 22.19  may not be used in determining any benefit increases.  The 
 22.20  separate account terminates for a fund when the aid payments to 
 22.21  the fund under paragraph (a) cease. 
 22.22     (e) Thirty percent of the difference between $5,720,000 and 
 22.23  the current year amortization aid or supplemental amortization 
 22.24  aid under subdivisions 1 and 1a that is not distributed for any 
 22.25  reason to a municipality for use by a local police or salaried 
 22.26  firefighter relief association must be distributed under section 
 22.27  69.021, subdivision 7, paragraph (d), as additional funding to 
 22.28  support a minimum fire state aid amount for volunteer 
 22.29  firefighter relief associations.  The amount required under this 
 22.30  paragraph is appropriated annually to the commissioner of 
 22.31  revenue. 
 22.32     Sec. 10.  Minnesota Statutes 1994, section 423B.01, 
 22.33  subdivision 9, is amended to read: 
 22.34     Subd. 9.  [EXCESS INVESTMENT INCOME.] "Excess investment 
 22.35  income" means the amount, if any, by which the average time 
 22.36  weighted total rate of return earned by the fund in the most 
 23.1   recent prior five fiscal year years has exceeded the actual 
 23.2   average percentage increase in the current monthly salary of a 
 23.3   first grade patrol officer in the most recent prior five fiscal 
 23.4   year years plus two percent, and must be expressed as a dollar 
 23.5   amount and may not exceed one percent of the total assets of the 
 23.6   fund and does not exist unless the yearly average percentage 
 23.7   increase of the time weighted total rate of return of the fund 
 23.8   for the previous five years exceeds by two percent the yearly 
 23.9   average percentage increase in monthly salary of a first grade 
 23.10  patrol officer during the previous five calendar years. 
 23.11     Sec. 11.  Minnesota Statutes 1994, section 423B.15, 
 23.12  subdivision 3, is amended to read: 
 23.13     Subd. 3.  [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The 
 23.14  amount determined under subdivision 2 must be applied in 
 23.15  accordance with this subdivision.  The relief association shall 
 23.16  apply the first one-half of excess investment income to the 
 23.17  payment of an annual postretirement payment as specified in this 
 23.18  subdivision.  The second one-half of excess investment income 
 23.19  must be applied to reduce the state amortization state aid or 
 23.20  supplementary amortization state aid payments otherwise due to 
 23.21  the relief association under section 423A.02 for the current 
 23.22  calendar year.  The relief association shall pay an annual 
 23.23  postretirement payment to all eligible members in an amount not 
 23.24  to exceed one-half of one percent of the assets of the fund.  
 23.25  Payment of the annual postretirement payment must be in a lump 
 23.26  sum amount on June 1 following the determination date in any 
 23.27  year.  Payment of the annual postretirement payment may be made 
 23.28  only if the average time weighted total rate of return for the 
 23.29  most recent prior five years exceeds by two percent the actual 
 23.30  average percentage increase in the current monthly salary of a 
 23.31  top grade patrol officer in the most recent prior five fiscal 
 23.32  year and the yearly average percentage increase of the time 
 23.33  weighted total rate of return of the fund for the previous five 
 23.34  years exceeds by two percent the yearly average percentage 
 23.35  increase in monthly salary of a top grade patrol officer of the 
 23.36  previous five years.  The total amount of all payments to 
 24.1   members may not exceed the amount determined under this 
 24.2   subdivision.  Payment to each eligible member must be calculated 
 24.3   by dividing the total number of pension units to which eligible 
 24.4   members are entitled into the excess investment income available 
 24.5   for distribution to members, and then multiplying that result by 
 24.6   the number of units to which each eligible member is entitled to 
 24.7   determine each eligible member's annual postretirement payment.  
 24.8   Payment to each eligible member may not exceed an amount equal 
 24.9   to the total monthly benefit that the eligible member was 
 24.10  entitled to in the prior year under the terms of the benefit 
 24.11  plan of the relief association or each eligible member's 
 24.12  proportionate share of the excess investment income, whichever 
 24.13  is less. 
 24.14     A person who received a pension or benefit for the entire 
 24.15  12 months before the determination date is eligible for a full 
 24.16  annual postretirement payment.  A person who received a pension 
 24.17  or benefit for less than 12 months before the determination date 
 24.18  is eligible for a prorated annual postretirement payment. 
 24.19     Sec. 12.  Laws 1989, chapter 319, article 19, section 7, 
 24.20  subdivision 1, as amended by Laws 1992, chapter 471, article 2, 
 24.21  section 5, is amended to read: 
 24.22     Subdivision 1.  [MINNEAPOLIS FIRE DEPARTMENT RELIEF 
 24.23  ASSOCIATION; DEFINITIONS.] For the purposes of this section, 
 24.24  each of the terms in this subdivision have the meanings given 
 24.25  them in paragraphs (a) to (h). 
 24.26     (a) "Annual postretirement payment" means the payment of a 
 24.27  lump sum postretirement benefit to an eligible member on June 1 
 24.28  following the determination date in any year. 
 24.29     (b) "City" means the city of Minneapolis. 
 24.30     (c) "Determination date" means December 31 of each year. 
 24.31     (d) "Eligible member" means a person, including a service 
 24.32  pensioner, a disability pensioner, a survivor, or dependent of a 
 24.33  deceased active member, service pensioner, or disability 
 24.34  pensioner, who received a pension or benefit from the relief 
 24.35  association during the 12 months before the determination date.  
 24.36  A person who received a pension or benefit for the entire 12 
 25.1   months before the determination date is eligible for a full 
 25.2   annual postretirement payment.  A person who received a pension 
 25.3   or benefit for less than 12 months before the determination date 
 25.4   is eligible for a prorated annual postretirement payment. 
 25.5      (e) "Excess investment income" means the amount by which 
 25.6   the average time weighted total rate of return earned by the 
 25.7   fund in the most recent prior five fiscal year years has 
 25.8   exceeded the actual average percentage increase in the current 
 25.9   monthly salary of a top grade firefighter in the most 
 25.10  recent prior five fiscal year years plus two percent.  The 
 25.11  excess investment income must be expressed as a dollar amount 
 25.12  and may not exceed one percent of the total assets of the 
 25.13  fund and does not exist unless the yearly average percentage 
 25.14  increase of the time weighted total rate of return of the fund 
 25.15  for the previous five years exceeds by two percent the yearly 
 25.16  average percentage increase in monthly salary of a top grade 
 25.17  firefighter during the previous five calendar years. 
 25.18     (f) "Fund" means the Minneapolis fire department relief 
 25.19  association. 
 25.20     (g) "Relief association" means the Minneapolis fire 
 25.21  department relief association.  
 25.22     (h) "Time weighted total rate of return" means the 
 25.23  percentage amount determined by using the formula or formulas 
 25.24  established by the state board of investment under Minnesota 
 25.25  Statutes, section 11A.04, clause (11), and in effect on January 
 25.26  1, 1987. 
 25.27     Sec. 13.  Laws 1989, chapter 319, article 19, section 7, 
 25.28  subdivision 4, as amended by Laws 1990, chapter 570, article 12, 
 25.29  section 63, and Laws 1992, chapter 471, article 2, section 6, is 
 25.30  amended to read: 
 25.31     Subd. 4.  [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The 
 25.32  amount determined under subdivision 3 must be applied in 
 25.33  accordance with this subdivision.  The relief association shall 
 25.34  apply the first one-half of one percent of assets which 
 25.35  constitute excess investment income to the payment of an annual 
 25.36  postretirement payment as specified in this subdivision.  The 
 26.1   second one-half of one percent of assets which constitute excess 
 26.2   investment income shall be applied to reduce the state 
 26.3   amortization state aid or supplementary amortization state aid 
 26.4   payments otherwise due to the relief association under section 
 26.5   423A.02 for the current calendar year.  The relief association 
 26.6   shall pay an annual postretirement payment to all eligible 
 26.7   members in an amount not to exceed one-half of one percent of 
 26.8   the assets of the fund.  Payment of the annual postretirement 
 26.9   payment must be in a lump sum amount on June 1 following the 
 26.10  determination date in any year.  Payment of the annual 
 26.11  postretirement payment may be made only if the average time 
 26.12  weighted total rate of return in the most recent prior five 
 26.13  fiscal years exceeds by two percent the actual average 
 26.14  percentage increase in the current monthly salary of a top grade 
 26.15  firefighter in the most recent prior five fiscal year and the 
 26.16  yearly average percentage increase of the time weighted total 
 26.17  rate of return of the fund for the previous five years exceeds 
 26.18  by two percent the yearly average percentage increase in monthly 
 26.19  salary of a top grade firefighter of the previous five years.  
 26.20  The total amount of all payments to members may not exceed the 
 26.21  amount determined under subdivision 3.  Payment to each eligible 
 26.22  member must be calculated by dividing the total number of 
 26.23  pension units to which eligible members are entitled into the 
 26.24  excess investment income available for distribution to members, 
 26.25  and then multiplying that result by the number of units to which 
 26.26  each eligible member is entitled to determine each eligible 
 26.27  member's annual postretirement payment.  Payment to each 
 26.28  eligible member may not exceed an amount equal to the total 
 26.29  monthly benefit that the eligible member was entitled to in the 
 26.30  prior year under the terms of the benefit plan of the relief 
 26.31  association or each eligible member's proportionate share of the 
 26.32  excess investment income, whichever is less. 
 26.33     Sec. 14.  [EFFECTIVE DATE.] 
 26.34     Sections 1 to 13 are effective the day following final 
 26.35  enactment and apply to aid payments beginning in calendar year 
 26.36  1996. 
 27.1                              ARTICLE 5
 27.2              ADMINISTRATIVE PROVISIONS RELATING TO THE
 27.3                AMBULANCE SERVICE PERSONNEL LONGEVITY
 27.4                            AWARD PROGRAM
 27.5      Section 1.  Minnesota Statutes 1994, section 144C.06, is 
 27.6   amended to read: 
 27.7      144C.06 [TRUST ACCOUNT INVESTMENT.] 
 27.8      The trust account must be invested by the state board of 
 27.9   investment in nonretirement funds established under the 
 27.10  provisions of section 11A.14.  The trust account must be 
 27.11  invested in investment accounts so that the asset allocation is 
 27.12  similar to the asset allocation of the income share account of 
 27.13  the Minnesota supplemental investment fund, as provided in 
 27.14  governed by section 11A.20 11A.17. 
 27.15     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 27.16  144C.07, subdivision 2, is amended to read: 
 27.17     Subd. 2.  [POTENTIAL ALLOCATIONS.] (a) On September 
 27.18  November 1, annually, the board or the board's designee under 
 27.19  section 144C.01, subdivision 2, shall determine the amount of 
 27.20  the allocation of the prior year's accumulation to each 
 27.21  qualified ambulance service person.  The prior year's net 
 27.22  investment gain or loss under paragraph (b) must be allocated 
 27.23  and that year's general fund appropriation, plus any transfer 
 27.24  from the suspense account under section 144C.03, subdivision 2, 
 27.25  and after deduction of administrative expenses, also must be 
 27.26  allocated.  
 27.27     (b) The difference in the market value of the assets of the 
 27.28  ambulance service personnel longevity award and incentive trust 
 27.29  account as of the immediately previous June 30 and the June 30 
 27.30  occurring 12 months earlier must be reported on or before August 
 27.31  15 by the state board of investment.  The market value gain or 
 27.32  loss must be expressed as a percentage of the total potential 
 27.33  award accumulations as of the immediately previous June 30, and 
 27.34  that positive or negative percentage must be applied to increase 
 27.35  or decrease the recorded potential award accumulation of each 
 27.36  qualified ambulance service person. 
 28.1      (c) The appropriation for this purpose, after deduction of 
 28.2   administrative expenses, must be divided by the total number of 
 28.3   additional ambulance service personnel years of service 
 28.4   recognized since the last allocation or 1,000 years of service, 
 28.5   whichever is greater.  If the allocation is based on the 1,000 
 28.6   years of service, any allocation not made for a qualified 
 28.7   ambulance service person must be credited to the suspense 
 28.8   account under section 144C.03, subdivision 2.  A qualified 
 28.9   ambulance service person must be credited with a year of service 
 28.10  if the person is certified by the chief administrative officer 
 28.11  of the ambulance service as having rendered active ambulance 
 28.12  service during the 12 months ending as of the immediately 
 28.13  previous June 30.  If the person has rendered prior active 
 28.14  ambulance service, the person must be additionally credited with 
 28.15  one-fifth of a year of service for each year of active ambulance 
 28.16  service rendered before June 30, 1993, but not to exceed in any 
 28.17  year one additional year of service or to exceed in total five 
 28.18  years of prior service.  Prior active ambulance service means 
 28.19  employment by or the provision of service to a licensed 
 28.20  ambulance service before June 30, 1993, as determined by the 
 28.21  person's current ambulance service based on records provided by 
 28.22  the person that were contemporaneous to the service.  The prior 
 28.23  ambulance service must be reported on or before August 15 1 to 
 28.24  the board in an affidavit from the chief administrative officer 
 28.25  of the ambulance service. 
 28.26     Sec. 3.  Minnesota Statutes 1995 Supplement, section 
 28.27  144C.08, is amended to read: 
 28.28     144C.08 [AMBULANCE SERVICE PERSONNEL LONGEVITY AWARD.] 
 28.29     (a) A qualified ambulance service person who has terminated 
 28.30  active ambulance service, who has at least five years of 
 28.31  credited ambulance service, who is at least 50 years old, and 
 28.32  who is among the 400 persons with the greatest amount of 
 28.33  credited ambulance service applying for a longevity award during 
 28.34  that year, is entitled, upon application, to an ambulance 
 28.35  service personnel longevity award.  An applicant whose 
 28.36  application is not approved because of the limit on the number 
 29.1   of annual awards may apply in a subsequent year. 
 29.2      (b) If a qualified ambulance service person who meets the 
 29.3   age and service requirements specified in paragraph (a) dies 
 29.4   before applying for a longevity award, the estate of the 
 29.5   decedent is entitled, upon application, to the decedent's 
 29.6   ambulance service personnel longevity award, without reference 
 29.7   to the limit on the number of annual awards. 
 29.8      (c) An ambulance service personnel longevity award is the 
 29.9   total amount of the person's accumulations indicated in the 
 29.10  person's separate record under section 144C.07 as of the August 
 29.11  15 preceding the application November 1 in the calendar year in 
 29.12  which application is made.  The amount is payable only in a lump 
 29.13  sum. 
 29.14     (d) Applications for an ambulance service personnel 
 29.15  longevity award must be received by the board or the board's 
 29.16  designee under section 144C.01, subdivision 2, by August 15 
 29.17  October 1, annually.  Ambulance service personnel longevity 
 29.18  awards are payable only as of the last business day in October 
 29.19  December annually. 
 29.20     Sec. 4.  [EFFECTIVE DATE.] 
 29.21     (a) Sections 1 to 3 are effective July 1, 1996. 
 29.22     (b) Any investments of the ambulance service personnel 
 29.23  longevity award and incentive trust account made before July 1, 
 29.24  1996, may be retained in the trust account after June 30, 1996, 
 29.25  until, in its judgment, the state board of investment determines 
 29.26  that it is appropriate to liquidate those prior holdings. 
 29.27                             ARTICLE 6
 29.28             PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN
 29.29          COVERAGE OPTION FOR LOCAL GOVERNMENT PHYSICIANS
 29.30     Section 1.  Minnesota Statutes 1994, section 353D.01, 
 29.31  subdivision 2, is amended to read: 
 29.32     Subd. 2.  [ELIGIBILITY.] Except as provided in section 
 29.33  353D.11, (a) Eligibility to participate in the defined 
 29.34  contribution plan is open available to an: 
 29.35     (1) elected local government official officials of a 
 29.36  governmental subdivision who elects elect to participate in the 
 30.1   plan under section 353D.02, subdivision 1, and who, for the 
 30.2   elected service rendered to a governmental subdivision, is are 
 30.3   not a member members of the public employees retirement 
 30.4   association within the meaning of section 353.01, subdivision 
 30.5   7,; 
 30.6      (2) physicians who, if they did not elect to participate in 
 30.7   the plan under section 353D.02, subdivision 2, would meet the 
 30.8   definition of member under section 353.01, subdivision 7; and to 
 30.9      (3) basic and advanced life support emergency medical 
 30.10  service personnel employed by or providing services for any 
 30.11  public ambulance service or privately operated ambulance service 
 30.12  that receives an operating subsidy from a governmental entity 
 30.13  that elects to participate under section 353D.02, subdivision 3. 
 30.14     (b) For purposes of this chapter, an elected local 
 30.15  government official includes a person appointed to fill a 
 30.16  vacancy in an elective office.  Service as an elected local 
 30.17  government official only includes service for the governmental 
 30.18  subdivision for which the official was elected by the 
 30.19  public-at-large.  Service as an elected local government 
 30.20  official ceases and eligibility to participate terminates when 
 30.21  the person ceases to be an elected official.  An elected local 
 30.22  government official does not include an elected county sheriff.  
 30.23     Except as provided in section 353D.11, (c) Elected local 
 30.24  government officials, physicians, and first response personnel 
 30.25  and emergency medical service personnel who are currently 
 30.26  covered by a public or private pension plan because of their 
 30.27  employment or provision of services are not eligible to 
 30.28  participate in the public employees defined contribution plan.  
 30.29     (d) A former participant is a person who has ceased to be 
 30.30  an elected local government official or an emergency medical 
 30.31  service employee and who terminated eligible employment or 
 30.32  service and has not withdrawn the value of an the person's 
 30.33  individual account. 
 30.34     Sec. 2.  Minnesota Statutes 1994, section 353D.02, is 
 30.35  amended to read: 
 30.36     353D.02 [ELECTION OF COVERAGE.] 
 31.1      Subdivision 1.  [ELECTED LOCAL GOVERNMENT OFFICIALS.] 
 31.2   Eligible elected local government officials may elect to 
 31.3   participate in the defined contribution plan after being elected 
 31.4   or appointed to elective public office by filing a membership 
 31.5   application on a form prescribed by the executive director of 
 31.6   the association authorizing contributions to be deducted from 
 31.7   the elected official's salary.  Participation begins on the 
 31.8   first day of the pay period for which the contributions were 
 31.9   deducted or, if pay period coverage dates are not provided, the 
 31.10  date on which the membership application or contributions are 
 31.11  received in the office of the association, whichever is received 
 31.12  first, provided further that the membership application is 
 31.13  received by the association within 60 days of the receipt of the 
 31.14  contributions.  An election to participate in the plan is 
 31.15  revocable during incumbency.  
 31.16     Subd. 2.  [ELIGIBLE PHYSICIAN.] Eligible physicians may 
 31.17  elect to participate in the defined contribution plan within 90 
 31.18  days of commencing employment with a government subdivision 
 31.19  under section 353.01, subdivision 6, by filing a membership 
 31.20  application on a form prescribed by the executive director of 
 31.21  the association authorizing contributions to be deducted from 
 31.22  the physician's salary.  Participation begins on the first day 
 31.23  of the pay period for which the contributions were deducted.  An 
 31.24  election to participate in the defined contribution plan is 
 31.25  irrevocable. 
 31.26     Subd. 3.  [ELIGIBLE AMBULANCE SERVICE PERSONNEL.] Each 
 31.27  public ambulance service or privately operated ambulance service 
 31.28  with eligible personnel that receives an operating subsidy from 
 31.29  a governmental entity may elect to participate in the plan.  If 
 31.30  a service elects to participate, its eligible personnel may 
 31.31  elect to participate or to decline to participate.  An 
 31.32  individual's election must be made within 30 days of the 
 31.33  service's election to participate or 30 days of the date on 
 31.34  which the individual was employed by the service or began to 
 31.35  provide service for it, whichever date is later.  An election by 
 31.36  a service or an individual is revocable. 
 32.1      Sec. 3.  Minnesota Statutes 1994, section 353D.03, is 
 32.2   amended to read: 
 32.3      353D.03 [FUNDING OF PLAN.] 
 32.4      (a) Subdivision 1.  [LOCAL GOVERNMENT OFFICIAL 
 32.5   CONTRIBUTION.] An eligible elected local government official who 
 32.6   elects to participate in the public employees defined 
 32.7   contribution plan shall contribute an amount equal to five 
 32.8   percent of salary as defined in section 353.01, subdivision 10.  
 32.9   A participating elected local government official's governmental 
 32.10  subdivision shall contribute a matching amount. 
 32.11     (b) Subd. 2.  [PHYSICIAN CONTRIBUTION.] An eligible 
 32.12  physician who elects to participate in the plan shall contribute 
 32.13  an amount equal to five percent of salary as defined in section 
 32.14  353.01, subdivision 10.  The employer shall contribute a 
 32.15  matching amount. 
 32.16     Subd. 3.  [AMBULANCE SERVICE PERSONNEL CONTRIBUTION.] A 
 32.17  public ambulance service or privately operated ambulance service 
 32.18  that receives an operating subsidy from a governmental entity 
 32.19  that elects to participate in the plan shall fund benefits for 
 32.20  its qualified personnel who individually elect to participate.  
 32.21  Personnel who are paid for their services may elect to make 
 32.22  member contributions in an amount not to exceed the service's 
 32.23  contribution on their behalf.  Ambulance service contributions 
 32.24  on behalf of salaried employees must be a fixed percentage of 
 32.25  salary.  An ambulance service making contributions for volunteer 
 32.26  or largely uncompensated personnel may assign a unit value for 
 32.27  each call or each period of alert duty for the purpose of 
 32.28  calculating ambulance service contributions. 
 32.29     (c) Subd. 4.  [PAYMENTS BY FORMER ELIGIBLE ELECTED 
 32.30  OFFICIALS.] Former participants eligible elected local 
 32.31  government officials in the defined contribution plan under this 
 32.32  chapter shall not contribute to the plan except under section 
 32.33  353D.12. 
 32.34     Sec. 4.  Minnesota Statutes 1994, section 353D.04, is 
 32.35  amended to read: 
 32.36     353D.04 [CONTRIBUTIONS AND DEDUCTIONS IN ERROR.] 
 33.1      (a) Subdivision 1.  [CREDITING OF ACCOUNT.] Contributions 
 33.2   made by or on behalf of a participating elected local government 
 33.3   official or physician must be remitted to the public employees 
 33.4   retirement association and credited to the individual account 
 33.5   established for the participant.  (b) Ambulance service 
 33.6   contributions must be remitted on a regular basis to the 
 33.7   association together with any member contributions paid or 
 33.8   withheld.  Those contributions must be credited to the 
 33.9   individual account of each participating member. 
 33.10     Subd. 2.  [AUTHORITY TO ADOPT POLICIES.] The executive 
 33.11  director may adopt policies and procedures regarding deductions 
 33.12  taken totally or partially in error by the employer from the 
 33.13  salary of an elected official. 
 33.14     Sec. 5.  [CURRENT ELIGIBLE PHYSICIANS.] 
 33.15     Subdivision 1.  [EXERCISE OF OPTION.] As of the effective 
 33.16  date of this section, an eligible physician, who with respect to 
 33.17  current service is participating in the general employees 
 33.18  defined benefit plan administered by the public employees 
 33.19  retirement association, may elect to participate in the public 
 33.20  employees defined contribution plan and terminate further 
 33.21  participation in the general employees defined benefit plan.  
 33.22  The necessary election must be made within six months after the 
 33.23  effective date of this section. 
 33.24     Subd. 2.  [REFUND OR DEFERRED ANNUITY.] An eligible 
 33.25  physician, who elects to transfer coverage under subdivision 1, 
 33.26  is deemed to have terminated public service for purposes of 
 33.27  Minnesota Statutes, section 353.34.  The termination of public 
 33.28  service is deemed to occur as of the first day of the month 
 33.29  following the month in which the election is made to participate 
 33.30  in the public employees defined contribution plan and any refund 
 33.31  of accumulated employee deductions, with interest, or future 
 33.32  deferred annuity is governed by the law in effect on that day.  
 33.33  A refund paid to an eligible physician under this section must 
 33.34  include employee contributions withheld from salary and omitted 
 33.35  employee contributions paid by the employee or employer under 
 33.36  Minnesota Statutes, section 353.27, subdivision 12. 
 34.1      Sec. 6.  [DEFINED CONTRIBUTION AND DEFINED BENEFIT PLAN 
 34.2   STUDY.] 
 34.3      The legislative commission on pensions and retirement shall 
 34.4   report to the legislature by February 15, 1997, on the relative 
 34.5   advantages and disadvantages, including any federal taxation 
 34.6   considerations, of defined benefit pension plans and of defined 
 34.7   contribution pension plans. 
 34.8      Sec. 7.  [REPEALER.] 
 34.9      Minnesota Statutes 1994, section 353D.11, is repealed. 
 34.10     Sec. 8.  [EFFECTIVE DATE.] 
 34.11     Sections 1 to 7 are effective the day following final 
 34.12  enactment. 
 34.13                             ARTICLE 7
 34.14            INDIVIDUAL RETIREMENT ACCOUNT PLANS DEFINED
 34.15             CONTRIBUTION PLAN COVERAGE FOR HISTORICAL
 34.16                         SOCIETY EMPLOYEES
 34.17     Section 1.  Minnesota Statutes 1995 Supplement, section 
 34.18  354D.02, subdivision 2, is amended to read: 
 34.19     Subd. 2.  [ELIGIBILITY.] Eligible employees are: 
 34.20     (1) any supervisory or professional employee of the state 
 34.21  arts board; and 
 34.22     (2) any supervisory or professional employee of the 
 34.23  Minnesota humanities commission; or 
 34.24     (3) any employee of the Minnesota historical society. 
 34.25     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 34.26  354D.03, is amended to read: 
 34.27     354D.03 [SOCIAL SECURITY COVERAGE.] 
 34.28     Plan participants remain are members of the general state 
 34.29  retirement plan for purposes of social security coverage only 
 34.30  remain, and are covered by the applicable agreement entered into 
 34.31  under section 355.02 but are not members of the general state 
 34.32  retirement plan for any other purpose while employed in covered 
 34.33  employment. 
 34.34     Sec. 3.  Minnesota Statutes 1995 Supplement, section 
 34.35  354D.04, is amended to read: 
 34.36     354D.04 [PLAN COVERAGE.] 
 35.1      An election made under this section is irrevocable.  
 35.2   Eligible employees under section 354D.02, subdivision 2, shall 
 35.3   elect to participate in either the individual retirement account 
 35.4   plan or their respective retirement plan as follows: 
 35.5      (1) An eligible employee first employed after the effective 
 35.6   date of Laws 1994, chapter 508, in covered employment with no 
 35.7   prior allowable service as a member of the Minnesota state 
 35.8   retirement system, the public employees retirement association, 
 35.9   or the teachers retirement association may elect retirement 
 35.10  coverage under either their respective state retirement plan or 
 35.11  the individual retirement account plan within 60 days of the 
 35.12  start of covered employment.  An election made under this 
 35.13  subdivision is irrevocable. 
 35.14     (2) An eligible employee with prior allowable service as a 
 35.15  member of the Minnesota state retirement system, the public 
 35.16  employees retirement association, or the teachers retirement 
 35.17  association may elect prospective coverage by the individual 
 35.18  retirement account plan.  If individual retirement account plan 
 35.19  coverage is elected, accumulated employer and employee 
 35.20  contributions and allowable service credit shall remain with the 
 35.21  applicable retirement association or system.  Notwithstanding 
 35.22  any provision of law to the contrary, an individual who has 
 35.23  transferred coverage for the same employment to the individual 
 35.24  retirement account plan is entitled to an augmented deferred 
 35.25  retirement annuity from the prior plan based on the amount 
 35.26  representing the employer and employee contributions made on the 
 35.27  individual's behalf in the retirement association or system in 
 35.28  which the individual was formerly enrolled without regard to 
 35.29  whether or not the individual meets the service credit vesting 
 35.30  requirements of the applicable retirement association or 
 35.31  system.  An election made under this subdivision clause must be 
 35.32  made within 120 days and is irrevocable following the date the 
 35.33  eligible employee first becomes eligible to make the election.  
 35.34     Sec. 4.  Minnesota Statutes 1995 Supplement, section 
 35.35  354D.06, is amended to read: 
 35.36     354D.06 [ADMINISTRATION.] 
 36.1      (a) The Minnesota state university system or its successor 
 36.2   shall administer the individual retirement account plan for 
 36.3   eligible employees listed in section 354D.02, subdivision 2, 
 36.4   clauses (1) and (2), in accordance with sections 354B.01 to 
 36.5   354B.05. 
 36.6      (b) The Minnesota historical society or its successor shall 
 36.7   administer the individual retirement account plan for eligible 
 36.8   employees listed in section 354D.02, subdivision 2, clause (3), 
 36.9   in accordance with section 354D.08. 
 36.10     Sec. 5.  [354D.08] [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 36.11  ADMINISTRATION; MINNESOTA HISTORICAL SOCIETY.] 
 36.12     Subdivision 1.  [GENERAL GOVERNANCE.] The Minnesota 
 36.13  historical society is the plan administrator and has the 
 36.14  administrative responsibility for the individual retirement 
 36.15  account plan for those eligible employees listed in section 
 36.16  354D.02, subdivision 2, clause (3).  
 36.17     Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS.] (a) 
 36.18  The plan administrator shall arrange for the purchase of fixed 
 36.19  annuity contracts, variable annuity contracts, a combination of 
 36.20  fixed and variable annuity contracts, or custodial accounts from 
 36.21  financial institutions which have been selected by the state 
 36.22  board of investment and approved by the plan administrator under 
 36.23  subdivision 3, as the investment vehicle for the retirement 
 36.24  coverage of plan participants and to provide retirement benefits 
 36.25  to plan participants.  Custodial accounts from financial 
 36.26  institutions shall include open-end investment companies 
 36.27  registered under the federal Investment Company Act of 1940, as 
 36.28  amended. 
 36.29     (b) The annuity contracts or accounts must be purchased 
 36.30  with contributions under section 354D.05, or with money or 
 36.31  assets otherwise provided by law by authority of the Minnesota 
 36.32  historical society and deemed acceptable by the applicable 
 36.33  financial institution. 
 36.34     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] The plan 
 36.35  administrator may approve up to two financial institutions 
 36.36  selected by the state board of investment under section 354B.25, 
 37.1   subdivision 3, to provide annuity products and custodial 
 37.2   accounts for those employees listed in section 354D.02, 
 37.3   subdivision 2, clause (3).  Only those financial institutions 
 37.4   selected by the state board of investment and approved by the 
 37.5   plan administrator may provide annuity products and custodial 
 37.6   accounts for those employees listed in section 354D.02, 
 37.7   subdivision 2, clause (3). 
 37.8      The state board of investment must periodically review at 
 37.9   least every three years each financial institution selected.  
 37.10  The state board of investment may retain consulting services to 
 37.11  assist in the periodic review, may establish a budget for its 
 37.12  costs in the periodic review process, and may charge a 
 37.13  proportional share of those costs to each financial institution 
 37.14  selected.  All contracts must be approved by the state board of 
 37.15  investment before execution by the Minnesota historical 
 37.16  society.  The state board of investment shall also establish 
 37.17  policies and procedures under section 11A.04, clause (2), to 
 37.18  carry out this subdivision. 
 37.19     Subd. 4.  [BENEFIT OWNERSHIP.] The retirement benefits 
 37.20  provided by the annuity contracts and custodial accounts of the 
 37.21  individual retirement account plan are held for the benefit of 
 37.22  plan participants and must be paid according to this chapter and 
 37.23  the plan document. 
 37.24     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 37.25  ADMINISTRATIVE EXPENSES; MINNESOTA HISTORICAL SOCIETY.] (a) The 
 37.26  reasonable and necessary administrative expenses of the 
 37.27  individual retirement account plan for those employees 
 37.28  enumerated in section 354D.02, subdivision 2, clause (3), must 
 37.29  be paid by plan participants.  The plan administrator may charge 
 37.30  to plan participants purchasing annuity contracts and custodial 
 37.31  accounts pursuant to subdivision 2, paragraph (a), an 
 37.32  administrative expenses assessment of a designated amount, not 
 37.33  to exceed two percent of member and employer contributions, as 
 37.34  those contributions are made.  
 37.35     (b) Any administrative expense charge that is not actually 
 37.36  needed for the administrative expenses of the individual 
 38.1   retirement account plan must be refunded to member accounts. 
 38.2      Sec. 6.  [EFFECTIVE DATE.] 
 38.3      Sections 1 to 5 are effective the day following final 
 38.4   enactment. 
 38.5                              ARTICLE 8
 38.6            VOLUNTEER FIREFIGHTER FIRE PREVENTION SERVICE
 38.7      Section 1.  Minnesota Statutes 1994, section 424A.001, is 
 38.8   amended by adding a subdivision to read: 
 38.9      Subd. 8.  [FIREFIGHTING SERVICE.] "Firefighting service," 
 38.10  if the applicable municipality approves for a fire department 
 38.11  that is a municipal department, or if the contracting 
 38.12  municipality or municipalities approve for a fire department 
 38.13  that is an independent nonprofit firefighting corporation, 
 38.14  includes service rendered by fire prevention personnel. 
 38.15     Sec. 2.  Minnesota Statutes 1994, section 424A.001, is 
 38.16  amended by adding a subdivision to read: 
 38.17     Subd. 9.  [SEPARATE FROM ACTIVE SERVICE.] "Separate from 
 38.18  active service" means to cease to perform fire suppression 
 38.19  duties, to cease to perform fire prevention duties, to cease to 
 38.20  supervise fire suppression duties, and to cease to supervise 
 38.21  fire prevention duties. 
 38.22     Sec. 3.  Minnesota Statutes 1994, section 424A.01, is 
 38.23  amended by adding a subdivision to read: 
 38.24     Subd. 5.  [FIRE PREVENTION PERSONNEL.] (a) If the fire 
 38.25  department is a municipal department and the applicable 
 38.26  municipality approves, or if the fire department is an 
 38.27  independent nonprofit firefighting corporation and the 
 38.28  contracting municipality or municipalities approve, the fire 
 38.29  department may employ or otherwise utilize the services of 
 38.30  persons as volunteer firefighters to perform fire prevention 
 38.31  duties and to supervise fire prevention activities. 
 38.32     (b) Personnel serving in fire prevention positions are 
 38.33  eligible to be members of the applicable volunteer firefighter 
 38.34  relief association and to qualify for service pension or other 
 38.35  benefit coverage of the relief association on the same basis as 
 38.36  fire department personnel who perform fire suppression duties. 
 39.1      (c) Personnel serving in fire prevention positions also are 
 39.2   eligible to receive any other benefits under the applicable law 
 39.3   or practice for services on the same basis as personnel employed 
 39.4   to perform fire suppression duties. 
 39.5      Sec. 4.  Minnesota Statutes 1994, section 424A.02, 
 39.6   subdivision 1, is amended to read: 
 39.7      Subdivision 1.  [AUTHORIZATION.] (a) A relief association, 
 39.8   when its articles of incorporation or bylaws so provide, may pay 
 39.9   out of the assets of its special fund a service pension to each 
 39.10  of its members who:  (1) separates from active service with the 
 39.11  fire department; (2) reaches age 50; (3) completes at least five 
 39.12  years of active service as an active member of the municipal 
 39.13  fire department to which the relief association is associated; 
 39.14  (4) completes at least five years of active membership with the 
 39.15  relief association before separation from active service; and 
 39.16  (5) complies with any additional conditions as to age, service, 
 39.17  and membership that are prescribed by the bylaws of the relief 
 39.18  association.  A service pension computed under this section may 
 39.19  be prorated monthly for fractional years of service, if the 
 39.20  bylaws or articles of incorporation of the relief association so 
 39.21  provide.  The service pension may be paid whether or not the 
 39.22  municipality or nonprofit firefighting corporation to which the 
 39.23  relief association is associated qualifies for fire state aid 
 39.24  under chapter 69.  
 39.25     (b) In the case of a member who has completed at least five 
 39.26  years of active service as an active member of the fire 
 39.27  department to which the relief association is associated on the 
 39.28  date that the relief association is established and 
 39.29  incorporated, the requirement that the member complete at least 
 39.30  five years of active membership with the relief association 
 39.31  before separation from active service may be waived by the board 
 39.32  of trustees of the relief association if the member completes at 
 39.33  least five years of inactive membership with the relief 
 39.34  association before the payment of the service pension.  During 
 39.35  the period of inactive membership, the member is not entitled to 
 39.36  receive disability benefit coverage, is not entitled to receive 
 40.1   additional service credit towards computation of a service 
 40.2   pension, and is considered to have the status of a person 
 40.3   entitled to a deferred service pension under subdivision 7. 
 40.4      (c) No municipality or nonprofit firefighting corporation 
 40.5   may delegate the power to take final action in setting a service 
 40.6   pension or ancillary benefit amount or level to the board of 
 40.7   trustees of the relief association or to approve in advance a 
 40.8   service pension or ancillary benefit amount or level equal to 
 40.9   the maximum amount or level that this chapter would allow rather 
 40.10  than a specific dollar amount or level.  
 40.11     (d) No relief association as defined in section 424A.001, 
 40.12  subdivision 4, may pay a service pension or disability benefit 
 40.13  to a former member of the relief association if that person has 
 40.14  not separated from active service with the fire department to 
 40.15  which the relief association is directly associated.  
 40.16     For the purposes of this chapter, "to separate from active 
 40.17  service" means to cease to perform fire suppression duties and 
 40.18  to cease to supervise fire suppression duties. 
 40.19     Sec. 5.  [EFFECTIVE DATE.] 
 40.20     Sections 1 to 4 are effective the day following final 
 40.21  enactment. 
 40.22                             ARTICLE 9
 40.23                 SERVICE CREDIT DEADLINE EXTENSIONS
 40.24                           AND PURCHASES
 40.25     Section 1.  Laws 1995, chapter 252, article 1, section 16, 
 40.26  is amended to read: 
 40.27     Sec. 16.  [RETROACTIVE PROVISIONS.] 
 40.28     (a) A teacher who had at least three years of allowable 
 40.29  service credit under Minnesota Statutes, chapter 354 or 354A, on 
 40.30  July 1, 1994, and who worked part-time between July 1, 1994, and 
 40.31  June 30, 1995, may be allowed to make contributions to and 
 40.32  accrue allowable service credit in the applicable retirement 
 40.33  fund, as if the teacher had been working full time, as provided 
 40.34  in Minnesota Statutes, sections 354.66, subdivision 4, and 
 40.35  354A.094, subdivision 4, for service after July 1, 1994, and 
 40.36  before June 30, 1995.  If a teacher described in this paragraph 
 41.1   wishes to obtain allowable service credit as if the teacher had 
 41.2   been working full time for the period from July 1, 1994, to June 
 41.3   30, 1995, the teacher must: 
 41.4      (1) make a lump sum payment to the applicable pension fund 
 41.5   within 60 days after the effective date of this section before 
 41.6   August 2, 1996, with respect to the St. Paul teachers retirement 
 41.7   fund association, or before August 2, 1995, with respect to any 
 41.8   other teacher retirement plan, of the difference between the 
 41.9   amount of the employer and employee contributions to the pension 
 41.10  fund that would have been paid if the teacher had been working 
 41.11  full time, and that amount that was actually paid for part-time 
 41.12  service during that period; and 
 41.13     (2) submit to the association a letter or other document 
 41.14  from the board of the teacher's employing district stating that 
 41.15  the board would have agreed to the teacher's participation in 
 41.16  the part-time mobility program during the 1994-1995 school year 
 41.17  but for the requirement then in effect that the district make 
 41.18  the full employer contribution to the retirement fund for 
 41.19  teachers with 20 or more years of service, based on the 
 41.20  compensation that would have been paid if the teacher had been 
 41.21  employed on a full-time basis. 
 41.22     (b) An employer of a teacher covered by paragraph (a) must 
 41.23  notify the teacher of the option available under paragraph (a) 
 41.24  in writing within 30 days of the effective date of this 
 41.25  section before July 3, 1996, with respect to the St. Paul 
 41.26  teachers retirement fund association, or before July 3, 1995, 
 41.27  with respect to any other teacher retirement plan. 
 41.28     (c) With respect to the St. Paul teachers retirement fund 
 41.29  association, any payment must include compound interest at an 
 41.30  annual rate of 8.5 percent from August 3, 1995, to the date on 
 41.31  which payment is made. 
 41.32     Sec. 2.  [STUDY OF REGIONAL TREATMENT CENTER AND RELATED 
 41.33  GOVERNMENTAL ENTITY EDUCATIONAL BREAKS-IN-SERVICE.] 
 41.34     The legislative commission on pensions and retirement shall 
 41.35  study the topic of the appropriate retirement coverage for 
 41.36  educational breaks-in-service to be accorded to state employees 
 42.1   who are employed by a regional treatment center, who terminated 
 42.2   state employment to undertake additional education with a 
 42.3   documented mutual expectation of rehiring upon completion of the 
 42.4   educational period, and who received a state stipend during the 
 42.5   educational period and to other comparably situated public 
 42.6   employees.  The commission shall attempt to identify the 
 42.7   actuarial accrued liability associated with granting public 
 42.8   pension plan allowable service credit for these educational 
 42.9   break-in-service periods and shall determine the appropriate 
 42.10  manner of funding that liability.  The commission shall report 
 42.11  the results of its study, including any recommendations in the 
 42.12  form of draft legislation, by March 1, 1997, to the chair of the 
 42.13  committee on governmental operations of the house of 
 42.14  representatives, the chair of the committee on governmental 
 42.15  operations and veterans of the senate, the chair of the 
 42.16  committee on ways and means of the house of representatives, and 
 42.17  the chair of the committee on finance of the senate. 
 42.18     Sec. 3.  [INDEPENDENT SCHOOL DISTRICT NO. 553, NEW YORK 
 42.19  MILLS; PART-TIME TEACHER RETIREMENT COVERAGE PROGRAM DEADLINE 
 42.20  EXTENSION.] 
 42.21     (a) Notwithstanding any provision of Minnesota Statutes, 
 42.22  section 354.66, to the contrary, the teachers retirement 
 42.23  association must accept the application for full-time retirement 
 42.24  coverage filed by independent school district No. 553, New York 
 42.25  Mills, on or about October 13, 1995, for a person who: 
 42.26     (1) was born on May 16, 1945; 
 42.27     (2) was initially hired by the school district in 1968; 
 42.28     (3) served in the military from school years 1969-1970 to 
 42.29  1972-1973; and 
 42.30     (4) began work as a part-time computer technology teacher 
 42.31  on July 1, 1995.  
 42.32     A person who meets the requirements of clauses (1) to (4) 
 42.33  is entitled to full-time teacher retirement association coverage 
 42.34  under Minnesota Statutes, section 354.66, for the 1995-1996 
 42.35  school year if all other conditions of that section are met 
 42.36  beyond the failure of the school district to timely file the 
 43.1   application. 
 43.2      (b) A person who meets the requirements of paragraph (a), 
 43.3   clauses (1) to (4), for teaching services shall pay the 
 43.4   applicable employee contribution under Minnesota Statutes, 
 43.5   section 354.42, subdivision 2, on the difference between the 
 43.6   amount of the person's compensation from which employee 
 43.7   contributions were actually deducted and the amount of the 
 43.8   person's full-time equivalent salary under Minnesota Statutes, 
 43.9   section 354.66, subdivision 4. 
 43.10     (c) Independent school district No. 553, New York Mills, 
 43.11  shall pay the applicable employer and additional employer 
 43.12  contributions under Minnesota Statutes, section 354.42, 
 43.13  subdivisions 3 and 5, on the person's full-time equivalent 
 43.14  salary, plus interest at the rate of 8.5 percent.  The school 
 43.15  district shall also pay interest at the rate of 8.5 percent on 
 43.16  the difference between the employee contributions actually 
 43.17  deducted from compensation and the amount of the person's 
 43.18  full-time equivalent salary under paragraph (b). 
 43.19     (d) The payments under paragraphs (b) and (c) must each be 
 43.20  made in a lump sum to the teachers retirement association before 
 43.21  June 30, 1996.  If payment is made earlier than June 30, 1996, 
 43.22  interest must be calculated to the end of the month in which 
 43.23  payment is made. 
 43.24     Sec. 4.  [INDEPENDENT SCHOOL DISTRICT NO. 200, HASTINGS; 
 43.25  PART-TIME TEACHER RETIREMENT COVERAGE PROGRAM DEADLINE 
 43.26  EXTENSION.] 
 43.27     (a) Notwithstanding any provision of Minnesota Statutes, 
 43.28  section 354.66, to the contrary, the teachers retirement 
 43.29  association must accept the application or applications for 
 43.30  full-time retirement coverage filed by independent school 
 43.31  district No. 200, Hastings, on or about February 5, 1996, for a 
 43.32  person who: 
 43.33     (1) was born on January 11, 1940; 
 43.34     (2) was initially hired by the school district on August 
 43.35  26, 1968; and 
 43.36     (3) was initially accepted by the school board for 
 44.1   participation in the qualified part-time teacher program under 
 44.2   Minnesota Statutes, section 354.66, on November 5, 1991. 
 44.3      A person who meets the requirements of clauses (1) to (3) 
 44.4   is entitled to full-time teacher retirement association coverage 
 44.5   under Minnesota Statutes, section 354.66, for the 1992-1993 
 44.6   through 1995-1996 school years if all other conditions of that 
 44.7   section are met beyond the failure of the school district to 
 44.8   timely file the applications. 
 44.9      (b) If full-time equivalent employee contributions have not 
 44.10  been received by the teachers retirement association, a person 
 44.11  who meets the requirements of paragraph (a), clauses (1) to (3), 
 44.12  for teaching services shall pay the applicable employee 
 44.13  contribution under Minnesota Statutes, section 354.42, 
 44.14  subdivision 2, on the difference between the amount of the 
 44.15  person's compensation from which employee contributions were 
 44.16  actually deducted and the amount of the person's full-time 
 44.17  equivalent salary under Minnesota Statutes, section 354.66, 
 44.18  subdivision 4. 
 44.19     (c) If full-time equivalent employer and additional 
 44.20  employer contributions have not been received previously by the 
 44.21  teachers retirement association, independent school district No. 
 44.22  200, Hastings, shall pay the applicable employer and additional 
 44.23  employer contributions under Minnesota Statutes, section 354.42, 
 44.24  subdivisions 3 and 5, on the difference, if any, between the 
 44.25  person's full-time equivalent salary and the salary upon which 
 44.26  contributions were made, plus interest at the rate of 8.5 
 44.27  percent compounded annually.  The school district shall also pay 
 44.28  interest at the rate of 8.5 percent compounded annually on the 
 44.29  difference, if any, between the employee contributions actually 
 44.30  deducted from compensation and the employee contributions based 
 44.31  on the person's full-time equivalent salary under paragraph (b). 
 44.32     (d) The payments under paragraphs (b) and (c) must each be 
 44.33  made in a lump sum to the teachers retirement association before 
 44.34  June 30, 1996, or before the retirement of a person meeting the 
 44.35  requirements of paragraph (a), clauses (1) to (3), whichever is 
 44.36  earlier.  If payment is made earlier than June 30, 1996, 
 45.1   interest must be calculated to the end of the month in which 
 45.2   payment is made. 
 45.3      Sec. 5.  [MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION; 
 45.4   ELIGIBILITY IN PART-TIME TEACHING PROGRAM FOR CERTAIN PART-TIME 
 45.5   TEACHERS.] 
 45.6      Notwithstanding any provision of Minnesota Statutes 1994, 
 45.7   section 354A.094, to the contrary, teachers in special school 
 45.8   district No. 1, Minneapolis, who were granted a part-time 
 45.9   position under Minnesota Statutes, section 354A.094, after June 
 45.10  30, 1994, but who were compensated in an amount that exceeded 67 
 45.11  percent of the compensation rate established by the board for a 
 45.12  full-time teacher with identical education and experience within 
 45.13  the district and who applied for and were approved by special 
 45.14  school district No. 1, Minneapolis, for the 1994-1995 school 
 45.15  year to participate in the qualified part-time teacher program 
 45.16  must be allowed to make, by June 30, 1996, the full-time 
 45.17  employee and employer contribution for the 1994-1995 school year 
 45.18  and receive service credit from the Minneapolis teachers 
 45.19  retirement fund association in amounts according to those 
 45.20  prescribed in Minnesota Statutes, sections 354A.094 and 354A.12. 
 45.21     Sec. 6.  [MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION; 
 45.22  PURCHASE OF PRIOR SERVICE CREDIT.] 
 45.23     Subdivision 1.  [ELIGIBILITY; FORMER MINNEAPOLIS 
 45.24  TEACHER.] (a) Notwithstanding Laws 1992, chapter 598, article 6, 
 45.25  section 19, an eligible person who was: 
 45.26     (1) born on January 4, 1930; 
 45.27     (2) employed as a typing teacher in the adult education 
 45.28  program at Bryant junior high school in Minneapolis in September 
 45.29  1969; 
 45.30     (3) employed as a reserve teacher in special school 
 45.31  district No. 1 from January 1, 1970, until May 30, 1970; and 
 45.32     (4) employed from June 1, 1970, to 1978, as a business 
 45.33  education teacher at the occupational skills training center in 
 45.34  Minneapolis; 
 45.35  may purchase allowable service credit in the basic program of 
 45.36  the Minneapolis teachers retirement fund association for the 
 46.1   period described in paragraph (b) by paying the amount specified 
 46.2   in subdivision 3. 
 46.3      (b) The service credit purchase is for the period or 
 46.4   periods of uncovered eligible service from September 1969 until 
 46.5   the commencement of Minneapolis teachers retirement association 
 46.6   fund coverage in 1974 for which membership was mandatory, or for 
 46.7   which coverage was at the employee's option, unless it can be 
 46.8   demonstrated that the person described in paragraph (a) waived 
 46.9   that coverage. 
 46.10     Subd. 2.  [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit 
 46.11  for prior eligible service under subdivision 1, there must be 
 46.12  paid to the Minneapolis teachers retirement fund association an 
 46.13  amount equal to the present value of the amount of the 
 46.14  additional retirement annuity obtained by purchase of the 
 46.15  additional service credit. 
 46.16     (b) Calculation of this amount must be made by the 
 46.17  executive director of the Minneapolis teachers retirement fund 
 46.18  association using the applicable preretirement interest rate 
 46.19  specified in Minnesota Statutes, section 356.215, subdivision 
 46.20  4d, and the mortality table adopted for the retirement 
 46.21  association.  The calculation must assume retirement at the age 
 46.22  at which the minimum requirements of the retirement association 
 46.23  for normal retirement, or retirement with an annuity unreduced 
 46.24  for retirement at an early age, including Minnesota Statutes, 
 46.25  section 356.30, are met with the additional service credit 
 46.26  purchased. 
 46.27     (c) The person making the purchase must establish in the 
 46.28  records of the association proof of the service for which the 
 46.29  purchase of prior service is requested.  The manner of the proof 
 46.30  of service must be in accordance with procedures prescribed by 
 46.31  the executive director of the retirement association. 
 46.32     (d) Payment of the amount calculated under this subdivision 
 46.33  is the obligation of the eligible individual in subdivision 1 
 46.34  and must be made prior to July 1, 1996, in a lump sum.  However, 
 46.35  the current or former employer of the eligible individual may, 
 46.36  at its discretion, pay all or any portion of the payment amount 
 47.1   that exceeds an amount equal to the employee contribution rates 
 47.2   in effect during the period or periods of prior service applied 
 47.3   to the actual salary rates in effect during the period or 
 47.4   periods of prior service, plus interest at the rate of 8.5 
 47.5   percent per year compounded annually from the date on which the 
 47.6   contributions would otherwise have been made to the date on 
 47.7   which the payment is made.  If the employer agrees to payments 
 47.8   under this paragraph, the employee must make the employee 
 47.9   payments required under this paragraph prior to July 1, 1996.  
 47.10  If that employee payment is made, the employing unit payment 
 47.11  under this paragraph must be remitted to the executive director 
 47.12  of the retirement association within 60 days of receipt by the 
 47.13  executive director of the employee payments specified under this 
 47.14  paragraph. 
 47.15     Subd. 3.  [SERVICE CREDIT GRANT.] Service credit for the 
 47.16  purchase period or periods must be granted to the account of the 
 47.17  eligible person upon receipt of the purchase payment amount 
 47.18  specified in subdivision 2. 
 47.19     Sec. 7.  [ELECTION OF PUBLIC EMPLOYEE RETIREMENT 
 47.20  ASSOCIATION COVERAGE.] 
 47.21     Subdivision 1.  Notwithstanding Minnesota Statutes, section 
 47.22  353.01, subdivision 2b, clause (14), to the contrary, a Kanabec 
 47.23  hospital employee born on December 6, 1940, employed by the 
 47.24  hospital from January 4, 1965, to the present, and a Kanabec 
 47.25  hospital employee born on October 6, 1942, employed by the 
 47.26  hospital from September, 1964, to August 1, 1966, and from May, 
 47.27  1967, to the present, is eligible to make the election under 
 47.28  subdivision 2. 
 47.29     Subd. 2.  [ELECTION OF COVERAGE.] An eligible employee 
 47.30  under subdivision 1 is entitled to elect retirement coverage by 
 47.31  the public employees retirement association general plan.  
 47.32  Service credit will begin to accrue at the beginning of the pay 
 47.33  period following the election of plan coverage by the eligible 
 47.34  employee.  The election of coverage must be made on a form 
 47.35  prescribed by the executive director of the association.  The 
 47.36  election must be made within 60 days after the effective date of 
 48.1   this section. 
 48.2      Sec. 8.  [REPEALER.] 
 48.3      Laws 1990, chapter 570, article 13, section 1, subdivision 
 48.4   5, is repealed. 
 48.5      Sec. 9.  [EFFECTIVE DATE.] 
 48.6      Sections 1 to 6 and 8 are effective the day following final 
 48.7   enactment.  Section 7 is effective upon approval by the Kanabec 
 48.8   county board and upon compliance with Minnesota Statutes, 
 48.9   section 645.021. 
 48.10                             ARTICLE 10 
 48.11              VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION 
 48.12                  INVESTMENT PERFORMANCE REPORTING 
 48.13     Section 1.  Minnesota Statutes 1995 Supplement, section 
 48.14  356.219, subdivision 2, is amended to read: 
 48.15     Subd. 2.  [CONTENT AND TIMING OF REPORTS.] (a) The 
 48.16  following information shall be included in the report required 
 48.17  by subdivision 1: 
 48.18     (1) the market value of all investments at the close of the 
 48.19  reporting period; 
 48.20     (2) regular payroll-based contributions to the fund; 
 48.21     (3) other contributions and revenue paid into the fund, 
 48.22  including, but not limited to, state or local non-payroll-based 
 48.23  contributions, repaid refunds, and buybacks; 
 48.24     (4) total benefits paid to members; 
 48.25     (5) fees paid for investment management services; 
 48.26     (6) salaries and other administrative expenses paid; and 
 48.27     (7) total return on investment. 
 48.28     The report must also include a written statement of the 
 48.29  investment policy in effect on June 30, 1988, and any investment 
 48.30  policy changes made subsequently and shall include the effective 
 48.31  date of each policy change.  The information required under this 
 48.32  subdivision must be reported separately for each investment 
 48.33  account or investment portfolio included in the pension fund. 
 48.34     (b) For public pension plans other than volunteer 
 48.35  firefighters' relief associations governed by sections 69.77 or 
 48.36  69.771 to 69.775, the information specified in paragraph (a) 
 49.1   must be provided separately for each quarter for the fiscal 
 49.2   years of the pension fund ending during calendar years 1989 
 49.3   through 1991 and on a monthly basis thereafter.  For volunteer 
 49.4   firefighters' relief associations governed by sections 69.77 or 
 49.5   69.771 to 69.775, the information specified in paragraph (a) 
 49.6   must be provided separately each quarter. 
 49.7      (c) Firefighters' relief associations that have assets with 
 49.8   a market value of less than $300,000 must submit a written 
 49.9   statement of their current investment policy on or before 
 49.10  October 1, 1996, must report any subsequent investment policy 
 49.11  changes, including the effective date of the change, within 90 
 49.12  days of the change, must begin collecting the required 
 49.13  information under paragraph (a), clauses (1) to (7), on January 
 49.14  1, 1996 1997, and must submit the required information to the 
 49.15  state auditor on or before October 1, 1997 1998, and 
 49.16  subsequently within six months of the end of each fiscal year.  
 49.17  Other associations must submit the required information through 
 49.18  fiscal year 1993 to the state auditor on or before October 1, 
 49.19  1994, and subsequently within six months of the end of each 
 49.20  fiscal year. 
 49.21     Sec. 2.  Minnesota Statutes 1994, section 356A.06, 
 49.22  subdivision 4, is amended to read: 
 49.23     Subd. 4.  [ECONOMIC INTEREST STATEMENT.] (a) Each member of 
 49.24  the governing board of a covered pension plan and the chief 
 49.25  administrative officer of the plan shall file with the plan a 
 49.26  statement of economic interest.  
 49.27     (b) For a covered pension plan other than a plan specified 
 49.28  in paragraph (c), the statement must contain the information 
 49.29  required by section 10A.09, subdivision 5, and any other 
 49.30  information that the fiduciary or the governing board of the 
 49.31  plan determines is necessary to disclose a reasonably 
 49.32  foreseeable potential or actual conflict of interest.  
 49.33     (c) For a covered pension plan governed by sections 69.771 
 49.34  to 69.776 or a covered pension plan governed by section 69.77 
 49.35  with assets under $8,000,000, the statement must contain the 
 49.36  following: 
 50.1      (1) the person's principal occupation and principal place 
 50.2   of business; 
 50.3      (2) whether or not the person has an ownership of or 
 50.4   interest of ten percent or greater in an investment security 
 50.5   brokerage business, a real estate sales business, an insurance 
 50.6   agency, a bank, a savings and loan, or another financial 
 50.7   institution; and 
 50.8      (3) any relationship or financial arrangement that can 
 50.9   reasonably be expected to give rise to a conflict of interest. 
 50.10     (d) The statement must be filed annually with the chief 
 50.11  administrative officer of the plan and be available for public 
 50.12  inspection during regular office hours at the office of the 
 50.13  pension plan.  
 50.14     (e) A disclosure form meeting the requirements of the 
 50.15  federal Investment Advisers Act of 1940, United States Code, 
 50.16  title 15, sections 80b-1 to 80b-21 as amended, and filed with 
 50.17  the state board of investment or the pension plan meets the 
 50.18  requirements of this subdivision. 
 50.19     (f) The chief administrative officer of each covered 
 50.20  pension plan, by January 15, annually, shall transmit a copy of 
 50.21  all statements of economic interest received by the plan under 
 50.22  this subdivision during the preceding 12 months to the ethical 
 50.23  practices board. 
 50.24     Sec. 3.  [REVIEW OF INVESTMENT PERFORMANCE ATTRIBUTION 
 50.25  REPORTING FORMS AND REPORTING PROCESS.] 
 50.26     (a) On or before February 15, 1997, the special task force 
 50.27  established in paragraph (b) shall report to the legislature on 
 50.28  its review of the investment performance attribution reporting 
 50.29  forms and reporting process as provided in paragraph (d). 
 50.30     (b) The special task force consists of: 
 50.31     (1) the chair of the legislative commission on pensions and 
 50.32  retirement or the chair's designee; 
 50.33     (2) the vice-chair of the legislative commission on 
 50.34  pensions and retirement or the vice-chair's designee; 
 50.35     (3) the chair of the committee on governmental operations 
 50.36  of the house of representatives or the chair's designee; 
 51.1      (4) the chair of the committee on governmental operations 
 51.2   and veterans of the senate or the chair's designee; 
 51.3      (5) the executive director of the state board of investment 
 51.4   or the director's designee; 
 51.5      (6) the state auditor or the auditor's designee; 
 51.6      (7) two persons who are each a volunteer firefighter member 
 51.7   of the board of trustees of a volunteer firefighter relief 
 51.8   association deemed representative of its membership and 
 51.9   designated by the governing board of the Minnesota area relief 
 51.10  association coalition; 
 51.11     (8) two persons who are each a volunteer firefighter member 
 51.12  of the board of trustees of a volunteer firefighter relief 
 51.13  association deemed representative of its membership and 
 51.14  designated by the governing board of the Minnesota state fire 
 51.15  chiefs association; 
 51.16     (9) two persons who are each a volunteer firefighter member 
 51.17  of the board of trustees of a volunteer firefighter relief 
 51.18  association deemed representative of its membership and 
 51.19  designated by the governing board of the Minnesota state fire 
 51.20  department association; 
 51.21     (10) a person who is a municipal representative on a board 
 51.22  of trustees of a volunteer firefighters relief association with 
 51.23  assets under $300,000 as designated by the executive director of 
 51.24  the league of Minnesota cities; 
 51.25     (11) a representative of a first class city teacher 
 51.26  retirement fund association as designated by the chair of the 
 51.27  legislative commission on pensions and retirement; and 
 51.28     (12) a representative of a local police or salaried 
 51.29  firefighter relief association governed by Minnesota Statutes, 
 51.30  section 69.77 as designated by the chair of the legislative 
 51.31  commission on pensions and retirement. 
 51.32     (c) The chair of the special task force is the chair of the 
 51.33  legislative commission on pensions and retirement or the chair's 
 51.34  designee and the chair shall establish the meeting schedule and 
 51.35  topic agenda for the special task force. 
 51.36     (d) The special task force, at a minimum, shall consider 
 52.1   the following topics and issues: 
 52.2      (1) the changes required to simplify the investment 
 52.3   performance attribution reporting under Minnesota Statutes, 
 52.4   section 356.219, for smaller local person plans; 
 52.5      (2) the changes required to include the investment 
 52.6   performance attribution reporting in the annual financial 
 52.7   reporting under Minnesota Statutes, section 69.051; 
 52.8      (3) the changes required to combine the investment 
 52.9   performance reporting under Minnesota Statutes, section 356.218, 
 52.10  with the investment performance attribution reporting under 
 52.11  Minnesota Statutes, section 356.219, and the appropriate entity 
 52.12  to administer any combined reporting program; and 
 52.13     (4) any other topics relevant to the investment reporting 
 52.14  programs under Minnesota Statutes, section 356.218 or 356.219. 
 52.15     Sec. 4.  [EFFECTIVE DATE.] 
 52.16     This article is effective the day following final enactment.