1.1                          A bill for an act 
  1.2             relating to retirement; various public pension plans; 
  1.3             expanding the membership of the state correctional 
  1.4             employees retirement plan to include certain Minnesota 
  1.5             extended treatment options program employees; 
  1.6             downsizing the early retirement reduction rates for 
  1.7             various public safety plans; grandparenting public 
  1.8             employee police and fire plan coverage for certain 
  1.9             Rice county correctional employees; requiring Rice 
  1.10            county to repay certain police state aid amounts; 
  1.11            providing employer penalties for pension plan 
  1.12            membership certification failures or errors; providing 
  1.13            special retirement coverage for certain state fire 
  1.14            marshal employees; requiring a study; clarifying 
  1.15            various Minneapolis employees retirement plan survivor 
  1.16            benefit provisions; increasing the number of vendors 
  1.17            for certain tax-sheltered annuities for educational 
  1.18            employees; modifying various benefit provisions for 
  1.19            certain Minnesota state college and university system 
  1.20            employees; authorizing the establishment of volunteer 
  1.21            rescue squad relief associations by Kandiyohi county 
  1.22            and the city of Litchfield; merging the pre-March 1, 
  1.23            1999, local police and paid fire consolidation 
  1.24            accounts into the public employees police and fire 
  1.25            plan; extending the minimum volunteer firefighter fire 
  1.26            state aid amount to post-1993 relief association 
  1.27            members; providing a targeted early retirement 
  1.28            incentive program for certain employees of the 
  1.29            metropolitan council; making miscellaneous changes in 
  1.30            the legislators retirement plan, the Minnesota state 
  1.31            college and university system individual retirement 
  1.32            account plan, the Minnesota state retirement system, 
  1.33            and the teachers retirement association; reducing the 
  1.34            membership of the legislative commission on pensions 
  1.35            and retirement; amending Minnesota Statutes 1998, 
  1.36            sections 3.85, subdivisions 3 and 12; 3A.02, 
  1.37            subdivision 1b; 43A.27, subdivision 3; 69.021, 
  1.38            subdivisions 7 and 10; 69.031, subdivision 5; 122A.46, 
  1.39            subdivision 2; 136F.48; 352.03, subdivision 1; 352.90; 
  1.40            352.91, by adding a subdivision; 352.93, subdivision 
  1.41            2a; 352B.08, subdivision 2a; 353.01, subdivisions 2b, 
  1.42            10, and 16; 353.64, subdivision 1; 353.65, 
  1.43            subdivisions 2 and 3; 353.651, subdivision 4; 
  1.44            353A.083, by adding a subdivision; 354.05, subdivision 
  1.45            40; 354.06, subdivision 1; 354.10, subdivision 4; 
  1.46            354.445; 354.66, subdivisions 1b, 1c, and 3; 354B.24, 
  2.1             subdivision 3; 354B.25, subdivisions 2, 3, and 5; 
  2.2             354C.11; 354C.12, subdivision 4; 356.19, by adding a 
  2.3             subdivision; 356.215, subdivision 4g; 356.24, 
  2.4             subdivision 1; 356A.01, subdivisions 7 and 8; 422A.06, 
  2.5             subdivisions 3 and 6; 422A.101, subdivision 4; 
  2.6             422A.18, subdivision 2; 422A.22, subdivisions 4 and 5; 
  2.7             422A.23; and 423A.02, subdivisions 1b, 2, and by 
  2.8             adding a subdivision; proposing coding for new law in 
  2.9             Minnesota Statutes, chapters 352; 353; 354B; and 422A; 
  2.10            proposing coding for new law as Minnesota Statutes, 
  2.11            chapter 425B; repealing Minnesota Statutes 1998, 
  2.12            sections 353.65, subdivision 3a; and 422A.16, 
  2.13            subdivision 3a. 
  2.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.15                             ARTICLE 1 
  2.16           CORRECTIONAL EMPLOYEES RETIREMENT PLAN CHANGES 
  2.17     Section 1.  Minnesota Statutes 1998, section 352.90, is 
  2.18  amended to read: 
  2.19     352.90 [POLICY.] 
  2.20     It is the policy of the legislature to provide special 
  2.21  retirement benefits and contributions for certain correctional 
  2.22  employees who may be required to retire at an early age because 
  2.23  they lose the mental or physical capacity required to maintain 
  2.24  the safety, security, discipline, and custody of inmates at 
  2.25  state correctional facilities or of patients at the Minnesota 
  2.26  security hospital or at the Minnesota sexual psychopathic 
  2.27  personality treatment center or of patients in the Minnesota 
  2.28  extended treatment options on-campus program at Cambridge.  
  2.29     Sec. 2.  Minnesota Statutes 1998, section 352.91, is 
  2.30  amended by adding a subdivision to read: 
  2.31     Subd. 3e.  [MINNESOTA EXTENDED TREATMENT OPTIONS PROGRAM; 
  2.32  CAMBRIDGE.] "Covered correctional service" means service by a 
  2.33  state employee in one of the following employment positions with 
  2.34  the Minnesota extended treatment options on-campus program at 
  2.35  Cambridge if at least 75 percent of the employee's working time 
  2.36  is spent in direct contact with patients who are in the 
  2.37  Minnesota extended treatment options program and if service in 
  2.38  such a position is certified to the executive director by the 
  2.39  commissioner of human services, unless the person elects to 
  2.40  retain current retirement coverage under section 4: 
  2.41     (1) behavior analyst I; 
  2.42     (2) human services support specialist; 
  3.1      (3) mental retardation residential program lead; 
  3.2      (4) psychologist II; 
  3.3      (5) recreation program assistant; 
  3.4      (6) recreation therapist assistant; 
  3.5      (7) recreation therapist senior; 
  3.6      (8) registered nurse senior; 
  3.7      (9) skills development specialist; and 
  3.8      (10) social worker senior. 
  3.9      Sec. 3.  Minnesota Statutes 1998, section 352.93, 
  3.10  subdivision 2a, is amended to read: 
  3.11     Subd. 2a.  [EARLY RETIREMENT.] Any covered correctional 
  3.12  employee, or former employee if service ended after June 30, 
  3.13  1989, who becomes at least 50 years old and who has at least 
  3.14  three years of allowable service is entitled upon application to 
  3.15  a reduced retirement annuity equal to the annuity calculated 
  3.16  under subdivision 2, reduced so that the reduced annuity is the 
  3.17  actuarial equivalent of the annuity that would be payable if the 
  3.18  employee deferred receipt of the annuity from the day the 
  3.19  annuity begins to accrue to age 55 by two-tenths of one percent 
  3.20  for each month that the correctional employee is under age 55 at 
  3.21  the time of retirement. 
  3.22     Sec. 4.  [TEMPORARY PROVISION; ELECTION TO RETAIN 
  3.23  RETIREMENT COVERAGE.] 
  3.24     (a) An employee in a position specified as qualifying under 
  3.25  Minnesota Statutes, section 352.91, subdivision 3e, may elect to 
  3.26  retain coverage under the general employees retirement plan of 
  3.27  the Minnesota state retirement system or may elect to transfer 
  3.28  coverage and contribute to the correctional employees retirement 
  3.29  plan.  An employee electing to participate in the correctional 
  3.30  employees retirement plan shall begin making contributions to 
  3.31  the correctional plan beginning the first full pay period after 
  3.32  July 1, 1999, or the first full pay period following filing of 
  3.33  their election to transfer coverage to the correctional 
  3.34  employees retirement plan, whichever is later.  The election to 
  3.35  retain coverage or to transfer coverage must be made in writing 
  3.36  by the person on a form prescribed by the executive director of 
  4.1   the Minnesota state retirement system and must be filed with the 
  4.2   executive director no later than December 31, 1999. 
  4.3      (b) An employee failing to make an election by December 15, 
  4.4   1999, must be notified by certified mail by the executive 
  4.5   director of the Minnesota state retirement system of the 
  4.6   deadline to make a choice.  A person who does not submit an 
  4.7   election form must continue coverage in the general employees 
  4.8   retirement plan and forfeits all rights to transfer retirement 
  4.9   coverage to the correctional employees retirement plan. 
  4.10     (c) The election to retain coverage in the general 
  4.11  employees retirement plan or the election to transfer retirement 
  4.12  coverage to the correctional employees retirement plan is 
  4.13  irrevocable once it is filed with the executive director. 
  4.14     Sec. 5.  [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 
  4.15  PERSONS.] 
  4.16     Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 
  4.17  (a) An employee who has future retirement coverage transferred 
  4.18  to the correctional employees retirement plan under section 4, 
  4.19  and who does not elect to retain general state employees 
  4.20  retirement plan coverage, is entitled to elect to obtain prior 
  4.21  service credit for eligible state service performed on or after 
  4.22  July 1, 1997, and before the first day of the first full pay 
  4.23  period beginning after December 31, 1999.  All prior service 
  4.24  credit must be purchased. 
  4.25     (b) Eligible state service is any period of service on or 
  4.26  after the date which the employee started employment with the 
  4.27  Minnesota extended treatment options program in a position 
  4.28  specified in Minnesota Statutes, section 352.91, subdivision 3e, 
  4.29  in which at least 75 percent of the employee's working time is 
  4.30  determined to have been spent in direct contact with Minnesota 
  4.31  extended treatment options program patients or July 1, 1997, 
  4.32  whichever is later, and the date the employee joined the 
  4.33  correctional employees plan.  
  4.34     (c) The department of human services shall certify eligible 
  4.35  state service to the executive director of the Minnesota 
  4.36  retirement system. 
  5.1      Subd. 2.  [PAYMENT FOR PRIOR SERVICE.] (a) An employee 
  5.2   electing to obtain prior service credit under subdivision 1 must 
  5.3   pay an additional employee contribution for that prior service.  
  5.4   The additional member contribution is the contribution 
  5.5   differential percentage applied to the actual salary paid to the 
  5.6   employee during the period of the prior eligible state service, 
  5.7   plus interest at the rate of six percent per annum, compounded 
  5.8   annually.  The contribution differential percentage is the 
  5.9   difference between 5.5 percent of salary and the applicable 
  5.10  employee contribution rate of the general state employees 
  5.11  retirement plan during the prior eligible state service. 
  5.12     (b) The additional member contribution must be paid only in 
  5.13  a lump sum.  Payment must accompany the election to obtain prior 
  5.14  service credit.  No election or payment may be made by the 
  5.15  person or accepted by the executive director after June 30, 2001.
  5.16     Subd. 3.  [TRANSFER OF ASSETS.] Assets must be transferred 
  5.17  from the general state employees retirement plan to the 
  5.18  correctional employees retirement plan in an amount equal to the 
  5.19  present value of benefits earned under the general employees 
  5.20  retirement plan for each employee transferring to the 
  5.21  correctional employees retirement plan, as determined by the 
  5.22  actuary retained by the legislative commission on pensions and 
  5.23  retirement in accordance with Minnesota Statutes, section 
  5.24  356.215, multiplied by the accrued liability funding ratio of 
  5.25  active members as derived from the most recent actuarial 
  5.26  valuation prepared by the commission-retained actuary.  The 
  5.27  transfer of assets must be made within 45 days after the 
  5.28  employee elects to transfer coverage to the correctional 
  5.29  employees retirement plan. 
  5.30     Subd. 4.  [EFFECT OF THE ASSET TRANSFER.] Upon the transfer 
  5.31  of assets in subdivision 3, service credit in the general state 
  5.32  employees plan of the Minnesota state retirement system is 
  5.33  forfeited and may not be reinstated.  The service credit and 
  5.34  transferred assets must be credited to the correctional 
  5.35  employees retirement plan. 
  5.36     Subd. 5.  [COUNSELING.] (a) The commissioners of human 
  6.1   services and employee relations and the executive director of 
  6.2   the Minnesota state retirement system have the joint 
  6.3   responsibility of providing affected employees with appropriate 
  6.4   and timely retirement and related benefit counseling. 
  6.5      (b) Counseling must include the anticipated impact of the 
  6.6   retirement coverage change on the person's future retirement 
  6.7   benefit amounts, future retirement eligibility, future 
  6.8   applicability of mandatory retirement laws, and future 
  6.9   postemployment insurance coverage. 
  6.10     (c) The commissioner of human services must consult with 
  6.11  the appropriate collective bargaining agents of the affected 
  6.12  employees regarding the content, form, and timing of the 
  6.13  counseling required by this section. 
  6.14     Sec. 6.  [TRANSITIONAL PROVISION; RETENTION OF CERTAIN 
  6.15  RIGHTS.] 
  6.16     (a) Nothing in sections 1, 2, and 4 to 7 may be considered 
  6.17  to restrict the entitlement of a person under state law to repay 
  6.18  a previously taken refund of employee or member contributions to 
  6.19  a Minnesota public pension plan if all qualifying requirements 
  6.20  are met. 
  6.21     (b) The period of correctional employees retirement plan 
  6.22  contributions, plus interest, must be restored upon the 
  6.23  repayment of the appropriate refund amount if the service was 
  6.24  correctional employees retirement plan covered service on the 
  6.25  date when the service was rendered or on the date when the 
  6.26  refund was taken. 
  6.27     Sec. 7.  [EARLY RETIREMENT INCENTIVE.] 
  6.28     This section applies to an employee who has future 
  6.29  retirement coverage transferred to the correctional employee 
  6.30  retirement plan under section 4 and who is at least 55 years old 
  6.31  on the effective date of section 4.  That employee may 
  6.32  participate in a health insurance early retirement incentive 
  6.33  available under the terms of a collective bargaining agreement, 
  6.34  notwithstanding any provision of the collective bargaining 
  6.35  agreement that limits participation to persons who select the 
  6.36  option during the payroll period in which they become 55 years 
  7.1   old.  A person selecting the health insurance early retirement 
  7.2   incentive under this section must retire by the later of 
  7.3   December 31, 2000, or within the pay period following the time 
  7.4   at which the person has at least three years of covered 
  7.5   correctional service, including any purchased service credit.  
  7.6   An employee meeting this criteria who wishes to extend the 
  7.7   person's employment must do so under Minnesota Statutes, section 
  7.8   43A.34, subdivision 3. 
  7.9      Sec. 8.  [EFFECTIVE DATE.] 
  7.10     Sections 1, 2, and 4 to 7 are effective on the first day of 
  7.11  the first full pay period beginning after July 1, 1999.  Section 
  7.12  3 is effective July 1, 1999. 
  7.13                             ARTICLE 2 
  7.14                   PUBLIC SAFETY EMPLOYEE PENSION 
  7.15                            PLAN CHANGES 
  7.16     Section 1.  Minnesota Statutes 1998, section 352B.08, 
  7.17  subdivision 2a, is amended to read: 
  7.18     Subd. 2a.  [EARLY RETIREMENT.] Any member who has become at 
  7.19  least 50 years old and who has at least three years of allowable 
  7.20  service is entitled upon application to a reduced retirement 
  7.21  annuity equal to the annuity calculated under subdivision 2, 
  7.22  reduced by two-tenths one-tenth of one percent for each month 
  7.23  that the member is under age 55 at the time of retirement. 
  7.24     Sec. 2.  Minnesota Statutes 1998, section 353.64, 
  7.25  subdivision 1, is amended to read: 
  7.26     Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
  7.27  person who prior to July 1, 1961, was a member of the police and 
  7.28  fire fund, by virtue of being a police officer or firefighter, 
  7.29  shall, as long as the person remains in either position, 
  7.30  continue membership in the fund.  
  7.31     (b) A person who was employed by a governmental subdivision 
  7.32  as a police officer and was a member of the police and fire fund 
  7.33  on July 1, 1978, by virtue of being a police officer as defined 
  7.34  by this section on that date, and if employed by the same 
  7.35  governmental subdivision in a position in the same department in 
  7.36  which the person was employed on that date, shall continue 
  8.1   membership in continues to be a member of the fund, whether or 
  8.2   not that person has the power of arrest by warrant and is 
  8.3   licensed by the peace officers standards and training board 
  8.4   after that date.  A person who was employed as a correctional 
  8.5   officer by Rice county before July 1, 1998, for the duration of 
  8.6   employment in the correctional position held on July 1, 1998, 
  8.7   continues to be a member of the public employees police and fire 
  8.8   plan, whether or not the person has the power of arrest by 
  8.9   warrant and is licensed by the peace officers standards and 
  8.10  training board after that date. 
  8.11     (c) A person who was employed by a governmental subdivision 
  8.12  as a police officer or a firefighter, whichever applies, was an 
  8.13  active member of the local police or salaried firefighters 
  8.14  relief association located in that governmental subdivision by 
  8.15  virtue of that employment as of the effective date of the 
  8.16  consolidation as authorized by sections 353A.01 to 353A.10, and 
  8.17  has elected coverage by the public employees police and fire 
  8.18  fund benefit plan, shall become a member of the police and fire 
  8.19  fund after that date if employed by the same governmental 
  8.20  subdivision in a position in the same department in which the 
  8.21  person was employed on that date. 
  8.22     (d) Any other employee serving on a full-time basis as a 
  8.23  police officer as defined in subdivision 2 or as a firefighter 
  8.24  as defined in subdivision 3 on or after July 1, 1961, shall 
  8.25  become a member of the public employees police and fire fund.  
  8.26     (e) An employee serving on less than a full-time basis as a 
  8.27  police officer shall become a member of the public employees 
  8.28  police and fire fund only after a resolution stating that the 
  8.29  employee should be covered by the police and fire fund is 
  8.30  adopted by the governing body of the governmental subdivision 
  8.31  employing the person declaring that the position which the 
  8.32  person holds is that of a police officer. 
  8.33     (f) An employee serving on less than a full-time basis as a 
  8.34  firefighter shall become a member of the public employees police 
  8.35  and fire fund only after a resolution stating that the employee 
  8.36  should be covered by the police and fire fund is adopted by the 
  9.1   governing body of the governmental subdivision employing the 
  9.2   person declaring that the position which the person holds is 
  9.3   that of a firefighter. 
  9.4      (g) A police officer or firefighter employed by a 
  9.5   governmental subdivision who by virtue of that employment is 
  9.6   required by law to be a member of and to contribute to any 
  9.7   police or firefighter relief association governed by section 
  9.8   69.77 which has not consolidated with the public employees 
  9.9   police and fire fund and any police officer or firefighter of a 
  9.10  relief association that has consolidated with the association 
  9.11  for which the employee has not elected coverage by the public 
  9.12  employees police and fire fund benefit plan as provided in 
  9.13  sections 353A.01 to 353A.10 shall not become a member of the 
  9.14  public employees police and fire fund. 
  9.15     Sec. 3.  Minnesota Statutes 1998, section 353.651, 
  9.16  subdivision 4, is amended to read: 
  9.17     Subd. 4.  [EARLY RETIREMENT.] Any police officer or 
  9.18  firefighter member who has become at least 50 years old and who 
  9.19  has at least three years of allowable service is entitled upon 
  9.20  application to a retirement annuity equal to the normal annuity 
  9.21  calculated under subdivision 3, reduced by two-tenths one-tenth 
  9.22  of one percent for each month that the member is under age 55 at 
  9.23  the time of retirement. 
  9.24     Sec. 4.  [353.652] [SOCIAL SECURITY BENEFIT OFFSET IN 
  9.25  CERTAIN INSTANCES.] 
  9.26     (a) If a public employee continues in retirement plan 
  9.27  coverage by the public employees police and fire retirement plan 
  9.28  by virtue of this article and subsequently is covered by the 
  9.29  federal old age, survivors, and disability insurance program for 
  9.30  service as a Rice county correctional officer, the retirement 
  9.31  annuity of the person under section 353.651 or the disability 
  9.32  benefit of the person under section 353.656 must be reduced 
  9.33  dollar-for-dollar for the social security benefit that the 
  9.34  person is entitled to receive by virtue of Rice county 
  9.35  correctional service rendered after the effective date of 
  9.36  section 2. 
 10.1      (b) To be effective, the retirement annuity or disability 
 10.2   benefit application form for a Rice county correctional employee 
 10.3   must include signed, written permission by the person for the 
 10.4   public employees retirement association to obtain the necessary 
 10.5   information from the federal old age, survivors, and disability 
 10.6   insurance program to implement the offset provision in paragraph 
 10.7   (a). 
 10.8      Sec. 5.  [353.90] [PENALTY FOR MEMBERSHIP MISCERTIFICATIONS 
 10.9   AND CERTIFICATION FAILURES.] 
 10.10     (a) If the board of trustees of the public employees 
 10.11  retirement association, upon the recommendation of the executive 
 10.12  director, determines that a governmental subdivision has 
 10.13  certified a public employee for membership in the public 
 10.14  employees police and fire retirement plan when the public 
 10.15  employee was not eligible for that retirement plan coverage, the 
 10.16  public employee must be covered by the correct retirement plan 
 10.17  for subsequent service, the public employee retains the coverage 
 10.18  for the period of the misclassification, and the governmental 
 10.19  subdivision shall pay in a lump sum the difference in the 
 10.20  actuarial present value of the retirement annuities to which the 
 10.21  public employee would have been entitled if the public employee 
 10.22  was properly classified.  The government subdivision payment is 
 10.23  payable within 30 days of the board's determination.  If unpaid, 
 10.24  it must be collected under section 353.28.  The lump-sum payment 
 10.25  must be deposited in the public employees retirement fund. 
 10.26     (b) If the executive director of the public employees 
 10.27  retirement association determines that a governmental 
 10.28  subdivision has failed to certify a person for retirement plan 
 10.29  membership and coverage under this chapter, in addition to the 
 10.30  procedures under section 353.27, subdivision 4, 9, 10, 11, 12, 
 10.31  12a, or 12b, the director shall charge a fine of $....... for 
 10.32  each membership certification failure. 
 10.33     Sec. 6.  Minnesota Statutes 1998, section 353A.083, is 
 10.34  amended by adding a subdivision to read: 
 10.35     Subd. 4.  [PRE-1999 CONSOLIDATIONS.] For any consolidation 
 10.36  account in effect on July 1, 1999, the public employees police 
 11.1   and fire fund benefit plan applicable to consolidation account 
 11.2   members who have elected or will elect that benefit plan 
 11.3   coverage under section 353A.08 is the most recent change adopted 
 11.4   by the applicable municipality under subdivision 1, 2, or 3, 
 11.5   unless the applicable municipality approves the extension of the 
 11.6   post-June 30, 1999, public employees police and fire fund 
 11.7   benefit plan to the consolidation account. 
 11.8      Sec. 7.  [COLLECTION OF POLICE STATE AID OVERPAYMENTS.] 
 11.9      As police state aid that was received by Rice county on 
 11.10  account of correctional officers who were improperly included in 
 11.11  retirement coverage by the public employees police and fire 
 11.12  plan, the total of the following amounts must be deducted in 20 
 11.13  equal annual installments from any police state aid payable to 
 11.14  Rice county under Minnesota Statutes, chapter 69: 
 11.15            Amount                 Year  
 11.16           $11,543                 1994
 11.17            19,096                 1995 
 11.18            39,111                 1996  
 11.19            19,170                 1997 
 11.20            13,764                 1998  
 11.21     Sec. 8.  [EFFECTIVE DATE.] 
 11.22     Sections 1, 3, and 7 are effective on July 1, 1999.  
 11.23  Sections 2, 4, and 6 are effective on the day following final 
 11.24  enactment.  Section 5 is effective on August 1, 2000. 
 11.25                             ARTICLE 3  
 11.26                    SPECIAL RETIREMENT COVERAGE  
 11.27                       FOR CERTAIN STATE FIRE 
 11.28                         MARSHAL EMPLOYEES
 11.29     Section 1.  [352.87] [STATE FIRE MARSHAL DIVISION 
 11.30  EMPLOYEES.] 
 11.31     Subdivision 1.  [ELIGIBILITY.] A member of the general plan 
 11.32  who is employed by the department of public safety, state fire 
 11.33  marshal division, as a deputy state fire marshal, fire/arson 
 11.34  investigator, who elects special benefit coverage under 
 11.35  subdivision 8, is entitled to retirement benefits or disability 
 11.36  benefits, as applicable, as stated in this section for eligible 
 12.1   service under this section rendered after July 1, 1999, for 
 12.2   which allowable service credit is received.  The covered member 
 12.3   must be at least age 55 to qualify for the retirement annuity 
 12.4   specified in subdivision 3. 
 12.5      Subd. 2.  [RETIREMENT ANNUITY ELIGIBILITY.] A person 
 12.6   specified in subdivision 1 who meets all eligibility 
 12.7   requirements specified in this chapter applicable to general 
 12.8   plan members is eligible for retirement benefits as specified in 
 12.9   subdivision 3. 
 12.10     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] A person specified 
 12.11  in subdivision 1 will have a retirement annuity applicable for 
 12.12  allowable service credit under this section calculated by 
 12.13  multiplying the employee's average salary, as defined in section 
 12.14  352.115, subdivision 2, by the percentage specified in section 
 12.15  356.19, subdivision 2a, for each year or portions of a year of 
 12.16  allowable service credit.  No reduction for retirement prior to 
 12.17  normal retirement age, as specified in section 352.01, 
 12.18  subdivision 25, applies to service to which this section applies.
 12.19     Subd. 4.  [NON-JOB-RELATED DISABILITY BENEFITS.] An 
 12.20  eligible member described in subdivision 1, who is less than 55 
 12.21  years of age and who becomes disabled and physically or mentally 
 12.22  unfit to perform the duties of the position because of sickness 
 12.23  or injury while not engaged in covered employment, is entitled 
 12.24  to a disability benefit amount equivalent to an annuity computed 
 12.25  under subdivision 3 assuming the member has 15 years of service 
 12.26  qualifying under this section and waiving the minimum age 
 12.27  requirement.  If the eligible member becomes disabled under this 
 12.28  subdivision with more than 15 years of service covered under 
 12.29  this section, the eligible member is entitled to a disability 
 12.30  benefit amount equivalent to an annuity computed under 
 12.31  subdivision 3 based on all years of service credited under this 
 12.32  section and waiving the minimum age requirement. 
 12.33     Subd. 5.  [JOB-RELATED DISABILITY BENEFITS.] An eligible 
 12.34  member defined in subdivision 1, who is less than 55 years of 
 12.35  age and who becomes disabled and physically or mentally unfit to 
 12.36  perform the duties of the position because of sickness or injury 
 13.1   while engaged in covered employment, is entitled to a disability 
 13.2   benefit amount equivalent to an annuity computed under 
 13.3   subdivision 3 assuming the member has 20 years of service 
 13.4   qualifying under this section and waiving the minimum age 
 13.5   requirement.  An eligible member who becomes disabled under this 
 13.6   subdivision with more than 20 years of service credited under 
 13.7   this section is entitled to a disability benefit amount 
 13.8   equivalent to an annuity computed under subdivision 3 based on 
 13.9   all years of service credited under this section and waiving the 
 13.10  age requirement. 
 13.11     Subd. 6.  [DISABILITY BENEFIT COORDINATION.] If the 
 13.12  eligible employee is entitled to receive a disability benefit as 
 13.13  provided in subdivision 4 or 5 and has allowable service credit 
 13.14  under this section for less service than the length of service 
 13.15  upon which the disability benefit in subdivision 4 or 5 is 
 13.16  based, and also has allowable service in the general plan not 
 13.17  includable in this section, the employee is entitled to a 
 13.18  disability benefit or deferred retirement annuity based on the 
 13.19  general plan service not includable in this section only for the 
 13.20  service that, when combined with the service includable in this 
 13.21  section, exceeds the number of years on which the disability 
 13.22  benefit provided in subdivision 4 or 5 is based.  The benefit 
 13.23  recipient under subdivision 4 or 5 who also has credit for 
 13.24  regular plan service must in all respects qualify under section 
 13.25  352.113 to be entitled to receive a disability benefit based on 
 13.26  the general plan service not includable in this section, except 
 13.27  that the service may be combined to satisfy length of service 
 13.28  requirements.  Any deferred annuity to which the employee may be 
 13.29  entitled based on general plan service not includable in this 
 13.30  section must be augmented as provided in section 352.72, 
 13.31  subdivision 2, while the employee is receiving a disability 
 13.32  benefit under this section. 
 13.33     Subd. 7.  [ADDITIONAL CONTRIBUTIONS.] The special 
 13.34  retirement annuity and disability coverage under this section 
 13.35  shall be financed by an employee contribution of $....... and an 
 13.36  employer contribution of $.......  These contributions are in 
 14.1   addition to the contributions required by section 352.04, 
 14.2   subdivisions 2 and 3, and must be made in the manner provided 
 14.3   for in section 352.04, subdivisions 4 to 6. 
 14.4      Subd. 8.  [ELECTION OF COVERAGE.] To be covered by this 
 14.5   section, an employee of the department of public safety 
 14.6   described in subdivision 1 who is employed in a position 
 14.7   described in that subdivision on or after July 1, 1999, must 
 14.8   file a notice with the executive director of the Minnesota state 
 14.9   retirement system on a form prescribed by the executive director 
 14.10  stating whether or not the employee elects to be covered by this 
 14.11  section.  Notice must be filed by September 1, 1999, or within 
 14.12  90 days of employment, whichever is later.  Elections are 
 14.13  irrevocable during any period of covered employment.  A failure 
 14.14  to file a timely notice shall be deemed a waiver of coverage by 
 14.15  this section. 
 14.16     Sec. 2.  Minnesota Statutes 1998, section 356.19, is 
 14.17  amended by adding a subdivision to read: 
 14.18     Subd. 2a.  [COORDINATED MEMBERS.] The applicable benefit 
 14.19  accrual rate is 2.0 percent. 
 14.20     Sec. 3.  [EFFECTIVE DATE.] 
 14.21     Sections 1 and 2 are effective the day following final 
 14.22  enactment. 
 14.23                             ARTICLE 4  
 14.24                    MNSCU INDIVIDUAL RETIREMENT  
 14.25                        ACCOUNT PLAN CHANGES  
 14.26     Section 1.  Minnesota Statutes 1998, section 43A.27, 
 14.27  subdivision 3, is amended to read:  
 14.28     Subd. 3.  [RETIRED EMPLOYEES.] (a) A person may elect to 
 14.29  purchase at personal expense individual and dependent hospital, 
 14.30  medical, and dental coverages if the person is: 
 14.31     (1) a retired employee of the state or an organization 
 14.32  listed in subdivision 2 or section 43A.24, subdivision 2, who, 
 14.33  at separation of service: 
 14.34     (i) is immediately eligible to receive a retirement benefit 
 14.35  under chapter 354B or an annuity under a retirement program 
 14.36  sponsored by the state or such organization of the state and; 
 15.1      (ii) immediately meets the age and service requirements in 
 15.2   section 352.115, subdivision 1; and 
 15.3      (ii) (iii) has five years of service or meets the service 
 15.4   requirement of the collective bargaining agreement or plan, 
 15.5   whichever is greater; or 
 15.6      (2) a retired employee of the state who is at least 50 
 15.7   years of age and has at least 15 years of state service.  
 15.8      (b) The commissioner shall offer at least one plan which is 
 15.9   actuarially equivalent to those made available through 
 15.10  collective bargaining agreements or plans established pursuant 
 15.11  to under section 43A.18 to employees in positions equivalent to 
 15.12  that from which retired. 
 15.13     (c) A spouse of a deceased retired employee who received an 
 15.14  annuity under a state retirement program person eligible under 
 15.15  paragraph (a) may purchase the coverage listed in this 
 15.16  subdivision if the spouse was a dependent under the retired 
 15.17  employee's coverage at the time of the employee's retiree's 
 15.18  death. 
 15.19     (d) Coverages must be coordinated with relevant health 
 15.20  insurance benefits provided through the federally sponsored 
 15.21  Medicare program.  Until the retired employee reaches age 65, 
 15.22  the retired employee and dependents must be pooled in the same 
 15.23  group as active employees for purposes of establishing premiums 
 15.24  and coverage for hospital, medical, and dental insurance.  
 15.25  Coverage for retired employees and their dependents may not 
 15.26  discriminate on the basis of evidence of insurability or 
 15.27  preexisting conditions unless identical conditions are imposed 
 15.28  on active employees in the group that the employee left.  
 15.29  Appointing authorities shall provide notice to employees no 
 15.30  later than the effective date of their retirement of the right 
 15.31  to exercise the option provided in this subdivision.  The 
 15.32  retired employee must notify the commissioner or designee of the 
 15.33  commissioner within 30 days after the effective date of the 
 15.34  retirement of intent to exercise this option. 
 15.35     Sec. 2.  Minnesota Statutes 1998, section 136F.48, is 
 15.36  amended to read: 
 16.1      136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
 16.2      (a) This section applies to a person who:  
 16.3      (1) retires from the Minnesota state college and university 
 16.4   system, the technical college system, or the community college 
 16.5   system, or from a successor system employing state university, 
 16.6   technical college, or community college faculty, with at least 
 16.7   ten years of combined service credit in a system under the 
 16.8   jurisdiction of the board of trustees of the Minnesota state 
 16.9   colleges and universities; 
 16.10     (2) was employed on a full-time basis immediately preceding 
 16.11  retirement as a state university, technical college, or 
 16.12  community college faculty member or as an unclassified 
 16.13  administrator in one of those systems the Minnesota state 
 16.14  college and university system; 
 16.15     (3) begins drawing a retirement benefit from the individual 
 16.16  retirement account plan or an annuity from the teachers 
 16.17  retirement association, the Minnesota state retirement system, 
 16.18  or from a first class city teacher plan; and 
 16.19     (4) returns to work on not less than a one-third time basis 
 16.20  and not more than a two-thirds time basis in the system from 
 16.21  which the person retired under an agreement in which the person 
 16.22  may not earn a salary of more than $35,000 in a calendar year 
 16.23  from employment after retirement in the system from which the 
 16.24  person retired.  
 16.25     (b) Initial participation, the amount of time worked, and 
 16.26  the duration of participation under this section must be 
 16.27  mutually agreed upon by the president of the institution where 
 16.28  the person returns to work and the employee.  The president may 
 16.29  require up to one-year notice of intent to participate in the 
 16.30  program as a condition of participation under this section.  The 
 16.31  president shall determine the time of year the employee shall 
 16.32  work.  The employer or the president may not require a person to 
 16.33  waive any rights under a collective bargaining agreement as a 
 16.34  condition of participation under this section.  
 16.35     (c) For a person eligible under paragraphs (a) and (b), the 
 16.36  employing board shall make the same employer contribution for 
 17.1   hospital, medical, and dental benefits as would be made if the 
 17.2   person were employed full time.  
 17.3      (d) For work under paragraph (a), a person must receive a 
 17.4   percentage of the person's salary at the time of retirement that 
 17.5   is equal to the percentage of time the person works compared to 
 17.6   full-time work.  
 17.7      (e) If a collective bargaining agreement covering a person 
 17.8   provides for an early retirement incentive that is based on age, 
 17.9   the incentive provided to the person must be based on the 
 17.10  person's age at the time employment under this section ends.  
 17.11  However, the salary used to determine the amount of the 
 17.12  incentive must be the salary that would have been paid if the 
 17.13  person had been employed full time for the year immediately 
 17.14  preceding the time employment under this section ends. 
 17.15     (f) A person who returns to work under this section is a 
 17.16  member of the appropriate bargaining unit and is covered by the 
 17.17  appropriate collective bargaining contract.  Except as provided 
 17.18  in this section, the person's coverage is subject to any part of 
 17.19  the contract limiting rights of part-time employees. 
 17.20     Sec. 3.  [352.1155] [NO ANNUITY REDUCTION.] 
 17.21     Subdivision 1.  [ELIGIBILITY.] Except as indicated in 
 17.22  subdivision 4, the annuity reduction provisions of section 
 17.23  352.115, subdivision 10, do not apply to a person who: 
 17.24     (1) retires from the Minnesota state college and university 
 17.25  system with at least ten years of combined service credit in a 
 17.26  system under the jurisdiction of the board of trustees of the 
 17.27  Minnesota state colleges and universities; 
 17.28     (2) was employed on a full-time basis immediately preceding 
 17.29  retirement as a faculty member or as an unclassified 
 17.30  administrator in that system; 
 17.31     (3) begins drawing an annuity from the Minnesota state 
 17.32  retirement system general plan; and 
 17.33     (4) returns to work on not less than a one-third time basis 
 17.34  and not more than a two-thirds time basis in the system from 
 17.35  which the person retired under an agreement in which the person 
 17.36  may not earn a salary of more than $35,000 in a calendar year 
 18.1   from employment after retirement in the system from which the 
 18.2   person retired. 
 18.3      Subd. 2.  [APPROVAL REQUIREMENTS.] Initial participation, 
 18.4   the amount of time worked, and the duration of participation 
 18.5   under this section must be mutually agreed upon by the president 
 18.6   of the institution where the person returns to work and the 
 18.7   employee.  The president may require up to a one-year notice of 
 18.8   intent to participate in the program as a condition of 
 18.9   participation under this section.  The president shall determine 
 18.10  the time of year the employee shall work.  The employer or the 
 18.11  president may not require a person to waive any rights under a 
 18.12  collective bargaining agreement as a condition of participation 
 18.13  under this section.  
 18.14     Subd. 3.  [SERVICE CREDIT PROHIBITION.] Notwithstanding any 
 18.15  law to the contrary, a person eligible under this section may 
 18.16  not, based on employment to which the waiver in this section 
 18.17  applies, earn further service credit in a Minnesota public 
 18.18  defined benefit plan and is not eligible to participate in a 
 18.19  Minnesota public defined contribution plan, other than a 
 18.20  volunteer fire plan governed by chapter 424A.  No employer or 
 18.21  employee contribution to any of these plans may be made on 
 18.22  behalf of such a person. 
 18.23     Subd. 4.  [EXEMPTION LIMIT.] For a person eligible under 
 18.24  this section who earns more than $35,000 in a calendar year from 
 18.25  reemployment in the Minnesota state college and university 
 18.26  system following retirement, the annuity reduction provisions of 
 18.27  section 352.115, subdivision 10, apply only to income over 
 18.28  $35,000. 
 18.29     Subd. 5.  [CONTINUING RIGHTS.] A person who returns to work 
 18.30  under this section is a member of the appropriate bargaining 
 18.31  unit and is covered by the appropriate collective bargaining 
 18.32  contract.  Except as provided in this section, the person's 
 18.33  coverage is subject to any part of the contract limiting rights 
 18.34  of part-time employees. 
 18.35     Sec. 4.  Minnesota Statutes 1998, section 354.445, is 
 18.36  amended to read: 
 19.1      354.445 [NO ANNUITY REDUCTION.] 
 19.2      (a) The annuity reduction provisions of section 354.44, 
 19.3   subdivision 5, do not apply to a person who: 
 19.4      (1) retires from the Minnesota state college and university 
 19.5   system, technical college system, or the community college 
 19.6   system, or from a successor system employing state university, 
 19.7   technical college, or community college faculty, with at least 
 19.8   ten years of combined service credit in a system under the 
 19.9   jurisdiction of the board of trustees of the Minnesota state 
 19.10  colleges and universities; 
 19.11     (2) was employed on a full-time basis immediately preceding 
 19.12  retirement as a state university, technical college, or 
 19.13  community college faculty member or as an unclassified 
 19.14  administrator in one of these systems that system; 
 19.15     (3) begins drawing an annuity from the teachers retirement 
 19.16  association; and 
 19.17     (4) returns to work on not less than a one-third time basis 
 19.18  and not more than a two-thirds time basis in the system from 
 19.19  which the person retired under an agreement in which the person 
 19.20  may not earn a salary of more than $35,000 in a calendar year 
 19.21  from employment after retirement in the system from which the 
 19.22  person retired. 
 19.23     (b) Initial participation, the amount of time worked, and 
 19.24  the duration of participation under this section must be 
 19.25  mutually agreed upon by the president of the institution where 
 19.26  the person returns to work and the employee.  The president may 
 19.27  require up to one-year notice of intent to participate in the 
 19.28  program as a condition of participation under this section.  The 
 19.29  president shall determine the time of year the employee shall 
 19.30  work.  The employer or the president may not require a person to 
 19.31  waive any rights under a collective bargaining agreement as a 
 19.32  condition of participation under this section.  
 19.33     (c) Notwithstanding any law to the contrary, a person 
 19.34  eligible under paragraphs (a) and (b) may not, based on 
 19.35  employment to which the waiver in this section applies, earn 
 19.36  further service credit in the teachers retirement association 
 20.1   and is not eligible to participate in the individual retirement 
 20.2   account plan or the supplemental retirement plan established in 
 20.3   chapter 354B as a result of service under this section a 
 20.4   Minnesota public defined benefit plan and is not eligible to 
 20.5   participate in a Minnesota public defined contribution plan, 
 20.6   other than a volunteer fire plan governed by chapter 424A.  No 
 20.7   employer or employee contribution to any of these plans may be 
 20.8   made on behalf of such a person. 
 20.9      (d) For a person eligible under paragraphs (a) and (b) who 
 20.10  earns more than $35,000 in a calendar year from employment after 
 20.11  retirement in the system from which the person retired due to 
 20.12  employment in the Minnesota state college and university system, 
 20.13  the annuity reduction provisions of section 354.44, subdivision 
 20.14  5, apply only to income over $35,000. 
 20.15     (e) A person who returns to work under this section is a 
 20.16  member of the appropriate bargaining unit and is covered by the 
 20.17  appropriate collective bargaining contract.  Except as provided 
 20.18  in this section, the person's coverage is subject to any part of 
 20.19  the contract limiting rights of part-time employees. 
 20.20     Sec. 5.  Minnesota Statutes 1998, section 354.66, 
 20.21  subdivision 1b, is amended to read: 
 20.22     Subd. 1b.  [DISTRICT, DEFINED.] For purposes of this 
 20.23  section, the term "district" means a school district, the 
 20.24  community or the Minnesota state college system and the state 
 20.25  university system. 
 20.26     Sec. 6.  Minnesota Statutes 1998, section 354.66, 
 20.27  subdivision 1c, is amended to read: 
 20.28     Subd. 1c.  [PARTICIPATION.] (a) Except as indicated in 
 20.29  paragraph (b), participation in the part-time mobility program 
 20.30  must be based on a full fiscal year and the employment pattern 
 20.31  of the teacher during the most recent fiscal year.  
 20.32     (b) For a teacher in the Minnesota state college and 
 20.33  university system who teaches only during the first semester in 
 20.34  an academic year and retires immediately after the first 
 20.35  semester, participation in the part-time mobility program must 
 20.36  be based on one-half of a full fiscal year and the employment 
 21.1   pattern of the teacher during the most recent one-half of the 
 21.2   most recent fiscal year. 
 21.3      Sec. 7.  Minnesota Statutes 1998, section 354.66, 
 21.4   subdivision 3, is amended to read: 
 21.5      Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] (a) For 
 21.6   purposes of this section, the term "part-time teaching position" 
 21.7   shall mean a teaching position within the district in which the 
 21.8   teacher is employed for at least 50 full days or a fractional 
 21.9   equivalent thereof as prescribed in section 354.091, and for 
 21.10  which the teacher is compensated in an amount not exceeding 80 
 21.11  percent of the compensation established by the board for a 
 21.12  full-time teacher with identical education and experience with 
 21.13  the employing unit.  
 21.14     The compensation of a teacher in the state colleges and 
 21.15  universities system may exceed the 80 percent limit if the 
 21.16  teacher does not teach just one of the three quarters in the 
 21.17  system's full school year, provided no additional services are 
 21.18  performed while the teacher participates in the program.  (b) 
 21.19  For a teacher to which subdivision 1c, paragraph (b), applies, 
 21.20  "part-time teaching position" means a teaching position within 
 21.21  the district in which the teacher is employed for at least 25 
 21.22  full days or a fractional equivalent thereof as prescribed in 
 21.23  section 354.091, and for which the teacher is compensated in an 
 21.24  amount not exceeding 40 percent of the compensation established 
 21.25  by the board for a full-time teacher, with identical education 
 21.26  and experience with the employing unit. 
 21.27     Sec. 8.  Minnesota Statutes 1998, section 354B.24, 
 21.28  subdivision 3, is amended to read: 
 21.29     Subd. 3.  [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) In 
 21.30  addition to contributions required by subdivision 2, a plan 
 21.31  participant on an approved sabbatical leave may shall make an 
 21.32  optional additional a member contribution.  The optional 
 21.33  additional member may not exceed based on the applicable member 
 21.34  contribution rate specified in section 354B.23, subdivision 1, 
 21.35  applied to the difference between the amount of salary actually 
 21.36  received during the sabbatical leave and the amount of full-time 
 22.1   salary actually received for a comparable period of an identical 
 22.2   length to the member would have received if not on sabbatical 
 22.3   leave that occurred during the fiscal year immediately preceding 
 22.4   the sabbatical leave.  
 22.5      (b) Any optional additional member contribution must be 
 22.6   made before the last day of the fiscal year next following the 
 22.7   fiscal year in which the sabbatical leave terminates.  The 
 22.8   optional additional member contribution may not include interest 
 22.9   through payroll deduction as though the member were employed 
 22.10  full time.  
 22.11     (c) When an optional additional member contribution is 
 22.12  made, the employing unit must make the employer contribution at 
 22.13  the rate set forth specified in section 354B.23, subdivision 3, 
 22.14  on the salary that was the basis for the optional additional 
 22.15  member contribution under paragraph (a). 
 22.16     (d) An employer contribution required under this section 
 22.17  must be made no later than 60 days after the date on which the 
 22.18  optional additional member contribution was made.  
 22.19     Sec. 9.  Minnesota Statutes 1998, section 354B.25, 
 22.20  subdivision 2, is amended to read: 
 22.21     Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS 
 22.22  INVESTMENT OPTIONS.] (a) The plan administrator shall arrange 
 22.23  for the purchase of fixed annuity contracts, variable annuity 
 22.24  contracts, a combination of fixed and variable annuity 
 22.25  contracts, or custodial accounts from financial institutions 
 22.26  which have been selected by the state board of investment under 
 22.27  subdivision 3, as the investment vehicle for the retirement 
 22.28  coverage of plan participants and to provide retirement benefits 
 22.29  to plan participants.  Custodial accounts from financial 
 22.30  institutions shall include open-end investment companies 
 22.31  registered under the federal Investment Company Act of 1940, as 
 22.32  amended investment products. 
 22.33     (b) The annuity contracts or accounts investment products 
 22.34  must be purchased with contributions under section 354B.23 or 
 22.35  with money or assets otherwise provided by law by authority of 
 22.36  the board and deemed acceptable by the applicable financial 
 23.1   institution. 
 23.2      (c) In addition to contracts and accounts from financial 
 23.3   institutions, The Minnesota supplemental investment fund 
 23.4   established under section 11A.17 and administered by the state 
 23.5   board of investment is one of the investment options products 
 23.6   for the individual retirement account plan.  Direct access must 
 23.7   also be provided to lower expense and no load mutual funds, as 
 23.8   those terms are defined by the federal Securities and Exchange 
 23.9   Commission, including stock funds, bond funds, and balanced 
 23.10  funds.  Other investment products or combination of investment 
 23.11  products which may be included are: 
 23.12     (1) savings accounts at federally insured financial 
 23.13  institutions; 
 23.14     (2) life insurance contracts and fixed and variable annuity 
 23.15  contracts from companies that are subject to regulation by the 
 23.16  commerce commissioner; 
 23.17     (3) investment options from open-ended investment companies 
 23.18  registered under the federal Investment Company Act of 1940, 
 23.19  United States Code, title 15, sections 80a-1 to 80a-64; 
 23.20     (4) investment options from a firm that is a registered 
 23.21  investment advisor under the federal Investment Advisors Act of 
 23.22  1940, United States Code, title 15, sections 80b-1 to 80b-21; 
 23.23  and 
 23.24     (5) investment options of a bank as defined in United 
 23.25  States Code, title 80b-2, subsection (a), paragraph (2), or a 
 23.26  bank holding company as defined in the federal Bank Holding 
 23.27  Company Act of 1956, United States Code, title 12, section 1841, 
 23.28  subsection (a), paragraph (1). 
 23.29     Sec. 10.  Minnesota Statutes 1998, section 354B.25, 
 23.30  subdivision 3, is amended to read: 
 23.31     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] (a) 
 23.32  The financial institutions investment options provided for under 
 23.33  subdivision 2 must be selected by the state board of 
 23.34  investment.  Financial institutions include open-end investment 
 23.35  companies registered under the federal Investment Company Act of 
 23.36  1940, as amended. 
 24.1      (b) The state board of investment may select up to five 
 24.2   financial institutions to provide annuity contracts, custodial 
 24.3   accounts, or a combination, as investment options for the 
 24.4   individual retirement account plan in addition to the Minnesota 
 24.5   supplemental investment fund.  In making its selection, at a 
 24.6   minimum, the state board of investment shall consider at least 
 24.7   the following: 
 24.8      (1) the experience and ability of the financial institution 
 24.9   to provide retirement and death benefits and products that are 
 24.10  suited to meet the needs of plan participants; 
 24.11     (2) the relationship of those retirement and death benefits 
 24.12  and products provided by the financial institution to their 
 24.13  cost; and 
 24.14     (3) the financial strength and stability of the financial 
 24.15  institution; and 
 24.16     (4) the fees and expenses associated with the investment 
 24.17  products in comparison to other products of similar risk and 
 24.18  rates of return. 
 24.19     (c) (b) After selecting a financial institution, the state 
 24.20  board of investment must periodically review each financial 
 24.21  institution selected under paragraph (b) and the offered 
 24.22  products.  The periodic review must occur at least every three 
 24.23  years.  In making its review, the state board of investment may 
 24.24  retain appropriate consulting services to assist it in its 
 24.25  periodic review, establish a budget for the cost of the periodic 
 24.26  review process, and charge a proportional share of these costs 
 24.27  to the reviewed financial institution. 
 24.28     (d) (c) Contracts with financial institutions under this 
 24.29  section must be executed by the board and must be approved by 
 24.30  the state board of investment before execution. 
 24.31     (e) (d) The state board of investment shall also establish 
 24.32  policies and procedures under section 11A.04, clause (2), to 
 24.33  carry out the provisions of this subdivision. 
 24.34     Sec. 11.  Minnesota Statutes 1998, section 354B.25, 
 24.35  subdivision 5, is amended to read: 
 24.36     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 25.1   ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
 25.2   administrative expenses of the individual retirement account 
 25.3   plan must may be paid by charged to plan participants by the 
 25.4   plan sponsor in the following manner: 
 25.5      (1) from plan participants with amounts invested in the 
 25.6   Minnesota supplemental investment fund, the plan administrator 
 25.7   may charge an administrative expense assessment in an amount 
 25.8   such that annual total fees charged for plan administration 
 25.9   cannot exceed 40/100 of one percent of the assets of the 
 25.10  Minnesota supplemental investment funds; and 
 25.11     (2) from plan participants with amounts through annuity 
 25.12  contracts and custodial accounts purchased under subdivision 2, 
 25.13  paragraph (a), the plan administrator may charge an 
 25.14  administrative expense assessment of a designated amount, not to 
 25.15  exceed two percent of member and employer contributions, as 
 25.16  those contributions are made form of an annual fee, an 
 25.17  asset-based fee, a percentage of the contributions to the plan, 
 25.18  or a combination thereof. 
 25.19     (b) Any administrative expense charge that is not actually 
 25.20  needed for the administrative expenses of the individual 
 25.21  retirement account plan must be refunded to member accounts. 
 25.22     (c) The board of trustees shall report annually, before 
 25.23  October 1, to the advisory committee created in subdivision 1a 
 25.24  on administrative expenses of the plan.  The report must include 
 25.25  a detailed accounting of charges for administrative expenses 
 25.26  collected from plan participants and expenditure of the 
 25.27  administrative expense charges.  The administrative expense 
 25.28  charges collected from plan participants must be kept in a 
 25.29  separate account from any other funds under control of the board 
 25.30  of trustees and may be used only for the necessary and 
 25.31  reasonable administrative expenses of the plan. 
 25.32     Sec. 12.  [354B.31] [IRAP PART-TIME TEACHER MOBILITY 
 25.33  PROGRAM.] 
 25.34     Subdivision 1.  [PARTICIPATION REQUIREMENTS.] A faculty 
 25.35  member who has three years or more of service in the Minnesota 
 25.36  state college and university system, by agreement with the board 
 26.1   or with the authorized representative of the board, may be 
 26.2   assigned to teaching service in a part-time teaching position 
 26.3   under subdivision 2. 
 26.4      Subd. 2.  [PART-TIME TEACHING POSITION; DEFINED.] For 
 26.5   purposes of this section, "part-time teaching position" means a 
 26.6   teaching position within the Minnesota state college and 
 26.7   university system in which the teacher is employed for at least 
 26.8   50 full days or a fractional equivalent as prescribed in section 
 26.9   354.091, and for which the faculty member is compensated in an 
 26.10  amount not exceeding 80 percent of the compensation established 
 26.11  by the board for a full-time faculty member with identical 
 26.12  education and experience with the employing unit. 
 26.13     Subd. 3.  [RETIREMENT CONTRIBUTIONS.] A faculty member 
 26.14  assigned to a part-time position under this section shall 
 26.15  continue to make employee contributions to the individual 
 26.16  retirement account plan during the period of part-time 
 26.17  employment on the same basis and in the same amounts as would 
 26.18  have been paid if the person had been employed on a full-time 
 26.19  basis provided that, prior to June 30 each year, the member and 
 26.20  the board make that portion of the required employer 
 26.21  contribution to the plan, in any proportion which they may agree 
 26.22  upon, that is based on the difference between the amount of 
 26.23  compensation that would have been paid if the person had been 
 26.24  employed on a full-time basis and the amount of compensation 
 26.25  actually received by the person for the services rendered in the 
 26.26  part-time assignment.  The employing unit shall make that 
 26.27  portion of the required employer contributions to the plan on 
 26.28  behalf of the person that is based on the amount of compensation 
 26.29  actually received by the person for the services rendered in the 
 26.30  part-time assignment.  The employee and employer contributions 
 26.31  shall be based on the rates of contribution prescribed by 
 26.32  section 354B.23.  Employee contributions for part-time teaching 
 26.33  service pursuant to this section shall not continue for more 
 26.34  than ten years. 
 26.35     Subd. 4.  [OTHER MEMBERSHIP PRECLUDED.] A faculty member 
 26.36  entitled to make employee contributions for part-time teaching 
 27.1   service pursuant to this section shall not be entitled during 
 27.2   the same period of time to be a member of, accrue allowable 
 27.3   service credit in, or make employee contributions to any other 
 27.4   Minnesota public employee pension plan, except a volunteer 
 27.5   firefighters relief association governed by sections 69.771 to 
 27.6   69.776. 
 27.7      Subd. 5.  [INSURANCE.] If the board enters into an 
 27.8   agreement authorized by this section, the board shall continue 
 27.9   any insurance programs furnished or authorized to a full-time 
 27.10  teacher on an identical basis and with identical sharing of 
 27.11  costs for a part-time teacher pursuant to this section.  
 27.12  However, the requirements of this subdivision may be modified by 
 27.13  a collective bargaining agreement between the board and an 
 27.14  exclusive representative pursuant to chapter 179A.  Teachers as 
 27.15  defined in section 136F.43 employed on a less than 75 percent 
 27.16  time basis pursuant to this section are eligible for state-paid 
 27.17  insurance benefits as if the teachers were employed full time. 
 27.18     Subd. 6.  [ELIGIBILITY FOR CREDIT.] Only teachers who are 
 27.19  public employees as defined in section 179A.03, subdivision 14, 
 27.20  during the school year preceding the period of part-time 
 27.21  employment pursuant to this section qualify for employee 
 27.22  contributions to the retirement plan for part-time teaching 
 27.23  service under subdivision 4.  Notwithstanding section 179A.03, 
 27.24  subdivision 14, clauses (e) and (f), teachers who are employed 
 27.25  on a part-time basis for purposes of this section and who would 
 27.26  therefore be disqualified from the bargaining unit by one or 
 27.27  both of those provisions, continue to be in the bargaining unit 
 27.28  during the period of part-time employment under this section for 
 27.29  purposes of compensation, fringe benefits, and the grievance 
 27.30  procedure. 
 27.31     Subd. 7.  [BOARD POWER NOT RESTRICTED.] This section does 
 27.32  not limit the authority of the board to assign a teacher to a 
 27.33  part-time teaching position which does not qualify for full 
 27.34  accrual of service credit from, and employee contributions to, 
 27.35  the retirement fund under this section. 
 27.36     Subd. 8.  [SUBSTITUTE TEACHING.] Subdivision 4 does not 
 28.1   prohibit a teacher who qualifies for full accrual of service 
 28.2   credit from and employee contributions to the retirement fund 
 28.3   pursuant to this section in any year from being employed as a 
 28.4   substitute teacher by any school district during that year.  
 28.5   Notwithstanding sections 354.091 and 354.42, a teacher may not 
 28.6   qualify for full accrual of service credit from and employee 
 28.7   contributions to the retirement fund for other teaching service 
 28.8   rendered for any part of any year for which the teacher 
 28.9   qualifies for employee contributions to the retirement plan 
 28.10  pursuant to this section. 
 28.11     Sec. 13.  Minnesota Statutes 1998, section 354C.12, 
 28.12  subdivision 4, is amended to read: 
 28.13     Subd. 4.  [ADMINISTRATIVE EXPENSES.] (a) The board of 
 28.14  trustees of the Minnesota state colleges and universities is 
 28.15  authorized to pay the necessary and reasonable administrative 
 28.16  expenses of the supplemental retirement plan and may bill 
 28.17  participants to recover these expenses.  The administrative fees 
 28.18  or charges must may be paid by charged to participants in the 
 28.19  following manner: as an annual fee, an asset-based fee, a 
 28.20  percentage of contributions to the plan, or a contribution 
 28.21  thereof. 
 28.22     (1) from participants whose contributions are invested with 
 28.23  the state board of investment, the plan administrator may 
 28.24  recover administrative expenses in the manner authorized by the 
 28.25  Minnesota state colleges and universities in an amount such that 
 28.26  annual total fees charged for plan administration cannot exceed 
 28.27  40/100 of one percent of the assets of the Minnesota 
 28.28  supplemental investment funds; or 
 28.29     (2) from participants where contributions are invested 
 28.30  through contracts purchased from any other authorized source, 
 28.31  the plan administrator may assess an amount of up to two percent 
 28.32  of the employee and employer contributions.  
 28.33     (b) Any recovered or assessed amounts that are not needed 
 28.34  for the necessary and reasonable administrative expenses of the 
 28.35  plan must be refunded to member accounts. 
 28.36     (c) The board of trustees shall report annually, before 
 29.1   October 1, to the advisory committee created in section 354B.25, 
 29.2   subdivision 1a, on administrative expenses of the plan.  The 
 29.3   report must include a detailed accounting of charges for 
 29.4   administrative expenses collected from plan participants and 
 29.5   expenditure of the administrative expense charges.  The 
 29.6   administrative expense charges collected from plan participants 
 29.7   must be kept in a separate account from any other funds under 
 29.8   control of the board of trustees and may be used only for the 
 29.9   necessary and reasonable administrative expenses of the plan. 
 29.10     Sec. 14.  [EFFECTIVE DATE.] 
 29.11     Sections 1 to 13 are effective on July 1, 1999. 
 29.12                             ARTICLE 5  
 29.13                   EMPLOYER MATCHING CONTRIBUTION  
 29.14                       TAX-SHELTERED ANNUITY  
 29.15                              CHANGES 
 29.16     Section 1.  Minnesota Statutes 1998, section 356.24, 
 29.17  subdivision 1, is amended to read: 
 29.18     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] (a) It is 
 29.19  unlawful for a school district or other governmental subdivision 
 29.20  or state agency to levy taxes for, or contribute public funds to 
 29.21  a supplemental pension or deferred compensation plan that is 
 29.22  established, maintained, and operated in addition to a primary 
 29.23  pension program for the benefit of the governmental subdivision 
 29.24  employees other than: 
 29.25     (1) to a supplemental pension plan that was established, 
 29.26  maintained, and operated before May 6, 1971; 
 29.27     (2) to a plan that provides solely for group health, 
 29.28  hospital, disability, or death benefits; 
 29.29     (3) to the individual retirement account plan established 
 29.30  by chapter 354B; 
 29.31     (4) to a plan that provides solely for severance pay under 
 29.32  section 465.72 to a retiring or terminating employee; 
 29.33     (5) for employees other than personnel employed by the 
 29.34  state university board or the community college board and 
 29.35  covered by the board of trustees of the Minnesota state colleges 
 29.36  and universities supplemental retirement plan under chapter 
 30.1   354C, if provided for in a personnel policy of the public 
 30.2   employer or in the collective bargaining agreement between the 
 30.3   public employer and the exclusive representative of public 
 30.4   employees in an appropriate unit, in an amount matching employee 
 30.5   contributions on a dollar for dollar basis, but not to exceed an 
 30.6   employer contribution of $2,000 a year per employee; 
 30.7      (i) to the state of Minnesota deferred compensation plan 
 30.8   under section 352.96; or 
 30.9      (ii) in payment of the applicable portion of the premium on 
 30.10  a tax-sheltered annuity contract qualified under section 403(b) 
 30.11  of the Internal Revenue Code, if purchased from a qualified 
 30.12  insurance company, or from a qualified investment entity, as 
 30.13  defined in subdivision 1a, and if the employing unit has 
 30.14  complied with any applicable pension plan provisions of the 
 30.15  Internal Revenue Code with respect to the tax-sheltered annuity 
 30.16  program during the preceding calendar year; or 
 30.17     (6) for personnel employed by the state university board or 
 30.18  the community college board and not covered by clause (5), to 
 30.19  the supplemental retirement plan under chapter 354C, if provided 
 30.20  for in a personnel policy or in the collective bargaining 
 30.21  agreement of the public employer with the exclusive 
 30.22  representative of the covered employees in an appropriate unit, 
 30.23  in an amount matching employee contributions on a dollar for 
 30.24  dollar basis, but not to exceed an employer contribution of 
 30.25  $2,000 a year for each employee.  
 30.26     (b) Subd. 1a.  [QUALIFIED INSURANCE COMPANY; QUALIFIED 
 30.27  INVESTMENT ENTITIES; DEFINITIONS.] (a) A qualified insurance 
 30.28  company is a company that: 
 30.29     (1) meets the definition in section 60A.02, subdivision 4; 
 30.30     (2) is licensed to engage in life insurance or annuity 
 30.31  business in the state; 
 30.32     (3) is determined by the commissioner of commerce to have a 
 30.33  rating within the top two rating categories by a recognized 
 30.34  national rating agency or organization that regularly rates 
 30.35  insurance companies; and 
 30.36     (4) is determined by the state board of investment to be 
 31.1   among the ten up to 20 applicant insurance companies with 
 31.2   competitive investment options and investment returns on annuity 
 31.3   products. 
 31.4      (b) A qualified investment entity is an open-end investment 
 31.5   company that is: 
 31.6      (1) registered under the federal Investment Company Act of 
 31.7   1940; 
 31.8      (2) licensed to do business in the state; 
 31.9      (3) determined by the commissioner of commerce to be in 
 31.10  sound financial standing; and 
 31.11     (4) determined by the state board of investment to be among 
 31.12  up to five applicant investment entities with competitive 
 31.13  investment options and investment returns. 
 31.14     (c) The state board of investment determination must be 
 31.15  made on or before January 1, 1993 July 1, 2000, and must be 
 31.16  reviewed periodically.  The state board of investment may retain 
 31.17  actuarial services to assist it in this determination and in its 
 31.18  periodic review.  The state board of investment may annually 
 31.19  establish a budget for its costs in any determination and 
 31.20  periodic review processes.  The state board of investment may 
 31.21  charge a proportional share of all costs related to the periodic 
 31.22  review to those qualified insurance companies and qualified 
 31.23  investment entities currently under contract and may charge a 
 31.24  proportional share of all costs related to soliciting and 
 31.25  evaluating bids in a determination process to each company and 
 31.26  investment entity selected by the state board of investment.  
 31.27  All contracts must be approved before execution by the state 
 31.28  board of investment.  The state board of investment shall 
 31.29  establish policies and procedures under section 11A.04, clause 
 31.30  (2), to carry out this paragraph. 
 31.31     (c) Subd. 1b.  [VENDOR RESTRICTIONS.] A personnel policy 
 31.32  for unrepresented employees or a collective bargaining agreement 
 31.33  may establish limits on the number of vendors under paragraph 
 31.34  (b), clause (5), subdivision 1 that it will utilize and 
 31.35  conditions under which the vendors may contact employees both 
 31.36  during working hours and after working hours. 
 32.1      Sec. 2.  [COMMISSION STUDY.] 
 32.2      The legislative commission on pensions and retirement shall 
 32.3   study the issue of the appropriate means to provide partially 
 32.4   employer-funded, tax-sheltered savings opportunities for 
 32.5   educational employees, including the establishment of a single 
 32.6   comprehensive program structure for all applicable educational 
 32.7   employers and the elimination of any restriction on investment 
 32.8   vendors in providing partially employer-funded investment 
 32.9   opportunities to educational employees. 
 32.10     Sec. 3.  [EFFECTIVE DATE.] 
 32.11     Section 1 is effective May 15, 2000.  Section 2 is 
 32.12  effective on the day following final enactment. 
 32.13                             ARTICLE 6  
 32.14                  MINNEAPOLIS EMPLOYEES RETIREMENT  
 32.15                            PLAN CHANGES  
 32.16     Section 1.  Minnesota Statutes 1998, section 422A.06, 
 32.17  subdivision 3, is amended to read: 
 32.18     Subd. 3.  [DEPOSIT ACCUMULATION FUND.] The deposit 
 32.19  accumulation fund consists of the assets held in the fund, 
 32.20  increased by including amounts contributed by or for employees, 
 32.21  amounts contributed by the city, amounts contributed by 
 32.22  municipal activities supported in whole or in part by revenues 
 32.23  other than taxes and amounts contributed by any public 
 32.24  corporation, amounts paid by the state, and by income from 
 32.25  investments.  There must be paid from the fund the amounts 
 32.26  required to be transferred to the retirement benefit fund, or 
 32.27  the disability benefit fund, refunds of contributions, death 
 32.28  benefits payable on death before retirement that are not payable 
 32.29  from the survivors' benefit fund including the 
 32.30  death-while-active refund specified in section 422A.22, 
 32.31  subdivision 4, postretirement increases in retirement allowances 
 32.32  granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 
 32.33  and expenses of the administration of the retirement fund which 
 32.34  were not charged by the retirement board against the income of 
 32.35  the retirement benefit fund from investments as the cost of 
 32.36  handling the investments of the retirement benefit fund. 
 33.1      Sec. 2.  Minnesota Statutes 1998, section 422A.06, 
 33.2   subdivision 6, is amended to read: 
 33.3      Subd. 6.  [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 
 33.4   fund shall consist consists of the amount held for survivor 
 33.5   benefits, increased by contributions for survivor benefits made 
 33.6   by and for employees, including contributions made by the 
 33.7   employer, by any municipal activity supported in whole or in 
 33.8   part by revenue other than taxes or by any public corporation.  
 33.9   A proportionate share of income from investments shall must be 
 33.10  allocated to this fund.  There shall be paid from such fund the 
 33.11  Survivor benefits specified in section 422A.23 except that the 
 33.12  refund of net accumulated deductions from the salary of a 
 33.13  contributing member shall upon death in service be paid from the 
 33.14  deposit accumulation fund must be paid from this fund. 
 33.15     Sec. 3.  Minnesota Statutes 1998, section 422A.101, 
 33.16  subdivision 4, is amended to read: 
 33.17     Subd. 4.  [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 
 33.18  INSTANCES.] (a) If a participating employing unit, other than 
 33.19  the state, has a negative asset balance in the deposit 
 33.20  accumulation fund, the executive director shall bill the 
 33.21  employing unit for the amount of the deficiency.  Any amount 
 33.22  billed will include six percent interest, compounded annually, 
 33.23  for any year or portion of a year from the billing date until 
 33.24  the date of payment. 
 33.25     (b) If assets in the deposit accumulation fund are 
 33.26  insufficient to make a transfer to the retirement benefit fund, 
 33.27  the city of Minneapolis shall pay the amount of that 
 33.28  insufficiency to the retirement benefit fund within three days 
 33.29  of certification of the insufficiency by the executive director 
 33.30  of the fund.  The city of Minneapolis may bill any other 
 33.31  participating employing unit other than the state for its 
 33.32  proportion of the amount paid.  Any amount billed by the city 
 33.33  under this paragraph will include interest as specified in 
 33.34  paragraph (a).  
 33.35     Sec. 4.  Minnesota Statutes 1998, section 422A.18, 
 33.36  subdivision 2, is amended to read: 
 34.1      Subd. 2.  [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 
 34.2   disability allowance under this section shall be the amount of 
 34.3   service allowance to which the employee would be entitled under 
 34.4   section 422A.15, notwithstanding the age requirements expressed 
 34.5   therein; or the lesser of the following amounts:  50 percent of 
 34.6   the final average compensation, or an amount equal to two 
 34.7   percent of final average compensation for each year of allowable 
 34.8   service for the first ten years, and thereafter 2.5 percent of 
 34.9   final average compensation per year of allowable service, 
 34.10  including in the latter assumed service between the date the 
 34.11  disability occurred and the 60th birthday of the employee. 
 34.12     If the amount of annuity (b) Annuities payable from the 
 34.13  Minnesota postretirement investment fund to any class of 
 34.14  annuitants is adjusted pursuant to section 11A.18, the amount of 
 34.15  benefits payable from the disability benefit fund for that class 
 34.16  of annuitants under this section shall also be adjusted at the 
 34.17  same time and rate as retirement annuities in the retirement 
 34.18  benefit fund. 
 34.19     Sec. 5.  Minnesota Statutes 1998, section 422A.22, 
 34.20  subdivision 4, is amended to read: 
 34.21     Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
 34.22  of a contributing an active member while still in the service of 
 34.23  the city, and before reaching the compulsory age of 
 34.24  retirement prior to termination of service, there shall be paid 
 34.25  to such person the beneficiary or persons as beneficiaries 
 34.26  designated by the member shall have nominated by written 
 34.27  designation on a form specified by the executive director and 
 34.28  filed with the retirement board, in such form as the retirement 
 34.29  board shall require, the net accumulated amount of employee 
 34.30  deductions from salary, pay, or compensation, including interest 
 34.31  , to the member's credit on date of compounded annually to the 
 34.32  date of the member's death.  The amount must not include any 
 34.33  contributions made by the employee or on the employee's behalf, 
 34.34  or any interest or investment earnings on those contributions, 
 34.35  which were allocated to the survivor benefit fund under section 
 34.36  422A.06, subdivision 6. 
 35.1      (b) If the employee fails to make a designation, or if 
 35.2   the person or persons beneficiary or beneficiaries designated by 
 35.3   such the employee predeceases such the employee, the net 
 35.4   accumulated amount of deductions from salary, pay, or 
 35.5   compensation including interest, to the credit of such employee 
 35.6   on date of death shall benefit specified in paragraph (a) must 
 35.7   be paid to such the deceased employee's estate. 
 35.8      (c) A benefit payable under this subdivision is in addition 
 35.9   to any applicable survivor benefit under section 422A.23. 
 35.10     Sec. 6.  Minnesota Statutes 1998, section 422A.22, 
 35.11  subdivision 5, is amended to read: 
 35.12     Subd. 5.  [REPAYMENT OF REFUND.] Upon reinstatement 
 35.13  reemployment of a former covered employee to the service, in 
 35.14  employment covered by the Minneapolis employees retirement fund, 
 35.15  service credit for such past service or for any part thereof 
 35.16  shall which was forfeited by taking a refund must be granted 
 35.17  reinstated only upon repayment of the amount of the separation 
 35.18  refund, with interest, from the time of separation payment of 
 35.19  the refund until the date repaid.  
 35.20     Sec. 7.  Minnesota Statutes 1998, section 422A.23, is 
 35.21  amended to read: 
 35.22     422A.23 [SURVIVOR BENEFITS.] 
 35.23     Subdivision 1.  [PAYMENT OF CITY INSTALLMENT ACCUMULATED 
 35.24  AMOUNT.] (a) If a contributing an active or deferred member dies 
 35.25  after having been in the service with ten or more years of 
 35.26  service credit, and before actual retirement, as determined by 
 35.27  the retirement board, the present worth of the city's annual 
 35.28  installments of $60 then to the credit of the contributing 
 35.29  member, shall be paid to a beneficiary designated by such 
 35.30  contributing member in such form as the retirement board shall 
 35.31  require, who shall be the surviving spouse, or surviving child, 
 35.32  or children of such member or, if there be no surviving spouse 
 35.33  or surviving child or children, then to a person actually 
 35.34  dependent on and receiving principal support from such member or 
 35.35  surviving mother or father, or grandchildren, or surviving 
 35.36  brother or sister, or surviving children of the deceased brother 
 36.1   or sister of such member except as noted in paragraph (d), the 
 36.2   individual specified in paragraph (b) is eligible to receive the 
 36.3   benefit specified in paragraph (c). 
 36.4      (b) An individual eligible for the benefit specified in 
 36.5   paragraph (c) is a beneficiary designated by the member on a 
 36.6   form specified by the executive director.  If the beneficiary 
 36.7   designated by the member is not one of the class of persons 
 36.8   named in the preceding sentence, such benefit from the 
 36.9   accumulation of city deposits shall be paid in the following 
 36.10  order:  (1) to the surviving spouse, the whole thereof; (2) if 
 36.11  there be no surviving spouse, to the surviving children, share 
 36.12  and share alike; (3) if there be no surviving spouse or child or 
 36.13  children, to the dependent or dependents as those terms are 
 36.14  herein defined, of the member, share and share alike; (4) if 
 36.15  there be no surviving spouse, child or children, or dependents, 
 36.16  to the surviving mother and father, share and share alike; (5) 
 36.17  if there be no surviving mother and father, to the 
 36.18  grandchildren, in equal shares; if there be no grandchildren, to 
 36.19  the surviving brothers and sisters of the member, in equal 
 36.20  shares; (6) if there be no surviving brothers and sisters, to 
 36.21  the surviving children of the deceased brothers and sisters of 
 36.22  the member, in equal shares; or (7) if there is none of the 
 36.23  foregoing persons who survives the member, the accumulation of 
 36.24  the city deposits shall be applied to the funeral expenses of 
 36.25  the member failed to designate a beneficiary, or if the 
 36.26  beneficiary or beneficiaries designated by the employee 
 36.27  predeceases the employee, the benefit in paragraph (c) is 
 36.28  payable to the deceased employee's estate. 
 36.29     (c) The benefit is a lump-sum payment of the present value 
 36.30  of the city's or other contributing employer's annual 
 36.31  installments of $60 to the credit of the member. 
 36.32     (d) No benefit is payable under this subdivision if a 
 36.33  monthly survivor benefit is paid under another subdivision of 
 36.34  this section. 
 36.35     Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 
 36.36  active member dies prior to termination of service with at least 
 37.1   18 months but less than 20 years of service credit, the 
 37.2   surviving spouse or surviving child or children is eligible to 
 37.3   receive the survivor benefit specified in paragraph (b) or (c), 
 37.4   as applicable.  Payment of a benefit for any surviving child 
 37.5   under the age of 18 years shall be made to the surviving parent, 
 37.6   or if there be none, to the legal guardian of the surviving 
 37.7   child.  For purposes of this subdivision, a surviving child is 
 37.8   an unmarried child of the deceased member under the age of 18, 
 37.9   or under the age of 22 if a full-time student at an accredited 
 37.10  school, college, or university. 
 37.11     (b) If the surviving spouse or surviving child benefit 
 37.12  commenced before July 1, 1983, the surviving spouse benefit is 
 37.13  increased from $500 per month to $750 per month and the 
 37.14  surviving child benefit is $225 per month, beginning with the 
 37.15  first monthly payment payable after May 28, 1998.  The sum of 
 37.16  surviving spouse and surviving child benefits payable under this 
 37.17  paragraph shall not exceed $900 per month.  The increased cost 
 37.18  resulting from the benefit increases under this paragraph must 
 37.19  be allocated to each employing unit listed in section 422A.101, 
 37.20  subdivisions 1a, 2, and 2a, on the basis of the additional 
 37.21  accrued liability resulting from increased benefits paid to the 
 37.22  survivors of employees from that unit. 
 37.23     (c) If the surviving spouse or surviving child benefit 
 37.24  commences after June 30, 1983, the surviving spouse benefit is 
 37.25  30 percent of the member's average salary in effect over the 
 37.26  last six months of allowable service preceding the month in 
 37.27  which death occurs.  The surviving child benefit is ten percent 
 37.28  of the member's average salary in effect over the last six 
 37.29  months of allowable service preceding the month in which death 
 37.30  occurs.  The sum of surviving spouse and surviving child 
 37.31  benefits payable under this paragraph shall not exceed 50 
 37.32  percent of the member's average salary in effect over the last 
 37.33  six months of allowable service. 
 37.34     (d) Any surviving child benefit or surviving spouse benefit 
 37.35  computed under paragraph (c) and in effect for the month 
 37.36  immediately prior to May 28, 1998, is increased by 15 percent as 
 38.1   of the first payment on or after May 28, 1998. 
 38.2      (e) Surviving child benefits under this subdivision 
 38.3   terminate when the child no longer meets the definition of 
 38.4   surviving child. 
 38.5      Subd. 5.  [ADMINISTRATION.] Benefits herein provided shall 
 38.6   in this section following the death of an active employee or 
 38.7   deferred member, as applicable, commence with on the first day 
 38.8   of the month following the month in which the active employee or 
 38.9   deferred member dies and shall end with the last day of the 
 38.10  month preceding the month in which eligibility 
 38.11  ceases.  Eligibility for the benefits herein provided shall be 
 38.12  determined by the retirement board and its determination shall 
 38.13  be final.  Each beneficiary or parent or guardian of a dependent 
 38.14  child or legal representative shall furnish such Information as 
 38.15  the board may deem deemed necessary by the executive director to 
 38.16  determine eligibility for the benefits provided by this section, 
 38.17  and must be submitted.  Failure to furnish any required 
 38.18  information shall be sufficient grounds for the denial or 
 38.19  discontinuance of benefits.  A determination made by the 
 38.20  executive director may be appealed to the retirement board, 
 38.21  whose determination is final.  If the surviving spouse of the 
 38.22  deceased active employee or deferred member becomes entitled to 
 38.23  a retirement allowance by reason of membership in this fund, the 
 38.24  surviving spouse shall is authorized to receive the retirement 
 38.25  allowance in addition to the all applicable surviving spouse's 
 38.26  benefit spouse benefits to which the surviving spouse is 
 38.27  entitled as specified in this section and section 422A.22, 
 38.28  subdivision 4, if applicable.  The cost of all monthly 
 38.29  survivor's benefits provided in this section shall be is an 
 38.30  obligation of the members and of the city, any of its boards, 
 38.31  departments, commissions or public corporations or other 
 38.32  applicable employing units. 
 38.33     Subd. 6.  [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 
 38.34  retirement board shall create a reserve account for survivor's 
 38.35  benefits from which shall be paid on an actuarial basis all 
 38.36  survivor benefits due and payable.  At the end of each fiscal 
 39.1   year, as part of the annual actuarial valuation of the fund 
 39.2   prepared by the commission-retained actuary, a determination of 
 39.3   the normal cost of the benefits payable from the survivor's 
 39.4   benefit account shall be made and the board shall reduce or 
 39.5   increase the employee contribution rate of one-fourth of one 
 39.6   percent if and when it is determined based on the annual 
 39.7   actuarial valuation that the member contribution rate is in 
 39.8   excess of or is less than the amount necessary to pay for 50 
 39.9   percent of the calculated normal cost of the survivor benefits 
 39.10  provided in this section. 
 39.11     Subd. 7.  [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 
 39.12  COVERAGE.] (a) If the contributing active or deferred member 
 39.13  dies after having been in the service of the city 20 or more 
 39.14  years, and before the effective date of retirement, as 
 39.15  determined by the retirement board, the board shall pay with 20 
 39.16  or more years of service credit, a beneficiary, as defined in 
 39.17  paragraph (b), is eligible to receive the benefit specified in 
 39.18  paragraph (c). 
 39.19     (b) The beneficiary eligible for a benefit under paragraph 
 39.20  (c) is the surviving spouse of the deceased employee.  If there 
 39.21  is no surviving spouse, the beneficiary may be a dependent 
 39.22  surviving child of the member or dependent parent designated by 
 39.23  the employee on a form prescribed by the executive director. 
 39.24     (c) The benefit payable to the beneficiary designated in 
 39.25  paragraph (b) is a monthly allowance for life to the designated 
 39.26  beneficiary of the employee.  The monthly allowance herein 
 39.27  provided for shall be is the actuarial equivalent of a single 
 39.28  life service allowance specified in section 422A.15, subdivision 
 39.29  1, which would have been payable to the employee on the date of 
 39.30  death, notwithstanding the age requirement stated in section 
 39.31  422A.15, subdivision 1.  For purposes of this section, the 
 39.32  amount of any excess contributions or voluntary additions by the 
 39.33  member shall not be included in the calculations in determining 
 39.34  the monthly allowance.  
 39.35     The survivor allowance under this subdivision shall be 
 39.36  computed and determined under a procedure specified by the 
 40.1   commission-retained actuary utilizing the appropriate mortality 
 40.2   table established by the board of trustees based on the 
 40.3   experience of the fund as recommended by the commission-retained 
 40.4   actuary and using the applicable postretirement interest rate 
 40.5   assumption specified in section 356.215, subdivision 4d. 
 40.6      (d) For benefits payable under this subdivision following 
 40.7   the death of a deferred member, the benefit must be calculated 
 40.8   as of the date of termination from service and increased by five 
 40.9   percent per year until January 1, 1981, and by three percent per 
 40.10  year thereafter, compounded annually. 
 40.11     Subd. 8.  [SURVIVING CHILD; DEPENDENT DEFINITION.] The 
 40.12  beneficiary designated by the employee shall be the surviving 
 40.13  spouse of such employee.  If there is no surviving spouse, the 
 40.14  designated beneficiary may be a dependent surviving child or 
 40.15  dependent parent of such employee as dependency is defined in 
 40.16  sections 422A.01 to 422A.25.  If the beneficiary designated by 
 40.17  the employee is not of the class of persons provided for in this 
 40.18  subdivision, or if the designated beneficiary predeceases the 
 40.19  employee, a refund shall be made as provided for in section 
 40.20  422A.22, in lieu of a life income.  If the employee does not 
 40.21  elect to designate a beneficiary to receive a life income as 
 40.22  herein provided, the designated beneficiary, if of the class of 
 40.23  persons set forth in this subdivision, may elect within 60 days 
 40.24  after the date of death of the employee to receive a life income 
 40.25  computed and determined as though the employee had retired on 
 40.26  the date of death under the option 2 plan of retirement, as 
 40.27  provided for in sections 422A.01 to 422A.25, and had designated 
 40.28  such person as beneficiary.  For purposes of subdivision 2, a 
 40.29  surviving child is an unmarried child of the deceased member 
 40.30  under the age of 18, or under the age of 22 if a full-time 
 40.31  student at an accredited school, college, or university.  For 
 40.32  purposes of subdivision 7, a dependent surviving child or 
 40.33  dependent parent must meet the definition of dependent, as 
 40.34  defined in section 422A.01, subdivision 12, at the time of the 
 40.35  active or deferred member's death. 
 40.36     Subd. 9.  [LUMP-SUM DEATH BENEFIT.] If any employee who has 
 41.1   contributed to the survivor's benefit account as herein provided 
 41.2   dies before the effective date of retirement on a service or 
 41.3   disability pension and is not survived by a beneficiary eligible 
 41.4   to receive a monthly allowance as herein provided If no monthly 
 41.5   survivor benefit is payable under subdivision 2 or 7, there 
 41.6   shall be paid from the survivor's survivor benefit account to a 
 41.7   beneficiary designated by the employee on a form prescribed by 
 41.8   the executive director a lump-sum death benefit of $750 if death 
 41.9   occurs prior to the end of the employee's tenth year of 
 41.10  service credit or of $1500 if the employee had prior to death 
 41.11  completed ten or more calendar years of service credit.  Upon 
 41.12  reinstatement of a former employee to the service, credit for 
 41.13  such past service or for any part thereof shall be granted only 
 41.14  upon repayment of the amount of the separation refund, with 
 41.15  interest, from the time of separation Any benefit under this 
 41.16  subdivision may be paid in addition to a benefit payable under 
 41.17  subdivision 1. 
 41.18     Subd. 10.  [BENEFIT INCREASES.] If the amount of annuity 
 41.19  payable from the Minnesota postretirement investment fund to any 
 41.20  class of annuitants is adjusted pursuant to section 11A.18, the 
 41.21  amount of benefits payable from the survivor's benefit fund 
 41.22  pursuant to subdivisions 7 or 8 for that class of annuitants 
 41.23  shall also be adjusted at the same time and rate.  Annuities 
 41.24  payable under this section shall be adjusted at the same time 
 41.25  and rate as retirement annuities in the retirement benefit fund. 
 41.26     Subd. 11.  [EFFECT OF SPOUSE REMARRIAGE.] A monthly 
 41.27  survivor benefit is must not suspended, be discontinued or 
 41.28  terminated, or otherwise stopped due to a surviving spouse's 
 41.29  remarriage. 
 41.30     Subd. 12.  [DETERMINATION OF ANNUITY.] The survivor 
 41.31  annuities payable under this section shall be computed and 
 41.32  determined under a procedure specified by the actuary retained 
 41.33  by the legislative commission on pensions and retirement 
 41.34  utilizing the appropriate mortality table based on the 
 41.35  experience of the fund as recommended by that actuary and 
 41.36  approved by the legislative commission on pensions and 
 42.1   retirement and using the applicable postretirement interest rate 
 42.2   assumption specified in section 356.215, subdivision 4d. 
 42.3      Sec. 8.  [422A.231] [COST ALLOCATION.] 
 42.4      Notwithstanding any law to the contrary, all current and 
 42.5   future contribution requirements due to this act are payable by 
 42.6   the participating contributing employing units other than the 
 42.7   state. 
 42.8      Sec. 9.  [REPEALER.] 
 42.9      Minnesota Statutes 1998, section 422A.16, subdivision 3a, 
 42.10  is repealed. 
 42.11     Sec. 10.  [EFFECTIVE DATE.] 
 42.12     Sections 1 to 9 are effective upon approval by the 
 42.13  Minneapolis city council and compliance with Minnesota Statutes, 
 42.14  section 645.021. 
 42.15                             ARTICLE 7 
 42.16                KANDIYOHI COUNTY AND LITCHFIELD CITY 
 42.17                   VOLUNTEER RESCUE SQUAD RELIEF 
 42.18                     ASSOCIATION AUTHORIZATION 
 42.19     Section 1.  Minnesota Statutes 1998, section 356A.01, 
 42.20  subdivision 7, is amended to read: 
 42.21     Subd. 7.  [COVERED GOVERNMENTAL ENTITY.] "Covered 
 42.22  governmental entity" means a governmental subdivision or other 
 42.23  governmental entity that employs persons who are plan 
 42.24  participants in a covered pension plan and who are eligible for 
 42.25  that participation because of their employment.  Covered 
 42.26  governmental entity also means a governmental subdivision or 
 42.27  other governmental entity that establishes a relief association 
 42.28  under chapter 425B. 
 42.29     Sec. 2.  Minnesota Statutes 1998, section 356A.01, 
 42.30  subdivision 8, is amended to read: 
 42.31     Subd. 8.  [COVERED PENSION PLAN.] "Covered pension plan" 
 42.32  means a pension plan or fund listed in section 356.20, 
 42.33  subdivision 2, or 356.30, subdivision 3, or the special fund of 
 42.34  any relief association established under chapter 425B. 
 42.35     Sec. 3.  [425B.01] [DEFINITIONS.] 
 42.36     Subdivision 1.  [TERMS DEFINED.] As used in this chapter, 
 43.1   the terms defined in this section have the meanings given. 
 43.2      Subd. 2.  [RESCUE SQUAD.] "Rescue squad" includes a 
 43.3   municipal or county rescue squad and independent nonprofit 
 43.4   rescue squad corporation that performs emergency management 
 43.5   services (EMS).  Rescue squad does not include any rescue squad 
 43.6   that is affiliated with a fire department or ambulance service 
 43.7   and whose members are eligible for membership in that fire 
 43.8   department's or ambulance's relief association or comparable 
 43.9   pension plan. 
 43.10     Subd. 3.  [MUNICIPALITY.] "Municipality" means the city of 
 43.11  Litchfield in Meeker county. 
 43.12     Subd. 4.  [COUNTY.] "County" means Kandiyohi county. 
 43.13     Sec. 4.  [425B.02] [VOLUNTEER RESCUE SQUAD RELIEF 
 43.14  ASSOCIATION; AUTHORIZATION.] 
 43.15     Notwithstanding any provision of section 356.24 or 356.25 
 43.16  to the contrary, the governing body of a municipality or county 
 43.17  is authorized to establish a rescue squad relief association as 
 43.18  provided in this chapter. 
 43.19     Sec. 5.  [425B.03] [RELIEF ASSOCIATION SELF-GOVERNING.] 
 43.20     Subdivision 1.  [INCORPORATION.] (a) The relief association 
 43.21  must be incorporated under chapter 317A. 
 43.22     (b) The incorporators of the relief association are the 
 43.23  members of the governing body of the municipality or county. 
 43.24     Subd. 2.  [BOARD OF TRUSTEES; COMPOSITION.] (a) The relief 
 43.25  association must be governed by a board of trustees. 
 43.26     (b) The relief association board of trustees consists of 
 43.27  nine persons.  Six members of the board of trustees must be 
 43.28  elected by and from the membership of the relief association.  
 43.29  The remaining members of the board of trustees must be appointed 
 43.30  by the governing body of the municipality or county. 
 43.31     (c) The relief association must have three officers, which 
 43.32  are a president, secretary, and treasurer.  The officers must be 
 43.33  elected by and from the membership of the relief association.  
 43.34     (d) Initially, the term of office of the elected members of 
 43.35  the board of trustees is one year for board members designated 
 43.36  "A" and "B," two years for board members designated "C" and "D," 
 44.1   and three years for board members designated "E" and "F."  
 44.2   Thereafter, the term of office of all elected members of the 
 44.3   board of trustees is three years.  The term of office of ex 
 44.4   officio members of the board of trustees is the term of office 
 44.5   of the person that gave rise to board membership.  The term of 
 44.6   office of an officer of the relief association is two years or 
 44.7   the balance of the board member's term of office as a board 
 44.8   member, whichever is shorter. 
 44.9      (e) The board of trustees must administer the affairs of 
 44.10  the relief association consistent with this chapter and the 
 44.11  applicable provisions of chapters 317A and 356A. 
 44.12     Subd. 3.  [SPECIAL AND GENERAL FUNDS.] (a) The relief 
 44.13  association shall establish and maintain a special fund and may 
 44.14  establish and maintain a general fund. 
 44.15     (b) The special fund must be credited with all money 
 44.16  received by the relief association from the municipality or 
 44.17  county or any money received from any other source for the 
 44.18  purpose of providing retirement benefits for rescue squad 
 44.19  members, any money or property that is donated, given, granted, 
 44.20  or devised by any person for the benefit of the rescue squad 
 44.21  relief association special fund, and any investment income 
 44.22  earned on the invested assets of the relief association. 
 44.23     (c) The treasurer of the relief association is the 
 44.24  custodian of the assets of the special fund and must be the 
 44.25  recipient, on behalf of the special fund, of all revenues 
 44.26  payable to the special fund.  The treasurer shall maintain 
 44.27  adequate records documenting any transaction involving the 
 44.28  assets or the revenues of the special fund.  The record of the 
 44.29  treasurer is public record and must be open for inspection by 
 44.30  any member of the relief association, any officer or employee of 
 44.31  the state of Minnesota or of the municipality or county, or any 
 44.32  member of the public, at reasonable times and places. 
 44.33     (d) Disbursements from the special fund may be made only 
 44.34  for one of the following purposes: 
 44.35     (1) for the payment of service pensions to retired members 
 44.36  of the relief association; 
 45.1      (2) for the payment of disability pensions to disabled 
 45.2   members of the relief association; 
 45.3      (3) for the payment of survivor benefits to the surviving 
 45.4   spouse, surviving dependent children, or estate of a deceased 
 45.5   member of the relief association; and 
 45.6      (4) for the payment of administrative expenses of the 
 45.7   relief association if the expenses are of the kind and type 
 45.8   authorized by section 69.80. 
 45.9      (e) All pension and benefit payments must be authorized by 
 45.10  and paid in accordance with the applicable law, the articles of 
 45.11  incorporation, and the bylaws of the relief association. 
 45.12     (f) The assets of the special fund must be invested only in 
 45.13  securities that comply with or are authorized by sections 
 45.14  356A.04 and 356A.06. 
 45.15     (g) The general fund, if established, must be operated as 
 45.16  provided in the articles of incorporation or bylaws of the 
 45.17  relief association. 
 45.18     Sec. 6.  [425B.04] [MEMBERSHIP; ELIGIBILITY.] 
 45.19     Subdivision 1.  [MEMBERSHIP.] The municipality or county, 
 45.20  by resolution, must specify the personnel providing rescue squad 
 45.21  service who may be members of the relief association. 
 45.22     Subd. 2.  [ELIGIBILITY.] The bylaws of the relief 
 45.23  association must specify any additional eligibility requirements 
 45.24  for persons specified under subdivision 1 for relief association 
 45.25  membership. 
 45.26     Sec. 7.  [425B.05] [BENEFITS.] 
 45.27     A relief association must either be a defined contribution 
 45.28  plan or a flexible service plan, as established by the 
 45.29  municipality or county. 
 45.30     Sec. 8.  [425B.06] [DEFINED CONTRIBUTION PLAN OPTION.] 
 45.31     Subdivision 1.  [INDIVIDUAL ACCOUNTS.] (a) The relief 
 45.32  association must establish individual accounts within the 
 45.33  special fund of the relief association for each relief 
 45.34  association member. 
 45.35     (b) To each individual account there must be credited an 
 45.36  equal share of any contribution made by the governing body of 
 46.1   the municipality or county; any gift, bequeath, devise, or other 
 46.2   transfer to the special fund; and any amount forfeited by a 
 46.3   former member who terminates active service with the rescue 
 46.4   squad before reaching the vesting requirements set forth in 
 46.5   subdivision 2, paragraph (b), and who does not return within 
 46.6   five years of the date of termination.  Any investment income of 
 46.7   the special fund must be credited to the individual accounts in 
 46.8   proportion to the balances in those accounts. 
 46.9      (c) Amounts to be credited to individual accounts may be 
 46.10  allocated only after the deduction of any reasonable and 
 46.11  necessary administrative expenses payable. 
 46.12     Subd. 2.  [SERVICE PENSION.] (a) The service pension amount 
 46.13  is the balance in the member's individual account. 
 46.14     (b) The service pension is not payable until the member 
 46.15  terminates active service with the rescue squad, has credit for 
 46.16  at least five years of service as an active member of the rescue 
 46.17  squad and five years as an active member of the relief 
 46.18  association, and has attained the age of at least 50 years. 
 46.19     (c) The retiring member must apply for the service pension. 
 46.20     Subd. 3.  [DISABILITY PENSION.] (a) The disability pension 
 46.21  amount is the balance in the member's individual account. 
 46.22     (b) The disability pension is not payable until the member 
 46.23  terminates active service with the rescue squad by virtue of any 
 46.24  injury or illness that renders the member incapable of 
 46.25  performing rescue squad duties.  
 46.26     Subd. 4.  [DEATH BENEFIT.] The death benefit amount is the 
 46.27  balance in the deceased member's individual account. 
 46.28     Subd. 5.  [PAYMENT.] All pensions and benefits under this 
 46.29  section are payable in a single lump-sum payment. 
 46.30     Sec. 9.  [425B.07] [FLEXIBLE SERVICE PLAN OPTION.] 
 46.31     A municipality or county may develop and implement its own 
 46.32  flexible service plan for payment of pensions to eligible 
 46.33  members out of the special fund.  The plan, as enacted by the 
 46.34  municipality or county as an ordinance, in the discretion of the 
 46.35  municipality or county, must include provisions for vesting 
 46.36  requirements; contribution levels; payment amounts; disability 
 47.1   pension provisions; death benefits; payment terms; the method of 
 47.2   payment, including lump sum, monthly, or annually; and such 
 47.3   other terms as the municipality or county deems necessary. 
 47.4      Sec. 10.  [425B.08] [FUNDING.] 
 47.5      (a) A municipality or county, annually, must include in its 
 47.6   budget a contribution to the relief association. 
 47.7      (b) The contribution amount must be transmitted to the 
 47.8   relief association treasurer annually on the payment date 
 47.9   specified by the governing body of the municipality or county. 
 47.10     Sec. 11.  [425B.09] [AUDIT.] 
 47.11     The rescue squad relief association must be audited 
 47.12  annually by the state auditor. 
 47.13     Sec. 12.  [425B.10] [SPECIAL BENEFITS FOR EXISTING 
 47.14  MEMBERS.] 
 47.15     A municipality or county may, under such terms and 
 47.16  conditions as it approves, provide pensions under either the 
 47.17  defined contribution plan option or flexible service plan option 
 47.18  to existing members of the rescue squad as of the date the 
 47.19  relief association is incorporated through waivers of length of 
 47.20  service vesting requirements.  The terms and conditions must be 
 47.21  included in the bylaws of the relief association at the time of 
 47.22  incorporation. 
 47.23     Sec. 13.  [425B.11] [NONAPPLICABILITY OF CHAPTERS 144C AND 
 47.24  424A.] 
 47.25     No member of the rescue squad relief association may 
 47.26  participate in or be eligible to receive any benefit or award 
 47.27  amount from the ambulance service personnel longevity award and 
 47.28  incentive program established under chapter 144E, or from any 
 47.29  volunteer firefighter relief association under chapter 424A, by 
 47.30  virtue of service rendered on behalf of the rescue squad. 
 47.31     Sec. 14.  [EFFECTIVE DATE.] 
 47.32     Sections 1 to 13 are effective on the day following final 
 47.33  enactment. 
 47.34                             ARTICLE 8
 47.35                      MERGER INTO PERA-P&F OF 
 47.36                       LOCAL POLICE AND FIRE 
 48.1                        CONSOLIDATION ACCOUNTS 
 48.2      Section 1.  Minnesota Statutes 1998, section 3.85, 
 48.3   subdivision 12, is amended to read: 
 48.4      Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
 48.5   commission shall assess each retirement plan specified in 
 48.6   subdivision 11, paragraph (b), the compensation paid to the 
 48.7   actuary retained by the commission for the actuarial valuation 
 48.8   calculations, quadrennial projection valuations, and quadrennial 
 48.9   experience studies.  The assessment is 100 percent of the amount 
 48.10  of contract compensation for the actuarial consulting firm 
 48.11  retained by the commission for actuarial valuation calculations, 
 48.12  including the public employees police and fire plan 
 48.13  consolidation accounts of the public employees retirement 
 48.14  association established after March 1, 1999, annual experience 
 48.15  data collection and processing, and quadrennial experience 
 48.16  studies and quadrennial projection valuations.  
 48.17     The portion of the total assessment payable by each 
 48.18  retirement system or pension plan must be determined as follows: 
 48.19     (1) Each pension plan specified in subdivision 11, 
 48.20  paragraph (b), clauses (1) to (13), must pay the following 
 48.21  indexed amount based on its total active, deferred, inactive, 
 48.22  and benefit recipient membership: 
 48.23         up to 2,000 members, inclusive         $2.55 per member 
 48.24         2,001 through 10,000 members           $1.13 per member 
 48.25         over 10,000 members                    $0.11 per member  
 48.26     The amount specified is applicable for the assessment of 
 48.27  the July 1, 1991, to June 30, 1992, fiscal year actuarial 
 48.28  compensation amounts.  For the July 1, 1992, to June 30, 1993, 
 48.29  fiscal year and subsequent fiscal year actuarial compensation 
 48.30  amounts, the amount specified must be increased at the same 
 48.31  percentage increase rate as the implicit price deflator for 
 48.32  state and local government purchases of goods and services for 
 48.33  the 12-month period ending with the first quarter of the 
 48.34  calendar year following the completion date for the actuarial 
 48.35  valuation calculations, as published by the federal Department 
 48.36  of Commerce, and rounded upward to the nearest full cent. 
 49.1      (2) The total per-member portion of the allocation must be 
 49.2   determined, and that total per-member amount must be subtracted 
 49.3   from the total amount for allocation.  Of the remainder dollar 
 49.4   amount, the following per-retirement system and per-pension plan 
 49.5   charges must be determined and the charges must be paid by the 
 49.6   system or plan: 
 49.7      (i) 37.87 percent is the total additional per-retirement 
 49.8   system charge, of which one-seventh must be paid by each 
 49.9   retirement system specified in subdivision 11, paragraph (b), 
 49.10  clauses (1), (2), (6), (7), (9), (10), and (11). 
 49.11     (ii) 62.13 percent is the total additional per-pension plan 
 49.12  charge, of which one-thirteenth must be paid by each pension 
 49.13  plan specified in subdivision 11, paragraph (b), clauses (1) to 
 49.14  (13).  
 49.15     (b) The assessment must be made following the completion of 
 49.16  the actuarial valuation calculations and the experience 
 49.17  analysis.  The amount of the assessment is appropriated from the 
 49.18  retirement fund applicable to the retirement plan.  Receipts 
 49.19  from assessments must be deposited in the state treasury and 
 49.20  credited to the general fund. 
 49.21     Sec. 2.  Minnesota Statutes 1998, section 69.021, 
 49.22  subdivision 10, is amended to read: 
 49.23     Subd. 10.  [REDUCTION IN POLICE STATE AID APPORTIONMENT.] 
 49.24  (a) The commissioner of revenue shall reduce the apportionment 
 49.25  of police state aid under subdivisions 5, paragraph (b), 6, and 
 49.26  7a, for eligible employer units by any excess police state aid. 
 49.27     (b) "Excess police state aid" is: 
 49.28     (1) for counties and for municipalities in which police 
 49.29  retirement coverage is provided wholly by the public employees 
 49.30  police and fire fund and all police officers are members of the 
 49.31  plan governed by sections 353.63 to 353.657, the amount in 
 49.32  excess of the employer's total prior calendar year obligation as 
 49.33  defined in paragraph (c), as certified by the executive director 
 49.34  of the public employees retirement association; 
 49.35     (2) for municipalities in which police retirement coverage 
 49.36  is provided in part by the public employees police and fire fund 
 50.1   governed by sections 353.63 to 353.657 and in part by a local 
 50.2   police consolidation account governed by chapter 353A, and 
 50.3   established after March 1, 1999, the amount in excess of the 
 50.4   employer's total prior calendar year obligation as defined in 
 50.5   paragraph (c), plus the amount of the employer's total prior 
 50.6   calendar year obligation under section 353A.09, subdivision 5, 
 50.7   paragraphs (a) and (b), as certified by the executive director 
 50.8   of the public employees retirement association; 
 50.9      (3) for municipalities in which police retirement coverage 
 50.10  is provided by the public employees police and fire plan 
 50.11  governed by sections 353.63 to 353.657, in which police 
 50.12  retirement coverage was provided by a police consolidation 
 50.13  account under chapter 353A before July 1, 1999, and for which 
 50.14  the municipality has an additional municipal contribution under 
 50.15  section 353.665, subdivision 8, paragraph (b), the amount in 
 50.16  excess of the employer's total prior calendar year obligation as 
 50.17  defined in paragraph (c), plus the amount of any additional 
 50.18  municipal contribution under section 353.665, subdivision 8, 
 50.19  paragraph (b), until the year 2010, as certified by the 
 50.20  executive director of the public employees retirement 
 50.21  association; 
 50.22     (4) for municipalities in which police retirement coverage 
 50.23  is provided in part by the public employees police and fire fund 
 50.24  governed by sections 353.63 to 353.657 and in part by a local 
 50.25  police relief association governed by sections 69.77 and 
 50.26  423A.01, the amount in excess of the employer's total prior 
 50.27  calendar year obligation as defined in paragraph (c), as 
 50.28  certified by the executive director of the public employees 
 50.29  retirement association, plus the amount of the financial 
 50.30  requirements of the relief association certified to the 
 50.31  applicable municipality during the prior calendar year under 
 50.32  section 69.77, subdivisions 2b and 2c, reduced by the amount of 
 50.33  member contributions deducted from the covered salary of the 
 50.34  relief association during the prior calendar year under section 
 50.35  69.77, subdivision 2a, as certified by the chief administrative 
 50.36  officer of the applicable municipality; 
 51.1      (4) (5) for the metropolitan airports commission, if there 
 51.2   are police officers hired before July 1, 1978, with retirement 
 51.3   coverage by the Minneapolis employees retirement fund remaining, 
 51.4   the amount in excess of the commission's total prior calendar 
 51.5   year obligation as defined in paragraph (c), as certified by the 
 51.6   executive director of the public employees retirement 
 51.7   association, plus the amount determined by expressing the 
 51.8   commission's total prior calendar year contribution to the 
 51.9   Minneapolis employees retirement fund under section 422A.101, 
 51.10  subdivisions 2 and 2a, as a percentage of the commission's total 
 51.11  prior calendar year covered payroll for commission employees 
 51.12  covered by the Minneapolis employees retirement fund and 
 51.13  applying that percentage to the commission's total prior 
 51.14  calendar year covered payroll for commission police officers 
 51.15  covered by the Minneapolis employees retirement fund, as 
 51.16  certified by the chief administrative officer of the 
 51.17  metropolitan airports commission; and 
 51.18     (5) (6) for the department of natural resources and for the 
 51.19  department of public safety, the amount in excess of the 
 51.20  employer's total prior calendar year obligation under section 
 51.21  352B.02, subdivision 1c, for plan members who are peace officers 
 51.22  under section 69.011, subdivision 1, clause (g), as certified by 
 51.23  the executive director of the Minnesota state retirement system. 
 51.24     (c) The employer's total prior calendar year obligation 
 51.25  with respect to the public employees police and fire plan is the 
 51.26  total prior calendar year obligation under section 353.65, 
 51.27  subdivision 3, for police officers as defined in section 353.64, 
 51.28  subdivision 2, and the actual total prior calendar year 
 51.29  obligation under section 353.65, subdivision 3, for 
 51.30  firefighters, as defined in section 353.64, subdivision 3, but 
 51.31  not to exceed for those firefighters the applicable following 
 51.32  amounts: 
 51.33    Municipality                       Maximum Amount 
 51.34    Albert Lea                          $54,157.01
 51.35    Anoka                                10,399.31
 51.36    Apple Valley                          5,442.44 
 52.1     Austin                               49,864.73
 52.2     Bemidji                              27,671.38
 52.3     Brooklyn Center                       6,605.92
 52.4     Brooklyn Park                        24,002.26  
 52.5     Burnsville                           15,956.00 
 52.6     Cloquet                               4,260.49 
 52.7     Coon Rapids                          39,920.00 
 52.8     Cottage Grove                         8,588.48
 52.9     Crystal                               5,855.00
 52.10    East Grand Forks                     51,009.88
 52.11    Edina                                32,251.00
 52.12    Elk River                             5,216.55
 52.13    Ely                                  13,584.16
 52.14    Eveleth                              16,288.27
 52.15    Fergus Falls                          6,742.00
 52.16    Fridley                              33,420.64
 52.17    Golden Valley                        11,744.61 
 52.18    Hastings                             16,561.00 
 52.19    Hopkins                               4,324.23  
 52.20    International Falls                  14,400.69 
 52.21    Lakeville                               782.35 
 52.22    Lino Lakes                            5,324.00 
 52.23    Little Falls                          7,889.41 
 52.24    Maple Grove                           6,707.54 
 52.25    Maplewood                             8,476.69 
 52.26    Minnetonka                           10,403.00 
 52.27    Montevideo                            1,307.66 
 52.28    Moorhead                             68,069.26 
 52.29    New Hope                              6,739.72 
 52.30    North St. Paul                        4,241.14 
 52.31    Northfield                              770.63 
 52.32    Owatonna                             37,292.67 
 52.33    Plymouth                              6,754.71 
 52.34    Red Wing                              3,504.01 
 52.35    Richfield                            53,757.96 
 52.36    Rosemount                             1,712.55 
 53.1     Roseville                             9,854.51 
 53.2     St. Anthony                          33,055.00 
 53.3     St. Louis Park                       53,643.11 
 53.4     Thief River Falls                    28,365.04 
 53.5     Virginia                             31,164.46 
 53.6     Waseca                               11,135.17 
 53.7     West St. Paul                        15,707.20 
 53.8     White Bear Lake                       6,521.04 
 53.9     Woodbury                              3,613.00 
 53.10    any other municipality                    0.00 
 53.11     (d) The total amount of excess police state aid must be 
 53.12  deposited in the excess police state-aid account in the general 
 53.13  fund, administered and distributed as provided in subdivision 11.
 53.14     Sec. 3.  Minnesota Statutes 1998, section 69.031, 
 53.15  subdivision 5, is amended to read: 
 53.16     Subd. 5.  [DEPOSIT OF STATE AID.] (a) The municipal 
 53.17  treasurer shall, within 30 days after receipt, transmit the fire 
 53.18  state aid to the treasurer of the duly incorporated 
 53.19  firefighters' relief association if there is one organized and 
 53.20  the association has filed a financial report with the 
 53.21  municipality.  If the relief association has not filed a 
 53.22  financial report with the municipality, the municipal treasurer 
 53.23  shall delay transmission of the fire state aid to the relief 
 53.24  association until the complete financial report is filed.  If 
 53.25  there is no relief association organized, or if the association 
 53.26  has dissolved, or has been removed as trustees of state aid, 
 53.27  then the treasurer of the municipality shall deposit the money 
 53.28  in the municipal treasury as provided for in section 424A.08 and 
 53.29  the money may be disbursed only for the purposes and in the 
 53.30  manner set forth in that section. 
 53.31     (b) The municipal treasurer, upon receipt of the police 
 53.32  state aid, shall disburse the police state aid in the following 
 53.33  manner: 
 53.34     (1) For a municipality in which a local police relief 
 53.35  association exists and all peace officers are members of the 
 53.36  association, the total state aid must be transmitted to the 
 54.1   treasurer of the relief association within 30 days of the date 
 54.2   of receipt, and the treasurer of the relief association shall 
 54.3   immediately deposit the total state aid in the special fund of 
 54.4   the relief association; 
 54.5      (2) For a municipality in which police retirement coverage 
 54.6   is provided by the public employees police and fire fund and all 
 54.7   peace officers are members of the fund, including municipalities 
 54.8   covered by section 353.665, the total state aid must be applied 
 54.9   toward the municipality's employer contribution to the public 
 54.10  employees police and fire fund under section sections 353.65, 
 54.11  subdivision 3, and 353.665, subdivision 8, paragraph (b), if 
 54.12  applicable; or 
 54.13     (3) For a municipality other than a city of the first class 
 54.14  with a population of more than 300,000 in which both a police 
 54.15  relief association exists and police retirement coverage is 
 54.16  provided in part by the public employees police and fire fund, 
 54.17  the municipality may elect at its option to transmit the total 
 54.18  state aid to the treasurer of the relief association as provided 
 54.19  in clause (1), to use the total state aid to apply toward the 
 54.20  municipality's employer contribution to the public employees 
 54.21  police and fire fund subject to all the provisions set forth in 
 54.22  clause (2), or to allot the total state aid proportionately to 
 54.23  be transmitted to the police relief association as provided in 
 54.24  this subdivision and to apply toward the municipality's employer 
 54.25  contribution to the public employees police and fire fund 
 54.26  subject to the provisions of clause (2) on the basis of the 
 54.27  respective number of active full-time peace officers, as defined 
 54.28  in section 69.011, subdivision 1, clause (g). 
 54.29     For a city of the first class with a population of more 
 54.30  than 300,000, in addition, the city may elect to allot the 
 54.31  appropriate portion of the total police state aid to apply 
 54.32  toward the employer contribution of the city to the public 
 54.33  employees police and fire fund based on the covered salary of 
 54.34  police officers covered by the fund each payroll period and to 
 54.35  transmit the balance to the police relief association; or 
 54.36     (4) For a municipality in which police retirement coverage 
 55.1   is provided in part by the public employees police and fire fund 
 55.2   and in part by a local police consolidation account governed by 
 55.3   chapter 353A and established after March 1, 1999, the total 
 55.4   police state aid must be applied towards the municipality's 
 55.5   total employer contribution to the public employees police and 
 55.6   fire fund and to the local police consolidation account under 
 55.7   sections 353.65, subdivision 3, and 353A.09, subdivision 5. 
 55.8      (c) The county treasurer, upon receipt of the police state 
 55.9   aid for the county, shall apply the total state aid toward the 
 55.10  county's employer contribution to the public employees police 
 55.11  and fire fund under section 353.65, subdivision 3. 
 55.12     (d) The designated metropolitan airports commission 
 55.13  official, upon receipt of the police state aid for the 
 55.14  metropolitan airports commission, shall apply the total police 
 55.15  state aid first toward the commission's employer contribution 
 55.16  for police officers to the Minneapolis employees retirement fund 
 55.17  under section 422A.101, subdivision 2a, and, if there is any 
 55.18  amount of police state aid remaining, shall apply that remainder 
 55.19  toward the commission's employer contribution for police 
 55.20  officers to the public employees police and fire plan under 
 55.21  section 353.65, subdivision 3. 
 55.22     (e) The police state aid apportioned to the departments of 
 55.23  public safety and natural resources under section 69.021, 
 55.24  subdivision 7a, is appropriated to the commissioner of finance 
 55.25  for transfer to the funds and accounts from which the salaries 
 55.26  of peace officers certified under section 69.011, subdivision 
 55.27  2a, are paid.  The commissioner of revenue shall certify to the 
 55.28  commissioners of public safety, natural resources, and finance 
 55.29  the amounts to be transferred from the appropriation for police 
 55.30  state aid.  The commissioners of public safety and natural 
 55.31  resources shall certify to the commissioner of finance the 
 55.32  amounts to be credited to each of the funds and accounts from 
 55.33  which the peace officers employed by their respective 
 55.34  departments are paid.  Each commissioner must allocate the 
 55.35  police state aid first for employer contributions for employees 
 55.36  funded from the general fund and then for employer contributions 
 56.1   for employees funded from other funds.  For peace officers whose 
 56.2   salaries are paid from the general fund, the amounts transferred 
 56.3   from the appropriation for police state aid must be canceled to 
 56.4   the general fund. 
 56.5      Sec. 4.  Minnesota Statutes 1998, section 353.01, 
 56.6   subdivision 2b, is amended to read: 
 56.7      Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
 56.8   employees shall not participate as members of the association 
 56.9   with retirement coverage by the public employees retirement plan 
 56.10  or the public employees police and fire retirement plan: 
 56.11     (1) elected public officers, or persons appointed to fill a 
 56.12  vacancy in an elective office, who do not elect to participate 
 56.13  in the association by filing an application for membership; 
 56.14     (2) election officers; 
 56.15     (3) patient and inmate personnel who perform services in 
 56.16  charitable, penal, or correctional institutions of a 
 56.17  governmental subdivision; 
 56.18     (4) employees who are hired for a temporary position under 
 56.19  subdivision 12a, and employees who resign from a nontemporary 
 56.20  position and accept a temporary position within 30 days in the 
 56.21  same governmental subdivision, but not those employees who are 
 56.22  hired for an unlimited period but are serving a probationary 
 56.23  period.  If the period of employment extends beyond six 
 56.24  consecutive months and the employee earns more than $425 from 
 56.25  one governmental subdivision in any one calendar month, the 
 56.26  department head shall report the employee for membership and 
 56.27  require employee deductions be made on behalf of the employee 
 56.28  under section 353.27, subdivision 4. 
 56.29     Membership eligibility of an employee who resigns or is 
 56.30  dismissed from a temporary position and within 30 days accepts 
 56.31  another temporary position in the same governmental subdivision 
 56.32  is determined on the total length of employment rather than on 
 56.33  each separate position.  Membership eligibility of an employee 
 56.34  who holds concurrent temporary and nontemporary positions in one 
 56.35  governmental subdivision is determined by the length of 
 56.36  employment and salary of each separate position; 
 57.1      (5) employees whose actual salary from one governmental 
 57.2   subdivision does not exceed $425 per month, or whose annual 
 57.3   salary from one governmental subdivision does not exceed a 
 57.4   stipulation prepared in advance, in writing, that the salary 
 57.5   must not exceed $5,100 per calendar year or per school year for 
 57.6   school employees for employment expected to be of a full year's 
 57.7   duration or more than the prorated portion of $5,100 per 
 57.8   employment period for employment expected to be of less than a 
 57.9   full year's duration; 
 57.10     (6) employees who are employed by reason of work emergency 
 57.11  caused by fire, flood, storm, or similar disaster; 
 57.12     (7) employees who by virtue of their employment in one 
 57.13  governmental subdivision are required by law to be a member of 
 57.14  and to contribute to any of the plans or funds administered by 
 57.15  the Minnesota state retirement system, the teachers retirement 
 57.16  association, the Duluth teachers retirement fund association, 
 57.17  the Minneapolis teachers retirement association, the St. Paul 
 57.18  teachers retirement fund association, the Minneapolis employees 
 57.19  retirement fund, or any police or firefighters relief 
 57.20  association governed by section 69.77 that has not consolidated 
 57.21  with the public employees retirement association, or any local 
 57.22  police or firefighters relief association that has consolidated 
 57.23  with the public employees retirement association consolidation 
 57.24  account but whose members who have not elected the type of 
 57.25  benefit coverage provided by the public employees police and 
 57.26  fire fund under sections 353A.01 to 353A.10, or any persons 
 57.27  covered by section 353.665, subdivision 4, 5, or 6, who have not 
 57.28  elected public employee police and fire plan benefit coverage.  
 57.29  This clause must not be construed to prevent a person from being 
 57.30  a member of and contributing to the public employees retirement 
 57.31  association and also belonging to and contributing to another 
 57.32  public pension fund for other service occurring during the same 
 57.33  period of time.  A person who meets the definition of "public 
 57.34  employee" in subdivision 2 by virtue of other service occurring 
 57.35  during the same period of time becomes a member of the 
 57.36  association unless contributions are made to another public 
 58.1   retirement fund on the salary based on the other service or to 
 58.2   the teachers retirement association by a teacher as defined in 
 58.3   section 354.05, subdivision 2; 
 58.4      (8) persons who are excluded from coverage under the 
 58.5   federal Old Age, Survivors, Disability, and Health Insurance 
 58.6   Program for the performance of service as specified in United 
 58.7   States Code, title 42, section 410(a)(8)(A), as amended through 
 58.8   January 1, 1987, if no irrevocable election of coverage has been 
 58.9   made under section 3121(r) of the Internal Revenue Code of 1954, 
 58.10  as amended; 
 58.11     (9) full-time students who are enrolled and are regularly 
 58.12  attending classes at an accredited school, college, or 
 58.13  university and who are part-time employees as defined by a 
 58.14  governmental subdivision; 
 58.15     (10) resident physicians, medical interns, and pharmacist 
 58.16  residents and pharmacist interns who are serving in a degree or 
 58.17  residency program in public hospitals; 
 58.18     (11) students who are serving in an internship or residency 
 58.19  program sponsored by an accredited educational institution; 
 58.20     (12) persons who hold a part-time adult supplementary 
 58.21  technical college license who render part-time teaching service 
 58.22  in a technical college; 
 58.23     (13) foreign citizens working for a governmental 
 58.24  subdivision with a work permit of less than three years, or an 
 58.25  H-1b visa valid for less than three years of employment.  Upon 
 58.26  notice to the association that the work permit or visa extends 
 58.27  beyond the three-year period, the foreign citizens are eligible 
 58.28  for membership from the date of the extension; 
 58.29     (14) public hospital employees who elected not to 
 58.30  participate as members of the association before 1972 and who 
 58.31  did not elect to participate from July 1, 1988, to October 1, 
 58.32  1988; 
 58.33     (15) except as provided in section 353.86, volunteer 
 58.34  ambulance service personnel, as defined in subdivision 35, but 
 58.35  persons who serve as volunteer ambulance service personnel may 
 58.36  still qualify as public employees under subdivision 2 and may be 
 59.1   members of the public employees retirement association and 
 59.2   participants in the public employees retirement fund or the 
 59.3   public employees police and fire fund on the basis of 
 59.4   compensation received from public employment service other than 
 59.5   service as volunteer ambulance service personnel; 
 59.6      (16) except as provided in section 353.87, volunteer 
 59.7   firefighters, as defined in subdivision 36, engaging in 
 59.8   activities undertaken as part of volunteer firefighter duties; 
 59.9   provided that a person who is a volunteer firefighter may still 
 59.10  qualify as a public employee under subdivision 2 and may be a 
 59.11  member of the public employees retirement association and a 
 59.12  participant in the public employees retirement fund or the 
 59.13  public employees police and fire fund on the basis of 
 59.14  compensation received from public employment activities other 
 59.15  than those as a volunteer firefighter; and 
 59.16     (17) pipefitters and associated trades personnel employed 
 59.17  by independent school district No. 625, St. Paul, with coverage 
 59.18  by the pipefitters local 455 pension plan under a collective 
 59.19  bargaining agreement who were either first employed after May 1, 
 59.20  1997, or, if first employed before May 2, 1997, elected to be 
 59.21  excluded under Laws 1997, chapter 241, article 2, section 12. 
 59.22     Sec. 5.  Minnesota Statutes 1998, section 353.01, 
 59.23  subdivision 10, is amended to read: 
 59.24     Subd. 10.  [SALARY.] (a) "Salary" means:  
 59.25     (1) periodic compensation of a public employee, before 
 59.26  deductions for deferred compensation, supplemental retirement 
 59.27  plans, or other voluntary salary reduction programs, and also 
 59.28  means "wages" and includes net income from fees; and 
 59.29     (2) for a public employee who has prior service covered by 
 59.30  a local police or firefighters' relief association that has 
 59.31  consolidated with the public employees retirement association or 
 59.32  to which section 353.665 applies and who has elected 
 59.33  coverage either under the public employees police and fire fund 
 59.34  benefit plan under section 353A.08 following the 
 59.35  consolidation or under section 353.665, subdivision 4, "salary" 
 59.36  means the rate of salary upon which member contributions to the 
 60.1   special fund of the relief association were made prior to the 
 60.2   effective date of the consolidation as specified by law and by 
 60.3   bylaw provisions governing the relief association on the date of 
 60.4   the initiation of the consolidation procedure and the actual 
 60.5   periodic compensation of the public employee after the effective 
 60.6   date of consolidation. 
 60.7      (b) Salary does not mean: 
 60.8      (1) fees paid to district court reporters, unused annual or 
 60.9   sick leave payments, in lump-sum or periodic payments, severance 
 60.10  payments, reimbursement of expenses, lump-sum settlements not 
 60.11  attached to a specific earnings period, or workers' compensation 
 60.12  payments; 
 60.13     (2) employer-paid amounts used by an employee toward the 
 60.14  cost of insurance coverage, employer-paid fringe benefits, 
 60.15  flexible spending accounts, cafeteria plans, health care expense 
 60.16  accounts, day care expenses, or any payments in lieu of any 
 60.17  employer-paid group insurance coverage, including the difference 
 60.18  between single and family rates that may be paid to a member 
 60.19  with single coverage and certain amounts determined by the 
 60.20  executive director to be ineligible; 
 60.21     (3) the amount equal to that which the employing 
 60.22  governmental subdivision would otherwise pay toward single or 
 60.23  family insurance coverage for a covered employee when, through a 
 60.24  contract or agreement with some but not all employees, the 
 60.25  employer: 
 60.26     (i) discontinues, or for new hires does not provide, 
 60.27  payment toward the cost of the employee's selected insurance 
 60.28  coverages under a group plan offered by the employer; 
 60.29     (ii) makes the employee solely responsible for all 
 60.30  contributions toward the cost of the employee's selected 
 60.31  insurance coverages under a group plan offered by the employer, 
 60.32  including any amount the employer makes toward other employees' 
 60.33  selected insurance coverages under a group plan offered by the 
 60.34  employer; and 
 60.35     (iii) provides increased salary rates for employees who do 
 60.36  not have any employer-paid group insurance coverages; and 
 61.1      (4) except as provided in section 353.86 or 353.87, 
 61.2   compensation of any kind paid to volunteer ambulance service 
 61.3   personnel or volunteer firefighters, as defined in subdivisions 
 61.4   35 and 36.  
 61.5      Sec. 6.  Minnesota Statutes 1998, section 353.01, 
 61.6   subdivision 16, is amended to read: 
 61.7      Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
 61.8   means service during years of actual membership in the course of 
 61.9   which employee contributions were made, periods covered by 
 61.10  payments in lieu of salary deductions under section 353.35, and 
 61.11  service in years during which the public employee was not a 
 61.12  member but for which the member later elected, while a member, 
 61.13  to obtain credit by making payments to the fund as permitted by 
 61.14  any law then in effect. 
 61.15     (b) "Allowable service" also means a period of authorized 
 61.16  leave of absence with pay from which deductions for employee 
 61.17  contributions are made, deposited, and credited to the fund. 
 61.18     (c) "Allowable service" also means a period of authorized 
 61.19  leave of absence without pay that does not exceed one year, and 
 61.20  during or for which a member obtained credit by payments to the 
 61.21  fund made in place of salary deductions, provided that the 
 61.22  payments are made in an amount or amounts based on the member's 
 61.23  average salary on which deductions were paid for the last six 
 61.24  months of public service, or for that portion of the last six 
 61.25  months while the member was in public service, to apply to the 
 61.26  period in either case immediately preceding commencement of the 
 61.27  leave of absence.  If the employee elects to pay employee 
 61.28  contributions for the period of any leave of absence without 
 61.29  pay, or for any portion of the leave, the employee shall also, 
 61.30  as a condition to the exercise of the election, pay to the fund 
 61.31  an amount equivalent to both the required employer and 
 61.32  additional employer contributions for the employee.  The payment 
 61.33  must be made within one year from the expiration of the leave of 
 61.34  absence or within 20 days after termination of public service 
 61.35  under subdivision 11a.  The employer by appropriate action of 
 61.36  its governing body, made a part of its official records, before 
 62.1   the date of the first payment of the employee contribution, may 
 62.2   certify to the association in writing its commitment to pay the 
 62.3   employer and additional employer contributions from the proceeds 
 62.4   of a tax levy made under section 353.28.  Payments under this 
 62.5   paragraph must include interest at an annual rate of 8.5 percent 
 62.6   compounded annually from the date of the termination of the 
 62.7   leave of absence to the date payment is made.  An employee shall 
 62.8   return to public service and receive a minimum of three months 
 62.9   of allowable service to be eligible to pay employee and employer 
 62.10  contributions for a subsequent authorized leave of absence 
 62.11  without pay. 
 62.12     (d) "Allowable service" also means a periodic, repetitive 
 62.13  leave that is offered to all employees of a governmental 
 62.14  subdivision.  The leave program may not exceed 208 hours per 
 62.15  annual normal work cycle as certified to the association by the 
 62.16  employer.  A participating member obtains service credit by 
 62.17  making employee contributions in an amount or amounts based on 
 62.18  the member's average salary that would have been paid if the 
 62.19  leave had not been taken.  The employer shall pay the employer 
 62.20  and additional employer contributions on behalf of the 
 62.21  participating member.  The employee and the employer are 
 62.22  responsible to pay interest on their respective shares at the 
 62.23  rate of 8.5 percent a year, compounded annually, from the end of 
 62.24  the normal cycle until full payment is made.  An employer shall 
 62.25  also make the employer and additional employer contributions, 
 62.26  plus 8.5 percent interest, compounded annually, on behalf of an 
 62.27  employee who makes employee contributions but terminates public 
 62.28  service.  The employee contributions must be made within one 
 62.29  year after the end of the annual normal working cycle or within 
 62.30  20 days after termination of public service, whichever is 
 62.31  sooner.  The association shall prescribe the manner and forms to 
 62.32  be used by a governmental subdivision in administering a 
 62.33  periodic, repetitive leave. 
 62.34     (e) "Allowable service" also means a period during which a 
 62.35  member is on an authorized sick leave of absence, without pay, 
 62.36  limited to one year.  An employee who has received one year of 
 63.1   allowable service shall return to public service and receive a 
 63.2   minimum of three months of allowable service to receive 
 63.3   allowable service for a subsequent authorized sick leave of 
 63.4   absence. 
 63.5      (f) "Allowable service" also means an authorized temporary 
 63.6   layoff under subdivision 12, limited to three months allowable 
 63.7   service per authorized temporary layoff in one calendar year.  
 63.8   An employee who has received the maximum service allowed for an 
 63.9   authorized temporary layoff shall return to public service and 
 63.10  receive a minimum of three months of allowable service to 
 63.11  receive allowable service for a subsequent authorized temporary 
 63.12  layoff. 
 63.13     (g) Notwithstanding any law to the contrary, "allowable 
 63.14  service" also means a parental leave.  The association shall 
 63.15  grant a maximum of two months service credit for a parental 
 63.16  leave, within six months after the birth or adoption, upon 
 63.17  documentation from the member's governmental subdivision or 
 63.18  presentation of a birth certificate or other evidence of birth 
 63.19  or adoption to the association. 
 63.20     (h) "Allowable service" also means a period during which a 
 63.21  member is on an authorized leave of absence to enter military 
 63.22  service, provided that the member returns to public service upon 
 63.23  discharge from military service under section 192.262 and pays 
 63.24  into the fund employee contributions based upon the employee's 
 63.25  salary at the date of return from military service.  Payment 
 63.26  must be made within five years of the date of discharge from the 
 63.27  military service.  The amount of these contributions must be in 
 63.28  accord with the contribution rates and salary limitations, if 
 63.29  any, in effect during the leave, plus interest at an annual rate 
 63.30  of 8.5 percent compounded annually from the date of return to 
 63.31  public service to the date payment is made.  The matching 
 63.32  employer contribution and additional employer contribution under 
 63.33  section 353.27, subdivisions 3 and 3a, must be paid by the 
 63.34  governmental subdivision employing the member upon return to 
 63.35  public service if the member makes the employee contributions.  
 63.36  The governmental subdivision involved may appropriate money for 
 64.1   those payments.  A member may not receive credit for a voluntary 
 64.2   extension of military service at the instance of the member 
 64.3   beyond the initial period of enlistment, induction, or call to 
 64.4   active duty. 
 64.5      (i) For calculating benefits under sections 353.30, 353.31, 
 64.6   353.32, and 353.33 for state officers and employees displaced by 
 64.7   the Community Corrections Act, chapter 401, and transferred into 
 64.8   county service under section 401.04, "allowable service" means 
 64.9   combined years of allowable service as defined in paragraphs (a) 
 64.10  to (i) and section 352.01, subdivision 11.  
 64.11     (j) For a public employee who has prior service covered by 
 64.12  a local police or firefighters relief association that has 
 64.13  consolidated with the public employees retirement association or 
 64.14  to which section 353.665 applies, and who has elected the type 
 64.15  of benefit coverage provided by the public employees police and 
 64.16  fire fund either under section 353A.08 following the 
 64.17  consolidation or under section 353.665, subdivision 4, 
 64.18  "applicable service" is a period of service credited by the 
 64.19  local police or firefighters relief association as of the 
 64.20  effective date of the consolidation based on law and on bylaw 
 64.21  provisions governing the relief association on the date of the 
 64.22  initiation of the consolidation procedure. 
 64.23     Sec. 7.  Minnesota Statutes 1998, section 353.64, 
 64.24  subdivision 1, is amended to read: 
 64.25     Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
 64.26  person who prior to July 1, 1961, was a member of the police and 
 64.27  fire fund, by virtue of being a police officer or firefighter, 
 64.28  shall, as long as the person remains in either position, 
 64.29  continue membership in the fund.  
 64.30     (b) A person who was employed by a governmental subdivision 
 64.31  as a police officer and was a member of the police and fire fund 
 64.32  on July 1, 1978, by virtue of being a police officer as defined 
 64.33  by this section on that date, and if employed by the same 
 64.34  governmental subdivision in a position in the same department in 
 64.35  which the person was employed on that date, shall continue 
 64.36  membership in the fund whether or not that person has the power 
 65.1   of arrest by warrant after that date. 
 65.2      (c) A person who was employed by a governmental subdivision 
 65.3   as a police officer or a firefighter, whichever applies, was an 
 65.4   active member of the local police or salaried firefighters 
 65.5   relief association located in that governmental subdivision by 
 65.6   virtue of that employment as of the effective date of the 
 65.7   consolidation as authorized by sections 353A.01 to 353A.10, and 
 65.8   has elected coverage by the public employees police and fire 
 65.9   fund benefit plan, shall become a member of the police and fire 
 65.10  fund after that date if employed by the same governmental 
 65.11  subdivision in a position in the same department in which the 
 65.12  person was employed on that date. 
 65.13     (d) Any other employee serving on a full-time basis as a 
 65.14  police officer or firefighter on or after July 1, 1961, shall 
 65.15  become a member of the public employees police and fire fund.  
 65.16     (e) An employee serving on less than a full-time basis as a 
 65.17  police officer shall become a member of the public employees 
 65.18  police and fire fund only after a resolution stating that the 
 65.19  employee should be covered by the police and fire fund is 
 65.20  adopted by the governing body of the governmental subdivision 
 65.21  employing the person declaring that the position which the 
 65.22  person holds is that of a police officer. 
 65.23     (f) An employee serving on less than a full-time basis as a 
 65.24  firefighter shall become a member of the public employees police 
 65.25  and fire fund only after a resolution stating that the employee 
 65.26  should be covered by the police and fire fund is adopted by the 
 65.27  governing body of the governmental subdivision employing the 
 65.28  person declaring that the position which the person holds is 
 65.29  that of a firefighter. 
 65.30     (g) A police officer or firefighter employed by a 
 65.31  governmental subdivision who by virtue of that employment is 
 65.32  required by law to be a member of and to contribute to any 
 65.33  police or firefighter relief association governed by section 
 65.34  69.77 which has not consolidated with the public employees 
 65.35  police and fire fund and, any police officer or firefighter of a 
 65.36  relief association that has consolidated with the association 
 66.1   for which the employee has not elected coverage by the public 
 66.2   employees police and fire fund benefit plan as provided in 
 66.3   sections 353A.01 to 353A.10, or any police officer or 
 66.4   firefighter to whom section 353.665 applies who has not elected 
 66.5   coverage by the public employees police and fire fund benefit 
 66.6   plan as provided in section 353.665, subdivision 4, shall not 
 66.7   become a member of the public employees police and fire fund. 
 66.8      Sec. 8.  Minnesota Statutes 1998, section 353.65, 
 66.9   subdivision 2, is amended to read: 
 66.10     Subd. 2.  [EMPLOYEE CONTRIBUTION RATE.] The employee 
 66.11  contribution is an amount equal to 7.6 6.2 percent of the total 
 66.12  salary of the member.  This contribution must be made by 
 66.13  deduction from salary in the manner provided in subdivision 4.  
 66.14  Where any portion of a member's salary is paid from other than 
 66.15  public funds, the member's employee contribution is based on the 
 66.16  total salary received from all sources.  
 66.17     Sec. 9.  Minnesota Statutes 1998, section 353.65, 
 66.18  subdivision 3, is amended to read: 
 66.19     Subd. 3.  [EMPLOYER CONTRIBUTION RATE.] The employer 
 66.20  contribution shall be an amount equal to 11.4 9.3 percent of the 
 66.21  total salary of every member.  This contribution shall be made 
 66.22  from funds available to the employing subdivision by the means 
 66.23  and in the manner provided in section 353.28. 
 66.24     Sec. 10.  [353.665] [MERGER OF CERTAIN CONSOLIDATION 
 66.25  ACCOUNTS INTO PERA-P&F.] 
 66.26     Subdivision 1.  [MERGER REQUIRED.] (a) Notwithstanding any 
 66.27  law to the contrary, unless the applicable municipality elects 
 66.28  otherwise under paragraph (b), every local police and fire 
 66.29  consolidation account under chapter 353A in existence on March 
 66.30  1, 1999, becomes a part of the public employees police and fire 
 66.31  plan and fund governed by sections 353.63 to 353.659 on July 1, 
 66.32  1999. 
 66.33     (b) If a municipality desires to retain its consolidation 
 66.34  account or consolidation accounts, the governing body of the 
 66.35  municipality must adopt a resolution to that effect and must 
 66.36  file a copy of the resolution with the secretary of state, state 
 67.1   auditor, legislative auditor, finance commissioner, revenue 
 67.2   commissioner, executive director of the public employees 
 67.3   retirement association, and executive director of the 
 67.4   legislative commission on pensions and retirement.  The 
 67.5   retention resolution must be adopted and filed with all 
 67.6   recipients before June 15, 1999. 
 67.7      Subd. 2.  [TRANSFER OF LIABILITIES.] All current and future 
 67.8   liabilities of a former local police or fire consolidation 
 67.9   account are the liabilities of the public employees police and 
 67.10  fire fund as of July 1, 1999. 
 67.11     Subd. 3.  [TRANSFER OF ASSETS.] Upon transfer, the 
 67.12  actuarial value of the assets of a former local police or fire 
 67.13  consolidation account less an amount equal to the residual 
 67.14  assets as determined under subdivision 7, paragraph (f), are the 
 67.15  assets of the public employees police and fire fund as of July 
 67.16  1, 1999.  The participation of a consolidation account in the 
 67.17  Minnesota postretirement investment fund becomes part of the 
 67.18  participation of the public employees police and fire fund in 
 67.19  the Minnesota postretirement investment fund.  The remaining 
 67.20  assets, excluding the amounts for distribution under subdivision 
 67.21  7, paragraph (f), become an asset of the public employees police 
 67.22  and fire fund.  The public employees police and fire fund also 
 67.23  must be credited as an asset with the amount of receivable 
 67.24  assets under subdivision 7, paragraph (e). 
 67.25     Subd. 4.  [BENEFIT COVERAGE FOR ACTIVE MEMBERS.] (a) A 
 67.26  person who is a police officer or a firefighter who, as such, is 
 67.27  an active member of a local police or fire consolidation account 
 67.28  on June 30, 1999, and who has not previously elected benefit 
 67.29  coverage under the relevant provisions of the public employees 
 67.30  police and fire fund benefit plan under section 353A.08, 
 67.31  subdivision 3, may elect benefit coverage under the relevant 
 67.32  provisions of the public employees police and fire fund benefit 
 67.33  plan.  This election must be made in writing on a form 
 67.34  prescribed by the executive director before September 1, 1999, 
 67.35  and is irrevocable. 
 67.36     (b) If an eligible person makes no affirmative election of 
 68.1   benefit coverage before September 1, 1999, the person retains 
 68.2   the benefit coverage provided by the relief association benefit 
 68.3   plan in effect on the effective date of the consolidation of the 
 68.4   local police or fire consolidation account as reflected in the 
 68.5   applicable provisions of chapter 353B and may elect benefit 
 68.6   coverage under the relevant provisions of the public employees 
 68.7   police and fire fund benefit plan when the person terminates 
 68.8   active employment for purposes of receiving a service pension, 
 68.9   disability benefit, or within 90 days of the date the member 
 68.10  terminates active employment and defers receipt of a service 
 68.11  pension, whichever applies.  
 68.12     (c) Notwithstanding any provision of section 353A.083 and 
 68.13  any municipal action under authority of that section to the 
 68.14  contrary, the provisions of the public employees police and fire 
 68.15  fund benefit plan applicable to active members of the local 
 68.16  police or fire consolidation accounts who elect the public 
 68.17  employees police and fire fund benefit plan under paragraph (a) 
 68.18  or section 353A.08, subdivision 3, are the applicable provisions 
 68.19  of sections 353.63 to 353.659. 
 68.20     Subd. 5.  [BENEFIT COVERAGE FOR RETIREES AND BENEFIT 
 68.21  RECIPIENTS.] (a) A person who received a service pension, a 
 68.22  disability pension or benefit, or a survivor benefit from a 
 68.23  local police or fire consolidation account for the month of June 
 68.24  1999, and who has not previously elected participation in the 
 68.25  Minnesota postretirement investment fund for any future 
 68.26  postretirement adjustments rather than the postretirement 
 68.27  adjustment mechanism or mechanisms of the relief association 
 68.28  benefit plan under section 353A.08, subdivision 1, may elect 
 68.29  participation in the Minnesota postretirement investment fund 
 68.30  for any future postretirement adjustments or retention of the 
 68.31  postretirement adjustment mechanism or mechanisms of the relief 
 68.32  association benefit plan in effect on the effective date of the 
 68.33  consolidation of the local police or fire consolidation account 
 68.34  as reflected in the applicable provisions of chapter 353B.  This 
 68.35  election must be in writing on a form prescribed by the 
 68.36  executive director and must be made before September 1, 1999. 
 69.1      (b) If an eligible person is a minor, the election must be 
 69.2   made by the person's parent or legal guardian.  If the eligible 
 69.3   person makes no affirmative election under this subdivision, the 
 69.4   person retains the postretirement adjustment mechanism or 
 69.5   mechanisms of the relief association benefit plan in effect on 
 69.6   the effective date of the consolidation of the local police or 
 69.7   fire consolidation account as reflected in the applicable 
 69.8   provisions of chapter 353B. 
 69.9      (c) The survivor benefit payable on behalf of any service 
 69.10  pension or disability benefit recipient who elects participation 
 69.11  in the Minnesota postretirement investment fund must be 
 69.12  calculated under the relief association benefit plan in effect 
 69.13  on the effective date of consolidation under chapter 353A as 
 69.14  reflected in the applicable provisions of chapter 353B. 
 69.15     Subd. 6.  [BENEFIT COVERAGE FOR DEFERRED MEMBERS.] A person 
 69.16  who terminated active employment as a police officer or a 
 69.17  firefighter that gave rise to membership in a local relief 
 69.18  association that consolidated with the public employees police 
 69.19  and fire plan under chapter 353A before July 1, 1999, and had 
 69.20  sufficient service credit to entitle the person to an eventual 
 69.21  service pension retains the benefit plan in effect for the 
 69.22  applicable local police or paid fire relief association in 
 69.23  effect on the effective date of consolidation under chapter 353A 
 69.24  as reflected in the applicable provisions of chapter 353B, 
 69.25  except that the deferred member may elect before September 1, 
 69.26  1999, to participate, upon retirement, in the Minnesota 
 69.27  postretirement investment fund.  Any election to participate in 
 69.28  the Minnesota postretirement investment fund is applicable to 
 69.29  any survivor benefit attributable to a deferred member covered 
 69.30  by this subdivision. 
 69.31     Subd. 7.  [CALCULATION OF FINAL FUNDED STATUS.] (a) As of 
 69.32  June 30, 1999, the actuary retained by the legislative 
 69.33  commission on pensions and retirement shall determine the final 
 69.34  funded status of local police and fire consolidation accounts 
 69.35  under chapter 353A as provided in this subdivision. 
 69.36     (b) The final funded status calculation must be made using 
 70.1   the benefit plan provisions applicable to the consolidation 
 70.2   account and the actuarial assumptions used for the June 30, 
 70.3   1998, actuarial valuation of the account. 
 70.4      (c) The actuary must calculate the total actuarial accrued 
 70.5   liability of the consolidation account, which is the sum of the 
 70.6   actuarial accrued liability for all consolidation account 
 70.7   members who are not included in the participation of the account 
 70.8   in the Minnesota postretirement investment fund calculated by 
 70.9   the entry age normal actuarial cost method.  The actuary also 
 70.10  must calculate any account unfunded accrued liability or any 
 70.11  account funding surplus.  An account unfunded accrued liability 
 70.12  is the actuarial accrued liability reduced by the amount of the 
 70.13  current value of assets, if the resulting number is positive.  
 70.14  An account funding surplus is the actuarial accrued liability 
 70.15  reduced by the amount of the current value of assets, if the 
 70.16  resulting number is negative. 
 70.17     (d) The actuary also must calculate the amortizable base 
 70.18  for every consolidation account.  The amortizable base is the 
 70.19  present value of future benefits for all account members who are 
 70.20  not included in the participation of the account in the 
 70.21  Minnesota postretirement investment fund reduced by the present 
 70.22  value of 19 percent of future covered salary and further reduced 
 70.23  by the current value of account assets other than its 
 70.24  participation in the Minnesota postretirement investment fund, 
 70.25  after adjustment for fiscal year 1999 net mortality gains and 
 70.26  losses and for the net actuarial affect of the election of 
 70.27  postretirement adjustment coverage under subdivision 5. 
 70.28     (e) If the amortizable base under paragraph (d) is a 
 70.29  positive number, the receivable assets are an amount equal to 
 70.30  the amortizable base number. 
 70.31     (f) If the amortizable base under paragraph (d) is a 
 70.32  negative number, the actuary must calculate the residual asset 
 70.33  amount.  The residual asset amount is: 
 70.34     (1) one-half of the amount by which the current assets of 
 70.35  the account exceed 100 percent of the total actuarial accrued 
 70.36  liability up to that percentage of the total actuarial accrued 
 71.1   liability that equals the public employees police and fire fund 
 71.2   funded ratio on June 30, 1999; and 
 71.3      (2) the amount by which the current assets of the account 
 71.4   exceed that percentage of the total actuarial accrued liability 
 71.5   that equals the public employees police and fire fund funded 
 71.6   ratio on June 30, 1999.  Following the calculation of the 
 71.7   residual asset amount for each applicable municipality and the 
 71.8   verification of the amount by the legislative auditor, the 
 71.9   executive director of the public employees retirement 
 71.10  association shall pay the applicable residual asset amount with 
 71.11  interest equal to the average yield on the invested treasurer's 
 71.12  cash fund from July 1, 1999, to the first of the month in which 
 71.13  the payment is issued to each qualifying municipality.  The 
 71.14  residual asset amount must be used by the municipality to defray 
 71.15  fire department expenditure items if the residual asset amount 
 71.16  was derived from a fire consolidation account or to defray 
 71.17  police department expenditure items if the residual asset amount 
 71.18  was derived from a police consolidation account.  The residual 
 71.19  asset amount must be deposited in a special fund or account in 
 71.20  the municipal treasury established for that purpose.  The 
 71.21  special fund or account must be invested and any investment 
 71.22  return attributable to the residual asset amount must be 
 71.23  credited to that special fund or account and its disbursement 
 71.24  similarly restricted.  The special fund or account must be 
 71.25  audited periodically by the state auditor. 
 71.26     Subd. 8.  [MEMBER AND EMPLOYER CONTRIBUTIONS.] (a) 
 71.27  Effective for the first pay period following July 1, 1999, the 
 71.28  employee contribution rate for former consolidation account 
 71.29  active members is the rate specified in section 353.65, 
 71.30  subdivision 2, and the regular municipal contribution rate on 
 71.31  behalf of former consolidation account active members is the 
 71.32  rate specified in section 353.65, subdivision 3. 
 71.33     (b) The municipality associated with a former local 
 71.34  consolidation account that had a positive value amortizable base 
 71.35  calculation under subdivision 7, paragraph (d), must make an 
 71.36  additional municipal contribution to the public employees police 
 72.1   and fire plan for the period from January 1, 2000, to December 
 72.2   31, 2009.  The amount of the additional municipal contribution 
 72.3   is the amount calculated by the actuary retained by the 
 72.4   legislative commission on pensions and retirement and certified 
 72.5   by the executive director of the public employees retirement 
 72.6   association by which the amortizable base amount would be 
 72.7   amortized on a level dollar annual end-of-the-year contribution 
 72.8   basis, using an 8.5 percent interest rate assumption. 
 72.9      Subd. 9.  [BENEFIT PLAN COVERAGE.] Unless modified by an 
 72.10  election authorized under subdivision 4, 5, or 6, the benefit 
 72.11  plan election by any person or on behalf of any person under 
 72.12  section 353A.08 remains binding.  Former consolidation account 
 72.13  members who elected the entirety of the public employees police 
 72.14  and fire benefit plan are entitled to an applicable annuity or 
 72.15  benefit under the provisions of sections 353.63 to 353.68 in 
 72.16  effect on the day that the former consolidation account member 
 72.17  terminated active service as a police officer or firefighter, 
 72.18  whichever applies.  
 72.19     Subd. 10.  [CONSOLIDATION ACCOUNT TERMINATION.] Upon the 
 72.20  payment of all residual asset amounts under subdivision 7 and 
 72.21  the transfer of all liabilities and remaining assets under 
 72.22  subdivisions 2 and 3, the local consolidation accounts under 
 72.23  chapter 353A in existence on March 1, 1999, are terminated. 
 72.24     Sec. 11.  Minnesota Statutes 1998, section 356.215, 
 72.25  subdivision 4g, is amended to read: 
 72.26     Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
 72.27  the exhibit indicating the level normal cost, the actuarial 
 72.28  valuation must contain an exhibit indicating the additional 
 72.29  annual contribution sufficient to amortize the unfunded 
 72.30  actuarial accrued liability.  For funds governed by chapters 3A, 
 72.31  352, 352B, 352C, 353, 354, 354A, and 490, the additional 
 72.32  contribution must be calculated on a level percentage of covered 
 72.33  payroll basis by the established date for full funding in effect 
 72.34  when the valuation is prepared.  For funds governed by chapter 
 72.35  3A, sections 352.90 through 352.951, chapters 352B, 352C, 
 72.36  sections 353.63 through 353.68, and chapters 353C, 354A, and 
 73.1   490, the level percent additional contribution must be 
 73.2   calculated assuming annual payroll growth of 6.5 percent.  For 
 73.3   funds governed by sections 352.01 through 352.86 and chapter 
 73.4   354, the level percent additional contribution must be 
 73.5   calculated assuming an annual payroll growth of five percent.  
 73.6   For the fund governed by sections 353.01 through 353.46, the 
 73.7   level percent additional contribution must be calculated 
 73.8   assuming an annual payroll growth of six percent.  For all other 
 73.9   funds, the additional annual contribution must be calculated on 
 73.10  a level annual dollar amount basis. 
 73.11     (b) For any fund other than the Minneapolis employees 
 73.12  retirement fund, after the first actuarial valuation date 
 73.13  occurring after June 1, 1989, if there has not been a change in 
 73.14  the actuarial assumptions used for calculating the actuarial 
 73.15  accrued liability of the fund, a change in the benefit plan 
 73.16  governing annuities and benefits payable from the fund, a change 
 73.17  in the actuarial cost method used in calculating the actuarial 
 73.18  accrued liability of all or a portion of the fund, or a 
 73.19  combination of the three, which change or changes by themselves 
 73.20  without inclusion of any other items of increase or decrease 
 73.21  produce a net increase in the unfunded actuarial accrued 
 73.22  liability of the fund, the established date for full funding for 
 73.23  the first actuarial valuation made after June 1, 1989, and each 
 73.24  successive actuarial valuation is the first actuarial valuation 
 73.25  date occurring after June 1, 2020.  
 73.26     (c) For any fund or plan other than the Minneapolis 
 73.27  employees retirement fund, after the first actuarial valuation 
 73.28  date occurring after June 1, 1989, if there has been a change in 
 73.29  any or all of the actuarial assumptions used for calculating the 
 73.30  actuarial accrued liability of the fund, a change in the benefit 
 73.31  plan governing annuities and benefits payable from the fund, a 
 73.32  change in the actuarial cost method used in calculating the 
 73.33  actuarial accrued liability of all or a portion of the fund, or 
 73.34  a combination of the three, and the change or changes, by 
 73.35  themselves and without inclusion of any other items of increase 
 73.36  or decrease, produce a net increase in the unfunded actuarial 
 74.1   accrued liability in the fund, the established date for full 
 74.2   funding must be determined using the following procedure:  
 74.3      (i) the unfunded actuarial accrued liability of the fund 
 74.4   must be determined in accordance with the plan provisions 
 74.5   governing annuities and retirement benefits and the actuarial 
 74.6   assumptions in effect before an applicable change; 
 74.7      (ii) the level annual dollar contribution or level 
 74.8   percentage, whichever is applicable, needed to amortize the 
 74.9   unfunded actuarial accrued liability amount determined under 
 74.10  item (i) by the established date for full funding in effect 
 74.11  before the change must be calculated using the interest 
 74.12  assumption specified in subdivision 4d in effect before the 
 74.13  change; 
 74.14     (iii) the unfunded actuarial accrued liability of the fund 
 74.15  must be determined in accordance with any new plan provisions 
 74.16  governing annuities and benefits payable from the fund and any 
 74.17  new actuarial assumptions and the remaining plan provisions 
 74.18  governing annuities and benefits payable from the fund and 
 74.19  actuarial assumptions in effect before the change; 
 74.20     (iv) the level annual dollar contribution or level 
 74.21  percentage, whichever is applicable, needed to amortize the 
 74.22  difference between the unfunded actuarial accrued liability 
 74.23  amount calculated under item (i) and the unfunded actuarial 
 74.24  accrued liability amount calculated under item (iii) over a 
 74.25  period of 30 years from the end of the plan year in which the 
 74.26  applicable change is effective must be calculated using the 
 74.27  applicable interest assumption specified in subdivision 4d in 
 74.28  effect after any applicable change; 
 74.29     (v) the level annual dollar or level percentage 
 74.30  amortization contribution under item (iv) must be added to the 
 74.31  level annual dollar amortization contribution or level 
 74.32  percentage calculated under item (ii); 
 74.33     (vi) the period in which the unfunded actuarial accrued 
 74.34  liability amount determined in item (iii) is amortized by the 
 74.35  total level annual dollar or level percentage amortization 
 74.36  contribution computed under item (v) must be calculated using 
 75.1   the interest assumption specified in subdivision 4d in effect 
 75.2   after any applicable change, rounded to the nearest integral 
 75.3   number of years, but not to exceed 30 years from the end of the 
 75.4   plan year in which the determination of the established date for 
 75.5   full funding using the procedure set forth in this clause is 
 75.6   made and not to be less than the period of years beginning in 
 75.7   the plan year in which the determination of the established date 
 75.8   for full funding using the procedure set forth in this clause is 
 75.9   made and ending by the date for full funding in effect before 
 75.10  the change; and 
 75.11     (vii) the period determined under item (vi) must be added 
 75.12  to the date as of which the actuarial valuation was prepared and 
 75.13  the date obtained is the new established date for full funding.  
 75.14     (d) For the Minneapolis employees retirement fund, the 
 75.15  established date for full funding is June 30, 2020. 
 75.16     (e) For the following plans for which the annual actuarial 
 75.17  valuation indicates an excess of valuation assets over the 
 75.18  actuarial accrued liability, the valuation assets in excess of 
 75.19  the actuarial accrued liability must be recognized in the 
 75.20  following manner: 
 75.21     (1) the public employees retirement association police and 
 75.22  fire plan, the valuation assets in excess of the actuarial 
 75.23  accrued liability serve to reduce the current contribution 
 75.24  requirements by an amount equal to the amortization of the 
 75.25  excess expressed as a level percentage of pay over a 30-year 
 75.26  period beginning anew with each annual actuarial valuation of 
 75.27  the plan; and 
 75.28     (2) the correctional employees retirement plan of the 
 75.29  Minnesota state retirement system, and the state patrol 
 75.30  retirement plan, an excess of valuation assets over actuarial 
 75.31  accrued liability must be amortized in the same manner over the 
 75.32  same period as an unfunded actuarial accrued liability but must 
 75.33  serve to reduce the required contribution instead of increasing 
 75.34  it. 
 75.35     Sec. 12.  Minnesota Statutes 1998, section 423A.02, 
 75.36  subdivision 1b, is amended to read: 
 76.1      Subd. 1b.  [ADDITIONAL AMORTIZATION STATE AID.] (a) 
 76.2   Annually, on October 1, the commissioner of revenue shall 
 76.3   allocate the additional amortization state aid transferred under 
 76.4   section 69.021, subdivision 11, to: 
 76.5      (1) all police or salaried firefighter relief associations 
 76.6   governed by and in full compliance with the requirements of 
 76.7   section 69.77, that had an unfunded actuarial accrued liability 
 76.8   in the actuarial valuation prepared under sections 356.215 and 
 76.9   356.216 as of the preceding December 31; and 
 76.10     (2) all local police or salaried firefighter consolidation 
 76.11  accounts governed by chapter 353A that are certified by the 
 76.12  executive director of the public employees retirement 
 76.13  association as having for the current fiscal year an additional 
 76.14  municipal contribution amount under section 353A.09, subdivision 
 76.15  5, paragraph (b), and that have implemented section 353A.083, 
 76.16  subdivision 1, if the effective date of the consolidation 
 76.17  preceded May 24, 1993, and that have implemented section 
 76.18  353A.083, subdivision 2, if the effective date of the 
 76.19  consolidation preceded June 1, 1995.; and 
 76.20     (3) municipalities that received amortization aid in 1999 
 76.21  and are required to make an additional municipal contribution 
 76.22  under section 353.665, subdivision 8, for the duration of the 
 76.23  required additional contribution. 
 76.24     (b) The commissioner shall allocate the state aid on the 
 76.25  basis of the proportional share of the relief association or 
 76.26  consolidation account of the total unfunded actuarial accrued 
 76.27  liability of all recipient relief associations and consolidation 
 76.28  accounts as of December 31, 1993, for relief associations, and 
 76.29  as of June 30, 1994, for consolidation accounts. 
 76.30     (c) Beginning October 1, 2000, and annually thereafter, the 
 76.31  commissioner shall allocate the state aid on the basis of 64.5 
 76.32  percent to municipalities to which section 353.665, subdivision 
 76.33  8, paragraph (b), applies for distribution in accordance with 
 76.34  paragraph (b) and subject to the limitation in subdivision 4, 
 76.35  34.2 percent to the city of Minneapolis to fund any unfunded 
 76.36  actuarial accrued liability in the actuarial valuation prepared 
 77.1   under sections 356.215 and 356.216 as of the preceding December 
 77.2   31 for the Minneapolis police relief association or the 
 77.3   Minneapolis fire department relief association, and 1.3 percent 
 77.4   to the city of Virginia to fund any unfunded actuarial accrued 
 77.5   liability in the actuarial valuation prepared under sections 
 77.6   356.215 and 356.216 as of the preceding December 31 for the 
 77.7   Virginia fire department relief association.  In the event that 
 77.8   there is no unfunded actuarial accrued liability in either the 
 77.9   Minneapolis police relief association or the Minneapolis fire 
 77.10  department relief association, the commissioner shall allocate 
 77.11  that 34.2 percent of the aid as follows:  49 percent to the 
 77.12  Minneapolis teachers retirement fund association, if the 
 77.13  association has a five-year average, time-weighted rate of 
 77.14  investment return equal to or in excess of the combined return 
 77.15  for the same period of the state board of investment for the 
 77.16  basic retirement funds and the Minnesota postretirement 
 77.17  investment fund calculated using the formula promulgated under 
 77.18  section 11A.04, clause (11), 21 percent to the St. Paul teachers 
 77.19  retirement fund association, if the association has a five-year 
 77.20  average, time-weighted rate of investment return equal to or in 
 77.21  excess of the combined return for the same period of the state 
 77.22  board of investment for the basic retirement funds and the 
 77.23  Minnesota postretirement investment fund calculated using the 
 77.24  formula promulgated under section 11A.04, clause (11), and 30 
 77.25  percent as additional funding to support minimum fire state aid 
 77.26  for volunteer firefighter relief associations, with the 
 77.27  allocation made at the same time and under the same procedures 
 77.28  in subdivision 3.  In the event there is no actuarial accrued 
 77.29  unfunded liability in the Virginia fire department relief 
 77.30  association, the commissioner shall allocate that 1.3 percent of 
 77.31  the aid as follows:  49 percent to the Minneapolis teachers 
 77.32  retirement fund association, if the association has a five-year 
 77.33  average, time-weighted rate of investment return equal to or in 
 77.34  excess of the combined return for the same period of the state 
 77.35  board of investment for the basic retirement funds and the 
 77.36  Minnesota postretirement investment fund calculated using the 
 78.1   formula promulgated under section 11A.04, clause (11), 21 
 78.2   percent to the St. Paul teachers retirement fund association, if 
 78.3   the association has a five-year average, time-weighted rate of 
 78.4   investment return equal to or in excess of the combined return 
 78.5   for the same period of the state board of investment for the 
 78.6   basic retirement funds and the Minnesota postretirement 
 78.7   investment fund calculated using the formula promulgated under 
 78.8   section 11A.04, clause (11), and 30 percent as additional 
 78.9   funding to support minimum fire state aid for volunteer 
 78.10  firefighter relief associations, with the allocation made at the 
 78.11  same time and under the same procedures in subdivision 3.  
 78.12     (d) The amounts required under this subdivision are 
 78.13  annually appropriated to the commissioner of revenue. 
 78.14     Sec. 13.  Minnesota Statutes 1998, section 423A.02, 
 78.15  subdivision 2, is amended to read: 
 78.16     Subd. 2.  [CONTINUED ELIGIBILITY.] A municipality that has 
 78.17  qualified for amortization state aid under subdivision 1 on 
 78.18  December 31, 1984, and has an additional municipal contribution 
 78.19  payable under section 353A.09, subdivision 5, paragraph (b), as 
 78.20  of the most recent December 31, continues upon application to be 
 78.21  entitled to receive amortization state aid under subdivision 1 
 78.22  and supplementary amortization state aid under subdivision 1a, 
 78.23  after the local police or salaried firefighters' relief 
 78.24  association has been consolidated into the public employees 
 78.25  police and fire fund.  If a municipality loses entitlement for 
 78.26  amortization state aid and supplementary amortization state aid 
 78.27  in any year because of not having an additional municipal 
 78.28  contribution, the municipality is not entitled to the aid 
 78.29  amounts in any subsequent year.  If the actuarial assumptions 
 78.30  specified in section 356.215 are changed in 1997, and the change 
 78.31  results in a municipality having an additional municipal 
 78.32  contribution, and the municipality had previously lost 
 78.33  entitlement for amortization aid and supplementary amortization 
 78.34  due to not having an additional municipal contribution, then the 
 78.35  municipality is again entitled to receive amortization aid and 
 78.36  supplementary amortization aid in the same amount as it 
 79.1   previously received.  A municipality that received amortization 
 79.2   aid in 1999 and is required to make an additional municipal 
 79.3   contribution under section 353.665, subdivision 8, continues to 
 79.4   qualify for the amortization state aid and the supplemental 
 79.5   amortization aid for the duration of the required additional 
 79.6   contribution. 
 79.7      Sec. 14.  Minnesota Statutes 1998, section 423A.02, is 
 79.8   amended by adding a subdivision to read: 
 79.9      Subd. 4.  [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 
 79.10  total of amortization aid, supplemental amortization aid, and 
 79.11  additional amortization aid under this section payable to a 
 79.12  municipality to which section 353.665, subdivision 8, paragraph 
 79.13  (b), applies, may not exceed the amount of the additional 
 79.14  municipal contribution payable by an individual municipality 
 79.15  under section 353.665, subdivision 8, paragraph (b). 
 79.16     (b) Any aid amount in excess of the limit under this 
 79.17  subdivision for an individual municipality must be redistributed 
 79.18  to the other municipalities to which section 353.665, 
 79.19  subdivision 8, paragraph (b), applies.  The excess aid must be 
 79.20  distributed in proportion to each municipality's additional 
 79.21  municipal contribution under section 353.665, subdivision 8, 
 79.22  paragraph (b). 
 79.23     (c) When the total aid for each municipality under this 
 79.24  section equals the limit under paragraph (a), any aid in excess 
 79.25  of the limit must be redistributed under subdivisions 1, 1a, and 
 79.26  1b. 
 79.27     Sec. 15.  [1999 PERA-P&F ACTUARIAL VALUATION.] 
 79.28     (a) As of July 1, 1999, no actuarial valuations of the 
 79.29  local police and fire consolidation accounts in existence before 
 79.30  March 1, 1999, are required. 
 79.31     (b) The actuary retained by the legislative commission on 
 79.32  pensions and retirement shall prepare all calculations required 
 79.33  under Minnesota Statutes, section 353.665, and shall present 
 79.34  them to the commission in a separate report. 
 79.35     (c) The calculated actuarial accrued liability of the 
 79.36  public employees police and fire plan for July 1, 1999, must 
 80.1   contain all liabilities associated with the former local police 
 80.2   and fire consolidation accounts affected by Minnesota Statutes, 
 80.3   section 353.665. 
 80.4      (d) The asset value of the public employees police and fire 
 80.5   plan for July 1, 1999, is the sum of the following: 
 80.6      (1) the current assets of the public employees police and 
 80.7   fire plan as of June 30, 1999, without reference to any local 
 80.8   consolidation accounts in existence on March 1, 1999; 
 80.9      (2) the amount of assets transferred from the Minnesota 
 80.10  postretirement investment fund with respect to local 
 80.11  consolidation accounts under Minnesota Statutes, section 
 80.12  353.665, subdivision 3; 
 80.13     (3) that portion of the market value of assets of the local 
 80.14  consolidation accounts after subtracting the amount in clause (2)
 80.15  determined by multiplying the total by the ratio that the 
 80.16  current asset value of public employee police and fire fund 
 80.17  assets other than the participation in the Minnesota 
 80.18  postretirement investment fund as of June 30, 1999, without 
 80.19  reference to any local consolidation accounts in existence on 
 80.20  March 1, 1999, bears to the market value of the same assets; and 
 80.21     (4) a receivable amount equal to the present value of the 
 80.22  future additional municipal contributions required under 
 80.23  Minnesota Statutes, section 353.665, subdivision 8, paragraph 
 80.24  (b). 
 80.25     Sec. 16.  [REPEALER.] 
 80.26     Minnesota Statutes 1998, section 353.65, subdivision 3a, is 
 80.27  repealed. 
 80.28     Sec. 17.  [EFFECTIVE DATE.] 
 80.29     Sections 1 to 10 and 12 to 16 are effective on the day 
 80.30  following final enactment.  Section 11 is effective on July 1, 
 80.31  2000. 
 80.32                             ARTICLE 9
 80.33                   MINIMUM VOLUNTEER FIREFIGHTER  
 80.34                      STATE AID AMOUNT CHANGES  
 80.35     Section 1.  Minnesota Statutes 1998, section 69.021, 
 80.36  subdivision 7, is amended to read: 
 81.1      Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
 81.2   MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 
 81.3   shall apportion the fire state aid relative to the premiums 
 81.4   reported on the Minnesota Firetown Premium Reports filed under 
 81.5   this chapter to each municipality and/or firefighters' relief 
 81.6   association.  
 81.7      (b) The commissioner shall calculate an initial fire state 
 81.8   aid allocation amount for each municipality or fire department 
 81.9   under paragraph (c) and a minimum fire state aid allocation 
 81.10  amount for each municipality or fire department under paragraph 
 81.11  (d).  The municipality or fire department must receive the 
 81.12  larger fire state aid amount. 
 81.13     (c) The initial fire state aid allocation amount is the 
 81.14  amount available for apportionment as fire state aid under 
 81.15  subdivision 5, without inclusion of any additional funding 
 81.16  amount to support a minimum fire state aid amount under section 
 81.17  423A.02, subdivision 3, allocated one-half in proportion to the 
 81.18  population as shown in the last official statewide federal 
 81.19  census for each fire town and one-half in proportion to the 
 81.20  market value of each fire town, including (1) the market value 
 81.21  of tax exempt property and (2) the market value of natural 
 81.22  resources lands receiving in lieu payments under sections 
 81.23  477A.11 to 477A.14, but excluding the market value of minerals.  
 81.24  In the case of incorporated or municipal fire departments 
 81.25  furnishing fire protection to other cities, towns, or townships 
 81.26  as evidenced by valid fire service contracts filed with the 
 81.27  commissioner, the distribution must be adjusted proportionately 
 81.28  to take into consideration the crossover fire protection 
 81.29  service.  Necessary adjustments shall be made to subsequent 
 81.30  apportionments.  In the case of municipalities or independent 
 81.31  fire departments qualifying for the aid, the commissioner shall 
 81.32  calculate the state aid for the municipality or relief 
 81.33  association on the basis of the population and the market value 
 81.34  of the area furnished fire protection service by the fire 
 81.35  department as evidenced by duly executed and valid fire service 
 81.36  agreements filed with the commissioner.  If one or more fire 
 82.1   departments are furnishing contracted fire service to a city, 
 82.2   town, or township, only the population and market value of the 
 82.3   area served by each fire department may be considered in 
 82.4   calculating the state aid and the fire departments furnishing 
 82.5   service shall enter into an agreement apportioning among 
 82.6   themselves the percent of the population and the market value of 
 82.7   each service area.  The agreement must be in writing and must be 
 82.8   filed with the commissioner. 
 82.9      (d) The minimum fire state aid allocation amount is the 
 82.10  amount in addition to the initial fire state allocation amount 
 82.11  that is derived from any additional funding amount to support a 
 82.12  minimum fire state aid amount under section 423A.02, subdivision 
 82.13  3, and allocated to municipalities with volunteer firefighter 
 82.14  relief associations based on the number of active volunteer 
 82.15  firefighters who are members of the relief association as 
 82.16  reported in the annual financial reporting for the calendar year 
 82.17  1993 to the office of the state auditor, but not to exceed 30 
 82.18  active volunteer firefighters, so that all municipalities or 
 82.19  fire departments with volunteer firefighter relief associations 
 82.20  receive in total at least a minimum fire state aid amount per 
 82.21  1993 active volunteer firefighter to a maximum of 30 
 82.22  firefighters.  If a relief association did not exist in calendar 
 82.23  year 1993, the number of active volunteer firefighters who are 
 82.24  members of the relief association as reported in the annual 
 82.25  financial reporting for calendar year 1998 to the office of the 
 82.26  state auditor, but not to exceed 30 active volunteer 
 82.27  firefighters, shall be used in this determination. 
 82.28     (e) The fire state aid must be paid to the treasurer of the 
 82.29  municipality where the fire department is located and the 
 82.30  treasurer of the municipality shall, within 30 days of receipt 
 82.31  of the fire state aid, transmit the aid to the relief 
 82.32  association if the relief association has filed a financial 
 82.33  report with the treasurer of the municipality and has met all 
 82.34  other statutory provisions pertaining to the aid apportionment. 
 82.35     (f) The commissioner may make rules to permit the 
 82.36  administration of the provisions of this section.  Any 
 83.1   adjustments needed to correct prior misallocations must be made 
 83.2   to subsequent apportionments. 
 83.3      Sec. 2.  [EFFECTIVE DATE.] 
 83.4      Section 1 is effective on the day following final enactment 
 83.5   and applies to the first fire state aid and minimum fire state 
 83.6   aid allocation occurring after that date. 
 83.7                              ARTICLE 10
 83.8                    METROPOLITAN COUNCIL TARGETED  
 83.9                      EARLY RETIREMENT INCENTIVE  
 83.10     Section 1.  [RETIREMENT INCENTIVE.] 
 83.11     The metropolitan council may offer its eligible employees, 
 83.12  as specified in sections 2 and 3, the retirement incentive 
 83.13  provided in section 4. 
 83.14     Sec. 2.  [INCLUSION.] 
 83.15     If the metropolitan council chooses to offer the retirement 
 83.16  incentive under section 4, it must designate the positions or 
 83.17  group of positions within the council divisions specified in 
 83.18  section 3, clause (1), that will qualify for participation in 
 83.19  its retirement incentive program and may exclude otherwise 
 83.20  eligible employees.  After initially designating the qualified 
 83.21  positions or group of positions, the council may at any time 
 83.22  modify its designation in order to further limit the qualified 
 83.23  positions or group of positions. 
 83.24     Sec. 3.  [ELIGIBILITY.] 
 83.25     An employee of the metropolitan council is eligible to 
 83.26  participate in the retirement incentive program if the employee: 
 83.27     (1) was employed in the environmental services, community 
 83.28  development, or regional administration divisions of the council 
 83.29  on January 1, 1999; 
 83.30     (2) notifies, on or after the effective date of this act, 
 83.31  the council's regional administrator in writing of the 
 83.32  employee's intention to retire, the plan or plans from which the 
 83.33  individual will retire, and the employee's date of separation 
 83.34  from employment with the council; 
 83.35     (3) is, on the date the council receives the employee's 
 83.36  written notice of intention to retire, within the positions or 
 84.1   group of positions then currently designated by the council 
 84.2   under section 2; 
 84.3      (4) has, on the date of retirement, at least 25 years of 
 84.4   combined allowable service in any covered fund or funds listed 
 84.5   in Minnesota Statutes, section 356.30, subdivision 3; 
 84.6      (5) is, on the date of retirement, at least 55 years of 
 84.7   age; 
 84.8      (6) is, upon retirement, immediately eligible for a 
 84.9   retirement annuity from a defined benefit plan listed in 
 84.10  Minnesota Statutes, section 356.30, subdivision 3; and 
 84.11     (7) has a retirement annuity accrual date in the applicable 
 84.12  plan or plans on or after July 1, 1999, and before July 1, 2000. 
 84.13     Sec. 4.  [RETIREMENT INCENTIVE.] 
 84.14     Subdivision 1.  [FORMULA INCREASE.] For an eligible 
 84.15  employee who elects to participate in the retirement incentive 
 84.16  program, the multiplier percentage or percentages used to 
 84.17  calculate the retirement annuity from each defined benefit plan 
 84.18  listed in Minnesota Statutes, section 356.30, subdivision 3, 
 84.19  from which the employee is eligible to receive a retirement 
 84.20  annuity must be increased by .25 percentage points for each year 
 84.21  of allowable service, and pro rata for completed months less 
 84.22  than a full year, in the applicable plan or plans.  If the 
 84.23  eligible employee has more than 30 years of combined service in 
 84.24  covered plans, the .25 percentage point increase applies only to 
 84.25  the first 30 years of allowable service in such covered funds. 
 84.26     Subd. 2.  [CERTIFICATION OF ELIGIBILITY.] Before applying 
 84.27  the formula increase in subdivision 1, the applicable retirement 
 84.28  plan or plans must receive a certification from the council's 
 84.29  regional administrator that the employee meets the eligibility 
 84.30  criteria in section 3, clauses (1) to (3). 
 84.31     Subd. 3.  [PAYMENT OF ENHANCED RETIREMENT COST.] (a) If the 
 84.32  metropolitan council chooses to offer a retirement incentive 
 84.33  under this section, it must make an additional employer 
 84.34  contribution or contributions as specified in paragraph (b) to 
 84.35  the applicable retirement plan or plans from which the eligible 
 84.36  individual retired under the incentive program. 
 85.1      (b) The additional employer contribution for the applicable 
 85.2   employee to each applicable plan is an amount equal to the 
 85.3   difference in the actuarial present value of the annuity payable 
 85.4   by the plan for the employee, with and without the retirement 
 85.5   incentive under subdivision 1. 
 85.6      (c) An additional employer contribution under paragraph (b) 
 85.7   must be paid within 60 days from the effective date of the 
 85.8   applicable annuity for the eligible employee who elects to 
 85.9   participate in the retirement incentive.  
 85.10     Sec. 5.  [LIMIT ON REHIRING AND FUTURE SERVICES.] 
 85.11     The metropolitan council may not rehire or contract for 
 85.12  services from an employee who retires under this act. 
 85.13     Sec. 6.  [APPLICATION OF OTHER LAWS.] 
 85.14     Unilateral implementation of retirement incentives under 
 85.15  this act by the metropolitan council is not an unfair labor 
 85.16  practice for purposes of Minnesota Statutes, chapter 179A. 
 85.17     Sec. 7.  [EFFECTIVE DATE.] 
 85.18     Sections 1 to 6 are effective on the day following final 
 85.19  enactment. 
 85.20                             ARTICLE 11
 85.21                   MISCELLANEOUS PENSION CHANGES 
 85.22     Section 1.  Minnesota Statutes 1998, section 3A.02, 
 85.23  subdivision 1b, is amended to read: 
 85.24     Subd. 1b.  [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 
 85.25  separation from service after the beginning of the 1981 
 85.26  legislative session, a former member of the legislature who has 
 85.27  attained the age of at least 60 years set by the board of 
 85.28  directors of the Minnesota state retirement system and who is 
 85.29  otherwise qualified in accordance with subdivision 1 is entitled 
 85.30  upon making written application on forms supplied by the 
 85.31  director to a retirement allowance in an amount equal to the 
 85.32  retirement allowance specified in subdivision 1 reduced so that 
 85.33  the reduced annuity is the actuarial equivalent of the annuity 
 85.34  that would be payable if the former member of the legislature 
 85.35  deferred receipt of the annuity and the annuity amount were 
 85.36  augmented at an annual rate of three percent compounded annually 
 86.1   from the date the annuity begins to accrue until age 62. 
 86.2      (b) The age set by the board of directors under paragraph 
 86.3   (a) cannot be less than the early retirement age under section 
 86.4   352.116, subdivision 1a. 
 86.5      (c) If there is an actuarial cost to the plan of resetting 
 86.6   the early retirement age under paragraph (a), the retired 
 86.7   legislator is required to pay an additional amount to cover the 
 86.8   full actuarial value. 
 86.9      (d) Authority for the board of directors to reset the early 
 86.10  retirement age expires on January 15, 2000, and the early 
 86.11  reduced retirement allowance age thereafter is age 60. 
 86.12     (e) The executive director of the Minnesota state 
 86.13  retirement system shall report to the legislative commission on 
 86.14  pensions and retirement on the utilization of this provision on 
 86.15  or before September 1, 2000. 
 86.16     Sec. 2.  Minnesota Statutes 1998, section 122A.46, 
 86.17  subdivision 2, is amended to read: 
 86.18     Subd. 2.  [LEAVE OF ABSENCE.] The board of any district may 
 86.19  grant an extended leave of absence without salary to any full- 
 86.20  or part-time elementary or secondary teacher who has been 
 86.21  employed by the district for at least five years and has at 
 86.22  least ten years of allowable service, as defined in section 
 86.23  354.05, subdivision 13, or the bylaws of the appropriate 
 86.24  retirement association or ten years of full-time teaching 
 86.25  service in Minnesota public elementary and secondary schools.  
 86.26  The maximum duration of an extended leave of absence pursuant to 
 86.27  under this section must be determined by mutual agreement of the 
 86.28  board and the teacher at the time the leave is granted and shall 
 86.29  be at least three but no more than five years.  An extended 
 86.30  leave of absence pursuant to under this section shall be taken 
 86.31  by mutual consent of the board and the teacher.  If the school 
 86.32  board denies a teacher's request, it must provide reasonable 
 86.33  justification for the denial. 
 86.34     Sec. 3.  Minnesota Statutes 1998, section 352.03, 
 86.35  subdivision 1, is amended to read: 
 86.36     Subdivision 1.  [MEMBERSHIP OF BOARD; ELECTION; TERM.] The 
 87.1   policy-making function of the system is vested in a board of 11 
 87.2   members, who must be known as the board of directors.  This 
 87.3   board shall consist of three members appointed by the governor, 
 87.4   one of whom must be a constitutional officer or appointed state 
 87.5   official and two of whom must be public members knowledgeable in 
 87.6   pension matters, four state employees elected by state employees 
 87.7   covered by the system excluding employees in categories 
 87.8   specifically authorized to designate or elect a member by this 
 87.9   subdivision, one employee of the transit operating division of 
 87.10  the metropolitan council's transit commission operations or its 
 87.11  successor agency designated by the executive committee of the 
 87.12  labor organization that is the exclusive bargaining agent 
 87.13  representing employees of the transit division, one member of 
 87.14  the state patrol retirement fund elected by members of that fund 
 87.15  at a time and in a manner fixed by the board, one employee 
 87.16  covered by the correctional employees plan elected by employees 
 87.17  covered by that plan, and one retired employee elected by 
 87.18  disabled and retired employees of all plans administered by the 
 87.19  system at a time and in a manner to be fixed by the board.  Two 
 87.20  state employee members, whose terms of office begin on the first 
 87.21  Monday in May after their election, must be elected biennially.  
 87.22  Elected members and the appointed member of the metropolitan 
 87.23  council's office of transit operations hold office for a term of 
 87.24  four years, except the retired member whose term is two years, 
 87.25  and until their successors are elected or appointed, and have 
 87.26  qualified.  An employee of the system is not eligible for 
 87.27  membership on the board of directors.  A state employee on leave 
 87.28  of absence is not eligible for election or reelection to 
 87.29  membership on the board of directors.  The term of any board 
 87.30  member who is on leave for more than six months automatically 
 87.31  ends on expiration of this period the term of office. 
 87.32     Sec. 4.  Minnesota Statutes 1998, section 354.05, 
 87.33  subdivision 40, is amended to read: 
 87.34     Subd. 40.  [TIMELY RECEIPT.] An application, payment, 
 87.35  return, claim, or other document that is not personally 
 87.36  delivered to the association on or before the applicable due 
 88.1   date is considered to be a timely receipt if officially 
 88.2   postmarked received on or before the due date or if delivered or 
 88.3   filed under section 645.151. 
 88.4      Sec. 5.  Minnesota Statutes 1998, section 354.06, 
 88.5   subdivision 1, is amended to read: 
 88.6      Subdivision 1.  The management of the association is vested 
 88.7   in a board of eight trustees known as the board of trustees of 
 88.8   the teachers retirement association.  It is composed of the 
 88.9   following persons:  the commissioner of children, families, and 
 88.10  learning, the commissioner of finance, a representative of the 
 88.11  Minnesota school boards association, four members of the 
 88.12  association elected by the members of the association, and one 
 88.13  retiree elected by the retirees of the association.  The five 
 88.14  elected members of the board of trustees must be chosen by mail 
 88.15  ballot in a manner fixed by the board of trustees of the 
 88.16  association.  In every odd-numbered year there shall be elected 
 88.17  two members of the association to the board of trustees for 
 88.18  terms of four years commencing on the first of July next 
 88.19  succeeding their election.  In every other odd-numbered year one 
 88.20  retiree of the association must be elected to the board of 
 88.21  trustees for a term of two four years commencing on the first of 
 88.22  July next succeeding the election.  The filing of candidacy for 
 88.23  a retiree election must include a petition of endorsement signed 
 88.24  by at least ten retirees of the association.  Each election must 
 88.25  be completed by June first of each succeeding odd-numbered 
 88.26  year.  In the case of elective members, any vacancy must be 
 88.27  filled by appointment by the remainder of the board, and the 
 88.28  appointee shall serve until the members or retirees of the 
 88.29  association at the next regular election have elected a trustee 
 88.30  to serve for the unexpired term caused by the vacancy.  No 
 88.31  member or retiree may be appointed by the board, or elected by 
 88.32  the members of the association as a trustee, if the person is 
 88.33  not a member or retiree of the association in good standing at 
 88.34  the time of the appointment or election.  
 88.35     Sec. 6.  Minnesota Statutes 1998, section 354.10, 
 88.36  subdivision 4, is amended to read: 
 89.1      Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any 
 89.2   beneficiary designated by a retiree or member under section 
 89.3   354.05, subdivision 22, may be changed or revoked by the retiree 
 89.4   or member on a form provided by the executive director.  A 
 89.5   change or revocation made under this subdivision is valid only 
 89.6   if the properly completed form is received by the association 
 89.7   postmarked on or before the date of death of the retiree or the 
 89.8   member.  If a designated beneficiary dies before the retiree or 
 89.9   member designating the beneficiary, and a new beneficiary is not 
 89.10  designated, the retiree's or member's estate is the beneficiary. 
 89.11     Sec. 7.  Minnesota Statutes 1998, section 354C.11, is 
 89.12  amended to read: 
 89.13     354C.11 [COVERAGE.] 
 89.14     Subdivision 1.  [AUTHORIZATION.] Personnel Individuals 
 89.15  employed by the board of trustees of the Minnesota state 
 89.16  colleges and universities who are in the unclassified service of 
 89.17  the state, and who have completed at least two years of 
 89.18  employment by the board or a predecessor board with a full-time 
 89.19  contract are participants authorized to participate in the 
 89.20  supplemental retirement plan, effective on the next following 
 89.21  July 1, if the person is employed in an eligible after meeting 
 89.22  eligibility requirements specified in subdivision 2. 
 89.23     Subd. 2.  [ELIGIBILITY.] (a) An individual is a participant 
 89.24  in the supplemental retirement plan if the individual is 
 89.25  employed by the board of trustees in the unclassified service of 
 89.26  the state and has completed at least two years with a full-time 
 89.27  contract of applicable unclassified employment with the board or 
 89.28  an applicable predecessor board in any of the positions 
 89.29  specified in paragraph (b). 
 89.30     (b) Eligible positions or employment classifications are: 
 89.31     (1) an unclassified administrative position as defined in 
 89.32  section 354B.20, subdivision 6, or is employed in; 
 89.33     (2) an employment classification included in one of the 
 89.34  following collective bargaining units under section 179A.10, 
 89.35  subdivision 2: 
 89.36     (1) (i) the state university instructional unit; 
 90.1      (2) (ii) the community college instructional unit; 
 90.2      (3) (iii) the technical college instructional unit; and 
 90.3      (4) (iv) the state university administrative unit; or 
 90.4      (3) an unclassified employee of the board included in the 
 90.5   general professional unit or supervisory employees unit under 
 90.6   section 179A.10, subdivision 2. 
 90.7      Subd. 3.  [CONTINUING ELIGIBILITY AUTHORIZATION.] Once a 
 90.8   person qualifies for participation in the 
 90.9   supplemental retirement plan, all subsequent service by the 
 90.10  person as an unclassified employee of the state university 
 90.11  board, the state board for community colleges, the higher 
 90.12  education board, or the technical colleges board of trustees in 
 90.13  a position or employment classification listed in subdivision 2, 
 90.14  paragraph (b), is covered by the supplemental retirement plan. 
 90.15     Sec. 8.  [EFFECTIVE DATE.] 
 90.16     Sections 1 and 3 to 7 are effective on the day following 
 90.17  final enactment.  Section 2 is effective on July 1, 1999. 
 90.18                             ARTICLE 12 
 90.19                           OTHER CHANGES 
 90.20     Section 1.  Minnesota Statutes 1998, section 3.85, 
 90.21  subdivision 3, is amended to read: 
 90.22     Subd. 3.  [MEMBERSHIP.] The commission consists of six five 
 90.23  members of the senate appointed by the subcommittee on 
 90.24  committees of the committee on rules and administration and six 
 90.25  five members of the house of representatives appointed by the 
 90.26  speaker.  Members shall be appointed at the commencement of each 
 90.27  regular session of the legislature for a two-year term beginning 
 90.28  January 16 of the first year of the regular session.  Vacancies 
 90.29  that occur while the legislature is in session shall be filled 
 90.30  like regular appointments.  If the legislature is not in 
 90.31  session, senate vacancies shall be filled by the last 
 90.32  subcommittee on committees of the senate committee on rules and 
 90.33  administration or other appointing authority designated by the 
 90.34  senate rules, and house vacancies shall be filled by the last 
 90.35  speaker of the house, or if the speaker is not available, by the 
 90.36  last chair of the house rules committee. 
 91.1      Sec. 2.  [EFFECTIVE DATE.] 
 91.2      Section 1 is effective on the day following final enactment.