1.1                          A bill for an act 
  1.2             relating to retirement; various pension plans; 
  1.3             providing special benefit coverage for privatized 
  1.4             employees of the Luverne public hospital, the Waconia 
  1.5             Ridgeview medical center, and the Glencoe area health 
  1.6             center; creating a local government correctional 
  1.7             service retirement plan; modifying actuarial cost 
  1.8             provision; providing a special property tax levy for 
  1.9             certain county retirement contributions; providing an 
  1.10            ad hoc postretirement adjustment to Eveleth police and 
  1.11            fire trust fund benefit recipients; establishing an 
  1.12            additional postretirement adjustment for the Fairmont 
  1.13            police relief association; extending survivor benefit 
  1.14            provisions to include certain Fairmont police relief 
  1.15            association survivors; providing a special ad hoc 
  1.16            postretirement adjustment to certain retired St. Cloud 
  1.17            police officers; merging the pre-March 1, 1999, local 
  1.18            police and paid fire consolidation accounts into the 
  1.19            public employees police and fire plan; extending the 
  1.20            minimum volunteer firefighter fire state aid amount to 
  1.21            post-1993 relief association members; modifying 
  1.22            governance provisions for the Minneapolis fire 
  1.23            department relief association and the Minneapolis 
  1.24            police relief association; providing a targeted early 
  1.25            retirement incentive program for certain employees of 
  1.26            the metropolitan council; permitting the purchase of 
  1.27            service credit by various public employees; mandating 
  1.28            certain school district service credit purchase 
  1.29            payments; making miscellaneous changes in the 
  1.30            legislators retirement plan, the Minnesota state 
  1.31            colleges and university system individual retirement 
  1.32            account plan, the Minnesota state retirement system, 
  1.33            and the teachers retirement association; including 
  1.34            supplemental needs trusts as recipients of optional 
  1.35            annuity forms; eliminating the service credit maximum 
  1.36            for monthly benefit volunteer fire relief 
  1.37            associations; mandating school district repayment of 
  1.38            certain omitted deduction interest charges; expanding 
  1.39            the membership of the state correctional employees 
  1.40            retirement plan to include certain Minnesota extended 
  1.41            treatment options program employees; downsizing the 
  1.42            early retirement reduction rates for various public 
  1.43            safety plans; grandparenting public employee police 
  1.44            and fire plan coverage for certain Rice county 
  1.45            correctional employees; requiring Rice county to repay 
  1.46            certain police state aid amounts; providing employer 
  2.1             penalties for pension plan membership certification 
  2.2             failures or errors; providing special retirement 
  2.3             coverage for certain state fire marshal employees; 
  2.4             authorizing the purchase of credit for certain periods 
  2.5             of prior military service, out-of-state public 
  2.6             teaching service, maternity leaves, maternity 
  2.7             breaks-in-employment, parochial or private school 
  2.8             teaching service, Peace Corps service or VISTA 
  2.9             service; clarifying various Minneapolis employees 
  2.10            retirement plan survivor benefit provisions; 
  2.11            increasing the number of vendors for certain 
  2.12            tax-sheltered annuities for educational employees; 
  2.13            modifying various benefit provisions for certain 
  2.14            Minnesota state colleges and universities employees; 
  2.15            reducing the membership of the legislative commission 
  2.16            on pensions and retirement; requiring a study; 
  2.17            authorizing the Minnesota state retirement system, the 
  2.18            public employees retirement association, and the 
  2.19            teachers retirement association to purchase or 
  2.20            construct an administrative building; authorizing the 
  2.21            issuance of certain revenue bonds; amending Minnesota 
  2.22            Statutes 1998, sections 3.85, subdivisions 3, 11, and 
  2.23            12; 3A.02, subdivision 1b; 43A.27, subdivision 3; 
  2.24            69.021, subdivisions 7 and 10; 69.031, subdivision 5; 
  2.25            122A.46, subdivision 2; 136F.48; 275.70, subdivision 
  2.26            5; 352.03, subdivision 1; 352.90; 352.91, by adding a 
  2.27            subdivision; 352.92, subdivisions 1 and 2; 352.93, 
  2.28            subdivision 2a; 352B.08, subdivision 2a; 353.01, 
  2.29            subdivisions 2b, 10, and 16; 353.03, subdivision 4; 
  2.30            353.27, subdivisions 2 and 3; 353.64, subdivision 1; 
  2.31            353.65, subdivisions 2 and 3; 353.651, subdivision 4; 
  2.32            353A.083, by adding a subdivision; 353A.09, 
  2.33            subdivisions 4 and 5; 354.05, subdivision 40; 354.06, 
  2.34            subdivisions 1 and 7; 354.10, subdivision 4; 354.445; 
  2.35            354.66, subdivisions 1b, 1c, and 3; 354B.24, 
  2.36            subdivision 3; 354B.25, subdivisions 2, 3, and 5; 
  2.37            354C.11; 354C.12, subdivision 4; 356.19, by adding 
  2.38            subdivisions; 356.20, subdivision 2; 356.215, 
  2.39            subdivision 4g; 356.24, subdivision 1; 356.30, 
  2.40            subdivision 3; 356.302, subdivision 7; and 356.303, 
  2.41            subdivision 4; 356.55, subdivisions 1 and 6; 422A.06, 
  2.42            subdivisions 3 and 6; 422A.101, subdivision 4; 
  2.43            422A.18, subdivision 2; 422A.22, subdivisions 4 and 5; 
  2.44            and 422A.23; 423A.02, subdivisions 1b, 2, and by 
  2.45            adding subdivisions; and 423B.07; Laws 1977, chapter 
  2.46            61, section 6, as amended; proposing coding for new 
  2.47            law in Minnesota Statutes, chapters 352; 353; 354; 
  2.48            354A; 354B; 356; and 422A; proposing coding for new 
  2.49            law as Minnesota Statutes, chapters 353E; and 353F; 
  2.50            repealing Minnesota Statutes 1998, sections 353.33, 
  2.51            subdivision 3a; 353.65, subdivision 3a; 422A.16, 
  2.52            subdivision 3a; and 424A.02, subdivision 5; Laws 1998, 
  2.53            chapter 390, article 1, section 1. 
  2.54  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.55                             ARTICLE 1
  2.56                  FUTURE PERA PENSION BENEFITS FOR 
  2.57                PRIVATIZED PUBLIC HOSPITAL EMPLOYEES 
  2.58     Section 1.  [353F.01] [PURPOSE AND INTENT.] 
  2.59     The purpose of this chapter is to ensure, to the extent 
  2.60  possible, that persons employed at public medical facilities who 
  2.61  are privatized and consequently are excluded from retirement 
  2.62  coverage by the public employees retirement association will be 
  3.1   entitled to receive future retirement benefits under the general 
  3.2   employees retirement plan of the public employees retirement 
  3.3   association commensurate with the prior contributions made by 
  3.4   them or made on their behalf upon the privatization of the 
  3.5   medical facility. 
  3.6      Sec. 2.  [DEFINITIONS.] 
  3.7      Subdivision 1.  [GENERALLY.] As used in this chapter, 
  3.8   unless the context clearly indicates otherwise, each of the 
  3.9   terms in the following subdivisions has the meaning indicated. 
  3.10     Subd. 2.  [ALLOWABLE SERVICE.] "Allowable service" has the 
  3.11  meaning provided in section 353.01, subdivision 16 of the 
  3.12  edition of Minnesota Statutes published in the year before the 
  3.13  year in which the privatization occurred. 
  3.14     Subd. 3.  [EFFECTIVE DATE.] "Effective date" means the date 
  3.15  that the operation of the medical facility is assumed by another 
  3.16  employer or the date that the medical facility is purchased by 
  3.17  another employer and active membership in the public employees 
  3.18  retirement association consequently terminates. 
  3.19     Subd. 4.  [MEDICAL FACILITY.] "Medical facility" means: 
  3.20     (1) the Glencoe area health center; 
  3.21     (2) the Luverne public hospital; and 
  3.22     (3) the Waconia-Ridgeview medical center. 
  3.23     Subd. 5.  [TERMINATED MEDICAL FACILITY 
  3.24  EMPLOYEE.] "Terminated medical facility employee" means a person 
  3.25  who: 
  3.26     (1) was employed on the day before the effective date by 
  3.27  the medical facility; or 
  3.28     (2) terminated employment with the medical facility on the 
  3.29  day before the effective date; and 
  3.30     (3) was a participant in the general employees retirement 
  3.31  plan of the public employees retirement association at the time 
  3.32  of termination of employment with the medical facility. 
  3.33     Subd. 6.  [YEARS OF ALLOWABLE SERVICE.] "Years of allowable 
  3.34  service" means the total number of years of allowable service 
  3.35  under section 353.01, subdivision 18 of the edition of Minnesota 
  3.36  Statutes published in the year before the year in which the 
  4.1   privatization occurred. 
  4.2      Sec. 3.  [VESTING RULE FOR CERTAIN EMPLOYEES.] 
  4.3      Notwithstanding any provision of Minnesota Statutes, 
  4.4   chapter 353, to the contrary, a terminated medical facility 
  4.5   employee is eligible to receive a retirement annuity under 
  4.6   section 353.29 of the edition of Minnesota Statutes published in 
  4.7   the year before the year in which the privatization occurred, 
  4.8   without regard to the requirement for three years of allowable 
  4.9   service. 
  4.10     Sec. 4.  [AUGMENTATION INTEREST RATE FOR TERMINATED MEDICAL 
  4.11  FACILITY EMPLOYEES.] 
  4.12     The deferred annuity of a terminated medical facility 
  4.13  employee is subject to augmentation in accordance with section 
  4.14  353.71, subdivision 2, of the edition of Minnesota Statutes 
  4.15  published in the year in which the privatization occurred, 
  4.16  except that the rate of interest for this purpose is 5.5 percent 
  4.17  compounded annually until January 1 following the year in which 
  4.18  such person attains age 55.  From that date to the effective 
  4.19  date of retirement, the rate is 7.5 percent.  These increased 
  4.20  augmentation rates are no longer applicable for any time after 
  4.21  the terminated medical facility employee becomes covered again 
  4.22  by a retirement fund enumerated in section 356.30, subdivision 
  4.23  3.  These increased deferred annuity augmentation rates do not 
  4.24  apply to a terminated transferred medical facility employee who 
  4.25  begins receipt of a retirement annuity while employed by the 
  4.26  employer which assumed operations of the medical facility or 
  4.27  purchased the medical facility. 
  4.28     Sec. 5.  [AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE 
  4.29  FOR CERTAIN EARLY RETIREMENT PURPOSES.] 
  4.30     For the purpose of determining eligibility for early 
  4.31  retirement benefits provided under section 353.30, subdivision 
  4.32  1a, of the edition of Minnesota Statutes published in the year 
  4.33  before the year in which the privatization occurred, and 
  4.34  notwithstanding any provision of chapter 353, to the contrary, 
  4.35  the years of allowable service for a terminated medical facility 
  4.36  employee who transfers employment on the effective date and does 
  5.1   not apply for a refund of contributions under section 353.34, 
  5.2   subdivision 1, of the edition of Minnesota Statutes published in 
  5.3   the year before the year in which the privatization occurred, or 
  5.4   any similar provision, includes service with the successor 
  5.5   employer to the medical facility following the effective date.  
  5.6   The successor employer shall provide any reports that the 
  5.7   executive director of the public employees retirement 
  5.8   association may reasonably request to permit calculation of 
  5.9   benefits.  
  5.10     To be eligible for early retirement benefits under this 
  5.11  section, the individual must separate from service with the 
  5.12  successor employer to the medical facility.  The terminated 
  5.13  eligible individual, or an individual authorized to act on 
  5.14  behalf of that individual, may apply for an annuity following 
  5.15  application procedures under section 353.29, subdivision 4. 
  5.16     Sec. 6.  [APPLICATION OF REEMPLOYED ANNUITANT EARNINGS 
  5.17  LIMITATIONS.] 
  5.18     The reemployed annuitant earnings limitations of section 
  5.19  353.37 apply to any service by a terminated medical facility 
  5.20  employee as an employee of the successor employer to the medical 
  5.21  facility. 
  5.22     Sec. 7.  [EFFECT ON REFUND.] 
  5.23     Notwithstanding any provision of Minnesota Statutes, 
  5.24  chapter 353, to the contrary, terminated medical facility 
  5.25  employees may receive a refund of employee accumulated 
  5.26  contributions plus interest at the rate of six percent per year 
  5.27  compounded annually in accordance with section 353.34, 
  5.28  subdivision 2, of the edition of Minnesota Statutes published in 
  5.29  the year in which the privatization occurred, at any time after 
  5.30  the transfer of employment to the successor employer to the 
  5.31  medical facility.  If a terminated medical facility employee has 
  5.32  received a refund from a pension plan enumerated in section 
  5.33  356.30, subdivision 3, the person may not repay that refund 
  5.34  unless the person again becomes a member of one of those 
  5.35  enumerated plans and complies with section 356.30, subdivision 2.
  5.36     Sec. 8.  [COUNSELING SERVICES.] 
  6.1      The medical facility and the executive director of the 
  6.2   public employees retirement association shall provide terminated 
  6.3   medical facility employees with counseling on their benefits 
  6.4   available under the general employees retirement plan of the 
  6.5   public employees retirement association during the 90 days 
  6.6   following privatization. 
  6.7      Sec. 9.  [REPEALER.] 
  6.8      Laws 1998, chapter 390, article 1, section 1, is repealed. 
  6.9      Sec. 10.  [EFFECTIVE DATE.] 
  6.10     Sections 1 to 9 are effective on the day following final 
  6.11  enactment. 
  6.12                             ARTICLE 2 
  6.13                ESTABLISHMENT OF LOCAL CORRECTIONAL 
  6.14                     EMPLOYEES RETIREMENT PLAN 
  6.15     Section 1.  Minnesota Statutes 1998, section 3.85, 
  6.16  subdivision 11, is amended to read: 
  6.17     Subd. 11.  [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The 
  6.18  commission shall contract with an established actuarial 
  6.19  consulting firm to conduct annual actuarial valuations for the 
  6.20  retirement plans named in paragraph (b).  The contract must 
  6.21  include provisions for performing cost analyses of proposals for 
  6.22  changes in benefit and funding policies.  
  6.23     (b) The contract for actuarial valuation must include the 
  6.24  following retirement plans:  
  6.25     (1) the teachers retirement plan, teachers retirement 
  6.26  association; 
  6.27     (2) the general state employees retirement plan, Minnesota 
  6.28  state retirement system; 
  6.29     (3) the correctional employees retirement plan, Minnesota 
  6.30  state retirement system; 
  6.31     (4) the state patrol retirement plan, Minnesota state 
  6.32  retirement system; 
  6.33     (5) the judges retirement plan, Minnesota state retirement 
  6.34  system; 
  6.35     (6) the Minneapolis employees retirement plan, Minneapolis 
  6.36  employees retirement fund; 
  7.1      (7) the public employees retirement plan, public employees 
  7.2   retirement association; 
  7.3      (8) the public employees police and fire plan, public 
  7.4   employees retirement association; 
  7.5      (9) the Duluth teachers retirement plan, Duluth teachers 
  7.6   retirement fund association; 
  7.7      (10) the Minneapolis teachers retirement plan, Minneapolis 
  7.8   teachers retirement fund association; 
  7.9      (11) the St. Paul teachers retirement plan, St. Paul 
  7.10  teachers retirement fund association; 
  7.11     (12) the legislators retirement plan, Minnesota state 
  7.12  retirement system; and 
  7.13     (13) the elective state officers retirement plan, Minnesota 
  7.14  state retirement system; and 
  7.15     (14) local government correctional service retirement plan, 
  7.16  public employees retirement association.  
  7.17     (c) The contract must specify completion of annual 
  7.18  actuarial valuation calculations on a fiscal year basis with 
  7.19  their contents as specified in section 356.215, and the 
  7.20  standards for actuarial work adopted by the commission.  
  7.21     The contract must specify completion of annual experience 
  7.22  data collection and processing and a quadrennial published 
  7.23  experience study for the plans listed in paragraph (b), clauses 
  7.24  (1), (2), and (7), as provided for in the standards for 
  7.25  actuarial work adopted by the commission.  The experience data 
  7.26  collection, processing, and analysis must evaluate the following:
  7.27     (1) individual salary progression; 
  7.28     (2) rate of return on investments based on current asset 
  7.29  value; 
  7.30     (3) payroll growth; 
  7.31     (4) mortality; 
  7.32     (5) retirement age; 
  7.33     (6) withdrawal; and 
  7.34     (7) disablement.  
  7.35     (d) The actuary retained by the commission shall annually 
  7.36  prepare a report to the legislature, including the commentary on 
  8.1   the actuarial valuation calculations for the plans named in 
  8.2   paragraph (b) and summarizing the results of the actuarial 
  8.3   valuation calculations.  The commission-retained actuary shall 
  8.4   include with the report the actuary's recommendations concerning 
  8.5   the appropriateness of the support rates to achieve proper 
  8.6   funding of the retirement funds by the required funding dates.  
  8.7   The commission-retained actuary shall, as part of the 
  8.8   quadrennial published experience study, include recommendations 
  8.9   to the legislature on the appropriateness of the actuarial 
  8.10  valuation assumptions required for evaluation in the study.  
  8.11     (e) If the actuarial gain and loss analysis in the 
  8.12  actuarial valuation calculations indicates a persistent pattern 
  8.13  of sizable gains or losses, as directed by the commission, the 
  8.14  actuary retained by the commission shall prepare a special 
  8.15  experience study for a plan listed in paragraph (b), clause (3), 
  8.16  (4), (5), (6), (8), (9), (10), (11), (12), or (13), or (14), in 
  8.17  the manner provided for in the standards for actuarial work 
  8.18  adopted by the commission. 
  8.19     (f) The term of the contract between the commission and the 
  8.20  actuary retained by the commission is four years.  The contract 
  8.21  is subject to competitive bidding procedures as specified by the 
  8.22  commission. 
  8.23     Sec. 2.  Minnesota Statutes 1998, section 3.85, subdivision 
  8.24  12, is amended to read: 
  8.25     Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
  8.26  commission shall assess each retirement plan specified in 
  8.27  subdivision 11, paragraph (b), its appropriate portion of the 
  8.28  compensation paid to the actuary retained by the commission for 
  8.29  the actuarial valuation calculations, quadrennial projection 
  8.30  valuations, and quadrennial experience studies.  The total 
  8.31  assessment is 100 percent of the amount of contract compensation 
  8.32  for the actuarial consulting firm retained by the commission for 
  8.33  actuarial valuation calculations, including the public employees 
  8.34  police and fire plan consolidation accounts of the public 
  8.35  employees retirement association, annual experience data 
  8.36  collection and processing, quadrennial projection valuations, 
  9.1   and quadrennial experience studies.  
  9.2      The portion of the total assessment payable by each 
  9.3   retirement system or pension plan must be determined as follows: 
  9.4      (1) Each pension plan specified in subdivision 11, 
  9.5   paragraph (b), clauses (1) to (13) (14), must pay the following 
  9.6   indexed amount based on its total active, deferred, inactive, 
  9.7   and benefit recipient membership: 
  9.8          up to 2,000 members, inclusive         $2.55 per member 
  9.9          2,001 through 10,000 members           $1.13 per member 
  9.10         over 10,000 members                    $0.11 per member  
  9.11     The amount specified is applicable for the assessment of 
  9.12  the July 1, 1991, to June 30, 1992, fiscal year actuarial 
  9.13  compensation amounts.  For the July 1, 1992, to June 30, 1993, 
  9.14  fiscal year and subsequent fiscal year actuarial compensation 
  9.15  amounts, the amount specified must be increased at the same 
  9.16  percentage increase rate as the implicit price deflator for 
  9.17  state and local government purchases of goods and services for 
  9.18  the 12-month period ending with the first quarter of the 
  9.19  calendar year following the completion date for the actuarial 
  9.20  valuation calculations, as published by the federal Department 
  9.21  of Commerce, and rounded upward to the nearest full cent. 
  9.22     (2) The total per-member portion of the allocation must be 
  9.23  determined, and that total per-member amount must be subtracted 
  9.24  from the total amount for allocation.  Of the remainder dollar 
  9.25  amount, the following per-retirement system and per-pension plan 
  9.26  charges must be determined and the charges must be paid by the 
  9.27  system or plan: 
  9.28     (i) 37.87 percent is the total additional per-retirement 
  9.29  system charge, of which one-seventh must be paid by each 
  9.30  retirement system specified in subdivision 11, paragraph (b), 
  9.31  clauses (1), (2), (6), (7), (9), (10), and (11). 
  9.32     (ii) 62.13 percent is the total additional per-pension plan 
  9.33  charge, of which one-thirteenth one-fourteenth must be paid by 
  9.34  each pension plan specified in subdivision 11, paragraph (b), 
  9.35  clauses (1) to (13) (14).  
  9.36     (b) The assessment must be made following the completion of 
 10.1   the actuarial valuation calculations and the experience 
 10.2   analysis.  The amount of the assessment is appropriated from the 
 10.3   retirement fund applicable to the retirement plan.  Receipts 
 10.4   from assessments must be deposited in the state treasury and 
 10.5   credited to the general fund. 
 10.6      Sec. 3.  Minnesota Statutes 1998, section 275.70, 
 10.7   subdivision 5, is amended to read: 
 10.8      Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
 10.9   portions of ad valorem taxes levied by a local governmental unit 
 10.10  for the following purposes or in the following manner: 
 10.11     (1) to pay the costs of the principal and interest on 
 10.12  bonded indebtedness or to reimburse for the amount of liquor 
 10.13  store revenues used to pay the principal and interest due on 
 10.14  municipal liquor store bonds in the year preceding the year for 
 10.15  which the levy limit is calculated; 
 10.16     (2) to pay the costs of principal and interest on 
 10.17  certificates of indebtedness issued for any corporate purpose 
 10.18  except for the following: 
 10.19     (i) tax anticipation or aid anticipation certificates of 
 10.20  indebtedness; 
 10.21     (ii) certificates of indebtedness issued under sections 
 10.22  298.28 and 298.282; 
 10.23     (iii) certificates of indebtedness used to fund current 
 10.24  expenses or to pay the costs of extraordinary expenditures that 
 10.25  result from a public emergency; or 
 10.26     (iv) certificates of indebtedness used to fund an 
 10.27  insufficiency in tax receipts or an insufficiency in other 
 10.28  revenue sources; 
 10.29     (3) to provide for the bonded indebtedness portion of 
 10.30  payments made to another political subdivision of the state of 
 10.31  Minnesota; 
 10.32     (4) to fund payments made to the Minnesota state armory 
 10.33  building commission under section 193.145, subdivision 2, to 
 10.34  retire the principal and interest on armory construction bonds; 
 10.35     (5) for unreimbursed expenses related to flooding that 
 10.36  occurred during the first half of calendar year 1997, as allowed 
 11.1   by the commissioner of revenue under section 275.74, paragraph 
 11.2   (b); 
 11.3      (6) for local units of government located in an area 
 11.4   designated by the Federal Emergency Management Agency pursuant 
 11.5   to a major disaster declaration issued for Minnesota by 
 11.6   President Clinton after April 1, 1997, and before June 11, 1997, 
 11.7   for the amount of tax dollars lost due to abatements authorized 
 11.8   under section 273.123, subdivision 7, and Laws 1997, chapter 
 11.9   231, article 2, section 64, to the extent that they are related 
 11.10  to the major disaster and to the extent that neither the state 
 11.11  or federal government reimburses the local government for the 
 11.12  amount lost; 
 11.13     (7) property taxes approved by voters which are levied 
 11.14  against the referendum market value as provided under section 
 11.15  275.61; 
 11.16     (8) to fund matching requirements needed to qualify for 
 11.17  federal or state grants or programs to the extent that either 
 11.18  (i) the matching requirement exceeds the matching requirement in 
 11.19  calendar year 1997, or (ii) it is a new matching requirement 
 11.20  that didn't exist prior to 1998; 
 11.21     (9) to pay the expenses reasonably and necessarily incurred 
 11.22  in preparing for or repairing the effects of natural disaster 
 11.23  including the occurrence or threat of widespread or severe 
 11.24  damage, injury, or loss of life or property resulting from 
 11.25  natural causes, in accordance with standards formulated by the 
 11.26  emergency services division of the state department of public 
 11.27  safety, as allowed by the commissioner of revenue under section 
 11.28  275.74, paragraph (b); 
 11.29     (10) for the amount of tax revenue lost due to abatements 
 11.30  authorized under section 273.123, subdivision 7, for damage 
 11.31  related to the tornadoes of March 29, 1998, to the extent that 
 11.32  neither the state or federal government provides reimbursement 
 11.33  for the amount lost; 
 11.34     (11) pay amounts required to correct an error in the levy 
 11.35  certified to the county auditor by a city or county in a levy 
 11.36  year, but only to the extent that when added to the preceding 
 12.1   year's levy it is not in excess of an applicable statutory, 
 12.2   special law or charter limitation, or the limitation imposed on 
 12.3   the governmental subdivision by sections 275.70 to 275.74 in the 
 12.4   preceding levy year; and 
 12.5      (12) to pay an abatement under section 469.1815; and 
 12.6      (13) to pay the employer contribution to the local 
 12.7   government correctional service retirement plan under section 
 12.8   353E.03, subdivision 2. 
 12.9      Sec. 4.  Minnesota Statutes 1998, section 353.27, 
 12.10  subdivision 2, is amended to read: 
 12.11     Subd. 2.  [EMPLOYEE CONTRIBUTION.] (a) Except as provided 
 12.12  in paragraph (b), The employee contribution shall be is an 
 12.13  amount (1) for a "basic member" equal to 8.75 percent of total 
 12.14  salary; and (2) for a "coordinated member" equal to 4.75 percent 
 12.15  of total salary. 
 12.16     (b) For local government correctional service employees, as 
 12.17  defined in section 353.33, subdivision 3a, the employee 
 12.18  contribution is an amount equal to 4.96 percent of total salary. 
 12.19     (c) These contributions must be made by deduction from 
 12.20  salary in the manner provided in subdivision 4.  Where any 
 12.21  portion of a member's salary is paid from other than public 
 12.22  funds, such member's employee contribution must be based on the 
 12.23  total salary received from all sources. 
 12.24     Sec. 5.  Minnesota Statutes 1998, section 353.27, 
 12.25  subdivision 3, is amended to read: 
 12.26     Subd. 3.  [EMPLOYER CONTRIBUTION.] (a) Except as provided 
 12.27  in paragraph (b), The employer contribution shall be is an 
 12.28  amount equal to the employee contribution under subdivision 2. 
 12.29     (b) On behalf of local government correctional service 
 12.30  employees, as defined in section 353.33, subdivision 3a, the 
 12.31  employer contribution is an amount equal to 5.06 percent of 
 12.32  total salary. 
 12.33     (c) This contribution shall must be made from funds 
 12.34  available to the employing subdivision by the means and in the 
 12.35  manner provided in section 353.28. 
 12.36     Sec. 6.  [353E.01] [LOCAL GOVERNMENT CORRECTIONAL SERVICE 
 13.1   RETIREMENT PLAN.] 
 13.2      Subdivision 1.  [PLAN ADMINISTRATION; FUND.] (a) The public 
 13.3   employees local government correctional service retirement plan 
 13.4   is established as a separate plan to be administered by the 
 13.5   board of trustees and the executive director of the public 
 13.6   employees retirement association. 
 13.7      (b) The board of trustees and the executive director shall 
 13.8   undertake their activities in a manner consistent with chapter 
 13.9   356A.  
 13.10     (c) The association shall maintain a special fund to be 
 13.11  known as the public employees local government correctional 
 13.12  service retirement fund. 
 13.13     Subd. 2.  [REVENUE SOURCES.] Member contributions under 
 13.14  section 353E.03, subdivision 1, and employer contributions under 
 13.15  section 353E.03, subdivision 2, and other amounts authorized by 
 13.16  law, including any investment return on invested fund assets, 
 13.17  must be deposited in the fund.  
 13.18     Subd. 3.  [INVESTMENT.] (a) The public employees local 
 13.19  government correctional service retirement fund participates in 
 13.20  the Minnesota postretirement investment fund.  
 13.21     (b) The amounts provided in section 353.271 must be 
 13.22  deposited in that fund.  
 13.23     (c) The balance of any assets of the fund must be deposited 
 13.24  in the Minnesota combined investment fund as provided in section 
 13.25  11A.14, if applicable, or otherwise invested under section 
 13.26  11A.23. 
 13.27     Subd. 4.  [COLLECTION OF CONTRIBUTIONS.] The collection of 
 13.28  member and employer contributions is governed by section 353.27, 
 13.29  subdivisions 4, 7, 7b, 10, 11, and 12. 
 13.30     Subd. 5.  [FUND DISBURSEMENT RESTRICTED.] (a) The public 
 13.31  employees local government correctional service retirement fund 
 13.32  and its share of participation in the Minnesota postretirement 
 13.33  investment fund may be disbursed only for the purposes provided 
 13.34  for in this chapter.  
 13.35     (b) The proportional share of the necessary and reasonable 
 13.36  administrative expenses of the association and any benefits 
 14.1   provided in this chapter, other than benefits payable from the 
 14.2   Minnesota postretirement investment fund, must be paid from the 
 14.3   public employees local government correctional service 
 14.4   retirement fund.  Retirement annuities, disability benefits, 
 14.5   survivorship benefits, and any refunds of accumulated deductions 
 14.6   may be paid only from the correctional service retirement fund 
 14.7   after those needs have been certified by the executive director 
 14.8   and any applicable amounts withdrawn from the share of 
 14.9   participation in the Minnesota postretirement fund under section 
 14.10  11A.18.  
 14.11     (c) The amounts necessary to make the payments from the 
 14.12  public employees local government correctional service 
 14.13  retirement fund and its participation in the Minnesota 
 14.14  postretirement investment fund are annually appropriated from 
 14.15  those funds for those purposes. 
 14.16     Sec. 7.  [353E.02] [CORRECTIONAL SERVICE EMPLOYEES.] 
 14.17     A local government correctional service employee is a 
 14.18  person who: 
 14.19     (1) is employed in a county-administered jail or 
 14.20  correctional facility or in a regional correctional facility 
 14.21  administered by multiple counties; 
 14.22     (2) spends at least 95 percent of the employee's working 
 14.23  time in direct contact with persons confined in the jail or 
 14.24  facility, as certified in writing, in advance, by the employer 
 14.25  to the executive director of the association; and 
 14.26     (3) is a "public employee" as defined in section 353.01, 
 14.27  but is not a member of the public employees police and fire fund.
 14.28     Sec. 8.  [353E.03] [CORRECTIONAL SERVICE PLAN 
 14.29  CONTRIBUTIONS.] 
 14.30     Subdivision 1.  [MEMBER CONTRIBUTIONS.] A local government 
 14.31  correctional service employee shall make an employee 
 14.32  contribution in an amount equal to 5.83 percent of salary. 
 14.33     Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
 14.34  contribute for a local government correctional service employee 
 14.35  an amount equal to 8.75 percent of salary. 
 14.36     Sec. 9.  [353E.04] [CORRECTIONAL SERVICE PLAN RETIREMENT 
 15.1   ANNUITY.] 
 15.2      Subdivision 1.  [ELIGIBILITY REQUIREMENTS.] After 
 15.3   termination of public employment, an employee covered under 
 15.4   section 353E.02 who has attained the age of at least 55 years 
 15.5   and has credit for not less than three years of coverage in the 
 15.6   local government correctional service plan is entitled, upon 
 15.7   application, to a normal retirement annuity.  Instead of a 
 15.8   normal retirement annuity, a retiring employee may elect to 
 15.9   receive the optional annuity provided in section 353.30, 
 15.10  subdivision 3. 
 15.11     Subd. 2.  [AVERAGE SALARY BASE.] In calculating the annuity 
 15.12  under subdivision 3, "average salary" means an amount equivalent 
 15.13  to the average of the highest salary earned as a local 
 15.14  government correctional employee upon which employee 
 15.15  contributions were paid for any five successive years of 
 15.16  allowable service.  Average salary must be based on all 
 15.17  allowable service if this service is less than five years. 
 15.18     Subd. 3.  [ANNUITY AMOUNT.] The average salary as defined 
 15.19  in subdivision 2, multiplied by the percent specified in section 
 15.20  356.19, subdivision 5a, for each year of allowable service, 
 15.21  determines the amount of the normal retirement annuity.  If a 
 15.22  person has earned allowable service in the public employees 
 15.23  retirement association or the public employees police and fire 
 15.24  fund prior to participation under this chapter, the retirement 
 15.25  annuity representing such service must be computed in accordance 
 15.26  with the formula specified in sections 353.29 and 353.30 or 
 15.27  353.651, whichever applies. 
 15.28     Subd. 4.  [EARLY RETIREMENT.] An employee covered under 
 15.29  section 353E.02 who has attained the age of at least 50 years 
 15.30  and has credit for not less than three years of coverage in the 
 15.31  local government correctional service plan is entitled, upon 
 15.32  application, to a reduced retirement annuity equal to the 
 15.33  annuity calculated under subdivision 3, reduced so that the 
 15.34  reduced annuity is the actuarial equivalent of the annuity that 
 15.35  would be payable if the employee deferred receipt of the annuity 
 15.36  from the day the annuity begins to accrue until age 55. 
 16.1      Subd. 5.  [ACCRUAL AND DURATION.] The retirement annuity 
 16.2   under this section begins to accrue as provided in section 
 16.3   353.29, subdivision 7.  The retirement annuity is payable for 
 16.4   the life of the recipient, or in accordance with the terms of 
 16.5   any optional annuity form selected by the retiring member. 
 16.6      Subd. 6.  [MULTIPLE SERVICE LIMITATION.] A former employee 
 16.7   who has both public employees retirement plan and public 
 16.8   employees local government correctional retirement plan credited 
 16.9   service must, if qualified, receive a retirement annuity from 
 16.10  each retirement plan that takes into account both periods of 
 16.11  service and both covered salary amounts, but no period of 
 16.12  service may be used more than once in calculating the annuity. 
 16.13     Sec. 10.  [353E.05] [AUGMENTATION IN CERTAIN CASES.] 
 16.14     Unless prior service has been transferred or unless a 
 16.15  combined service annuity under section 356.30 has been elected, 
 16.16  an employee who becomes a local government correctional employee 
 16.17  after being a member of the public employees retirement 
 16.18  association or the public employees police and fire fund is 
 16.19  covered under section 353.71, subdivision 2, with respect to 
 16.20  that prior service.  An employee who becomes a member of the 
 16.21  public employees retirement association or the public employees 
 16.22  police and fire plan after being a local government correctional 
 16.23  employee is also covered under section 353.71, subdivision 2, 
 16.24  with respect to that prior service, unless calculated under 
 16.25  section 356.30. 
 16.26     Sec. 11.  [353E.06] [DISABILITY BENEFITS.] 
 16.27     Subdivision 1.  [DUTY DISABILITY QUALIFICATION 
 16.28  REQUIREMENTS.] A local government correctional employee who 
 16.29  becomes disabled and physically or mentally unfit to perform the 
 16.30  duties of the position as a direct result of an injury, 
 16.31  sickness, or other disability that is medically determinable, 
 16.32  that was incurred in or arose out of any act of duty, and that 
 16.33  renders the employee physically or mentally unable to perform 
 16.34  the employee's duties, is entitled to a disability benefit.  The 
 16.35  disability benefit must be based on covered service under this 
 16.36  chapter only and is an amount equal to 50 percent of the average 
 17.1   salary defined in section 353E.04, subdivision 2, plus an 
 17.2   additional percent equal to that specified in section 356.19, 
 17.3   subdivision 5a, for each year of covered service under this 
 17.4   chapter in excess of 25 years. 
 17.5      Subd. 2.  [NONDUTY DISABILITY QUALIFICATION 
 17.6   REQUIREMENTS.] A local government correctional employee who has 
 17.7   at least one year of covered service under this chapter and 
 17.8   becomes disabled and physically or mentally unfit to perform the 
 17.9   duties of the position because of sickness or injury that is 
 17.10  medically determinable and that occurs while not engaged in 
 17.11  covered employment, is entitled to a disability benefit based on 
 17.12  covered service under this chapter.  The disability benefit must 
 17.13  be computed in the same manner as an annuity under section 
 17.14  353E.04, subdivision 3, and as though the employee had at least 
 17.15  ten years of covered correctional service. 
 17.16     Subd. 3.  [OPTIONAL ANNUITY.] A disabled local government 
 17.17  correctional employee may elect the normal disability benefit or 
 17.18  an optional annuity as provided in section 353.30, subdivision 
 17.19  3.  The election of an optional annuity must be made before the 
 17.20  commencement of payment of the disability benefit and is 
 17.21  effective on the date on which the disability benefit begins to 
 17.22  accrue as provided in section 353.33, subdivision 2.  Upon 
 17.23  becoming effective, the optional annuity begins to accrue on the 
 17.24  same date as provided for the disability benefit. 
 17.25     Subd. 4.  [DISABILITY BENEFIT APPLICATION.] A claim or 
 17.26  demand for a disability benefit must be initiated by written 
 17.27  application in the manner and form prescribed by the executive 
 17.28  director, filed in the office of the association, showing 
 17.29  compliance with the statutory conditions qualifying the 
 17.30  applicant for a disability benefit.  A member or former member 
 17.31  who became disabled during a period of membership may file an 
 17.32  application for disability benefits within three years following 
 17.33  termination of local government correctional service, but not 
 17.34  after that time has elapsed.  The disability benefit begins to 
 17.35  accrue the day following the commencement of disability, 90 days 
 17.36  preceding the filing of the application, or, if annual or sick 
 18.1   leave is paid for more than the 90-day period, from the date 
 18.2   salary ceased, whichever is latest.  No payment may accrue 
 18.3   beyond the end of the month in which entitlement has 
 18.4   terminated.  If the disabilitant dies before negotiating the 
 18.5   check for the month in which death occurs, payment must be made 
 18.6   to the optional annuitant or beneficiary. 
 18.7      Subd. 5.  [DISABILITY BENEFIT TERMINATION.] The disability 
 18.8   benefit paid to a disabled local government correctional 
 18.9   employee terminates at the end of the month in which the 
 18.10  employee reaches age 65.  If the disabled local government 
 18.11  correctional employee is still disabled when the employee 
 18.12  reaches age 65, the employee is deemed to be a retired employee 
 18.13  and, if the employee had elected an optional annuity under 
 18.14  subdivision 3, must receive an annuity in accordance with the 
 18.15  terms of the optional annuity previously elected.  If the 
 18.16  employee had not elected an optional annuity under subdivision 
 18.17  3, the employee may elect either to receive a normal retirement 
 18.18  annuity computed in the manner provided in section 353E.04, 
 18.19  subdivision 3, or to receive an optional annuity as provided in 
 18.20  section 353.30, subdivision 3, based on the same length of 
 18.21  service as used in the calculation of the disability benefit.  
 18.22  Election of an optional annuity must be made within 90 days 
 18.23  before attaining the age of 65 years, or reaching the five-year 
 18.24  anniversary of the effective date of the disability benefit, 
 18.25  whichever is later. 
 18.26     Subd. 6.  [RESUMPTION OF EMPLOYMENT.] If a disabled 
 18.27  employee resumes a gainful occupation from which earnings are 
 18.28  less than salary received at the date of disability or the 
 18.29  salary currently paid for similar positions, or should the 
 18.30  employee be entitled to receive workers' compensation benefits, 
 18.31  the disability benefit must be continued in an amount that, when 
 18.32  added to such earnings and workers' compensation benefits, does 
 18.33  not exceed the salary received at the date of disability or the 
 18.34  salary currently payable for the same employment position or an 
 18.35  employment position substantially similar to the one the person 
 18.36  held as of the date of the disability, whichever is greater. 
 19.1      Subd. 7.  [COMBINED SERVICE DISABILITY BENEFIT.] If the 
 19.2   employee is entitled to receive a disability benefit as provided 
 19.3   in subdivision 1 or 2 and has credit for less covered 
 19.4   correctional service than the length of service upon which the 
 19.5   correctional disability benefit is based, and also has credit 
 19.6   for public employees retirement plan service, the employee is 
 19.7   entitled to a disability benefit or deferred retirement annuity 
 19.8   based on the regular plan service only for the service that, 
 19.9   when combined with the correctional service, exceeds the number 
 19.10  of years on which the correctional disability benefit is based.  
 19.11  The disabled employee who also has credit for regular plan 
 19.12  service must in all respects qualify under section 353.33 to be 
 19.13  entitled to receive a disability benefit based on the public 
 19.14  employees retirement plan service, except that the service may 
 19.15  be combined to satisfy length of service requirements.  Any 
 19.16  deferred annuity to which the employee may be entitled based on 
 19.17  public employees retirement plan service must be augmented as 
 19.18  provided in section 353.71 while the employee is receiving a 
 19.19  disability benefit under this section. 
 19.20     Subd. 8.  [CONTINUING BENEFIT ELIGIBILITY.] Continuing 
 19.21  eligibility for a disability benefit is subject to section 
 19.22  353.33, subdivision 6. 
 19.23     Sec. 12.  [353E.07] [SURVIVOR BENEFITS.] 
 19.24     Subdivision 1.  [MEMBER AT LEAST AGE 50.] If a member or 
 19.25  former member of the local government correctional service 
 19.26  retirement plan who has attained the age of at least 50 years 
 19.27  and has credit for not less than three years of allowable 
 19.28  service dies before the annuity or disability benefit has become 
 19.29  payable, notwithstanding any designation of beneficiary to the 
 19.30  contrary, the surviving spouse may elect to receive, in lieu of 
 19.31  a refund with interest provided in section 353.32, subdivision 
 19.32  1, a surviving spouse annuity equal to the 100 percent joint and 
 19.33  survivor annuity for which the member could have qualified had 
 19.34  the member terminated service on the date of death. 
 19.35     Subd. 2.  [MEMBER NOT YET AGE 50.] If the member was under 
 19.36  age 50, dies, and had credit for not less than three years of 
 20.1   allowable service on the date of death but did not yet qualify 
 20.2   for retirement, the surviving spouse may elect to receive a 100 
 20.3   percent joint and survivor annuity based on the age of the 
 20.4   employee and the surviving spouse at the time of death.  The 
 20.5   annuity is payable using the early retirement reduction under 
 20.6   section 353E.04, subdivision 4, to age 50 and one-half the early 
 20.7   retirement reduction from age 50 to the age payment begins.  
 20.8   Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply 
 20.9   to a deferred annuity or surviving spouse benefit payable under 
 20.10  this subdivision. 
 20.11     Subd. 3.  [ELECTION; ACCRUAL.] A surviving spouse election 
 20.12  under subdivisions 1 and 2 may be made at any time after the 
 20.13  date of death of the local government correctional service 
 20.14  employee.  The surviving spouse benefit begins to accrue as of 
 20.15  the first of the next month following the date on which the 
 20.16  application for the benefit was filed. 
 20.17     Subd. 4.  [SURVIVING SPOUSE COVERAGE; TERM CERTAIN.] In 
 20.18  lieu of the 100 percent optional annuity under subdivision 1, 
 20.19  the surviving spouse of a deceased local government correctional 
 20.20  service employee may elect to receive survivor coverage in a 
 20.21  term certain of ten, 15, or 20 years.  The monthly term certain 
 20.22  annuity must be actuarially equivalent to the 100 percent 
 20.23  optional annuity under subdivision 1 and must be based on tables 
 20.24  approved by the actuary retained by the legislative commission 
 20.25  on pensions and retirement.  The optional annuity ceases upon 
 20.26  the expiration of the term certain period.  If a survivor elects 
 20.27  a term certain annuity and dies before the expiration of the 
 20.28  specified term certain period, the commuted value of the 
 20.29  remaining annuity payments must be paid in a lump sum to the 
 20.30  survivor's estate. 
 20.31     Subd. 5.  [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 
 20.32  no surviving spouse eligible for benefits under subdivisions 1, 
 20.33  2, and 4, a dependent child as defined in section 353.01, 
 20.34  subdivision 15a, is eligible for a dependent child survivor 
 20.35  benefit.  Benefits to a dependent child must be paid from the 
 20.36  date of the employee's death to the date the dependent child 
 21.1   attains age 20 if the child is under age 15 on the date of 
 21.2   death.  If the child is 15 years or older on the date of death, 
 21.3   the benefit is payable for five years.  The payment to a 
 21.4   dependent child is an amount actuarially equivalent to the value 
 21.5   of a 100 percent joint and survivor optional annuity using the 
 21.6   age of the employee and age of the dependent child at the date 
 21.7   of death in lieu of the age of the surviving spouse.  If there 
 21.8   is more than one dependent child, each dependent child shall 
 21.9   receive a proportionate share of the actuarial value of the 
 21.10  employee's account, with the amount of the benefit payable to 
 21.11  each child to be determined based on the portion of the total 
 21.12  eligibility period that each child is eligible.  The process for 
 21.13  calculating the dependent child survivor benefit must be 
 21.14  approved by the actuary retained by the legislative commission 
 21.15  on pensions and retirement. 
 21.16     Subd. 6.  [PAYMENT TO DESIGNATED BENEFICIARY.] An amount 
 21.17  equal to any excess of the accumulated contributions that were 
 21.18  credited to the account of the deceased employee over and above 
 21.19  the total of the annuities paid and payable to the surviving 
 21.20  spouse or dependent children must be paid to the deceased 
 21.21  member's last designated beneficiary or, if none, to the legal 
 21.22  representative of the estate of the deceased member. 
 21.23     Subd. 7.  [ELECTION THAT SECTION DOES NOT APPLY.] A member 
 21.24  may specify in writing that this section does not apply and that 
 21.25  payment must be made only to the designated beneficiary, as 
 21.26  otherwise provided by this chapter. 
 21.27     Sec. 13.  [353E.08] [SCOPE AND APPLICATION.] 
 21.28     The general provisions of chapter 353 apply to the local 
 21.29  government correctional service retirement plan except where 
 21.30  otherwise specifically provided in sections 353E.01 to 353E.07.  
 21.31     Sec. 14.  Minnesota Statutes 1998, section 356.19, is 
 21.32  amended by adding a subdivision to read: 
 21.33     Subd. 5a.  [LOCAL GOVERNMENT CORRECTIONAL SERVICE 
 21.34  PLAN.] The applicable benefit accrual rate is 2.0 percent.  
 21.35     Sec. 15.  Minnesota Statutes 1998, section 356.20, 
 21.36  subdivision 2, is amended to read: 
 22.1      Subd. 2.  [COVERED PUBLIC PENSION FUNDS.] This section 
 22.2   applies to the following public pension plans: 
 22.3      (1) State employees retirement fund. 
 22.4      (2) Public employees retirement fund. 
 22.5      (3) Teachers retirement association. 
 22.6      (4) State patrol retirement fund. 
 22.7      (5) Minneapolis teachers retirement fund association. 
 22.8      (6) St. Paul teachers retirement fund association. 
 22.9      (7) Duluth teachers retirement fund association. 
 22.10     (8) Minneapolis employees retirement fund. 
 22.11     (9) University of Minnesota faculty retirement plan. 
 22.12     (10) University of Minnesota faculty supplemental 
 22.13  retirement plan. 
 22.14     (11) Judges retirement fund. 
 22.15     (12) Any police or firefighter's relief association 
 22.16  enumerated in section 69.77, subdivision 1a, or 69.771, 
 22.17  subdivision 1. 
 22.18     (13) Public employees police and fire fund.  
 22.19     (14) Minnesota state retirement system correctional 
 22.20  officers retirement fund.  
 22.21     (15) Public employees local government correctional service 
 22.22  retirement plan. 
 22.23     Sec. 16.  Minnesota Statutes 1998, section 356.30, 
 22.24  subdivision 3, is amended to read: 
 22.25     Subd. 3.  [COVERED FUNDS.] This section applies to the 
 22.26  following retirement funds: 
 22.27     (1) state employees retirement fund, established pursuant 
 22.28  to chapter 352; 
 22.29     (2) correctional employees retirement program, established 
 22.30  pursuant to chapter 352; 
 22.31     (3) unclassified employees retirement plan, established 
 22.32  pursuant to chapter 352D; 
 22.33     (4) state patrol retirement fund, established pursuant to 
 22.34  chapter 352B; 
 22.35     (5) legislators retirement plan, established pursuant to 
 22.36  chapter 3A; 
 23.1      (6) elective state officers' retirement plan, established 
 23.2   pursuant to chapter 352C; 
 23.3      (7) public employees retirement association, established 
 23.4   pursuant to chapter 353; 
 23.5      (8) public employees police and fire fund, established 
 23.6   pursuant to chapter 353; 
 23.7      (9) public employees local government correctional service 
 23.8   retirement plan, established pursuant to chapter 353E; 
 23.9      (10) teachers retirement association, established pursuant 
 23.10  to chapter 354; 
 23.11     (10) (11) Minneapolis employees retirement fund, 
 23.12  established pursuant to chapter 422A; 
 23.13     (11) (12) Minneapolis teachers retirement fund association, 
 23.14  established pursuant to chapter 354A; 
 23.15     (12) (13) St. Paul teachers retirement fund association, 
 23.16  established pursuant to chapter 354A; 
 23.17     (13) (14) Duluth teachers retirement fund association, 
 23.18  established pursuant to chapter 354A; and 
 23.19     (14) (15) judges' retirement fund, established by sections 
 23.20  490.121 to 490.132. 
 23.21     Sec. 17.  Minnesota Statutes 1998, section 356.302, 
 23.22  subdivision 7, is amended to read: 
 23.23     Subd. 7.  [COVERED RETIREMENT PLANS.] This section applies 
 23.24  to the following retirement plans: 
 23.25     (1) state employees retirement fund, established by chapter 
 23.26  352; 
 23.27     (2) unclassified employees retirement plan, established by 
 23.28  chapter 352D; 
 23.29     (3) public employees retirement association, established by 
 23.30  chapter 353; 
 23.31     (4) teachers retirement association, established by chapter 
 23.32  354; 
 23.33     (5) Duluth teachers retirement fund association, 
 23.34  established by chapter 354A; 
 23.35     (6) Minneapolis teachers retirement fund association, 
 23.36  established by chapter 354A; 
 24.1      (7) St. Paul teachers retirement fund association, 
 24.2   established by chapter 354A; 
 24.3      (8) Minneapolis employees retirement fund, established by 
 24.4   chapter 422A; 
 24.5      (9) correctional employees retirement plan, established by 
 24.6   chapter 352; 
 24.7      (10) state patrol retirement fund, established by chapter 
 24.8   352B; 
 24.9      (11) public employees police and fire fund, established by 
 24.10  chapter 353; and 
 24.11     (12) public employees local government correctional service 
 24.12  retirement plan, established by chapter 353E; and 
 24.13     (13) judges' retirement fund, established by sections 
 24.14  490.121 to 490.132. 
 24.15     Sec. 18.  Minnesota Statutes 1998, section 356.303, 
 24.16  subdivision 4, is amended to read: 
 24.17     Subd. 4.  [COVERED RETIREMENT PLANS.] This section applies 
 24.18  to the following retirement plans: 
 24.19     (1) legislators retirement plan, established by chapter 3A; 
 24.20     (2) state employees retirement fund, established by chapter 
 24.21  352; 
 24.22     (3) correctional employees retirement plan, established by 
 24.23  chapter 352; 
 24.24     (4) state patrol retirement fund, established by chapter 
 24.25  352B; 
 24.26     (5) elective state officers retirement plan, established by 
 24.27  chapter 352C; 
 24.28     (6) unclassified employees retirement plan, established by 
 24.29  chapter 352D; 
 24.30     (7) public employees retirement association, established by 
 24.31  chapter 353; 
 24.32     (8) public employees police and fire fund, established by 
 24.33  chapter 353; 
 24.34     (9) public employees local government correctional service 
 24.35  retirement plan, established by chapter 353E; 
 24.36     (10) teachers retirement association, established by 
 25.1   chapter 354; 
 25.2      (10) (11) Duluth teachers retirement fund association, 
 25.3   established by chapter 354A; 
 25.4      (11) (12) Minneapolis teachers retirement fund association, 
 25.5   established by chapter 354A; 
 25.6      (12) (13) St. Paul teachers retirement fund association, 
 25.7   established by chapter 354A; 
 25.8      (13) (14) Minneapolis employees retirement fund, 
 25.9   established by chapter 422A; and 
 25.10     (14) (15) judges' retirement fund, established by sections 
 25.11  490.121 to 490.132. 
 25.12     Sec. 19.  [REPEALER.] 
 25.13     Minnesota Statutes 1998, section 353.33, subdivision 3a, is 
 25.14  repealed. 
 25.15     Sec. 20.  [EFFECTIVE DATE.] 
 25.16     Sections 1 to 7 and 9 to 19 are effective on July 1, 1999.  
 25.17  Section 8 is effective on the first day of the first payroll 
 25.18  period beginning after June 30, 1999. 
 25.19                             ARTICLE 3 
 25.20                 LOCAL POLICE AND PAID FIRE RELIEF 
 25.21                 ASSOCIATION BENEFIT MODIFICATIONS
 25.22     Section 1. Laws 1977, chapter 61, section 6, as amended by 
 25.23  Laws 1981, chapter 68, section 39, and Laws 1998, chapter 390, 
 25.24  article 7, section 3, is amended to read: 
 25.25     Sec. 6. [EVELETH RETIRED POLICE AND FIRE TRUST FUND; 
 25.26  FINANCIAL REQUIREMENTS OF THE TRUST FUND.] 
 25.27     (a) The city of Eveleth shall provide by annual levy amount 
 25.28  sufficient to pay an amount which when added to the investment 
 25.29  income of the trust fund is sufficient to pay the benefits 
 25.30  provided under the trust fund for the succeeding year as 
 25.31  certified by the board of trustees of the trust fund. 
 25.32     (b) If the city of Eveleth fails to contribute the amount 
 25.33  required in paragraph (a) in a given year, no postretirement 
 25.34  adjustment granted under Laws 1995, chapter 262, article 10, 
 25.35  section 1, or Laws 1997, chapter 241, article 2, section 19 is 
 25.36  payable in the following year. 
 26.1      Sec. 2.  [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 
 26.2   HOC POSTRETIREMENT ADJUSTMENT.] 
 26.3      In addition to the current pensions and other retirement 
 26.4   benefits payable, the pensions and retirement benefits payable 
 26.5   to retired police officers and firefighters and their surviving 
 26.6   spouses by the Eveleth police and fire trust fund are increased 
 26.7   by $100 a month.  Increases are retroactive to January 1, 1999. 
 26.8      Sec. 3.  [FAIRMONT POLICE RELIEF ASSOCIATION; ADDITIONAL 
 26.9   ANNUAL POSTRETIREMENT ADJUSTMENT.] 
 26.10     (a) If the requirement of paragraph (f) is met, every 
 26.11  recipient of a pension or benefit from the Fairmont police 
 26.12  relief association on June 30, annually, is entitled to receive 
 26.13  a postretirement adjustment as provided in this section in 
 26.14  addition to any pension or benefit increase by virtue of an 
 26.15  increase in the salary of active patrol officers in the city of 
 26.16  Fairmont on the following July 1. 
 26.17     (b) If the value of current assets of the relief 
 26.18  association is equal to at least 102 percent of the actuarial 
 26.19  accrued liability of the Fairmont police relief association as 
 26.20  of December 31 in the prior calendar year as calculated under 
 26.21  Minnesota Statutes, sections 356.215 and 356.216, one percent of 
 26.22  the value of current assets of the relief association is 
 26.23  available for the payment of the postretirement adjustment. 
 26.24     (c) The amount of the postretirement adjustment must be 
 26.25  calculated by the chief administrative officer of the relief 
 26.26  association.  The postretirement adjustment amount is payable 
 26.27  monthly.  The total amount of all service pensions, disability 
 26.28  pensions, and survivor benefits, without inclusion of any 
 26.29  postretirement adjustment paid previously under this section 
 26.30  must be calculated and the percentage amount of each recipient's 
 26.31  annual pension or benefit of the total amount, expressed as four 
 26.32  digits beyond the decimal point, must be determined.  The 
 26.33  monthly postretirement adjustment payable to each pension or 
 26.34  benefit recipient is 1/12 of the dollar amount determined by 
 26.35  applying each recipient's determined percentage of the total 
 26.36  amount of pensions and benefits to the total dollar amount 
 27.1   available for payment as a postretirement adjustment. 
 27.2      (d) The postretirement adjustment amount paid in any year 
 27.3   under this section does not compound and must not be added to 
 27.4   the pension base for the calculation of a subsequent 
 27.5   postretirement adjustment.  If a pension or benefit recipient 
 27.6   dies before the 12 monthly postretirement adjustments under this 
 27.7   section have been paid, the remaining monthly postretirement 
 27.8   adjustment payments cancel to the special fund of the relief 
 27.9   association.  Nothing in this section authorizes the payment of 
 27.10  the postretirement adjustment to an estate or to a person who 
 27.11  did not qualify for a postretirement adjustment in the person's 
 27.12  own right. 
 27.13     (e) The chief administrative officer of the relief 
 27.14  association will report the total amount of benefits paid under 
 27.15  this section to the executive director of the legislative 
 27.16  commission on pensions and retirement, the city clerk, and the 
 27.17  state auditor. 
 27.18     (f) Payment of the postretirement adjustment amount 
 27.19  provided under this section may be made in a given year only if 
 27.20  the average time-weighted total rate of return for the total 
 27.21  portfolio for the most recent five-year period exceeds by at 
 27.22  least two percent the actual average percent increase in the 
 27.23  current monthly salary of a first class patrol officer in the 
 27.24  most recent prior five fiscal years. 
 27.25     Sec. 4.  [FAIRMONT POLICE RELIEF ASSOCIATION; RETROACTIVITY 
 27.26  OF SURVIVING SPOUSE BENEFIT INCREASE.] 
 27.27     (a) The surviving spouse benefit amount under Laws 1963, 
 27.28  chapter 423, is payable to all surviving spouses receiving 
 27.29  benefits as of the date of the approval of this act. 
 27.30     (b) Any surviving spouse benefit increase under this 
 27.31  section is first payable on the first day of the month next 
 27.32  following the effective date of this section. 
 27.33     Sec. 5.  [FAIRMONT POLICE RELIEF ASSOCIATION; BYLAWS 
 27.34  AMENDMENTS REQUIRED.] 
 27.35     Sections 3 and 4 must be implemented by the appropriate 
 27.36  amendments to the bylaws of the Fairmont police relief 
 28.1   association. 
 28.2      Sec. 6.  [ST. CLOUD POLICE CONSOLIDATION ACCOUNT; SPECIAL 
 28.3   ONE-TIME POSTRETIREMENT ADJUSTMENT.] 
 28.4      (a) Notwithstanding any provision of general or special law 
 28.5   to the contrary, all service pensioners, disability pensioners, 
 28.6   and survivor benefit recipients of the St. Cloud police 
 28.7   consolidation account who had begun the receipt of pensions or 
 28.8   benefits before December 31, 1997, the effective date of the St. 
 28.9   Cloud police consolidation process under Minnesota Statutes, 
 28.10  chapter 353A, that began in April 1997, are entitled to receive 
 28.11  the pension or benefit increase granted under Laws 1997, chapter 
 28.12  233, article 1, section 72. 
 28.13     (b) The special one-time postretirement adjustment under 
 28.14  paragraph (a) is effective retroactive to January 1, 1998.  The 
 28.15  first payment of pensions and benefits next following the 
 28.16  effective date of this section must include any back payments of 
 28.17  the retroactive postretirement adjustment. 
 28.18     (c) Nothing in this section authorizes the payment of a 
 28.19  special postretirement adjustment to an estate. 
 28.20     Sec. 7. [EFFECTIVE DATE.] 
 28.21     (a) Sections 1 and 2 are effective on approval by the 
 28.22  Eveleth city council and compliance with Minnesota Statutes, 
 28.23  section 645.021. 
 28.24     (b) Sections 3, 4, and 5 are effective on the day following 
 28.25  approval by the Fairmont city council and compliance with 
 28.26  Minnesota Statutes, section 645.021. 
 28.27     (c) Section 6 is effective on the day following approval by 
 28.28  the St. Cloud city council and compliance with Minnesota 
 28.29  Statutes, section 645.021. 
 28.30                             ARTICLE 4
 28.31                      MERGER INTO PERA-P&F OF 
 28.32                       LOCAL POLICE AND FIRE 
 28.33                       CONSOLIDATION ACCOUNTS 
 28.34     Section 1.  Minnesota Statutes 1998, section 3.85, 
 28.35  subdivision 12, is amended to read: 
 28.36     Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
 29.1   commission shall assess each retirement plan specified in 
 29.2   subdivision 11, paragraph (b), the compensation paid to the 
 29.3   actuary retained by the commission for the actuarial valuation 
 29.4   calculations, quadrennial projection valuations, and quadrennial 
 29.5   experience studies.  The assessment is 100 percent of the amount 
 29.6   of contract compensation for the actuarial consulting firm 
 29.7   retained by the commission for actuarial valuation calculations, 
 29.8   including the public employees police and fire plan 
 29.9   consolidation accounts of the public employees retirement 
 29.10  association established before March 2, 1999, for which the 
 29.11  municipality declined merger under section 353.665, subdivision 
 29.12  1, or established after March 1, 1999, annual experience data 
 29.13  collection and processing, and quadrennial experience 
 29.14  studies and quadrennial projection valuations.  
 29.15     The portion of the total assessment payable by each 
 29.16  retirement system or pension plan must be determined as follows: 
 29.17     (1) Each pension plan specified in subdivision 11, 
 29.18  paragraph (b), clauses (1) to (13), must pay the following 
 29.19  indexed amount based on its total active, deferred, inactive, 
 29.20  and benefit recipient membership: 
 29.21         up to 2,000 members, inclusive         $2.55 per member 
 29.22         2,001 through 10,000 members           $1.13 per member 
 29.23         over 10,000 members                    $0.11 per member  
 29.24     The amount specified is applicable for the assessment of 
 29.25  the July 1, 1991, to June 30, 1992, fiscal year actuarial 
 29.26  compensation amounts.  For the July 1, 1992, to June 30, 1993, 
 29.27  fiscal year and subsequent fiscal year actuarial compensation 
 29.28  amounts, the amount specified must be increased at the same 
 29.29  percentage increase rate as the implicit price deflator for 
 29.30  state and local government purchases of goods and services for 
 29.31  the 12-month period ending with the first quarter of the 
 29.32  calendar year following the completion date for the actuarial 
 29.33  valuation calculations, as published by the federal Department 
 29.34  of Commerce, and rounded upward to the nearest full cent. 
 29.35     (2) The total per-member portion of the allocation must be 
 29.36  determined, and that total per-member amount must be subtracted 
 30.1   from the total amount for allocation.  Of the remainder dollar 
 30.2   amount, the following per-retirement system and per-pension plan 
 30.3   charges must be determined and the charges must be paid by the 
 30.4   system or plan: 
 30.5      (i) 37.87 percent is the total additional per-retirement 
 30.6   system charge, of which one-seventh must be paid by each 
 30.7   retirement system specified in subdivision 11, paragraph (b), 
 30.8   clauses (1), (2), (6), (7), (9), (10), and (11). 
 30.9      (ii) 62.13 percent is the total additional per-pension plan 
 30.10  charge, of which one-thirteenth must be paid by each pension 
 30.11  plan specified in subdivision 11, paragraph (b), clauses (1) to 
 30.12  (13).  
 30.13     (b) The assessment must be made following the completion of 
 30.14  the actuarial valuation calculations and the experience 
 30.15  analysis.  The amount of the assessment is appropriated from the 
 30.16  retirement fund applicable to the retirement plan.  Receipts 
 30.17  from assessments must be deposited in the state treasury and 
 30.18  credited to the general fund. 
 30.19     Sec. 2.  Minnesota Statutes 1998, section 69.021, 
 30.20  subdivision 10, is amended to read: 
 30.21     Subd. 10.  [REDUCTION IN POLICE STATE AID APPORTIONMENT.] 
 30.22  (a) The commissioner of revenue shall reduce the apportionment 
 30.23  of police state aid under subdivisions 5, paragraph (b), 6, and 
 30.24  7a, for eligible employer units by any excess police state aid. 
 30.25     (b) "Excess police state aid" is: 
 30.26     (1) for counties and for municipalities in which police 
 30.27  retirement coverage is provided wholly by the public employees 
 30.28  police and fire fund and all police officers are members of the 
 30.29  plan governed by sections 353.63 to 353.657, the amount in 
 30.30  excess of the employer's total prior calendar year obligation as 
 30.31  defined in paragraph (c), as certified by the executive director 
 30.32  of the public employees retirement association; 
 30.33     (2) for municipalities in which police retirement coverage 
 30.34  is provided in part by the public employees police and fire fund 
 30.35  governed by sections 353.63 to 353.657 and in part by a local 
 30.36  police consolidation account governed by chapter 353A, and 
 31.1   established before March 2, 1999, for which the municipality 
 31.2   declined merger under section 353.665, subdivision 1, or 
 31.3   established after March 1, 1999, the amount in excess of the 
 31.4   employer's total prior calendar year obligation as defined in 
 31.5   paragraph (c), plus the amount of the employer's total prior 
 31.6   calendar year obligation under section 353A.09, subdivision 5, 
 31.7   paragraphs (a) and (b), as certified by the executive director 
 31.8   of the public employees retirement association; 
 31.9      (3) for municipalities in which police retirement coverage 
 31.10  is provided by the public employees police and fire plan 
 31.11  governed by sections 353.63 to 353.657, in which police 
 31.12  retirement coverage was provided by a police consolidation 
 31.13  account under chapter 353A before July 1, 1999, and for which 
 31.14  the municipality has an additional municipal contribution under 
 31.15  section 353.665, subdivision 8, paragraph (b), the amount in 
 31.16  excess of the employer's total prior calendar year obligation as 
 31.17  defined in paragraph (c), plus the amount of any additional 
 31.18  municipal contribution under section 353.665, subdivision 8, 
 31.19  paragraph (b), until the year 2010, as certified by the 
 31.20  executive director of the public employees retirement 
 31.21  association; 
 31.22     (4) for municipalities in which police retirement coverage 
 31.23  is provided in part by the public employees police and fire fund 
 31.24  governed by sections 353.63 to 353.657 and in part by a local 
 31.25  police relief association governed by sections 69.77 and 
 31.26  423A.01, the amount in excess of the employer's total prior 
 31.27  calendar year obligation as defined in paragraph (c), as 
 31.28  certified by the executive director of the public employees 
 31.29  retirement association, plus the amount of the financial 
 31.30  requirements of the relief association certified to the 
 31.31  applicable municipality during the prior calendar year under 
 31.32  section 69.77, subdivisions 2b and 2c, reduced by the amount of 
 31.33  member contributions deducted from the covered salary of the 
 31.34  relief association during the prior calendar year under section 
 31.35  69.77, subdivision 2a, as certified by the chief administrative 
 31.36  officer of the applicable municipality; 
 32.1      (4) (5) for the metropolitan airports commission, if there 
 32.2   are police officers hired before July 1, 1978, with retirement 
 32.3   coverage by the Minneapolis employees retirement fund remaining, 
 32.4   the amount in excess of the commission's total prior calendar 
 32.5   year obligation as defined in paragraph (c), as certified by the 
 32.6   executive director of the public employees retirement 
 32.7   association, plus the amount determined by expressing the 
 32.8   commission's total prior calendar year contribution to the 
 32.9   Minneapolis employees retirement fund under section 422A.101, 
 32.10  subdivisions 2 and 2a, as a percentage of the commission's total 
 32.11  prior calendar year covered payroll for commission employees 
 32.12  covered by the Minneapolis employees retirement fund and 
 32.13  applying that percentage to the commission's total prior 
 32.14  calendar year covered payroll for commission police officers 
 32.15  covered by the Minneapolis employees retirement fund, as 
 32.16  certified by the chief administrative officer of the 
 32.17  metropolitan airports commission; and 
 32.18     (5) (6) for the department of natural resources and for the 
 32.19  department of public safety, the amount in excess of the 
 32.20  employer's total prior calendar year obligation under section 
 32.21  352B.02, subdivision 1c, for plan members who are peace officers 
 32.22  under section 69.011, subdivision 1, clause (g), as certified by 
 32.23  the executive director of the Minnesota state retirement system. 
 32.24     (c) The employer's total prior calendar year obligation 
 32.25  with respect to the public employees police and fire plan is the 
 32.26  total prior calendar year obligation under section 353.65, 
 32.27  subdivision 3, for police officers as defined in section 353.64, 
 32.28  subdivision 2, and the actual total prior calendar year 
 32.29  obligation under section 353.65, subdivision 3, for 
 32.30  firefighters, as defined in section 353.64, subdivision 3, but 
 32.31  not to exceed for those firefighters the applicable following 
 32.32  amounts: 
 32.33    Municipality                       Maximum Amount 
 32.34    Albert Lea                          $54,157.01
 32.35    Anoka                                10,399.31
 32.36    Apple Valley                          5,442.44 
 33.1     Austin                               49,864.73
 33.2     Bemidji                              27,671.38
 33.3     Brooklyn Center                       6,605.92
 33.4     Brooklyn Park                        24,002.26  
 33.5     Burnsville                           15,956.00 
 33.6     Cloquet                               4,260.49 
 33.7     Coon Rapids                          39,920.00 
 33.8     Cottage Grove                         8,588.48
 33.9     Crystal                               5,855.00
 33.10    East Grand Forks                     51,009.88
 33.11    Edina                                32,251.00
 33.12    Elk River                             5,216.55
 33.13    Ely                                  13,584.16
 33.14    Eveleth                              16,288.27
 33.15    Fergus Falls                          6,742.00
 33.16    Fridley                              33,420.64
 33.17    Golden Valley                        11,744.61 
 33.18    Hastings                             16,561.00 
 33.19    Hopkins                               4,324.23  
 33.20    International Falls                  14,400.69 
 33.21    Lakeville                               782.35 
 33.22    Lino Lakes                            5,324.00 
 33.23    Little Falls                          7,889.41 
 33.24    Maple Grove                           6,707.54 
 33.25    Maplewood                             8,476.69 
 33.26    Minnetonka                           10,403.00 
 33.27    Montevideo                            1,307.66 
 33.28    Moorhead                             68,069.26 
 33.29    New Hope                              6,739.72 
 33.30    North St. Paul                        4,241.14 
 33.31    Northfield                              770.63 
 33.32    Owatonna                             37,292.67 
 33.33    Plymouth                              6,754.71 
 33.34    Red Wing                              3,504.01 
 33.35    Richfield                            53,757.96 
 33.36    Rosemount                             1,712.55 
 34.1     Roseville                             9,854.51 
 34.2     St. Anthony                          33,055.00 
 34.3     St. Louis Park                       53,643.11 
 34.4     Thief River Falls                    28,365.04 
 34.5     Virginia                             31,164.46 
 34.6     Waseca                               11,135.17 
 34.7     West St. Paul                        15,707.20 
 34.8     White Bear Lake                       6,521.04 
 34.9     Woodbury                              3,613.00 
 34.10    any other municipality                    0.00 
 34.11     (d) The total amount of excess police state aid must be 
 34.12  deposited in the excess police state-aid account in the general 
 34.13  fund, administered and distributed as provided in subdivision 11.
 34.14     Sec. 3.  Minnesota Statutes 1998, section 69.031, 
 34.15  subdivision 5, is amended to read: 
 34.16     Subd. 5.  [DEPOSIT OF STATE AID.] (a) The municipal 
 34.17  treasurer shall, within 30 days after receipt, transmit the fire 
 34.18  state aid to the treasurer of the duly incorporated 
 34.19  firefighters' relief association if there is one organized and 
 34.20  the association has filed a financial report with the 
 34.21  municipality.  If the relief association has not filed a 
 34.22  financial report with the municipality, the municipal treasurer 
 34.23  shall delay transmission of the fire state aid to the relief 
 34.24  association until the complete financial report is filed.  If 
 34.25  there is no relief association organized, or if the association 
 34.26  has dissolved, or has been removed as trustees of state aid, 
 34.27  then the treasurer of the municipality shall deposit the money 
 34.28  in the municipal treasury as provided for in section 424A.08 and 
 34.29  the money may be disbursed only for the purposes and in the 
 34.30  manner set forth in that section. 
 34.31     (b) The municipal treasurer, upon receipt of the police 
 34.32  state aid, shall disburse the police state aid in the following 
 34.33  manner: 
 34.34     (1) For a municipality in which a local police relief 
 34.35  association exists and all peace officers are members of the 
 34.36  association, the total state aid must be transmitted to the 
 35.1   treasurer of the relief association within 30 days of the date 
 35.2   of receipt, and the treasurer of the relief association shall 
 35.3   immediately deposit the total state aid in the special fund of 
 35.4   the relief association; 
 35.5      (2) For a municipality in which police retirement coverage 
 35.6   is provided by the public employees police and fire fund and all 
 35.7   peace officers are members of the fund, including municipalities 
 35.8   covered by section 353.665, the total state aid must be applied 
 35.9   toward the municipality's employer contribution to the public 
 35.10  employees police and fire fund under section sections 353.65, 
 35.11  subdivision 3, and 353.665, subdivision 8, paragraph (b), if 
 35.12  applicable; or 
 35.13     (3) For a municipality other than a city of the first class 
 35.14  with a population of more than 300,000 in which both a police 
 35.15  relief association exists and police retirement coverage is 
 35.16  provided in part by the public employees police and fire fund, 
 35.17  the municipality may elect at its option to transmit the total 
 35.18  state aid to the treasurer of the relief association as provided 
 35.19  in clause (1), to use the total state aid to apply toward the 
 35.20  municipality's employer contribution to the public employees 
 35.21  police and fire fund subject to all the provisions set forth in 
 35.22  clause (2), or to allot the total state aid proportionately to 
 35.23  be transmitted to the police relief association as provided in 
 35.24  this subdivision and to apply toward the municipality's employer 
 35.25  contribution to the public employees police and fire fund 
 35.26  subject to the provisions of clause (2) on the basis of the 
 35.27  respective number of active full-time peace officers, as defined 
 35.28  in section 69.011, subdivision 1, clause (g). 
 35.29     For a city of the first class with a population of more 
 35.30  than 300,000, in addition, the city may elect to allot the 
 35.31  appropriate portion of the total police state aid to apply 
 35.32  toward the employer contribution of the city to the public 
 35.33  employees police and fire fund based on the covered salary of 
 35.34  police officers covered by the fund each payroll period and to 
 35.35  transmit the balance to the police relief association; or 
 35.36     (4) For a municipality in which police retirement coverage 
 36.1   is provided in part by the public employees police and fire fund 
 36.2   and in part by a local police consolidation account governed by 
 36.3   chapter 353A and established before March 2, 1999, for which the 
 36.4   municipality declined merger under section 353.665, subdivision 
 36.5   1, or established after March 1, 1999, the total police state 
 36.6   aid must be applied towards the municipality's total employer 
 36.7   contribution to the public employees police and fire fund and to 
 36.8   the local police consolidation account under sections 353.65, 
 36.9   subdivision 3, and 353A.09, subdivision 5. 
 36.10     (c) The county treasurer, upon receipt of the police state 
 36.11  aid for the county, shall apply the total state aid toward the 
 36.12  county's employer contribution to the public employees police 
 36.13  and fire fund under section 353.65, subdivision 3. 
 36.14     (d) The designated metropolitan airports commission 
 36.15  official, upon receipt of the police state aid for the 
 36.16  metropolitan airports commission, shall apply the total police 
 36.17  state aid first toward the commission's employer contribution 
 36.18  for police officers to the Minneapolis employees retirement fund 
 36.19  under section 422A.101, subdivision 2a, and, if there is any 
 36.20  amount of police state aid remaining, shall apply that remainder 
 36.21  toward the commission's employer contribution for police 
 36.22  officers to the public employees police and fire plan under 
 36.23  section 353.65, subdivision 3. 
 36.24     (e) The police state aid apportioned to the departments of 
 36.25  public safety and natural resources under section 69.021, 
 36.26  subdivision 7a, is appropriated to the commissioner of finance 
 36.27  for transfer to the funds and accounts from which the salaries 
 36.28  of peace officers certified under section 69.011, subdivision 
 36.29  2a, are paid.  The commissioner of revenue shall certify to the 
 36.30  commissioners of public safety, natural resources, and finance 
 36.31  the amounts to be transferred from the appropriation for police 
 36.32  state aid.  The commissioners of public safety and natural 
 36.33  resources shall certify to the commissioner of finance the 
 36.34  amounts to be credited to each of the funds and accounts from 
 36.35  which the peace officers employed by their respective 
 36.36  departments are paid.  Each commissioner must allocate the 
 37.1   police state aid first for employer contributions for employees 
 37.2   funded from the general fund and then for employer contributions 
 37.3   for employees funded from other funds.  For peace officers whose 
 37.4   salaries are paid from the general fund, the amounts transferred 
 37.5   from the appropriation for police state aid must be canceled to 
 37.6   the general fund. 
 37.7      Sec. 4.  Minnesota Statutes 1998, section 353.01, 
 37.8   subdivision 2b, is amended to read: 
 37.9      Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
 37.10  employees shall not participate as members of the association 
 37.11  with retirement coverage by the public employees retirement plan 
 37.12  or the public employees police and fire retirement plan: 
 37.13     (1) elected public officers, or persons appointed to fill a 
 37.14  vacancy in an elective office, who do not elect to participate 
 37.15  in the association by filing an application for membership; 
 37.16     (2) election officers; 
 37.17     (3) patient and inmate personnel who perform services in 
 37.18  charitable, penal, or correctional institutions of a 
 37.19  governmental subdivision; 
 37.20     (4) employees who are hired for a temporary position under 
 37.21  subdivision 12a, and employees who resign from a nontemporary 
 37.22  position and accept a temporary position within 30 days in the 
 37.23  same governmental subdivision, but not those employees who are 
 37.24  hired for an unlimited period but are serving a probationary 
 37.25  period.  If the period of employment extends beyond six 
 37.26  consecutive months and the employee earns more than $425 from 
 37.27  one governmental subdivision in any one calendar month, the 
 37.28  department head shall report the employee for membership and 
 37.29  require employee deductions be made on behalf of the employee 
 37.30  under section 353.27, subdivision 4. 
 37.31     Membership eligibility of an employee who resigns or is 
 37.32  dismissed from a temporary position and within 30 days accepts 
 37.33  another temporary position in the same governmental subdivision 
 37.34  is determined on the total length of employment rather than on 
 37.35  each separate position.  Membership eligibility of an employee 
 37.36  who holds concurrent temporary and nontemporary positions in one 
 38.1   governmental subdivision is determined by the length of 
 38.2   employment and salary of each separate position; 
 38.3      (5) employees whose actual salary from one governmental 
 38.4   subdivision does not exceed $425 per month, or whose annual 
 38.5   salary from one governmental subdivision does not exceed a 
 38.6   stipulation prepared in advance, in writing, that the salary 
 38.7   must not exceed $5,100 per calendar year or per school year for 
 38.8   school employees for employment expected to be of a full year's 
 38.9   duration or more than the prorated portion of $5,100 per 
 38.10  employment period for employment expected to be of less than a 
 38.11  full year's duration; 
 38.12     (6) employees who are employed by reason of work emergency 
 38.13  caused by fire, flood, storm, or similar disaster; 
 38.14     (7) employees who by virtue of their employment in one 
 38.15  governmental subdivision are required by law to be a member of 
 38.16  and to contribute to any of the plans or funds administered by 
 38.17  the Minnesota state retirement system, the teachers retirement 
 38.18  association, the Duluth teachers retirement fund association, 
 38.19  the Minneapolis teachers retirement association, the St. Paul 
 38.20  teachers retirement fund association, the Minneapolis employees 
 38.21  retirement fund, or any police or firefighters relief 
 38.22  association governed by section 69.77 that has not consolidated 
 38.23  with the public employees retirement association, or any local 
 38.24  police or firefighters relief association that has consolidated 
 38.25  with the public employees retirement association consolidation 
 38.26  account but whose members who have not elected the type of 
 38.27  benefit coverage provided by the public employees police and 
 38.28  fire fund under sections 353A.01 to 353A.10, or any persons 
 38.29  covered by section 353.665, subdivision 4, 5, or 6, who have not 
 38.30  elected public employees police and fire plan benefit coverage.  
 38.31  This clause must not be construed to prevent a person from being 
 38.32  a member of and contributing to the public employees retirement 
 38.33  association and also belonging to and contributing to another 
 38.34  public pension fund for other service occurring during the same 
 38.35  period of time.  A person who meets the definition of "public 
 38.36  employee" in subdivision 2 by virtue of other service occurring 
 39.1   during the same period of time becomes a member of the 
 39.2   association unless contributions are made to another public 
 39.3   retirement fund on the salary based on the other service or to 
 39.4   the teachers retirement association by a teacher as defined in 
 39.5   section 354.05, subdivision 2; 
 39.6      (8) persons who are excluded from coverage under the 
 39.7   federal Old Age, Survivors, Disability, and Health Insurance 
 39.8   Program for the performance of service as specified in United 
 39.9   States Code, title 42, section 410(a)(8)(A), as amended through 
 39.10  January 1, 1987, if no irrevocable election of coverage has been 
 39.11  made under section 3121(r) of the Internal Revenue Code of 1954, 
 39.12  as amended; 
 39.13     (9) full-time students who are enrolled and are regularly 
 39.14  attending classes at an accredited school, college, or 
 39.15  university and who are part-time employees as defined by a 
 39.16  governmental subdivision; 
 39.17     (10) resident physicians, medical interns, and pharmacist 
 39.18  residents and pharmacist interns who are serving in a degree or 
 39.19  residency program in public hospitals; 
 39.20     (11) students who are serving in an internship or residency 
 39.21  program sponsored by an accredited educational institution; 
 39.22     (12) persons who hold a part-time adult supplementary 
 39.23  technical college license who render part-time teaching service 
 39.24  in a technical college; 
 39.25     (13) foreign citizens working for a governmental 
 39.26  subdivision with a work permit of less than three years, or an 
 39.27  H-1b visa valid for less than three years of employment.  Upon 
 39.28  notice to the association that the work permit or visa extends 
 39.29  beyond the three-year period, the foreign citizens are eligible 
 39.30  for membership from the date of the extension; 
 39.31     (14) public hospital employees who elected not to 
 39.32  participate as members of the association before 1972 and who 
 39.33  did not elect to participate from July 1, 1988, to October 1, 
 39.34  1988; 
 39.35     (15) except as provided in section 353.86, volunteer 
 39.36  ambulance service personnel, as defined in subdivision 35, but 
 40.1   persons who serve as volunteer ambulance service personnel may 
 40.2   still qualify as public employees under subdivision 2 and may be 
 40.3   members of the public employees retirement association and 
 40.4   participants in the public employees retirement fund or the 
 40.5   public employees police and fire fund on the basis of 
 40.6   compensation received from public employment service other than 
 40.7   service as volunteer ambulance service personnel; 
 40.8      (16) except as provided in section 353.87, volunteer 
 40.9   firefighters, as defined in subdivision 36, engaging in 
 40.10  activities undertaken as part of volunteer firefighter duties; 
 40.11  provided that a person who is a volunteer firefighter may still 
 40.12  qualify as a public employee under subdivision 2 and may be a 
 40.13  member of the public employees retirement association and a 
 40.14  participant in the public employees retirement fund or the 
 40.15  public employees police and fire fund on the basis of 
 40.16  compensation received from public employment activities other 
 40.17  than those as a volunteer firefighter; and 
 40.18     (17) pipefitters and associated trades personnel employed 
 40.19  by independent school district No. 625, St. Paul, with coverage 
 40.20  by the pipefitters local 455 pension plan under a collective 
 40.21  bargaining agreement who were either first employed after May 1, 
 40.22  1997, or, if first employed before May 2, 1997, elected to be 
 40.23  excluded under Laws 1997, chapter 241, article 2, section 12. 
 40.24     Sec. 5.  Minnesota Statutes 1998, section 353.01, 
 40.25  subdivision 10, is amended to read: 
 40.26     Subd. 10.  [SALARY.] (a) "Salary" means:  
 40.27     (1) periodic compensation of a public employee, before 
 40.28  deductions for deferred compensation, supplemental retirement 
 40.29  plans, or other voluntary salary reduction programs, and also 
 40.30  means "wages" and includes net income from fees; and 
 40.31     (2) for a public employee who has prior service covered by 
 40.32  a local police or firefighters' relief association that has 
 40.33  consolidated with the public employees retirement association or 
 40.34  to which section 353.665 applies and who has elected 
 40.35  coverage either under the public employees police and fire fund 
 40.36  benefit plan under section 353A.08 following the 
 41.1   consolidation or under section 353.665, subdivision 4, "salary" 
 41.2   means the rate of salary upon which member contributions to the 
 41.3   special fund of the relief association were made prior to the 
 41.4   effective date of the consolidation as specified by law and by 
 41.5   bylaw provisions governing the relief association on the date of 
 41.6   the initiation of the consolidation procedure and the actual 
 41.7   periodic compensation of the public employee after the effective 
 41.8   date of consolidation. 
 41.9      (b) Salary does not mean: 
 41.10     (1) fees paid to district court reporters, unused annual or 
 41.11  sick leave payments, in lump-sum or periodic payments, severance 
 41.12  payments, reimbursement of expenses, lump-sum settlements not 
 41.13  attached to a specific earnings period, or workers' compensation 
 41.14  payments; 
 41.15     (2) employer-paid amounts used by an employee toward the 
 41.16  cost of insurance coverage, employer-paid fringe benefits, 
 41.17  flexible spending accounts, cafeteria plans, health care expense 
 41.18  accounts, day care expenses, or any payments in lieu of any 
 41.19  employer-paid group insurance coverage, including the difference 
 41.20  between single and family rates that may be paid to a member 
 41.21  with single coverage and certain amounts determined by the 
 41.22  executive director to be ineligible; 
 41.23     (3) the amount equal to that which the employing 
 41.24  governmental subdivision would otherwise pay toward single or 
 41.25  family insurance coverage for a covered employee when, through a 
 41.26  contract or agreement with some but not all employees, the 
 41.27  employer: 
 41.28     (i) discontinues, or for new hires does not provide, 
 41.29  payment toward the cost of the employee's selected insurance 
 41.30  coverages under a group plan offered by the employer; 
 41.31     (ii) makes the employee solely responsible for all 
 41.32  contributions toward the cost of the employee's selected 
 41.33  insurance coverages under a group plan offered by the employer, 
 41.34  including any amount the employer makes toward other employees' 
 41.35  selected insurance coverages under a group plan offered by the 
 41.36  employer; and 
 42.1      (iii) provides increased salary rates for employees who do 
 42.2   not have any employer-paid group insurance coverages; and 
 42.3      (4) except as provided in section 353.86 or 353.87, 
 42.4   compensation of any kind paid to volunteer ambulance service 
 42.5   personnel or volunteer firefighters, as defined in subdivisions 
 42.6   35 and 36.  
 42.7      Sec. 6.  Minnesota Statutes 1998, section 353.01, 
 42.8   subdivision 16, is amended to read: 
 42.9      Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
 42.10  means service during years of actual membership in the course of 
 42.11  which employee contributions were made, periods covered by 
 42.12  payments in lieu of salary deductions under section 353.35, and 
 42.13  service in years during which the public employee was not a 
 42.14  member but for which the member later elected, while a member, 
 42.15  to obtain credit by making payments to the fund as permitted by 
 42.16  any law then in effect. 
 42.17     (b) "Allowable service" also means a period of authorized 
 42.18  leave of absence with pay from which deductions for employee 
 42.19  contributions are made, deposited, and credited to the fund. 
 42.20     (c) "Allowable service" also means a period of authorized 
 42.21  leave of absence without pay that does not exceed one year, and 
 42.22  during or for which a member obtained credit by payments to the 
 42.23  fund made in place of salary deductions, provided that the 
 42.24  payments are made in an amount or amounts based on the member's 
 42.25  average salary on which deductions were paid for the last six 
 42.26  months of public service, or for that portion of the last six 
 42.27  months while the member was in public service, to apply to the 
 42.28  period in either case immediately preceding commencement of the 
 42.29  leave of absence.  If the employee elects to pay employee 
 42.30  contributions for the period of any leave of absence without 
 42.31  pay, or for any portion of the leave, the employee shall also, 
 42.32  as a condition to the exercise of the election, pay to the fund 
 42.33  an amount equivalent to both the required employer and 
 42.34  additional employer contributions for the employee.  The payment 
 42.35  must be made within one year from the expiration of the leave of 
 42.36  absence or within 20 days after termination of public service 
 43.1   under subdivision 11a.  The employer by appropriate action of 
 43.2   its governing body, made a part of its official records, before 
 43.3   the date of the first payment of the employee contribution, may 
 43.4   certify to the association in writing its commitment to pay the 
 43.5   employer and additional employer contributions from the proceeds 
 43.6   of a tax levy made under section 353.28.  Payments under this 
 43.7   paragraph must include interest at an annual rate of 8.5 percent 
 43.8   compounded annually from the date of the termination of the 
 43.9   leave of absence to the date payment is made.  An employee shall 
 43.10  return to public service and receive a minimum of three months 
 43.11  of allowable service to be eligible to pay employee and employer 
 43.12  contributions for a subsequent authorized leave of absence 
 43.13  without pay. 
 43.14     (d) "Allowable service" also means a periodic, repetitive 
 43.15  leave that is offered to all employees of a governmental 
 43.16  subdivision.  The leave program may not exceed 208 hours per 
 43.17  annual normal work cycle as certified to the association by the 
 43.18  employer.  A participating member obtains service credit by 
 43.19  making employee contributions in an amount or amounts based on 
 43.20  the member's average salary that would have been paid if the 
 43.21  leave had not been taken.  The employer shall pay the employer 
 43.22  and additional employer contributions on behalf of the 
 43.23  participating member.  The employee and the employer are 
 43.24  responsible to pay interest on their respective shares at the 
 43.25  rate of 8.5 percent a year, compounded annually, from the end of 
 43.26  the normal cycle until full payment is made.  An employer shall 
 43.27  also make the employer and additional employer contributions, 
 43.28  plus 8.5 percent interest, compounded annually, on behalf of an 
 43.29  employee who makes employee contributions but terminates public 
 43.30  service.  The employee contributions must be made within one 
 43.31  year after the end of the annual normal working cycle or within 
 43.32  20 days after termination of public service, whichever is 
 43.33  sooner.  The association shall prescribe the manner and forms to 
 43.34  be used by a governmental subdivision in administering a 
 43.35  periodic, repetitive leave. 
 43.36     (e) "Allowable service" also means a period during which a 
 44.1   member is on an authorized sick leave of absence, without pay, 
 44.2   limited to one year.  An employee who has received one year of 
 44.3   allowable service shall return to public service and receive a 
 44.4   minimum of three months of allowable service to receive 
 44.5   allowable service for a subsequent authorized sick leave of 
 44.6   absence. 
 44.7      (f) "Allowable service" also means an authorized temporary 
 44.8   layoff under subdivision 12, limited to three months allowable 
 44.9   service per authorized temporary layoff in one calendar year.  
 44.10  An employee who has received the maximum service allowed for an 
 44.11  authorized temporary layoff shall return to public service and 
 44.12  receive a minimum of three months of allowable service to 
 44.13  receive allowable service for a subsequent authorized temporary 
 44.14  layoff. 
 44.15     (g) Notwithstanding any law to the contrary, "allowable 
 44.16  service" also means a parental leave.  The association shall 
 44.17  grant a maximum of two months service credit for a parental 
 44.18  leave, within six months after the birth or adoption, upon 
 44.19  documentation from the member's governmental subdivision or 
 44.20  presentation of a birth certificate or other evidence of birth 
 44.21  or adoption to the association. 
 44.22     (h) "Allowable service" also means a period during which a 
 44.23  member is on an authorized leave of absence to enter military 
 44.24  service, provided that the member returns to public service upon 
 44.25  discharge from military service under section 192.262 and pays 
 44.26  into the fund employee contributions based upon the employee's 
 44.27  salary at the date of return from military service.  Payment 
 44.28  must be made within five years of the date of discharge from the 
 44.29  military service.  The amount of these contributions must be in 
 44.30  accord with the contribution rates and salary limitations, if 
 44.31  any, in effect during the leave, plus interest at an annual rate 
 44.32  of 8.5 percent compounded annually from the date of return to 
 44.33  public service to the date payment is made.  The matching 
 44.34  employer contribution and additional employer contribution under 
 44.35  section 353.27, subdivisions 3 and 3a, must be paid by the 
 44.36  governmental subdivision employing the member upon return to 
 45.1   public service if the member makes the employee contributions.  
 45.2   The governmental subdivision involved may appropriate money for 
 45.3   those payments.  A member may not receive credit for a voluntary 
 45.4   extension of military service at the instance of the member 
 45.5   beyond the initial period of enlistment, induction, or call to 
 45.6   active duty. 
 45.7      (i) For calculating benefits under sections 353.30, 353.31, 
 45.8   353.32, and 353.33 for state officers and employees displaced by 
 45.9   the Community Corrections Act, chapter 401, and transferred into 
 45.10  county service under section 401.04, "allowable service" means 
 45.11  combined years of allowable service as defined in paragraphs (a) 
 45.12  to (i) and section 352.01, subdivision 11.  
 45.13     (j) For a public employee who has prior service covered by 
 45.14  a local police or firefighters relief association that has 
 45.15  consolidated with the public employees retirement association or 
 45.16  to which section 353.665 applies, and who has elected the type 
 45.17  of benefit coverage provided by the public employees police and 
 45.18  fire fund either under section 353A.08 following the 
 45.19  consolidation or under section 353.665, subdivision 4, 
 45.20  "applicable service" is a period of service credited by the 
 45.21  local police or firefighters relief association as of the 
 45.22  effective date of the consolidation based on law and on bylaw 
 45.23  provisions governing the relief association on the date of the 
 45.24  initiation of the consolidation procedure. 
 45.25     Sec. 7.  Minnesota Statutes 1998, section 353.64, 
 45.26  subdivision 1, is amended to read: 
 45.27     Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
 45.28  person who prior to July 1, 1961, was a member of the police and 
 45.29  fire fund, by virtue of being a police officer or firefighter, 
 45.30  shall, as long as the person remains in either position, 
 45.31  continue membership in the fund.  
 45.32     (b) A person who was employed by a governmental subdivision 
 45.33  as a police officer and was a member of the police and fire fund 
 45.34  on July 1, 1978, by virtue of being a police officer as defined 
 45.35  by this section on that date, and if employed by the same 
 45.36  governmental subdivision in a position in the same department in 
 46.1   which the person was employed on that date, shall continue 
 46.2   membership in the fund whether or not that person has the power 
 46.3   of arrest by warrant after that date. 
 46.4      (c) A person who was employed by a governmental subdivision 
 46.5   as a police officer or a firefighter, whichever applies, was an 
 46.6   active member of the local police or salaried firefighters 
 46.7   relief association located in that governmental subdivision by 
 46.8   virtue of that employment as of the effective date of the 
 46.9   consolidation as authorized by sections 353A.01 to 353A.10, and 
 46.10  has elected coverage by the public employees police and fire 
 46.11  fund benefit plan, shall become a member of the police and fire 
 46.12  fund after that date if employed by the same governmental 
 46.13  subdivision in a position in the same department in which the 
 46.14  person was employed on that date. 
 46.15     (d) Any other employee serving on a full-time basis as a 
 46.16  police officer or firefighter on or after July 1, 1961, shall 
 46.17  become a member of the public employees police and fire fund.  
 46.18     (e) An employee serving on less than a full-time basis as a 
 46.19  police officer shall become a member of the public employees 
 46.20  police and fire fund only after a resolution stating that the 
 46.21  employee should be covered by the police and fire fund is 
 46.22  adopted by the governing body of the governmental subdivision 
 46.23  employing the person declaring that the position which the 
 46.24  person holds is that of a police officer. 
 46.25     (f) An employee serving on less than a full-time basis as a 
 46.26  firefighter shall become a member of the public employees police 
 46.27  and fire fund only after a resolution stating that the employee 
 46.28  should be covered by the police and fire fund is adopted by the 
 46.29  governing body of the governmental subdivision employing the 
 46.30  person declaring that the position which the person holds is 
 46.31  that of a firefighter. 
 46.32     (g) A police officer or firefighter employed by a 
 46.33  governmental subdivision who by virtue of that employment is 
 46.34  required by law to be a member of and to contribute to any 
 46.35  police or firefighter relief association governed by section 
 46.36  69.77 which has not consolidated with the public employees 
 47.1   police and fire fund and, any police officer or firefighter of a 
 47.2   relief association that has consolidated with the association 
 47.3   for which the employee has not elected coverage by the public 
 47.4   employees police and fire fund benefit plan as provided in 
 47.5   sections 353A.01 to 353A.10, or any police officer or 
 47.6   firefighter to whom section 353.665 applies who has not elected 
 47.7   coverage by the public employees police and fire fund benefit 
 47.8   plan as provided in section 353.665, subdivision 4, shall not 
 47.9   become a member of the public employees police and fire fund. 
 47.10     Sec. 8.  Minnesota Statutes 1998, section 353.65, 
 47.11  subdivision 2, is amended to read: 
 47.12     Subd. 2.  [EMPLOYEE CONTRIBUTION RATE.] The employee 
 47.13  contribution is an amount equal to 7.6 6.2 percent of the total 
 47.14  salary of the member.  This contribution must be made by 
 47.15  deduction from salary in the manner provided in subdivision 4.  
 47.16  Where any portion of a member's salary is paid from other than 
 47.17  public funds, the member's employee contribution is based on the 
 47.18  total salary received from all sources.  
 47.19     Sec. 9.  Minnesota Statutes 1998, section 353.65, 
 47.20  subdivision 3, is amended to read: 
 47.21     Subd. 3.  [EMPLOYER CONTRIBUTION RATE.] The employer 
 47.22  contribution shall be an amount equal to 11.4 9.3 percent of the 
 47.23  total salary of every member.  This contribution shall be made 
 47.24  from funds available to the employing subdivision by the means 
 47.25  and in the manner provided in section 353.28. 
 47.26     Sec. 10.  [353.665] [MERGER OF CERTAIN CONSOLIDATION 
 47.27  ACCOUNTS INTO PERA-P&F.] 
 47.28     Subdivision 1.  [MERGER AUTHORIZED.] (a) Notwithstanding 
 47.29  any provision of law to the contrary, unless the applicable 
 47.30  municipality elects otherwise under paragraph (b), every local 
 47.31  police and fire consolidation account under chapter 353A in 
 47.32  existence on March 1, 1999, becomes a part of the public 
 47.33  employees police and fire plan and fund governed by sections 
 47.34  353.63 to 353.659 on July 1, 1999. 
 47.35     (b) If a municipality desires to retain its consolidation 
 47.36  account or consolidation accounts, the governing body of the 
 48.1   municipality must adopt a resolution to that effect and must 
 48.2   file a copy of the resolution with the secretary of state, the 
 48.3   state auditor, the legislative auditor, the finance 
 48.4   commissioner, the revenue commissioner, the executive director 
 48.5   of the public employees retirement association, and the 
 48.6   executive director of the legislative commission on pensions and 
 48.7   retirement.  The retention resolution must be adopted and filed 
 48.8   with all recipients before June 15, 1999. 
 48.9      Subd. 2.  [TRANSFER OF LIABILITIES.] Unless the 
 48.10  municipality has elected to retain the consolidation account 
 48.11  under subdivision 1, paragraph (b), all current and future 
 48.12  liabilities of a former local police or fire consolidation 
 48.13  account are the liabilities of the public employees police and 
 48.14  fire fund as of July 1, 1999. 
 48.15     Subd. 3.  [TRANSFER OF ASSETS.] Unless the municipality has 
 48.16  elected to retain the consolidation account under subdivision 1, 
 48.17  paragraph (b), the assets of the former local police or fire 
 48.18  consolidation account must be transferred and upon transfer, the 
 48.19  actuarial value of the assets of a former local police or fire 
 48.20  consolidation account less an amount equal to the residual 
 48.21  assets as determined under subdivision 7, paragraph (f), are the 
 48.22  assets of the public employees police and fire fund as of July 
 48.23  1, 1999.  The participation of a consolidation account in the 
 48.24  Minnesota postretirement investment fund becomes part of the 
 48.25  participation of the public employees police and fire fund in 
 48.26  the Minnesota postretirement investment fund.  The remaining 
 48.27  assets, excluding the amounts for distribution under subdivision 
 48.28  7, paragraph (f), become an asset of the public employees police 
 48.29  and fire fund.  The public employees police and fire fund also 
 48.30  must be credited as an asset with the amount of receivable 
 48.31  assets under subdivision 7, paragraph (e). 
 48.32     Subd. 4.  [BENEFIT COVERAGE FOR ACTIVE MEMBERS.] (a) A 
 48.33  person who is a police officer or a firefighter who, as such, is 
 48.34  an active member of a merging local police or fire consolidation 
 48.35  account on June 30, 1999, and who has not previously elected 
 48.36  benefit coverage under the relevant provisions of the public 
 49.1   employees police and fire fund benefit plan under section 
 49.2   353A.08, subdivision 3, may elect benefit coverage under the 
 49.3   relevant provisions of the public employees police and fire fund 
 49.4   benefit plan.  This election must be made in writing on a form 
 49.5   prescribed by the executive director before September 1, 1999, 
 49.6   and is irrevocable. 
 49.7      (b) If an eligible person makes no affirmative election of 
 49.8   benefit coverage before September 1, 1999, the person retains 
 49.9   the benefit coverage provided by the relief association benefit 
 49.10  plan in effect on the effective date of the consolidation of the 
 49.11  local police or fire consolidation account as reflected in the 
 49.12  applicable provisions of chapter 353B and may elect benefit 
 49.13  coverage under the relevant provisions of the public employees 
 49.14  police and fire fund benefit plan when the person terminates 
 49.15  active employment for purposes of receiving a service pension, 
 49.16  disability benefit, or within 90 days of the date the member 
 49.17  terminates active employment and defers receipt of a service 
 49.18  pension, whichever applies.  
 49.19     (c) Notwithstanding any provision of section 353A.083 and 
 49.20  any municipal action under authority of that statute to the 
 49.21  contrary, the provisions of the public employees police and fire 
 49.22  fund benefit plan applicable to active members of the merging 
 49.23  local police or fire consolidation accounts who elect public 
 49.24  employees police and fire fund benefit plan under section 
 49.25  353A.08, subdivision 3, or paragraph (a), are the applicable 
 49.26  provisions of sections 353.63 to 353.659. 
 49.27     Subd. 5.  [BENEFIT COVERAGE FOR RETIREES AND BENEFIT 
 49.28  RECIPIENTS.] (a) A person who received a service pension, a 
 49.29  disability pension or benefit, or a survivor benefit from a 
 49.30  merging local police or fire consolidation account for the month 
 49.31  of June 1999, and who has not previously elected participation 
 49.32  in the Minnesota postretirement investment fund for any future 
 49.33  postretirement adjustments rather than the postretirement 
 49.34  adjustment mechanism or mechanisms of the relief association 
 49.35  benefit plan under section 353A.08, subdivision 1, may elect 
 49.36  participation in the Minnesota postretirement investment fund 
 50.1   for any future postretirement adjustments or retention of the 
 50.2   postretirement adjustment mechanism or mechanisms of the relief 
 50.3   association benefit plan in effect on the effective date of the 
 50.4   consolidation of the local police or fire consolidation account 
 50.5   as reflected in the applicable provisions of chapter 353B.  This 
 50.6   election must be in writing on a form prescribed by the 
 50.7   executive director and must be made before September 1, 1999. 
 50.8      (b) If an eligible person is a minor, the election must be 
 50.9   made by the person's parent or legal guardian.  If the eligible 
 50.10  person makes no affirmative election under this subdivision, the 
 50.11  person retains the postretirement adjustment mechanism or 
 50.12  mechanisms of the relief association benefit plan in effect on 
 50.13  the effective date of the consolidation of the local police or 
 50.14  fire consolidation account as reflected in the applicable 
 50.15  provisions of chapter 353B. 
 50.16     (c) The survivor benefit payable on behalf of any service 
 50.17  pension or disability benefit recipient who elects participation 
 50.18  in the Minnesota postretirement investment fund must be 
 50.19  calculated under the relief association benefit plan in effect 
 50.20  on the effective date of consolidation under chapter 353A as 
 50.21  reflected in the applicable provisions of chapter 353B. 
 50.22     Subd. 6.  [BENEFIT COVERAGE FOR DEFERRED MEMBERS.] A person 
 50.23  who terminated before July 1, 1999, active employment as a 
 50.24  police officer or a firefighter that gave rise to membership in 
 50.25  a local relief association that consolidated with the public 
 50.26  employees police and fire plan under chapter 353A and is merging 
 50.27  under this section and had sufficient service credit to entitle 
 50.28  the person to an eventual service pension retains the benefit 
 50.29  plan in effect for the applicable local police or paid fire 
 50.30  relief association in effect on the effective date of 
 50.31  consolidation under chapter 353A as reflected in the applicable 
 50.32  provisions of chapter 353B, except that the deferred member may 
 50.33  elect before September 1, 1999, to participate, upon retirement, 
 50.34  in the Minnesota postretirement investment fund.  Any election 
 50.35  to participate in the Minnesota postretirement investment fund 
 50.36  is applicable to any survivor benefit attributable to a deferred 
 51.1   member covered by this subdivision. 
 51.2      Subd. 7.  [CALCULATION OF FINAL FUNDED STATUS.] (a) As of 
 51.3   June 30, 1999, the actuary retained by the legislative 
 51.4   commission on pensions and retirement shall determine the final 
 51.5   funded status of local police and fire consolidation accounts 
 51.6   under chapter 353A that the applicable municipality has not 
 51.7   elected to retain under subdivision 1, paragraph (b), as 
 51.8   provided in this subdivision. 
 51.9      (b) The final funded status calculation must be made using 
 51.10  the benefit plan provisions applicable to the consolidation 
 51.11  account and the actuarial assumptions used for the June 30, 
 51.12  1998, actuarial valuation of the account. 
 51.13     (c) The actuary must calculate the total actuarial accrued 
 51.14  liability of the consolidation account, which is the sum of the 
 51.15  actuarial accrued liability for all consolidation account 
 51.16  members who are not included in the participation of the account 
 51.17  in the Minnesota postretirement investment fund calculated using 
 51.18  the entry age normal actuarial cost method.  If local 
 51.19  legislation enacted during the 1999 regular session or any 
 51.20  special session occurring before October 1, 1999, provides a 
 51.21  benefit increase for one consolidation account member or more, 
 51.22  whether the applicable municipality has given final approval to 
 51.23  the local legislation yet or not, the total actuarial accrued 
 51.24  liability calculation must include that benefit increase.  The 
 51.25  actuary also must calculate any account unfunded accrued 
 51.26  liability or any account funding surplus.  An account unfunded 
 51.27  accrued liability is the actuarial accrued liability reduced by 
 51.28  the amount of the current value of assets, if the resulting 
 51.29  number is positive.  An account funding surplus is the actuarial 
 51.30  accrued liability reduced by the amount of the current value of 
 51.31  assets, if the resulting number is negative. 
 51.32     (d) The actuary also must calculate the amortizable base 
 51.33  for every consolidation account.  The amortizable base is the 
 51.34  present value of future benefits for all account members who are 
 51.35  not included in the participation of the account in the 
 51.36  Minnesota postretirement investment fund reduced by the present 
 52.1   value of 19 percent of future covered salary and further reduced 
 52.2   by the current value of account assets other than its 
 52.3   participation in the Minnesota postretirement investment fund, 
 52.4   after adjustment for fiscal year 1999 net mortality gains and 
 52.5   losses and for the net actuarial affect of the election of 
 52.6   postretirement adjustment coverage under subdivision 5. 
 52.7      (e) If the amortizable base under paragraph (d) is a 
 52.8   positive number, the receivable assets are an amount equal to 
 52.9   the amortizable base number. 
 52.10     (f) If the amortizable base under paragraph (d) is a 
 52.11  negative number, the actuary must calculate the residual asset 
 52.12  amount.  The residual asset amount is: 
 52.13     (1) one-half of the amount by which the current assets of 
 52.14  the account exceed 100 percent of the total actuarial accrued 
 52.15  liability up to that percentage of the total actuarial accrued 
 52.16  liability that equals the public employees police and fire fund 
 52.17  funded ratio on June 30, 1999; and 
 52.18     (2) the amount by which the current assets of the account 
 52.19  exceed that percentage of the total actuarial accrued liability 
 52.20  that equals the public employees police and fire fund funded 
 52.21  ratio on June 30, 1999.  Following the calculation of the 
 52.22  residual asset amount for each applicable municipality and the 
 52.23  verification of the amount by the legislative auditor, the 
 52.24  executive director of the public employees retirement 
 52.25  association shall pay the applicable residual asset amount with 
 52.26  interest equal to the average yield on the invested treasurer's 
 52.27  cash fund from July 1, 1999, to the first of the month in which 
 52.28  the payment is issued to each qualifying municipality.  The 
 52.29  residual asset amount must be used by the municipality to defray 
 52.30  fire department expenditure items if the residual asset amount 
 52.31  was derived from a fire consolidation account or to defray 
 52.32  police department expenditure items if the residual asset amount 
 52.33  was derived from a police consolidation account.  The residual 
 52.34  asset amount must be deposited in a special fund or account in 
 52.35  the municipal treasury established for that purpose.  The 
 52.36  special fund or account must be invested and any investment 
 53.1   return attributable to the residual asset amount must be 
 53.2   credited to that special fund or account and its disbursement 
 53.3   similarly restricted.  The special fund or account must be 
 53.4   audited periodically by the state auditor. 
 53.5      Subd. 8.  [MEMBER AND EMPLOYER CONTRIBUTIONS.] (a) 
 53.6   Effective on the first day of the first full pay period 
 53.7   following June 30, 1999, the employee contribution rate for 
 53.8   merging former consolidation account active members is the rate 
 53.9   specified in section 353.65, subdivision 2, and the regular 
 53.10  municipal contribution rate on behalf of former consolidation 
 53.11  account active members is the rate specified in section 353.65, 
 53.12  subdivision 3. 
 53.13     (b) The municipality associated with a merging former local 
 53.14  consolidation account that had a positive value amortizable base 
 53.15  calculation under subdivision 7, paragraph (d), must make an 
 53.16  additional municipal contribution to the public employees police 
 53.17  and fire plan for the period from January 1, 2000, to December 
 53.18  31, 2009.  The amount of the additional municipal contribution 
 53.19  is the amount calculated by the actuary retained by the 
 53.20  legislative commission on pensions and retirement and certified 
 53.21  by the executive director of the public employees retirement 
 53.22  association by which the amortizable base amount would be 
 53.23  amortized on a level dollar annual end-of-the-year contribution 
 53.24  basis, using an 8.5 percent interest rate assumption.  The 
 53.25  additional municipal contribution is payable on December 31 
 53.26  annually.  Additional municipal contribution payments made after 
 53.27  December 31 must be charged interest at the compound rate of 8.5 
 53.28  percent per annum from the preceding July 1. 
 53.29     Subd. 9.  [BENEFIT PLAN COVERAGE.] Unless modified by an 
 53.30  election authorized under subdivision 4, 5, or 6, the benefit 
 53.31  plan election by any person or on behalf of any person under 
 53.32  section 353A.08 remains binding.  Merging former consolidation 
 53.33  account members who elected the entirety of the public employees 
 53.34  police and fire benefit plan are entitled to an applicable 
 53.35  annuity or benefit under the provisions of sections 353.63 to 
 53.36  353.68 in effect on the day that the merging former 
 54.1   consolidation account member terminated active service as a 
 54.2   police officer or firefighter, whichever applies.  
 54.3      Subd. 10.  [CONSOLIDATION ACCOUNT TERMINATION.] Unless the 
 54.4   municipality has elected to retain the consolidation account 
 54.5   under subdivision 1, paragraph (b), upon the payment of all 
 54.6   residual asset amounts under subdivision 7 and the transfer of 
 54.7   all liabilities and remaining assets under subdivisions 2 and 3, 
 54.8   the local consolidation accounts under chapter 353A in existence 
 54.9   on March 1, 1999, are terminated. 
 54.10     Sec. 11.  Minnesota Statutes 1998, section 353A.09, 
 54.11  subdivision 4, is amended to read: 
 54.12     Subd. 4.  [MEMBER CONTRIBUTIONS.] Following the effective 
 54.13  date of consolidation, the applicable member contribution rate 
 54.14  and applicable salary rate to which the member contribution rate 
 54.15  applies for persons who were formerly members of the relief 
 54.16  association shall be determined as follows:  
 54.17     (1) if the person has elected coverage by the public 
 54.18  employees police and fire fund benefit plan under section 
 54.19  353A.08, the applicable member contribution rate shall be that 
 54.20  rate specified in Minnesota Statutes 1998, section 353.65, 
 54.21  subdivision 2, and the applicable salary rate to which the 
 54.22  member contribution rate applies shall be the actual salary of 
 54.23  the person, as defined in section 353.01, subdivision 10; and 
 54.24     (2) if the person has not elected coverage by the public 
 54.25  employees police and fire fund benefit plan under section 
 54.26  353A.08, the applicable member contribution rate shall be the 
 54.27  rate specified in section 69.77, subdivision 2a, or the rate 
 54.28  specified in the applicable general law, special law, or bylaw 
 54.29  provision governing the relief association as of the date of the 
 54.30  initiation of consolidation, whichever is greater, and the 
 54.31  applicable salary rate to which the member contribution rate 
 54.32  applies shall be the salary rate specified in the applicable 
 54.33  general law, special law, or bylaw provision governing the 
 54.34  relief association as of the date of the initiation of 
 54.35  consolidation or the actual salary of the person, including 
 54.36  overtime pay and any regularly occurring special payments but 
 55.1   excluding lump sum annual leave payments, worker's compensation 
 55.2   payments, and severance payments, whichever salary rate is 
 55.3   greater.  
 55.4      The member contribution rate and applicable salary rate to 
 55.5   which the member contribution rate applies shall be effective as 
 55.6   of the first day of the first pay period occurring after the 
 55.7   effective date of consolidation.  
 55.8      The chief administrative officer of the municipal police 
 55.9   department or municipal fire department, whichever applies, 
 55.10  shall cause the member contributions required under this 
 55.11  subdivision to be deducted in the manner and subject to the 
 55.12  terms provided in section 353.27, subdivision 4.  
 55.13     Sec. 12.  Minnesota Statutes 1998, section 353A.09, 
 55.14  subdivision 5, is amended to read: 
 55.15     Subd. 5.  [REGULAR AND ADDITIONAL MUNICIPAL CONTRIBUTIONS.] 
 55.16  (a) Following the effective date of consolidation, the 
 55.17  applicable regular municipal contribution rate and applicable 
 55.18  salary rate to which the regular municipal contribution rate 
 55.19  applies on behalf of persons who were formerly members of the 
 55.20  relief association shall be as follows:  
 55.21     (1) on behalf of persons who have elected coverage by the 
 55.22  public employees police and fire fund benefit plan under section 
 55.23  353A.08, the applicable regular municipal contribution rate 
 55.24  shall be that specified in Minnesota Statutes 1998, section 
 55.25  353.65, subdivision 3, and the applicable salary rate to which 
 55.26  the regular municipal contribution rate applies shall be that 
 55.27  specified in subdivision 4, clause (1); and 
 55.28     (2) on behalf of persons who have not elected coverage by 
 55.29  the public employees police and fire fund benefit plan under 
 55.30  section 353A.08, the applicable regular municipal contribution 
 55.31  rate shall be 12 percent and the applicable salary rate to which 
 55.32  the regular municipal contribution rate applies shall be that 
 55.33  specified in subdivision 4, clause (2).  
 55.34     (b) Following the effective date of consolidation, the 
 55.35  applicable additional municipal contribution amount shall be the 
 55.36  sum of the following:  
 56.1      (1) the annual level dollar contribution as calculated by 
 56.2   the actuary retained by the commission as of the effective date 
 56.3   of consolidation which is required to amortize by December 31, 
 56.4   2010, that portion of the present value of future benefits 
 56.5   computed on the basis of the benefit plan producing the largest 
 56.6   present value of future benefits for each individual which 
 56.7   remains after subtracting the present value of future member 
 56.8   contributions as provided in subdivision 4, the present value of 
 56.9   future regular municipal contributions as provided in clause 
 56.10  (a), and the market value of the assets of the relief 
 56.11  association transferred to the fund; and 
 56.12     (2) the amount of the annual contribution as calculated by 
 56.13  the actuary retained by the commission as of the most recent 
 56.14  actuarial valuation date which is required to amortize on a 
 56.15  level annual dollar basis the amount of any net actuarial 
 56.16  experience loss incurred during the year which ended as of the 
 56.17  day immediately before the most recent actuarial valuation date 
 56.18  by December 31 of the year occurring 15 years later. 
 56.19     (c) Regular municipal contributions shall be made in the 
 56.20  manner provided in section 353.28.  Additional municipal 
 56.21  contributions shall be paid during the calendar year following 
 56.22  the annual certification of the amount of the annual additional 
 56.23  municipal contribution by the executive director of the public 
 56.24  employees retirement association and, if made during the month 
 56.25  of January, shall be payable without any interest, or if made 
 56.26  after January 31, but before the next following December 31, 
 56.27  shall be payable with interest for the period since January 1 at 
 56.28  a rate which is equal to the preretirement interest rate 
 56.29  assumption specified in section 356.215, subdivision 4d, 
 56.30  applicable to the fund expressed as a monthly rate and 
 56.31  compounded on a monthly basis or if made after December 31 of 
 56.32  the year in which the additional municipal contribution is due 
 56.33  shall be payable with interest at a rate which is four percent 
 56.34  greater than the highest interest rate assumption specified in 
 56.35  section 356.215, subdivision 4d, expressed as a monthly rate and 
 56.36  compounded monthly from January 1 of the year in which the 
 57.1   additional municipal contribution is due until the date on which 
 57.2   payment is made.  
 57.3      Sec. 13.  Minnesota Statutes 1998, section 356.215, 
 57.4   subdivision 4g, is amended to read: 
 57.5      Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
 57.6   the exhibit indicating the level normal cost, the actuarial 
 57.7   valuation must contain an exhibit indicating the additional 
 57.8   annual contribution sufficient to amortize the unfunded 
 57.9   actuarial accrued liability.  For funds governed by chapters 3A, 
 57.10  352, 352B, 352C, 353, 354, 354A, and 490, the additional 
 57.11  contribution must be calculated on a level percentage of covered 
 57.12  payroll basis by the established date for full funding in effect 
 57.13  when the valuation is prepared.  For funds governed by chapter 
 57.14  3A, sections 352.90 through 352.951, chapters 352B, 352C, 
 57.15  sections 353.63 through 353.68, and chapters 353C, 354A, and 
 57.16  490, the level percent additional contribution must be 
 57.17  calculated assuming annual payroll growth of 6.5 percent.  For 
 57.18  funds governed by sections 352.01 through 352.86 and chapter 
 57.19  354, the level percent additional contribution must be 
 57.20  calculated assuming an annual payroll growth of five percent.  
 57.21  For the fund governed by sections 353.01 through 353.46, the 
 57.22  level percent additional contribution must be calculated 
 57.23  assuming an annual payroll growth of six percent.  For all other 
 57.24  funds, the additional annual contribution must be calculated on 
 57.25  a level annual dollar amount basis. 
 57.26     (b) For any fund other than the Minneapolis employees 
 57.27  retirement fund, after the first actuarial valuation date 
 57.28  occurring after June 1, 1989, if there has not been a change in 
 57.29  the actuarial assumptions used for calculating the actuarial 
 57.30  accrued liability of the fund, a change in the benefit plan 
 57.31  governing annuities and benefits payable from the fund, a change 
 57.32  in the actuarial cost method used in calculating the actuarial 
 57.33  accrued liability of all or a portion of the fund, or a 
 57.34  combination of the three, which change or changes by themselves 
 57.35  without inclusion of any other items of increase or decrease 
 57.36  produce a net increase in the unfunded actuarial accrued 
 58.1   liability of the fund, the established date for full funding for 
 58.2   the first actuarial valuation made after June 1, 1989, and each 
 58.3   successive actuarial valuation is the first actuarial valuation 
 58.4   date occurring after June 1, 2020.  
 58.5      (c) For any fund or plan other than the Minneapolis 
 58.6   employees retirement fund, after the first actuarial valuation 
 58.7   date occurring after June 1, 1989, if there has been a change in 
 58.8   any or all of the actuarial assumptions used for calculating the 
 58.9   actuarial accrued liability of the fund, a change in the benefit 
 58.10  plan governing annuities and benefits payable from the fund, a 
 58.11  change in the actuarial cost method used in calculating the 
 58.12  actuarial accrued liability of all or a portion of the fund, or 
 58.13  a combination of the three, and the change or changes, by 
 58.14  themselves and without inclusion of any other items of increase 
 58.15  or decrease, produce a net increase in the unfunded actuarial 
 58.16  accrued liability in the fund, the established date for full 
 58.17  funding must be determined using the following procedure:  
 58.18     (i) the unfunded actuarial accrued liability of the fund 
 58.19  must be determined in accordance with the plan provisions 
 58.20  governing annuities and retirement benefits and the actuarial 
 58.21  assumptions in effect before an applicable change; 
 58.22     (ii) the level annual dollar contribution or level 
 58.23  percentage, whichever is applicable, needed to amortize the 
 58.24  unfunded actuarial accrued liability amount determined under 
 58.25  item (i) by the established date for full funding in effect 
 58.26  before the change must be calculated using the interest 
 58.27  assumption specified in subdivision 4d in effect before the 
 58.28  change; 
 58.29     (iii) the unfunded actuarial accrued liability of the fund 
 58.30  must be determined in accordance with any new plan provisions 
 58.31  governing annuities and benefits payable from the fund and any 
 58.32  new actuarial assumptions and the remaining plan provisions 
 58.33  governing annuities and benefits payable from the fund and 
 58.34  actuarial assumptions in effect before the change; 
 58.35     (iv) the level annual dollar contribution or level 
 58.36  percentage, whichever is applicable, needed to amortize the 
 59.1   difference between the unfunded actuarial accrued liability 
 59.2   amount calculated under item (i) and the unfunded actuarial 
 59.3   accrued liability amount calculated under item (iii) over a 
 59.4   period of 30 years from the end of the plan year in which the 
 59.5   applicable change is effective must be calculated using the 
 59.6   applicable interest assumption specified in subdivision 4d in 
 59.7   effect after any applicable change; 
 59.8      (v) the level annual dollar or level percentage 
 59.9   amortization contribution under item (iv) must be added to the 
 59.10  level annual dollar amortization contribution or level 
 59.11  percentage calculated under item (ii); 
 59.12     (vi) the period in which the unfunded actuarial accrued 
 59.13  liability amount determined in item (iii) is amortized by the 
 59.14  total level annual dollar or level percentage amortization 
 59.15  contribution computed under item (v) must be calculated using 
 59.16  the interest assumption specified in subdivision 4d in effect 
 59.17  after any applicable change, rounded to the nearest integral 
 59.18  number of years, but not to exceed 30 years from the end of the 
 59.19  plan year in which the determination of the established date for 
 59.20  full funding using the procedure set forth in this clause is 
 59.21  made and not to be less than the period of years beginning in 
 59.22  the plan year in which the determination of the established date 
 59.23  for full funding using the procedure set forth in this clause is 
 59.24  made and ending by the date for full funding in effect before 
 59.25  the change; and 
 59.26     (vii) the period determined under item (vi) must be added 
 59.27  to the date as of which the actuarial valuation was prepared and 
 59.28  the date obtained is the new established date for full funding.  
 59.29     (d) For the Minneapolis employees retirement fund, the 
 59.30  established date for full funding is June 30, 2020. 
 59.31     (e) For the following plans for which the annual actuarial 
 59.32  valuation indicates an excess of valuation assets over the 
 59.33  actuarial accrued liability, the valuation assets in excess of 
 59.34  the actuarial accrued liability must be recognized in the 
 59.35  following manner: 
 59.36     (1) the public employees retirement association police and 
 60.1   fire plan, the valuation assets in excess of the actuarial 
 60.2   accrued liability serve to reduce the current contribution 
 60.3   requirements by an amount equal to the amortization of the 
 60.4   excess expressed as a level percentage of pay over a 30-year 
 60.5   period beginning anew with each annual actuarial valuation of 
 60.6   the plan; and 
 60.7      (2) the correctional employees retirement plan of the 
 60.8   Minnesota state retirement system, and the state patrol 
 60.9   retirement plan, an excess of valuation assets over actuarial 
 60.10  accrued liability must be amortized in the same manner over the 
 60.11  same period as an unfunded actuarial accrued liability but must 
 60.12  serve to reduce the required contribution instead of increasing 
 60.13  it. 
 60.14     Sec. 14.  Minnesota Statutes 1998, section 423A.02, 
 60.15  subdivision 1b, is amended to read: 
 60.16     Subd. 1b.  [ADDITIONAL AMORTIZATION STATE AID.] (a) 
 60.17  Annually, on October 1, the commissioner of revenue shall 
 60.18  allocate the additional amortization state aid transferred under 
 60.19  section 69.021, subdivision 11, to: 
 60.20     (1) all police or salaried firefighter relief associations 
 60.21  governed by and in full compliance with the requirements of 
 60.22  section 69.77, that had an unfunded actuarial accrued liability 
 60.23  in the actuarial valuation prepared under sections 356.215 and 
 60.24  356.216 as of the preceding December 31; and 
 60.25     (2) all local police or salaried firefighter consolidation 
 60.26  accounts governed by chapter 353A that are certified by the 
 60.27  executive director of the public employees retirement 
 60.28  association as having for the current fiscal year an additional 
 60.29  municipal contribution amount under section 353A.09, subdivision 
 60.30  5, paragraph (b), and that have implemented section 353A.083, 
 60.31  subdivision 1, if the effective date of the consolidation 
 60.32  preceded May 24, 1993, and that have implemented section 
 60.33  353A.083, subdivision 2, if the effective date of the 
 60.34  consolidation preceded June 1, 1995.; and 
 60.35     (3) the public employees police and fire fund on behalf of 
 60.36  municipalities that received amortization aid in 1999 and are 
 61.1   required to make an additional municipal contribution under 
 61.2   section 353.665, subdivision 8, for the duration of the required 
 61.3   additional contribution. 
 61.4      (b) The commissioner shall allocate the state aid on the 
 61.5   basis of the proportional share of the relief association or 
 61.6   consolidation account of the total unfunded actuarial accrued 
 61.7   liability of all recipient relief associations and consolidation 
 61.8   accounts as of December 31, 1993, for relief associations, and 
 61.9   as of June 30, 1994, for consolidation accounts. 
 61.10     (c) Beginning October 1, 2000, and annually thereafter, the 
 61.11  commissioner shall allocate the state aid on the basis of 64.5 
 61.12  percent to the public employees police and fire fund or local 
 61.13  consolidation account, whichever applies, on behalf of 
 61.14  municipalities to which section 353.665, subdivision 8, 
 61.15  paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply 
 61.16  for distribution in accordance with paragraph (b) and subject to 
 61.17  the limitation in subdivision 4, 34.2 percent to the city of 
 61.18  Minneapolis to fund any unfunded actuarial accrued liability in 
 61.19  the actuarial valuation prepared under sections 356.215 and 
 61.20  356.216 as of the preceding December 31 for the Minneapolis 
 61.21  police relief association or the Minneapolis fire department 
 61.22  relief association, and 1.3 percent to the city of Virginia to 
 61.23  fund any unfunded actuarial accrued liability in the actuarial 
 61.24  valuation prepared under sections 356.215 and 356.216 as of the 
 61.25  preceding December 31 for the Virginia fire department relief 
 61.26  association.  In the event that there is no unfunded actuarial 
 61.27  accrued liability in both the Minneapolis police relief 
 61.28  association and the Minneapolis fire department relief 
 61.29  association, the commissioner shall allocate that 34.2 percent 
 61.30  of the aid as follows:  49 percent to the Minneapolis teachers 
 61.31  retirement fund association, provided that, annually, beginning 
 61.32  on July 1, 2005, if a teacher's association five-year average 
 61.33  time-weighted rate of investment return does not equal or exceed 
 61.34  the performance of a composite portfolio assumed passively 
 61.35  managed (indexed) invested ten percent in cash equivalents, 60 
 61.36  percent bonds and similar debt securities, and 30 percent in 
 62.1   domestic stock calculated using the formula under section 
 62.2   11A.04, clause (11), the aid under this section ceases until the 
 62.3   five-year annual rate of return equals or exceeds the 
 62.4   performance of a composite portfolio, 21 percent to the St. Paul 
 62.5   teachers retirement fund association, provided that, annually, 
 62.6   beginning on July 1, 2005, if a teacher's association five-year 
 62.7   average time-weighted rate of investment return does not equal 
 62.8   or exceed the performance of a composite portfolio assumed 
 62.9   passively managed (indexed) invested ten percent in cash 
 62.10  equivalents, 60 percent bonds and similar debt securities, and 
 62.11  30 percent in domestic stock calculated using the formula under 
 62.12  section 11A.04, clause (11), the aid under this section ceases 
 62.13  until the five-year annual rate of return equals or exceeds the 
 62.14  performance of a composite portfolio, and 30 percent as 
 62.15  additional funding to support minimum fire state aid for 
 62.16  volunteer firefighter relief associations, with the allocation 
 62.17  made at the same time and under the same procedures in 
 62.18  subdivision 3.  In the event there is no actuarial accrued 
 62.19  unfunded liability in the Virginia fire department relief 
 62.20  association, the commissioner shall allocate that 1.3 percent of 
 62.21  the aid as follows:  49 percent to the Minneapolis teachers 
 62.22  retirement fund association, provided that, annually, beginning 
 62.23  on July 1, 2005, if a teacher's association five-year average 
 62.24  time-weighted rate of investment return does not equal or exceed 
 62.25  the performance of a composite portfolio assumed passively 
 62.26  managed (indexed) invested ten percent in cash equivalents, 60 
 62.27  percent bonds and similar debt securities, and 30 percent in 
 62.28  domestic stock calculated using the formula under section 
 62.29  11A.04, clause (11), the aid under this section ceases until the 
 62.30  five-year annual rate of return equals or exceeds the 
 62.31  performance of a composite portfolio, 21 percent to the St. Paul 
 62.32  teachers retirement fund association, provided that, annually, 
 62.33  beginning on July 1, 2005, if a teacher's association five-year 
 62.34  average time-weighted rate of investment return does not equal 
 62.35  or exceed the performance of a composite portfolio assumed 
 62.36  passively managed (indexed) invested ten percent in cash 
 63.1   equivalents, 60 percent bonds and similar debt securities, and 
 63.2   30 percent in domestic stock calculated using the formula under 
 63.3   section 11A.04, clause (11), the aid under this section ceases 
 63.4   until the five-year annual rate of return equals or exceeds the 
 63.5   performance of a composite portfolio, and 30 percent as 
 63.6   additional funding to support minimum fire state aid for 
 63.7   volunteer firefighter relief associations, with the allocation 
 63.8   made at the same time and under the same procedures in 
 63.9   subdivision 3.  
 63.10     (d) Additional amortization state aid payable under 
 63.11  paragraph (a), clause (2) or clause (3), or under paragraph (c), 
 63.12  other than the city of Minneapolis or the city of Virginia, must 
 63.13  be credited by the executive director of the public employees 
 63.14  retirement association against any additional municipal 
 63.15  contribution to which the applicable municipality is obligated 
 63.16  to make under section 353A.09, subdivision 5, or under section 
 63.17  353.665, subdivision 8. 
 63.18     (e) The amounts required under this subdivision are 
 63.19  annually appropriated to the commissioner of revenue. 
 63.20     Sec. 15.  Minnesota Statutes 1998, section 423A.02, 
 63.21  subdivision 2, is amended to read: 
 63.22     Subd. 2.  [CONTINUED ELIGIBILITY.] A municipality that has 
 63.23  qualified for amortization state aid under subdivision 1 on 
 63.24  December 31, 1984, and has an additional municipal contribution 
 63.25  payable under section 353A.09, subdivision 5, paragraph (b), as 
 63.26  of the most recent December 31, continues upon application to be 
 63.27  entitled to receive amortization state aid under subdivision 1 
 63.28  and supplementary amortization state aid under subdivision 1a, 
 63.29  after the local police or salaried firefighters' relief 
 63.30  association has been consolidated into the public employees 
 63.31  police and fire fund.  If a municipality loses entitlement for 
 63.32  amortization state aid and supplementary amortization state aid 
 63.33  in any year because of not having an additional municipal 
 63.34  contribution under section 353A.09, subdivision 5, paragraph 
 63.35  (b), the municipality is not entitled to the aid amounts in any 
 63.36  subsequent year.  If the actuarial assumptions specified in 
 64.1   section 356.215 are changed in 1997, and the change results in a 
 64.2   municipality having an additional municipal contribution, and 
 64.3   the municipality had previously lost entitlement for 
 64.4   amortization aid and supplementary amortization due to not 
 64.5   having an additional municipal contribution, then the 
 64.6   municipality is again entitled to receive amortization aid and 
 64.7   supplementary amortization aid in the same amount as it 
 64.8   previously received.  A municipality that received amortization 
 64.9   aid in 1999 and is required to make an additional municipal 
 64.10  contribution under section 353.665, subdivision 8, continues to 
 64.11  qualify for the amortization state aid and the supplemental 
 64.12  amortization aid until December 31, 2009. 
 64.13     Sec. 16.  Minnesota Statutes 1998, section 423A.02, is 
 64.14  amended by adding a subdivision to read: 
 64.15     Subd. 4.  [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 
 64.16  total of amortization aid, supplemental amortization aid, and 
 64.17  additional amortization aid under this section payable to the 
 64.18  executive director of the public employees retirement 
 64.19  association on behalf of a municipality to which section 
 64.20  353.665, subdivision 8, paragraph (b), applies, may not exceed 
 64.21  the amount of the additional municipal contribution payable by 
 64.22  an individual municipality under section 353.665, subdivision 8, 
 64.23  paragraph (b). 
 64.24     (b) Any aid amount in excess of the limit under this 
 64.25  subdivision for an individual municipality must be redistributed 
 64.26  to the other municipalities to which section 353.665, 
 64.27  subdivision 8, paragraph (b), applies.  The excess aid must be 
 64.28  distributed in proportion to each municipality's additional 
 64.29  municipal contribution under section 353.665, subdivision 8, 
 64.30  paragraph (b). 
 64.31     (c) When the total aid for each municipality under this 
 64.32  section equals the limit under paragraph (a), any aid in excess 
 64.33  of the limit must be redistributed under subdivisions 1, 1a, and 
 64.34  1b. 
 64.35     Sec. 17.  Minnesota Statutes 1998, section 423A.02, is 
 64.36  amended by adding a subdivision to read: 
 65.1      Subd. 5.  [TERMINATION OF STATE AID PROGRAMS.] The 
 65.2   amortization state aid, supplemental amortization state aid, and 
 65.3   additional amortization state aid programs terminate when the 
 65.4   assets of the Minneapolis teachers retirement fund association 
 65.5   equal the actuarial accrued liability of that plan and when the 
 65.6   assets of the St. Paul teachers retirement fund association 
 65.7   equal the actuarial accrued liability of that plan. 
 65.8      Sec. 18.  [1999 PERA-P&F ACTUARIAL VALUATION.] 
 65.9      (a) As of July 1, 1999, no actuarial valuations are 
 65.10  required of the local police and fire consolidation accounts 
 65.11  which were in existence before March 1, 1999, and have not been 
 65.12  retained under Minnesota Statutes, section 353.655, subdivision 
 65.13  1, paragraph (b). 
 65.14     (b) The actuary retained by the legislative commission on 
 65.15  pensions and retirement shall prepare all calculations required 
 65.16  under Minnesota Statutes, section 353.665, and shall present 
 65.17  them to the commission in a separate report. 
 65.18     (c) The calculated actuarial accrued liability of the 
 65.19  public employees police and fire plan for July 1, 1999, must 
 65.20  contain all liabilities associated with the former local police 
 65.21  and fire consolidation accounts affected by Minnesota Statutes, 
 65.22  section 353.665. 
 65.23     (d) The asset value of the public employees police and fire 
 65.24  plan for July 1, 1999, is the sum of the following: 
 65.25     (1) the current assets of the public employees police and 
 65.26  fire plan as of June 30, 1999, without reference to any local 
 65.27  consolidation accounts in existence on March 1, 1999; 
 65.28     (2) the amount of assets transferred from the Minnesota 
 65.29  postretirement investment fund with respect to local 
 65.30  consolidation accounts under Minnesota Statutes, section 
 65.31  353.655, subdivision 3; 
 65.32     (3) that portion of the market value of assets of the local 
 65.33  consolidation accounts affected by Minnesota Statutes, section 
 65.34  353.665, after subtracting the amount in clause (2) determined 
 65.35  by multiplying the total by the ratio that the current asset 
 65.36  value of public employee police and fire fund assets other than 
 66.1   the participation in the Minnesota postretirement investment 
 66.2   fund as of June 30, 1999, without reference to any local 
 66.3   consolidation accounts in existence on March 1, 1999, bears to 
 66.4   the market value of the same assets; and 
 66.5      (4) a receivable amount equal to the present value of the 
 66.6   future additional municipal contributions required under 
 66.7   Minnesota Statutes, section 353.655, subdivision 8, paragraph 
 66.8   (b). 
 66.9      Sec. 19.  [REPEALER.] 
 66.10     Minnesota Statutes 1998, section 353.65, subdivision 3a, is 
 66.11  repealed. 
 66.12     Sec. 20.  [EFFECTIVE DATE.] 
 66.13     Sections 1 to 7, 10, 12, and 14 to 19 are effective on the 
 66.14  day following final enactment.  Sections 8 and 9 are effective 
 66.15  on the first day of the first full pay period that begins after 
 66.16  June 30, 1999.  Section 13 is effective on July 1, 2000. 
 66.17                             ARTICLE 5
 66.18                   MINIMUM VOLUNTEER FIREFIGHTER  
 66.19                      STATE AID AMOUNT CHANGES  
 66.20     Section 1.  Minnesota Statutes 1998, section 69.021, 
 66.21  subdivision 7, is amended to read: 
 66.22     Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
 66.23  MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 
 66.24  shall apportion the fire state aid relative to the premiums 
 66.25  reported on the Minnesota Firetown Premium Reports filed under 
 66.26  this chapter to each municipality and/or firefighters' relief 
 66.27  association.  
 66.28     (b) The commissioner shall calculate an initial fire state 
 66.29  aid allocation amount for each municipality or fire department 
 66.30  under paragraph (c) and a minimum fire state aid allocation 
 66.31  amount for each municipality or fire department under paragraph 
 66.32  (d).  The municipality or fire department must receive the 
 66.33  larger fire state aid amount. 
 66.34     (c) The initial fire state aid allocation amount is the 
 66.35  amount available for apportionment as fire state aid under 
 66.36  subdivision 5, without inclusion of any additional funding 
 67.1   amount to support a minimum fire state aid amount under section 
 67.2   423A.02, subdivision 3, allocated one-half in proportion to the 
 67.3   population as shown in the last official statewide federal 
 67.4   census for each fire town and one-half in proportion to the 
 67.5   market value of each fire town, including (1) the market value 
 67.6   of tax exempt property and (2) the market value of natural 
 67.7   resources lands receiving in lieu payments under sections 
 67.8   477A.11 to 477A.14, but excluding the market value of minerals.  
 67.9   In the case of incorporated or municipal fire departments 
 67.10  furnishing fire protection to other cities, towns, or townships 
 67.11  as evidenced by valid fire service contracts filed with the 
 67.12  commissioner, the distribution must be adjusted proportionately 
 67.13  to take into consideration the crossover fire protection 
 67.14  service.  Necessary adjustments shall be made to subsequent 
 67.15  apportionments.  In the case of municipalities or independent 
 67.16  fire departments qualifying for the aid, the commissioner shall 
 67.17  calculate the state aid for the municipality or relief 
 67.18  association on the basis of the population and the market value 
 67.19  of the area furnished fire protection service by the fire 
 67.20  department as evidenced by duly executed and valid fire service 
 67.21  agreements filed with the commissioner.  If one or more fire 
 67.22  departments are furnishing contracted fire service to a city, 
 67.23  town, or township, only the population and market value of the 
 67.24  area served by each fire department may be considered in 
 67.25  calculating the state aid and the fire departments furnishing 
 67.26  service shall enter into an agreement apportioning among 
 67.27  themselves the percent of the population and the market value of 
 67.28  each service area.  The agreement must be in writing and must be 
 67.29  filed with the commissioner. 
 67.30     (d) The minimum fire state aid allocation amount is the 
 67.31  amount in addition to the initial fire state allocation amount 
 67.32  that is derived from any additional funding amount to support a 
 67.33  minimum fire state aid amount under section 423A.02, subdivision 
 67.34  3, and allocated to municipalities with volunteer firefighter 
 67.35  relief associations based on the number of active volunteer 
 67.36  firefighters who are members of the relief association as 
 68.1   reported in the annual financial reporting for the calendar year 
 68.2   1993 to the office of the state auditor, but not to exceed 30 
 68.3   active volunteer firefighters, so that all municipalities or 
 68.4   fire departments with volunteer firefighter relief associations 
 68.5   receive in total at least a minimum fire state aid amount per 
 68.6   1993 active volunteer firefighter to a maximum of 30 
 68.7   firefighters.  If a relief association did not exist in calendar 
 68.8   year 1993, the number of active volunteer firefighters who are 
 68.9   members of the relief association as reported in the annual 
 68.10  financial reporting for calendar year 1998 to the office of the 
 68.11  state auditor, but not to exceed 30 active volunteer 
 68.12  firefighters, shall be used in this determination. 
 68.13     (e) The fire state aid must be paid to the treasurer of the 
 68.14  municipality where the fire department is located and the 
 68.15  treasurer of the municipality shall, within 30 days of receipt 
 68.16  of the fire state aid, transmit the aid to the relief 
 68.17  association if the relief association has filed a financial 
 68.18  report with the treasurer of the municipality and has met all 
 68.19  other statutory provisions pertaining to the aid apportionment. 
 68.20     (f) The commissioner may make rules to permit the 
 68.21  administration of the provisions of this section.  Any 
 68.22  adjustments needed to correct prior misallocations must be made 
 68.23  to subsequent apportionments. 
 68.24     Sec. 2.  [EFFECTIVE DATE.] 
 68.25     Section 1 is effective on the day following final enactment 
 68.26  and applies to the first fire state aid and minimum fire state 
 68.27  aid allocation occurring after that date. 
 68.28                             ARTICLE 6
 68.29               MINNEAPOLIS POLICE AND FIRE DEPARTMENT  
 68.30                   RELIEF ASSOCIATIONS GOVERNANCE  
 68.31                              CHANGES 
 68.32     Section 1.  Minnesota Statutes 1998, section 423B.07, is 
 68.33  amended to read: 
 68.34     423B.07 [AUTHORIZED FUND DISBURSEMENTS.] 
 68.35     The police pension fund may be used only for the payment of:
 68.36     (1) service, disability, or dependency pensions; 
 69.1      (2) notwithstanding a contrary provision of section 69.80, 
 69.2   the salary of the secretary of the association in an amount not 
 69.3   to exceed 30 percent of the base salary of a first grade patrol 
 69.4   officer, the salary of the president of the association in an 
 69.5   amount not to exceed ten percent of the base salary of a first 
 69.6   grade patrol officer, and the salaries of the other elected 
 69.7   members of the board of trustees in an amount not to exceed 
 69.8   three units; 
 69.9      (3) expenses of officers and employees of the association 
 69.10  in connection with the protection of the fund; 
 69.11     (4) expenses of operating and maintaining the association, 
 69.12  including the administrative expenses related to the 
 69.13  administration of the insurance plan authorized in section 
 69.14  423B.08; and 
 69.15     (5) other expenses authorized by section 69.80, or other 
 69.16  applicable law. 
 69.17     Sec. 2.  [CONTINUATION OF BOARD.] 
 69.18     Notwithstanding Minnesota Statutes, section 423A.01, 
 69.19  subdivision 2, or any other law to the contrary, the board of 
 69.20  trustees of the Minneapolis firefighters relief association 
 69.21  shall continue to govern the association until there are fewer 
 69.22  than 100 benefit recipients of the relief association pension 
 69.23  fund.  The special fund thereafter must become a trust fund in 
 69.24  accordance with Minnesota Statutes, section 423A.01, subdivision 
 69.25  2. 
 69.26     Sec. 3.  [EFFECTIVE DATE.] 
 69.27     (a) Section 1 is effective on December 31, 1999. 
 69.28     (b) Section 2 is effective on the day following approval by 
 69.29  the Minneapolis city council and compliance with Minnesota 
 69.30  Statutes, section 645.021, subdivision 3. 
 69.31                             ARTICLE 7
 69.32                   METROPOLITAN COUNCIL TARGETED  
 69.33                     EARLY RETIREMENT INCENTIVE  
 69.34     Section 1.  [RETIREMENT INCENTIVE.] 
 69.35     The metropolitan council may offer its eligible employees, 
 69.36  as specified in sections 2 and 3, the retirement incentive 
 70.1   provided in section 4. 
 70.2      Sec. 2.  [INCLUSION.] 
 70.3      If the metropolitan council chooses to offer the retirement 
 70.4   incentive under section 4, it must designate the positions or 
 70.5   group of positions within the council divisions specified in 
 70.6   section 3, clause (1), that will qualify for participation in 
 70.7   its retirement incentive program and may exclude otherwise 
 70.8   eligible employees.  After initially designating the qualified 
 70.9   positions or group of positions, the council may at any time 
 70.10  modify its designation in order to further limit the qualified 
 70.11  positions or group of positions. 
 70.12     Sec. 3.  [ELIGIBILITY.] 
 70.13     An employee of the metropolitan council is eligible to 
 70.14  participate in the retirement incentive program if the employee: 
 70.15     (1) was employed in the environmental services, community 
 70.16  development, or regional administration divisions of the council 
 70.17  on January 1, 1999; 
 70.18     (2) on or after the effective date of this article notifies 
 70.19  the council's regional administrator in writing of the 
 70.20  employee's intention to retire, the plan or plans from which the 
 70.21  individual will retire, and the employee's date of separation 
 70.22  from employment with the council; 
 70.23     (3) is, on the date the council receives the employee's 
 70.24  written notice of intention to retire, within the positions or 
 70.25  group of positions then currently designated by the council 
 70.26  under section 2; 
 70.27     (4) on the date of retirement has at least 25 years of 
 70.28  combined allowable service in any covered fund or funds listed 
 70.29  in Minnesota Statutes, section 356.30, subdivision 3; 
 70.30     (5) on the date of retirement is at least 55 years of age; 
 70.31     (6) upon retirement is immediately eligible for a 
 70.32  retirement annuity from a defined benefit plan listed in 
 70.33  Minnesota Statutes, section 356.30, subdivision 3; and 
 70.34     (7) has a retirement annuity accrual date in the applicable 
 70.35  plan or plans on or after July 1, 1999, and before July 1, 2000. 
 70.36     Sec. 4.  [RETIREMENT INCENTIVE.] 
 71.1      Subdivision 1.  [FORMULA INCREASE.] For an eligible 
 71.2   employee who elects to participate in the retirement incentive 
 71.3   program, the benefit accrual rate multiplier percentage or 
 71.4   percentages used to calculate the retirement annuity from each 
 71.5   defined benefit plan listed in Minnesota Statutes, section 
 71.6   356.30, subdivision 3, from which the employee is eligible to 
 71.7   receive a retirement annuity must be increased by .25 percentage 
 71.8   point for each year of allowable service, and pro rata for 
 71.9   completed months less than a full year, in the applicable plan 
 71.10  or plans.  If the eligible employee has more than 30 years of 
 71.11  combined service in covered plans, the .25 percentage point 
 71.12  increase applies only to the first 30 years of allowable service 
 71.13  in such covered funds. 
 71.14     Subd. 2.  [CERTIFICATION OF ELIGIBILITY.] Before applying 
 71.15  the formula increase in subdivision 1, the applicable retirement 
 71.16  plan or plans must receive a certification from the council's 
 71.17  regional administrator that the employee meets the eligibility 
 71.18  criteria in clauses (1), (2), and (3) of section 3. 
 71.19     Subd. 3.  [PAYMENT OF ENHANCED RETIREMENT COST.] (a) If the 
 71.20  metropolitan council chooses to offer a retirement incentive 
 71.21  under this section, it must make an additional employer 
 71.22  contribution or contributions as specified in paragraph (b) to 
 71.23  the applicable retirement plan or plans from which the eligible 
 71.24  individual retired under the incentive program. 
 71.25     (b) The additional employer contribution for the applicable 
 71.26  employee to each applicable plan is an amount equal to the 
 71.27  difference in the actuarial present value of the annuity payable 
 71.28  by the plan for the employee, with and without the retirement 
 71.29  incentive under subdivision 1.  The actuarial present value 
 71.30  calculations must be made by the chief administrative officer of 
 71.31  the applicable retirement plan. 
 71.32     (c) An additional employer contribution under paragraph (b) 
 71.33  must be paid within 60 days from the effective date of the 
 71.34  applicable annuity for the eligible employee who elects to 
 71.35  participate in the retirement incentive.  
 71.36     Sec. 5.  [LIMIT ON REHIRING AND FUTURE SERVICES.] 
 72.1      The metropolitan council may not rehire or contract for 
 72.2   services from a former employee who retires with an early 
 72.3   retirement incentive under this article. 
 72.4      Sec. 6.  [APPLICATION OF OTHER LAWS.] 
 72.5      Unilateral implementation of retirement incentives under 
 72.6   this article by the metropolitan council is not an unfair labor 
 72.7   practice for purposes of Minnesota Statutes, chapter 179A. 
 72.8      Sec. 7.  [EFFECTIVE DATE.] 
 72.9      Sections 1 to 6 are effective on the day following final 
 72.10  enactment. 
 72.11                             ARTICLE 8
 72.12                VARIOUS SMALL GROUP PENSION CHANGES
 72.13     Section 1.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; 
 72.14  PURCHASE OF SERVICE CREDIT BY RUSH CITY SCHOOL DISTRICT 
 72.15  EMPLOYEE.] 
 72.16     (a) Notwithstanding Minnesota Statutes, section 353.01, 
 72.17  subdivision 16, or any other law to the contrary, an eligible 
 72.18  person described in paragraph (b) may purchase service credit in 
 72.19  the public employees retirement association for the period 
 72.20  described in paragraph (c). 
 72.21     (b) An eligible person is a person who: 
 72.22     (1) was born on October 28, 1948; 
 72.23     (2) was first employed by the Rush City school district in 
 72.24  September 1968; 
 72.25     (3) has received service credit from the public employees 
 72.26  retirement association for a period of leave for military 
 72.27  service from April 1969 through March 1970; 
 72.28     (4) has not received service credit from the public 
 72.29  employees retirement association for a period of leave for 
 72.30  military service from April 1970 through March 1971. 
 72.31     (c) The period for service credit purchase is the 
 72.32  uncredited portion of the period from April 1970 through March 
 72.33  1971. 
 72.34     (d) An eligible person may purchase service under this 
 72.35  section by making the payment determined under Minnesota 
 72.36  Statutes, section 356.55, for the period in paragraph (c). 
 73.1      (e) The person who desires to purchase service credit under 
 73.2   this section must apply with the executive director to make the 
 73.3   purchase.  The application must include all necessary 
 73.4   documentation of the person's qualifications to make the 
 73.5   purchase, signed written permission to allow the executive 
 73.6   director to request and receive necessary verification of 
 73.7   applicable facts and eligibility requirements, and any other 
 73.8   relevant information that the executive director may require. 
 73.9      (f) Service credit for the purchase period must be granted 
 73.10  by the public employees retirement association to the purchaser 
 73.11  on receipt of the purchase payment amount. 
 73.12     Sec. 2.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
 73.13  SERVICE CREDIT BY SCHOOL DISTRICT NO. 786 TEACHER FOR UNCREDITED 
 73.14  LEAVE.] 
 73.15     (a) An eligible teacher as defined in paragraph (b) is 
 73.16  entitled to purchase allowable and formula service credit from 
 73.17  the teachers retirement association for an uncredited leave 
 73.18  during the 1996-1997 school year under terms specified in 
 73.19  paragraph (c). 
 73.20     (b) An eligible teacher is a person who: 
 73.21     (1) was born on November 14, 1944; 
 73.22     (2) became a member of the teachers retirement association 
 73.23  on September 29, 1972; 
 73.24     (3) is employed by independent school district No. 786 
 73.25  (Bertha-Hewitt); and 
 73.26     (4) failed to obtain one year of service credit due to 
 73.27  classification of a 1996-1997 school year leave as an "other" 
 73.28  leave rather than an extended leave. 
 73.29     (c) Notwithstanding Minnesota Statutes, section 356.55, 
 73.30  subdivision 5, the eligible person may pay, before January 1, 
 73.31  2000, or the date of retirement, whichever is earlier, an amount 
 73.32  equal to the employee contribution rate or rates in effect 
 73.33  during the leave period specified in paragraph (b) applied to 
 73.34  the actual salary rate or rates in effect during that period, 
 73.35  plus any applicable employer contributions the employee agreed 
 73.36  to pay under an agreement with independent school district No. 
 74.1   786, plus annual compound interest at the rate of 8.5 percent 
 74.2   from June 30, 1997, to the date on which the payment is actually 
 74.3   made.  Independent school district No. 786 (Bertha-Hewitt) must 
 74.4   pay the remaining balance of the prior service credit purchase 
 74.5   payment amount calculated under Minnesota Statutes, section 
 74.6   356.55, within 30 days of the payment by the eligible person.  
 74.7   The executive director of the teachers retirement association 
 74.8   must notify the superintendent of independent school district 
 74.9   No. 786 of its payment amount and payment due date if the 
 74.10  eligible person makes the required payment. 
 74.11     (d) If independent school district No. 786 fails to pay its 
 74.12  portion of the required prior service credit purchase payment 
 74.13  amount, the executive director may notify the commissioner of 
 74.14  finance of that fact and the commissioner of finance may order 
 74.15  that the required employer payment be deducted from the next 
 74.16  subsequent payment or payments of state education aid to the 
 74.17  school district and be transmitted to the teachers retirement 
 74.18  association. 
 74.19     (e) An eligible teacher must provide any relevant 
 74.20  documentation required by the executive director to determine 
 74.21  eligibility for the prior service credit under this section. 
 74.22     (f) Service credit for the purchase period must be granted 
 74.23  by the teachers retirement association to the account of the 
 74.24  eligible teacher upon receipt of the purchase payment amount 
 74.25  specified in paragraph (c). 
 74.26     Sec. 3.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
 74.27  UNREQUESTED LEAVE PERIOD BY VIRGINIA TEACHER.] 
 74.28     (a) A qualified teacher described in paragraph (b) is 
 74.29  entitled to purchase one year of allowable and formula service 
 74.30  credit from the teachers retirement association for a one-year 
 74.31  portion of the period of unrequested leave from teaching service 
 74.32  specified in paragraph (b), clause (5), upon the payment of the 
 74.33  purchase price specified in paragraph (c). 
 74.34     (b) A qualified teacher is a person who: 
 74.35     (1) was born in 1943; 
 74.36     (2) is a current member of the teachers retirement 
 75.1   association; 
 75.2      (3) initially was employed as a teacher in 1966 by the 
 75.3   Alexandria school district; 
 75.4      (4) was subsequently employed as an industrial arts teacher 
 75.5   at the Virginia high school by the Virginia school district; and 
 75.6      (5) was placed on unrequested leave by the Virginia school 
 75.7   district for the 1983-1984 and 1984-1985 school years. 
 75.8      (c) The purchase payment amount must be determined as 
 75.9   provided in Minnesota Statutes, section 356.55. 
 75.10     (d) Payment of the prior service credit purchase amount 
 75.11  must be made by January 1, 2000. 
 75.12     Sec. 4.  [PURCHASE OF SERVICE CREDIT; PRIOR SAINT PAUL 
 75.13  BUREAU OF HEALTH EMPLOYEE.] 
 75.14     (a) An eligible person, as described in paragraph (b), is 
 75.15  entitled to purchase coordinated service credit in the public 
 75.16  employees retirement association general plan for the period of 
 75.17  employment described in paragraph (b), clause (2), by making 
 75.18  payment as specified in paragraph (c). 
 75.19     (b) An eligible person is a person who: 
 75.20     (1) was born on May 22, 1932; 
 75.21     (2) was employed by the St. Paul Bureau of Health from 
 75.22  March 17, 1958, to September 21, 1962, was covered by the St. 
 75.23  Paul bureau of health relief association as a result of that 
 75.24  employment, and who forfeited all service credit in that relief 
 75.25  association upon leaving that employment; and 
 75.26     (3) later became a coordinated member of the general plan 
 75.27  of the public employees retirement association and currently is 
 75.28  a coordinated member of that plan. 
 75.29     (c) An eligible person described in paragraph (b) may 
 75.30  purchase service credit from the public employees retirement 
 75.31  association by paying the amount specified in Minnesota 
 75.32  Statutes, section 356.55, prior to termination of public 
 75.33  employees retirement association covered employment or prior to 
 75.34  January 1, 2000, whichever is earlier.  If the city of St. Paul 
 75.35  agrees to make a payment under Minnesota Statutes, section 
 75.36  356.55, subdivision 5, an eligible person must make the employee 
 76.1   payments prior to termination of public employees retirement 
 76.2   association covered employment or prior to January 1, 2000, 
 76.3   whichever is earlier.  If the employee payment is made in a 
 76.4   timely fashion, the city payment must be remitted 60 days 
 76.5   thereafter. 
 76.6      (d) An eligible person must provide any relevant 
 76.7   documentation required by the executive director to determine 
 76.8   eligibility for the prior service credit under this section. 
 76.9      (e) Service credit for the purchase period must be granted 
 76.10  by the public employees retirement association to the account of 
 76.11  the eligible person upon receipt of the purchase payment amount 
 76.12  specified in paragraph (c). 
 76.13     Sec. 5.  [INDEPENDENT SCHOOL DISTRICT NO. 276, MINNETONKA, 
 76.14  TEACHER; PRIOR SERVICE CREDIT PURCHASE.] 
 76.15     (a) Notwithstanding Minnesota Statutes, section 354.095, an 
 76.16  eligible person described in paragraph (b) is entitled to 
 76.17  purchase allowable and formula service credit in the teachers 
 76.18  retirement association for the period described in paragraph (c) 
 76.19  by paying the amount specified in Minnesota Statutes, section 
 76.20  356.55, subdivision 2. 
 76.21     (b) An eligible person is a person who: 
 76.22     (1) was on medical leave for a period that includes the 
 76.23  1994-1995 and the 1995-1996 school years; 
 76.24     (2) was employed by independent school district No. 276, 
 76.25  Minnetonka, during the period that the medical leave was taken; 
 76.26  and 
 76.27     (3) due to the failure of independent school district No. 
 76.28  276, Minnetonka, to file certain papers with the teachers 
 76.29  retirement association was not able to obtain service credit for 
 76.30  the 1994-1995 and 1995-1996 school year portions of the medical 
 76.31  leave. 
 76.32     (c) The period for service credit purchase is the 1994-1995 
 76.33  and 1995-1996 school years. 
 76.34     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 76.35  subdivision 5, the eligible person must pay, on or before 
 76.36  September 1, 1999, an amount equal to the employee, employer, 
 77.1   and employer additional contribution rates in effect during the 
 77.2   prior service period applied to the actual salary rates in 
 77.3   effect during the prior service period, plus annual compound 
 77.4   interest at the rate of 8.5 percent from the date on which the 
 77.5   contributions would have been made if made contemporaneous with 
 77.6   the service period to the date on which the payment is actually 
 77.7   made.  Independent school district No. 276, Minnetonka, must pay 
 77.8   one-half of the remaining balance of the prior service credit 
 77.9   purchase payment amount calculated under Minnesota Statutes, 
 77.10  section 356.55, within 30 days of the payment by the eligible 
 77.11  person.  Recognizing that the teachers retirement association 
 77.12  failed to provide adequate information on the opportunity of the 
 77.13  eligible person to make timely payments for the 1995-1996 school 
 77.14  year following receipt of the medical leave of absence forms on 
 77.15  August 16, 1996, the teachers retirement association is 
 77.16  responsible for one-half of the remaining balance of the prior 
 77.17  service credit purchase payment amount calculated under 
 77.18  Minnesota Statutes, section 356.55.  The executive director of 
 77.19  the teachers retirement association must notify the 
 77.20  superintendent of independent school district No. 276, 
 77.21  Minnetonka, of its payment amount and payment due date if the 
 77.22  eligible person makes the required payment. 
 77.23     (e) If independent school district No. 276, Minnetonka, 
 77.24  fails to pay its portion of the required prior service credit 
 77.25  purchase payment amount, the executive director may notify the 
 77.26  commissioner of finance of that fact and the commissioner of 
 77.27  finance may order that the required school district payment be 
 77.28  deducted from the next subsequent payment or payments of state 
 77.29  education aid to the school district and be transmitted to the 
 77.30  teachers retirement association.  
 77.31     Sec. 6.  [HOPKINS SCHOOL DISTRICT; REPAYMENT OF INTEREST 
 77.32  CHARGE ON CERTAIN MEMBER CONTRIBUTION SHORTAGE PAYMENTS.] 
 77.33     (a) Independent school district No. 274, Hopkins, shall pay 
 77.34  the amount of $1,004.08, plus compound interest on each amount 
 77.35  at the annual rate of six percent from June 1, 1997, to the date 
 77.36  of payment, to an eligible person described in paragraph (b) to 
 78.1   compensate the person for a past overcharge in a member 
 78.2   contribution shortage payment.  The shortage was caused by the 
 78.3   failure of the school district to make the required member 
 78.4   contribution deductions during the 1968-1969 school year and the 
 78.5   overpayment was caused by the failure of the teachers retirement 
 78.6   association to notify the eligible person in a timely fashion of 
 78.7   the shortage. 
 78.8      (b) An eligible person is a person who: 
 78.9      (1) was employed by independent school district No. 274 
 78.10  (Hopkins) during the 1968-1969 school year and suffered an under 
 78.11  deduction by the school district of $114.66; 
 78.12     (2) took a member contribution refund in the early 1970's 
 78.13  and repaid the refund in November 1974; and 
 78.14     (3) had an appeal denied by the teachers retirement 
 78.15  association board of trustees at a May 8, 1998, hearing, 
 78.16  reflected in a May 21, 1998, findings and final order. 
 78.17     (c) The payments must be made within 30 days of the 
 78.18  effective date.  If independent school district No. 274, 
 78.19  Hopkins, fails to make a timely payment of its obligation, the 
 78.20  teachers retirement association must make the payment and may 
 78.21  notify the commissioner of finance of the school district's 
 78.22  failure to pay.  In that event, the commissioner of finance may 
 78.23  order that the required school district payment be deducted from 
 78.24  the next subsequent payment of state education aid to the school 
 78.25  district and transmitted to the teachers retirement association. 
 78.26     Sec. 7.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
 78.27  SERVICE CREDIT FOR CERTAIN SABBATICAL LEAVES.] 
 78.28     (a) Notwithstanding any provision of Minnesota Statutes, 
 78.29  chapter 354, to the contrary, an eligible teacher as defined in 
 78.30  paragraph (b) is entitled to purchase allowable and formula 
 78.31  service credit from the teachers retirement association for the 
 78.32  uncredited portion of a sabbatical leave during the 1976-1977 
 78.33  school year under paragraph (c). 
 78.34     (b) An eligible teacher is a person who was born on 
 78.35  September 10, 1942, became a member of the teachers retirement 
 78.36  association on October 31, 1968, is employed by independent 
 79.1   school district No. 16, Spring Lake Park, and will qualify for 
 79.2   an early normal retirement annuity under the "rule of 90" on 
 79.3   September 16, 2000. 
 79.4      (c) Notwithstanding Minnesota Statutes, section 356.55, 
 79.5   subdivision 5, the eligible person may pay, before January 1, 
 79.6   2000, or the date of retirement, whichever is earlier, an amount 
 79.7   equal to the employee contribution rate or rates in effect 
 79.8   during the prior service period applied to the actual salary 
 79.9   rates in effect during the prior service period, plus annual 
 79.10  compound interest at the rate of 8.5 percent from the date on 
 79.11  which the contributions would have been made if made 
 79.12  contemporaneous with the service period to the date on which the 
 79.13  payment is actually made.  Independent school district No. 16, 
 79.14  Spring Lake Park, must pay the balance of the prior service 
 79.15  credit purchase payment amount calculated under Minnesota 
 79.16  Statutes, section 356.55, within 30 days of the payment by the 
 79.17  eligible person.  The executive director of the teachers 
 79.18  retirement association must notify the superintendent of 
 79.19  independent school district No. 16, Spring Lake Park, of its 
 79.20  payment amount and payment due date if the eligible person makes 
 79.21  the required payment. 
 79.22     (d) If independent school district No. 16, Spring Lake 
 79.23  Park, fails to pay its portion of the required prior service 
 79.24  credit purchase payment amount, the executive director may 
 79.25  notify the commissioner of finance of that fact and the 
 79.26  commissioner of finance may order that the required employer 
 79.27  payment be deducted from the next subsequent payment or payments 
 79.28  of state education aid to the school district and be transmitted 
 79.29  to the teachers retirement association. 
 79.30     (e) An eligible teacher must provide any relevant 
 79.31  documentation required by the executive director to determine 
 79.32  eligibility for the prior service credit under this section. 
 79.33     (f) Service credit for the purchase period must be granted 
 79.34  by the teachers retirement association to the account of the 
 79.35  eligible teacher upon receipt of the purchase payment amount 
 79.36  specified in paragraph (c). 
 80.1      Sec. 8.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; STATE 
 80.2   BOARD OF PUBLIC DEFENSE EMPLOYEE PRIOR SERVICE CREDIT PURCHASE.] 
 80.3      (a) An eligible person described in paragraph (b) is 
 80.4   entitled to purchase service credit from the public employees 
 80.5   retirement association for the period of omitted deductions 
 80.6   December 19, 1992, through December 27, 1994. 
 80.7      (b) An eligible person for purposes of paragraph (a) is a 
 80.8   person who: 
 80.9      (1) was born on August 17, 1950; 
 80.10     (2) was employed through Winona county until 1992; 
 80.11     (3) is currently employed by the state board of public 
 80.12  defense in the third judicial district public defender's office; 
 80.13  and 
 80.14     (4) had omitted member contributions for public employment 
 80.15  during the period December 19, 1992, through December 27, 1994. 
 80.16     (c) The prior service credit purchase payment amount is 
 80.17  governed by Minnesota Statutes, section 356.55.  Authority to 
 80.18  purchase the service credit expires on July 1, 2000. 
 80.19     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 80.20  subdivision 5, the eligible person must pay, on or before 
 80.21  September 1, 1999, an amount equal to the employee contribution 
 80.22  rate in effect during the prior service period applied to the 
 80.23  actual salary rates in effect during the prior service period, 
 80.24  plus annual compound interest at the rate of 8.5 percent from 
 80.25  the date on which the contributions would have been made if made 
 80.26  contemporaneous with the service period to the date on which the 
 80.27  payment is actually made.  The state board of public defense 
 80.28  must pay the balance of the prior service credit purchase 
 80.29  payment amount calculated under Minnesota Statutes, section 
 80.30  356.55, within 30 days of the payment by the eligible person. 
 80.31     (e) A person purchasing service credit under this section 
 80.32  must provide sufficient documentation of eligibility to the 
 80.33  executive director of the public employees retirement 
 80.34  association. 
 80.35     Sec. 9.  [TRA; PURCHASE OF SERVICE CREDIT FOR FINAL PORTION 
 80.36  OF EXTENDED LEAVE OF ABSENCE BY ANOKA-HENNEPIN TEACHER.] 
 81.1      (a) An eligible person, as described in paragraph (b), is 
 81.2   entitled to purchase allowable and formula service credit in the 
 81.3   teachers retirement association for the period specified in 
 81.4   paragraph (c) by making the payment specified in Minnesota 
 81.5   Statutes, section 356.55. 
 81.6      (b) An eligible person is a person who: 
 81.7      (1) was born February 1, 1943; 
 81.8      (2) was initially employed as a teacher by the Richfield 
 81.9   school district in 1966; 
 81.10     (3) is currently employed as an elementary school principal 
 81.11  by independent school district No. 11 (Anoka-Hennepin); and 
 81.12     (4) was on an extended leave of absence from June 29, 1984, 
 81.13  to June 28, 1989, but failed to obtain service credit for the 
 81.14  final two years of the leave. 
 81.15     (c) The prior service credit purchase period is July 1, 
 81.16  1987, through June 28, 1989. 
 81.17     Sec. 10.  [EFFECTIVE DATE.] 
 81.18     Sections 1 to 9 are effective on the day following final 
 81.19  enactment. 
 81.20                             ARTICLE 9
 81.21                   MISCELLANEOUS PENSION CHANGES 
 81.22     Section 1.  Minnesota Statutes 1998, section 3A.02, 
 81.23  subdivision 1b, is amended to read: 
 81.24     Subd. 1b.  [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 
 81.25  separation from service after the beginning of the 1981 
 81.26  legislative session, a former member of the legislature who has 
 81.27  attained the age of at least 60 years set by the board of 
 81.28  directors of the Minnesota state retirement system and who is 
 81.29  otherwise qualified in accordance with subdivision 1 is entitled 
 81.30  upon making written application on forms supplied by the 
 81.31  director to a retirement allowance in an amount equal to the 
 81.32  retirement allowance specified in subdivision 1 reduced so that 
 81.33  the reduced annuity is the actuarial equivalent of the annuity 
 81.34  that would be payable if the former member of the legislature 
 81.35  deferred receipt of the annuity and the annuity amount were 
 81.36  augmented at an annual rate of three percent compounded annually 
 82.1   from the date the annuity begins to accrue until age 62. 
 82.2      (b) The age set by the board of directors under paragraph 
 82.3   (a) cannot be less than the early retirement age under section 
 82.4   352.116, subdivision 1a. 
 82.5      (c) If there is an actuarial cost to the plan of resetting 
 82.6   the early retirement age under paragraph (a), the retired 
 82.7   legislator is required to pay an additional amount to cover the 
 82.8   full actuarial value.  The additional amount must be paid in a 
 82.9   lump sum within 30 days of the certification of the amount by 
 82.10  the executive director.  
 82.11     (d) The executive director of the Minnesota state 
 82.12  retirement system shall report to the legislative commission on 
 82.13  pensions and retirement on the utilization of this provision on 
 82.14  or before September 1, 2000. 
 82.15     Sec. 2.  Minnesota Statutes 1998, section 122A.46, 
 82.16  subdivision 2, is amended to read: 
 82.17     Subd. 2.  [LEAVE OF ABSENCE.] The board of any district may 
 82.18  grant an extended leave of absence without salary to any full- 
 82.19  or part-time elementary or secondary teacher who has been 
 82.20  employed by the district for at least five years and has at 
 82.21  least ten years of allowable service, as defined in section 
 82.22  354.05, subdivision 13, or the bylaws of the appropriate 
 82.23  retirement association or ten years of full-time teaching 
 82.24  service in Minnesota public elementary and secondary schools.  
 82.25  The maximum duration of an extended leave of absence pursuant to 
 82.26  under this section must be determined by mutual agreement of the 
 82.27  board and the teacher at the time the leave is granted and shall 
 82.28  be at least three but no more than five years.  An extended 
 82.29  leave of absence pursuant to under this section shall be taken 
 82.30  by mutual consent of the board and the teacher.  If the school 
 82.31  board denies a teacher's request, it must provide reasonable 
 82.32  justification for the denial. 
 82.33     Sec. 3.  Minnesota Statutes 1998, section 352.03, 
 82.34  subdivision 1, is amended to read: 
 82.35     Subdivision 1.  [MEMBERSHIP OF BOARD; ELECTION; TERM.] The 
 82.36  policy-making function of the system is vested in a board of 11 
 83.1   members, who must be known as the board of directors.  This 
 83.2   board shall consist of three members appointed by the governor, 
 83.3   one of whom must be a constitutional officer or appointed state 
 83.4   official and two of whom must be public members knowledgeable in 
 83.5   pension matters, four state employees elected by state employees 
 83.6   covered by the system excluding employees in categories 
 83.7   specifically authorized to designate or elect a member by this 
 83.8   subdivision, one employee of the transit operating division of 
 83.9   the metropolitan council's transit commission operations or its 
 83.10  successor agency designated by the executive committee of the 
 83.11  labor organization that is the exclusive bargaining agent 
 83.12  representing employees of the transit division, one member of 
 83.13  the state patrol retirement fund elected by members of that fund 
 83.14  at a time and in a manner fixed by the board, one employee 
 83.15  covered by the correctional employees plan elected by employees 
 83.16  covered by that plan, and one retired employee elected by 
 83.17  disabled and retired employees of all plans administered by the 
 83.18  system at a time and in a manner to be fixed by the board.  Two 
 83.19  state employee members, whose terms of office begin on the first 
 83.20  Monday in May after their election, must be elected biennially.  
 83.21  Elected members and the appointed member of the metropolitan 
 83.22  council's office of transit operations hold office for a term of 
 83.23  four years, except the retired member whose term is two years, 
 83.24  and until their successors are elected or appointed, and have 
 83.25  qualified.  An employee of the system is not eligible for 
 83.26  membership on the board of directors.  A state employee on leave 
 83.27  of absence is not eligible for election or reelection to 
 83.28  membership on the board of directors.  The term of any board 
 83.29  member who is on leave for more than six months automatically 
 83.30  ends on expiration of this period the term of office. 
 83.31     Sec. 4.  Minnesota Statutes 1998, section 354.05, 
 83.32  subdivision 40, is amended to read: 
 83.33     Subd. 40.  [TIMELY RECEIPT.] An application, payment, 
 83.34  return, claim, or other document that is not personally 
 83.35  delivered to the association on or before the applicable due 
 83.36  date is considered to be a timely receipt if officially 
 84.1   postmarked received on or before the due date or if delivered or 
 84.2   filed under section 645.151. 
 84.3      Sec. 5.  Minnesota Statutes 1998, section 354.06, 
 84.4   subdivision 1, is amended to read: 
 84.5      Subdivision 1.  The management of the association is vested 
 84.6   in a board of eight trustees known as the board of trustees of 
 84.7   the teachers retirement association.  It is composed of the 
 84.8   following persons:  the commissioner of children, families, and 
 84.9   learning, the commissioner of finance, a representative of the 
 84.10  Minnesota school boards association, four members of the 
 84.11  association elected by the members of the association, and one 
 84.12  retiree elected by the retirees of the association.  The five 
 84.13  elected members of the board of trustees must be chosen by mail 
 84.14  ballot in a manner fixed by the board of trustees of the 
 84.15  association.  In every odd-numbered year there shall be elected 
 84.16  two members of the association to the board of trustees for 
 84.17  terms of four years commencing on the first of July next 
 84.18  succeeding their election.  In every other odd-numbered year one 
 84.19  retiree of the association must be elected to the board of 
 84.20  trustees for a term of two four years commencing on the first of 
 84.21  July next succeeding the election.  The filing of candidacy for 
 84.22  a retiree election must include a petition of endorsement signed 
 84.23  by at least ten retirees of the association.  Each election must 
 84.24  be completed by June first of each succeeding odd-numbered 
 84.25  year.  In the case of elective members, any vacancy must be 
 84.26  filled by appointment by the remainder of the board, and the 
 84.27  appointee shall serve until the members or retirees of the 
 84.28  association at the next regular election have elected a trustee 
 84.29  to serve for the unexpired term caused by the vacancy.  No 
 84.30  member or retiree may be appointed by the board, or elected by 
 84.31  the members of the association as a trustee, if the person is 
 84.32  not a member or retiree of the association in good standing at 
 84.33  the time of the appointment or election.  
 84.34     Sec. 6.  Minnesota Statutes 1998, section 354.10, 
 84.35  subdivision 4, is amended to read: 
 84.36     Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any 
 85.1   beneficiary designated by a retiree or member under section 
 85.2   354.05, subdivision 22, may be changed or revoked by the retiree 
 85.3   or member on a form provided by the executive director.  A 
 85.4   change or revocation made under this subdivision is valid only 
 85.5   if the properly completed form is received by the association 
 85.6   postmarked on or before the date of death of the retiree or the 
 85.7   member.  If a designated beneficiary dies before the retiree or 
 85.8   member designating the beneficiary, and a new beneficiary is not 
 85.9   designated, the retiree's or member's estate is the beneficiary. 
 85.10     Sec. 7.  Minnesota Statutes 1998, section 354C.11, is 
 85.11  amended to read: 
 85.12     354C.11 [COVERAGE.] 
 85.13     Subdivision 1.  [AUTHORIZATION.] Personnel Individuals 
 85.14  employed by the board of trustees of the Minnesota state 
 85.15  colleges and universities who are in the unclassified service of 
 85.16  the state, and who have completed at least two years of 
 85.17  employment by the board or a predecessor board with a full-time 
 85.18  contract are participants authorized to participate in the 
 85.19  supplemental retirement plan, effective on the next following 
 85.20  July 1, if the person is employed in an eligible after meeting 
 85.21  eligibility requirements specified in subdivision 2. 
 85.22     Subd. 2.  [ELIGIBILITY.] (a) An individual must participate 
 85.23  in the supplemental retirement plan if the individual is 
 85.24  employed by the board of trustees in the unclassified service of 
 85.25  the state, has completed at least two years with a full time 
 85.26  contract of applicable unclassified employment with the board or 
 85.27  an applicable predecessor board in any of the positions 
 85.28  specified in paragraph (b). 
 85.29     (b) Eligible positions or employment classifications are: 
 85.30     (1) an unclassified administrative position as defined in 
 85.31  section 354B.20, subdivision 6, or is employed in; 
 85.32     (2) an employment classification included in one of the 
 85.33  following collective bargaining units under section 179A.10, 
 85.34  subdivision 2: 
 85.35     (1) (a) the state university instructional unit; 
 85.36     (2) (b) the community college instructional unit; 
 86.1      (3) (c) the technical college instructional unit; and 
 86.2      (4) (d) the state university administrative unit; or 
 86.3      (3) an unclassified employee of the board included in the 
 86.4   general professional unit or supervisory employees unit under 
 86.5   section 179A.10, subdivision 2. 
 86.6      Subd. 3.  [CONTINUING ELIGIBILITY AUTHORIZATION.] Once a 
 86.7   person qualifies for participation in the 
 86.8   supplemental retirement plan, all subsequent service by the 
 86.9   person as an unclassified employee of the state university 
 86.10  board, the state board for community colleges, the higher 
 86.11  education board, or the technical colleges board of trustees in 
 86.12  a position or employment classification listed in subdivision 2, 
 86.13  paragraph (b), is covered by the supplemental retirement plan. 
 86.14     Sec. 8.  [EFFECTIVE DATE.] 
 86.15     Sections 1 and 3 to 7 are effective on the day following 
 86.16  final enactment.  Section 2 is effective on July 1, 1999. 
 86.17                             ARTICLE 10
 86.18               INCLUSION OF SUPPLEMENTAL NEEDS TRUSTS 
 86.19                AS OPTIONAL ANNUITY FORM RECIPIENTS 
 86.20     Section 1.  [356.372] [SUPPLEMENTAL NEEDS TRUST AS OPTIONAL 
 86.21  ANNUITY FORM RECIPIENT.] 
 86.22     Subdivision 1.  [INCLUSION AS RECIPIENT.] Notwithstanding 
 86.23  any provision to the contrary of the laws, articles of 
 86.24  incorporation, or bylaws governing a covered retirement plan 
 86.25  specified in subdivision 3, a retiring member may designate a 
 86.26  qualified supplemental needs trust under subdivision 2 as the 
 86.27  remainder recipient on an optional retirement annuity form for a 
 86.28  period not to exceed the lifetime of the beneficiary of the 
 86.29  supplemental needs trust. 
 86.30     Subd. 2.  [QUALIFIED SUPPLEMENTAL NEEDS TRUST.] A qualified 
 86.31  supplemental needs trust is a trust that: 
 86.32     (1) was established on or after July 1, 1992; 
 86.33     (2) was established solely for the benefit of one person 
 86.34  who has a disability under federal Social Security 
 86.35  Administration supplemental security income or retirement, 
 86.36  survivors, and disability insurance disability determination 
 87.1   standards who was determined as such before the creation of the 
 87.2   trust; 
 87.3      (3) is funded, in whole or in part, by the primary 
 87.4   recipient of the optional annuity form and, unless the trust is 
 87.5   a Zebley trust, is not funded by the beneficiary, the 
 87.6   beneficiary's spouse, or a person who is required to pay a sum 
 87.7   to or for the trust beneficiary under the terms of litigation or 
 87.8   a litigation settlement; 
 87.9      (4) is established to cover reasonable living expenses and 
 87.10  other basic needs of the disabilitant, in whole or in part, in 
 87.11  instances when public assistance does not provide sufficiently 
 87.12  for these needs; 
 87.13     (5) is not permitted to make disbursement to replace or 
 87.14  reduce public assistance otherwise available; 
 87.15     (6) is irrevocable; 
 87.16     (7) terminates upon the death of the disabled person for 
 87.17  whose benefit it was established; and 
 87.18     (8) is determined by the executive director to be a trust 
 87.19  that contains excluded assets for purposes of the qualification 
 87.20  for public entitlement benefits under the applicable federal and 
 87.21  state laws and regulations. 
 87.22     Subd. 3.  [COVERED RETIREMENT PLAN.] The provisions of this 
 87.23  section apply to the following retirement plans: 
 87.24     (1) general state employees retirement plan of the 
 87.25  Minnesota state retirement system, established under chapter 
 87.26  352; 
 87.27     (2) correctional employees retirement plan of the Minnesota 
 87.28  state retirement system, established under chapter 352; 
 87.29     (3) state patrol retirement plan, established under chapter 
 87.30  352B; 
 87.31     (4) legislators retirement plan, established under chapter 
 87.32  3A; 
 87.33     (5) judges retirement plan, established under chapter 490; 
 87.34     (6) public employees retirement plan, established under 
 87.35  chapter 353; 
 87.36     (7) public employees police and fire plan, established 
 88.1   under chapter 353; 
 88.2      (8) teachers retirement plan, established under chapter 
 88.3   354; 
 88.4      (9) Duluth teachers retirement fund association, 
 88.5   established under chapter 354A; 
 88.6      (10) St. Paul teachers retirement fund association, 
 88.7   established under chapter 354A; 
 88.8      (11) Minneapolis teachers retirement fund association, 
 88.9   established under chapter 354A; 
 88.10     (12) Minneapolis employees retirement plan, established 
 88.11  under chapter 422A; 
 88.12     (13) Minneapolis firefighters relief association, 
 88.13  established under chapter 69; and 
 88.14     (14) Minneapolis police relief association, established 
 88.15  under chapter 423B. 
 88.16     Sec. 2.  [EFFECTIVE DATE.] 
 88.17     Section 1 is effective on the day following final enactment.
 88.18                             ARTICLE 11
 88.19             VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES 
 88.20     Section 1.  [REPEALER.] 
 88.21     Minnesota Statutes 1998, section 424A.02, subdivision 5, is 
 88.22  repealed. 
 88.23     Sec. 2.  [EFFECTIVE DATE.] 
 88.24     Section 1 is effective July 1, 1999. 
 88.25                             ARTICLE 12
 88.26           CORRECTIONAL EMPLOYEES RETIREMENT PLAN CHANGES 
 88.27     Section 1.  Minnesota Statutes 1998, section 352.90, is 
 88.28  amended to read: 
 88.29     352.90 [POLICY.] 
 88.30     It is the policy of the legislature to provide special 
 88.31  retirement benefits and contributions for certain correctional 
 88.32  employees who may be required to retire at an early age because 
 88.33  they lose the mental or physical capacity required to maintain 
 88.34  the safety, security, discipline, and custody of inmates at 
 88.35  state correctional facilities or of patients at the Minnesota 
 88.36  security hospital or at the Minnesota sexual psychopathic 
 89.1   personality treatment center or of patients in the Minnesota 
 89.2   extended treatment options on-campus program at the Cambridge 
 89.3   regional human services center.  
 89.4      Sec. 2.  Minnesota Statutes 1998, section 352.91, is 
 89.5   amended by adding a subdivision to read: 
 89.6      Subd. 3e.  [MINNESOTA EXTENDED TREATMENT OPTIONS PROGRAM; 
 89.7   CAMBRIDGE.] "Covered correctional service" means service by a 
 89.8   state employee in one of the following employment positions with 
 89.9   the Minnesota extended treatment options on-campus program at 
 89.10  the Cambridge regional human services center if at least 75 
 89.11  percent of the employee's working time is spent in direct 
 89.12  contact with patients who are in the Minnesota extended 
 89.13  treatment options program and if service in such a position is 
 89.14  certified to the executive director by the commissioner of human 
 89.15  services, unless the person elects to retain current retirement 
 89.16  coverage under section 6: 
 89.17     (1) behavior analyst I ; 
 89.18     (2) human services support specialist; 
 89.19     (3) mental retardation residential program lead; 
 89.20     (4) psychologist 2; 
 89.21     (5) recreation program assistant; 
 89.22     (6) recreation therapist senior; 
 89.23     (7) registered nurse senior; 
 89.24     (8) skills development specialist; and 
 89.25     (9) social worker senior. 
 89.26     Sec. 3.  Minnesota Statutes 1998, section 352.92, 
 89.27  subdivision 1, is amended to read: 
 89.28     Subdivision 1.  [EMPLOYEE CONTRIBUTIONS.] Employee 
 89.29  contributions of covered correctional employees must be in an 
 89.30  amount equal to 5.50 5.69 percent of salary.  
 89.31     Sec. 4.  Minnesota Statutes 1998, section 352.92, 
 89.32  subdivision 2, is amended to read: 
 89.33     Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
 89.34  contribute for covered correctional employees an amount equal to 
 89.35  7.70 7.98 percent of salary. 
 89.36     Sec. 5.  Minnesota Statutes 1998, section 352.93, 
 90.1   subdivision 2a, is amended to read: 
 90.2      Subd. 2a.  [EARLY RETIREMENT.] Any covered correctional 
 90.3   employee, or former employee if service ended after June 30, 
 90.4   1989, who becomes at least 50 years old and who has at least 
 90.5   three years of allowable service is entitled upon application to 
 90.6   a reduced retirement annuity equal to the annuity calculated 
 90.7   under subdivision 2, reduced so that the reduced annuity is the 
 90.8   actuarial equivalent of the annuity that would be payable if the 
 90.9   employee deferred receipt of the annuity from the day the 
 90.10  annuity begins to accrue to age 55 by two-tenths of one percent 
 90.11  for each month that the correctional employee is under age 55 at 
 90.12  the time of retirement. 
 90.13     Sec. 6.  [TEMPORARY PROVISION; ELECTION TO RETAIN 
 90.14  RETIREMENT COVERAGE.] 
 90.15     (a) An employee in a position specified as qualifying under 
 90.16  section 2 may elect to retain coverage under the general 
 90.17  employees retirement plan of the Minnesota state retirement 
 90.18  system or may elect to transfer coverage and contribute to the 
 90.19  correctional employees retirement plan.  An employee electing to 
 90.20  participate in the correctional employees retirement plan shall 
 90.21  begin making contributions to the correctional plan beginning 
 90.22  the first full pay period after July 1, 1999, or the first full 
 90.23  pay period following filing of their election to transfer 
 90.24  coverage to the correctional employees retirement plan, 
 90.25  whichever is later.  The election to retain coverage or to 
 90.26  transfer coverage must be made in writing by the person on a 
 90.27  form prescribed by the executive director of the Minnesota state 
 90.28  retirement system and must be filed with the executive director 
 90.29  no later than December 31, 1999. 
 90.30     (b) An employee failing to make an election by December 15, 
 90.31  1999, must be notified by certified mail by the executive 
 90.32  director of the Minnesota state retirement system of the 
 90.33  deadline to make a choice.  A person who does not submit an 
 90.34  election form must continue coverage in the general employees 
 90.35  retirement plan and forfeits all rights to transfer retirement 
 90.36  coverage to the correctional employees retirement plan. 
 91.1      (c) The election to retain coverage in the general 
 91.2   employees retirement plan or the election to transfer retirement 
 91.3   coverage to the correctional employees retirement plan is 
 91.4   irrevocable once it is filed with the executive director. 
 91.5      Sec. 7.  [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 
 91.6   PERSONS.] 
 91.7      Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 
 91.8   (a) An employee who has future retirement coverage transferred 
 91.9   to the correctional employees retirement plan under section 6, 
 91.10  and who does not elect to retain general state employees 
 91.11  retirement plan coverage, is entitled to elect to obtain prior 
 91.12  service credit for eligible state service performed on or after 
 91.13  July 1, 1997, and before the first day of the first full pay 
 91.14  period beginning after December 31, 1999.  All prior service 
 91.15  credit must be purchased. 
 91.16     (b) Eligible state service is any period of service on or 
 91.17  after the date which the employee started employment with the 
 91.18  Minnesota extended treatment options program in a position 
 91.19  specified in Minnesota Statutes, section 352.91, subdivision 3e, 
 91.20  in which at least 75 percent of the employee's working time is 
 91.21  determined to have been spent in direct contact with Minnesota 
 91.22  extended treatment options program patients or July 1, 1997, 
 91.23  whichever is later, and the date the employee joined the 
 91.24  correctional employees plan.  
 91.25     (c) The department of human services shall certify eligible 
 91.26  state service to the executive director of the Minnesota 
 91.27  retirement system. 
 91.28     Subd. 2.  [PAYMENT FOR PRIOR SERVICE.] (a) An employee 
 91.29  electing to obtain prior service credit under subdivision 1 must 
 91.30  pay an additional employee contribution for that prior service.  
 91.31  The additional member contribution is the contribution 
 91.32  differential percentage applied to the actual salary paid to the 
 91.33  employee during the period of the prior eligible state service, 
 91.34  plus interest at the rate of six percent per annum, compounded 
 91.35  annually.  The contribution differential percentage is the 
 91.36  difference between 5.5 percent of salary and the applicable 
 92.1   employee contribution rate of the general state employees 
 92.2   retirement plan during the prior eligible state service. 
 92.3      (b) The additional member contribution must be paid only in 
 92.4   a lump sum.  Payment must accompany the election to obtain prior 
 92.5   service credit.  No election or payment may be made by the 
 92.6   person or accepted by the executive director after June 30, 2001.
 92.7      Subd. 3.  [TRANSFER OF ASSETS.] Assets must be transferred 
 92.8   from the general state employees retirement plan to the 
 92.9   correctional employees retirement plan in an amount equal to the 
 92.10  present value of benefits earned under the general employees 
 92.11  retirement plan for each employee transferring to the 
 92.12  correctional employees retirement plan, as determined by the 
 92.13  actuary retained by the legislative commission on pensions and 
 92.14  retirement in accordance with Minnesota Statutes, section 
 92.15  356.215, multiplied by the accrued liability funding ratio of 
 92.16  active members as derived from the most recent actuarial 
 92.17  valuation prepared by the commission-retained actuary.  The 
 92.18  transfer of assets must be made within 45 days after the 
 92.19  employee elects to transfer coverage to the correctional 
 92.20  employees retirement plan. 
 92.21     Subd. 4.  [EFFECT OF THE ASSET TRANSFER.] Upon the transfer 
 92.22  of assets in subdivision 3, service credit in the general state 
 92.23  employees plan of the Minnesota state retirement system is 
 92.24  forfeited and may not be reinstated.  The service credit and 
 92.25  transferred assets must be credited to the correctional 
 92.26  employees retirement plan. 
 92.27     Subd. 5.  [COUNSELING.] (a) The commissioners of human 
 92.28  services and employee relations, and the executive director of 
 92.29  the Minnesota state retirement system have the joint 
 92.30  responsibility of providing affected employees with appropriate 
 92.31  and timely retirement and related benefit counseling. 
 92.32     (b) Counseling must include the anticipated impact of the 
 92.33  retirement coverage change on the person's future retirement 
 92.34  benefit amounts, future retirement eligibility, future 
 92.35  applicability of mandatory retirement laws, and future 
 92.36  postemployment insurance coverage. 
 93.1      (c) The commissioner of human services must consult with 
 93.2   the appropriate collective bargaining agents of the affected 
 93.3   employees regarding the content, form, and timing of the 
 93.4   counseling required by this section. 
 93.5      Sec. 8.  [TRANSITIONAL PROVISION; RETENTION OF CERTAIN 
 93.6   RIGHTS.] 
 93.7      (a) Nothing in sections 1, 2, and 6 to 9 may be considered 
 93.8   to restrict the entitlement of a person under state law to repay 
 93.9   a previously taken refund of employee or member contributions to 
 93.10  a Minnesota public pension plan if all qualifying requirements 
 93.11  are met. 
 93.12     (b) The period of correctional employees retirement plan 
 93.13  contributions, plus interest, must be restored upon the 
 93.14  repayment of the appropriate refund amount if the service was 
 93.15  correctional employees retirement plan covered service on the 
 93.16  date when the service was rendered or on the date when the 
 93.17  refund was taken. 
 93.18     Sec. 9.  [EARLY RETIREMENT INCENTIVE.] 
 93.19     This section applies to an employee who has future 
 93.20  retirement coverage transferred to the correctional employee 
 93.21  retirement plan under section 6 and who is at least 55 years old 
 93.22  on the effective date of section 6.  That employee may 
 93.23  participate in a health insurance early retirement incentive 
 93.24  available under the terms of a collective bargaining agreement, 
 93.25  notwithstanding any provision of the collective bargaining 
 93.26  agreement that limits participation to persons who select the 
 93.27  option during the payroll period in which they become 55 years 
 93.28  old.  A person selecting the health insurance early retirement 
 93.29  incentive under this section must retire by the later of 
 93.30  December 31, 2000, or within the pay period following the time 
 93.31  at which the person has at least three years of covered 
 93.32  correctional service, including any purchased service credit.  
 93.33  An employee meeting this criteria who wishes to extend the 
 93.34  person's employment must do so under Minnesota Statutes, section 
 93.35  43A.34, subdivision 3. 
 93.36     Sec. 10.  [EFFECTIVE DATE.] 
 94.1      Sections 1, 2, and 6 to 9 are effective on the first day of 
 94.2   the first full pay period beginning after July 1, 1999.  Section 
 94.3   5 is effective July 1, 1999. 
 94.4                              ARTICLE 13
 94.5                    PUBLIC SAFETY EMPLOYEE PENSION 
 94.6                             PLAN CHANGES 
 94.7      Section 1.  Minnesota Statutes 1998, section 352B.08, 
 94.8   subdivision 2a, is amended to read: 
 94.9      Subd. 2a.  [EARLY RETIREMENT.] Any member who has become at 
 94.10  least 50 years old and who has at least three years of allowable 
 94.11  service is entitled upon application to a reduced retirement 
 94.12  annuity equal to the annuity calculated under subdivision 2, 
 94.13  reduced by two-tenths one-tenth of one percent for each month 
 94.14  that the member is under age 55 at the time of retirement. 
 94.15     Sec. 2.  Minnesota Statutes 1998, section 353.64, 
 94.16  subdivision 1, is amended to read: 
 94.17     Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
 94.18  person who prior to July 1, 1961, was a member of the police and 
 94.19  fire fund, by virtue of being a police officer or firefighter, 
 94.20  shall, as long as the person remains in either position, 
 94.21  continue membership in the fund.  
 94.22     (b) A person who was employed by a governmental subdivision 
 94.23  as a police officer and was a member of the police and fire fund 
 94.24  on July 1, 1978, by virtue of being a police officer as defined 
 94.25  by this section on that date, and if employed by the same 
 94.26  governmental subdivision in a position in the same department in 
 94.27  which the person was employed on that date, shall continue 
 94.28  membership in continues to be a member of the fund, whether or 
 94.29  not that person has the power of arrest by warrant and is 
 94.30  licensed by the peace officers standards and training board 
 94.31  after that date.  A person who was employed as a correctional 
 94.32  officer by Rice county before July 1, 1998, for the duration of 
 94.33  employment in the correctional position held on July 1, 1998, 
 94.34  continues to be a member of the public employees police and fire 
 94.35  plan, whether or not the person has the power of arrest by 
 94.36  warrant and is licensed by the peace officers standards and 
 95.1   training board after that date. 
 95.2      (c) A person who was employed by a governmental subdivision 
 95.3   as a police officer or a firefighter, whichever applies, was an 
 95.4   active member of the local police or salaried firefighters 
 95.5   relief association located in that governmental subdivision by 
 95.6   virtue of that employment as of the effective date of the 
 95.7   consolidation as authorized by sections 353A.01 to 353A.10, and 
 95.8   has elected coverage by the public employees police and fire 
 95.9   fund benefit plan, shall become a member of the police and fire 
 95.10  fund after that date if employed by the same governmental 
 95.11  subdivision in a position in the same department in which the 
 95.12  person was employed on that date. 
 95.13     (d) Any other employee serving on a full-time basis as a 
 95.14  police officer as defined in subdivision 2 or as a firefighter 
 95.15  as defined in subdivision 3 on or after July 1, 1961, shall 
 95.16  become a member of the public employees police and fire fund.  
 95.17     (e) An employee serving on less than a full-time basis as a 
 95.18  police officer shall become a member of the public employees 
 95.19  police and fire fund only after a resolution stating that the 
 95.20  employee should be covered by the police and fire fund is 
 95.21  adopted by the governing body of the governmental subdivision 
 95.22  employing the person declaring that the position which the 
 95.23  person holds is that of a police officer. 
 95.24     (f) An employee serving on less than a full-time basis as a 
 95.25  firefighter shall become a member of the public employees police 
 95.26  and fire fund only after a resolution stating that the employee 
 95.27  should be covered by the police and fire fund is adopted by the 
 95.28  governing body of the governmental subdivision employing the 
 95.29  person declaring that the position which the person holds is 
 95.30  that of a firefighter. 
 95.31     (g) A police officer or firefighter employed by a 
 95.32  governmental subdivision who by virtue of that employment is 
 95.33  required by law to be a member of and to contribute to any 
 95.34  police or firefighter relief association governed by section 
 95.35  69.77 which has not consolidated with the public employees 
 95.36  police and fire fund and any police officer or firefighter of a 
 96.1   relief association that has consolidated with the association 
 96.2   for which the employee has not elected coverage by the public 
 96.3   employees police and fire fund benefit plan as provided in 
 96.4   sections 353A.01 to 353A.10 shall not become a member of the 
 96.5   public employees police and fire fund. 
 96.6      Sec. 3.  Minnesota Statutes 1998, section 353.651, 
 96.7   subdivision 4, is amended to read: 
 96.8      Subd. 4.  [EARLY RETIREMENT.] Any police officer or 
 96.9   firefighter member who has become at least 50 years old and who 
 96.10  has at least three years of allowable service is entitled upon 
 96.11  application to a retirement annuity equal to the normal annuity 
 96.12  calculated under subdivision 3, reduced by two-tenths one-tenth 
 96.13  of one percent for each month that the member is under age 55 at 
 96.14  the time of retirement. 
 96.15     Sec. 4.  [353.652] [SOCIAL SECURITY BENEFIT OFFSET IN 
 96.16  CERTAIN INSTANCES.] 
 96.17     (a) If a public employee continues in retirement plan 
 96.18  coverage by the public employees police and fire retirement plan 
 96.19  by virtue of this article and subsequently is covered by the 
 96.20  federal old age, survivors, and disability insurance program for 
 96.21  service as a Rice county correctional officer, the retirement 
 96.22  annuity of the person under section 353.651 or the disability 
 96.23  benefit of the person under section 353.656 must be reduced 
 96.24  dollar for dollar for the social security benefit that the 
 96.25  person is entitled to receive by virtue of Rice county 
 96.26  correctional service rendered after the effective date of 
 96.27  section 1. 
 96.28     (b) To be effective, the retirement annuity or disability 
 96.29  benefit application form for a Rice county correctional employee 
 96.30  must include signed written permission by the person for the 
 96.31  public employees retirement association to obtain the necessary 
 96.32  information from the federal old age, survivors, and disability 
 96.33  insurance program to implement the offset provision in paragraph 
 96.34  (a). 
 96.35     Sec. 5.  [353.90] [PENALTY FOR MEMBERSHIP MISCERTIFICATIONS 
 96.36  AND CERTIFICATION FAILURES.] 
 97.1      (a) If the board of trustees of the public employees 
 97.2   retirement association, upon the recommendation of the executive 
 97.3   director, determines that a governmental subdivision has 
 97.4   certified a public employee for membership in the public 
 97.5   employees police and fire retirement plan when the public 
 97.6   employee was not eligible for that retirement plan coverage, the 
 97.7   public employee must be covered by the correct retirement plan 
 97.8   for subsequent service, the public employee retains the coverage 
 97.9   for the period of the misclassification, and the governmental 
 97.10  subdivision shall pay in a lump sum the difference in the 
 97.11  actuarial present value of the retirement annuities to which the 
 97.12  public employee would have been entitled if the public employee 
 97.13  was properly classified.  The governmental subdivision payment 
 97.14  is payable within 30 days of the board's determination.  If 
 97.15  unpaid, it must be collected under section 353.28.  The lump sum 
 97.16  payment must be deposited in the public employees retirement 
 97.17  fund. 
 97.18     (b) If the executive director of the public employees 
 97.19  retirement association determines that a governmental 
 97.20  subdivision has failed to certify a person for retirement plan 
 97.21  membership and coverage under this chapter, in addition to the 
 97.22  procedures under section 353.27, subdivision 4, 9, 10, 11, 12, 
 97.23  12a, or 12b, the director shall charge a fine of $25 for each 
 97.24  membership certification failure. 
 97.25     Sec. 6.  Minnesota Statutes 1998, section 353A.083, is 
 97.26  amended by adding a subdivision to read: 
 97.27     Subd. 4.  [PRE-1999 CONSOLIDATIONS.] For any consolidation 
 97.28  account in effect on July 1, 1999, the public employees police 
 97.29  and fire fund benefit plan applicable to consolidation account 
 97.30  members who have elected or will elect that benefit plan 
 97.31  coverage under section 353A.08 is the most recent change adopted 
 97.32  by the applicable municipality under subdivision 1, 2, or 3, 
 97.33  unless the applicable municipality approves the extension of the 
 97.34  post-June 30, 1999, public employees police and fire fund 
 97.35  benefit plan to the consolidation account. 
 97.36     Sec. 7.  [COLLECTION OF POLICE STATE OVERPAYMENTS.] 
 98.1      (a) As police state aid that was received by Rice county on 
 98.2   account of correctional officers who were improperly included in 
 98.3   retirement coverage by the public employees police and fire 
 98.4   plan, the total of the following amounts must be deducted in 20 
 98.5   equal annual installments from any police state aid payable to 
 98.6   Rice county under Minnesota Statutes, chapter 69: 
 98.7             amount                 year  
 98.8            $11,543                 1994
 98.9             19,096                 1995 
 98.10            39,111                 1996  
 98.11            19,170                 1997 
 98.12            13,764                 1998.  
 98.13     (b) Rice county correctional officers who are members of 
 98.14  the public employees police and fire plan may not be included in 
 98.15  the police officer certification under Minnesota Statutes, 
 98.16  section 69.011, subdivision 2, paragraph (b), and the employer 
 98.17  contributions to the public employees police and fire fund on 
 98.18  behalf of those correctional employees may not be included in 
 98.19  the employer police retirement coverage prior calendar year 
 98.20  obligation for the determination of excess police state aid 
 98.21  under Minnesota Statutes, section 69.021, subdivision 10, unless 
 98.22  the correctional officer is a peace officer as defined in 
 98.23  Minnesota Statutes, section 69.011, subdivision 1, paragraph (g).
 98.24     Sec. 8.  [EFFECTIVE DATE.] 
 98.25     (a) Sections 1, 3, and 7 are effective on July 1, 1999.  
 98.26  Sections 2, 4, and 6 are effective on the day following final 
 98.27  enactment.  Section 5 is effective on August 1, 2000. 
 98.28     (b) If all consolidation accounts in effect on March 1, 
 98.29  1999, are merged with the public employees police and fire fund 
 98.30  after July 1, 1999, section 6 is repealed as of June 30, 1999. 
 98.31                             ARTICLE 14
 98.32                    SPECIAL RETIREMENT COVERAGE  
 98.33                       FOR CERTAIN STATE FIRE 
 98.34                         MARSHAL EMPLOYEES
 98.35     Section 1.  [352.87] [STATE FIRE MARSHAL DIVISION 
 98.36  EMPLOYEES.] 
 99.1      Subdivision 1.  [ELIGIBILITY.] A member of the general plan 
 99.2   who is employed by the department of public safety, state fire 
 99.3   marshal division, as a deputy state fire marshal, fire/arson 
 99.4   investigator, who elects special benefit coverage under 
 99.5   subdivision 8, is entitled to retirement benefits or disability 
 99.6   benefits, as applicable, as stated in this section for eligible 
 99.7   service under this section rendered after July 1, 1999, for 
 99.8   which allowable service credit is received.  The covered member 
 99.9   must be at least age 55 to qualify for the retirement annuity 
 99.10  specified in subdivision 3. 
 99.11     Subd. 2.  [RETIREMENT ANNUITY ELIGIBILITY.] A person 
 99.12  specified in subdivision 1 who meets all eligibility 
 99.13  requirements specified in this chapter applicable to general 
 99.14  plan members is eligible for retirement benefits as specified in 
 99.15  subdivision 3. 
 99.16     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] A person specified 
 99.17  in subdivision 1 will have a retirement annuity applicable for 
 99.18  allowable service credit under this section calculated by 
 99.19  multiplying the employee's average salary, as defined in section 
 99.20  352.115, subdivision 2, by the percent specified in section 
 99.21  356.19, subdivision 2a, for each year or portions of a year of 
 99.22  allowable service credit.  No reduction for retirement prior to 
 99.23  normal retirement age, as specified in section 352.01, 
 99.24  subdivision 25, applies to service to which this section applies.
 99.25     Subd. 4.  [NON-JOB-RELATED DISABILITY BENEFITS.] An 
 99.26  eligible member described in subdivision 1, who is less than 55 
 99.27  years of age and who becomes disabled and physically or mentally 
 99.28  unfit to perform the duties of the position because of sickness 
 99.29  or injury while not engaged in covered employment, is entitled 
 99.30  to a disability benefit amount equivalent to an annuity computed 
 99.31  under subdivision 3 assuming the member has 15 years of service 
 99.32  qualifying under this section and waiving the minimum age 
 99.33  requirement.  If the eligible member becomes disabled under this 
 99.34  subdivision with more than 15 years of service covered under 
 99.35  this section, the eligible member is entitled to a disability 
 99.36  benefit amount equivalent to an annuity computed under 
100.1   subdivision 3 based on all years of service credited under this 
100.2   section and waiving the minimum age requirement. 
100.3      Subd. 5.  [JOB-RELATED DISABILITY BENEFITS.] An eligible 
100.4   member defined in subdivision 1, who is less than 55 years of 
100.5   age and who becomes disabled and physically or mentally unfit to 
100.6   perform the duties of the position because of sickness or injury 
100.7   while engaged in covered employment, is entitled to a disability 
100.8   benefit amount equivalent to an annuity computed under 
100.9   subdivision 3 assuming the member has 20 years of service 
100.10  qualifying under this section and waiving the minimum age 
100.11  requirement.  An eligible member who becomes disabled under this 
100.12  subdivision with more than 20 years of service credited under 
100.13  this section is entitled to a disability benefit amount 
100.14  equivalent to an annuity computed under subdivision 3 based on 
100.15  all years of service credited under this section and waiving the 
100.16  age requirement. 
100.17     Subd. 6.  [DISABILITY BENEFIT COORDINATION.] If the 
100.18  eligible employee is entitled to receive a disability benefit as 
100.19  provided in subdivision 4 or 5 and has allowable service credit 
100.20  under this section for less service than the length of service 
100.21  upon which the disability benefit in subdivision 4 or 5 is 
100.22  based, and also has allowable service in the general plan not 
100.23  includable in this section, the employee is entitled to a 
100.24  disability benefit or deferred retirement annuity based on the 
100.25  general plan service not includable in this section only for the 
100.26  service that, when combined with the service includable in this 
100.27  section, exceeds the number of years on which the disability 
100.28  benefit provided in subdivision 4 or 5 is based.  The benefit 
100.29  recipient under subdivision 4 or 5 who also has credit for 
100.30  regular plan service must in all respects qualify under section 
100.31  352.113 to be entitled to receive a disability benefit based on 
100.32  the general plan service not includable in this section, except 
100.33  that the service may be combined to satisfy length of service 
100.34  requirements.  Any deferred annuity to which the employee may be 
100.35  entitled based on general plan service not includable in this 
100.36  section must be augmented as provided in section 352.72, 
101.1   subdivision 2, while the employee is receiving a disability 
101.2   benefit under this section. 
101.3      Subd. 7.  [ADDITIONAL CONTRIBUTIONS.] The special 
101.4   retirement annuity and disability coverage under this section 
101.5   must be financed by an employee contribution of 2.78 percent of 
101.6   covered salary and an employer contribution of 4.20 percent.  
101.7   These contributions are in addition to the contributions 
101.8   required by section 352.04, subdivisions 2 and 3, and must be 
101.9   made in the manner provided for in section 352.04, subdivisions 
101.10  4, 5, and 6. 
101.11     Subd. 8.  [ELECTION OF COVERAGE.] To be covered by this 
101.12  section, an employee of the department of public safety 
101.13  described in subdivision 1 who is employed in a position 
101.14  described in that subdivision on or after July 1, 1999, must 
101.15  file a notice with the executive director of the Minnesota state 
101.16  retirement system on a form prescribed by the executive director 
101.17  stating whether or not the employee elects to be covered by this 
101.18  section.  Notice must be filed by September 1, 1999, or within 
101.19  90 days of employment, whichever is later.  Elections are 
101.20  irrevocable during any period of covered employment.  A failure 
101.21  to file a timely notice shall be deemed a waiver of coverage by 
101.22  this section. 
101.23     Sec. 2.  Minnesota Statutes 1998, section 356.19, is 
101.24  amended by adding a subdivision to read: 
101.25     Subd. 2a.  [COORDINATED MEMBERS.] The applicable benefit 
101.26  accrual rate is 2.0 percent. 
101.27     Sec. 3.  [EFFECTIVE DATE.] 
101.28     Sections 1 and 2 are effective the day following final 
101.29  enactment. 
101.30                             ARTICLE 15
101.31                      TEACHER RETIREMENT PLANS  
101.32                   PRIOR SERVICE CREDIT PURCHASE  
101.33                           AUTHORIZATION  
101.34     Section 1.  [354.533] [PRIOR OR UNCREDITED MILITARY SERVICE 
101.35  CREDIT PURCHASE.] 
101.36     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
102.1   teacher who has at least three years of allowable service credit 
102.2   with the teachers retirement association and who performed 
102.3   service in the United States armed forces before becoming a 
102.4   teacher as defined in section 354.05, subdivision 2, or who 
102.5   failed to obtain service credit for a military leave of absence 
102.6   under the provisions of section 354.53, is entitled to purchase 
102.7   allowable and formula service credit for the initial period of 
102.8   enlistment, induction, or call to active duty without any 
102.9   voluntary extension by making payment under section 356.55 
102.10  provided the teacher is not entitled to receive a current or 
102.11  deferred retirement annuity from a United States armed forces 
102.12  pension plan and has not purchased service credit from any other 
102.13  defined benefit public employee pension plan for the same period 
102.14  of service. 
102.15     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
102.16  desires to purchase service credit under subdivision 1 must 
102.17  apply with the executive director to make the purchase.  The 
102.18  application must include all necessary documentation of the 
102.19  teacher's qualifications to make the purchase, signed written 
102.20  permission to allow the executive director to request and 
102.21  receive necessary verification of applicable facts and 
102.22  eligibility requirements, and any other relevant information 
102.23  that the executive director may require. 
102.24     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
102.25  service credit for the purchase period must be granted by the 
102.26  teachers retirement association to the purchasing teacher upon 
102.27  receipt of the purchase payment amount.  Payment must be made 
102.28  before the teacher's effective date of retirement.  
102.29     Sec. 2.  [354.534] [PRIOR OUT-OF-STATE TEACHING SERVICE 
102.30  CREDIT PURCHASE.] 
102.31     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
102.32  teacher who has at least three years of allowable service credit 
102.33  with the teachers retirement association is entitled to purchase 
102.34  up to ten years of allowable and formula service credit for 
102.35  out-of-state teaching service by making payment under section 
102.36  356.55, provided the out-of-state teaching service was performed 
103.1   for an educational institution established and operated by 
103.2   another state, governmental subdivision of another state, or the 
103.3   federal government and the teacher is not entitled to receive a 
103.4   current or deferred age and service retirement annuity or 
103.5   disability benefit and has not purchased service credit from 
103.6   another defined benefit public employee pension plan for that 
103.7   out-of-state teaching service. 
103.8      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
103.9   desires to purchase service credit under subdivision 1 must 
103.10  apply with the executive director to make the purchase.  The 
103.11  application must include all necessary documentation of the 
103.12  teacher's qualifications to make the purchase, signed written 
103.13  permission to allow the executive director to request and 
103.14  receive necessary verification of applicable facts and 
103.15  eligibility requirements, and any other relevant information 
103.16  that the executive director may require.  Payment must be made 
103.17  before the teacher's effective date of retirement.  
103.18     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
103.19  service credit for the purchase period must be granted by the 
103.20  teachers retirement association to the purchasing teacher on 
103.21  receipt of the purchase payment amount. 
103.22     Sec. 3.  [354.535] [MATERNITY LEAVE OF ABSENCE AND BREAK IN 
103.23  SERVICE PURCHASES.] 
103.24     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
103.25  teacher who has at least three years of allowable service credit 
103.26  with the teachers retirement association and who was granted a 
103.27  maternity leave of absence by a school district or other 
103.28  employing unit covered by the teachers retirement association 
103.29  for which the teacher did not previously receive allowable and 
103.30  formula service credit, or who had a maternity break in teaching 
103.31  service for which the teacher did not receive or purchase 
103.32  service credit from another defined benefit public employee 
103.33  pension plan is entitled to purchase the actual period of the 
103.34  leave or of the break in teaching service, up to five years, of 
103.35  allowable and formula service credit for applicable maternity 
103.36  leaves of absence or applicable maternity break in teaching 
104.1   service periods by making payment under section 356.55. 
104.2      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
104.3   desires to purchase service credit under subdivision 1 must 
104.4   apply with the executive director to make the purchase.  The 
104.5   application must include all necessary documentation of the 
104.6   teacher's qualifications to make the purchase, signed written 
104.7   permission to allow the executive director to request and 
104.8   receive necessary verification of applicable facts and 
104.9   eligibility requirements, and any other relevant information 
104.10  that the executive director may require.  Payment must be made 
104.11  before the teacher's effective date of retirement.  
104.12     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
104.13  service credit for the purchase period must be granted by the 
104.14  teachers retirement association to the purchasing teacher on 
104.15  receipt of the purchase payment amount. 
104.16     Sec. 4.  [354.536] [PRIVATE OR PAROCHIAL TEACHING SERVICE 
104.17  CREDIT PURCHASE.] 
104.18     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
104.19  teacher who has at least three years of allowable service credit 
104.20  with the teachers retirement association is entitled to purchase 
104.21  up to ten years of allowable and formula service credit for 
104.22  private or parochial school teaching service by making payment 
104.23  under section 356.55, provided that the teacher is not entitled 
104.24  to receive a current or deferred age and service retirement 
104.25  annuity or disability benefit from the applicable 
104.26  employer-sponsored pension plan and has not purchased service 
104.27  credit from the applicable defined benefit employer-sponsored 
104.28  pension plan for that service. 
104.29     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
104.30  desires to purchase service credit under subdivision 1 must 
104.31  apply with the executive director to make the purchase.  The 
104.32  application must include all necessary documentation of the 
104.33  teacher's qualifications to make the purchase, signed written 
104.34  permission to allow the executive director to request and 
104.35  receive necessary verification of applicable facts and 
104.36  eligibility requirements, and any other relevant information 
105.1   that the executive director may require.  Payment must be made 
105.2   before the teacher's effective date of retirement.  
105.3      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
105.4   service credit for the purchase period must be granted by the 
105.5   teachers retirement association to the purchasing teacher on 
105.6   receipt of the purchase payment amount. 
105.7      Sec. 5.  [354.537] [PEACE CORPS OR VISTA SERVICE CREDIT 
105.8   PURCHASE.] 
105.9      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
105.10  teacher who has at least three years of allowable service credit 
105.11  with the teachers retirement association is entitled to purchase 
105.12  up to ten years of allowable and formula service credit for 
105.13  service rendered in the federal peace corps program or in the 
105.14  federal volunteers in service to America program by making 
105.15  payment under section 356.55, provided that the teacher has not 
105.16  purchased service credit from any defined benefit pension plan 
105.17  for that service. 
105.18     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
105.19  desires to purchase service credit under subdivision 1 must 
105.20  apply with the executive director to make the purchase.  The 
105.21  application must include all necessary documentation of the 
105.22  teacher's qualifications to make the purchase, signed written 
105.23  permission to allow the executive director to request and 
105.24  receive necessary verification of applicable facts and 
105.25  eligibility requirements, and any other relevant information 
105.26  that the executive director may require. 
105.27     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
105.28  service credit for the purchase period must be granted by the 
105.29  teachers retirement association to the purchasing teacher on 
105.30  receipt of the purchase payment amount. 
105.31     Sec. 6.  [354.538] [CHARTER SCHOOL TEACHING SERVICE CREDIT 
105.32  PURCHASE.] 
105.33     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
105.34  teacher who has at least three years of allowable service credit 
105.35  with the teachers retirement association is entitled to purchase 
105.36  up to ten years of allowable and formula service credit for 
106.1   charter school teaching service by making payment under section 
106.2   356.55, provided that the teacher is not entitled to receive a 
106.3   current or deferred age and service retirement annuity or 
106.4   disability benefit from the applicable employer-sponsored 
106.5   pension plan and has not purchased service credit from the 
106.6   applicable defined benefit employer-sponsored pension plan for 
106.7   that service. 
106.8      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
106.9   desires to purchase service credit under subdivision 1 must 
106.10  apply with the executive director to make the purchase.  The 
106.11  application must include all necessary documentation of the 
106.12  teacher's qualifications to make the purchase, signed written 
106.13  permission to allow the executive director to request and 
106.14  receive necessary verification of applicable facts and 
106.15  eligibility requirements, and any other relevant information 
106.16  that the executive director may require.  Payment must be made 
106.17  before the teacher's effective date of retirement. 
106.18     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
106.19  service credit for the purchase period must be granted by the 
106.20  teachers retirement association to the purchasing teacher on 
106.21  receipt of the purchase payment amount. 
106.22     Sec. 7.  [354A.097] [PRIOR OR UNCREDITED MILITARY SERVICE 
106.23  CREDIT PURCHASE.] 
106.24     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
106.25  teacher who has at least three years of allowable service credit 
106.26  with the teachers retirement fund association and who performed 
106.27  service in the United States armed forces before becoming a 
106.28  teacher as defined in section 354A.011, subdivision 27, or who 
106.29  failed to obtain service credit for a military leave of absence 
106.30  period under section 354A.093, is entitled to purchase allowable 
106.31  service credit for the initial period of enlistment, induction, 
106.32  or call to active duty without any voluntary extension by making 
106.33  payment under section 356.55 provided the teacher is not 
106.34  entitled to receive a current or deferred retirement annuity 
106.35  from a United States armed forces pension plan and has not 
106.36  purchased service credit from another defined benefit public 
107.1   employee pension plan for the same period of service. 
107.2      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
107.3   desires to purchase service credit under subdivision 1 must 
107.4   apply with the executive director or secretary of the respective 
107.5   teachers retirement fund association to make the purchase.  The 
107.6   application must include all necessary documentation of the 
107.7   teacher's qualifications to make the purchase, signed written 
107.8   permission to allow the executive director or secretary to 
107.9   request and receive necessary verification of applicable facts 
107.10  and eligibility requirements, and any other relevant information 
107.11  that the executive director or secretary may require.  Payment 
107.12  must be made before the teacher's effective date of retirement.  
107.13     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
107.14  for the purchase period must be granted by the applicable 
107.15  teachers retirement fund association to the purchasing teacher 
107.16  on receipt of the purchase payment amount. 
107.17     Sec. 8.  [354A.098] [PRIOR OUT-OF-STATE TEACHING SERVICE 
107.18  CREDIT PURCHASE.] 
107.19     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
107.20  teacher who has at least three years of allowable service credit 
107.21  with one of the retirement fund associations under this chapter 
107.22  and who rendered out-of-state teaching service for an 
107.23  educational institution established and operated by another 
107.24  state, governmental subdivision of another state, or the federal 
107.25  government, is entitled to purchase up to ten years of allowable 
107.26  service credit for that out-of-state service by making payment 
107.27  under section 356.55, provided the teacher is not entitled to 
107.28  receive a current or deferred age and service retirement annuity 
107.29  or disability benefit and has not purchased service credit from 
107.30  another defined benefit public employee pension plan for that 
107.31  out-of-state teaching service.  Payment must be made before the 
107.32  teacher's effective date of retirement.  
107.33     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
107.34  desires to purchase service credit under subdivision 1 must 
107.35  apply with the executive director or secretary of the respective 
107.36  teachers retirement fund association to make the purchase.  The 
108.1   application must include all necessary documentation of the 
108.2   teacher's qualifications to make the purchase, signed written 
108.3   permission to allow the executive director or secretary to 
108.4   request and receive necessary verification of applicable facts 
108.5   and eligibility requirements, and any other relevant information 
108.6   that the executive director or secretary may require. 
108.7      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
108.8   for the purchase period must be granted by the applicable 
108.9   teachers retirement fund association to the purchasing teacher 
108.10  on receipt of the purchase payment amount. 
108.11     Sec. 9.  [354A.099] [MATERNITY BREAK IN SERVICE OR LEAVE 
108.12  SERVICE CREDIT PURCHASE.] 
108.13     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
108.14  teacher who has at least three years of allowable service credit 
108.15  with the teachers retirement fund association and who was 
108.16  granted a maternity leave of absence by a school district or 
108.17  other employing unit covered by the teachers retirement 
108.18  association for which the teacher did not previously receive 
108.19  allowable service credit or who had a maternity break in 
108.20  teaching service for which the teacher did not receive or 
108.21  purchase service credit from another defined benefit public 
108.22  employee pension plan is entitled to purchase the actual period 
108.23  of the leave or of the break in teaching service, up to five 
108.24  years, of allowable service credit for applicable maternity 
108.25  leaves of absence or applicable maternity break in teaching 
108.26  service periods by making payment under section 356.55. 
108.27     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
108.28  desires to purchase service credit under subdivision 1 must 
108.29  apply with the executive director or secretary of the respective 
108.30  retirement fund association to make the purchase.  The 
108.31  application must include all necessary documentation of the 
108.32  teacher's qualifications to make the purchase, signed written 
108.33  permission to allow the executive director or secretary to 
108.34  request and receive any necessary verification of applicable 
108.35  facts and eligibility requirements, and any other relevant 
108.36  information that the executive director or secretary may require.
109.1   Payment must be made before the teacher's effective date of 
109.2   retirement.  
109.3      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
109.4   for the purchase period must be granted by the applicable 
109.5   teachers retirement fund association to the purchasing teacher 
109.6   on receipt of the purchase payment amount. 
109.7      Sec. 10.  [354A.101] [PRIVATE OR PAROCHIAL TEACHING SERVICE 
109.8   CREDIT PURCHASE.] 
109.9      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
109.10  teacher who has at least three years of allowable service credit 
109.11  with the teachers retirement fund association is entitled to 
109.12  purchase up to ten years of allowable service credit for private 
109.13  or parochial school teaching service by making payment under 
109.14  section 356.55, provided that the teacher is not entitled to 
109.15  receive a current or deferred age and service retirement annuity 
109.16  or disability benefit from the applicable employer-sponsored 
109.17  pension plan and has not purchased service credit from the 
109.18  applicable defined benefit employer-sponsored pension plan for 
109.19  that service. 
109.20     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
109.21  desires to purchase service credit under subdivision 1 must 
109.22  apply with the executive director to make the purchase.  The 
109.23  application must include all necessary documentation of the 
109.24  teacher's qualifications to make the purchase, signed written 
109.25  permission to allow the executive director to request and 
109.26  receive necessary verification of applicable facts and 
109.27  eligibility requirements, and any other relevant information 
109.28  that the executive director may require.  Payment must be made 
109.29  before the teacher's effective date of retirement.  
109.30     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
109.31  for the purchase period must be granted by the teachers 
109.32  retirement fund association to the purchasing teacher on receipt 
109.33  of the purchase payment amount. 
109.34     Sec. 11.  [354A.102] [PEACE CORPS OR VISTA SERVICE CREDIT 
109.35  PURCHASE.] 
109.36     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
110.1   teacher who has at least three years of allowable service credit 
110.2   with the teachers retirement fund association is entitled to 
110.3   purchase up to ten years of allowable service credit for service 
110.4   rendered in the federal Peace Corps program or in the federal 
110.5   Volunteers in Service to America program by making payment under 
110.6   section 356.55, provided that the teacher has not purchased 
110.7   service credit from any defined benefit pension plan for that 
110.8   service. 
110.9      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
110.10  desires to purchase service credit under subdivision 1 must 
110.11  apply with the executive director to make the purchase.  The 
110.12  application must include all necessary documentation of the 
110.13  teacher's qualifications to make the purchase, signed written 
110.14  permission to allow the executive director to request and 
110.15  receive necessary verification of applicable facts and 
110.16  eligibility requirements, and any other relevant information 
110.17  that the executive director may require.  Payment must be made 
110.18  before the teacher's effective date of retirement.  
110.19     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
110.20  for the purchase period must be granted by the teachers 
110.21  retirement fund association to the purchasing teacher on receipt 
110.22  of the purchase payment amount. 
110.23     Sec. 12.  [354A.103] [CHARTER SCHOOL TEACHING SERVICE 
110.24  CREDIT PURCHASE.] 
110.25     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
110.26  teacher who has at least three years of allowable service credit 
110.27  with the teachers retirement fund association is entitled to 
110.28  purchase up to ten years of allowable service credit for charter 
110.29  school teaching service by making payment under section 356.55, 
110.30  provided that the teacher is not entitled to receive a current 
110.31  or deferred age and service retirement annuity or disability 
110.32  benefit from the applicable employer-sponsored pension plan and 
110.33  has not purchased service credit from the applicable defined 
110.34  benefit employer-sponsored pension plan for that service. 
110.35     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
110.36  desires to purchase service credit under subdivision 1 must 
111.1   apply with the executive director to make the purchase.  The 
111.2   application must include all necessary documentation of the 
111.3   teacher's qualifications to make the purchase, signed written 
111.4   permission to allow the executive director to request and 
111.5   receive necessary verification of applicable facts and 
111.6   eligibility requirements, and any other relevant information 
111.7   that the executive director may require.  Payment must be made 
111.8   before the teacher's effective date of retirement. 
111.9      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
111.10  for the purchase period must be granted by the teachers 
111.11  retirement fund association to the purchasing teacher on receipt 
111.12  of the purchase payment amount. 
111.13     Sec. 13.  [354A.104] [PREVIOUSLY UNCREDITED PART-TIME 
111.14  TEACHING SERVICE CREDIT PURCHASE.] 
111.15     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
111.16  teacher who has at least three years of allowable service credit 
111.17  with the teachers retirement fund association and who performed 
111.18  part-time teaching service in the applicable school district and 
111.19  was not eligible previously for service credit for that service 
111.20  is entitled to purchase the previously uncredited service by 
111.21  making payment under section 356.55. 
111.22     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
111.23  desires to purchase service credit under subdivision 1 must 
111.24  apply with the executive director to make the purchase.  The 
111.25  application must include all necessary documentation of the 
111.26  teacher's qualifications to make the purchase, signed written 
111.27  permission to allow the executive director to request and 
111.28  receive necessary verification of applicable facts and 
111.29  eligibility requirements, and any other relevant information 
111.30  that the executive director may require. 
111.31     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
111.32  for the purchase period must be granted by the teachers 
111.33  retirement fund association to the purchasing teacher on receipt 
111.34  of the purchase payment amount. 
111.35     Sec. 14.  Minnesota Statutes 1998, section 356.55, 
111.36  subdivision 1, is amended to read: 
112.1      Subdivision 1.  [APPLICATION.] Unless the prior service 
112.2   credit purchase authorization special law or general statute 
112.3   provision explicitly specifies a different purchase payment 
112.4   amount determination procedure, this section governs the 
112.5   determination of the prior service credit purchase payment 
112.6   amount of any prior service credit purchase.  The purchase 
112.7   payment amount determination procedure must recognize any 
112.8   service credit accrued to the purchaser in a pension plan listed 
112.9   in section 356.30, subdivision 3.  Any service credit in a 
112.10  Minnesota defined benefit public employee pension plan available 
112.11  to be reinstated by the purchaser through the repayment of a 
112.12  refund of member or employee contributions previously received 
112.13  must be repaid in full before any purchase of prior service 
112.14  credit payment is made under this section. 
112.15     Sec. 15.  Minnesota Statutes 1998, section 356.55, 
112.16  subdivision 6, is amended to read: 
112.17     Subd. 6.  [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 
112.18  As part of the regular data reporting to the consulting actuary 
112.19  retained by the legislative commission on pensions and 
112.20  retirement annually, the chief administrative officer of each 
112.21  public pension plan that has accepted a prior service credit 
112.22  purchase payment under this section shall report for any 
112.23  purchase, the purchaser, the purchaser's employer, the age of 
112.24  the purchaser, the period of the purchase, the purchaser's 
112.25  prepurchase accrued service credit, the purchaser's postpurchase 
112.26  accrued service credit, the purchaser's prior service credit 
112.27  payment, the prior service credit payment made by the 
112.28  purchaser's employer, and the amount of the additional benefit 
112.29  or annuity purchased. 
112.30     (b) As part of a supplemental report to the regular annual 
112.31  actuarial valuation for the applicable public pension plan 
112.32  prepared by the consulting actuary retained by the legislative 
112.33  commission on pensions and retirement, there must be an exhibit 
112.34  comparing a comparison for each purchase showing the total prior 
112.35  service credit payment received from all sources and the 
112.36  increased public pension plan actuarial accrued liability 
113.1   resulting from each purchase. 
113.2      Sec. 16.  [INSTRUCTION TO REVISOR.] 
113.3      The revisor of statutes shall replace the current headnote 
113.4   for Minnesota Statutes, section 354.53, with the headnote 
113.5   "CREDIT FOR MILITARY SERVICE LEAVE OF ABSENCE." 
113.6      Sec. 17.  [EFFECTIVE DATE.] 
113.7      (a) This article is effective on May 16, 1999.  
113.8      (b) A teacher who retires on or before May 16, 1999, is not 
113.9   eligible to purchase service credit under the provisions of this 
113.10  act.  A teacher who desires to purchase service credit under 
113.11  this article before November 1, 1999, must pay an administrative 
113.12  processing fee to the applicable retirement plan or plans for 
113.13  the preparation of the estimate.  The amount of the 
113.14  administrative processing fee for a teacher retirement plan must 
113.15  be established by the board of the plan based on a reasonable 
113.16  estimate of the likely cost to the plan of processing the 
113.17  service credit purchase payment estimate, but not less than $50. 
113.18                             ARTICLE 16
113.19                  MINNEAPOLIS EMPLOYEES RETIREMENT  
113.20                            PLAN CHANGES  
113.21     Section 1.  Minnesota Statutes 1998, section 422A.06, 
113.22  subdivision 3, is amended to read: 
113.23     Subd. 3.  [DEPOSIT ACCUMULATION FUND.] The deposit 
113.24  accumulation fund consists of the assets held in the fund, 
113.25  increased by including amounts contributed by or for employees, 
113.26  amounts contributed by the city, amounts contributed by 
113.27  municipal activities supported in whole or in part by revenues 
113.28  other than taxes and amounts contributed by any public 
113.29  corporation, amounts paid by the state, and by income from 
113.30  investments.  There must be paid from the fund the amounts 
113.31  required to be transferred to the retirement benefit fund, or 
113.32  the disability benefit fund, refunds of contributions, death 
113.33  benefits payable on death before retirement that are not payable 
113.34  from the survivors' benefit fund including the 
113.35  death-while-active refund specified in section 422A.22, 
113.36  subdivision 4, postretirement increases in retirement allowances 
114.1   granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 
114.2   and expenses of the administration of the retirement fund which 
114.3   were not charged by the retirement board against the income of 
114.4   the retirement benefit fund from investments as the cost of 
114.5   handling the investments of the retirement benefit fund. 
114.6      Sec. 2.  Minnesota Statutes 1998, section 422A.06, 
114.7   subdivision 6, is amended to read: 
114.8      Subd. 6.  [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 
114.9   fund shall consist consists of the amount held for survivor 
114.10  benefits, increased by contributions for survivor benefits made 
114.11  by and for employees, including contributions made by the 
114.12  employer, by any municipal activity supported in whole or in 
114.13  part by revenue other than taxes or by any public corporation.  
114.14  A proportionate share of income from investments shall must be 
114.15  allocated to this fund.  There shall be paid from such fund the 
114.16  Survivor benefits specified in section 422A.23 except that the 
114.17  refund of net accumulated deductions from the salary of a 
114.18  contributing member shall upon death in service be paid from the 
114.19  deposit accumulation fund must be paid from this fund. 
114.20     Sec. 3.  Minnesota Statutes 1998, section 422A.101, 
114.21  subdivision 4, is amended to read: 
114.22     Subd. 4.  [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 
114.23  INSTANCES.] (a) If a participating employing unit, other than 
114.24  the state, has a negative asset balance in the deposit 
114.25  accumulation fund, the executive director shall bill the 
114.26  employing unit for the amount of the deficiency.  Any amount 
114.27  billed must include six percent interest, compounded annually, 
114.28  for any year or portion of a year from the billing date until 
114.29  the date of payment. 
114.30     (b) If assets in the deposit accumulation fund are 
114.31  insufficient to make a transfer to the retirement benefit fund, 
114.32  the city of Minneapolis shall pay the amount of that 
114.33  insufficiency to the retirement benefit fund within three days 
114.34  of certification of the insufficiency by the executive director 
114.35  of the fund.  The city of Minneapolis may bill any other 
114.36  participating employing unit other than the state for its 
115.1   proportion of the amount paid.  Any amount billed by the city 
115.2   under this paragraph must include interest as specified in 
115.3   paragraph (a).  
115.4      Sec. 4.  Minnesota Statutes 1998, section 422A.18, 
115.5   subdivision 2, is amended to read: 
115.6      Subd. 2.  [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 
115.7   disability allowance under this section shall be the amount of 
115.8   service allowance to which the employee would be entitled under 
115.9   section 422A.15, notwithstanding the age requirements expressed 
115.10  therein; or the lesser of the following amounts:  50 percent of 
115.11  the final average compensation, or an amount equal to two 
115.12  percent of final average compensation for each year of allowable 
115.13  service for the first ten years, and thereafter 2.5 percent of 
115.14  final average compensation per year of allowable service, 
115.15  including in the latter assumed service between the date the 
115.16  disability occurred and the 60th birthday of the employee. 
115.17     If the amount of annuity (b) Annuities payable from the 
115.18  Minnesota postretirement investment fund to any class of 
115.19  annuitants is adjusted pursuant to section 11A.18, the amount of 
115.20  benefits payable from the disability benefit fund for that class 
115.21  of annuitants under this section shall also be adjusted at the 
115.22  same time and rate as retirement annuities in the retirement 
115.23  benefit fund. 
115.24     Sec. 5.  Minnesota Statutes 1998, section 422A.22, 
115.25  subdivision 4, is amended to read: 
115.26     Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
115.27  of a contributing an active member while still in the service of 
115.28  the city, and before reaching the compulsory age of 
115.29  retirement prior to termination of service, there shall be paid 
115.30  to such person the beneficiary or persons as beneficiaries 
115.31  designated by the member shall have nominated by written 
115.32  designation on a form specified by the executive director and 
115.33  filed with the retirement board, in such form as the retirement 
115.34  board shall require, the net accumulated amount of employee 
115.35  deductions from salary, pay, or compensation, including interest 
115.36  , to the member's credit on date of compounded annually to the 
116.1   date of the member's death.  The amount must not include any 
116.2   contributions made by the employee or on the employee's behalf, 
116.3   or any interest or investment earnings on those contributions, 
116.4   which were allocated to the survivor benefit fund under section 
116.5   422A.06, subdivision 6. 
116.6      (b) If the employee fails to make a designation, or if 
116.7   the person or persons beneficiary or beneficiaries designated by 
116.8   such the employee predeceases such the employee, the net 
116.9   accumulated amount of deductions from salary, pay, or 
116.10  compensation including interest, to the credit of such employee 
116.11  on date of death shall benefit specified in paragraph (a) must 
116.12  be paid to such the deceased employee's estate. 
116.13     (c) A benefit payable under this subdivision is in addition 
116.14  to any applicable survivor benefit under section 422A.23. 
116.15     Sec. 6.  Minnesota Statutes 1998, section 422A.22, 
116.16  subdivision 5, is amended to read: 
116.17     Subd. 5.  [REPAYMENT OF REFUND.] Upon reinstatement 
116.18  reemployment of a former covered employee to the service, in 
116.19  employment covered by the Minneapolis employees retirement fund, 
116.20  service credit for such past service or for any part thereof 
116.21  shall which was forfeited by taking a refund must be granted 
116.22  reinstated only upon repayment of the amount of the separation 
116.23  refund, with interest, from the time of separation payment of 
116.24  the refund until the date repaid.  
116.25     Sec. 7.  Minnesota Statutes 1998, section 422A.23, is 
116.26  amended to read: 
116.27     422A.23 [SURVIVOR BENEFITS.] 
116.28     Subdivision 1.  [PAYMENT OF CITY INSTALLMENT ACCUMULATED 
116.29  AMOUNT.] (a) If a contributing an active or deferred member dies 
116.30  after having been in the service with ten or more years of 
116.31  service credit, and before actual retirement, as determined by 
116.32  the retirement board, the present worth of the city's annual 
116.33  installments of $60 then to the credit of the contributing 
116.34  member, shall be paid to a beneficiary designated by such 
116.35  contributing member in such form as the retirement board shall 
116.36  require, who shall be the surviving spouse, or surviving child, 
117.1   or children of such member or, if there be no surviving spouse 
117.2   or surviving child or children, then to a person actually 
117.3   dependent on and receiving principal support from such member, 
117.4   or surviving mother or father, or grandchildren, or surviving 
117.5   brother or sister, or surviving children of the deceased brother 
117.6   or sister of such member except as noted in paragraph (d), the 
117.7   individual specified in paragraph (b) is eligible to receive the 
117.8   benefit specified in paragraph (c). 
117.9      (b) An individual eligible for the benefit specified in 
117.10  paragraph (c) is a beneficiary designated by the member on a 
117.11  form specified by the executive director.  If the beneficiary 
117.12  designated by the member is not one of the class of persons 
117.13  named in the preceding sentence, such benefit from the 
117.14  accumulation of city deposits shall be paid in the following 
117.15  order:  (1) to the surviving spouse, the whole thereof; (2) if 
117.16  there be no surviving spouse, to the surviving children, share 
117.17  and share alike; (3) if there be no surviving spouse or child or 
117.18  children, to the dependent or dependents as those terms are 
117.19  herein defined, of the member, share and share alike; (4) if 
117.20  there be no surviving spouse, child or children, or dependents, 
117.21  to the surviving mother and father, share and share alike; (5) 
117.22  if there be no surviving mother and father, to the 
117.23  grandchildren, in equal shares; if there be no grandchildren, to 
117.24  the surviving brothers and sisters of the member, in equal 
117.25  shares; (6) if there be no surviving brothers and sisters, to 
117.26  the surviving children of the deceased brothers and sisters of 
117.27  the member, in equal shares; or (7) if there is none of the 
117.28  foregoing persons who survives the member, the accumulation of 
117.29  the city deposits shall be applied to the funeral expenses of 
117.30  the member failed to designate a beneficiary, or if the 
117.31  beneficiary or beneficiaries designated by the employee 
117.32  predecease the employee, the benefit in paragraph (c) is payable 
117.33  to the deceased employee's estate. 
117.34     (c) The benefit is a lump-sum payment of the present value 
117.35  of the city's or other contributing employer's annual 
117.36  installments of $60 to the credit of the member. 
118.1      (d) No benefit is payable under this subdivision if a 
118.2   monthly survivor benefit is paid on behalf of the deceased 
118.3   employee under another subdivision of this section. 
118.4      Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 
118.5   active member dies prior to termination of service with at least 
118.6   18 months but less than 20 years of service credit, the 
118.7   surviving spouse or surviving child or children is eligible to 
118.8   receive the survivor benefit specified in paragraph (b) or (c), 
118.9   as applicable.  Payment of a benefit for any surviving child 
118.10  under the age of 18 years shall be made to the surviving parent, 
118.11  or if there be none, to the legal guardian of the surviving 
118.12  child.  For purposes of this subdivision, a surviving child is 
118.13  an unmarried child of the deceased member under the age of 18, 
118.14  or under the age of 22 if a full-time student at an accredited 
118.15  school, college, or university. 
118.16     (b) If the surviving spouse or surviving child benefit 
118.17  commenced before July 1, 1983, the surviving spouse benefit is 
118.18  increased from $500 per month to $750 per month and the 
118.19  surviving child benefit is $225 per month, beginning with the 
118.20  first monthly payment payable after May 28, 1998.  The sum of 
118.21  surviving spouse and surviving child benefits payable under this 
118.22  paragraph shall not exceed $900 per month.  The increased cost 
118.23  resulting from the benefit increases under this paragraph must 
118.24  be allocated to each employing unit listed in section 422A.101, 
118.25  subdivisions 1a, 2, and 2a, on the basis of the additional 
118.26  accrued liability resulting from increased benefits paid to the 
118.27  survivors of employees from that unit. 
118.28     (c) If the surviving spouse or surviving child benefit 
118.29  commences after June 30, 1983, the surviving spouse benefit is 
118.30  30 percent of the member's average salary in effect over the 
118.31  last six months of allowable service preceding the month in 
118.32  which death occurs.  The surviving child benefit is ten percent 
118.33  of the member's average salary in effect over the last six 
118.34  months of allowable service preceding the month in which death 
118.35  occurs.  The sum of surviving spouse and surviving child 
118.36  benefits payable under this paragraph shall not exceed 50 
119.1   percent of the member's average salary in effect over the last 
119.2   six months of allowable service. 
119.3      (d) Any surviving child benefit or surviving spouse benefit 
119.4   computed under paragraph (c) and in effect for the month 
119.5   immediately prior to May 28, 1998, is increased by 15 percent as 
119.6   of the first payment on or after May 28, 1998. 
119.7      (e) Surviving child benefits under this subdivision 
119.8   terminate when the child no longer meets the definition of 
119.9   surviving child. 
119.10     Subd. 5.  [ADMINISTRATION.] Benefits herein provided shall 
119.11  in this section following the death of an active employee or 
119.12  deferred member, as applicable, commence with on the first day 
119.13  of the month following the month in which the active employee or 
119.14  deferred member dies and shall end with the last day of the 
119.15  month preceding the month in which eligibility 
119.16  ceases.  Eligibility for the benefits herein provided shall be 
119.17  determined by the retirement board and its determination shall 
119.18  be final.  Each beneficiary or parent or guardian of a dependent 
119.19  child or legal representative shall furnish such Information as 
119.20  the board may deem deemed necessary by the executive director to 
119.21  determine eligibility for the benefits provided by this section, 
119.22  and must be submitted.  Failure to furnish any required 
119.23  information shall be sufficient grounds for the denial or 
119.24  discontinuance of benefits.  A determination made by the 
119.25  executive director may be appealed to the retirement board, 
119.26  whose determination is final.  If the surviving spouse of the 
119.27  deceased active employee or deferred member becomes entitled to 
119.28  a retirement allowance by reason of membership in this fund, the 
119.29  surviving spouse shall is authorized to receive the retirement 
119.30  allowance in addition to the all applicable surviving spouse's 
119.31  benefit spouse benefits to which the surviving spouse is 
119.32  entitled as specified in this section and section 422A.22, 
119.33  subdivision 4, if applicable.  The cost of all monthly 
119.34  survivor's benefits provided in this section shall be is an 
119.35  obligation of the members and of the city, any of its boards, 
119.36  departments, commissions or public corporations or other 
120.1   applicable employing units. 
120.2      Subd. 6.  [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 
120.3   retirement board shall create a reserve account for survivor's 
120.4   benefits from which shall be paid on an actuarial basis all 
120.5   survivor benefits due and payable.  At the end of each fiscal 
120.6   year, as part of the annual actuarial valuation of the fund 
120.7   prepared by the commission-retained actuary, a determination of 
120.8   the normal cost of the benefits payable from the survivor's 
120.9   benefit account shall be made and the board shall reduce or 
120.10  increase the employee contribution rate of one-fourth of one 
120.11  percent if and when it is determined based on the annual 
120.12  actuarial valuation that the member contribution rate is in 
120.13  excess of or is less than the amount necessary to pay for 50 
120.14  percent of the calculated normal cost of the survivor benefits 
120.15  provided in this section. 
120.16     Subd. 7.  [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 
120.17  COVERAGE.] (a) If the contributing active or deferred member 
120.18  dies after having been in the service of the city 20 or more 
120.19  years, and before the effective date of retirement, as 
120.20  determined by the retirement board, the board shall pay with 20 
120.21  or more years of service credit, a beneficiary as defined in 
120.22  paragraph (b) is eligible to receive the benefit specified in 
120.23  paragraph (c). 
120.24     (b) The beneficiary eligible for a benefit under paragraph 
120.25  (c) is the surviving spouse of the deceased employee.  If there 
120.26  is no surviving spouse, the beneficiary may be a dependent 
120.27  surviving child of the member or dependent parent designated by 
120.28  the employee on a form prescribed by the executive director. 
120.29     (c) The benefit payable to the beneficiary designated in 
120.30  paragraph (b) is a monthly allowance for life to the designated 
120.31  beneficiary of the employee.  The monthly allowance herein 
120.32  provided for shall be is the actuarial equivalent of a single 
120.33  life service allowance specified in section 422A.15, subdivision 
120.34  1, which would have been payable to the employee on the date of 
120.35  death, notwithstanding the age requirement stated in section 
120.36  422A.15, subdivision 1.  For purposes of this section, the 
121.1   amount of any excess contributions or voluntary additions by the 
121.2   member shall not be included in the calculations in determining 
121.3   the monthly allowance.  
121.4      The survivor allowance under this subdivision shall be 
121.5   computed and determined under a procedure specified by the 
121.6   commission-retained actuary utilizing the appropriate mortality 
121.7   table established by the board of trustees based on the 
121.8   experience of the fund as recommended by the commission-retained 
121.9   actuary and using the applicable postretirement interest rate 
121.10  assumption specified in section 356.215, subdivision 4d. 
121.11     (d) For benefits payable under this subdivision following 
121.12  the death of a deferred member, the benefit must be calculated 
121.13  as of the date of termination from service and increased by five 
121.14  percent per year until January 1, 1981, and by three percent per 
121.15  year thereafter compounded annually. 
121.16     Subd. 8.  [SURVIVING CHILD; DEPENDENT DEFINITION.] The 
121.17  beneficiary designated by the employee shall be the surviving 
121.18  spouse of such employee.  If there is no surviving spouse, the 
121.19  designated beneficiary may be a dependent surviving child or 
121.20  dependent parent of such employee as dependency is defined in 
121.21  sections 422A.01 to 422A.25.  If the beneficiary designated by 
121.22  the employee is not of the class of persons provided for in this 
121.23  subdivision, or if the designated beneficiary predeceases the 
121.24  employee, a refund shall be made as provided for in section 
121.25  422A.22, in lieu of a life income.  If the employee does not 
121.26  elect to designate a beneficiary to receive a life income as 
121.27  herein provided, the designated beneficiary, if of the class of 
121.28  persons set forth in this subdivision, may elect within 60 days 
121.29  after the date of death of the employee to receive a life income 
121.30  computed and determined as though the employee had retired on 
121.31  the date of death under the option 2 plan of retirement, as 
121.32  provided for in sections 422A.01 to 422A.25, and had designated 
121.33  such person as beneficiary.  For purposes of subdivision 2, a 
121.34  surviving child is an unmarried child of the deceased member 
121.35  under the age of 18, or under the age of 22 if a full-time 
121.36  student at an accredited school, college, or university.  For 
122.1   purposes of subdivision 7, a dependent surviving child or 
122.2   dependent parent must meet the definition of dependent, as 
122.3   defined in section 422A.01, subdivision 12, at the time of the 
122.4   active or deferred member's death. 
122.5      Subd. 9.  [LUMP-SUM DEATH BENEFIT.] If any employee who has 
122.6   contributed to the survivor's benefit account as herein provided 
122.7   dies before the effective date of retirement on a service or 
122.8   disability pension and is not survived by a beneficiary eligible 
122.9   to receive a monthly allowance as herein provided If no monthly 
122.10  survivor benefit is payable under subdivision 2 or 7, there 
122.11  shall be paid from the survivor's survivor benefit account to a 
122.12  beneficiary designated by the employee on a form prescribed by 
122.13  the executive director a lump-sum death benefit of $750 if death 
122.14  occurs prior to the end of the employee's tenth year of 
122.15  service credit or of $1500 if the employee had prior to death 
122.16  completed ten or more calendar years of service credit.  Upon 
122.17  reinstatement of a former employee to the service, credit for 
122.18  such past service or for any part thereof shall be granted only 
122.19  upon repayment of the amount of the separation refund, with 
122.20  interest, from the time of separation Any benefit under this 
122.21  subdivision may be paid in addition to a benefit payable under 
122.22  subdivision 1. 
122.23     Subd. 10.  [BENEFIT INCREASES.] If the amount of annuity 
122.24  payable from the Minnesota postretirement investment fund to any 
122.25  class of annuitants is adjusted pursuant to section 11A.18, the 
122.26  amount of benefits payable from the survivor's benefit fund 
122.27  pursuant to subdivisions 7 or 8 for that class of annuitants 
122.28  shall also be adjusted at the same time and rate.  Annuities 
122.29  payable under this section must be adjusted at the same time and 
122.30  rate as retirement annuities in the retirement benefit fund. 
122.31     Subd. 11.  [EFFECT OF SPOUSE REMARRIAGE.] A monthly 
122.32  survivor benefit is must not suspended, be discontinued or 
122.33  terminated, or otherwise stopped due to a surviving spouse's 
122.34  remarriage. 
122.35     Subd. 12.  [DETERMINATION OF ANNUITY.] The survivor 
122.36  annuities payable under this section must be computed and 
123.1   determined under a procedure specified by the actuary retained 
123.2   by the legislative commission on pensions and retirement 
123.3   utilizing the appropriate mortality table based on the 
123.4   experience of the fund as recommended by that actuary and 
123.5   approved by the legislative commission on pensions and 
123.6   retirement and using the applicable postretirement interest rate 
123.7   assumption specified in section 356.215, subdivision 4d. 
123.8      Sec. 8.  [422A.231] [COST ALLOCATION.] 
123.9      (a) Notwithstanding any law to the contrary, all current 
123.10  and future contribution requirements due to this article are 
123.11  payable by the participating contributing employing units other 
123.12  than the state. 
123.13     (b) In each actuarial valuation of the retirement fund, the 
123.14  actuary retained by the legislative commission on pensions and 
123.15  retirement shall include an exhibit on the impact of the benefit 
123.16  increases contained in this article on the survivor benefit 
123.17  fund.  The actuary shall calculate the expected change in the 
123.18  present value of the future benefits payable from the survivor 
123.19  benefit fund attributable to this article, using the actuarial 
123.20  method and assumptions applicable to the Minneapolis employees 
123.21  retirement fund, from the prior actuarial valuation and shall 
123.22  compare that result with the actual change in the present value 
123.23  of future benefits payable from the survivor benefit fund 
123.24  attributable to this article from the prior actuarial valuation. 
123.25     (c) The executive director shall assess each participating 
123.26  employer, other than the state, its proportional share of the 
123.27  net increase amount calculated under paragraph (b).  The 
123.28  assessment must be made on the first business day of the 
123.29  following February, plus compound interest at an annual rate of 
123.30  six percent on the amount from the actuarial valuation date to 
123.31  the date of payment. 
123.32     Sec. 9.  [REPEALER.] 
123.33     Minnesota Statutes 1998, section 422A.16, subdivision 3a, 
123.34  is repealed. 
123.35     Sec. 10.  [EFFECTIVE DATE.] 
123.36     (a) This article is effective upon approval by the 
124.1   Minneapolis city council and compliance with Minnesota Statutes, 
124.2   section 645.021. 
124.3      (b) All sections of this article must be approved for the 
124.4   approval of any section to be effective. 
124.5                              ARTICLE 17
124.6                    EMPLOYER MATCHING CONTRIBUTION  
124.7                        TAX-SHELTERED ANNUITY  
124.8                               CHANGES 
124.9      Section 1.  Minnesota Statutes 1998, section 356.24, 
124.10  subdivision 1, is amended to read: 
124.11     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] (a) It is 
124.12  unlawful for a school district or other governmental subdivision 
124.13  or state agency to levy taxes for, or contribute public funds to 
124.14  a supplemental pension or deferred compensation plan that is 
124.15  established, maintained, and operated in addition to a primary 
124.16  pension program for the benefit of the governmental subdivision 
124.17  employees other than: 
124.18     (1) to a supplemental pension plan that was established, 
124.19  maintained, and operated before May 6, 1971; 
124.20     (2) to a plan that provides solely for group health, 
124.21  hospital, disability, or death benefits; 
124.22     (3) to the individual retirement account plan established 
124.23  by chapter 354B; 
124.24     (4) to a plan that provides solely for severance pay under 
124.25  section 465.72 to a retiring or terminating employee; 
124.26     (5) for employees other than personnel employed by the 
124.27  state university board or the community college board and 
124.28  covered by the board of trustees of the Minnesota state colleges 
124.29  and universities supplemental retirement plan under chapter 
124.30  354C, if provided for in a personnel policy of the public 
124.31  employer or in the collective bargaining agreement between the 
124.32  public employer and the exclusive representative of public 
124.33  employees in an appropriate unit, in an amount matching employee 
124.34  contributions on a dollar for dollar basis, but not to exceed an 
124.35  employer contribution of $2,000 a year per employee; 
124.36     (i) to the state of Minnesota deferred compensation plan 
125.1   under section 352.96; or 
125.2      (ii) in payment of the applicable portion of the premium on 
125.3   a tax-sheltered annuity contract qualified under section 403(b) 
125.4   of the Internal Revenue Code, if purchased from a qualified 
125.5   insurance company, or to a qualified investment entity, as 
125.6   defined in subdivision 1a, and, in either case, if the employing 
125.7   unit has complied with any applicable pension plan provisions of 
125.8   the Internal Revenue Code with respect to the tax-sheltered 
125.9   annuity program during the preceding calendar year; or 
125.10     (6) for personnel employed by the state university board or 
125.11  the community college board and not covered by clause (5), to 
125.12  the supplemental retirement plan under chapter 354C, if provided 
125.13  for in a personnel policy or in the collective bargaining 
125.14  agreement of the public employer with the exclusive 
125.15  representative of the covered employees in an appropriate unit, 
125.16  in an amount matching employee contributions on a dollar for 
125.17  dollar basis, but not to exceed an employer contribution of 
125.18  $2,000 a year for each employee.  
125.19     (b) Subd. 1a.  [QUALIFIED INSURANCE COMPANY; QUALIFIED 
125.20  INVESTMENT ENTITIES; DEFINITIONS.] (a) A qualified insurance 
125.21  company is a company that: 
125.22     (1) meets the definition in section 60A.02, subdivision 4; 
125.23     (2) is licensed to engage in life insurance or annuity 
125.24  business in the state; 
125.25     (3) is determined by the commissioner of commerce to have a 
125.26  rating within the top two rating categories by a recognized 
125.27  national rating agency or organization that regularly rates 
125.28  insurance companies; and 
125.29     (4) is determined by the state board of investment to be 
125.30  among the ten up to 20 applicant insurance companies with 
125.31  competitive investment options and investment returns on annuity 
125.32  products. 
125.33     (b) A qualified investment entity is an open-end investment 
125.34  company that: 
125.35     (1) is registered under the federal Investment Company Act 
125.36  of 1940; 
126.1      (2) is licensed to do business in the state; 
126.2      (3) is determined by the commissioner of commerce to be in 
126.3   sound financial standing; and 
126.4      (4) is determined by the state board of investment to be 
126.5   among up to five applicant investment entities with competitive 
126.6   investment options and investment returns. 
126.7      (c) The state board of investment determination must be 
126.8   made on or before January 1, 1993 July 1, 2000, and must be 
126.9   reviewed periodically.  The state board of investment may retain 
126.10  actuarial services to assist it in this determination and in its 
126.11  periodic review.  The state board of investment may annually 
126.12  establish a budget for its costs in any determination and 
126.13  periodic review processes.  The state board of investment may 
126.14  charge a proportional share of all costs related to the periodic 
126.15  review to those qualified insurance companies and qualified 
126.16  investment entities currently under contract and may charge a 
126.17  proportional share of all costs related to soliciting and 
126.18  evaluating bids in a determination process to each company and 
126.19  investment entity selected by the state board of investment.  
126.20  All contracts must be approved before execution by the state 
126.21  board of investment.  The state board of investment shall 
126.22  establish policies and procedures under section 11A.04, clause 
126.23  (2), to carry out this paragraph. 
126.24     (c) Subd. 1b.  [VENDOR RESTRICTIONS.] A personnel policy 
126.25  for unrepresented employees or a collective bargaining agreement 
126.26  may establish limits on the number of vendors under paragraph 
126.27  (b), clause (5), subdivision 1 that it will utilize and 
126.28  conditions under which the vendors may contact employees both 
126.29  during working hours and after working hours. 
126.30     Sec. 2.  [COMMISSION STUDY.] 
126.31     The legislative commission on pensions and retirement shall 
126.32  study the issue of the appropriate means to provide partially 
126.33  employer-funded tax-sheltered savings opportunities for 
126.34  educational employees, including the establishment of a single 
126.35  comprehensive program structure for all applicable educational 
126.36  employers and the elimination of any restriction on investment 
127.1   vendors in providing partially employer-funded investment 
127.2   opportunities to educational employees. 
127.3      Sec. 3.  [EFFECTIVE DATE.] 
127.4      Section 1 is effective May 15, 2000.  Section 2 is 
127.5   effective on the day following final enactment. 
127.6                              ARTICLE 18
127.7                     MNSCU INDIVIDUAL RETIREMENT  
127.8                         ACCOUNT PLAN CHANGES  
127.9      Section 1.  Minnesota Statutes 1998, section 43A.27, 
127.10  subdivision 3, is amended to read:  
127.11     Subd. 3.  [RETIRED EMPLOYEES.] (a) A person may elect to 
127.12  purchase at personal expense individual and dependent hospital, 
127.13  medical, and dental coverages if the person is: 
127.14     (1) a retired employee of the state or an organization 
127.15  listed in subdivision 2 or section 43A.24, subdivision 2, who, 
127.16  at separation of service: 
127.17     (i) is immediately eligible to receive a retirement benefit 
127.18  under chapter 354B or an annuity under a retirement program 
127.19  sponsored by the state or such organization of the state and; 
127.20     (ii) immediately meets the age and service requirements in 
127.21  section 352.115, subdivision 1; and 
127.22     (ii) (iii) has five years of service or meets the service 
127.23  requirement of the collective bargaining agreement or plan, 
127.24  whichever is greater; or 
127.25     (2) a retired employee of the state who is at least 50 
127.26  years of age and has at least 15 years of state service.  
127.27     (b) The commissioner shall offer at least one plan which is 
127.28  actuarially equivalent to those made available through 
127.29  collective bargaining agreements or plans established pursuant 
127.30  to under section 43A.18 to employees in positions equivalent to 
127.31  that from which retired. 
127.32     (c) A spouse of a deceased retired employee who received an 
127.33  annuity under a state retirement program person eligible under 
127.34  paragraph (a) may purchase the coverage listed in this 
127.35  subdivision if the spouse was a dependent under the retired 
127.36  employee's coverage at the time of the employee's retiree's 
128.1   death. 
128.2      (d) Coverages must be coordinated with relevant health 
128.3   insurance benefits provided through the federally sponsored 
128.4   Medicare program.  Until the retired employee reaches age 65, 
128.5   the retired employee and dependents must be pooled in the same 
128.6   group as active employees for purposes of establishing premiums 
128.7   and coverage for hospital, medical, and dental insurance.  
128.8   Coverage for retired employees and their dependents may not 
128.9   discriminate on the basis of evidence of insurability or 
128.10  preexisting conditions unless identical conditions are imposed 
128.11  on active employees in the group that the employee left.  
128.12  Appointing authorities shall provide notice to employees no 
128.13  later than the effective date of their retirement of the right 
128.14  to exercise the option provided in this subdivision.  The 
128.15  retired employee must notify the commissioner or designee of the 
128.16  commissioner within 30 days after the effective date of the 
128.17  retirement of intent to exercise this option. 
128.18     Sec. 2.  Minnesota Statutes 1998, section 136F.48, is 
128.19  amended to read: 
128.20     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
128.21     (a) This section applies to a person who:  
128.22     (1) retires from the Minnesota state university colleges 
128.23  and universities system, the technical college system, or the 
128.24  community college system, or from a successor system employing 
128.25  state university, technical college, or community college 
128.26  faculty, with at least ten years of combined service credit in a 
128.27  system under the jurisdiction of the board of trustees of the 
128.28  Minnesota state colleges and universities; 
128.29     (2) was employed on a full-time basis immediately preceding 
128.30  retirement as a state university, technical college, or 
128.31  community college faculty member or as an unclassified 
128.32  administrator in one of those systems the Minnesota state 
128.33  colleges and universities system; 
128.34     (3) begins drawing a retirement benefit from the individual 
128.35  retirement account plan or an annuity from the teachers 
128.36  retirement association, the Minnesota state retirement system, 
129.1   or from a first class city teacher plan; and 
129.2      (4) returns to work on not less than a one-third time basis 
129.3   and not more than a two-thirds time basis in the system from 
129.4   which the person retired under an agreement in which the person 
129.5   may not earn a salary of more than $35,000 in a calendar year 
129.6   from employment after retirement in the system from which the 
129.7   person retired.  
129.8      (b) Initial participation, the amount of time worked, and 
129.9   the duration of participation under this section must be 
129.10  mutually agreed upon by the president of the institution where 
129.11  the person returns to work and the employee.  The president may 
129.12  require up to one-year notice of intent to participate in the 
129.13  program as a condition of participation under this section.  The 
129.14  president shall determine the time of year the employee shall 
129.15  work.  The employer or the president may not require a person to 
129.16  waive any rights under a collective bargaining agreement as a 
129.17  condition of participation under this section.  
129.18     (c) For a person eligible under paragraphs (a) and (b), the 
129.19  employing board shall make the same employer contribution for 
129.20  hospital, medical, and dental benefits as would be made if the 
129.21  person were employed full time.  
129.22     (d) For work under paragraph (a), a person must receive a 
129.23  percentage of the person's salary at the time of retirement that 
129.24  is equal to the percentage of time the person works compared to 
129.25  full-time work.  
129.26     (e) If a collective bargaining agreement covering a person 
129.27  provides for an early retirement incentive that is based on age, 
129.28  the incentive provided to the person must be based on the 
129.29  person's age at the time employment under this section ends.  
129.30  However, the salary used to determine the amount of the 
129.31  incentive must be the salary that would have been paid if the 
129.32  person had been employed full time for the year immediately 
129.33  preceding the time employment under this section ends. 
129.34     (f) A person who returns to work under this section is a 
129.35  member of the appropriate bargaining unit and is covered by the 
129.36  appropriate collective bargaining contract.  Except as provided 
130.1   in this section, the person's coverage is subject to any part of 
130.2   the contract limiting rights of part-time employees. 
130.3      Sec. 3.  [352.1155] [NO ANNUITY REDUCTION.] 
130.4      Subdivision 1.  [ELIGIBILITY.] Except as indicated in 
130.5   subdivision 4, the annuity reduction provisions of section 
130.6   352.115, subdivision 10, do not apply to a person who: 
130.7      (1) retires from the Minnesota state colleges and 
130.8   universities system with at least ten years of combined service 
130.9   credit in a system under the jurisdiction of the board of 
130.10  trustees of the Minnesota state colleges and universities; 
130.11     (2) was employed on a full-time basis immediately preceding 
130.12  retirement as a faculty member or as an unclassified 
130.13  administrator in that system; 
130.14     (3) begins drawing an annuity from the general employees 
130.15  retirement plan of the Minnesota state retirement system; and 
130.16     (4) returns to work on not less than a one-third time basis 
130.17  and not more than a two-thirds time basis in the system from 
130.18  which the person retired under an agreement in which the person 
130.19  may not earn a salary of more than $35,000 in a calendar year 
130.20  from employment after retirement in the system from which the 
130.21  person retired. 
130.22     Subd. 2.  [APPROVAL REQUIREMENTS.] Initial participation, 
130.23  the amount of time worked, and the duration of participation 
130.24  under this section must be mutually agreed upon by the president 
130.25  of the institution where the person returns to work and the 
130.26  employee.  The president may require up to one-year notice of 
130.27  intent to participate in the program as a condition of 
130.28  participation under this section.  The president shall determine 
130.29  the time of year the employee shall work.  The employer or the 
130.30  president may not require a person to waive any rights under a 
130.31  collective bargaining agreement as a condition of participation 
130.32  under this section.  
130.33     Subd. 3.  [SERVICE CREDIT PROHIBITION.] Notwithstanding any 
130.34  law to the contrary, a person eligible under this section may 
130.35  not, based on employment to which the waiver in this section 
130.36  applies, earn further service credit in a Minnesota public 
131.1   defined benefit plan and is not eligible to participate in a 
131.2   Minnesota public defined contribution plan, other than a 
131.3   volunteer fire plan governed by chapter 424A.  No employer or 
131.4   employee contribution to any of these plans may be made on 
131.5   behalf of such a person. 
131.6      Subd. 4.  [EXEMPTION LIMIT.] For a person eligible under 
131.7   this section who earns more than $35,000 in a calendar year from 
131.8   reemployment in the Minnesota state colleges and universities 
131.9   system following retirement, the annuity reduction provisions of 
131.10  section 352.115, subdivision 10, apply only to income over 
131.11  $35,000. 
131.12     Subd. 5.  [CONTINUING RIGHTS.] A person who returns to work 
131.13  under this section is a member of the appropriate bargaining 
131.14  unit and is covered by the appropriate collective bargaining 
131.15  contract.  Except as provided in this section, the person's 
131.16  coverage is subject to any part of the contract limiting rights 
131.17  of part-time employees. 
131.18     Sec. 4.  Minnesota Statutes 1998, section 354.445, is 
131.19  amended to read: 
131.20     354.445 [NO ANNUITY REDUCTION.] 
131.21     (a) The annuity reduction provisions of section 354.44, 
131.22  subdivision 5, do not apply to a person who: 
131.23     (1) retires from the Minnesota state university colleges 
131.24  and universities system, technical college system, or the 
131.25  community college system, or from a successor system employing 
131.26  state university, technical college, or community college 
131.27  faculty, with at least ten years of combined service credit in a 
131.28  system under the jurisdiction of the board of trustees of the 
131.29  Minnesota state colleges and universities; 
131.30     (2) was employed on a full-time basis immediately preceding 
131.31  retirement as a state university, technical college, or 
131.32  community college faculty member or as an unclassified 
131.33  administrator in one of these systems that system; 
131.34     (3) begins drawing an annuity from the teachers retirement 
131.35  association; and 
131.36     (4) returns to work on not less than a one-third time basis 
132.1   and not more than a two-thirds time basis in the system from 
132.2   which the person retired under an agreement in which the person 
132.3   may not earn a salary of more than $35,000 in a calendar year 
132.4   from employment after retirement in the system from which the 
132.5   person retired. 
132.6      (b) Initial participation, the amount of time worked, and 
132.7   the duration of participation under this section must be 
132.8   mutually agreed upon by the president of the institution where 
132.9   the person returns to work and the employee.  The president may 
132.10  require up to one-year notice of intent to participate in the 
132.11  program as a condition of participation under this section.  The 
132.12  president shall determine the time of year the employee shall 
132.13  work.  The employer or the president may not require a person to 
132.14  waive any rights under a collective bargaining agreement as a 
132.15  condition of participation under this section.  
132.16     (c) Notwithstanding any law to the contrary, a person 
132.17  eligible under paragraphs (a) and (b) may not, based on 
132.18  employment to which the waiver in this section applies, earn 
132.19  further service credit in the teachers retirement association 
132.20  and is not eligible to participate in the individual retirement 
132.21  account plan or the supplemental retirement plan established in 
132.22  chapter 354B as a result of service under this section a 
132.23  Minnesota public defined benefit plan and is not eligible to 
132.24  participate in a Minnesota public defined contribution plan, 
132.25  other than a volunteer fire plan governed by chapter 424A.  No 
132.26  employer or employee contribution to any of these plans may be 
132.27  made on behalf of such a person. 
132.28     (d) For a person eligible under paragraphs (a) and (b) who 
132.29  earns more than $35,000 in a calendar year from employment after 
132.30  retirement in the system from which the person retired due to 
132.31  employment by the Minnesota state colleges and universities 
132.32  system, the annuity reduction provisions of section 354.44, 
132.33  subdivision 5, apply only to income over $35,000. 
132.34     (e) A person who returns to work under this section is a 
132.35  member of the appropriate bargaining unit and is covered by the 
132.36  appropriate collective bargaining contract.  Except as provided 
133.1   in this section, the person's coverage is subject to any part of 
133.2   the contract limiting rights of part-time employees. 
133.3      Sec. 5.  Minnesota Statutes 1998, section 354.66, 
133.4   subdivision 1b, is amended to read: 
133.5      Subd. 1b.  [DISTRICT, DEFINED.] For purposes of this 
133.6   section, the term "district" means a school district, the 
133.7   community or the Minnesota state college system and the state 
133.8   university system. 
133.9      Sec. 6.  Minnesota Statutes 1998, section 354.66, 
133.10  subdivision 1c, is amended to read: 
133.11     Subd. 1c.  [PARTICIPATION.] (a) Except as indicated in 
133.12  paragraph (b), participation in the part-time mobility program 
133.13  must be based on a full fiscal year and the employment pattern 
133.14  of the teacher during the most recent fiscal year.  
133.15     (b) For a teacher in the Minnesota state colleges and 
133.16  universities system who teaches only during the first semester 
133.17  in an academic year and retires immediately after the first 
133.18  semester, participation in the part-time mobility program must 
133.19  be based on one-half of a full fiscal year and the employment 
133.20  pattern of the teacher during the most recent one-half of the 
133.21  most recent fiscal year. 
133.22     Sec. 7.  Minnesota Statutes 1998, section 354.66, 
133.23  subdivision 3, is amended to read: 
133.24     Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] (a) For 
133.25  purposes of this section, the term "part-time teaching position" 
133.26  shall mean means a teaching position within the district in 
133.27  which the teacher is employed for at least 50 full days or a 
133.28  fractional equivalent thereof as prescribed in section 354.091, 
133.29  and for which the teacher is compensated in an amount not 
133.30  exceeding 80 percent of the compensation established by the 
133.31  board for a full-time teacher with identical education and 
133.32  experience with the employing unit.  
133.33     (b) The compensation of a teacher in the state colleges and 
133.34  universities system may exceed the 80 percent limit if the 
133.35  teacher does not teach just one of the three quarters in the 
133.36  system's full school year, provided no additional services are 
134.1   performed while the teacher participates in the program.  For a 
134.2   teacher to which subdivision 1c, paragraph (b), applies, the 
134.3   term "part-time teaching position" means a teaching position 
134.4   within the district in which the teacher is employed for at 
134.5   least 25 full days or a fractional equivalent thereof as 
134.6   prescribed in section 354.091, and for which the teacher is 
134.7   compensated in an amount not exceeding 40 percent of the 
134.8   compensation established by the board for a full-time teacher, 
134.9   with identical education and experience with the employing unit. 
134.10     Sec. 8.  Minnesota Statutes 1998, section 354B.24, 
134.11  subdivision 3, is amended to read: 
134.12     Subd. 3.  [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) In 
134.13  addition to contributions required by subdivision 2, a plan 
134.14  participant on an approved sabbatical leave may shall make an 
134.15  optional additional a member contribution.  The optional 
134.16  additional member may not exceed based on the applicable member 
134.17  contribution rate specified in section 354B.23, subdivision 1, 
134.18  applied to the difference between the amount of salary actually 
134.19  received during the sabbatical leave and the amount of full-time 
134.20  salary actually received for a comparable period of an identical 
134.21  length to the member would have received if not on sabbatical 
134.22  leave that occurred during the fiscal year immediately preceding 
134.23  the sabbatical leave.  
134.24     (b) Any optional additional member contribution must be 
134.25  made before the last day of the fiscal year next following the 
134.26  fiscal year in which the sabbatical leave terminates.  The 
134.27  optional additional member contribution may not include interest 
134.28  through payroll deduction as though the member were employed 
134.29  full-time.  
134.30     (c) When an optional additional member contribution is 
134.31  made, the employing unit must make the employer contribution at 
134.32  the rate set forth specified in section 354B.23, subdivision 3, 
134.33  on the salary that was the basis for the optional additional 
134.34  member contribution under paragraph (a). 
134.35     (d) An employer contribution required under this section 
134.36  must be made no later than 60 days after the date on which the 
135.1   optional additional member contribution was made.  
135.2      Sec. 9.  Minnesota Statutes 1998, section 354B.25, 
135.3   subdivision 2, is amended to read: 
135.4      Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS 
135.5   INVESTMENT OPTIONS.] (a) The plan administrator shall arrange 
135.6   for the purchase of fixed annuity contracts, variable annuity 
135.7   contracts, a combination of fixed and variable annuity 
135.8   contracts, or custodial accounts from financial institutions 
135.9   which have been selected by the state board of investment under 
135.10  subdivision 3, as the investment vehicle for the retirement 
135.11  coverage of plan participants and to provide retirement benefits 
135.12  to plan participants.  Custodial accounts from financial 
135.13  institutions shall include open-end investment companies 
135.14  registered under the federal Investment Company Act of 1940, as 
135.15  amended investment products. 
135.16     (b) The annuity contracts or accounts investment products 
135.17  must be purchased with contributions under section 354B.23 or 
135.18  with money or assets otherwise provided by law by authority of 
135.19  the board and deemed acceptable by the applicable financial 
135.20  institution. 
135.21     (c) In addition to contracts and accounts from financial 
135.22  institutions, The Minnesota supplemental investment fund 
135.23  established under section 11A.17 and administered by the state 
135.24  board of investment is one of the investment options products 
135.25  for the individual retirement account plan.  Direct access must 
135.26  also be provided to lower expense and no load mutual funds, as 
135.27  those terms are defined by the federal securities and exchange 
135.28  commission, including stock funds, bond funds, and balanced 
135.29  funds.  Other investment products or combination of investment 
135.30  products which may be included are: 
135.31     (1) savings accounts at federally insured financial 
135.32  institutions; 
135.33     (2) life insurance contracts, fixed and variable annuity 
135.34  contracts from companies that are subject to regulation by the 
135.35  commerce commissioner; 
135.36     (3) investment options from open ended investment companies 
136.1   registered under the federal Investment Company Act of 1940, 
136.2   United States Code, title 15, sections 80a-1 to 80a-64; 
136.3      (4) investment options from a firm that is a registered 
136.4   investment advisor under the Investment Advisors Act of 1940, 
136.5   United States Code, title 15, sections 80b-1 to 80b-21; 
136.6      (5) investment options of a bank as defined in United 
136.7   States Code, title 15, section 80b-2, subsection (a), paragraph 
136.8   2, or a bank holding company as defined in the Bank Holding 
136.9   Company Act of 1956, United States Code, title 12, section 1841, 
136.10  subsection (a), paragraph (1). 
136.11     Sec. 10.  Minnesota Statutes 1998, section 354B.25, 
136.12  subdivision 3, is amended to read: 
136.13     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] (a) 
136.14  The financial institutions investment options provided for under 
136.15  subdivision 2 must be selected by the state board of 
136.16  investment.  Financial institutions include open-end investment 
136.17  companies registered under the federal Investment Company Act of 
136.18  1940, as amended. 
136.19     (b) The state board of investment may select up to five 
136.20  financial institutions to provide annuity contracts, custodial 
136.21  accounts, or a combination, as investment options for the 
136.22  individual retirement account plan in addition to the Minnesota 
136.23  supplemental investment fund.  In making its selection, at a 
136.24  minimum, the state board of investment shall consider at least 
136.25  the following: 
136.26     (1) the experience and ability of the financial institution 
136.27  to provide retirement and death benefits and products that are 
136.28  suited to meet the needs of plan participants; 
136.29     (2) the relationship of those retirement and death benefits 
136.30  and products provided by the financial institution to their 
136.31  cost; and 
136.32     (3) the financial strength and stability of the financial 
136.33  institution; and 
136.34     (4) the fees and expenses associated with the investment 
136.35  products in comparison to other products of similar risk and 
136.36  rates of return. 
137.1      (c) (b) After selecting a financial institution, the state 
137.2   board of investment must periodically review each financial 
137.3   institution selected under paragraph (b) and the offered 
137.4   products.  The periodic review must occur at least every three 
137.5   years.  In making its review, the state board of investment may 
137.6   retain appropriate consulting services to assist it in its 
137.7   periodic review, establish a budget for the cost of the periodic 
137.8   review process, and charge a proportional share of these costs 
137.9   to the reviewed financial institution. 
137.10     (d) (c) Contracts with financial institutions under this 
137.11  section must be executed by the board and must be approved by 
137.12  the state board of investment before execution. 
137.13     (e) (d) The state board of investment shall also establish 
137.14  policies and procedures under section 11A.04, clause (2), to 
137.15  carry out the provisions of this subdivision. 
137.16     Sec. 11.  Minnesota Statutes 1998, section 354B.25, 
137.17  subdivision 5, is amended to read: 
137.18     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
137.19  ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
137.20  administrative expenses of the individual retirement account 
137.21  plan must may be paid by charged to plan participants by the 
137.22  plan sponsor in the following manner: 
137.23     (1) from plan participants with amounts invested in the 
137.24  Minnesota supplemental investment fund, the plan administrator 
137.25  may charge an administrative expense assessment in an amount 
137.26  such that annual total fees charged for plan administration 
137.27  cannot exceed 40/100 of one percent of the assets of the 
137.28  Minnesota supplemental investment funds; and 
137.29     (2) from plan participants with amounts through annuity 
137.30  contracts and custodial accounts purchased under subdivision 2, 
137.31  paragraph (a), the plan administrator may charge an 
137.32  administrative expense assessment of a designated amount, not to 
137.33  exceed two percent of member and employer contributions, as 
137.34  those contributions are made form of an annual fee, an asset 
137.35  based fee, a percentage of the contributions to the plan, or a 
137.36  combination thereof. 
138.1      (b) Any administrative expense charge that is not actually 
138.2   needed for the administrative expenses of the individual 
138.3   retirement account plan must be refunded to member accounts. 
138.4      (c) The board of trustees shall report annually, before 
138.5   October 1, to the advisory committee created in subdivision 1a 
138.6   on administrative expenses of the plan.  The report must include 
138.7   a detailed accounting of charges for administrative expenses 
138.8   collected from plan participants and expenditure of the 
138.9   administrative expense charges.  The administrative expense 
138.10  charges collected from plan participants must be kept in a 
138.11  separate account from any other funds under control of the board 
138.12  of trustees and may be used only for the necessary and 
138.13  reasonable administrative expenses of the plan. 
138.14     Sec. 12.  [354B.31] [IRAP PART-TIME TEACHER MOBILITY 
138.15  PROGRAM.] 
138.16     Subdivision 1.  [PARTICIPATION REQUIREMENTS.] A faculty 
138.17  member who has three years or more of service in the Minnesota 
138.18  state colleges and universities system, by agreement with the 
138.19  board or with the authorized representative of the board, may be 
138.20  assigned to teaching service in a part-time teaching position 
138.21  under subdivision 2. 
138.22     Subd. 2.  [PART-TIME TEACHING POSITION; DEFINED.] For 
138.23  purposes of this section, "part-time teaching position" means a 
138.24  teaching position within the Minnesota state colleges and 
138.25  universities system in which the teacher is employed for at 
138.26  least 50 full days or a fractional equivalent as prescribed in 
138.27  section 354.091, and for which the faculty member is compensated 
138.28  in an amount not exceeding 80 percent of the compensation 
138.29  established by the board for a full-time faculty member with 
138.30  identical education and experience with the employing unit. 
138.31     Subd. 3.  [RETIREMENT CONTRIBUTIONS.] A faculty member 
138.32  assigned to a part-time position under this section shall 
138.33  continue to make employee contributions to the individual 
138.34  retirement account plan during the period of part-time 
138.35  employment on the same basis and in the same amounts as would 
138.36  have been paid if the person had been employed on a full-time 
139.1   basis provided that, prior to June 30 each year the member and 
139.2   the board make that portion of the required employer 
139.3   contribution to the plan, in any proportion which they may agree 
139.4   upon, that is based on the difference between the amount of 
139.5   compensation that would have been paid if the person had been 
139.6   employed on a full-time basis and the amount of compensation 
139.7   actually received by the person for the services rendered in the 
139.8   part-time assignment.  The employing unit shall make that 
139.9   portion of the required employer contributions to the plan on 
139.10  behalf of the person that is based on the amount of compensation 
139.11  actually received by the person for the services rendered in the 
139.12  part-time assignment.  The employee and employer contributions 
139.13  shall be based upon the rates of contribution prescribed by 
139.14  section 354B.23.  Employee contributions for part-time teaching 
139.15  service pursuant to this section shall not continue for more 
139.16  than ten years. 
139.17     Subd. 4.  [OTHER MEMBERSHIP PRECLUDED.] A faculty member 
139.18  entitled to make employee contributions for part-time teaching 
139.19  service pursuant to this section shall not be entitled during 
139.20  the same period of time to be a member of, accrue allowable 
139.21  service credit in or make employee contributions to any other 
139.22  Minnesota public employee pension plan, except a volunteer 
139.23  firefighters relief association governed by sections 69.771 to 
139.24  69.776. 
139.25     Subd. 5.  [INSURANCE.] If the board enters into an 
139.26  agreement authorized by this section, the board shall continue 
139.27  any insurance programs furnished or authorized a full-time 
139.28  teacher on an identical basis and with identical sharing of 
139.29  costs for a part-time teacher pursuant to this section.  
139.30  However, the requirements of this subdivision may be modified by 
139.31  a collective bargaining agreement between a board and an 
139.32  exclusive representative pursuant to chapter 179A.  Teachers as 
139.33  defined in section 136F.43 employed on a less than 75 percent 
139.34  time basis pursuant to this section are eligible for state paid 
139.35  insurance benefits as if the teachers were employed full-time. 
139.36     Subd. 6.  [ELIGIBILITY FOR CREDIT.] Only teachers who are 
140.1   public employees as defined in section 179A.03, subdivision 14, 
140.2   during the school year preceding the period of part-time 
140.3   employment pursuant to this section qualify for employee 
140.4   contributions to the retirement plan for part-time teaching 
140.5   service under subdivision 4.  Notwithstanding section 179A.03, 
140.6   subdivision 14, clauses (e) and (f), teachers who are employed 
140.7   on a part-time basis for purposes of this section and who would 
140.8   therefore be disqualified from the bargaining unit by one or 
140.9   both of those provisions, continue to be in the bargaining unit 
140.10  during the period of part-time employment under this section for 
140.11  purposes of compensation, fringe benefits, and the grievance 
140.12  procedure. 
140.13     Subd. 7.  [BOARD POWER NOT RESTRICTED.] This section does 
140.14  not limit the authority of the board to assign a teacher to a 
140.15  part-time teaching position which does not qualify for full 
140.16  accrual of service credit from and employee contributions to the 
140.17  retirement fund under this section. 
140.18     Subd. 8.  [SUBSTITUTE TEACHING.] Subdivision 4 does not 
140.19  prohibit a teacher who qualifies for full accrual of service 
140.20  credit from and employee contributions to the retirement fund 
140.21  pursuant to this section in any year from being employed as a 
140.22  substitute teacher by any school district during that year.  
140.23  Notwithstanding sections 354.091 and 354.42, a teacher may not 
140.24  qualify for full accrual of service credit from and employee 
140.25  contributions to the retirement fund for other teaching service 
140.26  rendered for any part of any year for which the teacher 
140.27  qualifies for employee contributions to the retirement plan 
140.28  pursuant to this section. 
140.29     Sec. 13.  Minnesota Statutes 1998, section 354C.12, 
140.30  subdivision 4, is amended to read: 
140.31     Subd. 4.  [ADMINISTRATIVE EXPENSES.] (a) The board of 
140.32  trustees of the Minnesota state colleges and universities is 
140.33  authorized to pay the necessary and reasonable administrative 
140.34  expenses of the supplemental retirement plan and may bill 
140.35  participants to recover these expenses.  The administrative fees 
140.36  or charges must may be paid by charged to participants in the 
141.1   following manner: as an annual fee, an asset based fee, a 
141.2   percentage of contributions to the plan, or a contribution 
141.3   thereof. 
141.4      (1) from participants whose contributions are invested with 
141.5   the state board of investment, the plan administrator may 
141.6   recover administrative expenses in the manner authorized by the 
141.7   Minnesota state colleges and universities in an amount such that 
141.8   annual total fees charged for plan administration cannot exceed 
141.9   40/100 of one percent of the assets of the Minnesota 
141.10  supplemental investment funds; or 
141.11     (2) from participants where contributions are invested 
141.12  through contracts purchased from any other authorized source, 
141.13  the plan administrator may assess an amount of up to two percent 
141.14  of the employee and employer contributions.  
141.15     (b) Any recovered or assessed amounts that are not needed 
141.16  for the necessary and reasonable administrative expenses of the 
141.17  plan must be refunded to member accounts. 
141.18     (c) The board of trustees shall report annually, before 
141.19  October 1, to the advisory committee created in section 354B.25, 
141.20  subdivision 1a, on administrative expenses of the plan.  The 
141.21  report must include a detailed accounting of charges for 
141.22  administrative expenses collected from plan participants and 
141.23  expenditure of the administrative expense charges.  The 
141.24  administrative expense charges collected from plan participants 
141.25  must be kept in a separate account from any other funds under 
141.26  control of the board of trustees and may be used only for the 
141.27  necessary and reasonable administrative expenses of the plan. 
141.28     Sec. 14.  [EFFECTIVE DATE.] 
141.29     Sections 1 to 13 are effective on July 1, 1999. 
141.30                             ARTICLE 19
141.31                           OTHER CHANGES 
141.32     Section 1.  Minnesota Statutes 1998, section 3.85, 
141.33  subdivision 3, is amended to read: 
141.34     Subd. 3.  [MEMBERSHIP.] The commission consists of six five 
141.35  members of the senate appointed by the subcommittee on 
141.36  committees of the committee on rules and administration and six 
142.1   five members of the house of representatives appointed by the 
142.2   speaker.  Members shall be appointed at the commencement of each 
142.3   regular session of the legislature for a two-year term beginning 
142.4   January 16 of the first year of the regular session.  Vacancies 
142.5   that occur while the legislature is in session shall be filled 
142.6   like regular appointments.  If the legislature is not in 
142.7   session, senate vacancies shall be filled by the last 
142.8   subcommittee on committees of the senate committee on rules and 
142.9   administration or other appointing authority designated by the 
142.10  senate rules, and house vacancies shall be filled by the last 
142.11  speaker of the house, or if the speaker is not available, by the 
142.12  last chair of the house rules committee. 
142.13     Sec. 2.  [STUDY.] 
142.14     The legislative commission on pensions and retirement shall 
142.15  study the feasibility and cost-effectiveness of converting 
142.16  public employee retirement plans to defined-contribution plans, 
142.17  projecting the cost and benefit implications to 2020, and shall 
142.18  report to the legislature by February 15, 2000. 
142.19     Sec. 3.  [EFFECTIVE DATE.] 
142.20     Sections 1 and 2 are effective on the day following final 
142.21  enactment. 
142.22                             ARTICLE 20
142.23                     PUBLIC PENSION FACILITIES
142.24     Section 1.  Minnesota Statutes 1998, section 353.03, 
142.25  subdivision 4, is amended to read: 
142.26     Subd. 4.  [OFFICES.] The commissioner of 
142.27  administration shall may make provision for suitable office 
142.28  space in the state capitol or other state office buildings, or 
142.29  at such other location in St. Paul as is determined by the 
142.30  commissioner for the use of the board of trustees and its 
142.31  executive director.  The commissioner shall give the board at 
142.32  least four months notice for any proposed removal from their 
142.33  present location.  Any and all rental charges shall be paid by 
142.34  the trustees from the public employees retirement fund. 
142.35     Sec. 2.  Minnesota Statutes 1998, section 354.06, 
142.36  subdivision 7, is amended to read: 
143.1      Subd. 7.  [OFFICES.] A suitable office shall may be 
143.2   provided by the state through the proper officer for the use of 
143.3   the board and its executive director. 
143.4      Sec. 3.  [356.89] [PUBLIC PENSION FACILITIES.] 
143.5      Subdivision 1.  [BUILDING; RELATED FACILITIES.] The board 
143.6   of directors of the Minnesota state retirement system, the board 
143.7   of trustees of the public employees retirement association, and 
143.8   the board of trustees of the teachers retirement association are 
143.9   authorized to expend or otherwise pledge pension funds or the 
143.10  proceeds of revenue bonds as provided in subdivision 3 for the 
143.11  common ownership, operation, and improvement of a building and 
143.12  related facilities for the administration of their public 
143.13  pension systems.  This authority includes the authority to 
143.14  purchase or lease land and facilities and the authority to 
143.15  design, construct, furnish, improve, and equip a building and 
143.16  related parking facilities to accommodate employees and 
143.17  visitors.  The boards' planning, selection, design, and building 
143.18  of facilities are not subject to the capital improvements 
143.19  provisions of section 16B.33.  The competitive acquisition 
143.20  process set forth in chapter 16C does not apply provided the 
143.21  process set forth in subdivision 2 is followed.  Notwithstanding 
143.22  that no appropriation is made, the requirements of sections 
143.23  16B.30 to 16B.32 and 16B.335 apply to this project. 
143.24     Subd. 2.  [CONTRACTING PROCEDURES.] (a) The boards may 
143.25  enter into a contract for facilities with a contractor to 
143.26  furnish the architectural, engineering, and related services as 
143.27  well as the labor, materials, supplies, equipment, and related 
143.28  construction services on the basis of a request for 
143.29  qualifications and competitive responses received through a 
143.30  request for proposals process which must include the items 
143.31  listed in paragraphs (b) to (i). 
143.32     (b) Prior to issuing a request for qualifications and a 
143.33  request for proposals, the boards, with the assistance of the 
143.34  department of administration, shall prepare performance criteria 
143.35  and specifications which shall include: 
143.36     (1) a general floor plan or layout indicating the general 
144.1   dimensions of the public building and space requirements; 
144.2      (2) design criteria for the exterior and site area; 
144.3      (3) performance specifications for all building systems and 
144.4   components to assure quality and cost efficiencies; 
144.5      (4) conceptual floor plans for systems space; 
144.6      (5) preferred types of interior finishes, styles of 
144.7   windows, lighting and outlets, doors and features such as 
144.8   built-in counters and telephone wiring; 
144.9      (6) mechanical and electrical requirements; 
144.10     (7) special interior features required; and 
144.11     (8) completion schedule. 
144.12     (c) The boards shall first solicit statements of 
144.13  qualifications from eligible contractors and select more than 
144.14  one qualified contractor based upon experience, technical 
144.15  competence, past performance, capability to perform, and other 
144.16  appropriate facts.  Contractors selected under this process 
144.17  shall be, employ, or have as a partner, member, coventurer, or 
144.18  subcontractor, persons licensed and registered under chapter 326 
144.19  to provide the services required to design and complete the 
144.20  project.  The boards do not have to select any of the 
144.21  respondents if none reasonably fulfill the criteria set forth 
144.22  within. 
144.23     (d) The contractors selected shall be asked to respond to a 
144.24  request for proposals.  Responses must include site plans, 
144.25  design concept, elevation, statement of material to be used, 
144.26  floor layouts, a detailed development budget, and a total cost 
144.27  to complete the project.  The proposal must indicate that the 
144.28  contractor obtained at least two proposals from subcontractors 
144.29  for each item of work and must set forth how the subcontractors 
144.30  were selected.  The boards shall evaluate the proposals based 
144.31  upon design, cost, quality, aesthetics, and the best overall 
144.32  value to the state pension funds.  The board need not select any 
144.33  of the proposals submitted and reserves the right to reject any 
144.34  and all proposals, and may terminate the process or revise the 
144.35  request for proposals and solicit new proposals if the boards 
144.36  determine that the best interests of the pension funds would be 
145.1   better served by doing so.  Proposals submitted shall constitute 
145.2   nonpublic data until the contract is awarded. 
145.3      (e) The contractor selected must comply with sections 
145.4   574.26 to 574.261.  Prior to the execution of a final contract, 
145.5   the contractor selected shall certify a firm construction price 
145.6   and completion date. 
145.7      (f) The boards may consider building sites in the city of 
145.8   St. Paul and surrounding suburbs. 
145.9      (g) Any land, building, or facility leased, constructed, or 
145.10  acquired and any leasehold interest acquired under this section 
145.11  shall be held in common ownership in the name of the three 
145.12  retirement systems as tenants in common.  Each retirement system 
145.13  fund shall consider its interest as a fixed asset of its pension 
145.14  fund in accordance with governmental accounting standards. 
145.15     (h) The boards may lease to another governmental 
145.16  subdivision any portion of the funds' building and lands which 
145.17  is not required for their direct use upon such terms and 
145.18  conditions as they deem to be in the best interest of the 
145.19  pension funds.  Any income accruing from such rentals shall be 
145.20  separately accounted for and utilized to offset ongoing 
145.21  administrative expenses and any excess shall be carried forward 
145.22  for future administrative expenses.  The boards are also 
145.23  authorized to enter into lease agreements for the establishment 
145.24  of satellite offices should the boards find such offices to be 
145.25  necessary in order to assure their members reasonable access to 
145.26  their services.  The boards also have the authority to request 
145.27  the commissioner of administration to lease any portion of their 
145.28  building not required for their direct use pursuant to the 
145.29  commissioner's authorities under section 16B.24. 
145.30     (i) The boards shall formulate and adopt a written working 
145.31  agreement which shall set forth the nature of each retirement 
145.32  system's ownership interest, the duties and obligations of each 
145.33  system towards the construction, operation, and maintenance 
145.34  costs of their facilities, and the identification of one 
145.35  retirement fund to serve as manager for operating and 
145.36  maintenance purposes.  The boards may contract with independent 
146.1   third parties for maintenance-related activities, services, and 
146.2   supplies, and may utilize the services of the department of 
146.3   administration where economically feasible to do so.  In the 
146.4   event the boards cannot agree or resolve a dispute which relates 
146.5   to operations or maintenance of the facilities, they may request 
146.6   the commissioner of administration to appoint a representative 
146.7   from the department's real estate management division to serve 
146.8   as arbitrator of the dispute with authority to issue a written 
146.9   resolution of the dispute. 
146.10     Subd. 3.  [REVENUE BONDS AUTHORIZED.] The boards, or any of 
146.11  them, may issue revenue bonds in the principal amount necessary, 
146.12  in the opinion of the boards, to achieve the purposes described 
146.13  in subdivisions 1 and 2; to pay issuance costs and interest 
146.14  costs; and to establish necessary reserves to secure the bonds.  
146.15  The boards may issue bonds for the purpose of refunding bonds 
146.16  issued under this subdivision. 
146.17     Subd. 4.  [PROCEDURE.] The bonds authorized in subdivision 
146.18  3 must be sold, issued, and secured in the manner provided in 
146.19  chapter 475 for bonds payable solely from revenues, and the 
146.20  boards have the same powers and duties as a municipality and its 
146.21  governing body in issuing bonds under that chapter.  The bonds 
146.22  may be sold at any price and at public or private sale as 
146.23  determined by the boards.  The bonds may be sold in one or more 
146.24  series.  Different series may be backed by different revenue 
146.25  sources.  No election is required. 
146.26     Subd. 5.  [NONLIABILITY OF STATE.] The state of Minnesota 
146.27  is not liable on bonds of the boards and the bonds are not a 
146.28  general or moral obligation of the state. 
146.29     Subd. 6.  [NONLIABILITY OF INDIVIDUALS.] Neither the 
146.30  members of the boards nor any person executing the bonds on 
146.31  behalf of the boards shall be personally liable on the bonds or 
146.32  subject to any personal liability or accountability by reason of 
146.33  executing them.