1.1                          A bill for an act 
  1.2             relating to retirement; police state aid; revising 
  1.3             various police state aid provisions to fully implement 
  1.4             intended 1996 modifications; appropriating money as 
  1.5             1996 police state aid; ratifying the calculation of 
  1.6             certain 1996 police state aid amounts; modifying 
  1.7             various fire state aid provisions; amending Minnesota 
  1.8             Statutes 1996, sections 69.021, subdivisions 4, 5, 6, 
  1.9             7a, 8, 9, 10, and 11; and 69.031, subdivisions 1, 3, 
  1.10            and 5. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1996, section 69.021, 
  1.13  subdivision 4, is amended to read: 
  1.14     Subd. 4.  [DETERMINATION OF QUALIFIED STATE AID RECIPIENTS; 
  1.15  CERTIFICATION TO COMMISSIONER OF REVENUE FINANCE.] (a) The 
  1.16  commissioner shall determine which municipalities and 
  1.17  independent nonprofit firefighting corporations are qualified to 
  1.18  receive fire state aid and which municipalities and counties are 
  1.19  qualified to receive police state peace officer aid.  
  1.20     (b) The commissioner shall determine qualification for 
  1.21  state aid upon receipt of: 
  1.22     (1) the fire department personnel and equipment 
  1.23  certification or the police department and qualified peace 
  1.24  officers certificate, whichever is applicable applies, required 
  1.25  under section 69.011,; 
  1.26     (2) the financial compliance report required under section 
  1.27  6.495, subdivision 3, if applicable; and 
  1.28     (3) any other relevant information which comes to the 
  2.1   attention of the commissioner. 
  2.2      (c) Upon completion of the determination, on or before 
  2.3   October 1, the commissioner shall calculate under subdivision 6 
  2.4   the amount of (a) state peace officer: 
  2.5      (1) the police state aid which each county or municipality 
  2.6   is to receive under subdivisions 5, 6, 7a, and 10; and 
  2.7      (b) (2) the fire state aid which each municipality or 
  2.8   nonprofit firefighting corporation is to receive under 
  2.9   subdivisions 5 and 7. 
  2.10     (d) The commissioner shall certify to the commissioner of 
  2.11  finance the name of each county or municipality, and the amount 
  2.12  of state aid which each county or municipality is to receive, in 
  2.13  the case of police state peace officer aid; and.  The 
  2.14  commissioner shall certify to the commissioner of finance the 
  2.15  name of each municipality or independent nonprofit firefighting 
  2.16  corporation and the amount of state aid which each municipality 
  2.17  or independent nonprofit firefighting corporation is to receive, 
  2.18  in the case of fire state aid. 
  2.19     Sec. 2.  Minnesota Statutes 1996, section 69.021, 
  2.20  subdivision 5, is amended to read: 
  2.21     Subd. 5.  [CALCULATION OF STATE AID.] (a) The amount of 
  2.22  fire state aid available for apportionment shall be, before the 
  2.23  addition of the minimum fire state aid allocation amount under 
  2.24  subdivision 7, is equal to 107 percent of the amount of premium 
  2.25  taxes paid to the state upon the fire, lightning, sprinkler 
  2.26  leakage, and extended coverage premiums reported to the 
  2.27  commissioner by insurers on the Minnesota Firetown Premium 
  2.28  Report.  This amount shall be reduced by the amount required to 
  2.29  pay the state auditor's costs and expenses of the audits or 
  2.30  exams of the firefighters relief associations. 
  2.31     (b) The total amount for apportionment in respect to peace 
  2.32  officer state aid is equal to 104 percent of the amount of 
  2.33  premium taxes paid to the state upon the premiums reported to 
  2.34  the commissioner by insurers on the Minnesota Aid to Police 
  2.35  Premium Report, plus the payment amounts received under section 
  2.36  60A.152 since the last aid apportionment, and reduced by the 
  3.1   amount required to pay the state auditor's costs and expenses of 
  3.2   the audits or exams of the police relief associations.  The 
  3.3   total amount for apportionment in respect to firefighters fire 
  3.4   state aid shall must not be less than two percent of the 
  3.5   premiums reported to the commissioner by insurers on the 
  3.6   Minnesota Firetown Premium Report after subtracting the 
  3.7   following amounts: 
  3.8      (1) the amount required to pay the state auditor's costs 
  3.9   and expenses of the audits or exams of the firefighters relief 
  3.10  associations,; and 
  3.11     (2) one percent of the premiums reported by town and 
  3.12  farmers' mutual insurance companies and mutual property and 
  3.13  casualty companies with total assets of $5,000,000 or less.  
  3.14     (b) The total amount for apportionment as police state aid 
  3.15  is equal to 104 percent of the amount of premium taxes paid to 
  3.16  the state on the premiums reported to the commissioner by 
  3.17  insurers on the Minnesota Aid to Police Premium Report, plus the 
  3.18  payment amounts received under section 60A.152 since the last 
  3.19  aid apportionment, and reduced by the amount required to pay the 
  3.20  costs and expenses of the state auditor for audits or exams of 
  3.21  police relief associations.  The total amount for apportionment 
  3.22  in respect to the police state aid program shall must not be 
  3.23  less than two percent of the amount of premiums reported to the 
  3.24  commissioner by insurers on the Minnesota Aid to Police Premium 
  3.25  Report after subtracting the amount required to pay the state 
  3.26  auditor's cost and expenses of the audits or exams of the police 
  3.27  relief associations.  
  3.28     (c) The commissioner shall calculate the percentage of 
  3.29  increase or decrease reflected in the apportionment over or 
  3.30  under the previous year's available state aid using the same 
  3.31  premiums as a basis for comparison. 
  3.32     Sec. 3.  Minnesota Statutes 1996, section 69.021, 
  3.33  subdivision 6, is amended to read: 
  3.34     Subd. 6.  [CALCULATION OF APPORTIONMENT OF POLICE STATE 
  3.35  PEACE OFFICERS AID TO COUNTIES.] The peace officers police state 
  3.36  aid available shall must be distributed to the counties in 
  4.1   proportion to the relationship that the total number of active 
  4.2   peace officers, as defined in section 69.011, subdivision 1, 
  4.3   clause (g), in each county who are employed either by 
  4.4   municipalities maintaining police departments or by the county, 
  4.5   bears to the total number of peace officers employed by all 
  4.6   municipalities and counties, subject to any reduction under 
  4.7   subdivision 10.  Any necessary additional adjustments shall be 
  4.8   made to subsequent apportionments. 
  4.9      Sec. 4.  Minnesota Statutes 1996, section 69.021, 
  4.10  subdivision 7a, is amended to read: 
  4.11     Subd. 7a.  [APPORTIONMENT OF POLICE STATE AID.] (a) Subject 
  4.12  to the reduction provided for under subdivision 10, the 
  4.13  commissioner shall apportion the police state peace officer aid 
  4.14  to each municipality and to the county in the following manner: 
  4.15     (1) for all municipalities maintaining police departments 
  4.16  and the county, the state aid must be distributed in proportion 
  4.17  to the relationship that the total number of peace officers, as 
  4.18  determined under section 69.011, subdivision 1, clause (g), and 
  4.19  subdivision 2, clause (b), employed by each that municipality 
  4.20  and by the or county for 12 calendar months and the proportional 
  4.21  or fractional number who were employed less than 12 months bears 
  4.22  to the total number of peace officers employed by all 
  4.23  municipalities and counties subject to any reduction under 
  4.24  subdivision 10; 
  4.25     (2) for each municipality which contracts with the county 
  4.26  for police service, a proportionate amount of the state aid 
  4.27  distributed to the county based on the full-time equivalent 
  4.28  number of peace officers providing contract service to that 
  4.29  municipality must be credited against the municipality's 
  4.30  contract obligation; and 
  4.31     (3) for each municipality which contracts with another 
  4.32  municipality for police service, a proportionate amount of the 
  4.33  state aid distributed to the municipality providing contract 
  4.34  service based on the full-time equivalent number of peace 
  4.35  officers providing contract service to that municipality on a 
  4.36  full-time equivalent basis must be credited against the contract 
  5.1   obligation of the municipality receiving contract service. 
  5.2      (b) No municipality entitled to receive state peace officer 
  5.3   aid may be apportioned less state peace officer aid for any year 
  5.4   under Laws 1976, chapter 315, than the amount which was 
  5.5   apportioned to it for calendar year 1975 based on premiums 
  5.6   reported to the commissioner for calendar year 1974; provided, 
  5.7   the amount of state peace officer aid to other municipalities 
  5.8   within the county and to the county must be adjusted in 
  5.9   proportion to the total number of peace officers in the 
  5.10  municipalities and the county, so that the amount of state peace 
  5.11  officer aid apportioned does not exceed the amount of state 
  5.12  peace officer aid available for apportionment. 
  5.13     Sec. 5.  Minnesota Statutes 1996, section 69.021, 
  5.14  subdivision 8, is amended to read: 
  5.15     Subd. 8.  [POPULATION AND MARKET VALUE.] In 
  5.16  computations relating to fire state aid requiring the use of 
  5.17  population figures, only official statewide federal census 
  5.18  figures are to be used. Increases or decreases in population 
  5.19  disclosed by reason of any special census shall must not be 
  5.20  taken into consideration. 
  5.21     In calculations relating to fire state aid requiring the 
  5.22  use of market value property figures, only the latest available 
  5.23  market value property figures are to may be used. 
  5.24     Sec. 6.  Minnesota Statutes 1996, section 69.021, 
  5.25  subdivision 9, is amended to read: 
  5.26     Subd. 9.  [APPEAL.] In the event that any municipality, 
  5.27  county, fire relief association or police department relief 
  5.28  association feels itself to be aggrieved, it may request the 
  5.29  commissioner to review and adjust the apportionment of funds 
  5.30  within the county in the case of police state peace officer aid, 
  5.31  and or within the state in the case of fire state aid, and.  The 
  5.32  decision of the commissioner shall be is subject to appeal, 
  5.33  review, and adjustment by the district court in the county in 
  5.34  which the applicable fire or police department is located. 
  5.35     Sec. 7.  Minnesota Statutes 1996, section 69.021, 
  5.36  subdivision 10, is amended to read: 
  6.1      Subd. 10.  [REDUCTION IN POLICE STATE AID 
  6.2   APPORTIONMENT.] (a) The commissioner of revenue shall reduce the 
  6.3   apportionment of police state aid under subdivisions 5, 
  6.4   paragraph (b), 6, and 7 7a, for eligible employer units by 
  6.5   any excess police state aid. 
  6.6      (b) "Excess police state aid" is: 
  6.7      (1) for counties and for municipalities in which police 
  6.8   retirement coverage is provided wholly by the public employees 
  6.9   police and fire fund and all police officers are members of the 
  6.10  plan governed by sections 353.63 to 353.657, the amount in 
  6.11  excess of the employer's total prior calendar year obligation 
  6.12  under section 353.65, subdivision 3, as certified by the 
  6.13  executive director of the public employees retirement 
  6.14  association.; 
  6.15     (2) for municipalities in which police retirement coverage 
  6.16  is provided in part by the public employees police and fire fund 
  6.17  governed by sections 353.63 to 353.657 and in part by a local 
  6.18  police consolidation account governed by chapter 353A, the 
  6.19  amount in excess of the employer's total prior calendar year 
  6.20  obligation under sections 353.65, subdivision 3, and 353A.09, 
  6.21  subdivision 5, paragraphs (a) and (b), as certified by the 
  6.22  executive director of the public employees retirement 
  6.23  association; 
  6.24     (3) for municipalities in which police retirement coverage 
  6.25  is provided in part by the public employees police and fire fund 
  6.26  governed by sections 353.63 to 353.657 and in part by a local 
  6.27  police relief association governed by sections 69.77 and 
  6.28  423A.01, the amount in excess of the employer's total prior 
  6.29  calendar year obligation under section 353.65, subdivision 3, as 
  6.30  certified by the executive director of the public employees 
  6.31  retirement association, plus the amount of the financial 
  6.32  requirements of the relief association certified to the 
  6.33  applicable municipality during the prior calendar year under 
  6.34  section 69.77, subdivisions 2b and 2c, reduced by the amount of 
  6.35  member contributions deducted from the covered salary of the 
  6.36  relief association during the prior calendar year under section 
  7.1   69.77, subdivision 2a, as certified by the chief administrative 
  7.2   officer of the applicable municipality; and 
  7.3      (4) for the metropolitan airports commission, if there are 
  7.4   police officers hired before July 1, 1978, with retirement 
  7.5   coverage by the Minneapolis employees retirement fund remaining, 
  7.6   the amount in excess of the commission's total prior calendar 
  7.7   year obligation under section 353.65, subdivision 3, as 
  7.8   certified by the executive director of the public employees 
  7.9   retirement association, plus the amount determined by expressing 
  7.10  the commission's total prior calendar year contribution to the 
  7.11  Minneapolis employees retirement fund under section 422A.101, 
  7.12  subdivisions 2 and 2a, as a percentage of the commission's total 
  7.13  prior calendar year covered payroll for commission employees 
  7.14  covered by the Minneapolis employees retirement fund and 
  7.15  applying that percentage to the commission's total prior 
  7.16  calendar year covered payroll for commission police officers 
  7.17  covered by the Minneapolis employees retirement fund, as 
  7.18  certified by the chief administrative officer of the 
  7.19  metropolitan airports commission. 
  7.20     (c) The total shall amount of excess police state aid must 
  7.21  be deposited in a separate the excess police state-aid account 
  7.22  in the general fund, administered and distributed as provided in 
  7.23  subdivision 11. 
  7.24     Sec. 8.  Minnesota Statutes 1996, section 69.021, 
  7.25  subdivision 11, is amended to read: 
  7.26     Subd. 11.  [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] 
  7.27  (a) An The excess police state-aid holding account is 
  7.28  established in the general fund.  The excess police state-aid 
  7.29  holding account must be administered by the commissioner. 
  7.30     (b) Excess police state aid determined according to section 
  7.31  69.021, subdivision 10, must be deposited in the excess police 
  7.32  state-aid holding account. 
  7.33     (c) From the balance in the excess police state-aid holding 
  7.34  account, $1,000,000 is appropriated to and must be transferred 
  7.35  annually to the ambulance service personnel longevity award and 
  7.36  incentive suspense account established by section 144C.03, 
  8.1   subdivision 2. 
  8.2      (d) If a police officer stress reduction program is created 
  8.3   by law and money is appropriated for that program, an amount 
  8.4   equal to that appropriation must be transferred from the balance 
  8.5   in the excess police state-aid holding account. 
  8.6      (e) On October 1, 1997, and annually on each subsequent 
  8.7   October 1, one-half of the balance of the excess police 
  8.8   state-aid holding account remaining after the deductions under 
  8.9   paragraphs (c) and (d) is appropriated for additional 
  8.10  amortization aid under section 423A.02, subdivision 1b. 
  8.11     (f) Annually, the remaining balance in the excess police 
  8.12  state-aid holding account, after the deductions under paragraphs 
  8.13  (c), (d), and (e), cancels to the general fund. 
  8.14     Sec. 9.  Minnesota Statutes 1996, section 69.031, 
  8.15  subdivision 1, is amended to read: 
  8.16     Subdivision 1.  [COMMISSIONER OF FINANCE'S WARRANT.] The 
  8.17  commissioner of finance shall issue to the county, municipality, 
  8.18  or independent nonprofit firefighting corporation certified to 
  8.19  the commissioner of finance by the commissioner a warrant for an 
  8.20  amount equal to the amount of fire state aid or police state 
  8.21  aid, whichever applies, certified to for the applicable state 
  8.22  aid recipient by the commissioner pursuant to under section 
  8.23  69.021.  The amount of state aid due and not paid by October 1 
  8.24  accrues interest at the rate of one percent for each month or 
  8.25  part of a month the amount remains unpaid, beginning the 
  8.26  preceding July 1. 
  8.27     Sec. 10.  Minnesota Statutes 1996, section 69.031, 
  8.28  subdivision 3, is amended to read: 
  8.29     Subd. 3.  [APPROPRIATIONS.] There is hereby appropriated 
  8.30  annually from the state general fund to the commissioner 
  8.31  of revenue finance an amount sufficient to make the police and 
  8.32  fire state aid payments specified in this section and section 
  8.33  69.021. 
  8.34     Sec. 11.  Minnesota Statutes 1996, section 69.031, 
  8.35  subdivision 5, is amended to read: 
  8.36     Subd. 5.  [DEPOSIT OF STATE AID.] (1) (a) The municipal 
  9.1   treasurer, on receiving the fire state aid, shall, within 30 
  9.2   days after receipt, transmit it the fire state aid to the 
  9.3   treasurer of the duly incorporated firefighters' relief 
  9.4   association if there is one organized and the association has 
  9.5   filed a financial report with the municipality; but.  If there 
  9.6   is no relief association organized, or if any the association 
  9.7   dissolve, be removed, or has heretofore dissolved, or has been 
  9.8   removed as trustees of state aid, then the treasurer of the 
  9.9   municipality shall keep deposit the money in the municipal 
  9.10  treasury as provided for in section 424A.08 and shall the money 
  9.11  may be disbursed only for the purposes and in the manner set 
  9.12  forth in that section.  If the association has not filed a 
  9.13  financial report with the municipality, the municipal treasurer 
  9.14  shall delay transmission of the fire state aid to the 
  9.15  association until the financial report is filed.  
  9.16     (2) (b) The municipal treasurer, upon receipt of the police 
  9.17  state aid, shall disburse the police state aid in the following 
  9.18  manner: 
  9.19     (a) (1) For a municipality in which a local police relief 
  9.20  association exists and all peace officers are members of the 
  9.21  association, the total state aid shall must be transmitted to 
  9.22  the treasurer of the relief association within 30 days of the 
  9.23  date of receipt, and the treasurer of the relief association 
  9.24  shall immediately deposit the total state aid in the special 
  9.25  fund of the relief association; 
  9.26     (b) (2) For a municipality in which police retirement 
  9.27  coverage is provided by the public employees police and fire 
  9.28  fund and all peace officers are members of the fund, the total 
  9.29  state aid shall must be applied toward the municipality's 
  9.30  employer contribution to the public employees police and fire 
  9.31  fund pursuant under to section 353.65, subdivision 3; or 
  9.32     (c) (3) For a municipality other than a city of the first 
  9.33  class with a population of more than 300,000 in which both a 
  9.34  police relief association exists and police retirement coverage 
  9.35  is provided in part by the public employees police and fire 
  9.36  fund, the municipality may elect at its option to transmit the 
 10.1   total state aid to the treasurer of the relief association as 
 10.2   provided in clause (a) (1), to use the total state aid to apply 
 10.3   toward the municipality's employer contribution to the public 
 10.4   employees police and fire fund subject to all the provisions set 
 10.5   forth in clause (b) (2), or to allot the total state aid 
 10.6   proportionately to be transmitted to the police relief 
 10.7   association as provided in this subdivision and to apply toward 
 10.8   the municipality's employer contribution to the public employees 
 10.9   police and fire fund subject to the provisions of clause (b) (2) 
 10.10  on the basis of the respective number of active full-time peace 
 10.11  officers, as defined in section 69.011, subdivision 1, clause 
 10.12  (g). 
 10.13     For a city of the first class with a population of more 
 10.14  than 300,000, in addition, the city may elect to allot the 
 10.15  appropriate portion of the total police state aid to apply 
 10.16  toward the employer contribution of the city to the public 
 10.17  employees police and fire fund based on the covered salary of 
 10.18  police officers covered by the fund each payroll period and to 
 10.19  transmit the balance to the police relief association.; or 
 10.20     (4) For a municipality in which police retirement coverage 
 10.21  is provided in part by the public employees police and fire fund 
 10.22  and in part by a local police consolidation account governed by 
 10.23  chapter 353A, the total police state aid must be applied towards 
 10.24  the municipality's total employer contribution to the public 
 10.25  employees police and fire fund and to the local police 
 10.26  consolidation account under sections 353.65, subdivision 3, and 
 10.27  353A.09, subdivision 5. 
 10.28     (3) (c) The county treasurer, upon receipt of the police 
 10.29  state aid for the county, shall apply the total state aid toward 
 10.30  the county's employer contribution to the public employees 
 10.31  police and fire fund pursuant to under section 353.65, 
 10.32  subdivision 3. 
 10.33     (4) (d) The designated metropolitan airports commission 
 10.34  official, upon receipt of the police state aid for the 
 10.35  metropolitan airports commission, shall apply the total police 
 10.36  state aid toward the commission's employer contribution to the 
 11.1   Minneapolis employees retirement fund under section 422A.101, 
 11.2   subdivision 2a. 
 11.3      Sec. 12.  [PAYMENT OF CERTAIN OMITTED POLICE STATE AID 
 11.4   AMOUNTS.] 
 11.5      (a) The legislature determines that certain police state 
 11.6   aid recipients received less police state aid in September, 
 11.7   1996, than was intended by virtue of drafting deficiencies in 
 11.8   Laws 1996, chapter 390, sections 26 to 30. 
 11.9      (b) There is hereby appropriated as 1996 police state aid 
 11.10  the following amounts to the following governmental entities, 
 11.11  plus interest on the applicable amount as provided in paragraph 
 11.12  (c): 
 11.13      Governmental                     Additional 1996 police 
 11.14        entity:                           state aid amount: 
 11.15    (1) Brainerd                            $45,669.00  
 11.16    (2) Crookston                            52,728.00  
 11.17    (3) Fairmont                             57,775.00  
 11.18    (4) Faribault                            28,224.00  
 11.19    (5) Mankato                               3,509.00  
 11.20    (6) Metropolitan airports commission     30,541.00  
 11.21    (7) Minneapolis                       1,918,185.00  
 11.22    (8) South St. Paul                       32,377.00  
 11.23     (c) Interest is payable for the period October 1, 1996, to 
 11.24  the last day of the full calendar month occurring immediately 
 11.25  before the effective date specified in section 13 on the amount 
 11.26  specified in paragraph (b) in the larger of the following two 
 11.27  amounts: 
 11.28     (1) the total time-weighted rate of return, calculated as 
 11.29  required under Minnesota Statutes 1996, section 356.218, 
 11.30  actually earned by the police pension fund applicable to the 
 11.31  municipalities enumerated as paragraph (b), clauses (1) to (5), 
 11.32  (7), and (8), or by the Minneapolis employees retirement fund 
 11.33  for the governmental entity enumerated as paragraph (b), clause 
 11.34  (6), for the period October 1, 1996, to the last day of the full 
 11.35  calendar month occurring immediately before the effective date 
 11.36  specified in section 13; or 
 12.1      (2) one percent per month, multiplied by the number of 
 12.2   months that have elapsed during the period October 1, 1996, to 
 12.3   the last day of the full calendar month occurring immediately 
 12.4   before the effective date specified in section 13. 
 12.5      (d) The amounts paid under paragraphs (b) and (c) are 
 12.6   police state aid payments and must be transmitted to the 
 12.7   applicable police relief association or retirement fund 
 12.8   providing police pension coverage. 
 12.9      (e) For purposes of the actuarial valuation of police 
 12.10  relief associations as of December 31, 1996, and for purposes of 
 12.11  the calculation of the annual financial requirements of the 
 12.12  police relief association under Minnesota Statutes, section 
 12.13  69.77, the amounts specified in paragraph (b) may be treated as 
 12.14  assets of the relief association as of that date. 
 12.15     (f) Amounts paid as police state aid in September 1996, to 
 12.16  the following municipalities are hereby ratified as the intended 
 12.17  1996 police state aid payment amounts: 
 12.18    (1) Albert Lea; 
 12.19    (2) Anoka; 
 12.20    (3) Austin; 
 12.21    (4) Bloomington; 
 12.22    (5) Buhl; 
 12.23    (6) Chisholm; 
 12.24    (7) Columbia Heights; 
 12.25    (8) Crystal; 
 12.26    (9) Duluth; 
 12.27    (10) Fridley; 
 12.28    (11) Hibbing; 
 12.29    (12) New Ulm;  
 12.30    (13) Red Wing; 
 12.31    (14) Richfield; 
 12.32    (15) Rochester; 
 12.33    (16) St. Louis Park; 
 12.34    (17) St. Paul; 
 12.35    (18) West St. Paul; and 
 12.36    (19) Winona. 
 13.1      Sec. 13.  [EFFECTIVE DATE.] 
 13.2      Sections 1 to 12 are effective the day following final 
 13.3   enactment.