1.1                          A bill for an act 
  1.2             relating to retirement; various retirement plans; 
  1.3             adjusting pension coverage for certain privatized 
  1.4             public hospital employees; providing for increased 
  1.5             survivor benefits relating to certain public employees 
  1.6             murdered in the line of duty; authorizing certain 
  1.7             service credit purchases; specifying prior service 
  1.8             credit purchase payment amount determination 
  1.9             procedures increasing salaries of various judges; 
  1.10            modifying other judicial salaries; modifying the 
  1.11            judges retirement plan member and employer 
  1.12            contribution rates; authorizing the transfer of 
  1.13            certain prior retirement contributions from the 
  1.14            legislators retirement plan and from the elective 
  1.15            state officers retirement plan; creating a 
  1.16            contribution transfer account in the general fund of 
  1.17            the state; appropriating money; reformulating the 
  1.18            Columbia Heights volunteer firefighters relief 
  1.19            association plan as a defined contribution plan under 
  1.20            the general volunteer fire law; restructuring the 
  1.21            Columbia Heights volunteer firefighter relief 
  1.22            association board; modifying various higher education 
  1.23            retirement plan provisions; modifying administrative 
  1.24            expense provisions for various public pension plans; 
  1.25            expanding the teacher retirement plans part-time 
  1.26            teaching positions eligible to participate in the 
  1.27            qualified full-time service credit for part-time 
  1.28            teaching service program; making certain Minneapolis 
  1.29            fire department relief association survivor benefit 
  1.30            options retroactive; providing increased disability 
  1.31            benefit coverage for certain local government 
  1.32            correctional facility employees; increasing local 
  1.33            government correctional employee and employer 
  1.34            contribution rates; providing increased survivor 
  1.35            benefits to certain Minneapolis employee retirement 
  1.36            fund survivors; authorizing certain Hennepin county 
  1.37            regional park employees to change retirement plan 
  1.38            membership; amending Minnesota Statutes 1996, sections 
  1.39            136F.45, by adding a subdivision; 136F.48; 352.96, 
  1.40            subdivision 4; 352D.09, subdivision 7; 352D.12; 
  1.41            353D.05, subdivision 3; 354.445; 354.66, subdivisions 
  1.42            2 and 3; 354A.094, subdivisions 2 and 3; 354B.23, by 
  1.43            adding a subdivision; 354C.12, by adding a 
  1.44            subdivision; 383B.52; 422A.23, subdivision 2; and 
  1.45            490.123, subdivisions 1a and 1b; Minnesota Statutes 
  1.46            1997 Supplement, sections 15A.083, subdivisions 5, 6a, 
  2.1             and 7; 354B.25, subdivisions 1a and 5; and 354C.12, 
  2.2             subdivision 4; and Laws 1997, Second Special Session 
  2.3             chapter 3, section 16; proposing new law for coding in 
  2.4             Minnesota Statutes, chapter 356; repealing Minnesota 
  2.5             Statutes 1996, sections 11A.17, subdivisions 10a and 
  2.6             14; and 352D.09, subdivision 8; Minnesota Statutes 
  2.7             1997 Supplement, section 136F.45, subdivision 3. 
  2.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.9                              ARTICLE 1 
  2.10               PUBLIC MEDICAL FACILITY PRIVATIZATIONS 
  2.11     Section 1.  [LUVERNE COMMUNITY HOSPITAL; PENSION COVERAGE 
  2.12  FOR TRANSFERRED EMPLOYEES.] 
  2.13     Subdivision 1.  [AUTHORIZATION.] This section applies if 
  2.14  the Luverne Community Hospital is sold, leased, or transferred 
  2.15  to a private entity, nonprofit corporation, or public 
  2.16  corporation.  Notwithstanding Minnesota Statutes, sections 
  2.17  356.24 and 356.25, to facilitate the orderly transition of 
  2.18  employees affected by the sale, lease, or transfer, the city 
  2.19  may, at its discretion, make, from assets to be transferred to 
  2.20  the private entity, nonprofit corporation, or public 
  2.21  corporation, payments to a qualified pension plan established 
  2.22  for the transferred employees by the private entity, nonprofit 
  2.23  corporation, or public corporation, to provide benefits 
  2.24  substantially similar to those the employees would have been 
  2.25  entitled to under the provisions of the public employees 
  2.26  retirement association applicable to nonpublic safety employees 
  2.27  under Minnesota Statutes, chapter 353, as amended, in effect on 
  2.28  the date of the sale, lease, or transfer. 
  2.29     Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
  2.30  ELIGIBILITY.] (a) An eligible individual is an individual who: 
  2.31     (1) is an employee of the Luverne Community Hospital 
  2.32  immediately prior to the sale, lease, or transfer of that 
  2.33  facility to a private entity, nonprofit corporation, or public 
  2.34  corporation; 
  2.35     (2) is terminated at the time of the sale, lease, or 
  2.36  transfer; and 
  2.37     (3) had less than three years of service credit in the 
  2.38  public employees retirement association plan at the date of 
  2.39  termination. 
  3.1      (b) For an eligible individual under paragraph (a), the 
  3.2   city may make a member contribution equivalent payment under 
  3.3   subdivision 3. 
  3.4      Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
  3.5   member contribution equivalent payment is an amount equal to the 
  3.6   total refund provided by Minnesota Statutes, section 353.34, 
  3.7   subdivisions 1 and 2.  To be eligible for the member 
  3.8   contribution equivalent payment, the individual in subdivision 
  3.9   2, paragraph (a), must apply for a refund under Minnesota 
  3.10  Statutes, section 353.34, subdivisions 1 and 2, within one year 
  3.11  of termination.  A member contribution equivalent amount 
  3.12  exceeding $200 must be made directly to an individual retirement 
  3.13  account under section 408(a) of the Internal Revenue Code, as 
  3.14  amended, or to another qualified plan.  A member contribution 
  3.15  equivalent amount of $200 or less may, at the preference of the 
  3.16  individual, be made to the individual or to an individual 
  3.17  retirement account under section 408(a) of the Internal Revenue 
  3.18  Code, as amended, or to another qualified plan. 
  3.19     Sec. 2.  [ARNOLD MEMORIAL HOSPITAL, ADRIAN, MINNESOTA; 
  3.20  PENSION COVERAGE FOR TRANSFERRED EMPLOYEES.] 
  3.21     Subdivision 1.  [AUTHORIZATION.] This section applies if 
  3.22  the Arnold Memorial Hospital in Adrian is sold, leased, or 
  3.23  transferred to a private entity, nonprofit corporation, or 
  3.24  public corporation.  Notwithstanding Minnesota Statutes, 
  3.25  sections 356.24 and 356.25, to facilitate the orderly transition 
  3.26  of employees affected by the sale, lease, or transfer, the city 
  3.27  may, at its discretion, make, from assets to be transferred to 
  3.28  the private entity, nonprofit corporation, or public 
  3.29  corporation, payments to a qualified pension plan established 
  3.30  for the transferred employees by the private entity, nonprofit 
  3.31  corporation, or public corporation, to provide benefits 
  3.32  substantially similar to those the employees would have been 
  3.33  entitled to under the provisions of the public employees 
  3.34  retirement association applicable to nonpublic safety employees 
  3.35  under Minnesota Statutes, chapter 353, as amended, in effect on 
  3.36  the date of the sale, lease, or transfer. 
  4.1      Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
  4.2   ELIGIBILITY.] (a) An eligible individual is an individual who: 
  4.3      (1) is an employee of the Arnold Memorial Hospital in 
  4.4   Adrian immediately prior to the sale, lease, or transfer of that 
  4.5   facility to a private entity, nonprofit corporation, or public 
  4.6   corporation; 
  4.7      (2) is terminated at the time of the sale, lease, or 
  4.8   transfer; and 
  4.9      (3) had less than three years of service credit in the 
  4.10  public employees retirement association plan at the date of 
  4.11  termination. 
  4.12     (b) For an eligible individual under paragraph (a), the 
  4.13  city may make a member contribution equivalent payment under 
  4.14  subdivision 3. 
  4.15     Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
  4.16  member contribution equivalent payment is an amount equal to the 
  4.17  total refund provided by Minnesota Statutes, section 353.34, 
  4.18  subdivisions 1 and 2.  To be eligible for the member 
  4.19  contribution equivalent payment, the individual in subdivision 
  4.20  2, paragraph (a), must apply for a refund under Minnesota 
  4.21  Statutes, section 353.34, subdivisions 1 and 2, within one year 
  4.22  of termination.  A member contribution equivalent amount 
  4.23  exceeding $200 must be made directly to an individual retirement 
  4.24  account under section 408(a) of the Internal Revenue Code, as 
  4.25  amended, or to another qualified plan.  A member contribution 
  4.26  equivalent amount of $200 or less may, at the preference of the 
  4.27  individual, be made to the individual or to an individual 
  4.28  retirement account under section 408(a) of the Internal Revenue 
  4.29  Code, as amended, or to another qualified plan. 
  4.30     Sec. 3.  [EFFECTIVE DATE.] 
  4.31     (a) Section 1 is effective on the day following approval by 
  4.32  the Luverne city council and compliance with Minnesota Statutes, 
  4.33  section 645.021. 
  4.34     (b) Section 2 is effective on the day following approval by 
  4.35  the Adrian city council and compliance with Minnesota Statutes, 
  4.36  section 645.021. 
  5.1                              ARTICLE 2 
  5.2            MISCELLANEOUS GENERAL EMPLOYEE PENSION CHANGES 
  5.3      Section 1.  Minnesota Statutes 1996, section 136F.45, is 
  5.4   amended by adding a subdivision to read: 
  5.5      Subd. 3a.  [SHARING OF FEES.] (a) For purposes of this 
  5.6   subdivision, a gross fee amount is defined as the fees, 
  5.7   commissions, and other charges which an annuity investment 
  5.8   provider or vendor would charge a typical consumer of those 
  5.9   services for identical or similar products.  A net fee amount is 
  5.10  an amount below the gross fee amount reflecting a negotiated 
  5.11  reduction below gross fees. 
  5.12     (b) To offset the board's necessary and reasonable expenses 
  5.13  incurred under subdivisions 1 and 2, the Minnesota state 
  5.14  colleges and universities system is authorized to negotiate with 
  5.15  an annuity investment provider or vendor to establish a net fee 
  5.16  amount. 
  5.17     (c) Under the negotiated arrangements, the Minnesota state 
  5.18  colleges and universities system is authorized to either make 
  5.19  arrangements to recapture the difference between gross and net 
  5.20  fee amounts through a rebate from the annuity investment 
  5.21  provider or vendor, or deduct those amounts prior to 
  5.22  transmitting the contributions or premiums. 
  5.23     (d) The revenues collected or retained under these 
  5.24  negotiated arrangements must be used to offset the board's 
  5.25  necessary and reasonable expenses incurred under this section.  
  5.26  Any excess above the necessary and reasonable expenses must be 
  5.27  allocated annually to the accounts of the participants. 
  5.28     Sec. 2.  Minnesota Statutes 1996, section 136F.48, is 
  5.29  amended to read: 
  5.30     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
  5.31     (a) This section applies to a person who:  
  5.32     (1) retires from the state university system, the technical 
  5.33  college system, or the community college system, or from a 
  5.34  successor system employing state university, technical college, 
  5.35  or community college faculty, with at least ten years of 
  5.36  combined service credit in a system under the jurisdiction of 
  6.1   the board of trustees of the Minnesota state colleges and 
  6.2   universities; 
  6.3      (2) was employed on a full-time basis immediately preceding 
  6.4   retirement as a state university, technical college, or 
  6.5   community college faculty member or as an unclassified 
  6.6   administrator in one of those systems; 
  6.7      (3) begins drawing an annuity from the teachers retirement 
  6.8   association or from a first class city teacher plan; and 
  6.9      (4) returns to work on not less than a one-third time basis 
  6.10  and not more than a two-thirds time basis in the system from 
  6.11  which the person retired under an agreement in which the person 
  6.12  may not earn a salary of more than $35,000 in a calendar year 
  6.13  from employment after retirement in the system from which the 
  6.14  person retired.  
  6.15     (b) Initial participation, the amount of time worked, and 
  6.16  the duration of participation under this section must be 
  6.17  mutually agreed upon by the employer president of the 
  6.18  institution where the person returns to work and the employee.  
  6.19  The employer president may require up to one-year notice of 
  6.20  intent to participate in the program as a condition of 
  6.21  participation under this section.  The employer president shall 
  6.22  determine the time of year the employee shall work.  The 
  6.23  employer or the president may not require a person to waive any 
  6.24  rights under a collective bargaining agreement as a condition of 
  6.25  participation under this section.  
  6.26     (c) For a person eligible under paragraphs (a) and (b), the 
  6.27  employing board shall make the same employer contribution for 
  6.28  hospital, medical, and dental benefits as would be made if the 
  6.29  person were employed full time.  
  6.30     (d) For work under paragraph (a), a person must receive a 
  6.31  percentage of the person's salary at the time of retirement that 
  6.32  is equal to the percentage of time the person works compared to 
  6.33  full-time work.  
  6.34     (e) If a collective bargaining agreement covering a person 
  6.35  provides for an early retirement incentive that is based on age, 
  6.36  the incentive provided to the person must be based on the 
  7.1   person's age at the time employment under this section ends.  
  7.2   However, the salary used to determine the amount of the 
  7.3   incentive must be the salary that would have been paid if the 
  7.4   person had been employed full time for the year immediately 
  7.5   preceding the time employment under this section ends. 
  7.6      (f) A person who returns to work under this section is a 
  7.7   member of the appropriate bargaining unit and is covered by the 
  7.8   appropriate collective bargaining contract.  Except as provided 
  7.9   in this section, the person's coverage is subject to any part of 
  7.10  the contract limiting rights of part-time employees. 
  7.11     Sec. 3.  Minnesota Statutes 1996, section 352.96, 
  7.12  subdivision 4, is amended to read: 
  7.13     Subd. 4.  [EXECUTIVE DIRECTOR TO ESTABLISH RULES.] The 
  7.14  executive director of the system with the advice and consent of 
  7.15  the board of directors shall establish rules and procedures to 
  7.16  carry out this section including allocation of administrative 
  7.17  costs against the assets accumulated under this section.  Funds 
  7.18  to pay these costs are appropriated from the fund or account in 
  7.19  which the assets accumulated under this section are placed of 
  7.20  the plan to participants.  Fees cannot be charged on 
  7.21  contributions and investment returns attributable to 
  7.22  contributions made to the Minnesota supplemental investment 
  7.23  funds before July 1, 1992.  Annual total fees charged for plan 
  7.24  administration for the Minnesota supplemental investment funds 
  7.25  cannot exceed 40/100 of one percent of the contributions and 
  7.26  investment returns attributable to contributions made on or 
  7.27  after July 1, 1992.  The rules established by the executive 
  7.28  director must conform to federal and state tax laws, 
  7.29  regulations, and rulings, and are not subject to the 
  7.30  administrative procedure act.  Except for the marketing rules, 
  7.31  rules relating to the options provided under subdivision 2, 
  7.32  clauses (2) and (3), must be approved by the state board of 
  7.33  investment.  
  7.34     Sec. 4.  Minnesota Statutes 1996, section 352D.09, 
  7.35  subdivision 7, is amended to read: 
  7.36     Subd. 7.  Up to one-tenth of one percent of salary shall be 
  8.1   deducted from the employee contributions and up to one-tenth of 
  8.2   one percent of salary from the employer contributions authorized 
  8.3   by section 352D.04, subdivision 2, The board of directors shall 
  8.4   establish a budget and charge participants a fee to pay the 
  8.5   administrative expenses of the unclassified program.  Fees 
  8.6   cannot be charged on contributions and investment returns 
  8.7   attributable to contributions made before July 1, 1992.  Annual 
  8.8   total fees charged for plan administration cannot exceed 10/100 
  8.9   of one percent of the contributions and investment returns 
  8.10  attributable to contributions made on or after July 1, 1992. 
  8.11     Sec. 5.  Minnesota Statutes 1996, section 353D.05, 
  8.12  subdivision 3, is amended to read: 
  8.13     Subd. 3.  [ADMINISTRATIVE EXPENSES.] The executive director 
  8.14  of the association with the advice and consent of the board 
  8.15  shall annually set an amount to recover the costs of the 
  8.16  association in administering the public employees defined 
  8.17  contribution plan that are not met by the amount recovered under 
  8.18  section 11A.17. 
  8.19     Sec. 6.  Minnesota Statutes 1996, section 354.445, is 
  8.20  amended to read: 
  8.21     354.445 [NO ANNUITY REDUCTION.] 
  8.22     (a) The annuity reduction provisions of section 354.44, 
  8.23  subdivision 5, do not apply to a person who: 
  8.24     (1) retires from the state university system, technical 
  8.25  college system, or the community college system, or from a 
  8.26  successor system employing state university, technical college, 
  8.27  or community college faculty, with at least ten years of 
  8.28  combined service credit in a system under the jurisdiction of 
  8.29  the board of trustees of the Minnesota state colleges and 
  8.30  universities; 
  8.31     (2) was employed on a full-time basis immediately preceding 
  8.32  retirement as a state university, technical college, or 
  8.33  community college faculty member or as an unclassified 
  8.34  administrator in one of these systems; 
  8.35     (3) begins drawing an annuity from the teachers retirement 
  8.36  association; and 
  9.1      (4) returns to work on not less than a one-third time basis 
  9.2   and not more than a two-thirds time basis in the system from 
  9.3   which the person retired under an agreement in which the person 
  9.4   may not earn a salary of more than $35,000 in a calendar year 
  9.5   from employment after retirement in the system from which the 
  9.6   person retired. 
  9.7      (b) Initial participation, the amount of time worked, and 
  9.8   the duration of participation under this section must be 
  9.9   mutually agreed upon by the employer president of the 
  9.10  institution where the person returns to work and the employee.  
  9.11  The employer president may require up to one-year notice of 
  9.12  intent to participate in the program as a condition of 
  9.13  participation under this section.  The employer president shall 
  9.14  determine the time of year the employee shall work.  The 
  9.15  employer or the president may not require a person to waive any 
  9.16  rights under a collective bargaining agreement as a condition of 
  9.17  participation under this section.  
  9.18     (c) Notwithstanding any law to the contrary, a person 
  9.19  eligible under paragraphs (a) and (b) may not earn further 
  9.20  service credit in the teachers retirement association and is not 
  9.21  eligible to participate in the individual retirement account 
  9.22  plan or the supplemental retirement plan established in chapter 
  9.23  354B as a result of service under this section.  No employer or 
  9.24  employee contribution to any of these plans may be made on 
  9.25  behalf of such a person. 
  9.26     (d) For a person eligible under paragraphs (a) and (b) who 
  9.27  earns more than $35,000 in a calendar year from employment after 
  9.28  retirement in the system from which the person retired, the 
  9.29  annuity reduction provisions of section 354.44, subdivision 5, 
  9.30  apply only to income over $35,000. 
  9.31     (e) A person who returns to work under this section is a 
  9.32  member of the appropriate bargaining unit and is covered by the 
  9.33  appropriate collective bargaining contract.  Except as provided 
  9.34  in this section, the person's coverage is subject to any part of 
  9.35  the contract limiting rights of part-time employees. 
  9.36     Sec. 7.  Minnesota Statutes 1996, section 354B.23, is 
 10.1   amended by adding a subdivision to read: 
 10.2      Subd. 5a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
 10.3   to the plan exceed limits imposed by federal law or regulation 
 10.4   and it is necessary to return contributions to comply with the 
 10.5   federal limits, excess contributions must be returned to the 
 10.6   employee and to the employer in the same proportions as the 
 10.7   contributions were made. 
 10.8      (b) When an employer contribution required under section 
 10.9   354B.24 due to a sabbatical leave is made after completion of 
 10.10  the leave or an employer contribution is made due to omitted 
 10.11  deductions under subdivision 5, and these employer contributions 
 10.12  cause or would cause total contributions to the plan to exceed 
 10.13  limits imposed by federal law or regulation, the employer must 
 10.14  make that portion of the contribution that would exceed the 
 10.15  federal limit during the next calendar year. 
 10.16     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
 10.17  354B.25, subdivision 1a, is amended to read: 
 10.18     Subd. 1a.  [ADVISORY COMMITTEE.] (a) A committee is created 
 10.19  to advise the state board of investment and the board of 
 10.20  trustees of the Minnesota state colleges and universities 
 10.21  concerning administration of the individual retirement account 
 10.22  plan and the supplemental retirement plan established in chapter 
 10.23  354C.  The committee shall adopt recommendations by majority 
 10.24  vote of those members voting on each issue.  The exclusive 
 10.25  representatives of the state university instructional unit, the 
 10.26  community college instructional unit, and the technical college 
 10.27  instructional unit shall each appoint two members to the 
 10.28  committee.  The exclusive representatives of the general 
 10.29  professional unit, the supervisory employees unit and the state 
 10.30  university administrative unit shall each appoint one member to 
 10.31  the committee.  The chancellor of the Minnesota state colleges 
 10.32  and universities shall appoint three members, at least one of 
 10.33  whom shall be a personnel administrator.  No member of the 
 10.34  committee shall be retired.  Members serve at the pleasure of 
 10.35  the applicable appointing authority, but no member shall serve 
 10.36  for more than a total of five years.  Members shall be 
 11.1   reimbursed from the administrative expense account of the 
 11.2   individual retirement account plan for expenses as provided in 
 11.3   section 15.059, subdivision 3. 
 11.4      (b) The committee shall: 
 11.5      (1) advise the board of trustees of the Minnesota state 
 11.6   colleges and universities on the structure and operation of the 
 11.7   individual retirement account plan and the supplemental 
 11.8   retirement plan; 
 11.9      (2) along with any other consultants selected by the board, 
 11.10  advise the state board of investment on selection of financial 
 11.11  institutions and on the type of investment products to be 
 11.12  offered by these institutions for the plans; 
 11.13     (3) advise the board of trustees of the Minnesota state 
 11.14  colleges and universities on administration of the plans, 
 11.15  including selection of a third-party plan administrator, if any, 
 11.16  for the individual retirement account plan. 
 11.17     (c) The board of trustees of the Minnesota state colleges 
 11.18  and universities shall provide the advisory committee with 
 11.19  meeting space and other administrative support.  
 11.20     (d) Expenses of the advisory committee are considered 
 11.21  administrative expenses of the plans under subdivision 5 and 
 11.22  section 354C.12, subdivision 4, and must be allocated between 
 11.23  the two plans in proportion to the market value of the total 
 11.24  assets of the plans as of the most recent prior audited annual 
 11.25  financial report. 
 11.26     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
 11.27  354B.25, subdivision 5, is amended to read: 
 11.28     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 11.29  ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
 11.30  administrative expenses of the individual retirement account 
 11.31  plan must be paid by plan participants in the following manner: 
 11.32     (1) from plan participants with amounts invested in the 
 11.33  Minnesota supplemental investment fund, the plan administrator 
 11.34  may charge an administrative expense assessment as provided in 
 11.35  section 11A.17, subdivisions 10a and 14 in an amount such that 
 11.36  annual total fees charged for plan administration cannot exceed 
 12.1   40/100 of one percent of the assets of the Minnesota 
 12.2   supplemental investment funds; and 
 12.3      (2) from plan participants with amounts through annuity 
 12.4   contracts and custodial accounts purchased under subdivision 2, 
 12.5   paragraph (a), the plan administrator may charge an 
 12.6   administrative expense assessment of a designated amount, not to 
 12.7   exceed two percent of member and employer contributions, as 
 12.8   those contributions are made. 
 12.9      (b) Any administrative expense charge that is not actually 
 12.10  needed for the administrative expenses of the individual 
 12.11  retirement account plan must be refunded to member accounts. 
 12.12     (c) The board of trustees shall report annually, before 
 12.13  October 1, to the advisory committee created in subdivision 1a 
 12.14  on administrative expenses of the plan.  The report must include 
 12.15  a detailed accounting of charges for administrative expenses 
 12.16  collected from plan participants and expenditure of the 
 12.17  administrative expense charges.  The administrative expense 
 12.18  charges collected from plan participants must be kept in a 
 12.19  separate account from any other funds under control of the board 
 12.20  of trustees and may be used only for the necessary and 
 12.21  reasonable administrative expenses of the plan. 
 12.22     Sec. 10.  Minnesota Statutes 1996, section 354C.12, is 
 12.23  amended by adding a subdivision to read: 
 12.24     Subd. 1a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
 12.25  to the plan exceed limits imposed by federal law or regulation 
 12.26  and it is necessary to return contributions to comply with the 
 12.27  federal limits, one-half of the excess contributions must be 
 12.28  returned to the employee and half to the employer. 
 12.29     (b) When an employer contribution is made due to omitted 
 12.30  deductions under subdivision 2, and these employer contributions 
 12.31  cause or would cause total contributions to the plan to exceed 
 12.32  limits imposed by federal law or regulation, the employer must 
 12.33  make that portion of the contribution that would exceed the 
 12.34  federal limit during the next calendar year. 
 12.35     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
 12.36  354C.12, subdivision 4, is amended to read: 
 13.1      Subd. 4.  [ADMINISTRATIVE EXPENSES.] The board of trustees 
 13.2   of the Minnesota state colleges and universities is authorized 
 13.3   to pay the necessary and reasonable administrative expenses of 
 13.4   the supplemental retirement plan.  The administrative fees or 
 13.5   charges must be paid by participants in the following manner: 
 13.6      (1) from participants whose contributions are invested with 
 13.7   the state board of investment, the plan administrator may 
 13.8   recover administrative expenses in the manner provided by 
 13.9   section 11A.17, subdivisions 10a and 14 authorized by the 
 13.10  Minnesota state colleges and universities in an amount such that 
 13.11  annual total fees charged for plan administration cannot exceed 
 13.12  40/100 of one percent of the assets of the Minnesota 
 13.13  supplemental investment funds; or 
 13.14     (2) from participants where contributions are invested 
 13.15  through contracts purchased from any other authorized source, 
 13.16  the plan administrator may assess an amount of up to two percent 
 13.17  of the employee and employer contributions. 
 13.18     Any recovered or assessed amounts that are not needed for 
 13.19  the necessary and reasonable administrative expenses of the plan 
 13.20  must be refunded to member accounts. 
 13.21     The board of trustees shall report annually, before October 
 13.22  1, to the advisory committee created in section 354B.25, 
 13.23  subdivision 1a, on administrative expenses of the plan.  The 
 13.24  report must include a detailed accounting of charges for 
 13.25  administrative expenses collected from plan participants and 
 13.26  expenditure of the administrative expense charges.  The 
 13.27  administrative expense charges collected from plan participants 
 13.28  must be kept in a separate account from any other funds under 
 13.29  control of the board of trustees and may be used only for the 
 13.30  necessary and reasonable administrative expenses of the plan.  
 13.31     Sec. 12.  Minnesota Statutes 1996, section 383B.52, is 
 13.32  amended to read: 
 13.33     383B.52 [ADMINISTRATION COSTS.] 
 13.34     The board of county commissioners of Hennepin county is 
 13.35  hereby authorized to appropriate money for the administration of 
 13.36  the supplementary benefit program created by sections 383B.46 to 
 14.1   383B.52.  The board of county commissioners of Hennepin county 
 14.2   may charge participants a fee to recover the administrative 
 14.3   expenses of the supplementary benefit program.  Annual total 
 14.4   fees charged to administer the supplementary benefit program may 
 14.5   not exceed 40/100 of one percent of the assets of the program. 
 14.6      Sec. 13.  Minnesota Statutes 1996, section 422A.23, 
 14.7   subdivision 2, is amended to read: 
 14.8      Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] Upon the death 
 14.9   of a contributing (a) If an active member after having been in 
 14.10  the city service not less than dies prior to termination of 
 14.11  service with at least 18 months but before the effective date of 
 14.12  retirement, the board shall in lieu of the settlement 
 14.13  hereinbefore provided pay to the surviving spouse and/or 
 14.14  children of the member under the age of 18, or under the age of 
 14.15  22 if a full-time student at an accredited school, college or 
 14.16  university, and single, the following monthly benefit: 
 14.17     (a) Surviving spouse $325 per month, except for benefits 
 14.18  beginning after July 1, 1983, which shall be 30 percent of 
 14.19  member's average salary in effect over the last six months of 
 14.20  allowable service preceding the month in which the death 
 14.21  occurred. 
 14.22     (b) Each surviving child $150 per month, except for 
 14.23  benefits beginning after July 1, 1983, which shall be ten 
 14.24  percent of the member's average salary in effect over the last 
 14.25  six months of allowable service preceding the month in which the 
 14.26  death occurred but less than 20 years of service credit, the 
 14.27  surviving spouse or surviving child or children is eligible to 
 14.28  receive the survivor benefit specified in paragraph (b) or (c), 
 14.29  as applicable.  Payments for the Payment of a benefit of for 
 14.30  any surviving child under the age of 18 years shall be made to 
 14.31  the surviving parent, or if there be none, to the legal guardian 
 14.32  of such the surviving child.  The maximum monthly benefit shall 
 14.33  not exceed a total of $750. 
 14.34     (c) Effective for payments made after June 30, 1991, 
 14.35  surviving spouse and surviving child benefits under paragraphs 
 14.36  (a) and (b) beginning on or before July 1, 1983, are increased 
 15.1   to $500 per month and $225 per month, respectively.  The maximum 
 15.2   monthly payment under paragraph (b) is increased to $900.  The 
 15.3   increased cost resulting from the benefit increases in this 
 15.4   paragraph must be allocated to each employing unit listed in 
 15.5   section 422A.101, subdivisions 1a, 2, and 2a, on the basis of 
 15.6   the additional accrued liability resulting from increased 
 15.7   benefits paid to the survivors of employees from that unit. For 
 15.8   purposes of this subdivision, a surviving child is an unmarried 
 15.9   child of the deceased member under the age of 18, or under the 
 15.10  age of 22 if a full-time student at an accredited school, 
 15.11  college, or university. 
 15.12     (b) If the surviving spouse or surviving child benefit 
 15.13  commenced before July 1, 1983, the surviving spouse benefit is 
 15.14  $750 per month and the surviving child benefit is $225 per 
 15.15  month, beginning with the first monthly payment payable after 
 15.16  the effective date of this section.  The sum of surviving spouse 
 15.17  and surviving child benefits payable under this paragraph shall 
 15.18  not exceed $900 per month.  The increased cost resulting from 
 15.19  the benefit increases under this paragraph must be allocated to 
 15.20  each employing unit listed in section 422A.101, subdivisions 1a, 
 15.21  2, and 2a, on the basis of the additional accrued liability 
 15.22  resulting from increased benefits paid to the survivors of 
 15.23  employees from that unit. 
 15.24     (c) If the surviving spouse or surviving child benefit 
 15.25  commences after June 30, 1983, the surviving spouse benefit is 
 15.26  30 percent of the member's average salary in effect over the 
 15.27  last six months of allowable service preceding the month in 
 15.28  which death occurs.  The surviving child benefit is ten percent 
 15.29  of the member's average salary in effect over the last six 
 15.30  months of allowable service preceding the month in which death 
 15.31  occurs.  The sum of surviving spouse and surviving child 
 15.32  benefits payable under this paragraph shall not exceed 50 
 15.33  percent of the member's average salary in effect over the last 
 15.34  six months of allowable service. 
 15.35     (d) Any surviving child benefit or surviving spouse benefit 
 15.36  computed under paragraph (c) and in effect for the month 
 16.1   immediately prior to the effective date of this section is 
 16.2   increased by 15 percent as of the first payment on or after the 
 16.3   effective date of this section. 
 16.4      (e) Surviving child benefits under this subdivision 
 16.5   terminate when the child no longer meets the definition of 
 16.6   surviving child. 
 16.7      Sec. 14.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; SPECIAL 
 16.8   SURVIVING SPOUSE BENEFIT ELIGIBILITY.] 
 16.9      (a) Notwithstanding any provision of law to the contrary, 
 16.10  the surviving spouse of a deceased qualified public employee who 
 16.11  died as a result of an alleged homicide in the line of duty 
 16.12  within one month of eligibility for normal retirement is 
 16.13  entitled to receive the second portion of a 100 percent joint 
 16.14  and survivor optional annuity under Minnesota Statutes, section 
 16.15  353.31, subdivision 1b, calculated as if the deceased qualified 
 16.16  public employee had qualified for the "rule of 90" early normal 
 16.17  retirement annuity on the date of death. 
 16.18     (b) A deceased qualified public employee is a person who: 
 16.19     (1) was born on August 18, 1941; 
 16.20     (2) became a member of the public employees retirement 
 16.21  association on July 7, 1964; 
 16.22     (3) was a member of the basic program of the public 
 16.23  employees retirement association; 
 16.24     (4) was employed as a building inspector by the city of St. 
 16.25  Paul; 
 16.26     (5) died during the course of employment duties on December 
 16.27  24, 1997; and 
 16.28     (6) would have been eligible to retire under the "rule of 
 16.29  90" early normal retirement provision on or before February 1, 
 16.30  1998. 
 16.31     (c) The benefit under paragraph (a) is payable in lieu of 
 16.32  any other survivor benefit from the public employee retirement 
 16.33  association.  The benefit under paragraph (a) accrues on January 
 16.34  1, 1998, and the initial payment of the benefit must include any 
 16.35  applicable retroactive payment amounts.  The benefit under 
 16.36  paragraph (a) must be elected by the surviving spouse on a form 
 17.1   prescribed by the executive director of the public employee 
 17.2   retirement association. 
 17.3      Sec. 15.  [REIMBURSEMENT OF ACTUARIAL COST BY CITY OF ST. 
 17.4   PAUL.] 
 17.5      On the effective date of this section, the city of St. Paul 
 17.6   shall pay to the public employees retirement association $36,698 
 17.7   and whatever portion of a remaining $36,697 is not appropriated 
 17.8   from the general fund to the public employees retirement 
 17.9   association for this purpose in order to offset the increased 
 17.10  actuarial accrued liability related to the survivor benefit 
 17.11  increase provided in section 14. 
 17.12     Sec. 16.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION COVERAGE 
 17.13  TERMINATION.] 
 17.14     Subdivision 1.  [ELIGIBILITY.] (a) An eligible member 
 17.15  specified in paragraph (b) is authorized to apply for a 
 17.16  retirement annuity, provided necessary age and service 
 17.17  requirements are met, under Minnesota Statutes, section 353.29 
 17.18  or 353.30, as applicable, as further specified under subdivision 
 17.19  2. 
 17.20     (b) An eligible member is an individual who: 
 17.21     (1) is an active member of the public employees retirement 
 17.22  association coordinated plan; 
 17.23     (2) contributes to that plan based on employment by the 
 17.24  suburban Hennepin county regional park district and as an 
 17.25  elected member of the Minneapolis park and recreation board; and 
 17.26     (3) was born on February 25, 1936. 
 17.27     Subd. 2.  [RETIREMENT ANNUITY.] (a) Notwithstanding 
 17.28  Minnesota Statutes, section 353.01, subdivision 2a, clause (3), 
 17.29  and continuation of elected service, an eligible individual 
 17.30  under subdivision 1, paragraph (b), is deemed to have terminated 
 17.31  membership under Minnesota Statutes, section 353.01, subdivision 
 17.32  11b, following termination of the suburban Hennepin county 
 17.33  regional park district employment and meeting applicable length 
 17.34  of separation requirements. 
 17.35     (b) If the requirements of paragraph (a) are satisfied, the 
 17.36  eligible individual may apply for a retirement annuity under 
 18.1   Minnesota Statutes, section 353.29 or 353.30, whichever 
 18.2   applies.  In computing the annuity, the public employees 
 18.3   retirement association must exclude salary due to appointed and 
 18.4   elected Minneapolis park and recreation board service. 
 18.5      Subd. 3.  [TREATMENT OF MINNEAPOLIS PARK AND RECREATION 
 18.6   BOARD CONTRIBUTION TO THE PUBLIC EMPLOYEES RETIREMENT 
 18.7   ASSOCIATION.] (a) Upon termination of the suburban Hennepin 
 18.8   county regional park district employment, all employee 
 18.9   contributions to the public employees retirement association 
 18.10  coordinated plan by an eligible individual in subdivision 1, 
 18.11  paragraph (b), due to Minneapolis park and recreation board 
 18.12  appointed and elected service, and all corresponding employer 
 18.13  contributions, terminate. 
 18.14     (b) Following termination of contributions under paragraph 
 18.15  (a), an eligible member under subdivision 1, paragraph (b), must 
 18.16  elect, within one year of termination of contributions under 
 18.17  paragraph (a) or termination of elective service, whichever is 
 18.18  earlier, a refund under Minnesota Statutes, section 353.34, 
 18.19  subdivision 2, or coverage by the public employees defined 
 18.20  contribution plan under Minnesota Statutes, chapter 353D, as 
 18.21  further specified in paragraph (c). 
 18.22     (c) If public employee defined contribution plan coverage 
 18.23  is elected under this paragraph, contributions to that plan 
 18.24  commence as of the first day of the pay period following this 
 18.25  election.  Notwithstanding Minnesota Statutes, section 353D.12, 
 18.26  accumulated employee contributions made by an eligible member as 
 18.27  specified in subdivision 1, paragraph (b), and corresponding 
 18.28  employer contributions, due to the Minneapolis park and 
 18.29  recreation board appointed and elected service, must be 
 18.30  transferred with six percent annual interest to an account for 
 18.31  an eligible member in the public employees defined contribution 
 18.32  plan. 
 18.33     (d) If no election is made by an eligible member by the 
 18.34  required date in paragraph (b), the individual is assumed to 
 18.35  have elected the refund indicated in paragraph (b). 
 18.36     (e) Upon an election under paragraph (b), or a mandatory 
 19.1   refund under paragraph (d), all rights in the public employees 
 19.2   retirement association coordinated plan due to elected and 
 19.3   appointed service are forfeited and may not be reestablished. 
 19.4      Sec. 17.  [LEGISLATIVE COMMISSION ON PENSIONS AND 
 19.5   RETIREMENT; STUDY OF THE APPROPRIATE MANNER FOR ESTABLISHING THE 
 19.6   ACTUARIAL VALUE OF RETIREMENT PLAN ASSETS.] 
 19.7      (a) The legislative commission on pensions and retirement 
 19.8   shall study the advantages and disadvantages of various methods 
 19.9   for establishing the actuarial value of retirement plan assets 
 19.10  and shall formulate a recommendation for the most appropriate 
 19.11  retirement plan actuarial asset valuation method.  The study 
 19.12  must include in the study a review of methods that smooth 
 19.13  short-term market value fluctuations in establishing a long-term 
 19.14  actuarial value of retirement plan assets. 
 19.15     (b) A report summarizing the study and discussing the 
 19.16  recommendation for the most appropriate retirement plan 
 19.17  actuarial asset valuation method, including the required 
 19.18  proposed legislation, must be transmitted to the chair of the 
 19.19  committee on governmental operations of the house of 
 19.20  representatives and to the chair of the committee on 
 19.21  governmental operations and veterans of the senate.  The report 
 19.22  must be transmitted on or before February 15, 1999. 
 19.23     Sec. 18.  [STATE BOARD OF INVESTMENT STUDY.] 
 19.24     (a) The state board of investment shall study the issue of 
 19.25  increasing the frequency of the valuation and purchase of shares 
 19.26  in the Minnesota supplemental investment fund under Minnesota 
 19.27  Statutes, section 11A.17, subdivision 7.  The study must include 
 19.28  an assessment of any increase in the administrative expenses of 
 19.29  the fund that would result from an increase in the share 
 19.30  valuation and purchase frequency, the consistency of the current 
 19.31  valuation and purchase timing with the timing of routine 
 19.32  contributions to the retirement plans invested through the 
 19.33  Minnesota supplemental investment fund, and the extent of 
 19.34  investment income loss borne by retirement plan contributors who 
 19.35  make contributions under alternate time frames or through 
 19.36  nonelectronic transmittal mechanisms. 
 20.1      (b) The study results must be reported to the chair of the 
 20.2   legislative commission on pensions and retirement, the chair of 
 20.3   the committee on governmental operations of the house of 
 20.4   representatives, and the chair of the committee on governmental 
 20.5   operations and veterans of the senate.  The study report must be 
 20.6   filed on or before February 1, 1999. 
 20.7      Sec. 19.  [REPEALER.] 
 20.8      (a) Minnesota Statutes 1996, sections 11A.17, subdivisions 
 20.9   10a and 14; and 352D.09, subdivision 8, are repealed. 
 20.10     (b) Minnesota Statutes 1997 Supplement, section 136F.45, 
 20.11  subdivision 3, is repealed. 
 20.12     Sec. 20.  [EFFECTIVE DATE.] 
 20.13     (a) Sections 1 and 19, paragraph (b), are effective on the 
 20.14  day following final enactment. 
 20.15     (b) Sections 2, 6, 7, 8, 10, and 16 are effective on the 
 20.16  day following final enactment. 
 20.17     (c) Sections 3, 4, 5, 9, 11, 12, and 19, paragraph (a), are 
 20.18  effective July 1, 1999. 
 20.19     (d) Section 13 is effective upon approval by the 
 20.20  Minneapolis city council and compliance with Minnesota Statutes, 
 20.21  section 645.021. 
 20.22     (e) Sections 14 and 15 are effective on the day following 
 20.23  approval by the city council of the city of St. Paul and 
 20.24  compliance with Minnesota Statutes, section 645.021. 
 20.25                             ARTICLE 3 
 20.26           QUALIFIED PART-TIME TEACHER RETIREMENT PROGRAM 
 20.27                         REPORTING DEADLINE
 20.28     Section 1.  Minnesota Statutes 1996, section 354.66, 
 20.29  subdivision 2, is amended to read: 
 20.30     Subd. 2.  [QUALIFIED PART-TIME POSITIONS TEACHER PROGRAM 
 20.31  PARTICIPATION REQUIREMENTS.] A teacher in the a Minnesota public 
 20.32  elementary schools school, a Minnesota secondary schools 
 20.33  school, or technical the Minnesota state colleges or in the 
 20.34  community college system or the state university and 
 20.35  universities system of the state who has three years or more of 
 20.36  allowable service in the association or three years or more of 
 21.1   full-time teaching service in Minnesota public elementary 
 21.2   schools, Minnesota secondary schools, or technical the Minnesota 
 21.3   state colleges or in the community college system or the state 
 21.4   university and universities system, may, by agreement with the 
 21.5   board of the employing district or with the authorized 
 21.6   representative of the board, may be assigned to teaching service 
 21.7   within the district in a part-time teaching position under 
 21.8   subdivision 3.  The association must receive a copy of the 
 21.9   agreement must be executed before October 1 of the year for 
 21.10  which the teacher requests to make retirement contributions 
 21.11  under subdivision 4.  A copy of the executed agreement must be 
 21.12  filed with the executive director of the association.  If the 
 21.13  copy of the executed agreement is filed with the association 
 21.14  after October 1 of the year for which the teacher requests to 
 21.15  make retirement contributions under subdivision 4, the employing 
 21.16  unit shall pay the fine specified in section 354.52, subdivision 
 21.17  6, for each calendar day that elapsed since the October 1 due 
 21.18  date.  The association may not accept an executed agreement that 
 21.19  is received by the association more than 15 months late.  The 
 21.20  association may not waive the fine required by this section. 
 21.21     Sec. 2.  Minnesota Statutes 1996, section 354.66, 
 21.22  subdivision 3, is amended to read: 
 21.23     Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] For 
 21.24  purposes of this section, the term "part-time teaching position" 
 21.25  shall mean a teaching position within the district in which the 
 21.26  teacher is employed for at least 50 full days or a fractional 
 21.27  equivalent thereof as prescribed in section 354.091, and for 
 21.28  which the teacher is compensated in an amount not exceeding 67 
 21.29  80 percent of the compensation established by the board for a 
 21.30  full-time teacher with identical education and experience with 
 21.31  the employing unit.  The compensation of a teacher in the state 
 21.32  colleges and university system may exceed the 67 80 percent 
 21.33  limit if the teacher does not teach just one of the three 
 21.34  quarters in the system's full school year, provided no 
 21.35  additional services are performed while the teacher participates 
 21.36  in the program. 
 22.1      Sec. 3.  Minnesota Statutes 1996, section 354A.094, 
 22.2   subdivision 2, is amended to read: 
 22.3      Subd. 2.  [PART-TIME TEACHING POSITION, DEFINED.] For 
 22.4   purposes of this section, the term "part-time teaching position" 
 22.5   shall mean a teaching position within the district in which the 
 22.6   teacher is employed for at least 50 full days or a fractional 
 22.7   equivalent of 50 full days calculated using the appropriate 
 22.8   minimum number of hours which would result in a full day of 
 22.9   service credit by the appropriate association and for which the 
 22.10  teacher is compensated in an amount not to exceed 67 80 percent 
 22.11  of the compensation rate established by the board for a 
 22.12  full-time teacher with identical education and experience within 
 22.13  the district. 
 22.14     Sec. 4.  Minnesota Statutes 1996, section 354A.094, 
 22.15  subdivision 3, is amended to read: 
 22.16     Subd. 3.  [QUALIFIED PART-TIME TEACHER PROGRAM 
 22.17  PARTICIPATION REQUIREMENTS.] A teacher in the public schools of 
 22.18  a city of the first class who has three years or more allowable 
 22.19  service in the applicable retirement fund association or three 
 22.20  years or more of full-time teaching service in Minnesota public 
 22.21  elementary schools, Minnesota secondary schools, and technical 
 22.22  Minnesota state colleges and universities system may, by 
 22.23  agreement with the board of the employing district, be assigned 
 22.24  to teaching service within the district in a part-time teaching 
 22.25  position.  The agreement must be executed before October 1 of 
 22.26  the year for which the teacher requests to make retirement 
 22.27  contributions under subdivision 4.  A copy of the executed 
 22.28  agreement must be filed with the executive director of the 
 22.29  retirement fund association.  If the copy of the executed 
 22.30  agreement is filed with the association after October 1 of the 
 22.31  year for which the teacher requests to make retirement 
 22.32  contributions under subdivision 4, the employing school district 
 22.33  shall pay a fine of $5 for each calendar day that elapsed since 
 22.34  the October 1 due date.  The association may not accept an 
 22.35  executed agreement that is received by the association more than 
 22.36  15 months late.  The association may not waive the fine required 
 23.1   by this section. 
 23.2      Sec. 5.  [EFFECTIVE DATE.] 
 23.3      (a) Sections 1 and 4 are effective on the day following 
 23.4   final enactment. 
 23.5      (b) Sections 2 and 3 are effective on July 1, 1998. 
 23.6                              ARTICLE 4 
 23.7                    PRIOR SERVICE CREDIT PURCHASES 
 23.8      Section 1.  [356.55] [PRIOR SERVICE CREDIT PURCHASE PAYMENT 
 23.9   AMOUNT DETERMINATION PROCEDURE.] 
 23.10     Subdivision 1.  [APPLICATION.] Unless the prior service 
 23.11  credit purchase authorization special law or general statute 
 23.12  provision explicitly specifies a different purchase payment 
 23.13  amount determination procedure, this section governs the 
 23.14  determination of the prior service credit purchase payment 
 23.15  amount of any prior service credit purchase. 
 23.16     Subd. 2.  [DETERMINATION.] (a) Unless the prior service 
 23.17  credit purchase minimum amount determined under paragraph (d) is 
 23.18  greater, the prior service credit purchase amount is the result 
 23.19  obtained by subtracting the amount determined under paragraph 
 23.20  (c) from the amount determined under paragraph (b). 
 23.21     (b) The present value of the unreduced single life 
 23.22  retirement annuity, with the purchase of the additional service 
 23.23  credit included, must be calculated as follows: 
 23.24     (1) the age at first eligibility for an unreduced single 
 23.25  life retirement annuity, including the purchase of the 
 23.26  additional service credit, must be determined; 
 23.27     (2) the length of total service credit, including the 
 23.28  period of the purchase of the additional service credit, at the 
 23.29  age determined under clause (1) must be determined; 
 23.30     (3) the highest five successive years average salary at the 
 23.31  age determined under clause (1), assuming five percent annual 
 23.32  compounding salary increases from the most current annual salary 
 23.33  amount at the age determined under clause (1), must be 
 23.34  determined; 
 23.35     (4) using the benefit accrual rate or rates applicable to 
 23.36  the prospective purchaser of the service credit based on the 
 24.1   prospective purchaser's actual date of entry into covered 
 24.2   service, the length of service determined under clause (2), and 
 24.3   the final average salary determined under clause (3), the annual 
 24.4   unreduced single life retirement annuity amount must be 
 24.5   determined; 
 24.6      (5) the actuarial present value of the projected annual 
 24.7   unreduced single life retirement annuity amount determined under 
 24.8   clause (4) at the age determined under clause (1), using the 
 24.9   same actuarial factor that the plan would use to determine 
 24.10  actuarial equivalence for optional annuity forms and related 
 24.11  purposes, must be determined; and 
 24.12     (6) the discounted value of the amount determined under 
 24.13  clause (5) to the date of the prospective purchase, using an 
 24.14  interest rate of 8.5 percent and no mortality probability 
 24.15  decrement, must be determined. 
 24.16     (c) The present value of the unreduced single life 
 24.17  retirement annuity, without the purchase of the additional 
 24.18  service credit included, must be calculated as follows:  
 24.19     (1) the age at first eligibility for an unreduced single 
 24.20  life retirement annuity, not including the purchase of 
 24.21  additional service credit, must be determined; 
 24.22     (2) the length of accrued service credit, without the 
 24.23  period of of the purchase of the additional service credit, at 
 24.24  the age determined under clause (1), must be determined; 
 24.25     (3) the highest five successive years average salary at the 
 24.26  age determined under clause (1), assuming five percent annual 
 24.27  compounding salary increases from the must current annual salary 
 24.28  amount to the age determined under clause (1), must be 
 24.29  determined; 
 24.30     (4) using the benefit accrual rate or rates applicable to 
 24.31  the prospective purchaser of the service credit based on the 
 24.32  prospective purchaser's actual date of entry into covered 
 24.33  service the length of service credit determined under clause 
 24.34  (2), and the final average salary determined under clause (3), 
 24.35  the annual unreduced single life retirement annuity amount must 
 24.36  be determined; 
 25.1      (5) the actuarial present value of the projected annual 
 25.2   unreduced single life retirement annuity amount determined under 
 25.3   clause (4) at the age determined under clause (1), using the 
 25.4   same actuarial factor that the plan would use to determined 
 25.5   actuarial equivalence for optional annuity forms and related 
 25.6   purposes, must be determined; 
 25.7      (6) the discounted value of the amount determined under 
 25.8   clause (5) to the date of the prospective purchase, using an 
 25.9   interest rate of 8.5 percent and no mortality probability 
 25.10  decrement, must be determined; and 
 25.11     (7) the net value of the discounted value determined under 
 25.12  clause (6), must be determined by applying a service ratio, 
 25.13  where the numerator is the total length of credited service 
 25.14  determined under paragraph (b), clause (2), reduced by the 
 25.15  period of the additional service credit proposed to be 
 25.16  purchased, and where the denominator is the total length of 
 25.17  service credit determined under clause (2). 
 25.18     (d) The minimum prior service credit purchase amount is the 
 25.19  amount determined by multiplying the most current annual salary 
 25.20  of the prospective purchaser by the combined current employee, 
 25.21  employer, and any additional employer contribution rates for the 
 25.22  applicable pension plan and by multiplying that results by the 
 25.23  number of years of service or fractions of years of service of 
 25.24  the potential service credit purchase. 
 25.25     Subd. 3.  [SOURCE OF DETERMINATION.] The prior service 
 25.26  credit purchase amounts under subdivision 2 must be calculated 
 25.27  by the chief administrative officer of the public pension plan 
 25.28  using a prior service credit purchase amount determination 
 25.29  process that has been verified for accuracy and consistency 
 25.30  under this section by the commission-retained actuary.  That 
 25.31  verification must be in writing and must occur before the first 
 25.32  prior service credit purchase for the plan under this section is 
 25.33  accepted and every five years thereafter or whenever the 
 25.34  preretirement interest rate, postretirement interest rate, 
 25.35  payroll growth, or mortality actuarial assumption for the 
 25.36  applicable pension plan is modified under section 356.215, 
 26.1   whichever occurs first. 
 26.2      Subd. 4.  [PRIOR SERVICE CREDIT PURCHASE PROCESSING FEE.] A 
 26.3   public pension plan may establish a fee to be charged to the 
 26.4   prospective purchaser for processing a prior service credit 
 26.5   purchase application and the prior service credit payment amount 
 26.6   calculation.  The fee must be established by the governing board 
 26.7   of the pension plan and must be uniform for comparable service 
 26.8   credit purchase situations or actuarial calculation requests.  
 26.9   The prior service credit purchase processing fee structure must 
 26.10  be published by the chief administrative officer of the 
 26.11  applicable retirement plan in the State Register. 
 26.12     Subd. 5.  [PAYMENT RESPONSIBILITY; EMPLOYER OPTION.] Unless 
 26.13  the prior service credit purchase authorization special law or 
 26.14  general statute provision explicitly specifies otherwise, the 
 26.15  prior service credit purchase payment amount determined under 
 26.16  subdivision 2 is payable by the purchaser, but the former 
 26.17  employer of the purchaser or the current employer of the 
 26.18  purchaser may, at its discretion, pay all or a portion of the 
 26.19  purchase payment amount in excess of an amount equal to the 
 26.20  employee contribution rate or rates in effect during the prior 
 26.21  service period applied to the actual salary rates in effect 
 26.22  during the prior service period, plus annual compound interest 
 26.23  at the rate of 8.5 percent from the date on which the 
 26.24  contributions would have been made if made contemporaneous with 
 26.25  the service period to the date on which the payment is actually 
 26.26  made. 
 26.27     Subd. 6.  [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 
 26.28  As part of the regular data reporting to the consulting actuary 
 26.29  retained by the legislative commission on pensions and 
 26.30  retirement annually, the chief administrative officer of each 
 26.31  public pension plan that has accepted a prior service credit 
 26.32  purchase payment under this section shall report for any 
 26.33  purchase, the purchaser, the purchaser's employer, the age of 
 26.34  the purchaser, the period of the purchase, the purchaser's 
 26.35  prepurchase accrued service credit, the purchaser's postpurchase 
 26.36  accrued service credit, the purchaser's prior service credit 
 27.1   payment, the prior service credit payment made by the 
 27.2   purchaser's employer, and the amount of the additional benefit 
 27.3   or annuity purchased. 
 27.4      (b) As part of the regular annual actuarial valuation for 
 27.5   the applicable public pension plan prepared by the consulting 
 27.6   actuary retained by the legislative commission on pensions and 
 27.7   retirement, there must be an exhibit comparing for each purchase 
 27.8   the total prior service credit payment received from all sources 
 27.9   and the increased public pension plan actuarial accrued 
 27.10  liability resulting from each purchase. 
 27.11     Subd. 7.  [EXPIRATION OF PURCHASE PAYMENT DETERMINATION 
 27.12  PROCEDURE.] (a) This section expires and is repealed on July 1, 
 27.13  2001. 
 27.14     (b) Authority for any public pension plan to accept a prior 
 27.15  service credit payment calculated in a timely fashion under this 
 27.16  section expires on October 1, 2001. 
 27.17     Sec. 2.  [356.551] [POST-JULY 1, 2001, PRIOR SERVICE CREDIT 
 27.18  PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 
 27.19     (a) Unless the prior service credit purchase authorization 
 27.20  special law or general statute provision explicitly specifies a 
 27.21  different purchase payment amount determination procedure, and 
 27.22  if section 356.55 has expired, this section governs the 
 27.23  determination of the prior service credit purchase payment 
 27.24  amount of any prior service credit purchase. 
 27.25     (b) The prior service credit purchase amount is an amount 
 27.26  equal to the actuarial present value, on the date of payment, as 
 27.27  calculated by the chief administrative officer of the pension 
 27.28  plan and reviewed by the actuary retained by the legislative 
 27.29  commission on pensions and retirement, of the amount of the 
 27.30  additional retirement annuity obtained by the acquisition of the 
 27.31  additional service credit in this section.  Calculation of this 
 27.32  amount must be made using the preretirement interest rate 
 27.33  applicable to the public pension plan specified in section 
 27.34  356.215, subdivision 4d, and the mortality table adopted for the 
 27.35  public pension plan.  The calculation must assume continuous 
 27.36  future service in the public pension plan until, and retirement 
 28.1   at, the age at which the minimum requirements of the fund for 
 28.2   normal retirement or retirement with an annuity unreduced for 
 28.3   retirement at an early age, including section 356.30, are met 
 28.4   with the additional service credit purchased.  The calculation 
 28.5   must also assume a full-time equivalent salary, or actual 
 28.6   salary, whichever is greater, and a future salary history that 
 28.7   includes annual salary increases at the applicable salary 
 28.8   increase rate for the plan specified in section 356.215, 
 28.9   subdivision 4d.  Payment must be made in one lump sum within one 
 28.10  year of the prior service credit authorization.  Payment of the 
 28.11  amount calculated under this subdivision must be made by the 
 28.12  applicable eligible person.  However, the current employer or 
 28.13  the prior employer may, at its discretion, pay all or any 
 28.14  portion of the payment amount that exceeds an amount equal to 
 28.15  the employee contribution rates in effect during the period or 
 28.16  periods of prior service applied to the actual salary rates in 
 28.17  effect during the period or periods of prior service, plus 
 28.18  interest at the rate of 8.5 percent a year compounded annually 
 28.19  from the date on which the contributions would otherwise have 
 28.20  been made to the date on which the payment is made.  If the 
 28.21  employer agrees to payments under this paragraph, the purchaser 
 28.22  must make the employee payments required under this paragraph 
 28.23  within 290 days of the prior service credit authorization.  If 
 28.24  that employee payment is made, the employer payment under this 
 28.25  paragraph must be remitted to the chief administrative officer 
 28.26  of the public pension plan within 60 days of receipt by the 
 28.27  chief administrative officer of the employee payments specified 
 28.28  under this paragraph. 
 28.29     (c) The prospective purchaser must provide any relevant 
 28.30  documentation required by the chief administrative officer of 
 28.31  the public pension plan to determine eligibility for the prior 
 28.32  service credit under this section. 
 28.33     (d) Service credit for the purchase period must be granted 
 28.34  by the public pension plan to the purchaser upon receipt of the 
 28.35  purchase payment amount specified in paragraph (b). 
 28.36     Sec. 3.  [PRIOR SERVICE CREDIT PURCHASE AUTHORIZATION.] 
 29.1      Subdivision 1.  [INDEPENDENT SCHOOL DISTRICT NO. 77, 
 29.2   MANKATO, TEACHER.] (a) Notwithstanding any provision of 
 29.3   Minnesota Statutes, section 354.094, or other law to the 
 29.4   contrary, an eligible person described in paragraph (b) is 
 29.5   entitled to obtain allowable and formula service credit in the 
 29.6   teachers retirement association for the period described in 
 29.7   paragraph (c) upon the payment of the full service credit 
 29.8   purchase amount specified in Minnesota Statutes, section 356.55. 
 29.9      (b) An eligible person is a person who was: 
 29.10     (1) born on June 23, 1946; 
 29.11     (2) granted an extended leave of absence from employment 
 29.12  under the teacher mobility program by independent school 
 29.13  district No. 77, Mankato, on March 3, 1986, for the period July 
 29.14  1, 1986, to June 30, 1989; and 
 29.15     (3) granted a leave which was erroneously characterized in 
 29.16  the "other" category on the leave of absence report submitted to 
 29.17  the teachers retirement association. 
 29.18     (c) The period for service credit purchase is July 1, 1986, 
 29.19  to June 30, 1989. 
 29.20     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 29.21  subdivision 5, the eligible person must pay, on or before 
 29.22  September 1, 1998, an amount equal to the employee contribution 
 29.23  rate or rates in effect during the prior service period applied 
 29.24  to the actual salary rates in effect during the prior service 
 29.25  period, plus annual compound interest at the rate of 8.5 percent 
 29.26  from the date on which the contributions would have been made if 
 29.27  made contemporaneous with the service period to the date on 
 29.28  which the payment is actually made and independent school 
 29.29  district No. 77, Mankato, must pay the balance of the prior 
 29.30  service credit purchase payment amount calculated under 
 29.31  Minnesota Statutes, section 356.55, within 30 days of the 
 29.32  payment by the eligible person.  The executive director of the 
 29.33  teachers retirement association must notify the superintendent 
 29.34  of independent school district No. 77, Mankato, of its payment 
 29.35  amount and payment due date if the eligible person makes the 
 29.36  required payment. 
 30.1      (e) If independent school district No. 77, Mankato, fails 
 30.2   to pay its portion of the required prior service credit purchase 
 30.3   payment amount, the executive director may notify the 
 30.4   commissioner of finance of that fact and the commissioner of 
 30.5   finance may order that the required school district payment be 
 30.6   deducted from the next subsequent payment or payments of state 
 30.7   education aid to the school district and be transmitted to the 
 30.8   teachers retirement association. 
 30.9      Subd. 2.  [INDEPENDENT SCHOOL DISTRICT NO. 199, INVER GROVE 
 30.10  HEIGHTS, TEACHER.] (a) Notwithstanding Minnesota Statutes, 
 30.11  section 354.096, an eligible person described in paragraph (b) 
 30.12  is entitled to purchase allowable service credit in the teachers 
 30.13  retirement association for the period described in paragraph (c) 
 30.14  by paying the amount specified in Minnesota Statutes, section 
 30.15  356.55, subdivision 2. 
 30.16     (b) An eligible person is a person who: 
 30.17     (1) was on medical leave for multiple sclerosis in the fall 
 30.18  of 1990; 
 30.19     (2) was employed by independent school district No. 199, 
 30.20  Inver Grove Heights, during the period that the medical leave 
 30.21  was taken; and 
 30.22     (3) was not properly notified of the deadline to purchase 
 30.23  service credit for the medical leave period. 
 30.24     (c) The period for service credit purchase is 18 days of a 
 30.25  period of medical leave during the fall of 1990. 
 30.26     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 30.27  subdivision 5, the eligible person must pay, on or before 
 30.28  September 1, 1998, an amount equal to the employee contribution 
 30.29  rate or rates in effect during the prior service period applied 
 30.30  to the actual salary rates in effect during the prior service 
 30.31  period, plus annual compound interest at the rate of 8.5 percent 
 30.32  from the date on which the contributions would have been made if 
 30.33  made contemporaneous with the service period to the date on 
 30.34  which the payment is actually made and independent school 
 30.35  district No. 199, Inver Grove Heights, must pay the balance of 
 30.36  the prior service credit purchase payment amount calculated 
 31.1   under Minnesota Statutes, section 356.55, within 30 days of the 
 31.2   payment by the eligible person.  The executive director of the 
 31.3   teachers retirement association must notify the superintendent 
 31.4   of independent school district No. 199, Inver Grove Heights, of 
 31.5   its payment amount and payment due date if the eligible person 
 31.6   makes the required payment. 
 31.7      (e) If independent school district No. 199, Inver Grove 
 31.8   Heights, fails to pay its portion of the required prior service 
 31.9   credit purchase payment amount, the executive director may 
 31.10  notify the commissioner of finance of that fact and the 
 31.11  commissioner of finance may order that the required school 
 31.12  district payment be deducted from the next subsequent payment or 
 31.13  payments of state education aid to the school district and be 
 31.14  transmitted to the teachers retirement association. 
 31.15     Subd. 3.  [PRE-JANUARY 1, 1998, LATE REPORTED QUALIFIED 
 31.16  PART-TIME TEACHER PROGRAM AGREEMENT PERIODS.] (a) 
 31.17  Notwithstanding any provision of Minnesota Statutes, section 
 31.18  354.66, to the contrary, an eligible person described in 
 31.19  paragraph (b) is entitled to obtain allowable and formula 
 31.20  service credit in the teachers retirement association for the 
 31.21  period described in paragraph (c) upon the payment of the full 
 31.22  service credit purchase amount specified in Minnesota Statutes, 
 31.23  section 356.55. 
 31.24     (b) An eligible person is a person who rendered part-time 
 31.25  teaching service after the end of the 1993-1994 school year and 
 31.26  before the beginning of the 1998-1999 school year under an 
 31.27  agreement with a school district or other applicable employer 
 31.28  under Minnesota Statutes, section 354.66, that was executed 
 31.29  before the applicable October 1, but was not filed by the 
 31.30  employing unit with the teachers retirement association before 
 31.31  the applicable October 1 deadline. 
 31.32     (c) The period for service credit purchase is the 
 31.33  uncredited portion of a full year of service credit during the 
 31.34  1994-1995, 1995-1996, 1996-1997, and 1997-1998 school years 
 31.35  where the uncredited period of service resulted solely from a 
 31.36  failure of the employing unit to file the part-time teaching 
 32.1   participation agreement with the teachers retirement association 
 32.2   in a timely fashion. 
 32.3      (d) Notwithstanding Minnesota Statutes, section 356.55, 
 32.4   subdivision 5, the eligible person must pay, on or before 
 32.5   November 30, 1998, an amount equal to the employee contribution 
 32.6   rate or rates in effect during the prior service period applied 
 32.7   to the actual salary rates in effect during the prior service 
 32.8   period, plus annual compound interest at the rate of 8.5 percent 
 32.9   from the date on which the contributions would have been made if 
 32.10  made contemporaneous with the service period to the date on 
 32.11  which the payment is actually made and the employing unit that 
 32.12  agreed to the part-time teaching service participation program 
 32.13  must pay the balance of the prior service credit purchase 
 32.14  payment amount calculated under Minnesota Statutes, section 
 32.15  356.55, within 30 days of the payment by the eligible person.  
 32.16  The executive director of the teachers retirement association 
 32.17  must notify the chief administrative officer of the applicable 
 32.18  employing unit of its payment amount and payment due date if the 
 32.19  eligible person makes the required payment. 
 32.20     (e) If the applicable employing unit fails to pay its 
 32.21  portion of the required prior service credit purchase payment 
 32.22  amount, the executive director may notify the commissioner of 
 32.23  finance of that fact and the commissioner of finance may order 
 32.24  that the required employer payment be deducted from the next 
 32.25  subsequent payment or payments of any state education or other 
 32.26  aid to that employing unit and be transmitted to the teachers 
 32.27  retirement association. 
 32.28     Subd. 4.  [PURCHASE OF SERVICE CREDIT AUTHORIZATION; MIDDLE 
 32.29  MANAGEMENT ASSOCIATION EMPLOYEE.] (a) Notwithstanding Minnesota 
 32.30  Statutes, sections 352.01, subdivision 2, and 352.029, 
 32.31  subdivision 1, and Minnesota Statutes 1997 Supplement, section 
 32.32  352.01, subdivision 2a, an eligible employee described in 
 32.33  paragraph (b) is eligible for membership in the Minnesota state 
 32.34  retirement system general plan and is eligible to purchase 
 32.35  service credit in that plan as specified in paragraph (d). 
 32.36     (b) An eligible employee is a person who: 
 33.1      (1) has been employed by the middle management association 
 33.2   since February 14, 1994; and 
 33.3      (2) was born on September 13, 1958. 
 33.4      (c) An eligible employee in paragraph (b) remains eligible 
 33.5   for membership in the Minnesota state retirement system general 
 33.6   plan, under this subdivision, while the individual remains 
 33.7   employed by the middle management association or a successor 
 33.8   organization providing contribution requirements and other 
 33.9   general requirements for membership are met. 
 33.10     (d) An eligible employee under paragraph (b) is entitled to 
 33.11  purchase service credit in the Minnesota state retirement system 
 33.12  general plan for the period of service prior to the effective 
 33.13  date of this act for service with the middle management 
 33.14  association.  An eligible employee may not purchase service 
 33.15  credit for any period during which the employer has made 
 33.16  contributions on behalf of the employee to a defined 
 33.17  contribution pension plan or for any period during which the 
 33.18  employee or the employer have made contributions to a defined 
 33.19  benefit pension plan covering public, nonprofit, or private 
 33.20  sector employees, other than a volunteer firefighter relief 
 33.21  association governed by Minnesota Statutes, chapter 424A.  
 33.22  Authority to make the payment terminates on July 1, 1999, or 
 33.23  upon termination of employment with the middle management 
 33.24  association, whichever is earlier. 
 33.25     Subd. 5.  [INDEPENDENT SCHOOL DISTRICT NO. 13, COLUMBIA 
 33.26  HEIGHTS, TEACHER.] (a) Notwithstanding Minnesota Statutes, 
 33.27  section 354.094, an eligible person described in paragraph (b) 
 33.28  is entitled to purchase allowable and formula service credit in 
 33.29  the teachers retirement association for the period described in 
 33.30  paragraph (c) by paying the amount specified in Minnesota 
 33.31  Statutes, section 356.55, subdivision 2. 
 33.32     (b) An eligible person for purposes of paragraph (a) is a 
 33.33  person who was born on January 26, 1944, was initially hired by 
 33.34  independent school district No. 13, Columbia Heights, on August 
 33.35  30, 1967, was granted a five year extended leave of absence by 
 33.36  independent school district No. 13, Columbia Heights, for the 
 34.1   period July 1, 1994, through June 30, 1999, and was unable to 
 34.2   make contributions under Minnesota Statutes, section 354.094, 
 34.3   subdivision 1, because of the failure of independent school 
 34.4   district No. 13, Columbia Heights, to timely forward the 
 34.5   person's leave payment to the teachers retirement association. 
 34.6      (c) The period for service credit purchase is the extended 
 34.7   leave of absence for the 1996-1997 school year. 
 34.8      (d) Notwithstanding Minnesota Statutes, section 356.55, 
 34.9   subdivision 5, the eligible person must pay, on or before 
 34.10  September 1, 1998, an amount equal to the employee, employer, 
 34.11  and employer additional contribution rates in effect during the 
 34.12  prior service period applied to the actual salary rates in 
 34.13  effect during the prior service period, plus annual compound 
 34.14  interest at the rate of 8.5 percent from the date on which the 
 34.15  contributions would have been made if made contemporaneous with 
 34.16  the service period to the date on which the payment is actually 
 34.17  made and independent school district No. 13, Columbia Heights, 
 34.18  must pay the balance of the prior service credit purchase 
 34.19  payment amount calculated under Minnesota Statutes, section 
 34.20  356.55, within 30 days of the payment by the eligible person.  
 34.21  The executive director of the teachers retirement association 
 34.22  must notify the superintendent of independent school district 
 34.23  No. 13, Columbia Heights, of its payment amount and payment due 
 34.24  date if the eligible person makes the required payment. 
 34.25     (e) If independent school district No. 13, Columbia 
 34.26  Heights, fails to pay its portion of the required prior service 
 34.27  credit purchase payment amount, the executive director may 
 34.28  notify the commissioner of finance of that fact and the 
 34.29  commissioner of finance may order that the required employer 
 34.30  payment be deducted from any state education or other aid 
 34.31  payable to independent school district No. 13, Columbia Heights, 
 34.32  and be transmitted to the teachers retirement association. 
 34.33     Subd. 6.  [WINONA STATE UNIVERSITY FACULTY MEMBER.] (a) 
 34.34  Notwithstanding Minnesota Statutes, section 354.094, an eligible 
 34.35  person described in paragraph (b) is entitled to purchase 
 34.36  allowable service credit in the teachers retirement association 
 35.1   for the period described in paragraph (c) by paying the amount 
 35.2   specified in Minnesota Statutes, section 356.55, subdivision 2. 
 35.3      (b) An eligible person for purposes of paragraph (a) is a 
 35.4   person who was born on September 5, 1943, was initially hired by 
 35.5   Winona state university on September 4, 1979, was granted an 
 35.6   extended leave of absence by Winona state university on March 
 35.7   18, 1996, and was unable to make contributions under Minnesota 
 35.8   Statutes, section 354.094, subdivision 1, because of the failure 
 35.9   of Winona state university to timely submit the leave of absence 
 35.10  report to the teachers retirement association. 
 35.11     (c) The period for service credit purchase is the first 
 35.12  year of a three year extended leave of absence that began with 
 35.13  the 1996-1997 school year. 
 35.14     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 35.15  subdivision 5, the eligible person must pay, on or before 
 35.16  September 1, 1998, an amount equal to the employee, employer, 
 35.17  and employer additional contribution rates in effect during the 
 35.18  prior service period applied to the actual salary rates in 
 35.19  effect during the prior service period, plus annual compound 
 35.20  interest at the rate of 8.5 percent from the date on which the 
 35.21  contributions would have been made if made contemporaneous with 
 35.22  the service period to the date on which the payment is actually 
 35.23  made and Winona state university must pay the balance of the 
 35.24  prior service credit purchase payment amount calculated under 
 35.25  Minnesota Statutes, section 356.55, within 30 days of the 
 35.26  payment by the eligible person.  The executive director of the 
 35.27  teachers retirement association must notify the president of 
 35.28  Winona state university of its payment amount and payment due 
 35.29  date if the eligible person makes the required payment. 
 35.30     (e) If Winona state university fails to pay its portion of 
 35.31  the required prior service credit purchase payment amount, the 
 35.32  executive director may notify the commissioner of finance of 
 35.33  that fact and the commissioner of finance may order that the 
 35.34  required employer payment be deducted from any appropriation to 
 35.35  the Minnesota state colleges and universities system and be 
 35.36  transmitted to the teachers retirement association. 
 36.1      Subd. 7.  [INDEPENDENT SCHOOL DISTRICT NO. 621, MOUNDS 
 36.2   VIEW, TEACHER.] (a) Notwithstanding Minnesota Statutes, section 
 36.3   354.092, an eligible person described in paragraph (b) is 
 36.4   entitled to purchase allowable service credit in the teachers 
 36.5   retirement association for the period described in paragraph (c) 
 36.6   by paying the amount specified in Minnesota Statutes, section 
 36.7   356.55, subdivision 2. 
 36.8      (b) An eligible person for purposes of paragraph (a) is a 
 36.9   person who was born on December 19, 1940, was initially employed 
 36.10  as a teacher on August 27, 1968, and is employed by independent 
 36.11  school district No. 621, Mounds View. 
 36.12     (c) The period for service credit purchase is the 
 36.13  uncredited portion of a sabbatical leave during the 1984-1985 
 36.14  school year. 
 36.15     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 36.16  subdivision 5, the eligible person must pay, on or before 
 36.17  September 1, 1998, an amount equal to the employee contribution 
 36.18  rate or rates in effect during the prior service period applied 
 36.19  to the actual salary rates in effect during the prior service 
 36.20  period, plus annual compound interest at the rate of 8.5 percent 
 36.21  from the date on which the contributions would have been made if 
 36.22  made contemporaneous with the service period to the date on 
 36.23  which the payment is actually made.  Independent school district 
 36.24  No. 621, Mounds View, must pay the balance of the prior service 
 36.25  credit purchase payment amount calculated under Minnesota 
 36.26  Statutes, section 356.55, within 30 days of the payment by the 
 36.27  eligible person.  The executive director of the teachers 
 36.28  retirement association must notify the superintendent of 
 36.29  independent school district No. 621, Mounds View, of its payment 
 36.30  amount and payment due date if the eligible person makes the 
 36.31  required payment. 
 36.32     (e) If independent school district No. 621, Mounds View, 
 36.33  fails to pay its portion of the required prior service credit 
 36.34  purchase payment amount, the executive director may notify the 
 36.35  commissioner of finance of that fact and the commissioner of 
 36.36  finance may order that the required employer payment be deducted 
 37.1   from the next subsequent payment or payments of state education 
 37.2   aid to the school district be transmitted to the teachers 
 37.3   retirement association. 
 37.4      Subd. 8.  [INDEPENDENT SCHOOL DISTRICT NO. 709, DULUTH, 
 37.5   TEACHER.] (a) Notwithstanding any provision of Minnesota 
 37.6   Statutes, chapter 354A, the articles of incorporation of the 
 37.7   Duluth teachers retirement fund association, or the Duluth 
 37.8   teachers retirement fund association bylaws to the contrary, an 
 37.9   eligible person described in paragraph (b) is entitled to 
 37.10  purchase allowable service credit in the Duluth teachers 
 37.11  retirement fund association for the periods described in 
 37.12  paragraph (c) by paying the amount specified in Minnesota 
 37.13  Statutes, section 356.55, subdivision 2. 
 37.14     (b) An eligible person for purposes of paragraph (a) is a 
 37.15  person who was born on October 29, 1942, was first employed by 
 37.16  independent school district No. 709, Duluth, on September 7, 
 37.17  1966, was granted a maternity leave that began on February 26, 
 37.18  1968, was employed by independent school district No. 709, 
 37.19  Duluth, on a less-than-full-time basis during the 1970-1971 and 
 37.20  1971-1972 school years, and was employed on a full-time contract 
 37.21  basis from September 4, 1972, through the 1997-1998 school year. 
 37.22     (c) The period for service credit purchase is any portion 
 37.23  of the period February 26, 1968, to September 4, 1972, that was 
 37.24  not previously credited as allowable service by the Duluth 
 37.25  teachers retirement fund association, but not to exceed one year 
 37.26  of service credit for any school year. 
 37.27     Subd. 9.  [INDEPENDENT SCHOOL DISTRICT NO. 200, HASTINGS, 
 37.28  TEACHER.] (a) Notwithstanding Minnesota Statutes, section 
 37.29  354.094, an eligible person described in paragraph (b) is 
 37.30  entitled to purchase allowable and formula service credit in the 
 37.31  teachers retirement association for the period described in 
 37.32  paragraph (c) by paying the amount specified in Minnesota 
 37.33  Statutes, section 356.55, subdivision 2. 
 37.34     (b) An eligible person for purposes of paragraph (a) is a 
 37.35  person who was born on December 17, 1941, was initially employed 
 37.36  by independent school district No. 200, Hastings, and was first 
 38.1   granted an extended leave of absence for the 1996-1997 school 
 38.2   year. 
 38.3      (c) The period for service credit purchase is the 1996-1997 
 38.4   school year. 
 38.5      (d) Notwithstanding Minnesota Statutes, section 356.55, 
 38.6   subdivision 5, the eligible person must pay, on or before 
 38.7   September 1, 1998, an amount equal to the employee contribution 
 38.8   rate or rates in effect during the prior service period applied 
 38.9   to the actual salary rates in effect during the prior service 
 38.10  period, plus annual compound interest at the rate of 8.5 percent 
 38.11  from the date on which the contributions would have been made if 
 38.12  made contemporaneous with the service period to the date on 
 38.13  which the payment is actually made.  Independent school district 
 38.14  No. 200, Hastings, must pay the balance of the prior service 
 38.15  credit purchase payment amount calculated under Minnesota 
 38.16  Statutes, section 356.55, within 30 days of the payment by the 
 38.17  eligible person.  The executive director of the teachers 
 38.18  retirement association must notify the superintendent of 
 38.19  independent school district No. 200, Hastings, of its payment 
 38.20  amount and payment due date if the eligible person makes the 
 38.21  required payment. 
 38.22     (e) If independent school district No. 200, Hastings, fails 
 38.23  to pay its portion of the required prior service credit purchase 
 38.24  payment amount, the executive director may notify the 
 38.25  commissioner of finance of that fact and the commissioner of 
 38.26  finance may order that the required employer payment be deducted 
 38.27  from the next subsequent payment or payments of state education 
 38.28  aid to the school district be transmitted to the teachers 
 38.29  retirement association. 
 38.30     Sec. 4.  [EFFECTIVE DATE.] 
 38.31     Sections 1, 2, and 3 are effective on the day following 
 38.32  final enactment. 
 38.33                             ARTICLE 5 
 38.34         JUDGES RETIREMENT PLAN CONTRIBUTION MODIFICATIONS
 38.35     Section 1.  Minnesota Statutes 1997 Supplement, section 
 38.36  15A.083, subdivision 5, is amended to read: 
 39.1      Subd. 5.  [TAX COURT.] The salary of a judge of the tax 
 39.2   court is the same as 98.52 percent of the salary for a district 
 39.3   court judge.  The salary of the chief tax court judge is the 
 39.4   same as 98.52 percent of the salary for a chief district court 
 39.5   judge. 
 39.6      Sec. 2.  Minnesota Statutes 1997 Supplement, section 
 39.7   15A.083, subdivision 6a, is amended to read: 
 39.8      Subd. 6a.  [ADMINISTRATIVE LAW JUDGE; SALARIES.] The salary 
 39.9   of the chief administrative law judge is the same as 98.52 
 39.10  percent of the salary of a district court judge.  The salaries 
 39.11  of the assistant chief administrative law judge and 
 39.12  administrative law judge supervisors are 95 93.60 percent of the 
 39.13  salary of a district court judge.  The salary of an 
 39.14  administrative law judge employed by the office of 
 39.15  administrative hearings is 90 88.67 percent of the salary of a 
 39.16  district court judge as set under section 15A.082, subdivision 3.
 39.17     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
 39.18  15A.083, subdivision 7, is amended to read: 
 39.19     Subd. 7.  [WORKERS' COMPENSATION COURT OF APPEALS AND 
 39.20  COMPENSATION JUDGES.] Salaries of judges of the workers' 
 39.21  compensation court of appeals are the same as 98.52 percent of 
 39.22  the salary for district court judges.  The salary of the chief 
 39.23  judge of the workers' compensation court of appeals is the same 
 39.24  as 98.52 percent of the salary for a chief district court 
 39.25  judge.  Salaries of compensation judges are 90 88.67 percent of 
 39.26  the salary of district court judges.  The chief workers' 
 39.27  compensation settlement judge at the department of labor and 
 39.28  industry may be paid an annual salary that is up to five percent 
 39.29  greater than the salary of workers' compensation settlement 
 39.30  judges at the department of labor and industry. 
 39.31     Sec. 4.  Minnesota Statutes 1996, section 490.123, 
 39.32  subdivision 1a, is amended to read: 
 39.33     Subd. 1a.  [MEMBER CONTRIBUTION RATES.] (a) A judge who is 
 39.34  covered by the federal old age, survivors, disability, and 
 39.35  health insurance program shall contribute to the fund from each 
 39.36  salary payment a sum equal to 6.27 8.00 percent of salary.  
 40.1      (b) A judge not so covered shall contribute to the fund 
 40.2   from each salary payment a sum equal to 8.15 percent of salary. 
 40.3      (c) The contribution under this subdivision is payable by 
 40.4   salary deduction. 
 40.5      Sec. 5.  Minnesota Statutes 1996, section 490.123, 
 40.6   subdivision 1b, is amended to read: 
 40.7      Subd. 1b.  [EMPLOYER CONTRIBUTION RATE.] The employer 
 40.8   contribution rate on behalf of a judge is 22 20.5 percent of 
 40.9   salary. 
 40.10     The employer contribution must be paid by the state court 
 40.11  administrator and is payable at the same time as member 
 40.12  contributions under subdivision 1a are remitted. 
 40.13     Sec. 6.  Laws 1997, Second Special Session chapter 3, 
 40.14  section 16, is amended to read: 
 40.15     Sec. 16.  [SALARIES OF CONSTITUTIONAL OFFICERS, 
 40.16  LEGISLATORS, AND JUDGES.] 
 40.17     (a) The salaries of constitutional officers are increased 
 40.18  by 2.5 percent effective July 1, 1997, and by 2.5 percent 
 40.19  effective January 1, 1998. 
 40.20     (b) The salaries of legislators are increased by 5.0 
 40.21  percent effective January 4, 1999. 
 40.22     (c) The salaries of the judges of the supreme court, court 
 40.23  of appeals, and district court are increased by 4.0 percent 
 40.24  effective July 1, 1997, and by 5.0 percent effective January 1, 
 40.25  1998, and by 1.5 percent effective July 1, 1998. 
 40.26     (d) Effective July 1, 1999, the salaries of judges of the 
 40.27  supreme court, court of appeals, and district court are 
 40.28  increased by the average of the general salary adjustments for 
 40.29  state employees in fiscal year 1998 provided by negotiated 
 40.30  collective bargaining agreements or arbitration awards ratified 
 40.31  by the legislature in the 1998 legislative session. 
 40.32     (e) Effective January 1, 2000, the salaries of judges of 
 40.33  the supreme court, court of appeals, and district court are 
 40.34  increased by the average of the general salary adjustments for 
 40.35  state employees in fiscal year 1999 provided by negotiated 
 40.36  collective bargaining agreements or arbitration awards ratified 
 41.1   by the legislature in the 1998 legislative session. 
 41.2      (f) The commissioner of employee relations shall calculate 
 41.3   the average of the general salary adjustments provided by 
 41.4   negotiated collective bargaining agreements or arbitration 
 41.5   awards ratified by the legislature in the 1998 legislative 
 41.6   session.  Negotiated collective bargaining agreements or 
 41.7   arbitration awards that do not include general salary 
 41.8   adjustments may not be included in these calculations.  The 
 41.9   commissioner shall weigh the general salary adjustments by the 
 41.10  number of full-time equivalent employees covered by each 
 41.11  agreement or arbitration award.  The commissioner shall 
 41.12  calculate the average general salary adjustment for each fiscal 
 41.13  year covered by the agreements or arbitration awards.  The 
 41.14  results of these calculations must be expressed as percentages, 
 41.15  rounded to the nearest one-tenth of one percent.  The 
 41.16  commissioner shall calculate the new salaries for the positions 
 41.17  listed in paragraphs (d) and (e) using the applicable 
 41.18  percentages from the calculations in this paragraph and report 
 41.19  them to the speaker of the house, the president of the senate, 
 41.20  the chief justice of the supreme court, and the governor. 
 41.21     Sec. 7.  [SALARY INCREASE CONDITIONED ON MEMBER 
 41.22  CONTRIBUTION INCREASE.] 
 41.23     The increase in judicial salaries under section 6 is not 
 41.24  applicable to a judge if the member contribution rate increase 
 41.25  under section 4, paragraph (a), is not also deducted from the 
 41.26  salary of the judge. 
 41.27     Sec. 8.  [EFFECTIVE DATE.] 
 41.28     Sections 1 to 7 are effective on July 1, 1998. 
 41.29                             ARTICLE 6 
 41.30              UNCLASSIFIED STATE EMPLOYEE PENSION PLAN 
 41.31                           MODIFICATIONS 
 41.32     Section 1.  Minnesota Statutes 1996, section 352D.12, is 
 41.33  amended to read: 
 41.34     352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 
 41.35     (a) An employee who is a participant in the unclassified 
 41.36  program and who has prior service credit in a covered plan under 
 42.1   chapters 3A, 352, 352C, 353, 354, 354A, and 422A may, within the 
 42.2   time limits specified in this section, elect to transfer to the 
 42.3   unclassified program prior service contributions to one or more 
 42.4   of those plans.  Participants with six or more years of prior 
 42.5   service credit in a plan governed by chapter 3A or 352C on July 
 42.6   1, 1998, may not transfer prior service contributions.  
 42.7   Participants with less than six years of prior service credit in 
 42.8   a plan governed by chapter 3A or 352C on July 1, 1998, must be 
 42.9   contributing to the unclassified plan on or after January 5, 
 42.10  1999, in order to transfer prior contributions. 
 42.11     (b) For participants with prior service credit in a plan 
 42.12  governed by chapter 352, 353, 354, 354A, or 422A, "prior service 
 42.13  contributions" means the accumulated employee and equal employer 
 42.14  contributions with interest at an annual rate of 8.5 percent 
 42.15  compounded annually, based on fiscal year balances.  For 
 42.16  participants with less than six years of service credit as of 
 42.17  July 1, 1998, and with prior service credit in a plan governed 
 42.18  by chapter 3A or 352C, "prior service contributions" means an 
 42.19  amount equal to twice the amount of the accumulated member 
 42.20  contributions plus annual compound interest at the rate of 8.5 
 42.21  percent, computed on fiscal year balances.  
 42.22     (c) If a participant has taken a refund from a fund 
 42.23  retirement plan listed in this section, the participant may 
 42.24  repay the refund to that fund plan, notwithstanding any 
 42.25  restrictions on repayment to that fund plan, plus 8.5 percent 
 42.26  interest compounded annually and have the accumulated employee 
 42.27  and equal employer contributions transferred to the unclassified 
 42.28  program with interest at an annual rate of 8.5 percent 
 42.29  compounded annually based on fiscal year balances.  If a person 
 42.30  repays a refund and subsequently elects to have the money 
 42.31  transferred to the unclassified program, the repayment amount, 
 42.32  including interest, is added to the fiscal year balance in the 
 42.33  year which the repayment was made. 
 42.34     (d) A participant electing to transfer prior service 
 42.35  contributions credited to a retirement plan governed by chapter 
 42.36  352, 353, 354, 354A, or 422A as provided under this section must 
 43.1   complete the application for the transfer and repay any refund 
 43.2   within one year of July 1, 1985 or the commencement of the 
 43.3   employee's participation in the unclassified program, whichever 
 43.4   is later.  A participant electing to transfer prior service 
 43.5   contributions credited to a retirement plan governed by chapter 
 43.6   3A or 352C as provided under this section must complete the 
 43.7   application for the transfer and repay any refund between 
 43.8   January 5, 1999, and June 1, 1999, if the employee commenced 
 43.9   participation in the unclassified program before January 5, 
 43.10  1999, or within one year of the commencement of the employee's 
 43.11  participation in the unclassified program if the employee 
 43.12  commenced participation in the unclassified program after 
 43.13  January 4, 1999. 
 43.14     Sec. 2.  [FUNDING.] 
 43.15     Money appropriated in Laws 1997, chapter 202, article 1, 
 43.16  section 31, may be used to make transfers of funds on behalf of 
 43.17  legislators and constitutional officers under section 1. 
 43.18     Sec. 3.  [EFFECTIVE DATE.] 
 43.19     Sections 1 and 2 are effective July 1, 1998. 
 43.20                             ARTICLE 7 
 43.21              LOCAL POLICE AND FIRE RELIEF ASSOCIATION  
 43.22                          PENSION CHANGES 
 43.23     Section 1.  [COLUMBIA HEIGHTS VOLUNTEER FIRE DEPARTMENT 
 43.24  RELIEF ASSOCIATION; INCORPORATION AND PLAN RESTRUCTURING.] 
 43.25     Subdivision 1.  [ORGANIZATION AND PLAN RESTRUCTURING.] 
 43.26  Notwithstanding the provisions of Laws 1977, chapter 374, 
 43.27  sections 38 to 60, as amended, the entity currently known as the 
 43.28  "Columbia Heights fire department relief association, volunteer 
 43.29  division" shall become incorporated under Minnesota Statutes, 
 43.30  chapter 317A, and be known as the "Columbia Heights volunteer 
 43.31  fire department relief association."  The new entity will be 
 43.32  governed by Minnesota Statutes, chapters 69, 317A, 356, 356A, 
 43.33  and 424A, and any other laws applicable to volunteer fire 
 43.34  department relief associations.  The Columbia Heights volunteer 
 43.35  fire department relief association may adopt the existing bylaws 
 43.36  of the "Columbia Heights fire department relief association, 
 44.1   volunteer division"; provided, however, that the bylaws must 
 44.2   provide that future benefits payable to any member of the 
 44.3   association are defined contribution lump sum service pensions 
 44.4   under Minnesota Statutes, section 424A.02, subdivision 4.  
 44.5      Subd. 2.  [BOARD RESTRUCTURING.] The board must be 
 44.6   reconstituted in conformance with Minnesota Statutes, section 
 44.7   424A.04 within 90 days after the effective date of this section. 
 44.8      Sec. 2.  [MINNEAPOLIS FIRE; OPTIONAL ANNUITY EXTENSION TO 
 44.9   CERTAIN SURVIVORS.] 
 44.10     (a) Notwithstanding Laws 1997, chapter 233, article 4, 
 44.11  section 18, the surviving spouse of any service pensioner or 
 44.12  disability benefit recipient of the Minneapolis fire department 
 44.13  relief association who died between July 1, 1997, and October 1, 
 44.14  1997, is entitled to a surviving spouse benefit equal to the 100 
 44.15  percent joint and survivor annuity amount which the decedent 
 44.16  would have been eligible to select if the decedent had been 
 44.17  entitled and able to select an optional annuity form on the date 
 44.18  of death. 
 44.19     (b) The benefit under paragraph (a) is in lieu of any other 
 44.20  survivor benefit payable from the Minneapolis fire department 
 44.21  relief association. 
 44.22     (c) The benefit under this section accrues as of October 1, 
 44.23  1997, and is payable on the first day of the month next 
 44.24  following the effective date of this section.  The initial 
 44.25  benefit payment must include the increase amounts retroactive to 
 44.26  October 1, 1997. 
 44.27     Sec. 3.  [EFFECTIVE DATE.] 
 44.28     (a) Section 1 is effective the day after approval by the 
 44.29  Columbia Heights city council and compliance with Minnesota 
 44.30  Statutes, section 645.021. 
 44.31     (b) Section 2 is effective upon approval by the city 
 44.32  council of the city of Minneapolis and compliance with Minnesota 
 44.33  Statutes, section 645.021, subdivision 3.