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 voluntary 
  1.5             deduction of health insurance premiums from certain 
  1.6             annuities; providing for increased survivor benefits 
  1.7             relating to certain public employees murdered in the 
  1.8             line of duty; authorizing certain service credit 
  1.9             purchases; specifying prior service credit purchase 
  1.10            payment amount determination procedures increasing 
  1.11            salaries of various judges; modifying other judicial 
  1.12            salaries; modifying the judges retirement plan member 
  1.13            and employer contribution rates; authorizing the 
  1.14            transfer of certain prior retirement contributions 
  1.15            from the legislators retirement plan and from the 
  1.16            elective state officers retirement plan; creating a 
  1.17            contribution transfer account in the general fund of 
  1.18            the state; appropriating money; reformulating the 
  1.19            Columbia Heights volunteer firefighters relief 
  1.20            association plan as a defined contribution plan under 
  1.21            the general volunteer fire law; restructuring the 
  1.22            Columbia Heights volunteer firefighter relief 
  1.23            association board; modifying various higher education 
  1.24            retirement plan provisions; modifying administrative 
  1.25            expense provisions for various public pension plans; 
  1.26            expanding the teacher retirement plans part-time 
  1.27            teaching positions eligible to participate in the 
  1.28            qualified full-time service credit for part-time 
  1.29            teaching service program; making certain Minneapolis 
  1.30            fire department relief association survivor benefit 
  1.31            options retroactive; providing increased disability 
  1.32            benefit coverage for certain local government 
  1.33            correctional facility employees; increasing local 
  1.34            government correctional employee and employer 
  1.35            contribution rates; providing increased survivor 
  1.36            benefits to certain Minneapolis employee retirement 
  1.37            fund survivors; authorizing certain Hennepin county 
  1.38            regional park employees to change retirement plan 
  1.39            membership; modifying benefit increase provision for 
  1.40            Eveleth police and firefighters; modifying the length 
  1.41            of the actuarial services contract of the legislative 
  1.42            commission on pensions and retirement; modifying the 
  1.43            scope of quadrennial projection valuations; providing 
  1.44            special disability coverage for local correctional 
  1.45            employees; requiring report on tax sheltered annuity 
  1.46            for higher education employees; amending Minnesota 
  2.1             Statutes 1996, sections 3A.13; 11A.17, subdivision 2; 
  2.2             136F.45, by adding subdivisions; 136F.48; 352.96, 
  2.3             subdivision 4; 352D.09, subdivision 7; 352D.12; 
  2.4             353.27, subdivision 3; 353.33, subdivision 3a; 
  2.5             353D.05, subdivision 3; 354.445; 354.66, subdivisions 
  2.6             2 and 3; 354A.094, subdivisions 2 and 3; 354B.23, by 
  2.7             adding a subdivision; 354C.12, by adding a 
  2.8             subdivision; 383B.52; 422A.23, subdivision 2; and 
  2.9             490.123, subdivisions 1a and 1b; Minnesota Statutes 
  2.10            1997 Supplement, sections 3.85, subdivision 11; 
  2.11            15A.083, subdivisions 5, 6a, and 7; 353.27, 
  2.12            subdivision 2; 354B.25, subdivisions 1a and 5; 
  2.13            354C.12, subdivision 4; and 356.215, subdivision 2; 
  2.14            Laws 1977, chapter 61, section 6, as amended; Laws 
  2.15            1995, chapter 262, article 10, section 1; Laws 1997, 
  2.16            Second Special Session chapter 3, section 16; 
  2.17            proposing coding for new law in Minnesota Statutes, 
  2.18            chapter 356; repealing Minnesota Statutes 1996, 
  2.19            sections 11A.17, subdivisions 10a and 14; and 352D.09, 
  2.20            subdivision 8; Minnesota Statutes 1997 Supplement, 
  2.21            section 136F.45, subdivision 3. 
  2.22  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.23                             ARTICLE 1 
  2.24               PUBLIC MEDICAL FACILITY PRIVATIZATIONS 
  2.25     Section 1.  [LUVERNE COMMUNITY HOSPITAL; PENSION COVERAGE 
  2.26  FOR TRANSFERRED EMPLOYEES.] 
  2.27     Subdivision 1.  [AUTHORIZATION.] This section applies if 
  2.28  the Luverne Community Hospital is sold, leased, or transferred 
  2.29  to a private entity, nonprofit corporation, or public 
  2.30  corporation.  Notwithstanding Minnesota Statutes, sections 
  2.31  356.24 and 356.25, to facilitate the orderly transition of 
  2.32  employees affected by the sale, lease, or transfer, the city 
  2.33  may, at its discretion, make, from assets to be transferred to 
  2.34  the private entity, nonprofit corporation, or public 
  2.35  corporation, payments to a qualified pension plan established 
  2.36  for the transferred employees by the private entity, nonprofit 
  2.37  corporation, or public corporation, to provide benefits 
  2.38  substantially similar to those the employees would have been 
  2.39  entitled to under the provisions of the public employees 
  2.40  retirement association applicable to nonpublic safety employees 
  2.41  under Minnesota Statutes, chapter 353, as amended, in effect on 
  2.42  the date of the sale, lease, or transfer. 
  2.43     Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
  2.44  ELIGIBILITY.] (a) An eligible individual is an individual who: 
  2.45     (1) is an employee of the Luverne Community Hospital 
  2.46  immediately prior to the sale, lease, or transfer of that 
  3.1   facility to a private entity, nonprofit corporation, or public 
  3.2   corporation; 
  3.3      (2) is terminated at the time of the sale, lease, or 
  3.4   transfer; and 
  3.5      (3) had less than three years of service credit in the 
  3.6   public employees retirement association plan at the date of 
  3.7   termination. 
  3.8      (b) For an eligible individual under paragraph (a), the 
  3.9   city may make a member contribution equivalent payment under 
  3.10  subdivision 3. 
  3.11     Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
  3.12  member contribution equivalent payment is an amount equal to the 
  3.13  total refund provided by Minnesota Statutes, section 353.34, 
  3.14  subdivisions 1 and 2.  To be eligible for the member 
  3.15  contribution equivalent payment, the individual in subdivision 
  3.16  2, paragraph (a), must apply for a refund under Minnesota 
  3.17  Statutes, section 353.34, subdivisions 1 and 2, within one year 
  3.18  of termination.  A member contribution equivalent amount 
  3.19  exceeding $200 must be made directly to an individual retirement 
  3.20  account under section 408(a) of the Internal Revenue Code, as 
  3.21  amended, or to another qualified plan.  A member contribution 
  3.22  equivalent amount of $200 or less may, at the preference of the 
  3.23  individual, be made to the individual or to an individual 
  3.24  retirement account under section 408(a) of the Internal Revenue 
  3.25  Code, as amended, or to another qualified plan. 
  3.26     Sec. 2.  [ARNOLD MEMORIAL HOSPITAL, ADRIAN, MINNESOTA; 
  3.27  PENSION COVERAGE FOR TRANSFERRED EMPLOYEES.] 
  3.28     Subdivision 1.  [AUTHORIZATION.] This section applies if 
  3.29  the Arnold Memorial Hospital in Adrian is sold, leased, or 
  3.30  transferred to a private entity, nonprofit corporation, or 
  3.31  public corporation.  Notwithstanding Minnesota Statutes, 
  3.32  sections 356.24 and 356.25, to facilitate the orderly transition 
  3.33  of employees affected by the sale, lease, or transfer, the city 
  3.34  may, at its discretion, make, from assets to be transferred to 
  3.35  the private entity, nonprofit corporation, or public 
  3.36  corporation, payments to a qualified pension plan established 
  4.1   for the transferred employees by the private entity, nonprofit 
  4.2   corporation, or public corporation, to provide benefits 
  4.3   substantially similar to those the employees would have been 
  4.4   entitled to under the provisions of the public employees 
  4.5   retirement association applicable to nonpublic safety employees 
  4.6   under Minnesota Statutes, chapter 353, as amended, in effect on 
  4.7   the date of the sale, lease, or transfer. 
  4.8      Subd. 2.  [TREATMENT OF TERMINATED, NONVESTED EMPLOYEES; 
  4.9   ELIGIBILITY.] (a) An eligible individual is an individual who: 
  4.10     (1) is an employee of the Arnold Memorial Hospital in 
  4.11  Adrian immediately prior to the sale, lease, or transfer of that 
  4.12  facility to a private entity, nonprofit corporation, or public 
  4.13  corporation; 
  4.14     (2) is terminated at the time of the sale, lease, or 
  4.15  transfer; and 
  4.16     (3) had less than three years of service credit in the 
  4.17  public employees retirement association plan at the date of 
  4.18  termination. 
  4.19     (b) For an eligible individual under paragraph (a), the 
  4.20  city may make a member contribution equivalent payment under 
  4.21  subdivision 3. 
  4.22     Subd. 3.  [MEMBER CONTRIBUTION EQUIVALENT PAYMENT.] The 
  4.23  member contribution equivalent payment is an amount equal to the 
  4.24  total refund provided by Minnesota Statutes, section 353.34, 
  4.25  subdivisions 1 and 2.  To be eligible for the member 
  4.26  contribution equivalent payment, the individual in subdivision 
  4.27  2, paragraph (a), must apply for a refund under Minnesota 
  4.28  Statutes, section 353.34, subdivisions 1 and 2, within one year 
  4.29  of termination.  A member contribution equivalent amount 
  4.30  exceeding $200 must be made directly to an individual retirement 
  4.31  account under section 408(a) of the Internal Revenue Code, as 
  4.32  amended, or to another qualified plan.  A member contribution 
  4.33  equivalent amount of $200 or less may, at the preference of the 
  4.34  individual, be made to the individual or to an individual 
  4.35  retirement account under section 408(a) of the Internal Revenue 
  4.36  Code, as amended, or to another qualified plan. 
  5.1      Sec. 3.  [EFFECTIVE DATE.] 
  5.2      (a) Section 1 is effective on the day following approval by 
  5.3   the Luverne city council and compliance with Minnesota Statutes, 
  5.4   section 645.021. 
  5.5      (b) Section 2 is effective on the day following approval by 
  5.6   the Adrian city council and compliance with Minnesota Statutes, 
  5.7   section 645.021. 
  5.8                              ARTICLE 2 
  5.9            MISCELLANEOUS GENERAL EMPLOYEE PENSION CHANGES 
  5.10     Section 1.  Minnesota Statutes 1996, section 3A.13, is 
  5.11  amended to read: 
  5.12     3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 
  5.13  DEDUCTION.] 
  5.14     The provisions of section 352.15 shall apply to the 
  5.15  legislators retirement plan, chapter 3A.  The executive director 
  5.16  of the Minnesota state retirement system must, at the request of 
  5.17  a retired legislator who is enrolled in a health insurance plan 
  5.18  covering state employees, deduct the person's health insurance 
  5.19  premiums from the person's annuity and transfer the amount of 
  5.20  the premium to a health insurance carrier covering state 
  5.21  employees. 
  5.22     Sec. 2.  Minnesota Statutes 1996, section 11A.17, 
  5.23  subdivision 2, is amended to read: 
  5.24     Subd. 2.  [ASSETS.] The assets of the supplemental 
  5.25  investment fund shall consist of the money certified and 
  5.26  transmitted to the state board from the participating public 
  5.27  retirement plans and funds and shall or from the board of the 
  5.28  Minnesota state colleges and universities under section 
  5.29  136F.45.  The assets must be used to purchase investment shares 
  5.30  in the investment accounts specified by the plan or fund. 
  5.31     Sec. 3.  Minnesota Statutes 1996, section 136F.45, is 
  5.32  amended by adding a subdivision to read: 
  5.33     Subd. 1a.  [SUBSEQUENT VENDOR CONTRACTS.] (a) The board may 
  5.34  limit the number of vendors under subdivision 1. 
  5.35     (b) In addition to any other tax-sheltered annuity program 
  5.36  investment options, the board may offer as an investment option 
  6.1   the Minnesota supplemental investment fund administered by the 
  6.2   state board of investment under section 11A.17. 
  6.3      (c) For the tax-sheltered annuity program vendor contracts 
  6.4   to be executed for the period beginning July 1, 2000, the board 
  6.5   shall actively solicit participation of and shall include as 
  6.6   vendors lower expense and "no-load" mutual funds or equivalent 
  6.7   investment products as those terms are defined by the federal 
  6.8   securities and exchange commission.  To the extent possible, in 
  6.9   addition to a range of insurance annuity contract providers and 
  6.10  other mutual fund provider arrangements, the board must assure 
  6.11  that no less than five insurance annuity providers and no less 
  6.12  than one nor more than three lower expense and "no-load" mutual 
  6.13  funds or equivalent investment products will be made available 
  6.14  for direct-access by employee participants.  To the extent that 
  6.15  offering a lower expense "no-load" product increases the total 
  6.16  necessary and reasonable expenses of the program and if the 
  6.17  board is unable to negotiate a rebate of fees from the mutual 
  6.18  fund or equivalent investment product providers, the board may 
  6.19  charge the participants utilizing the lower expense "no-load" 
  6.20  mutual fund products a fee to cover those expenses.  The 
  6.21  participant fee may not exceed one percent of the participant's 
  6.22  annual contributions or $20 per participant per year, whichever 
  6.23  is greater.  Any excess fee revenue generated under this 
  6.24  subdivision must be reimbursed to participant accounts in the 
  6.25  manner provided in subdivision 3a. 
  6.26     Sec. 4.  Minnesota Statutes 1996, section 136F.45, is 
  6.27  amended by adding a subdivision to read: 
  6.28     Subd. 3a.  [SHARING OF FEES.] (a) For purposes of this 
  6.29  subdivision, a gross fee amount is defined as the fees, 
  6.30  commissions, and other charges which an annuity investment 
  6.31  provider or vendor would charge a typical consumer of those 
  6.32  services for identical or similar products.  A net fee amount is 
  6.33  an amount below the gross fee amount reflecting a negotiated 
  6.34  reduction below gross fees. 
  6.35     (b) To offset the board's necessary and reasonable expenses 
  6.36  incurred under subdivisions 1 and 2, the Minnesota state 
  7.1   colleges and universities system is authorized to negotiate with 
  7.2   an annuity investment provider or vendor to establish a net fee 
  7.3   amount. 
  7.4      (c) Under the negotiated arrangements, the Minnesota state 
  7.5   colleges and universities system is authorized to either make 
  7.6   arrangements to recapture the difference between gross and net 
  7.7   fee amounts through a rebate from the annuity investment 
  7.8   provider or vendor, or deduct those amounts prior to 
  7.9   transmitting the contributions or premiums. 
  7.10     (d) The revenues collected or retained under these 
  7.11  negotiated arrangements must be used to offset the board's 
  7.12  necessary and reasonable expenses incurred under this section.  
  7.13  Any excess above the necessary and reasonable expenses must be 
  7.14  allocated annually to the accounts of the participants. 
  7.15     Sec. 5.  Minnesota Statutes 1996, section 136F.48, is 
  7.16  amended to read: 
  7.17     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
  7.18     (a) This section applies to a person who:  
  7.19     (1) retires from the state university system, the technical 
  7.20  college system, or the community college system, or from a 
  7.21  successor system employing state university, technical college, 
  7.22  or community college faculty, with at least ten years of 
  7.23  combined service credit in a system under the jurisdiction of 
  7.24  the board of trustees of the Minnesota state colleges and 
  7.25  universities; 
  7.26     (2) was employed on a full-time basis immediately preceding 
  7.27  retirement as a state university, technical college, or 
  7.28  community college faculty member or as an unclassified 
  7.29  administrator in one of those systems; 
  7.30     (3) begins drawing an annuity from the teachers retirement 
  7.31  association or from a first class city teacher plan; and 
  7.32     (4) returns to work on not less than a one-third time basis 
  7.33  and not more than a two-thirds time basis in the system from 
  7.34  which the person retired under an agreement in which the person 
  7.35  may not earn a salary of more than $35,000 in a calendar year 
  7.36  from employment after retirement in the system from which the 
  8.1   person retired.  
  8.2      (b) Initial participation, the amount of time worked, and 
  8.3   the duration of participation under this section must be 
  8.4   mutually agreed upon by the employer president of the 
  8.5   institution where the person returns to work and the employee.  
  8.6   The employer president may require up to one-year notice of 
  8.7   intent to participate in the program as a condition of 
  8.8   participation under this section.  The employer president shall 
  8.9   determine the time of year the employee shall work.  The 
  8.10  employer or the president may not require a person to waive any 
  8.11  rights under a collective bargaining agreement as a condition of 
  8.12  participation under this section.  
  8.13     (c) For a person eligible under paragraphs (a) and (b), the 
  8.14  employing board shall make the same employer contribution for 
  8.15  hospital, medical, and dental benefits as would be made if the 
  8.16  person were employed full time.  
  8.17     (d) For work under paragraph (a), a person must receive a 
  8.18  percentage of the person's salary at the time of retirement that 
  8.19  is equal to the percentage of time the person works compared to 
  8.20  full-time work.  
  8.21     (e) If a collective bargaining agreement covering a person 
  8.22  provides for an early retirement incentive that is based on age, 
  8.23  the incentive provided to the person must be based on the 
  8.24  person's age at the time employment under this section ends.  
  8.25  However, the salary used to determine the amount of the 
  8.26  incentive must be the salary that would have been paid if the 
  8.27  person had been employed full time for the year immediately 
  8.28  preceding the time employment under this section ends. 
  8.29     (f) A person who returns to work under this section is a 
  8.30  member of the appropriate bargaining unit and is covered by the 
  8.31  appropriate collective bargaining contract.  Except as provided 
  8.32  in this section, the person's coverage is subject to any part of 
  8.33  the contract limiting rights of part-time employees. 
  8.34     Sec. 6.  Minnesota Statutes 1996, section 352.96, 
  8.35  subdivision 4, is amended to read: 
  8.36     Subd. 4.  [EXECUTIVE DIRECTOR TO ESTABLISH RULES.] The 
  9.1   executive director of the system with the advice and consent of 
  9.2   the board of directors shall establish rules and procedures to 
  9.3   carry out this section including allocation of administrative 
  9.4   costs against the assets accumulated under this section.  Funds 
  9.5   to pay these costs are appropriated from the fund or account in 
  9.6   which the assets accumulated under this section are placed of 
  9.7   the plan to participants.  Fees cannot be charged on 
  9.8   contributions and investment returns attributable to 
  9.9   contributions made to the Minnesota supplemental investment 
  9.10  funds before July 1, 1992.  Annual total fees charged for plan 
  9.11  administration for the Minnesota supplemental investment funds 
  9.12  cannot exceed 40/100 of one percent of the contributions and 
  9.13  investment returns attributable to contributions made on or 
  9.14  after July 1, 1992.  The rules established by the executive 
  9.15  director must conform to federal and state tax laws, 
  9.16  regulations, and rulings, and are not subject to the 
  9.17  administrative procedure act.  Except for the marketing rules, 
  9.18  rules relating to the options provided under subdivision 2, 
  9.19  clauses (2) and (3), must be approved by the state board of 
  9.20  investment.  
  9.21     Sec. 7.  Minnesota Statutes 1996, section 352D.09, 
  9.22  subdivision 7, is amended to read: 
  9.23     Subd. 7.  Up to one-tenth of one percent of salary shall be 
  9.24  deducted from the employee contributions and up to one-tenth of 
  9.25  one percent of salary from the employer contributions authorized 
  9.26  by section 352D.04, subdivision 2, The board of directors shall 
  9.27  establish a budget and charge participants a fee to pay the 
  9.28  administrative expenses of the unclassified program.  Fees 
  9.29  cannot be charged on contributions and investment returns 
  9.30  attributable to contributions made before July 1, 1992.  Annual 
  9.31  total fees charged for plan administration cannot exceed 10/100 
  9.32  of one percent of the contributions and investment returns 
  9.33  attributable to contributions made on or after July 1, 1992. 
  9.34     Sec. 8.  Minnesota Statutes 1996, section 353D.05, 
  9.35  subdivision 3, is amended to read: 
  9.36     Subd. 3.  [ADMINISTRATIVE EXPENSES.] The executive director 
 10.1   of the association with the advice and consent of the board 
 10.2   shall annually set an amount to recover the costs of the 
 10.3   association in administering the public employees defined 
 10.4   contribution plan that are not met by the amount recovered under 
 10.5   section 11A.17. 
 10.6      Sec. 9.  Minnesota Statutes 1996, section 354.445, is 
 10.7   amended to read: 
 10.8      354.445 [NO ANNUITY REDUCTION.] 
 10.9      (a) The annuity reduction provisions of section 354.44, 
 10.10  subdivision 5, do not apply to a person who: 
 10.11     (1) retires from the state university system, technical 
 10.12  college system, or the community college system, or from a 
 10.13  successor system employing state university, technical college, 
 10.14  or community college faculty, with at least ten years of 
 10.15  combined service credit in a system under the jurisdiction of 
 10.16  the board of trustees of the Minnesota state colleges and 
 10.17  universities; 
 10.18     (2) was employed on a full-time basis immediately preceding 
 10.19  retirement as a state university, technical college, or 
 10.20  community college faculty member or as an unclassified 
 10.21  administrator in one of these systems; 
 10.22     (3) begins drawing an annuity from the teachers retirement 
 10.23  association; and 
 10.24     (4) returns to work on not less than a one-third time basis 
 10.25  and not more than a two-thirds time basis in the system from 
 10.26  which the person retired under an agreement in which the person 
 10.27  may not earn a salary of more than $35,000 in a calendar year 
 10.28  from employment after retirement in the system from which the 
 10.29  person retired. 
 10.30     (b) Initial participation, the amount of time worked, and 
 10.31  the duration of participation under this section must be 
 10.32  mutually agreed upon by the employer president of the 
 10.33  institution where the person returns to work and the employee.  
 10.34  The employer president may require up to one-year notice of 
 10.35  intent to participate in the program as a condition of 
 10.36  participation under this section.  The employer president shall 
 11.1   determine the time of year the employee shall work.  The 
 11.2   employer or the president may not require a person to waive any 
 11.3   rights under a collective bargaining agreement as a condition of 
 11.4   participation under this section.  
 11.5      (c) Notwithstanding any law to the contrary, a person 
 11.6   eligible under paragraphs (a) and (b) may not earn further 
 11.7   service credit in the teachers retirement association and is not 
 11.8   eligible to participate in the individual retirement account 
 11.9   plan or the supplemental retirement plan established in chapter 
 11.10  354B as a result of service under this section.  No employer or 
 11.11  employee contribution to any of these plans may be made on 
 11.12  behalf of such a person. 
 11.13     (d) For a person eligible under paragraphs (a) and (b) who 
 11.14  earns more than $35,000 in a calendar year from employment after 
 11.15  retirement in the system from which the person retired, the 
 11.16  annuity reduction provisions of section 354.44, subdivision 5, 
 11.17  apply only to income over $35,000. 
 11.18     (e) A person who returns to work under this section is a 
 11.19  member of the appropriate bargaining unit and is covered by the 
 11.20  appropriate collective bargaining contract.  Except as provided 
 11.21  in this section, the person's coverage is subject to any part of 
 11.22  the contract limiting rights of part-time employees. 
 11.23     Sec. 10.  Minnesota Statutes 1996, section 354B.23, is 
 11.24  amended by adding a subdivision to read: 
 11.25     Subd. 5a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
 11.26  to the plan exceed limits imposed by federal law or regulation 
 11.27  and it is necessary to return contributions to comply with the 
 11.28  federal limits, excess contributions must be returned to the 
 11.29  employee and to the employer in the same proportions as the 
 11.30  contributions were made. 
 11.31     (b) When an employer contribution required under section 
 11.32  354B.24 due to a sabbatical leave is made after completion of 
 11.33  the leave or an employer contribution is made due to omitted 
 11.34  deductions under subdivision 5, and these employer contributions 
 11.35  cause or would cause total contributions to the plan to exceed 
 11.36  limits imposed by federal law or regulation, the employer must 
 12.1   make that portion of the contribution that would exceed the 
 12.2   federal limit during the next calendar year. 
 12.3      Sec. 11.  Minnesota Statutes 1997 Supplement, section 
 12.4   354B.25, subdivision 1a, is amended to read: 
 12.5      Subd. 1a.  [ADVISORY COMMITTEE.] (a) A committee is created 
 12.6   to advise the state board of investment and the board of 
 12.7   trustees of the Minnesota state colleges and universities 
 12.8   concerning administration of the individual retirement account 
 12.9   plan and the supplemental retirement plan established in chapter 
 12.10  354C.  The committee shall adopt recommendations by majority 
 12.11  vote of those members voting on each issue.  The exclusive 
 12.12  representatives of the state university instructional unit, the 
 12.13  community college instructional unit, and the technical college 
 12.14  instructional unit shall each appoint two members to the 
 12.15  committee.  The exclusive representatives of the general 
 12.16  professional unit, the supervisory employees unit and the state 
 12.17  university administrative unit shall each appoint one member to 
 12.18  the committee.  The chancellor of the Minnesota state colleges 
 12.19  and universities shall appoint three members, at least one of 
 12.20  whom shall be a personnel administrator.  No member of the 
 12.21  committee shall be retired.  Members serve at the pleasure of 
 12.22  the applicable appointing authority, but no member shall serve 
 12.23  for more than a total of five years.  Members shall be 
 12.24  reimbursed from the administrative expense account of the 
 12.25  individual retirement account plan for expenses as provided in 
 12.26  section 15.059, subdivision 3. 
 12.27     (b) The committee shall: 
 12.28     (1) advise the board of trustees of the Minnesota state 
 12.29  colleges and universities on the structure and operation of the 
 12.30  individual retirement account plan and the supplemental 
 12.31  retirement plan; 
 12.32     (2) along with any other consultants selected by the board, 
 12.33  advise the state board of investment on selection of financial 
 12.34  institutions and on the type of investment products to be 
 12.35  offered by these institutions for the plans; 
 12.36     (3) advise the board of trustees of the Minnesota state 
 13.1   colleges and universities on administration of the plans, 
 13.2   including selection of a third-party plan administrator, if any, 
 13.3   for the individual retirement account plan. 
 13.4      (c) The board of trustees of the Minnesota state colleges 
 13.5   and universities shall provide the advisory committee with 
 13.6   meeting space and other administrative support.  
 13.7      (d) Expenses of the advisory committee are considered 
 13.8   administrative expenses of the plans under subdivision 5 and 
 13.9   section 354C.12, subdivision 4, and must be allocated between 
 13.10  the two plans in proportion to the market value of the total 
 13.11  assets of the plans as of the most recent prior audited annual 
 13.12  financial report. 
 13.13     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 13.14  354B.25, subdivision 5, is amended to read: 
 13.15     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 13.16  ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
 13.17  administrative expenses of the individual retirement account 
 13.18  plan must be paid by plan participants in the following manner: 
 13.19     (1) from plan participants with amounts invested in the 
 13.20  Minnesota supplemental investment fund, the plan administrator 
 13.21  may charge an administrative expense assessment as provided in 
 13.22  section 11A.17, subdivisions 10a and 14 in an amount such that 
 13.23  annual total fees charged for plan administration cannot exceed 
 13.24  40/100 of one percent of the assets of the Minnesota 
 13.25  supplemental investment funds; and 
 13.26     (2) from plan participants with amounts through annuity 
 13.27  contracts and custodial accounts purchased under subdivision 2, 
 13.28  paragraph (a), the plan administrator may charge an 
 13.29  administrative expense assessment of a designated amount, not to 
 13.30  exceed two percent of member and employer contributions, as 
 13.31  those contributions are made. 
 13.32     (b) Any administrative expense charge that is not actually 
 13.33  needed for the administrative expenses of the individual 
 13.34  retirement account plan must be refunded to member accounts. 
 13.35     (c) The board of trustees shall report annually, before 
 13.36  October 1, to the advisory committee created in subdivision 1a 
 14.1   on administrative expenses of the plan.  The report must include 
 14.2   a detailed accounting of charges for administrative expenses 
 14.3   collected from plan participants and expenditure of the 
 14.4   administrative expense charges.  The administrative expense 
 14.5   charges collected from plan participants must be kept in a 
 14.6   separate account from any other funds under control of the board 
 14.7   of trustees and may be used only for the necessary and 
 14.8   reasonable administrative expenses of the plan. 
 14.9      Sec. 13.  Minnesota Statutes 1996, section 354C.12, is 
 14.10  amended by adding a subdivision to read: 
 14.11     Subd. 1a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
 14.12  to the plan exceed limits imposed by federal law or regulation 
 14.13  and it is necessary to return contributions to comply with the 
 14.14  federal limits, one-half of the excess contributions must be 
 14.15  returned to the employee and half to the employer. 
 14.16     (b) When an employer contribution is made due to omitted 
 14.17  deductions under subdivision 2, and these employer contributions 
 14.18  cause or would cause total contributions to the plan to exceed 
 14.19  limits imposed by federal law or regulation, the employer must 
 14.20  make that portion of the contribution that would exceed the 
 14.21  federal limit during the next calendar year. 
 14.22     Sec. 14.  Minnesota Statutes 1997 Supplement, section 
 14.23  354C.12, subdivision 4, is amended to read: 
 14.24     Subd. 4.  [ADMINISTRATIVE EXPENSES.] The board of trustees 
 14.25  of the Minnesota state colleges and universities is authorized 
 14.26  to pay the necessary and reasonable administrative expenses of 
 14.27  the supplemental retirement plan.  The administrative fees or 
 14.28  charges must be paid by participants in the following manner: 
 14.29     (1) from participants whose contributions are invested with 
 14.30  the state board of investment, the plan administrator may 
 14.31  recover administrative expenses in the manner provided by 
 14.32  section 11A.17, subdivisions 10a and 14 authorized by the 
 14.33  Minnesota state colleges and universities in an amount such that 
 14.34  annual total fees charged for plan administration cannot exceed 
 14.35  40/100 of one percent of the assets of the Minnesota 
 14.36  supplemental investment funds; or 
 15.1      (2) from participants where contributions are invested 
 15.2   through contracts purchased from any other authorized source, 
 15.3   the plan administrator may assess an amount of up to two percent 
 15.4   of the employee and employer contributions. 
 15.5      Any recovered or assessed amounts that are not needed for 
 15.6   the necessary and reasonable administrative expenses of the plan 
 15.7   must be refunded to member accounts. 
 15.8      The board of trustees shall report annually, before October 
 15.9   1, to the advisory committee created in section 354B.25, 
 15.10  subdivision 1a, on administrative expenses of the plan.  The 
 15.11  report must include a detailed accounting of charges for 
 15.12  administrative expenses collected from plan participants and 
 15.13  expenditure of the administrative expense charges.  The 
 15.14  administrative expense charges collected from plan participants 
 15.15  must be kept in a separate account from any other funds under 
 15.16  control of the board of trustees and may be used only for the 
 15.17  necessary and reasonable administrative expenses of the plan.  
 15.18     Sec. 15.  Minnesota Statutes 1996, section 383B.52, is 
 15.19  amended to read: 
 15.20     383B.52 [ADMINISTRATION COSTS.] 
 15.21     The board of county commissioners of Hennepin county is 
 15.22  hereby authorized to appropriate money for the administration of 
 15.23  the supplementary benefit program created by sections 383B.46 to 
 15.24  383B.52.  The board of county commissioners of Hennepin county 
 15.25  may charge participants a fee to recover the administrative 
 15.26  expenses of the supplementary benefit program.  Annual total 
 15.27  fees charged to administer the supplementary benefit program may 
 15.28  not exceed 40/100 of one percent of the assets of the program. 
 15.29     Sec. 16.  Minnesota Statutes 1996, section 422A.23, 
 15.30  subdivision 2, is amended to read: 
 15.31     Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] Upon the death 
 15.32  of a contributing (a) If an active member after having been in 
 15.33  the city service not less than dies prior to termination of 
 15.34  service with at least 18 months but before the effective date of 
 15.35  retirement, the board shall in lieu of the settlement 
 15.36  hereinbefore provided pay to the surviving spouse and/or 
 16.1   children of the member under the age of 18, or under the age of 
 16.2   22 if a full-time student at an accredited school, college or 
 16.3   university, and single, the following monthly benefit: 
 16.4      (a) Surviving spouse $325 per month, except for benefits 
 16.5   beginning after July 1, 1983, which shall be 30 percent of 
 16.6   member's average salary in effect over the last six months of 
 16.7   allowable service preceding the month in which the death 
 16.8   occurred. 
 16.9      (b) Each surviving child $150 per month, except for 
 16.10  benefits beginning after July 1, 1983, which shall be ten 
 16.11  percent of the member's average salary in effect over the last 
 16.12  six months of allowable service preceding the month in which the 
 16.13  death occurred but less than 20 years of service credit, the 
 16.14  surviving spouse or surviving child or children is eligible to 
 16.15  receive the survivor benefit specified in paragraph (b) or (c), 
 16.16  as applicable.  Payments for the Payment of a benefit of for 
 16.17  any surviving child under the age of 18 years shall be made to 
 16.18  the surviving parent, or if there be none, to the legal guardian 
 16.19  of such the surviving child.  The maximum monthly benefit shall 
 16.20  not exceed a total of $750. 
 16.21     (c) Effective for payments made after June 30, 1991, 
 16.22  surviving spouse and surviving child benefits under paragraphs 
 16.23  (a) and (b) beginning on or before July 1, 1983, are increased 
 16.24  to $500 per month and $225 per month, respectively.  The maximum 
 16.25  monthly payment under paragraph (b) is increased to $900.  The 
 16.26  increased cost resulting from the benefit increases in this 
 16.27  paragraph must be allocated to each employing unit listed in 
 16.28  section 422A.101, subdivisions 1a, 2, and 2a, on the basis of 
 16.29  the additional accrued liability resulting from increased 
 16.30  benefits paid to the survivors of employees from that unit. For 
 16.31  purposes of this subdivision, a surviving child is an unmarried 
 16.32  child of the deceased member under the age of 18, or under the 
 16.33  age of 22 if a full-time student at an accredited school, 
 16.34  college, or university. 
 16.35     (b) If the surviving spouse or surviving child benefit 
 16.36  commenced before July 1, 1983, the surviving spouse benefit is 
 17.1   $750 per month and the surviving child benefit is $225 per 
 17.2   month, beginning with the first monthly payment payable after 
 17.3   the effective date of this section.  The sum of surviving spouse 
 17.4   and surviving child benefits payable under this paragraph shall 
 17.5   not exceed $900 per month.  The increased cost resulting from 
 17.6   the benefit increases under this paragraph must be allocated to 
 17.7   each employing unit listed in section 422A.101, subdivisions 1a, 
 17.8   2, and 2a, on the basis of the additional accrued liability 
 17.9   resulting from increased benefits paid to the survivors of 
 17.10  employees from that unit. 
 17.11     (c) If the surviving spouse or surviving child benefit 
 17.12  commences after June 30, 1983, the surviving spouse benefit is 
 17.13  30 percent of the member's average salary in effect over the 
 17.14  last six months of allowable service preceding the month in 
 17.15  which death occurs.  The surviving child benefit is ten percent 
 17.16  of the member's average salary in effect over the last six 
 17.17  months of allowable service preceding the month in which death 
 17.18  occurs.  The sum of surviving spouse and surviving child 
 17.19  benefits payable under this paragraph shall not exceed 50 
 17.20  percent of the member's average salary in effect over the last 
 17.21  six months of allowable service. 
 17.22     (d) Any surviving child benefit or surviving spouse benefit 
 17.23  computed under paragraph (c) and in effect for the month 
 17.24  immediately prior to the effective date of this section is 
 17.25  increased by 15 percent as of the first payment on or after the 
 17.26  effective date of this section. 
 17.27     (e) Surviving child benefits under this subdivision 
 17.28  terminate when the child no longer meets the definition of 
 17.29  surviving child. 
 17.30     Sec. 17.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; SPECIAL 
 17.31  SURVIVING SPOUSE BENEFIT ELIGIBILITY.] 
 17.32     (a) Notwithstanding any provision of law to the contrary, 
 17.33  the surviving spouse of a deceased qualified public employee who 
 17.34  died as a result of an alleged homicide in the line of duty 
 17.35  within one month of eligibility for normal retirement is 
 17.36  entitled to receive the second portion of a 100 percent joint 
 18.1   and survivor optional annuity under Minnesota Statutes, section 
 18.2   353.31, subdivision 1b, calculated as if the deceased qualified 
 18.3   public employee had qualified for the "rule of 90" early normal 
 18.4   retirement annuity on the date of death. 
 18.5      (b) A deceased qualified public employee is a person who: 
 18.6      (1) was born on August 18, 1941; 
 18.7      (2) became a member of the public employees retirement 
 18.8   association on July 7, 1964; 
 18.9      (3) was a member of the basic program of the public 
 18.10  employees retirement association; 
 18.11     (4) was employed as a building inspector by the city of St. 
 18.12  Paul; 
 18.13     (5) died during the course of employment duties on December 
 18.14  24, 1997; and 
 18.15     (6) would have been eligible to retire under the "rule of 
 18.16  90" early normal retirement provision on or before February 1, 
 18.17  1998. 
 18.18     (c) The benefit under paragraph (a) is payable in lieu of 
 18.19  any other survivor benefit from the public employee retirement 
 18.20  association.  The benefit under paragraph (a) accrues on January 
 18.21  1, 1998, and the initial payment of the benefit must include any 
 18.22  applicable retroactive payment amounts.  The benefit under 
 18.23  paragraph (a) must be elected by the surviving spouse on a form 
 18.24  prescribed by the executive director of the public employee 
 18.25  retirement association. 
 18.26     Sec. 18.  [REIMBURSEMENT OF ACTUARIAL COST BY CITY OF ST. 
 18.27  PAUL.] 
 18.28     On the effective date of this section, the city of St. Paul 
 18.29  shall pay to the public employees retirement association $36,698 
 18.30  and whatever portion of a remaining $36,697 is not appropriated 
 18.31  from the general fund to the public employees retirement 
 18.32  association for this purpose in order to offset the increased 
 18.33  actuarial accrued liability related to the survivor benefit 
 18.34  increase provided in section 15. 
 18.35     Sec. 19.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION COVERAGE 
 18.36  TERMINATION.] 
 19.1      Subdivision 1.  [ELIGIBILITY.] (a) An eligible member 
 19.2   specified in paragraph (b) is authorized to apply for a 
 19.3   retirement annuity, provided necessary age and service 
 19.4   requirements are met, under Minnesota Statutes, section 353.29 
 19.5   or 353.30, as applicable, as further specified under subdivision 
 19.6   2. 
 19.7      (b) An eligible member is an individual who: 
 19.8      (1) is an active member of the public employees retirement 
 19.9   association coordinated plan; 
 19.10     (2) contributes to that plan based on employment by the 
 19.11  suburban Hennepin county regional park district and as an 
 19.12  elected member of the Minneapolis park and recreation board; and 
 19.13     (3) was born on February 25, 1936. 
 19.14     Subd. 2.  [RETIREMENT ANNUITY.] (a) Notwithstanding 
 19.15  Minnesota Statutes, section 353.01, subdivision 2a, clause (3), 
 19.16  and continuation of elected service, an eligible individual 
 19.17  under subdivision 1, paragraph (b), is deemed to have terminated 
 19.18  membership under Minnesota Statutes, section 353.01, subdivision 
 19.19  11b, following termination of the suburban Hennepin county 
 19.20  regional park district employment and meeting applicable length 
 19.21  of separation requirements. 
 19.22     (b) If the requirements of paragraph (a) are satisfied, the 
 19.23  eligible individual may apply for a retirement annuity under 
 19.24  Minnesota Statutes, section 353.29 or 353.30, whichever 
 19.25  applies.  In computing the annuity, the public employees 
 19.26  retirement association must exclude salary due to appointed and 
 19.27  elected Minneapolis park and recreation board service. 
 19.28     Subd. 3.  [TREATMENT OF MINNEAPOLIS PARK AND RECREATION 
 19.29  BOARD CONTRIBUTION TO THE PUBLIC EMPLOYEES RETIREMENT 
 19.30  ASSOCIATION.] (a) Upon termination of the suburban Hennepin 
 19.31  county regional park district employment, all employee 
 19.32  contributions to the public employees retirement association 
 19.33  coordinated plan by an eligible individual in subdivision 1, 
 19.34  paragraph (b), due to Minneapolis park and recreation board 
 19.35  appointed and elected service, and all corresponding employer 
 19.36  contributions, terminate. 
 20.1      (b) Following termination of contributions under paragraph 
 20.2   (a), an eligible member under subdivision 1, paragraph (b), must 
 20.3   elect, within one year of termination of contributions under 
 20.4   paragraph (a) or termination of elective service, whichever is 
 20.5   earlier, a refund under Minnesota Statutes, section 353.34, 
 20.6   subdivision 2, or coverage by the public employees defined 
 20.7   contribution plan under Minnesota Statutes, chapter 353D, as 
 20.8   further specified in paragraph (c). 
 20.9      (c) If public employee defined contribution plan coverage 
 20.10  is elected under this paragraph, contributions to that plan 
 20.11  commence as of the first day of the pay period following this 
 20.12  election.  Notwithstanding Minnesota Statutes, section 353D.12, 
 20.13  accumulated employee contributions made by an eligible member as 
 20.14  specified in subdivision 1, paragraph (b), and corresponding 
 20.15  employer contributions, due to the Minneapolis park and 
 20.16  recreation board appointed and elected service, must be 
 20.17  transferred with six percent annual interest to an account for 
 20.18  an eligible member in the public employees defined contribution 
 20.19  plan. 
 20.20     (d) If no election is made by an eligible member by the 
 20.21  required date in paragraph (b), the individual is assumed to 
 20.22  have elected the refund indicated in paragraph (b). 
 20.23     (e) Upon an election under paragraph (b), or a mandatory 
 20.24  refund under paragraph (d), all rights in the public employees 
 20.25  retirement association coordinated plan due to elected and 
 20.26  appointed service are forfeited and may not be reestablished. 
 20.27     Sec. 20.  [MNSCU STUDY.] 
 20.28     (a) The board of the Minnesota state colleges and 
 20.29  universities, in consultation with representatives of the 
 20.30  respective collective bargaining units, shall study the issue of 
 20.31  converting the tax sheltered annuity program under Minnesota 
 20.32  Statutes, section 136F.45, to an unrestricted investment vendor 
 20.33  program, recognizing that college and university employees 
 20.34  should have maximum flexibility to exercise their own judgment 
 20.35  about the investment of their personal retirement savings.  As 
 20.36  an unrestricted investment vendor program, the role of the 
 21.1   Minnesota state colleges and universities system would be to 
 21.2   minimize additional costs for activities other than those 
 21.3   necessary for administrative or monitoring duties required under 
 21.4   state or federal law. 
 21.5      (b) The study results must be reported to the chair of the 
 21.6   legislative commission on pensions and retirement, the chair of 
 21.7   the committee on governmental operations of the house of 
 21.8   representatives, and the chair of the committee on governmental 
 21.9   operations and veterans of the senate.  The study report must be 
 21.10  filed on or before February 1, 1999. 
 21.11     Sec. 21.  [REPEALER.] 
 21.12     (a) Minnesota Statutes 1996, sections 11A.17, subdivisions 
 21.13  10a and 14; and 352D.09, subdivision 8, are repealed. 
 21.14     (b) Minnesota Statutes 1997 Supplement, section 136F.45, 
 21.15  subdivision 3, is repealed. 
 21.16     Sec. 22.  [EFFECTIVE DATE.] 
 21.17     (a) Sections 4 and 21, paragraph (b), are effective on the 
 21.18  day following final enactment.  Sections 5 and 9 do not abrogate 
 21.19  or modify any memorandum of understanding between an exclusive 
 21.20  representative of affected employees and the board of the 
 21.21  Minnesota state colleges and universities entered into before 
 21.22  the effective date of those sections.  
 21.23     (b) Sections 2, 3, 5, 9, 10, 11, 13, 19, and 20 are 
 21.24  effective on the day following final enactment. 
 21.25     (c) Sections 1, 6, 7, 8, 12, 14, 15, and 21, paragraph (a), 
 21.26  are effective July 1, 1999. 
 21.27     (d) Section 16 is effective upon approval by the 
 21.28  Minneapolis city council and compliance with Minnesota Statutes, 
 21.29  section 645.021. 
 21.30     (e) Sections 17 and 18 are effective on the day following 
 21.31  approval by the city council of the city of St. Paul and 
 21.32  compliance with Minnesota Statutes, section 645.021. 
 21.33                             ARTICLE 3 
 21.34           QUALIFIED PART-TIME TEACHER RETIREMENT PROGRAM 
 21.35                         REPORTING DEADLINE
 21.36     Section 1.  Minnesota Statutes 1996, section 354.66, 
 22.1   subdivision 2, is amended to read: 
 22.2      Subd. 2.  [QUALIFIED PART-TIME POSITIONS TEACHER PROGRAM 
 22.3   PARTICIPATION REQUIREMENTS.] A teacher in the a Minnesota public 
 22.4   elementary schools school, a Minnesota secondary schools 
 22.5   school, or technical the Minnesota state colleges or in the 
 22.6   community college system or the state university and 
 22.7   universities system of the state who has three years or more of 
 22.8   allowable service in the association or three years or more of 
 22.9   full-time teaching service in Minnesota public elementary 
 22.10  schools, Minnesota secondary schools, or technical the Minnesota 
 22.11  state colleges or in the community college system or the state 
 22.12  university and universities system, may, by agreement with the 
 22.13  board of the employing district or with the authorized 
 22.14  representative of the board, may be assigned to teaching service 
 22.15  within the district in a part-time teaching position under 
 22.16  subdivision 3.  The association must receive a copy of the 
 22.17  agreement must be executed before October 1 of the year for 
 22.18  which the teacher requests to make retirement contributions 
 22.19  under subdivision 4.  A copy of the executed agreement must be 
 22.20  filed with the executive director of the association.  If the 
 22.21  copy of the executed agreement is filed with the association 
 22.22  after October 1 of the year for which the teacher requests to 
 22.23  make retirement contributions under subdivision 4, the employing 
 22.24  unit shall pay the fine specified in section 354.52, subdivision 
 22.25  6, for each calendar day that elapsed since the October 1 due 
 22.26  date.  The association may not accept an executed agreement that 
 22.27  is received by the association more than 15 months late.  The 
 22.28  association may not waive the fine required by this section. 
 22.29     Sec. 2.  Minnesota Statutes 1996, section 354.66, 
 22.30  subdivision 3, is amended to read: 
 22.31     Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] For 
 22.32  purposes of this section, the term "part-time teaching position" 
 22.33  shall mean a teaching position within the district in which the 
 22.34  teacher is employed for at least 50 full days or a fractional 
 22.35  equivalent thereof as prescribed in section 354.091, and for 
 22.36  which the teacher is compensated in an amount not exceeding 67 
 23.1   80 percent of the compensation established by the board for a 
 23.2   full-time teacher with identical education and experience with 
 23.3   the employing unit.  The compensation of a teacher in the state 
 23.4   colleges and university system may exceed the 67 80 percent 
 23.5   limit if the teacher does not teach just one of the three 
 23.6   quarters in the system's full school year, provided no 
 23.7   additional services are performed while the teacher participates 
 23.8   in the program. 
 23.9      Sec. 3.  Minnesota Statutes 1996, section 354A.094, 
 23.10  subdivision 2, is amended to read: 
 23.11     Subd. 2.  [PART-TIME TEACHING POSITION, DEFINED.] For 
 23.12  purposes of this section, the term "part-time teaching position" 
 23.13  shall mean a teaching position within the district in which the 
 23.14  teacher is employed for at least 50 full days or a fractional 
 23.15  equivalent of 50 full days calculated using the appropriate 
 23.16  minimum number of hours which would result in a full day of 
 23.17  service credit by the appropriate association and for which the 
 23.18  teacher is compensated in an amount not to exceed 67 80 percent 
 23.19  of the compensation rate established by the board for a 
 23.20  full-time teacher with identical education and experience within 
 23.21  the district. 
 23.22     Sec. 4.  Minnesota Statutes 1996, section 354A.094, 
 23.23  subdivision 3, is amended to read: 
 23.24     Subd. 3.  [QUALIFIED PART-TIME TEACHER PROGRAM 
 23.25  PARTICIPATION REQUIREMENTS.] A teacher in the public schools of 
 23.26  a city of the first class who has three years or more allowable 
 23.27  service in the applicable retirement fund association or three 
 23.28  years or more of full-time teaching service in Minnesota public 
 23.29  elementary schools, Minnesota secondary schools, and technical 
 23.30  Minnesota state colleges and universities system may, by 
 23.31  agreement with the board of the employing district, be assigned 
 23.32  to teaching service within the district in a part-time teaching 
 23.33  position.  The agreement must be executed before October 1 of 
 23.34  the year for which the teacher requests to make retirement 
 23.35  contributions under subdivision 4.  A copy of the executed 
 23.36  agreement must be filed with the executive director of the 
 24.1   retirement fund association.  If the copy of the executed 
 24.2   agreement is filed with the association after October 1 of the 
 24.3   year for which the teacher requests to make retirement 
 24.4   contributions under subdivision 4, the employing school district 
 24.5   shall pay a fine of $5 for each calendar day that elapsed since 
 24.6   the October 1 due date.  The association may not accept an 
 24.7   executed agreement that is received by the association more than 
 24.8   15 months late.  The association may not waive the fine required 
 24.9   by this section. 
 24.10     Sec. 5.  [EFFECTIVE DATE.] 
 24.11     (a) Sections 1 and 4 are effective on the day following 
 24.12  final enactment. 
 24.13     (b) Sections 2 and 3 are effective on July 1, 1998. 
 24.14                             ARTICLE 4 
 24.15                   PRIOR SERVICE CREDIT PURCHASES 
 24.16     Section 1.  [356.55] [PRIOR SERVICE CREDIT PURCHASE PAYMENT 
 24.17  AMOUNT DETERMINATION PROCEDURE.] 
 24.18     Subdivision 1.  [APPLICATION.] Unless the prior service 
 24.19  credit purchase authorization special law or general statute 
 24.20  provision explicitly specifies a different purchase payment 
 24.21  amount determination procedure, this section governs the 
 24.22  determination of the prior service credit purchase payment 
 24.23  amount of any prior service credit purchase. 
 24.24     Subd. 2.  [DETERMINATION.] (a) Unless the prior service 
 24.25  credit purchase minimum amount determined under paragraph (d) is 
 24.26  greater, the prior service credit purchase amount is the result 
 24.27  obtained by subtracting the amount determined under paragraph 
 24.28  (c) from the amount determined under paragraph (b). 
 24.29     (b) The present value of the unreduced single life 
 24.30  retirement annuity, with the purchase of the additional service 
 24.31  credit included, must be calculated as follows: 
 24.32     (1) the age at first eligibility for an unreduced single 
 24.33  life retirement annuity, including the purchase of the 
 24.34  additional service credit, must be determined; 
 24.35     (2) the length of total service credit, including the 
 24.36  period of the purchase of the additional service credit, at the 
 25.1   age determined under clause (1) must be determined; 
 25.2      (3) the highest five successive years average salary at the 
 25.3   age determined under clause (1), assuming five percent annual 
 25.4   compounding salary increases from the most current annual salary 
 25.5   amount at the age determined under clause (1), must be 
 25.6   determined; 
 25.7      (4) using the benefit accrual rate or rates applicable to 
 25.8   the prospective purchaser of the service credit based on the 
 25.9   prospective purchaser's actual date of entry into covered 
 25.10  service, the length of service determined under clause (2), and 
 25.11  the final average salary determined under clause (3), the annual 
 25.12  unreduced single life retirement annuity amount must be 
 25.13  determined; 
 25.14     (5) the actuarial present value of the projected annual 
 25.15  unreduced single life retirement annuity amount determined under 
 25.16  clause (4) at the age determined under clause (1), using the 
 25.17  same actuarial factor that the plan would use to determine 
 25.18  actuarial equivalence for optional annuity forms and related 
 25.19  purposes, must be determined; and 
 25.20     (6) the discounted value of the amount determined under 
 25.21  clause (5) to the date of the prospective purchase, using an 
 25.22  interest rate of 8.5 percent and no mortality probability 
 25.23  decrement, must be determined. 
 25.24     (c) The present value of the unreduced single life 
 25.25  retirement annuity, without the purchase of the additional 
 25.26  service credit included, must be calculated as follows:  
 25.27     (1) the age at first eligibility for an unreduced single 
 25.28  life retirement annuity, not including the purchase of 
 25.29  additional service credit, must be determined; 
 25.30     (2) the length of accrued service credit, without the 
 25.31  period of of the purchase of the additional service credit, at 
 25.32  the age determined under clause (1), must be determined; 
 25.33     (3) the highest five successive years average salary at the 
 25.34  age determined under clause (1), assuming five percent annual 
 25.35  compounding salary increases from the must current annual salary 
 25.36  amount to the age determined under clause (1), must be 
 26.1   determined; 
 26.2      (4) using the benefit accrual rate or rates applicable to 
 26.3   the prospective purchaser of the service credit based on the 
 26.4   prospective purchaser's actual date of entry into covered 
 26.5   service the length of service credit determined under clause 
 26.6   (2), and the final average salary determined under clause (3), 
 26.7   the annual unreduced single life retirement annuity amount must 
 26.8   be determined; 
 26.9      (5) the actuarial present value of the projected annual 
 26.10  unreduced single life retirement annuity amount determined under 
 26.11  clause (4) at the age determined under clause (1), using the 
 26.12  same actuarial factor that the plan would use to determined 
 26.13  actuarial equivalence for optional annuity forms and related 
 26.14  purposes, must be determined; 
 26.15     (6) the discounted value of the amount determined under 
 26.16  clause (5) to the date of the prospective purchase, using an 
 26.17  interest rate of 8.5 percent and no mortality probability 
 26.18  decrement, must be determined; and 
 26.19     (7) the net value of the discounted value determined under 
 26.20  clause (6), must be determined by applying a service ratio, 
 26.21  where the numerator is the total length of credited service 
 26.22  determined under paragraph (b), clause (2), reduced by the 
 26.23  period of the additional service credit proposed to be 
 26.24  purchased, and where the denominator is the total length of 
 26.25  service credit determined under clause (2). 
 26.26     (d) The minimum prior service credit purchase amount is the 
 26.27  amount determined by multiplying the most current annual salary 
 26.28  of the prospective purchaser by the combined current employee, 
 26.29  employer, and any additional employer contribution rates for the 
 26.30  applicable pension plan and by multiplying that results by the 
 26.31  number of years of service or fractions of years of service of 
 26.32  the potential service credit purchase. 
 26.33     Subd. 3.  [SOURCE OF DETERMINATION.] The prior service 
 26.34  credit purchase amounts under subdivision 2 must be calculated 
 26.35  by the chief administrative officer of the public pension plan 
 26.36  using a prior service credit purchase amount determination 
 27.1   process that has been verified for accuracy and consistency 
 27.2   under this section by the commission-retained actuary.  That 
 27.3   verification must be in writing and must occur before the first 
 27.4   prior service credit purchase for the plan under this section is 
 27.5   accepted and every five years thereafter or whenever the 
 27.6   preretirement interest rate, postretirement interest rate, 
 27.7   payroll growth, or mortality actuarial assumption for the 
 27.8   applicable pension plan is modified under section 356.215, 
 27.9   whichever occurs first. 
 27.10     Subd. 4.  [PRIOR SERVICE CREDIT PURCHASE PROCESSING FEE.] A 
 27.11  public pension plan may establish a fee to be charged to the 
 27.12  prospective purchaser for processing a prior service credit 
 27.13  purchase application and the prior service credit payment amount 
 27.14  calculation.  The fee must be established by the governing board 
 27.15  of the pension plan and must be uniform for comparable service 
 27.16  credit purchase situations or actuarial calculation requests.  
 27.17  The prior service credit purchase processing fee structure must 
 27.18  be published by the chief administrative officer of the 
 27.19  applicable retirement plan in the State Register. 
 27.20     Subd. 5.  [PAYMENT RESPONSIBILITY; EMPLOYER OPTION.] Unless 
 27.21  the prior service credit purchase authorization special law or 
 27.22  general statute provision explicitly specifies otherwise, the 
 27.23  prior service credit purchase payment amount determined under 
 27.24  subdivision 2 is payable by the purchaser, but the former 
 27.25  employer of the purchaser or the current employer of the 
 27.26  purchaser may, at its discretion, pay all or a portion of the 
 27.27  purchase payment amount in excess of an amount equal to the 
 27.28  employee contribution rate or rates in effect during the prior 
 27.29  service period applied to the actual salary rates in effect 
 27.30  during the prior service period, plus annual compound interest 
 27.31  at the rate of 8.5 percent from the date on which the 
 27.32  contributions would have been made if made contemporaneous with 
 27.33  the service period to the date on which the payment is actually 
 27.34  made. 
 27.35     Subd. 6.  [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 
 27.36  As part of the regular data reporting to the consulting actuary 
 28.1   retained by the legislative commission on pensions and 
 28.2   retirement annually, the chief administrative officer of each 
 28.3   public pension plan that has accepted a prior service credit 
 28.4   purchase payment under this section shall report for any 
 28.5   purchase, the purchaser, the purchaser's employer, the age of 
 28.6   the purchaser, the period of the purchase, the purchaser's 
 28.7   prepurchase accrued service credit, the purchaser's postpurchase 
 28.8   accrued service credit, the purchaser's prior service credit 
 28.9   payment, the prior service credit payment made by the 
 28.10  purchaser's employer, and the amount of the additional benefit 
 28.11  or annuity purchased. 
 28.12     (b) As part of the regular annual actuarial valuation for 
 28.13  the applicable public pension plan prepared by the consulting 
 28.14  actuary retained by the legislative commission on pensions and 
 28.15  retirement, there must be an exhibit comparing for each purchase 
 28.16  the total prior service credit payment received from all sources 
 28.17  and the increased public pension plan actuarial accrued 
 28.18  liability resulting from each purchase. 
 28.19     Subd. 7.  [EXPIRATION OF PURCHASE PAYMENT DETERMINATION 
 28.20  PROCEDURE.] (a) This section expires and is repealed on July 1, 
 28.21  2001. 
 28.22     (b) Authority for any public pension plan to accept a prior 
 28.23  service credit payment calculated in a timely fashion under this 
 28.24  section expires on October 1, 2001. 
 28.25     Sec. 2.  [356.551] [POST-JULY 1, 2001, PRIOR SERVICE CREDIT 
 28.26  PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 
 28.27     (a) Unless the prior service credit purchase authorization 
 28.28  special law or general statute provision explicitly specifies a 
 28.29  different purchase payment amount determination procedure, and 
 28.30  if section 356.55 has expired, this section governs the 
 28.31  determination of the prior service credit purchase payment 
 28.32  amount of any prior service credit purchase. 
 28.33     (b) The prior service credit purchase amount is an amount 
 28.34  equal to the actuarial present value, on the date of payment, as 
 28.35  calculated by the chief administrative officer of the pension 
 28.36  plan and reviewed by the actuary retained by the legislative 
 29.1   commission on pensions and retirement, of the amount of the 
 29.2   additional retirement annuity obtained by the acquisition of the 
 29.3   additional service credit in this section.  Calculation of this 
 29.4   amount must be made using the preretirement interest rate 
 29.5   applicable to the public pension plan specified in section 
 29.6   356.215, subdivision 4d, and the mortality table adopted for the 
 29.7   public pension plan.  The calculation must assume continuous 
 29.8   future service in the public pension plan until, and retirement 
 29.9   at, the age at which the minimum requirements of the fund for 
 29.10  normal retirement or retirement with an annuity unreduced for 
 29.11  retirement at an early age, including section 356.30, are met 
 29.12  with the additional service credit purchased.  The calculation 
 29.13  must also assume a full-time equivalent salary, or actual 
 29.14  salary, whichever is greater, and a future salary history that 
 29.15  includes annual salary increases at the applicable salary 
 29.16  increase rate for the plan specified in section 356.215, 
 29.17  subdivision 4d.  Payment must be made in one lump sum within one 
 29.18  year of the prior service credit authorization.  Payment of the 
 29.19  amount calculated under this subdivision must be made by the 
 29.20  applicable eligible person.  However, the current employer or 
 29.21  the prior employer may, at its discretion, pay all or any 
 29.22  portion of the payment amount that exceeds an amount equal to 
 29.23  the employee contribution rates in effect during the period or 
 29.24  periods of prior service applied to the actual salary rates in 
 29.25  effect during the period or periods of prior service, plus 
 29.26  interest at the rate of 8.5 percent a year compounded annually 
 29.27  from the date on which the contributions would otherwise have 
 29.28  been made to the date on which the payment is made.  If the 
 29.29  employer agrees to payments under this paragraph, the purchaser 
 29.30  must make the employee payments required under this paragraph 
 29.31  within 290 days of the prior service credit authorization.  If 
 29.32  that employee payment is made, the employer payment under this 
 29.33  paragraph must be remitted to the chief administrative officer 
 29.34  of the public pension plan within 60 days of receipt by the 
 29.35  chief administrative officer of the employee payments specified 
 29.36  under this paragraph. 
 30.1      (c) The prospective purchaser must provide any relevant 
 30.2   documentation required by the chief administrative officer of 
 30.3   the public pension plan to determine eligibility for the prior 
 30.4   service credit under this section. 
 30.5      (d) Service credit for the purchase period must be granted 
 30.6   by the public pension plan to the purchaser upon receipt of the 
 30.7   purchase payment amount specified in paragraph (b). 
 30.8      Sec. 3.  [PRIOR SERVICE CREDIT PURCHASE AUTHORIZATION.] 
 30.9      Subdivision 1.  [INDEPENDENT SCHOOL DISTRICT NO. 77, 
 30.10  MANKATO, TEACHER.] (a) Notwithstanding any provision of 
 30.11  Minnesota Statutes, section 354.094, or other law to the 
 30.12  contrary, an eligible person described in paragraph (b) is 
 30.13  entitled to obtain allowable and formula service credit in the 
 30.14  teachers retirement association for the period described in 
 30.15  paragraph (c) upon the payment of the full service credit 
 30.16  purchase amount specified in Minnesota Statutes, section 356.55. 
 30.17     (b) An eligible person is a person who was: 
 30.18     (1) born on June 23, 1946; 
 30.19     (2) granted an extended leave of absence from employment 
 30.20  under the teacher mobility program by independent school 
 30.21  district No. 77, Mankato, on March 3, 1986, for the period July 
 30.22  1, 1986, to June 30, 1989; and 
 30.23     (3) granted a leave which was erroneously characterized in 
 30.24  the "other" category on the leave of absence report submitted to 
 30.25  the teachers retirement association. 
 30.26     (c) The period for service credit purchase is July 1, 1986, 
 30.27  to June 30, 1989. 
 30.28     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 30.29  subdivision 5, the eligible person must pay, on or before 
 30.30  September 1, 1998, an amount equal to the employee contribution 
 30.31  rate or rates in effect during the prior service period applied 
 30.32  to the actual salary rates in effect during the prior service 
 30.33  period, plus annual compound interest at the rate of 8.5 percent 
 30.34  from the date on which the contributions would have been made if 
 30.35  made contemporaneous with the service period to the date on 
 30.36  which the payment is actually made and independent school 
 31.1   district No. 77, Mankato, must pay the balance of the prior 
 31.2   service credit purchase payment amount calculated under 
 31.3   Minnesota Statutes, section 356.55, within 30 days of the 
 31.4   payment by the eligible person.  The executive director of the 
 31.5   teachers retirement association must notify the superintendent 
 31.6   of independent school district No. 77, Mankato, of its payment 
 31.7   amount and payment due date if the eligible person makes the 
 31.8   required payment. 
 31.9      (e) If independent school district No. 77, Mankato, fails 
 31.10  to pay its portion of the required prior service credit purchase 
 31.11  payment amount, the executive director may notify the 
 31.12  commissioner of finance of that fact and the commissioner of 
 31.13  finance may order that the required school district payment be 
 31.14  deducted from the next subsequent payment or payments of state 
 31.15  education aid to the school district and be transmitted to the 
 31.16  teachers retirement association. 
 31.17     Subd. 2.  [INDEPENDENT SCHOOL DISTRICT NO. 199, INVER GROVE 
 31.18  HEIGHTS, TEACHER.] (a) Notwithstanding Minnesota Statutes, 
 31.19  section 354.096, an eligible person described in paragraph (b) 
 31.20  is entitled to purchase allowable service credit in the teachers 
 31.21  retirement association for the period described in paragraph (c) 
 31.22  by paying the amount specified in Minnesota Statutes, section 
 31.23  356.55, subdivision 2. 
 31.24     (b) An eligible person is a person who: 
 31.25     (1) was on medical leave for multiple sclerosis in the fall 
 31.26  of 1990; 
 31.27     (2) was employed by independent school district No. 199, 
 31.28  Inver Grove Heights, during the period that the medical leave 
 31.29  was taken; and 
 31.30     (3) was not properly notified of the deadline to purchase 
 31.31  service credit for the medical leave period. 
 31.32     (c) The period for service credit purchase is 18 days of a 
 31.33  period of medical leave during the fall of 1990. 
 31.34     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 31.35  subdivision 5, the eligible person must pay, on or before 
 31.36  September 1, 1998, an amount equal to the employee contribution 
 32.1   rate or rates in effect during the prior service period applied 
 32.2   to the actual salary rates in effect during the prior service 
 32.3   period, plus annual compound interest at the rate of 8.5 percent 
 32.4   from the date on which the contributions would have been made if 
 32.5   made contemporaneous with the service period to the date on 
 32.6   which the payment is actually made and independent school 
 32.7   district No. 199, Inver Grove Heights, must pay the balance of 
 32.8   the prior service credit purchase payment amount calculated 
 32.9   under Minnesota Statutes, section 356.55, within 30 days of the 
 32.10  payment by the eligible person.  The executive director of the 
 32.11  teachers retirement association must notify the superintendent 
 32.12  of independent school district No. 199, Inver Grove Heights, of 
 32.13  its payment amount and payment due date if the eligible person 
 32.14  makes the required payment. 
 32.15     (e) If independent school district No. 199, Inver Grove 
 32.16  Heights, fails to pay its portion of the required prior service 
 32.17  credit purchase payment amount, the executive director may 
 32.18  notify the commissioner of finance of that fact and the 
 32.19  commissioner of finance may order that the required school 
 32.20  district payment be deducted from the next subsequent payment or 
 32.21  payments of state education aid to the school district and be 
 32.22  transmitted to the teachers retirement association. 
 32.23     Subd. 3.  [PRE-JANUARY 1, 1998, LATE REPORTED QUALIFIED 
 32.24  PART-TIME TEACHER PROGRAM AGREEMENT PERIODS.] (a) 
 32.25  Notwithstanding any provision of Minnesota Statutes, section 
 32.26  354.66, to the contrary, an eligible person described in 
 32.27  paragraph (b) is entitled to obtain allowable and formula 
 32.28  service credit in the teachers retirement association for the 
 32.29  period described in paragraph (c) upon the payment of the full 
 32.30  service credit purchase amount specified in Minnesota Statutes, 
 32.31  section 356.55. 
 32.32     (b) An eligible person is a person who rendered part-time 
 32.33  teaching service after the end of the 1993-1994 school year and 
 32.34  before the beginning of the 1998-1999 school year under an 
 32.35  agreement with a school district or other applicable employer 
 32.36  under Minnesota Statutes, section 354.66, that was executed 
 33.1   before the applicable October 1, but was not filed by the 
 33.2   employing unit with the teachers retirement association before 
 33.3   the applicable October 1 deadline. 
 33.4      (c) The period for service credit purchase is the 
 33.5   uncredited portion of a full year of service credit during the 
 33.6   1994-1995, 1995-1996, 1996-1997, and 1997-1998 school years 
 33.7   where the uncredited period of service resulted solely from a 
 33.8   failure of the employing unit to file the part-time teaching 
 33.9   participation agreement with the teachers retirement association 
 33.10  in a timely fashion. 
 33.11     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 33.12  subdivision 5, the eligible person must pay, on or before 
 33.13  November 30, 1998, an amount equal to the employee contribution 
 33.14  rate or rates in effect during the prior service period applied 
 33.15  to the actual salary rates in effect during the prior service 
 33.16  period, plus annual compound interest at the rate of 8.5 percent 
 33.17  from the date on which the contributions would have been made if 
 33.18  made contemporaneous with the service period to the date on 
 33.19  which the payment is actually made and the employing unit that 
 33.20  agreed to the part-time teaching service participation program 
 33.21  must pay the balance of the prior service credit purchase 
 33.22  payment amount calculated under Minnesota Statutes, section 
 33.23  356.55, within 30 days of the payment by the eligible person.  
 33.24  The executive director of the teachers retirement association 
 33.25  must notify the chief administrative officer of the applicable 
 33.26  employing unit of its payment amount and payment due date if the 
 33.27  eligible person makes the required payment. 
 33.28     (e) If the applicable employing unit fails to pay its 
 33.29  portion of the required prior service credit purchase payment 
 33.30  amount, the executive director may notify the commissioner of 
 33.31  finance of that fact and the commissioner of finance may order 
 33.32  that the required employer payment be deducted from the next 
 33.33  subsequent payment or payments of any state education or other 
 33.34  aid to that employing unit and be transmitted to the teachers 
 33.35  retirement association. 
 33.36     Subd. 4.  [PURCHASE OF SERVICE CREDIT AUTHORIZATION; MIDDLE 
 34.1   MANAGEMENT ASSOCIATION EMPLOYEE.] (a) Notwithstanding Minnesota 
 34.2   Statutes, sections 352.01, subdivision 2, and 352.029, 
 34.3   subdivision 1, and Minnesota Statutes 1997 Supplement, section 
 34.4   352.01, subdivision 2a, an eligible employee described in 
 34.5   paragraph (b) is eligible for membership in the Minnesota state 
 34.6   retirement system general plan and is eligible to purchase 
 34.7   service credit in that plan as specified in paragraph (d). 
 34.8      (b) An eligible employee is a person who: 
 34.9      (1) has been employed by the middle management association 
 34.10  since February 14, 1994; and 
 34.11     (2) was born on September 13, 1958. 
 34.12     (c) An eligible employee in paragraph (b) remains eligible 
 34.13  for membership in the Minnesota state retirement system general 
 34.14  plan, under this subdivision, while the individual remains 
 34.15  employed by the middle management association or a successor 
 34.16  organization providing contribution requirements and other 
 34.17  general requirements for membership are met. 
 34.18     (d) An eligible employee under paragraph (b) is entitled to 
 34.19  purchase service credit in the Minnesota state retirement system 
 34.20  general plan for the period of service prior to the effective 
 34.21  date of this act for service with the middle management 
 34.22  association.  An eligible employee may not purchase service 
 34.23  credit for any period during which the employer has made 
 34.24  contributions on behalf of the employee to a defined 
 34.25  contribution pension plan or for any period during which the 
 34.26  employee or the employer have made contributions to a defined 
 34.27  benefit pension plan covering public, nonprofit, or private 
 34.28  sector employees, other than a volunteer firefighter relief 
 34.29  association governed by Minnesota Statutes, chapter 424A.  
 34.30  Authority to make the payment terminates on July 1, 1999, or 
 34.31  upon termination of employment with the middle management 
 34.32  association, whichever is earlier. 
 34.33     Subd. 5.  [INDEPENDENT SCHOOL DISTRICT NO. 13, COLUMBIA 
 34.34  HEIGHTS, TEACHER.] (a) Notwithstanding Minnesota Statutes, 
 34.35  section 354.094, an eligible person described in paragraph (b) 
 34.36  is entitled to purchase allowable and formula service credit in 
 35.1   the teachers retirement association for the period described in 
 35.2   paragraph (c) by paying the amount specified in Minnesota 
 35.3   Statutes, section 356.55, subdivision 2. 
 35.4      (b) An eligible person for purposes of paragraph (a) is a 
 35.5   person who was born on January 26, 1944, was initially hired by 
 35.6   independent school district No. 13, Columbia Heights, on August 
 35.7   30, 1967, was granted a five year extended leave of absence by 
 35.8   independent school district No. 13, Columbia Heights, for the 
 35.9   period July 1, 1994, through June 30, 1999, and was unable to 
 35.10  make contributions under Minnesota Statutes, section 354.094, 
 35.11  subdivision 1, because of the failure of independent school 
 35.12  district No. 13, Columbia Heights, to timely forward the 
 35.13  person's leave payment to the teachers retirement association. 
 35.14     (c) The period for service credit purchase is the extended 
 35.15  leave of absence for the 1996-1997 school year. 
 35.16     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 35.17  subdivision 5, the eligible person must pay, on or before 
 35.18  September 1, 1998, an amount equal to the employee, employer, 
 35.19  and employer additional contribution rates in effect during the 
 35.20  prior service period applied to the actual salary rates in 
 35.21  effect during the prior service period, plus annual compound 
 35.22  interest at the rate of 8.5 percent from the date on which the 
 35.23  contributions would have been made if made contemporaneous with 
 35.24  the service period to the date on which the payment is actually 
 35.25  made and independent school district No. 13, Columbia Heights, 
 35.26  must pay the balance of the prior service credit purchase 
 35.27  payment amount calculated under Minnesota Statutes, section 
 35.28  356.55, within 30 days of the payment by the eligible person.  
 35.29  The executive director of the teachers retirement association 
 35.30  must notify the superintendent of independent school district 
 35.31  No. 13, Columbia Heights, of its payment amount and payment due 
 35.32  date if the eligible person makes the required payment. 
 35.33     (e) If independent school district No. 13, Columbia 
 35.34  Heights, fails to pay its portion of the required prior service 
 35.35  credit purchase payment amount, the executive director may 
 35.36  notify the commissioner of finance of that fact and the 
 36.1   commissioner of finance may order that the required employer 
 36.2   payment be deducted from any state education or other aid 
 36.3   payable to independent school district No. 13, Columbia Heights, 
 36.4   and be transmitted to the teachers retirement association. 
 36.5      Subd. 6.  [WINONA STATE UNIVERSITY FACULTY MEMBER.] (a) 
 36.6   Notwithstanding Minnesota Statutes, section 354.094, an eligible 
 36.7   person described in paragraph (b) is entitled to purchase 
 36.8   allowable service credit in the teachers retirement association 
 36.9   for the period described in paragraph (c) by paying the amount 
 36.10  specified in Minnesota Statutes, section 356.55, subdivision 2. 
 36.11     (b) An eligible person for purposes of paragraph (a) is a 
 36.12  person who was born on September 5, 1943, was initially hired by 
 36.13  Winona state university on September 4, 1979, was granted an 
 36.14  extended leave of absence by Winona state university on March 
 36.15  18, 1996, and was unable to make contributions under Minnesota 
 36.16  Statutes, section 354.094, subdivision 1, because of the failure 
 36.17  of Winona state university to timely submit the leave of absence 
 36.18  report to the teachers retirement association. 
 36.19     (c) The period for service credit purchase is the first 
 36.20  year of a three year extended leave of absence that began with 
 36.21  the 1996-1997 school year. 
 36.22     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 36.23  subdivision 5, the eligible person must pay, on or before 
 36.24  September 1, 1998, an amount equal to the employee, employer, 
 36.25  and employer additional contribution rates in effect during the 
 36.26  prior service period applied to the actual salary rates in 
 36.27  effect during the prior service period, plus annual compound 
 36.28  interest at the rate of 8.5 percent from the date on which the 
 36.29  contributions would have been made if made contemporaneous with 
 36.30  the service period to the date on which the payment is actually 
 36.31  made and Winona state university must pay the balance of the 
 36.32  prior service credit purchase payment amount calculated under 
 36.33  Minnesota Statutes, section 356.55, within 30 days of the 
 36.34  payment by the eligible person.  The executive director of the 
 36.35  teachers retirement association must notify the president of 
 36.36  Winona state university of its payment amount and payment due 
 37.1   date if the eligible person makes the required payment. 
 37.2      (e) If Winona state university fails to pay its portion of 
 37.3   the required prior service credit purchase payment amount, the 
 37.4   executive director may notify the commissioner of finance of 
 37.5   that fact and the commissioner of finance may order that the 
 37.6   required employer payment be deducted from any appropriation to 
 37.7   the Minnesota state colleges and universities system and be 
 37.8   transmitted to the teachers retirement association. 
 37.9      Subd. 7.  [INDEPENDENT SCHOOL DISTRICT NO. 621, MOUNDS 
 37.10  VIEW, TEACHER.] (a) Notwithstanding Minnesota Statutes, section 
 37.11  354.092, an eligible person described in paragraph (b) is 
 37.12  entitled to purchase allowable service credit in the teachers 
 37.13  retirement association for the period described in paragraph (c) 
 37.14  by paying the amount specified in Minnesota Statutes, section 
 37.15  356.55, subdivision 2. 
 37.16     (b) An eligible person for purposes of paragraph (a) is a 
 37.17  person who was born on December 19, 1940, was initially employed 
 37.18  as a teacher on August 27, 1968, and is employed by independent 
 37.19  school district No. 621, Mounds View. 
 37.20     (c) The period for service credit purchase is the 
 37.21  uncredited portion of a sabbatical leave during the 1984-1985 
 37.22  school year. 
 37.23     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 37.24  subdivision 5, the eligible person must pay, on or before 
 37.25  September 1, 1998, an amount equal to the employee contribution 
 37.26  rate or rates in effect during the prior service period applied 
 37.27  to the actual salary rates in effect during the prior service 
 37.28  period, plus annual compound interest at the rate of 8.5 percent 
 37.29  from the date on which the contributions would have been made if 
 37.30  made contemporaneous with the service period to the date on 
 37.31  which the payment is actually made.  Independent school district 
 37.32  No. 621, Mounds View, must pay the balance of the prior service 
 37.33  credit purchase payment amount calculated under Minnesota 
 37.34  Statutes, section 356.55, within 30 days of the payment by the 
 37.35  eligible person.  The executive director of the teachers 
 37.36  retirement association must notify the superintendent of 
 38.1   independent school district No. 621, Mounds View, of its payment 
 38.2   amount and payment due date if the eligible person makes the 
 38.3   required payment. 
 38.4      (e) If independent school district No. 621, Mounds View, 
 38.5   fails to pay its portion of the required prior service credit 
 38.6   purchase payment amount, the executive director may notify the 
 38.7   commissioner of finance of that fact and the commissioner of 
 38.8   finance may order that the required employer payment be deducted 
 38.9   from the next subsequent payment or payments of state education 
 38.10  aid to the school district be transmitted to the teachers 
 38.11  retirement association. 
 38.12     Subd. 8.  [INDEPENDENT SCHOOL DISTRICT NO. 709, DULUTH, 
 38.13  TEACHER.] (a) Notwithstanding any provision of Minnesota 
 38.14  Statutes, chapter 354A, the articles of incorporation of the 
 38.15  Duluth teachers retirement fund association, or the Duluth 
 38.16  teachers retirement fund association bylaws to the contrary, an 
 38.17  eligible person described in paragraph (b) is entitled to 
 38.18  purchase allowable service credit in the Duluth teachers 
 38.19  retirement fund association for the periods described in 
 38.20  paragraph (c) by paying the amount specified in Minnesota 
 38.21  Statutes, section 356.55, subdivision 2. 
 38.22     (b) An eligible person for purposes of paragraph (a) is a 
 38.23  person who was born on October 29, 1942, was first employed by 
 38.24  independent school district No. 709, Duluth, on September 7, 
 38.25  1966, was granted a maternity leave that began on February 26, 
 38.26  1968, was employed by independent school district No. 709, 
 38.27  Duluth, on a less-than-full-time basis during the 1970-1971 and 
 38.28  1971-1972 school years, and was employed on a full-time contract 
 38.29  basis from September 4, 1972, through the 1997-1998 school year. 
 38.30     (c) The period for service credit purchase is any portion 
 38.31  of the period February 26, 1968, to September 4, 1972, that was 
 38.32  not previously credited as allowable service by the Duluth 
 38.33  teachers retirement fund association, but not to exceed one year 
 38.34  of service credit for any school year. 
 38.35     Subd. 9.  [INDEPENDENT SCHOOL DISTRICT NO. 200, HASTINGS, 
 38.36  TEACHER.] (a) Notwithstanding Minnesota Statutes, section 
 39.1   354.094, an eligible person described in paragraph (b) is 
 39.2   entitled to purchase allowable and formula service credit in the 
 39.3   teachers retirement association for the period described in 
 39.4   paragraph (c) by paying the amount specified in Minnesota 
 39.5   Statutes, section 356.55, subdivision 2. 
 39.6      (b) An eligible person for purposes of paragraph (a) is a 
 39.7   person who was born on December 17, 1941, was initially employed 
 39.8   by independent school district No. 200, Hastings, and was first 
 39.9   granted an extended leave of absence for the 1996-1997 school 
 39.10  year. 
 39.11     (c) The period for service credit purchase is the 1996-1997 
 39.12  school year. 
 39.13     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 39.14  subdivision 5, the eligible person must pay, on or before 
 39.15  September 1, 1998, an amount equal to the employee contribution 
 39.16  rate or rates in effect during the prior service period applied 
 39.17  to the actual salary rates in effect during the prior service 
 39.18  period, plus annual compound interest at the rate of 8.5 percent 
 39.19  from the date on which the contributions would have been made if 
 39.20  made contemporaneous with the service period to the date on 
 39.21  which the payment is actually made.  Independent school district 
 39.22  No. 200, Hastings, must pay the balance of the prior service 
 39.23  credit purchase payment amount calculated under Minnesota 
 39.24  Statutes, section 356.55, within 30 days of the payment by the 
 39.25  eligible person.  The executive director of the teachers 
 39.26  retirement association must notify the superintendent of 
 39.27  independent school district No. 200, Hastings, of its payment 
 39.28  amount and payment due date if the eligible person makes the 
 39.29  required payment. 
 39.30     (e) If independent school district No. 200, Hastings, fails 
 39.31  to pay its portion of the required prior service credit purchase 
 39.32  payment amount, the executive director may notify the 
 39.33  commissioner of finance of that fact and the commissioner of 
 39.34  finance may order that the required employer payment be deducted 
 39.35  from the next subsequent payment or payments of state education 
 39.36  aid to the school district be transmitted to the teachers 
 40.1   retirement association. 
 40.2      Sec. 4.  [EFFECTIVE DATE.] 
 40.3      Sections 1, 2, and 3 are effective on the day following 
 40.4   final enactment. 
 40.5                              ARTICLE 5 
 40.6          JUDGES RETIREMENT PLAN CONTRIBUTION MODIFICATIONS
 40.7      Section 1.  Minnesota Statutes 1997 Supplement, section 
 40.8   15A.083, subdivision 5, is amended to read: 
 40.9      Subd. 5.  [TAX COURT.] The salary of a judge of the tax 
 40.10  court is the same as 98.52 percent of the salary for a district 
 40.11  court judge.  The salary of the chief tax court judge is the 
 40.12  same as 98.52 percent of the salary for a chief district court 
 40.13  judge. 
 40.14     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
 40.15  15A.083, subdivision 6a, is amended to read: 
 40.16     Subd. 6a.  [ADMINISTRATIVE LAW JUDGE; SALARIES.] The salary 
 40.17  of the chief administrative law judge is the same as 98.52 
 40.18  percent of the salary of a district court judge.  The salaries 
 40.19  of the assistant chief administrative law judge and 
 40.20  administrative law judge supervisors are 95 93.60 percent of the 
 40.21  salary of a district court judge.  The salary of an 
 40.22  administrative law judge employed by the office of 
 40.23  administrative hearings is 90 88.67 percent of the salary of a 
 40.24  district court judge as set under section 15A.082, subdivision 3.
 40.25     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
 40.26  15A.083, subdivision 7, is amended to read: 
 40.27     Subd. 7.  [WORKERS' COMPENSATION COURT OF APPEALS AND 
 40.28  COMPENSATION JUDGES.] Salaries of judges of the workers' 
 40.29  compensation court of appeals are the same as 98.52 percent of 
 40.30  the salary for district court judges.  The salary of the chief 
 40.31  judge of the workers' compensation court of appeals is the same 
 40.32  as 98.52 percent of the salary for a chief district court 
 40.33  judge.  Salaries of compensation judges are 90 88.67 percent of 
 40.34  the salary of district court judges.  The chief workers' 
 40.35  compensation settlement judge at the department of labor and 
 40.36  industry may be paid an annual salary that is up to five percent 
 41.1   greater than the salary of workers' compensation settlement 
 41.2   judges at the department of labor and industry. 
 41.3      Sec. 4.  Minnesota Statutes 1996, section 490.123, 
 41.4   subdivision 1a, is amended to read: 
 41.5      Subd. 1a.  [MEMBER CONTRIBUTION RATES.] (a) A judge who is 
 41.6   covered by the federal old age, survivors, disability, and 
 41.7   health insurance program shall contribute to the fund from each 
 41.8   salary payment a sum equal to 6.27 8.00 percent of salary.  
 41.9      (b) A judge not so covered shall contribute to the fund 
 41.10  from each salary payment a sum equal to 8.15 percent of salary. 
 41.11     (c) The contribution under this subdivision is payable by 
 41.12  salary deduction. 
 41.13     Sec. 5.  Minnesota Statutes 1996, section 490.123, 
 41.14  subdivision 1b, is amended to read: 
 41.15     Subd. 1b.  [EMPLOYER CONTRIBUTION RATE.] The employer 
 41.16  contribution rate on behalf of a judge is 22 20.5 percent of 
 41.17  salary. 
 41.18     The employer contribution must be paid by the state court 
 41.19  administrator and is payable at the same time as member 
 41.20  contributions under subdivision 1a are remitted. 
 41.21     Sec. 6.  Laws 1997, Second Special Session chapter 3, 
 41.22  section 16, is amended to read: 
 41.23     Sec. 16.  [SALARIES OF CONSTITUTIONAL OFFICERS, 
 41.24  LEGISLATORS, AND JUDGES.] 
 41.25     (a) The salaries of constitutional officers are increased 
 41.26  by 2.5 percent effective July 1, 1997, and by 2.5 percent 
 41.27  effective January 1, 1998. 
 41.28     (b) The salaries of legislators are increased by 5.0 
 41.29  percent effective January 4, 1999. 
 41.30     (c) The salaries of the judges of the supreme court, court 
 41.31  of appeals, and district court are increased by 4.0 percent 
 41.32  effective July 1, 1997, and by 5.0 percent effective January 1, 
 41.33  1998, and by 1.5 percent effective July 1, 1998. 
 41.34     (d) Effective July 1, 1999, the salaries of judges of the 
 41.35  supreme court, court of appeals, and district court are 
 41.36  increased by the average of the general salary adjustments for 
 42.1   state employees in fiscal year 1998 provided by negotiated 
 42.2   collective bargaining agreements or arbitration awards ratified 
 42.3   by the legislature in the 1998 legislative session. 
 42.4      (e) Effective January 1, 2000, the salaries of judges of 
 42.5   the supreme court, court of appeals, and district court are 
 42.6   increased by the average of the general salary adjustments for 
 42.7   state employees in fiscal year 1999 provided by negotiated 
 42.8   collective bargaining agreements or arbitration awards ratified 
 42.9   by the legislature in the 1998 legislative session. 
 42.10     (f) The commissioner of employee relations shall calculate 
 42.11  the average of the general salary adjustments provided by 
 42.12  negotiated collective bargaining agreements or arbitration 
 42.13  awards ratified by the legislature in the 1998 legislative 
 42.14  session.  Negotiated collective bargaining agreements or 
 42.15  arbitration awards that do not include general salary 
 42.16  adjustments may not be included in these calculations.  The 
 42.17  commissioner shall weigh the general salary adjustments by the 
 42.18  number of full-time equivalent employees covered by each 
 42.19  agreement or arbitration award.  The commissioner shall 
 42.20  calculate the average general salary adjustment for each fiscal 
 42.21  year covered by the agreements or arbitration awards.  The 
 42.22  results of these calculations must be expressed as percentages, 
 42.23  rounded to the nearest one-tenth of one percent.  The 
 42.24  commissioner shall calculate the new salaries for the positions 
 42.25  listed in paragraphs (d) and (e) using the applicable 
 42.26  percentages from the calculations in this paragraph and report 
 42.27  them to the speaker of the house, the president of the senate, 
 42.28  the chief justice of the supreme court, and the governor. 
 42.29     Sec. 7.  [SALARY INCREASE CONDITIONED ON MEMBER 
 42.30  CONTRIBUTION INCREASE.] 
 42.31     (a) The increase in judicial salaries under section 6 is 
 42.32  not applicable to a judge if the member contribution rate 
 42.33  increase under section 4, paragraph (a), is not also deducted 
 42.34  from the salary of the judge. 
 42.35     (b) The increase in judicial salaries under section 6 also 
 42.36  applies to judges who are not covered by the federal old age, 
 43.1   survivors, disability, and health insurance program. 
 43.2      Sec. 8.  [EFFECTIVE DATE.] 
 43.3      Sections 1 to 7 are effective on July 1, 1998. 
 43.4                              ARTICLE 6 
 43.5               UNCLASSIFIED STATE EMPLOYEE PENSION PLAN 
 43.6                            MODIFICATIONS 
 43.7      Section 1.  Minnesota Statutes 1996, section 352D.12, is 
 43.8   amended to read: 
 43.9      352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 
 43.10     (a) An employee who is a participant in the unclassified 
 43.11  program and who has prior service credit in a covered plan under 
 43.12  chapters 3A, 352, 352C, 353, 354, 354A, and 422A may, within the 
 43.13  time limits specified in this section, elect to transfer to the 
 43.14  unclassified program prior service contributions to one or more 
 43.15  of those plans.  Participants with six or more years of prior 
 43.16  service credit in a plan governed by chapter 3A or 352C on July 
 43.17  1, 1998, may not transfer prior service contributions.  
 43.18  Participants with less than six years of prior service credit in 
 43.19  a plan governed by chapter 3A or 352C on July 1, 1998, must be 
 43.20  contributing to the unclassified plan on or after January 5, 
 43.21  1999, in order to transfer prior contributions. 
 43.22     (b) For participants with prior service credit in a plan 
 43.23  governed by chapter 352, 353, 354, 354A, or 422A, "prior service 
 43.24  contributions" means the accumulated employee and equal employer 
 43.25  contributions with interest at an annual rate of 8.5 percent 
 43.26  compounded annually, based on fiscal year balances.  For 
 43.27  participants with less than six years of service credit as of 
 43.28  July 1, 1998, and with prior service credit in a plan governed 
 43.29  by chapter 3A or 352C, "prior service contributions" means an 
 43.30  amount equal to twice the amount of the accumulated member 
 43.31  contributions plus annual compound interest at the rate of 8.5 
 43.32  percent, computed on fiscal year balances.  
 43.33     (c) If a participant has taken a refund from a fund 
 43.34  retirement plan listed in this section, the participant may 
 43.35  repay the refund to that fund plan, notwithstanding any 
 43.36  restrictions on repayment to that fund plan, plus 8.5 percent 
 44.1   interest compounded annually and have the accumulated employee 
 44.2   and equal employer contributions transferred to the unclassified 
 44.3   program with interest at an annual rate of 8.5 percent 
 44.4   compounded annually based on fiscal year balances.  If a person 
 44.5   repays a refund and subsequently elects to have the money 
 44.6   transferred to the unclassified program, the repayment amount, 
 44.7   including interest, is added to the fiscal year balance in the 
 44.8   year which the repayment was made. 
 44.9      (d) A participant electing to transfer prior service 
 44.10  contributions credited to a retirement plan governed by chapter 
 44.11  352, 353, 354, 354A, or 422A as provided under this section must 
 44.12  complete the application for the transfer and repay any refund 
 44.13  within one year of July 1, 1985 or the commencement of the 
 44.14  employee's participation in the unclassified program, whichever 
 44.15  is later.  A participant electing to transfer prior service 
 44.16  contributions credited to a retirement plan governed by chapter 
 44.17  3A or 352C as provided under this section must complete the 
 44.18  application for the transfer and repay any refund between 
 44.19  January 5, 1999, and June 1, 1999, if the employee commenced 
 44.20  participation in the unclassified program before January 5, 
 44.21  1999, or within one year of the commencement of the employee's 
 44.22  participation in the unclassified program if the employee 
 44.23  commenced participation in the unclassified program after 
 44.24  January 4, 1999. 
 44.25     Sec. 2.  [FUNDING.] 
 44.26     Money appropriated in Laws 1997, chapter 202, article 1, 
 44.27  section 31, may be used to make transfers of funds on behalf of 
 44.28  legislators and constitutional officers under section 1. 
 44.29     Sec. 3.  [EFFECTIVE DATE.] 
 44.30     Sections 1 and 2 are effective July 1, 1998. 
 44.31                             ARTICLE 7 
 44.32              LOCAL POLICE AND FIRE RELIEF ASSOCIATION  
 44.33                          PENSION CHANGES 
 44.34     Section 1.  [COLUMBIA HEIGHTS VOLUNTEER FIRE DEPARTMENT 
 44.35  RELIEF ASSOCIATION; INCORPORATION AND PLAN RESTRUCTURING.] 
 44.36     Subdivision 1.  [ORGANIZATION AND PLAN RESTRUCTURING.] 
 45.1   Notwithstanding the provisions of Laws 1977, chapter 374, 
 45.2   sections 38 to 60, as amended, the entity currently known as the 
 45.3   "Columbia Heights fire department relief association, volunteer 
 45.4   division" shall become incorporated under Minnesota Statutes, 
 45.5   chapter 317A, and be known as the "Columbia Heights volunteer 
 45.6   fire department relief association."  The new entity will be 
 45.7   governed by Minnesota Statutes, chapters 69, 317A, 356, 356A, 
 45.8   and 424A, and any other laws applicable to volunteer fire 
 45.9   department relief associations.  The Columbia Heights volunteer 
 45.10  fire department relief association may adopt the existing bylaws 
 45.11  of the "Columbia Heights fire department relief association, 
 45.12  volunteer division"; provided, however, that the bylaws must 
 45.13  provide that future benefits payable to any member of the 
 45.14  association are defined contribution lump sum service pensions 
 45.15  under Minnesota Statutes, section 424A.02, subdivision 4.  
 45.16     Subd. 2.  [BOARD RESTRUCTURING.] The board must be 
 45.17  reconstituted in conformance with Minnesota Statutes, section 
 45.18  424A.04 within 90 days after the effective date of this section. 
 45.19     Sec. 2.  [MINNEAPOLIS FIRE; OPTIONAL ANNUITY EXTENSION TO 
 45.20  CERTAIN SURVIVORS.] 
 45.21     (a) Notwithstanding Laws 1997, chapter 233, article 4, 
 45.22  section 18, the surviving spouse of any service pensioner or 
 45.23  disability benefit recipient of the Minneapolis fire department 
 45.24  relief association who died between July 1, 1997, and October 1, 
 45.25  1997, is entitled to a surviving spouse benefit equal to the 100 
 45.26  percent joint and survivor annuity amount which the decedent 
 45.27  would have been eligible to select if the decedent had been 
 45.28  entitled and able to select an optional annuity form on the date 
 45.29  of death. 
 45.30     (b) The benefit under paragraph (a) is in lieu of any other 
 45.31  survivor benefit payable from the Minneapolis fire department 
 45.32  relief association. 
 45.33     (c) The benefit under this section accrues as of October 1, 
 45.34  1997, and is payable on the first day of the month next 
 45.35  following the effective date of this section.  The initial 
 45.36  benefit payment must include the increase amounts retroactive to 
 46.1   October 1, 1997. 
 46.2      Sec. 3.  Laws 1977, chapter 61, section 6, as amended by 
 46.3   Laws 1981, chapter 68, section 39, is amended to read: 
 46.4      Sec. 6.  [FINANCIAL REQUIREMENTS OF THE TRUST FUND.] 
 46.5      Commencing January 1, 1978, (a) The city of Eveleth shall 
 46.6   provide by annual levy an amount sufficient to pay the greater 
 46.7   of either (a) an amount which when added to the investment 
 46.8   income of the trust fund is sufficient to pay the benefits 
 46.9   provided under the trust fund for the succeeding year as 
 46.10  certified by the board of trustees of the trust fund.; or (b) an 
 46.11  amount equal to the level annual dollar amount sufficient to 
 46.12  amortize the unfunded accrued liability of the trust fund by 
 46.13  December 31, 1991, as determined in accordance with Minnesota 
 46.14  Statutes, Sections 69.77, 356.215 and 356.216, in the latest 
 46.15  actuarial valuation. 
 46.16     The annual levy under this section shall not be included in 
 46.17  any limitation as to rate or amount set by charter and shall be 
 46.18  a special levy for purposes of Minnesota Statutes, Section 
 46.19  275.50, Subdivision 5.  All revenues generated by the levy 
 46.20  required under this section shall be transferred to the trust 
 46.21  fund. 
 46.22     (b) If the city of Eveleth fails to contribute the amount 
 46.23  required in paragraph (a) in a given year, no postretirement 
 46.24  adjustment granted under Laws 1995, chapter 262, article 10, 
 46.25  section 1, or Laws 1997, chapter 241, article 2, section 19, is 
 46.26  payable in the following year. 
 46.27     Sec. 4.  Laws 1995, chapter 262, article 10, section 1, is 
 46.28  amended to read: 
 46.29     Section 1.  [EVELETH POLICE AND FIREFIGHTERS; BENEFIT 
 46.30  INCREASE.] 
 46.31     Notwithstanding any general or special law to the contrary, 
 46.32  in addition to the current pensions and other retirement 
 46.33  benefits payable, the pensions and retirement benefits payable 
 46.34  to retired police officers and firefighters and their surviving 
 46.35  spouses by the Eveleth police and fire trust fund are increased 
 46.36  by $100 a month.  Increases are retroactive to January 1, 1995.  
 47.1   If the city of Eveleth fails to contribute an amount required in 
 47.2   a given year sufficient to amortize the unfunded actuarial 
 47.3   accrued liability of the police and fire trust fund by December 
 47.4   31, 1998, the increases under this section in the following year 
 47.5   are not payable. 
 47.6      Sec. 5.  [EFFECTIVE DATE.] 
 47.7      (a) Section 1 is effective the day after approval by the 
 47.8   Columbia Heights city council and compliance with Minnesota 
 47.9   Statutes, section 645.021. 
 47.10     (b) Section 2 is effective upon approval by the city 
 47.11  council of the city of Minneapolis and compliance with Minnesota 
 47.12  Statutes, section 645.021, subdivision 3. 
 47.13                             ARTICLE 8
 47.14            ACTUARIAL SERVICES CONTRACT-RELATED CHANGES 
 47.15     Section 1.  Minnesota Statutes 1997 Supplement, section 
 47.16  3.85, subdivision 11, is amended to read: 
 47.17     Subd. 11.  [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The 
 47.18  commission shall contract with an established actuarial 
 47.19  consulting firm to conduct annual actuarial valuations for the 
 47.20  retirement plans named in paragraph (b).  The contract must 
 47.21  include provisions for performing cost analyses of proposals for 
 47.22  changes in benefit and funding policies.  
 47.23     (b) The contract for actuarial valuation must include the 
 47.24  following retirement plans:  
 47.25     (1) the teachers retirement plan, teachers retirement 
 47.26  association; 
 47.27     (2) the general state employees retirement plan, Minnesota 
 47.28  state retirement system; 
 47.29     (3) the correctional employees retirement plan, Minnesota 
 47.30  state retirement system; 
 47.31     (4) the state patrol retirement plan, Minnesota state 
 47.32  retirement system; 
 47.33     (5) the judges retirement plan, Minnesota state retirement 
 47.34  system; 
 47.35     (6) the Minneapolis employees retirement plan, Minneapolis 
 47.36  employees retirement fund; 
 48.1      (7) the public employees retirement plan, public employees 
 48.2   retirement association; 
 48.3      (8) the public employees police and fire plan, public 
 48.4   employees retirement association; 
 48.5      (9) the Duluth teachers retirement plan, Duluth teachers 
 48.6   retirement fund association; 
 48.7      (10) the Minneapolis teachers retirement plan, Minneapolis 
 48.8   teachers retirement fund association; 
 48.9      (11) the St. Paul teachers retirement plan, St. Paul 
 48.10  teachers retirement fund association; 
 48.11     (12) the legislators retirement plan, Minnesota state 
 48.12  retirement system; and 
 48.13     (13) the elective state officers retirement plan, Minnesota 
 48.14  state retirement system.  
 48.15     (c) The contract must specify completion of annual 
 48.16  actuarial valuation calculations on a fiscal year basis with 
 48.17  their contents as specified in section 356.215, and the 
 48.18  standards for actuarial work adopted by the commission.  
 48.19     The contract must specify completion of annual experience 
 48.20  data collection and processing and a quadrennial published 
 48.21  experience study for the plans listed in paragraph (b), clauses 
 48.22  (1), (2), and (7), as provided for in the standards for 
 48.23  actuarial work adopted by the commission.  The experience data 
 48.24  collection, processing, and analysis must evaluate the following:
 48.25     (1) individual salary progression; 
 48.26     (2) rate of return on investments based on current asset 
 48.27  value; 
 48.28     (3) payroll growth; 
 48.29     (4) mortality; 
 48.30     (5) retirement age; 
 48.31     (6) withdrawal; and 
 48.32     (7) disablement.  
 48.33     (d) The actuary retained by the commission shall annually 
 48.34  prepare a report to the legislature, including the commentary on 
 48.35  the actuarial valuation calculations for the plans named in 
 48.36  paragraph (b) and summarizing the results of the actuarial 
 49.1   valuation calculations.  The commission-retained actuary shall 
 49.2   include with the report the actuary's recommendations concerning 
 49.3   the appropriateness of the support rates to achieve proper 
 49.4   funding of the retirement funds by the required funding dates.  
 49.5   The commission-retained actuary shall, as part of the 
 49.6   quadrennial published experience study, include recommendations 
 49.7   to the legislature on the appropriateness of the actuarial 
 49.8   valuation assumptions required for evaluation in the study.  
 49.9      (e) If the actuarial gain and loss analysis in the 
 49.10  actuarial valuation calculations indicates a persistent pattern 
 49.11  of sizable gains or losses, as directed by the commission, the 
 49.12  actuary retained by the commission shall prepare a special 
 49.13  experience study for a plan listed in paragraph (b), clause (3), 
 49.14  (4), (5), (6), (8), (9), (10), (11), (12), or (13), in the 
 49.15  manner provided for in the standards for actuarial work adopted 
 49.16  by the commission. 
 49.17     (f) The term of the contract between the commission and the 
 49.18  actuary retained by the commission is two four years, plus not 
 49.19  to exceed two one-year extensions before competitive bidding.  
 49.20  The contract is subject to competitive bidding procedures as 
 49.21  specified by the commission. 
 49.22     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
 49.23  356.215, subdivision 2, is amended to read: 
 49.24     Subd. 2.  [REQUIREMENTS.] (a) It is the policy of the 
 49.25  legislature that it is necessary and appropriate to determine 
 49.26  annually the financial status of tax supported retirement and 
 49.27  pension plans for public employees.  To achieve this goal, the 
 49.28  legislative commission on pensions and retirement shall have 
 49.29  prepared by the actuary retained by the commission annual 
 49.30  actuarial valuations of the retirement plans enumerated in 
 49.31  section 3.85, subdivision 11, paragraph (b), quadrennial 
 49.32  experience studies of the retirement plans enumerated in section 
 49.33  3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7), 
 49.34  and, two years after each set of quadrennial experience studies, 
 49.35  quadrennial projection valuations of at least one of the 
 49.36  retirement plans enumerated in section 3.85, subdivision 11, 
 50.1   paragraph (b), clauses (1), (2), and (7), and of any other 
 50.2   retirement plan enumerated in section 3.85, subdivision 11, 
 50.3   paragraph (b), for which it determines that the analysis is may 
 50.4   be beneficial.  The governing or managing board or 
 50.5   administrative officials of each public pension and retirement 
 50.6   fund or plan enumerated in section 356.20, subdivision 2, 
 50.7   clauses (9), (10), and (12), shall have prepared by an approved 
 50.8   actuary annual actuarial valuations of their respective funds as 
 50.9   provided in this section.  This requirement also applies to any 
 50.10  fund that is the successor to any organization enumerated in 
 50.11  section 356.20, subdivision 2, or to the governing or managing 
 50.12  board or administrative officials of any newly formed retirement 
 50.13  fund or association operating under the control or supervision 
 50.14  of any public employee group, governmental unit, or institution 
 50.15  receiving a portion of its support through legislative 
 50.16  appropriations, and any local police or fire fund coming within 
 50.17  the provisions of section 356.216. 
 50.18     (b) The A quadrennial projection valuations valuation 
 50.19  required under paragraph (a) are is intended to serve as an 
 50.20  additional analytical tool with which policy makers may assess 
 50.21  the future funding status of public plans through forecasting 
 50.22  and testing various potential outcomes over time if certain plan 
 50.23  assumptions or valuation methods were to be modified.  In 
 50.24  consultation with the executive director of the legislative 
 50.25  commission on pensions and retirement, the retirement fund 
 50.26  directors, the state economist, the state demographer, the 
 50.27  commissioner of finance, and the commissioner of employee 
 50.28  relations, the actuary retained by the legislative commission on 
 50.29  pensions and retirement shall perform the quadrennial projection 
 50.30  valuations, testing future implications for plan funding by 
 50.31  modifying assumptions and methods currently in place.  The 
 50.32  commission-retained actuary shall provide advice to the 
 50.33  commission as to the periods over which such projections should 
 50.34  be made, the nature and scope of the scenarios to be analyzed, 
 50.35  and the measures of funding status to be employed, and shall 
 50.36  report the results of these analyses in the same manner as for 
 51.1   quadrennial experience studies. 
 51.2      Sec. 3.  [EFFECTIVE DATE.] 
 51.3      Sections 1 and 2 are effective on the day following final 
 51.4   enactment. 
 51.5                              ARTICLE 9
 51.6            PERA CORRECTIONAL EMPLOYEE DISABILITY COVERAGE 
 51.7      Section 1.  Minnesota Statutes 1997 Supplement, section 
 51.8   353.27, subdivision 2, is amended to read: 
 51.9      Subd. 2.  [EMPLOYEE CONTRIBUTION.] (a) Except as provided 
 51.10  in paragraph (b), the employee contribution shall be an 
 51.11  amount (a) (1) for a "basic member" equal to 8.75 percent of 
 51.12  total salary; and (b) (2) for a "coordinated member" equal to 
 51.13  4.75 percent of total salary. 
 51.14     (b) For local government correctional service employees, as 
 51.15  defined in section 353.33, subdivision 3a, the employee 
 51.16  contribution is an amount equal to 4.96 percent of total salary. 
 51.17     (c) These contributions must be made by deduction from 
 51.18  salary in the manner provided in subdivision 4.  Where any 
 51.19  portion of a member's salary is paid from other than public 
 51.20  funds, such member's employee contribution must be based on the 
 51.21  total salary received from all sources. 
 51.22     Sec. 2.  Minnesota Statutes 1996, section 353.27, 
 51.23  subdivision 3, is amended to read: 
 51.24     Subd. 3.  [EMPLOYER CONTRIBUTION.] (a) Except as provided 
 51.25  in paragraph (b), the employer contribution shall be an amount 
 51.26  equal to the employee contribution under subdivision 2. 
 51.27     (b) On behalf of local government correctional service 
 51.28  employees, as defined in section 353.33, subdivision 3a, the 
 51.29  employer contribution is an amount equal to 5.06 percent of 
 51.30  total salary. 
 51.31     (c) This contribution shall be made from funds available to 
 51.32  the employing subdivision by the means and in the manner 
 51.33  provided in section 353.28. 
 51.34     Sec. 3.  Minnesota Statutes 1996, section 353.33, 
 51.35  subdivision 3a, is amended to read: 
 51.36     Subd. 3a.  [CORRECTIONAL EMPLOYEE DISABILITY BENEFIT 
 52.1   COVERAGE.] (a) For purposes of the disability benefit coverage 
 52.2   provided under this subdivision, a local government correctional 
 52.3   service employee is a person who: 
 52.4      (1) is an "essential employee" as defined in section 
 52.5   179A.03, subdivision 7; 
 52.6      (2) is employed in a county-administered jail or 
 52.7   correctional facility or in a regional correctional facility 
 52.8   administered by multiple counties; 
 52.9      (3) spends at least 75 percent of the employee's working 
 52.10  time in direct contact with persons confined in the jail or 
 52.11  facility, as certified by the employer to the executive director 
 52.12  of the association before August 1, 1998, or within 30 days of 
 52.13  employment in the qualifying county employment position, 
 52.14  whichever is later; and 
 52.15     (4) is a "public employee" as defined in section 353.01, 
 52.16  and is not a member of the public employees retirement 
 52.17  association police and fire fund. 
 52.18     (b) A local government correctional employee who becomes 
 52.19  disabled and physically or mentally unfit to perform the duties 
 52.20  of the position as a direct result of an injury, sickness, or 
 52.21  other disability incurred in or arising out of any act of duty 
 52.22  that renders the employee physically or mentally unable to 
 52.23  perform the employee's correctional facility duties, is entitled 
 52.24  to a disability benefit based on covered service under this 
 52.25  chapter only in an amount equal to 45 percent of the average 
 52.26  salary defined in section 353.29, subdivision 2, plus an 
 52.27  additional 1.8 percent for each year of service as a 
 52.28  correctional service employee after July 1, 1998, in excess of 
 52.29  25 years. 
 52.30     (c) If the eligible employee is entitled to receive a 
 52.31  disability benefit as provided in paragraph (b) and has credit 
 52.32  for less covered correctional service than the length of service 
 52.33  upon which the correctional disability benefit is based, and 
 52.34  also has credit for regular plan service, the employee is 
 52.35  entitled to a disability benefit or deferred retirement annuity 
 52.36  based on the regular plan service only for the service that, 
 53.1   when combined with the correctional service, exceeds the number 
 53.2   of years on which the correctional disability benefit is based.  
 53.3   The disabled employee who also has credit for regular plan 
 53.4   service must in all respects qualify under section 353.33 to be 
 53.5   entitled to receive a disability benefit based on the regular 
 53.6   plan service, except that the service may be combined to satisfy 
 53.7   length of service requirements.  Any deferred annuity to which 
 53.8   the employee may be entitled based on regular plan service must 
 53.9   be augmented as provided in section 353.71 while the employee is 
 53.10  receiving a disability benefit under this subdivision. 
 53.11     Subd. 3b.  [OPTIONAL ANNUITY ELECTION.] A disabled member 
 53.12  may elect to receive the normal disability benefit or an 
 53.13  optional annuity under section 353.30, subdivision 3.  The 
 53.14  election of an optional annuity must be made prior to the 
 53.15  commencement of payment of the disability benefit.  The optional 
 53.16  annuity must begin to accrue on the same date as provided for 
 53.17  the disability benefit.  
 53.18     (1) If a person who is not the spouse of a member is named 
 53.19  as beneficiary of the joint and survivor optional annuity, the 
 53.20  person is eligible to receive the annuity only if the spouse, on 
 53.21  the disability application form prescribed by the executive 
 53.22  director, permanently waives the surviving spouse benefits under 
 53.23  sections 353.31, subdivision 1, and 353.32, subdivision 1a.  If 
 53.24  the spouse of the member refuses to permanently waive the 
 53.25  surviving spouse coverage, the selection of a person other than 
 53.26  the spouse of the member as a joint annuitant is invalid. 
 53.27     (2) If the spouse of the member permanently waives survivor 
 53.28  coverage, the dependent children, if any, continue to be 
 53.29  eligible for survivor benefits under section 353.31, subdivision 
 53.30  1, including the minimum benefit in section 353.31, subdivision 
 53.31  1a.  The designated optional annuity beneficiary may draw the 
 53.32  monthly benefit; however, the amount payable to the dependent 
 53.33  child or children and joint annuitant must not exceed the 70 
 53.34  percent maximum family benefit under section 353.31, subdivision 
 53.35  1a.  If the maximum is exceeded, the benefit of the joint 
 53.36  annuitant must be reduced to the amount necessary so that the 
 54.1   total family benefit does not exceed the 70 percent maximum 
 54.2   family benefit amount. 
 54.3      (3) If the spouse is named as the beneficiary of the joint 
 54.4   and survivor optional annuity, the spouse may draw the monthly 
 54.5   benefits; however, the amount payable to the dependent child or 
 54.6   children and the joint annuitant must not exceed the 70 percent 
 54.7   maximum family benefit under section 353.31, subdivision 1a.  If 
 54.8   the maximum is exceeded, each dependent child will receive ten 
 54.9   percent of the member's specified average monthly salary, and 
 54.10  the benefit to the joint annuitant must be reduced to the amount 
 54.11  necessary so that the total family benefit does not exceed the 
 54.12  70 percent maximum family benefit amount.  The joint and 
 54.13  survivor optional annuity must be restored to the surviving 
 54.14  spouse, plus applicable postretirement adjustments under section 
 54.15  356.41, as the dependent child or children become no longer 
 54.16  dependent under section 353.01, subdivision 15. 
 54.17     Sec. 4.  [EFFECTIVE DATE.] 
 54.18     Sections 1 and 2 are effective the first full pay period 
 54.19  beginning after June 30, 1998.  Section 3 is effective July 1, 
 54.20  1998, and applies to disabilities that occur after June 30, 1998.