1.1                          A bill for an act 
  1.2             relating to state government; making changes in 
  1.3             certain retirement and related benefits affecting 
  1.4             higher education faculty and certain other state 
  1.5             employees; amending Minnesota Statutes 1998, sections 
  1.6             43A.27, subdivision 3; 136F.48; 354.445; 354.66, 
  1.7             subdivisions 1b, 1c, and 3; 354B.24, subdivision 3; 
  1.8             and 354B.25, subdivisions 2 and 3; proposing coding 
  1.9             for new law in Minnesota Statutes, chapter 354B. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1998, section 43A.27, 
  1.12  subdivision 3, is amended to read: 
  1.13     Subd. 3.  [RETIRED EMPLOYEES.] A person may elect to 
  1.14  purchase at personal expense individual and dependent hospital, 
  1.15  medical, and dental coverages if the person is: 
  1.16     (1) a retired employee of the state or an organization 
  1.17  listed in subdivision 2 or section 43A.24, subdivision 2, who, 
  1.18  at separation of service: 
  1.19     (i) is immediately eligible to receive an annuity under a 
  1.20  retirement program sponsored by the state or such organization 
  1.21  of the state and immediately meets the age and service 
  1.22  requirements in section 352.115, subdivision 1 is at least 55 
  1.23  years old and has at least five years of state service, or has 
  1.24  at least 30 years of state service regardless of age; and 
  1.25     (ii) has five years of service or meets the service 
  1.26  requirement of the collective bargaining agreement or plan, 
  1.27  whichever is if these requirements are greater than the 
  2.1   requirements in clause (i); or 
  2.2      (2) a retired employee of the state who is at least 50 
  2.3   years of age and has at least 15 years of state service.  
  2.4      The commissioner shall offer at least one plan which is 
  2.5   actuarially equivalent to those made available through 
  2.6   collective bargaining agreements or plans established pursuant 
  2.7   to section 43A.18 to employees in positions equivalent to that 
  2.8   from which retired.  A spouse of a deceased retired employee who 
  2.9   received an annuity under a state retirement program may 
  2.10  purchase the coverage listed in this subdivision if the spouse 
  2.11  was a dependent under the retired employee's coverage at the 
  2.12  time of the employee's death.  Coverages must be coordinated 
  2.13  with relevant health insurance benefits provided through the 
  2.14  federally sponsored Medicare program.  Until the retired 
  2.15  employee reaches age 65, the retired employee and dependents 
  2.16  must be pooled in the same group as active employees for 
  2.17  purposes of establishing premiums and coverage for hospital, 
  2.18  medical, and dental insurance.  Coverage for retired employees 
  2.19  and their dependents may not discriminate on the basis of 
  2.20  evidence of insurability or preexisting conditions unless 
  2.21  identical conditions are imposed on active employees in the 
  2.22  group that the employee left.  Appointing authorities shall 
  2.23  provide notice to employees no later than the effective date of 
  2.24  their retirement of the right to exercise the option provided in 
  2.25  this subdivision.  The retired employee must notify the 
  2.26  commissioner or designee of the commissioner within 30 days 
  2.27  after the effective date of the retirement of intent to exercise 
  2.28  this option. 
  2.29     Sec. 2.  Minnesota Statutes 1998, section 136F.48, is 
  2.30  amended to read: 
  2.31     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
  2.32     (a) This section applies to a person who:  
  2.33     (1) retires from the state university system, the technical 
  2.34  college system, or the community college system, or from a 
  2.35  successor system employing state university, technical college, 
  2.36  or community college faculty, with at least ten years of 
  3.1   combined service credit in a system under the jurisdiction of 
  3.2   the board of trustees of the Minnesota state colleges and 
  3.3   universities; 
  3.4      (2) was employed on a full-time basis or on a part-time 
  3.5   basis under sections 354.66 or 354B.31 immediately preceding 
  3.6   retirement as a state university, technical college, or 
  3.7   community college faculty member or as an unclassified 
  3.8   administrator in one of those systems; 
  3.9      (3) begins drawing a retirement benefit from the individual 
  3.10  retirement account plan or an annuity from the teachers 
  3.11  retirement association, the Minnesota state retirement system, 
  3.12  or from a first class city teacher plan; and 
  3.13     (4) returns to work within one year on not less than a 
  3.14  one-third time basis and not more than a two-thirds time basis 
  3.15  in the system from which the person retired under an agreement 
  3.16  in which the person may not earn a salary of more than $35,000 
  3.17  in a calendar year from employment after retirement in the 
  3.18  system from which the person retired.  
  3.19     (b) Initial participation, the amount of time worked, and 
  3.20  the duration of participation under this section must be 
  3.21  mutually agreed upon by the president of the institution where 
  3.22  the person returns to work and the employee.  The president may 
  3.23  require up to one-year notice of intent to participate in the 
  3.24  program as a condition of participation under this section.  The 
  3.25  president shall determine the time of year the employee shall 
  3.26  work.  The employer or the president may not require a person to 
  3.27  waive any rights under a collective bargaining agreement as a 
  3.28  condition of participation under this section.  
  3.29     (c) For a person eligible under paragraphs (a) and (b), the 
  3.30  employing board shall make the same employer contribution for 
  3.31  hospital, medical, and dental benefits as would be made if the 
  3.32  person were employed full time.  
  3.33     (d) For work under paragraph (a), a person must receive a 
  3.34  percentage of the person's salary at the time of retirement that 
  3.35  is equal to the percentage of time the person works compared to 
  3.36  full-time work.  
  4.1      (e) If a collective bargaining agreement covering a person 
  4.2   provides for an early retirement incentive that is based on age, 
  4.3   the incentive provided to the person must be based on the 
  4.4   person's age at the time employment under this section ends.  
  4.5   However, the salary used to determine the amount of the 
  4.6   incentive must be the salary that would have been paid if the 
  4.7   person had been employed full time for the year immediately 
  4.8   preceding the time employment under this section ends. 
  4.9      (f) A person who returns to work under this section is a 
  4.10  member of the appropriate bargaining unit and is covered by the 
  4.11  appropriate collective bargaining contract.  Except as provided 
  4.12  in this section, the person's coverage is subject to any part of 
  4.13  the contract limiting rights of part-time employees. 
  4.14     Sec. 3.  Minnesota Statutes 1998, section 354.445, is 
  4.15  amended to read: 
  4.16     354.445 [NO ANNUITY REDUCTION.] 
  4.17     (a) The annuity reduction provisions of section sections 
  4.18  354.44, subdivision 5, and 352.115, subdivision 10, do not apply 
  4.19  to a person who: 
  4.20     (1) retires from the state university system, technical 
  4.21  college system, or the community college system, or from a 
  4.22  successor system employing state university, technical college, 
  4.23  or community college faculty, with at least ten years of 
  4.24  combined service credit in a system under the jurisdiction of 
  4.25  the board of trustees of the Minnesota state colleges and 
  4.26  universities; 
  4.27     (2) was employed on a full-time basis immediately preceding 
  4.28  retirement as a state university, technical college, or 
  4.29  community college faculty member or as an unclassified 
  4.30  administrator in one of these systems; 
  4.31     (3) begins drawing an annuity from the teachers retirement 
  4.32  association or the Minnesota state retirement system; and 
  4.33     (4) returns to work on not less than a one-third time basis 
  4.34  and not more than a two-thirds time basis in the system from 
  4.35  which the person retired under an agreement in which the person 
  4.36  may not earn a salary of more than $35,000 in a calendar year 
  5.1   from employment after retirement in the system from which the 
  5.2   person retired. 
  5.3      (b) Initial participation, the amount of time worked, and 
  5.4   the duration of participation under this section must be 
  5.5   mutually agreed upon by the president of the institution where 
  5.6   the person returns to work and the employee.  The president may 
  5.7   require up to one-year notice of intent to participate in the 
  5.8   program as a condition of participation under this section.  The 
  5.9   president shall determine the time of year the employee shall 
  5.10  work.  The employer or the president may not require a person to 
  5.11  waive any rights under a collective bargaining agreement as a 
  5.12  condition of participation under this section.  
  5.13     (c) Notwithstanding any law to the contrary, a person 
  5.14  eligible under paragraphs (a) and (b) may not earn further 
  5.15  service credit in the teachers retirement association and is not 
  5.16  eligible to participate in the individual retirement account 
  5.17  plan or the supplemental retirement plan established in chapter 
  5.18  354B as a result of service under this section.  No employer or 
  5.19  employee contribution to any of these plans may be made on 
  5.20  behalf of such a person. 
  5.21     (d) For a person eligible under paragraphs (a) and (b) who 
  5.22  earns more than $35,000 in a calendar year from employment after 
  5.23  retirement in the system from which the person retired, the 
  5.24  annuity reduction provisions of section sections 354.44, 
  5.25  subdivision 5, and 352.115, subdivision 10, apply only to income 
  5.26  over $35,000. 
  5.27     (e) A person who returns to work under this section is a 
  5.28  member of the appropriate bargaining unit and is covered by the 
  5.29  appropriate collective bargaining contract.  Except as provided 
  5.30  in this section, the person's coverage is subject to any part of 
  5.31  the contract limiting rights of part-time employees. 
  5.32     Sec. 4.  Minnesota Statutes 1998, section 354.66, 
  5.33  subdivision 1b, is amended to read: 
  5.34     Subd. 1b.  [DISTRICT, DEFINED.] For purposes of this 
  5.35  section, the term "district" means a school district, the 
  5.36  community and the Minnesota state college system and the state 
  6.1   university system. 
  6.2      Sec. 5.  Minnesota Statutes 1998, section 354.66, 
  6.3   subdivision 1c, is amended to read: 
  6.4      Subd. 1c.  [PARTICIPATION.] Participation in the part-time 
  6.5   mobility program must be based on a full fiscal year and the 
  6.6   employment pattern of the teacher during the most recent fiscal 
  6.7   year.  For a teacher in the Minnesota state college and 
  6.8   universities system who teaches only during the first semester 
  6.9   in an academic year and retires immediately after the first 
  6.10  semester, participation in the part-time mobility program must 
  6.11  be based on one-half of a full fiscal year and the employment 
  6.12  pattern of the teacher during the most recent one-half of the 
  6.13  most recent fiscal year.  A teacher covered by this subdivision 
  6.14  is eligible for a retirement annuity immediately upon retirement 
  6.15  following the first semester. 
  6.16     Sec. 6.  Minnesota Statutes 1998, section 354.66, 
  6.17  subdivision 3, is amended to read: 
  6.18     Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] For 
  6.19  purposes of this section, the term "part-time teaching position" 
  6.20  shall mean a teaching position within the district in which the 
  6.21  teacher is employed for at least 50 full days, or for a 
  6.22  Minnesota state college and university system teacher teaching 
  6.23  only the first semester of an academic year, at least 25 full 
  6.24  days or a fractional equivalent thereof as prescribed in section 
  6.25  354.091, and for which the teacher is compensated in an amount 
  6.26  not exceeding 80 percent of the compensation established by the 
  6.27  board for a full-time teacher with identical education and 
  6.28  experience with the employing unit.  The compensation of a 
  6.29  teacher in the state colleges and universities system may exceed 
  6.30  the 80 percent limit if the teacher does not teach just one of 
  6.31  the three quarters in the system's full school year, provided no 
  6.32  additional services are performed while the teacher participates 
  6.33  in the program. 
  6.34     Sec. 7.  Minnesota Statutes 1998, section 354B.24, 
  6.35  subdivision 3, is amended to read: 
  6.36     Subd. 3.  [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) In 
  7.1   addition to contributions required by subdivision 2, a plan 
  7.2   participant on an approved sabbatical leave may shall make an 
  7.3   optional additional a member contribution.  The optional 
  7.4   additional member may not exceed based on the applicable member 
  7.5   contribution rate specified in section 354B.23, subdivision 1, 
  7.6   applied to the difference between the amount of salary actually 
  7.7   received during the sabbatical leave and the amount of full-time 
  7.8   salary actually received for a comparable period of an identical 
  7.9   length to the member would have received if not on sabbatical 
  7.10  leave that occurred during the fiscal year immediately preceding 
  7.11  the sabbatical leave.  
  7.12     (b) Any optional additional member contribution must be 
  7.13  made before the last day of the fiscal year next following the 
  7.14  fiscal year in which the sabbatical leave terminates.  The 
  7.15  optional additional member contribution may not include interest 
  7.16  through payroll deduction as though the member were employed 
  7.17  full-time.  
  7.18     (c) When an optional additional member contribution is 
  7.19  made, the employing unit must make the employer contribution at 
  7.20  the rate set forth in section 354B.23, subdivision 3, on the 
  7.21  salary that was the basis for the optional additional member 
  7.22  contribution under paragraph (a). 
  7.23     (d) An employer contribution required under this section 
  7.24  must be made no later than 60 days after the date on which the 
  7.25  optional additional member contribution was made. 
  7.26     Sec. 8.  Minnesota Statutes 1998, section 354B.25, 
  7.27  subdivision 2, is amended to read: 
  7.28     Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS.] (a) 
  7.29  The plan administrator shall arrange for the purchase of fixed 
  7.30  annuity contracts, variable annuity contracts, a combination of 
  7.31  fixed and variable annuity contracts, or custodial accounts from 
  7.32  financial institutions which have been selected by the state 
  7.33  board of investment under subdivision 3, as the investment 
  7.34  vehicle for the retirement coverage of plan participants and to 
  7.35  provide retirement benefits to plan participants.  Custodial 
  7.36  accounts from financial institutions shall include open-end 
  8.1   investment companies registered under the federal Investment 
  8.2   Company Act of 1940, as amended.  At least one of the vendors 
  8.3   selected by the state board of investment shall offer 
  8.4   participants direct access to lower expense and "no load" mutual 
  8.5   funds, as those terms are defined by the federal securities and 
  8.6   exchange commission.  
  8.7      (b) The annuity contracts or accounts must be purchased 
  8.8   with contributions under section 354B.23 or with money or assets 
  8.9   otherwise provided by law by authority of the board and deemed 
  8.10  acceptable by the applicable financial institution. 
  8.11     (c) In addition to contracts and accounts from financial 
  8.12  institutions, the Minnesota supplemental investment fund 
  8.13  established under section 11A.17 and administered by the state 
  8.14  board of investment is one of the investment options for the 
  8.15  individual retirement account plan. 
  8.16     Sec. 9.  Minnesota Statutes 1998, section 354B.25, 
  8.17  subdivision 3, is amended to read: 
  8.18     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] (a) The 
  8.19  financial institutions provided for under subdivision 2 must be 
  8.20  selected by the state board of investment.  Financial 
  8.21  institutions include open-end investment companies registered 
  8.22  under the federal Investment Company Act of 1940, as amended. 
  8.23     (b) The state board of investment may select up to five 
  8.24  financial institutions to provide annuity contracts, custodial 
  8.25  accounts, or a combination, as investment options for the 
  8.26  individual retirement account plan in addition to the Minnesota 
  8.27  supplemental investment fund.  In making its selection, at a 
  8.28  minimum, the state board of investment shall consider at least 
  8.29  the following: 
  8.30     (1) the experience and ability of the financial institution 
  8.31  to provide retirement and death benefits that are suited to meet 
  8.32  the needs of plan participants; 
  8.33     (2) the relationship of those retirement and death benefits 
  8.34  provided by the financial institution to their cost; and 
  8.35     (3) the financial strength and stability of the financial 
  8.36  institution; and 
  9.1      (4) the fees and expenses associated with the investment 
  9.2   products in comparison to other products of like risk and rates 
  9.3   of return. 
  9.4      (c) After selecting a financial institution, the state 
  9.5   board of investment must periodically review each financial 
  9.6   institution selected under paragraph (b).  The periodic review 
  9.7   must occur at least every three years.  In making its review, 
  9.8   the state board of investment may retain appropriate consulting 
  9.9   services to assist it in its periodic review, establish a budget 
  9.10  for the cost of the periodic review process, and charge a 
  9.11  proportional share of these costs to the reviewed financial 
  9.12  institution. 
  9.13     (d) Contracts with financial institutions under this 
  9.14  section must be executed by the board and must be approved by 
  9.15  the state board of investment before execution. 
  9.16     (e) The state board of investment shall also establish 
  9.17  policies and procedures under section 11A.04, clause (2), to 
  9.18  carry out the provisions of this subdivision. 
  9.19     Sec. 10.  [354B.31] [IRAP PART-TIME TEACHER MOBILITY 
  9.20  PROGRAM.] 
  9.21     Subdivision 1.  [PARTICIPATION REQUIREMENTS.] A faculty 
  9.22  member who has three years or more of service in the Minnesota 
  9.23  state colleges and universities system, by agreement with the 
  9.24  board or with the authorized representative of the board, may be 
  9.25  assigned to teaching service in a part-time teaching position 
  9.26  under subdivision 2. 
  9.27     Subd. 2.  [PART-TIME TEACHING POSITION; DEFINED.] For 
  9.28  purposes of this section, "part-time teaching position" means a 
  9.29  teaching position within the Minnesota state colleges and 
  9.30  universities system in which the teacher is employed for at 
  9.31  least 50 full days or a fractional equivalent as prescribed in 
  9.32  section 354.091, and for which the faculty member is compensated 
  9.33  in an amount not exceeding 80 percent of the compensation 
  9.34  established by the board for a full-time faculty member with 
  9.35  identical education and experience with the employing unit. 
  9.36     Subd. 3.  [RETIREMENT CONTRIBUTIONS.] A faculty member 
 10.1   assigned to a part-time position under this section shall 
 10.2   continue to make employee contributions to the individual 
 10.3   retirement account plan during the period of part-time 
 10.4   employment on the same basis and in the same amounts as would 
 10.5   have been paid if the person had been employed on a full-time 
 10.6   basis provided that, prior to June 30 each year the member and 
 10.7   the board make that portion of the required employer 
 10.8   contribution to the plan, in any proportion which they may agree 
 10.9   upon, that is based on the difference between the amount of 
 10.10  compensation that would have been paid if the person had been 
 10.11  employed on a full-time basis and the amount of compensation 
 10.12  actually received by the person for the services rendered in the 
 10.13  part-time assignment.  The employing unit shall make that 
 10.14  portion of the required employer contributions to the plan on 
 10.15  behalf of the person that is based on the amount of compensation 
 10.16  actually received by the person for the services rendered in the 
 10.17  part-time assignment.  The employee and employer contributions 
 10.18  shall be based upon the rates of contribution prescribed by 
 10.19  section 354B.23.  Employee contributions for part-time teaching 
 10.20  service pursuant to this section shall not continue for more 
 10.21  than ten years. 
 10.22     Subd. 4.  [OTHER MEMBERSHIP PRECLUDED.] A faculty member 
 10.23  entitled to make employee contributions for part-time teaching 
 10.24  service pursuant to this section shall not be entitled during 
 10.25  the same period of time to be a member of, accrue allowable 
 10.26  service credit in or make employee contributions to any other 
 10.27  Minnesota public employee pension plan, except a volunteer 
 10.28  firefighters relief association governed by sections 69.771 to 
 10.29  69.776. 
 10.30     Subd. 5.  [INSURANCE.] If the board enters into an 
 10.31  agreement authorized by this section, the board shall continue 
 10.32  any insurance programs furnished or authorized a full-time 
 10.33  teacher on an identical basis and with identical sharing of 
 10.34  costs for a part-time teacher pursuant to this section.  
 10.35  However, the requirements of this subdivision may be modified by 
 10.36  a collective bargaining agreement between a board and an 
 11.1   exclusive representative pursuant to chapter 179A.  Teachers as 
 11.2   defined in section 136F.43 employed on a less than 75 percent 
 11.3   time basis pursuant to this section are eligible for state paid 
 11.4   insurance benefits as if the teachers were employed full-time. 
 11.5      Subd. 6.  [ELIGIBILITY FOR CREDIT.] Only teachers who are 
 11.6   public employees as defined in section 179A.03, subdivision 14, 
 11.7   during the school year preceding the period of part-time 
 11.8   employment pursuant to this section qualify for employee 
 11.9   contributions to the retirement plan for part-time teaching 
 11.10  service under subdivision 4.  Notwithstanding section 179A.03, 
 11.11  subdivision 14, clauses (e) and (f), teachers who are employed 
 11.12  on a part-time basis for purposes of this section and who would 
 11.13  therefore be disqualified from the bargaining unit by one or 
 11.14  both of those provisions, continue to be in the bargaining unit 
 11.15  during the period of part-time employment under this section for 
 11.16  purposes of compensation, fringe benefits, and the grievance 
 11.17  procedure. 
 11.18     Subd. 7.  [BOARD POWER NOT RESTRICTED.] This section does 
 11.19  not limit the authority of the board to assign a teacher to a 
 11.20  part-time teaching position which does not qualify for full 
 11.21  accrual of service credit from and employee contributions to the 
 11.22  retirement fund under this section. 
 11.23     Subd. 8.  [SUBSTITUTE TEACHING.] Subdivision 4 does not 
 11.24  prohibit a teacher who qualifies for full accrual of service 
 11.25  credit from and employee contributions to the retirement fund 
 11.26  pursuant to this section in any year from being employed as a 
 11.27  substitute teacher by any school district during that year.  
 11.28  Notwithstanding sections 354.091 and 354.42, a teacher may not 
 11.29  qualify for full accrual of service credit from and employee 
 11.30  contributions to the retirement fund for other teaching service 
 11.31  rendered for any part of any year for which the teacher 
 11.32  qualifies for employee contributions to the retirement plan 
 11.33  pursuant to this section. 
 11.34     Sec. 11.  [EFFECTIVE DATE.] 
 11.35     Sections 1 to 10 are effective July 1, 1999.