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 purchase or construction of an 
  2.18            administration building for the Minnesota state 
  2.19            retirement system, the public employees retirement 
  2.20            association, and the teachers retirement association; 
  2.21            authorizing the issuance of certain revenue bonds; 
  2.22            amending Minnesota Statutes 1998, sections 3.751, 
  2.23            subdivision 1; 3.85, subdivisions 3, 11, and 12; 
  2.24            3A.02, subdivision 1b; 43A.27, subdivision 3; 69.021, 
  2.25            subdivisions 7 and 10; 69.031, subdivision 5; 122A.46, 
  2.26            subdivision 2; 136F.48; 273.1385, subdivision 2; 
  2.27            275.70, subdivision 5; 352.03, subdivision 1; 352.90; 
  2.28            352.91, by adding a subdivision; 352.92, subdivisions 
  2.29            1 and 2; 352.93, subdivision 2a; 352B.08, subdivision 
  2.30            2a; 353.01, subdivisions 2b, 10, and 16; 353.03, 
  2.31            subdivision 4; 353.27, subdivisions 2 and 3; 353.64, 
  2.32            subdivision 1; 353.65, subdivisions 2 and 3; 353.651, 
  2.33            subdivision 4; 353A.083, by adding a subdivision; 
  2.34            353A.09, subdivisions 4, 5, and by adding a 
  2.35            subdivision; 353D.01, subdivision 2; 353D.02, by 
  2.36            adding a subdivision; 353D.03, subdivision 3; 354.05, 
  2.37            subdivision 40; 354.06, subdivision 1; 354.10, 
  2.38            subdivision 4; 354.445; 354.66, subdivisions 1b, 1c, 
  2.39            3, and 5; 354B.24, subdivision 3; 354B.25, 
  2.40            subdivisions 2, 3, and 5; 354C.11; 354C.12, 
  2.41            subdivision 4; 356.19, by adding subdivisions; 356.20, 
  2.42            subdivision 2; 356.215, subdivision 4g; 356.24, 
  2.43            subdivision 1; 356.30, subdivision 3; 356.302, 
  2.44            subdivision 7; and 356.303, subdivision 4; 356.55, 
  2.45            subdivisions 1 and 6; 356.61; 422A.06, subdivisions 3 
  2.46            and 6; 422A.101, subdivision 4; 422A.18, subdivision 
  2.47            2; 422A.22, subdivisions 4 and 5; and 422A.23; 
  2.48            423A.02, subdivisions 1b, 2, and by adding 
  2.49            subdivisions; and 423B.07; Laws 1977, chapter 61, 
  2.50            section 6, as amended; proposing coding for new law in 
  2.51            Minnesota Statutes, chapters 352; 353; 354; 354A; 
  2.52            354B; 356; and 422A; proposing coding for new law as 
  2.53            Minnesota Statutes, chapters 353E; and 353F; repealing 
  2.54            Minnesota Statutes 1998, sections 353.33, subdivision 
  2.55            3a; 353.65, subdivision 3a; 422A.16, subdivision 3a; 
  2.56            and 424A.02, subdivision 5; Laws 1998, chapter 390, 
  2.57            article 1, section 1. 
  2.58  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.59                             ARTICLE 1
  2.60                  FUTURE PERA PENSION BENEFITS FOR 
  2.61            PRIVATIZED PUBLIC HOSPITAL AND OTHER PUBLIC
  2.62                              EMPLOYEES 
  2.63     Section 1.  [353F.01] [PURPOSE AND INTENT.] 
  2.64     The purpose of this chapter is to ensure, to the extent 
  3.1   possible, that persons employed at public medical facilities and 
  3.2   other public employing units who are privatized and consequently 
  3.3   are excluded from retirement coverage by the public employees 
  3.4   retirement association will be entitled to receive future 
  3.5   retirement benefits under the general employees retirement plan 
  3.6   of the public employees retirement association commensurate with 
  3.7   the prior contributions made by them or made on their behalf 
  3.8   upon the privatization of the medical facility or other public 
  3.9   employing unit. 
  3.10     Sec. 2.  [353F.02] [DEFINITIONS.] 
  3.11     Subdivision 1.  [GENERALLY.] As used in this chapter, 
  3.12  unless the context clearly indicates otherwise, each of the 
  3.13  terms in the following subdivisions has the meaning indicated. 
  3.14     Subd. 2.  [ALLOWABLE SERVICE.] "Allowable service" has the 
  3.15  meaning provided in section 353.01, subdivision 16 of the 
  3.16  edition of Minnesota Statutes published in the year before the 
  3.17  year in which the privatization occurred. 
  3.18     Subd. 3.  [EFFECTIVE DATE.] "Effective date" means the date 
  3.19  that the operation of the medical facility or other public 
  3.20  employing unit is assumed by another employer or the date that 
  3.21  the medical facility or other public employing unit is purchased 
  3.22  by another employer and active membership in the public 
  3.23  employees retirement association consequently terminates. 
  3.24     Subd. 4.  [MEDICAL FACILITY.] "Medical facility" means: 
  3.25     (1) the Glencoe area health center; 
  3.26     (2) the Luverne public hospital; and 
  3.27     (3) the Waconia-Ridgeview medical center. 
  3.28     Subd. 5.  [OTHER PUBLIC EMPLOYING UNIT.] "Other public 
  3.29  employing unit" means Metro II, a joint powers organization 
  3.30  formed under section 471.59. 
  3.31     Subd. 6.  [TERMINATED MEDICAL FACILITY OR OTHER PUBLIC 
  3.32  EMPLOYING UNIT EMPLOYEE.] "Terminated medical facility or other 
  3.33  public employing unit employee" means a person who: 
  3.34     (1) was employed on the day before the effective date by 
  3.35  the medical facility or other public employing unit; or 
  3.36     (2) terminated employment with the medical facility or 
  4.1   other public employing unit on the day before the effective 
  4.2   date; and 
  4.3      (3) was a participant in the general employees retirement 
  4.4   plan of the public employees retirement association at the time 
  4.5   of termination of employment with the medical facility or other 
  4.6   public employing unit. 
  4.7      Subd. 7.  [YEARS OF ALLOWABLE SERVICE.] "Years of allowable 
  4.8   service" means the total number of years of allowable service 
  4.9   under section 353.01, subdivision 18, of the edition of 
  4.10  Minnesota Statutes published in the year before the year in 
  4.11  which the privatization occurred. 
  4.12     Sec. 3.  [353F.03] [VESTING RULE FOR CERTAIN EMPLOYEES.] 
  4.13     Notwithstanding any provision of chapter 353 to the 
  4.14  contrary, a terminated medical facility or other public 
  4.15  employing unit employee is eligible to receive a retirement 
  4.16  annuity under section 353.29 of the edition of Minnesota 
  4.17  Statutes published in the year before the year in which the 
  4.18  privatization occurred, without regard to the requirement for 
  4.19  three years of allowable service. 
  4.20     Sec. 4.  [353F.04] [AUGMENTATION INTEREST RATE FOR 
  4.21  TERMINATED MEDICAL FACILITY EMPLOYEES.] 
  4.22     The deferred annuity of a terminated medical facility or 
  4.23  other public employing unit employee is subject to augmentation 
  4.24  in accordance with section 353.71, subdivision 2, of the edition 
  4.25  of Minnesota Statutes published in the year in which the 
  4.26  privatization occurred, except that the rate of interest for 
  4.27  this purpose is 5.5 percent compounded annually until January 1 
  4.28  following the year in which such person attains age 55.  From 
  4.29  that date to the effective date of retirement, the rate is 7.5 
  4.30  percent.  These increased augmentation rates are no longer 
  4.31  applicable for any time after the terminated medical facility or 
  4.32  other public employing unit employee becomes covered again by a 
  4.33  retirement fund enumerated in section 356.30, subdivision 3.  
  4.34  These increased deferred annuity augmentation rates do not apply 
  4.35  to a terminated transferred medical facility or other public 
  4.36  employing unit employee who begins receipt of a retirement 
  5.1   annuity while employed by the employer which assumed operations 
  5.2   of the medical facility or other public employing unit or 
  5.3   purchased the medical facility or other public employing unit. 
  5.4      Sec. 5.  [353F.05] [AUTHORIZATION FOR ADDITIONAL ALLOWABLE 
  5.5   SERVICE FOR CERTAIN EARLY RETIREMENT PURPOSES.] 
  5.6      For the purpose of determining eligibility for early 
  5.7   retirement benefits provided under section 353.30, subdivision 
  5.8   1a, of the edition of Minnesota Statutes published in the year 
  5.9   before the year in which the privatization occurred, and 
  5.10  notwithstanding any provision of chapter 353, to the contrary, 
  5.11  the years of allowable service for a terminated medical facility 
  5.12  or other public employing unit employee who transfers employment 
  5.13  on the effective date and does not apply for a refund of 
  5.14  contributions under section 353.34, subdivision 1, of the 
  5.15  edition of Minnesota Statutes published in the year before the 
  5.16  year in which the privatization occurred, or any similar 
  5.17  provision, includes service with the successor employer to the 
  5.18  medical facility or other public employing unit following the 
  5.19  effective date.  The successor employer shall provide any 
  5.20  reports that the executive director of the public employees 
  5.21  retirement association may reasonably request to permit 
  5.22  calculation of benefits.  
  5.23     To be eligible for early retirement benefits under this 
  5.24  section, the individual must separate from service with the 
  5.25  successor employer to the medical facility.  The terminated 
  5.26  eligible individual, or an individual authorized to act on 
  5.27  behalf of that individual, may apply for an annuity following 
  5.28  application procedures under section 353.29, subdivision 4. 
  5.29     Sec. 6.  [353F.06] [APPLICATION OF REEMPLOYED ANNUITANT 
  5.30  EARNINGS LIMITATIONS.] 
  5.31     The reemployed annuitant earnings limitations of section 
  5.32  353.37 apply to any service by a terminated medical facility or 
  5.33  other public employing unit employee as an employee of the 
  5.34  successor employer to the medical facility. 
  5.35     Sec. 7.  [353F.07] [EFFECT ON REFUND.] 
  5.36     Notwithstanding any provision of chapter 353 to the 
  6.1   contrary, terminated medical facility or other public employing 
  6.2   unit employees may receive a refund of employee accumulated 
  6.3   contributions plus interest at the rate of six percent per year 
  6.4   compounded annually in accordance with section 353.34, 
  6.5   subdivision 2, of the edition of Minnesota Statutes published in 
  6.6   the year in which the privatization occurred, at any time after 
  6.7   the transfer of employment to the successor employer to the 
  6.8   medical facility or other public employing unit.  If a 
  6.9   terminated medical facility employee has received a refund from 
  6.10  a pension plan enumerated in section 356.30, subdivision 3, the 
  6.11  person may not repay that refund unless the person again becomes 
  6.12  a member of one of those enumerated plans and complies with 
  6.13  section 356.30, subdivision 2. 
  6.14     Sec. 8.  [353F.08] [COUNSELING SERVICES.] 
  6.15     The medical facility or other public employing unit and the 
  6.16  executive director of the public employees retirement 
  6.17  association shall provide terminated medical facility or other 
  6.18  public employing unit employees with counseling on their 
  6.19  benefits available under the general employees retirement plan 
  6.20  of the public employees retirement association during the 90 
  6.21  days following privatization. 
  6.22     Sec. 9.  [REPEALER.] 
  6.23     Laws 1998, chapter 390, article 1, section 1, is repealed. 
  6.24     Sec. 10.  [EFFECTIVE DATE.] 
  6.25     (a) Sections 1 to 9 with respect to privatized medical 
  6.26  facilities are effective on the day following final enactment. 
  6.27     (b) Sections 1 to 9 with respect to Metro II are effective 
  6.28  on the first day of the month next following certification by 
  6.29  the executive director of the public employees retirement 
  6.30  association that the actuarial accrued liability of the special 
  6.31  benefit coverage proposed for extension to the privatized Metro 
  6.32  II employees under this article does not exceed the actuarial 
  6.33  gain otherwise to be accrued by the public employees retirement 
  6.34  association, as calculated by the consulting actuary retained by 
  6.35  the legislative commission on pensions and retirement.  The cost 
  6.36  of the actuarial calculations must be borne by Metro II. 
  7.1                              ARTICLE 2 
  7.2                 ESTABLISHMENT OF LOCAL CORRECTIONAL 
  7.3                      EMPLOYEES RETIREMENT PLAN 
  7.4      Section 1.  Minnesota Statutes 1998, section 3.85, 
  7.5   subdivision 11, is amended to read: 
  7.6      Subd. 11.  [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The 
  7.7   commission shall contract with an established actuarial 
  7.8   consulting firm to conduct annual actuarial valuations for the 
  7.9   retirement plans named in paragraph (b).  The contract must 
  7.10  include provisions for performing cost analyses of proposals for 
  7.11  changes in benefit and funding policies.  
  7.12     (b) The contract for actuarial valuation must include the 
  7.13  following retirement plans:  
  7.14     (1) the teachers retirement plan, teachers retirement 
  7.15  association; 
  7.16     (2) the general state employees retirement plan, Minnesota 
  7.17  state retirement system; 
  7.18     (3) the correctional employees retirement plan, Minnesota 
  7.19  state retirement system; 
  7.20     (4) the state patrol retirement plan, Minnesota state 
  7.21  retirement system; 
  7.22     (5) the judges retirement plan, Minnesota state retirement 
  7.23  system; 
  7.24     (6) the Minneapolis employees retirement plan, Minneapolis 
  7.25  employees retirement fund; 
  7.26     (7) the public employees retirement plan, public employees 
  7.27  retirement association; 
  7.28     (8) the public employees police and fire plan, public 
  7.29  employees retirement association; 
  7.30     (9) the Duluth teachers retirement plan, Duluth teachers 
  7.31  retirement fund association; 
  7.32     (10) the Minneapolis teachers retirement plan, Minneapolis 
  7.33  teachers retirement fund association; 
  7.34     (11) the St. Paul teachers retirement plan, St. Paul 
  7.35  teachers retirement fund association; 
  7.36     (12) the legislators retirement plan, Minnesota state 
  8.1   retirement system; and 
  8.2      (13) the elective state officers retirement plan, Minnesota 
  8.3   state retirement system; and 
  8.4      (14) local government correctional service retirement plan, 
  8.5   public employees retirement association.  
  8.6      (c) The contract must specify completion of annual 
  8.7   actuarial valuation calculations on a fiscal year basis with 
  8.8   their contents as specified in section 356.215, and the 
  8.9   standards for actuarial work adopted by the commission.  
  8.10     The contract must specify completion of annual experience 
  8.11  data collection and processing and a quadrennial published 
  8.12  experience study for the plans listed in paragraph (b), clauses 
  8.13  (1), (2), and (7), as provided for in the standards for 
  8.14  actuarial work adopted by the commission.  The experience data 
  8.15  collection, processing, and analysis must evaluate the following:
  8.16     (1) individual salary progression; 
  8.17     (2) rate of return on investments based on current asset 
  8.18  value; 
  8.19     (3) payroll growth; 
  8.20     (4) mortality; 
  8.21     (5) retirement age; 
  8.22     (6) withdrawal; and 
  8.23     (7) disablement.  
  8.24     (d) The actuary retained by the commission shall annually 
  8.25  prepare a report to the legislature, including the commentary on 
  8.26  the actuarial valuation calculations for the plans named in 
  8.27  paragraph (b) and summarizing the results of the actuarial 
  8.28  valuation calculations.  The commission-retained actuary shall 
  8.29  include with the report the actuary's recommendations concerning 
  8.30  the appropriateness of the support rates to achieve proper 
  8.31  funding of the retirement funds by the required funding dates.  
  8.32  The commission-retained actuary shall, as part of the 
  8.33  quadrennial published experience study, include recommendations 
  8.34  to the legislature on the appropriateness of the actuarial 
  8.35  valuation assumptions required for evaluation in the study.  
  8.36     (e) If the actuarial gain and loss analysis in the 
  9.1   actuarial valuation calculations indicates a persistent pattern 
  9.2   of sizable gains or losses, as directed by the commission, the 
  9.3   actuary retained by the commission shall prepare a special 
  9.4   experience study for a plan listed in paragraph (b), clause (3), 
  9.5   (4), (5), (6), (8), (9), (10), (11), (12), or (13), or (14), in 
  9.6   the manner provided for in the standards for actuarial work 
  9.7   adopted by the commission. 
  9.8      (f) The term of the contract between the commission and the 
  9.9   actuary retained by the commission is four years.  The contract 
  9.10  is subject to competitive bidding procedures as specified by the 
  9.11  commission. 
  9.12     Sec. 2.  Minnesota Statutes 1998, section 3.85, subdivision 
  9.13  12, is amended to read: 
  9.14     Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
  9.15  commission shall assess each retirement plan specified in 
  9.16  subdivision 11, paragraph (b), its appropriate portion of the 
  9.17  compensation paid to the actuary retained by the commission for 
  9.18  the actuarial valuation calculations, quadrennial projection 
  9.19  valuations, and quadrennial experience studies.  The total 
  9.20  assessment is 100 percent of the amount of contract compensation 
  9.21  for the actuarial consulting firm retained by the commission for 
  9.22  actuarial valuation calculations, including the public employees 
  9.23  police and fire plan consolidation accounts of the public 
  9.24  employees retirement association, annual experience data 
  9.25  collection and processing, quadrennial projection valuations, 
  9.26  and quadrennial experience studies.  
  9.27     The portion of the total assessment payable by each 
  9.28  retirement system or pension plan must be determined as follows: 
  9.29     (1) Each pension plan specified in subdivision 11, 
  9.30  paragraph (b), clauses (1) to (13) (14), must pay the following 
  9.31  indexed amount based on its total active, deferred, inactive, 
  9.32  and benefit recipient membership: 
  9.33         up to 2,000 members, inclusive         $2.55 per member 
  9.34         2,001 through 10,000 members           $1.13 per member 
  9.35         over 10,000 members                    $0.11 per member  
  9.36     The amount specified is applicable for the assessment of 
 10.1   the July 1, 1991, to June 30, 1992, fiscal year actuarial 
 10.2   compensation amounts.  For the July 1, 1992, to June 30, 1993, 
 10.3   fiscal year and subsequent fiscal year actuarial compensation 
 10.4   amounts, the amount specified must be increased at the same 
 10.5   percentage increase rate as the implicit price deflator for 
 10.6   state and local government purchases of goods and services for 
 10.7   the 12-month period ending with the first quarter of the 
 10.8   calendar year following the completion date for the actuarial 
 10.9   valuation calculations, as published by the federal Department 
 10.10  of Commerce, and rounded upward to the nearest full cent. 
 10.11     (2) The total per-member portion of the allocation must be 
 10.12  determined, and that total per-member amount must be subtracted 
 10.13  from the total amount for allocation.  Of the remainder dollar 
 10.14  amount, the following per-retirement system and per-pension plan 
 10.15  charges must be determined and the charges must be paid by the 
 10.16  system or plan: 
 10.17     (i) 37.87 percent is the total additional per-retirement 
 10.18  system charge, of which one-seventh must be paid by each 
 10.19  retirement system specified in subdivision 11, paragraph (b), 
 10.20  clauses (1), (2), (6), (7), (9), (10), and (11). 
 10.21     (ii) 62.13 percent is the total additional per-pension plan 
 10.22  charge, of which one-thirteenth one-fourteenth must be paid by 
 10.23  each pension plan specified in subdivision 11, paragraph (b), 
 10.24  clauses (1) to (13) (14).  
 10.25     (b) The assessment must be made following the completion of 
 10.26  the actuarial valuation calculations and the experience 
 10.27  analysis.  The amount of the assessment is appropriated from the 
 10.28  retirement fund applicable to the retirement plan.  Receipts 
 10.29  from assessments must be deposited in the state treasury and 
 10.30  credited to the general fund. 
 10.31     Sec. 3.  Minnesota Statutes 1998, section 273.1385, 
 10.32  subdivision 2, is amended to read: 
 10.33     Subd. 2.  [LIMIT ON AID AND POTENTIAL FUTURE PERMANENT AID 
 10.34  REDUCTIONS.] (a) The aid amount received by any jurisdiction in 
 10.35  fiscal year 2000 or any year thereafter may not exceed the 
 10.36  amount it received in fiscal year 1999.  The commissioner may, 
 11.1   from time to time, request the most recent fiscal year payroll 
 11.2   information by jurisdiction to be certified by the executive 
 11.3   director of the public employees retirement association.  For 
 11.4   any jurisdiction where newly certified public employees 
 11.5   retirement association general plan payroll is significantly 
 11.6   lower than the fiscal 1997 amount, as determined by the 
 11.7   commissioner, the commissioner shall recalculate the aid amount 
 11.8   based on the most recent fiscal year payroll information, 
 11.9   certify the recalculated aid amount for the next distribution 
 11.10  year, and permanently reduce the aid amount to that jurisdiction.
 11.11     (b) Aid to a jurisdiction must not be reduced under this 
 11.12  section due to a transfer of an employee from the general plan 
 11.13  of the public employees retirement association to the local 
 11.14  government correctional service plan administered by the public 
 11.15  employees retirement association.  The executive director of the 
 11.16  public employees retirement association must provide the 
 11.17  commissioner of revenue with any information requested by the 
 11.18  commissioner to administer this paragraph. 
 11.19     Sec. 4.  Minnesota Statutes 1998, section 275.70, 
 11.20  subdivision 5, is amended to read: 
 11.21     Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
 11.22  portions of ad valorem taxes levied by a local governmental unit 
 11.23  for the following purposes or in the following manner: 
 11.24     (1) to pay the costs of the principal and interest on 
 11.25  bonded indebtedness or to reimburse for the amount of liquor 
 11.26  store revenues used to pay the principal and interest due on 
 11.27  municipal liquor store bonds in the year preceding the year for 
 11.28  which the levy limit is calculated; 
 11.29     (2) to pay the costs of principal and interest on 
 11.30  certificates of indebtedness issued for any corporate purpose 
 11.31  except for the following: 
 11.32     (i) tax anticipation or aid anticipation certificates of 
 11.33  indebtedness; 
 11.34     (ii) certificates of indebtedness issued under sections 
 11.35  298.28 and 298.282; 
 11.36     (iii) certificates of indebtedness used to fund current 
 12.1   expenses or to pay the costs of extraordinary expenditures that 
 12.2   result from a public emergency; or 
 12.3      (iv) certificates of indebtedness used to fund an 
 12.4   insufficiency in tax receipts or an insufficiency in other 
 12.5   revenue sources; 
 12.6      (3) to provide for the bonded indebtedness portion of 
 12.7   payments made to another political subdivision of the state of 
 12.8   Minnesota; 
 12.9      (4) to fund payments made to the Minnesota state armory 
 12.10  building commission under section 193.145, subdivision 2, to 
 12.11  retire the principal and interest on armory construction bonds; 
 12.12     (5) for unreimbursed expenses related to flooding that 
 12.13  occurred during the first half of calendar year 1997, as allowed 
 12.14  by the commissioner of revenue under section 275.74, paragraph 
 12.15  (b); 
 12.16     (6) for local units of government located in an area 
 12.17  designated by the Federal Emergency Management Agency pursuant 
 12.18  to a major disaster declaration issued for Minnesota by 
 12.19  President Clinton after April 1, 1997, and before June 11, 1997, 
 12.20  for the amount of tax dollars lost due to abatements authorized 
 12.21  under section 273.123, subdivision 7, and Laws 1997, chapter 
 12.22  231, article 2, section 64, to the extent that they are related 
 12.23  to the major disaster and to the extent that neither the state 
 12.24  or federal government reimburses the local government for the 
 12.25  amount lost; 
 12.26     (7) property taxes approved by voters which are levied 
 12.27  against the referendum market value as provided under section 
 12.28  275.61; 
 12.29     (8) to fund matching requirements needed to qualify for 
 12.30  federal or state grants or programs to the extent that either 
 12.31  (i) the matching requirement exceeds the matching requirement in 
 12.32  calendar year 1997, or (ii) it is a new matching requirement 
 12.33  that didn't exist prior to 1998; 
 12.34     (9) to pay the expenses reasonably and necessarily incurred 
 12.35  in preparing for or repairing the effects of natural disaster 
 12.36  including the occurrence or threat of widespread or severe 
 13.1   damage, injury, or loss of life or property resulting from 
 13.2   natural causes, in accordance with standards formulated by the 
 13.3   emergency services division of the state department of public 
 13.4   safety, as allowed by the commissioner of revenue under section 
 13.5   275.74, paragraph (b); 
 13.6      (10) for the amount of tax revenue lost due to abatements 
 13.7   authorized under section 273.123, subdivision 7, for damage 
 13.8   related to the tornadoes of March 29, 1998, to the extent that 
 13.9   neither the state or federal government provides reimbursement 
 13.10  for the amount lost; 
 13.11     (11) pay amounts required to correct an error in the levy 
 13.12  certified to the county auditor by a city or county in a levy 
 13.13  year, but only to the extent that when added to the preceding 
 13.14  year's levy it is not in excess of an applicable statutory, 
 13.15  special law or charter limitation, or the limitation imposed on 
 13.16  the governmental subdivision by sections 275.70 to 275.74 in the 
 13.17  preceding levy year; and 
 13.18     (12) to pay an abatement under section 469.1815; and 
 13.19     (13) to pay the employer contribution to the local 
 13.20  government correctional service retirement plan under section 
 13.21  353E.03, subdivision 2, to the extent that the employer 
 13.22  contribution exceeds 5.49 percent of total salary. 
 13.23     Sec. 5.  Minnesota Statutes 1998, section 353.27, 
 13.24  subdivision 2, is amended to read: 
 13.25     Subd. 2.  [EMPLOYEE CONTRIBUTION.] (a) Except as provided 
 13.26  in paragraph (b), The employee contribution shall be is an 
 13.27  amount (1) for a "basic member" equal to 8.75 percent of total 
 13.28  salary; and (2) for a "coordinated member" equal to 4.75 percent 
 13.29  of total salary. 
 13.30     (b) For local government correctional service employees, as 
 13.31  defined in section 353.33, subdivision 3a, the employee 
 13.32  contribution is an amount equal to 4.96 percent of total salary. 
 13.33     (c) These contributions must be made by deduction from 
 13.34  salary in the manner provided in subdivision 4.  Where any 
 13.35  portion of a member's salary is paid from other than public 
 13.36  funds, such member's employee contribution must be based on the 
 14.1   total salary received from all sources. 
 14.2      Sec. 6.  Minnesota Statutes 1998, section 353.27, 
 14.3   subdivision 3, is amended to read: 
 14.4      Subd. 3.  [EMPLOYER CONTRIBUTION.] (a) Except as provided 
 14.5   in paragraph (b), The employer contribution shall be is an 
 14.6   amount equal to the employee contribution under subdivision 2. 
 14.7      (b) On behalf of local government correctional service 
 14.8   employees, as defined in section 353.33, subdivision 3a, the 
 14.9   employer contribution is an amount equal to 5.06 percent of 
 14.10  total salary. 
 14.11     (c) This contribution shall must be made from funds 
 14.12  available to the employing subdivision by the means and in the 
 14.13  manner provided in section 353.28. 
 14.14     Sec. 7.  [353E.01] [LOCAL GOVERNMENT CORRECTIONAL SERVICE 
 14.15  RETIREMENT PLAN.] 
 14.16     Subdivision 1.  [PLAN ADMINISTRATION; FUND.] (a) The public 
 14.17  employees local government correctional service retirement plan 
 14.18  is established as a separate plan to be administered by the 
 14.19  board of trustees and the executive director of the public 
 14.20  employees retirement association. 
 14.21     (b) The board of trustees and the executive director shall 
 14.22  undertake their activities in a manner consistent with chapter 
 14.23  356A.  
 14.24     (c) The association shall maintain a special fund to be 
 14.25  known as the public employees local government correctional 
 14.26  service retirement fund. 
 14.27     Subd. 2.  [REVENUE SOURCES.] Member contributions under 
 14.28  section 353E.03, subdivision 1, and employer contributions under 
 14.29  section 353E.03, subdivision 2, and other amounts authorized by 
 14.30  law, including any investment return on invested fund assets, 
 14.31  must be deposited in the fund.  
 14.32     Subd. 3.  [INVESTMENT.] (a) The public employees local 
 14.33  government correctional service retirement fund participates in 
 14.34  the Minnesota postretirement investment fund.  
 14.35     (b) The amounts provided in section 353.271 must be 
 14.36  deposited in that fund.  
 15.1      (c) The balance of any assets of the fund must be deposited 
 15.2   in the Minnesota combined investment fund as provided in section 
 15.3   11A.14, if applicable, or otherwise invested under section 
 15.4   11A.23. 
 15.5      Subd. 4.  [COLLECTION OF CONTRIBUTIONS.] The collection of 
 15.6   member and employer contributions is governed by section 353.27, 
 15.7   subdivisions 4, 7, 7b, 10, 11, and 12. 
 15.8      Subd. 5.  [FUND DISBURSEMENT RESTRICTED.] (a) The public 
 15.9   employees local government correctional service retirement fund 
 15.10  and its share of participation in the Minnesota postretirement 
 15.11  investment fund may be disbursed only for the purposes provided 
 15.12  for in this chapter.  
 15.13     (b) The proportional share of the necessary and reasonable 
 15.14  administrative expenses of the association and any benefits 
 15.15  provided in this chapter, other than benefits payable from the 
 15.16  Minnesota postretirement investment fund, must be paid from the 
 15.17  public employees local government correctional service 
 15.18  retirement fund.  Retirement annuities, disability benefits, 
 15.19  survivorship benefits, and any refunds of accumulated deductions 
 15.20  may be paid only from the correctional service retirement fund 
 15.21  after those needs have been certified by the executive director 
 15.22  and any applicable amounts withdrawn from the share of 
 15.23  participation in the Minnesota postretirement fund under section 
 15.24  11A.18.  
 15.25     (c) The amounts necessary to make the payments from the 
 15.26  public employees local government correctional service 
 15.27  retirement fund and its participation in the Minnesota 
 15.28  postretirement investment fund are annually appropriated from 
 15.29  those funds for those purposes. 
 15.30     Sec. 8.  [353E.02] [CORRECTIONAL SERVICE EMPLOYEES.] 
 15.31     A local government correctional service employee is a 
 15.32  person who: 
 15.33     (1) is employed in a county-administered jail or 
 15.34  correctional facility or in a regional correctional facility 
 15.35  administered by multiple counties; 
 15.36     (2) spends at least 95 percent of the employee's working 
 16.1   time in direct contact with persons confined in the jail or 
 16.2   facility, as certified in writing, in advance, by the employer 
 16.3   to the executive director of the association; and 
 16.4      (3) is a "public employee" as defined in section 353.01, 
 16.5   but is not a member of the public employees police and fire fund.
 16.6      Sec. 9.  [353E.03] [CORRECTIONAL SERVICE PLAN 
 16.7   CONTRIBUTIONS.] 
 16.8      Subdivision 1.  [MEMBER CONTRIBUTIONS.] A local government 
 16.9   correctional service employee shall make an employee 
 16.10  contribution in an amount equal to 5.83 percent of salary. 
 16.11     Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
 16.12  contribute for a local government correctional service employee 
 16.13  an amount equal to 8.75 percent of salary. 
 16.14     Sec. 10.  [353E.04] [CORRECTIONAL SERVICE PLAN RETIREMENT 
 16.15  ANNUITY.] 
 16.16     Subdivision 1.  [ELIGIBILITY REQUIREMENTS.] After 
 16.17  termination of public employment, an employee covered under 
 16.18  section 353E.02 who has attained the age of at least 55 years 
 16.19  and has credit for not less than three years of coverage in the 
 16.20  local government correctional service plan is entitled, upon 
 16.21  application, to a normal retirement annuity.  Instead of a 
 16.22  normal retirement annuity, a retiring employee may elect to 
 16.23  receive the optional annuity provided in section 353.30, 
 16.24  subdivision 3. 
 16.25     Subd. 2.  [AVERAGE SALARY BASE.] In calculating the annuity 
 16.26  under subdivision 3, "average salary" means an amount equivalent 
 16.27  to the average of the highest salary earned as a local 
 16.28  government correctional employee upon which employee 
 16.29  contributions were paid for any five successive years of 
 16.30  allowable service.  Average salary must be based on all 
 16.31  allowable service if this service is less than five years. 
 16.32     Subd. 3.  [ANNUITY AMOUNT.] The average salary as defined 
 16.33  in subdivision 2, multiplied by the percent specified in section 
 16.34  356.19, subdivision 5a, for each year of allowable service, 
 16.35  determines the amount of the normal retirement annuity.  If a 
 16.36  person has earned allowable service in the public employees 
 17.1   retirement association or the public employees police and fire 
 17.2   fund prior to participation under this chapter, the retirement 
 17.3   annuity representing such service must be computed in accordance 
 17.4   with the formula specified in sections 353.29 and 353.30 or 
 17.5   353.651, whichever applies. 
 17.6      Subd. 4.  [EARLY RETIREMENT.] An employee covered under 
 17.7   section 353E.02 who has attained the age of at least 50 years 
 17.8   and has credit for not less than three years of coverage in the 
 17.9   local government correctional service plan is entitled, upon 
 17.10  application, to a reduced retirement annuity equal to the 
 17.11  annuity calculated under subdivision 3, reduced so that the 
 17.12  reduced annuity is the actuarial equivalent of the annuity that 
 17.13  would be payable if the employee deferred receipt of the annuity 
 17.14  from the day the annuity begins to accrue until age 55. 
 17.15     Subd. 5.  [ACCRUAL AND DURATION.] The retirement annuity 
 17.16  under this section begins to accrue as provided in section 
 17.17  353.29, subdivision 7.  The retirement annuity is payable for 
 17.18  the life of the recipient, or in accordance with the terms of 
 17.19  any optional annuity form selected by the retiring member. 
 17.20     Subd. 6.  [MULTIPLE SERVICE LIMITATION.] A former employee 
 17.21  who has both public employees retirement plan and public 
 17.22  employees local government correctional retirement plan credited 
 17.23  service must, if qualified, receive a retirement annuity from 
 17.24  each retirement plan that takes into account both periods of 
 17.25  service and both covered salary amounts, but no period of 
 17.26  service may be used more than once in calculating the annuity. 
 17.27     Sec. 11.  [353E.05] [AUGMENTATION IN CERTAIN CASES.] 
 17.28     Unless prior service has been transferred or unless a 
 17.29  combined service annuity under section 356.30 has been elected, 
 17.30  an employee who becomes a local government correctional employee 
 17.31  after being a member of the public employees retirement 
 17.32  association or the public employees police and fire fund is 
 17.33  covered under section 353.71, subdivision 2, with respect to 
 17.34  that prior service.  An employee who becomes a member of the 
 17.35  public employees retirement association or the public employees 
 17.36  police and fire plan after being a local government correctional 
 18.1   employee is also covered under section 353.71, subdivision 2, 
 18.2   with respect to that prior service, unless calculated under 
 18.3   section 356.30. 
 18.4      Sec. 12.  [353E.06] [DISABILITY BENEFITS.] 
 18.5      Subdivision 1.  [DUTY DISABILITY QUALIFICATION 
 18.6   REQUIREMENTS.] A local government correctional employee who 
 18.7   becomes disabled and physically or mentally unfit to perform the 
 18.8   duties of the position as a direct result of an injury, 
 18.9   sickness, or other disability that is medically determinable, 
 18.10  that was incurred in or arose out of any act of duty, and that 
 18.11  renders the employee physically or mentally unable to perform 
 18.12  the employee's duties, is entitled to a disability benefit.  The 
 18.13  disability benefit must be based on covered service under this 
 18.14  chapter only and is an amount equal to 47.5 percent of the 
 18.15  average salary defined in section 353E.04, subdivision 2, plus 
 18.16  an additional percent equal to that specified in section 356.19, 
 18.17  subdivision 5a, for each year of covered service under this 
 18.18  chapter in excess of 25 years. 
 18.19     Subd. 2.  [NONDUTY DISABILITY QUALIFICATION 
 18.20  REQUIREMENTS.] A local government correctional employee who has 
 18.21  at least one year of covered service under this chapter and 
 18.22  becomes disabled and physically or mentally unfit to perform the 
 18.23  duties of the position because of sickness or injury that is 
 18.24  medically determinable and that occurs while not engaged in 
 18.25  covered employment, is entitled to a disability benefit based on 
 18.26  covered service under this chapter.  The disability benefit must 
 18.27  be computed in the same manner as an annuity under section 
 18.28  353E.04, subdivision 3, and as though the employee had at least 
 18.29  ten years of covered correctional service. 
 18.30     Subd. 3.  [OPTIONAL ANNUITY.] A disabled local government 
 18.31  correctional employee may elect the normal disability benefit or 
 18.32  an optional annuity as provided in section 353.30, subdivision 
 18.33  3.  The election of an optional annuity must be made before the 
 18.34  commencement of payment of the disability benefit and is 
 18.35  effective on the date on which the disability benefit begins to 
 18.36  accrue as provided in section 353.33, subdivision 2.  Upon 
 19.1   becoming effective, the optional annuity begins to accrue on the 
 19.2   same date as provided for the disability benefit. 
 19.3      Subd. 4.  [DISABILITY BENEFIT APPLICATION.] A claim or 
 19.4   demand for a disability benefit must be initiated by written 
 19.5   application in the manner and form prescribed by the executive 
 19.6   director, filed in the office of the association, showing 
 19.7   compliance with the statutory conditions qualifying the 
 19.8   applicant for a disability benefit.  A member or former member 
 19.9   who became disabled during a period of membership may file an 
 19.10  application for disability benefits within three years following 
 19.11  termination of local government correctional service, but not 
 19.12  after that time has elapsed.  The disability benefit begins to 
 19.13  accrue the day following the commencement of disability, 90 days 
 19.14  preceding the filing of the application, or, if annual or sick 
 19.15  leave is paid for more than the 90-day period, from the date 
 19.16  salary ceased, whichever is latest.  No payment may accrue 
 19.17  beyond the end of the month in which entitlement has 
 19.18  terminated.  If the disabilitant dies before negotiating the 
 19.19  check for the month in which death occurs, payment must be made 
 19.20  to the optional annuitant or beneficiary. 
 19.21     Subd. 5.  [DISABILITY BENEFIT TERMINATION.] The disability 
 19.22  benefit paid to a disabled local government correctional 
 19.23  employee terminates at the end of the month in which the 
 19.24  employee reaches age 65.  If the disabled local government 
 19.25  correctional employee is still disabled when the employee 
 19.26  reaches age 65, the employee is deemed to be a retired employee 
 19.27  and, if the employee had elected an optional annuity under 
 19.28  subdivision 3, must receive an annuity in accordance with the 
 19.29  terms of the optional annuity previously elected.  If the 
 19.30  employee had not elected an optional annuity under subdivision 
 19.31  3, the employee may elect either to receive a normal retirement 
 19.32  annuity computed in the manner provided in section 353E.04, 
 19.33  subdivision 3, or to receive an optional annuity as provided in 
 19.34  section 353.30, subdivision 3, based on the same length of 
 19.35  service as used in the calculation of the disability benefit.  
 19.36  Election of an optional annuity must be made within 90 days 
 20.1   before attaining the age of 65 years, or reaching the five-year 
 20.2   anniversary of the effective date of the disability benefit, 
 20.3   whichever is later. 
 20.4      Subd. 6.  [RESUMPTION OF EMPLOYMENT.] If a disabled 
 20.5   employee resumes a gainful occupation from which earnings are 
 20.6   less than salary received at the date of disability or the 
 20.7   salary currently paid for similar positions, or should the 
 20.8   employee be entitled to receive workers' compensation benefits, 
 20.9   the disability benefit must be continued in an amount that, when 
 20.10  added to such earnings and workers' compensation benefits, does 
 20.11  not exceed the salary received at the date of disability or the 
 20.12  salary currently payable for the same employment position or an 
 20.13  employment position substantially similar to the one the person 
 20.14  held as of the date of the disability, whichever is greater. 
 20.15     Subd. 7.  [COMBINED SERVICE DISABILITY BENEFIT.] If the 
 20.16  employee is entitled to receive a disability benefit as provided 
 20.17  in subdivision 1 or 2 and has credit for less covered 
 20.18  correctional service than the length of service upon which the 
 20.19  correctional disability benefit is based, and also has credit 
 20.20  for public employees retirement plan service, the employee is 
 20.21  entitled to a disability benefit or deferred retirement annuity 
 20.22  based on the regular plan service only for the service that, 
 20.23  when combined with the correctional service, exceeds the number 
 20.24  of years on which the correctional disability benefit is based.  
 20.25  The disabled employee who also has credit for regular plan 
 20.26  service must in all respects qualify under section 353.33 to be 
 20.27  entitled to receive a disability benefit based on the public 
 20.28  employees retirement plan service, except that the service may 
 20.29  be combined to satisfy length of service requirements.  Any 
 20.30  deferred annuity to which the employee may be entitled based on 
 20.31  public employees retirement plan service must be augmented as 
 20.32  provided in section 353.71 while the employee is receiving a 
 20.33  disability benefit under this section. 
 20.34     Subd. 8.  [CONTINUING BENEFIT ELIGIBILITY.] Continuing 
 20.35  eligibility for a disability benefit is subject to section 
 20.36  353.33, subdivision 6. 
 21.1      Sec. 13.  [353E.07] [SURVIVOR BENEFITS.] 
 21.2      Subdivision 1.  [MEMBER AT LEAST AGE 50.] If a member or 
 21.3   former member of the local government correctional service 
 21.4   retirement plan who has attained the age of at least 50 years 
 21.5   and has credit for not less than three years of allowable 
 21.6   service dies before the annuity or disability benefit has become 
 21.7   payable, notwithstanding any designation of beneficiary to the 
 21.8   contrary, the surviving spouse may elect to receive, in lieu of 
 21.9   a refund with interest provided in section 353.32, subdivision 
 21.10  1, a surviving spouse annuity equal to the 100 percent joint and 
 21.11  survivor annuity for which the member could have qualified had 
 21.12  the member terminated service on the date of death. 
 21.13     Subd. 2.  [MEMBER NOT YET AGE 50.] If the member was under 
 21.14  age 50, dies, and had credit for not less than three years of 
 21.15  allowable service on the date of death but did not yet qualify 
 21.16  for retirement, the surviving spouse may elect to receive a 100 
 21.17  percent joint and survivor annuity based on the age of the 
 21.18  employee and the surviving spouse at the time of death.  The 
 21.19  annuity is payable using the early retirement reduction under 
 21.20  section 353E.04, subdivision 4, to age 50 and one-half the early 
 21.21  retirement reduction from age 50 to the age payment begins.  
 21.22  Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply 
 21.23  to a deferred annuity or surviving spouse benefit payable under 
 21.24  this subdivision. 
 21.25     Subd. 3.  [ELECTION; ACCRUAL.] A surviving spouse election 
 21.26  under subdivisions 1 and 2 may be made at any time after the 
 21.27  date of death of the local government correctional service 
 21.28  employee.  The surviving spouse benefit begins to accrue as of 
 21.29  the first of the next month following the date on which the 
 21.30  application for the benefit was filed. 
 21.31     Subd. 4.  [SURVIVING SPOUSE COVERAGE; TERM CERTAIN.] In 
 21.32  lieu of the 100 percent optional annuity under subdivision 1, 
 21.33  the surviving spouse of a deceased local government correctional 
 21.34  service employee may elect to receive survivor coverage in a 
 21.35  term certain of ten, 15, or 20 years.  The monthly term certain 
 21.36  annuity must be actuarially equivalent to the 100 percent 
 22.1   optional annuity under subdivision 1 and must be based on tables 
 22.2   approved by the actuary retained by the legislative commission 
 22.3   on pensions and retirement.  The optional annuity ceases upon 
 22.4   the expiration of the term certain period.  If a survivor elects 
 22.5   a term certain annuity and dies before the expiration of the 
 22.6   specified term certain period, the commuted value of the 
 22.7   remaining annuity payments must be paid in a lump sum to the 
 22.8   survivor's estate. 
 22.9      Subd. 5.  [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 
 22.10  no surviving spouse eligible for benefits under subdivisions 1, 
 22.11  2, and 4, a dependent child as defined in section 353.01, 
 22.12  subdivision 15a, is eligible for a dependent child survivor 
 22.13  benefit.  Benefits to a dependent child must be paid from the 
 22.14  date of the employee's death to the date the dependent child 
 22.15  attains age 20 if the child is under age 15 on the date of 
 22.16  death.  If the child is 15 years or older on the date of death, 
 22.17  the benefit is payable for five years.  The payment to a 
 22.18  dependent child is an amount actuarially equivalent to the value 
 22.19  of a 100 percent joint and survivor optional annuity using the 
 22.20  age of the employee and age of the dependent child at the date 
 22.21  of death in lieu of the age of the surviving spouse.  If there 
 22.22  is more than one dependent child, each dependent child shall 
 22.23  receive a proportionate share of the actuarial value of the 
 22.24  employee's account, with the amount of the benefit payable to 
 22.25  each child to be determined based on the portion of the total 
 22.26  eligibility period that each child is eligible.  The process for 
 22.27  calculating the dependent child survivor benefit must be 
 22.28  approved by the actuary retained by the legislative commission 
 22.29  on pensions and retirement. 
 22.30     Subd. 6.  [PAYMENT TO DESIGNATED BENEFICIARY.] An amount 
 22.31  equal to any excess of the accumulated contributions that were 
 22.32  credited to the account of the deceased employee over and above 
 22.33  the total of the annuities paid and payable to the surviving 
 22.34  spouse or dependent children must be paid to the deceased 
 22.35  member's last designated beneficiary or, if none, to the legal 
 22.36  representative of the estate of the deceased member. 
 23.1      Subd. 7.  [ELECTION THAT SECTION DOES NOT APPLY.] A member 
 23.2   may specify in writing that this section does not apply and that 
 23.3   payment must be made only to the designated beneficiary, as 
 23.4   otherwise provided by this chapter. 
 23.5      Sec. 14.  [353E.08] [SCOPE AND APPLICATION.] 
 23.6      The general provisions of chapter 353 apply to the local 
 23.7   government correctional service retirement plan except where 
 23.8   otherwise specifically provided in sections 353E.01 to 353E.07.  
 23.9      Sec. 15.  Minnesota Statutes 1998, section 356.19, is 
 23.10  amended by adding a subdivision to read: 
 23.11     Subd. 5a.  [LOCAL GOVERNMENT CORRECTIONAL SERVICE 
 23.12  PLAN.] The applicable benefit accrual rate is 1.9 percent.  
 23.13     Sec. 16.  Minnesota Statutes 1998, section 356.20, 
 23.14  subdivision 2, is amended to read: 
 23.15     Subd. 2.  [COVERED PUBLIC PENSION FUNDS.] This section 
 23.16  applies to the following public pension plans: 
 23.17     (1) State employees retirement fund. 
 23.18     (2) Public employees retirement fund. 
 23.19     (3) Teachers retirement association. 
 23.20     (4) State patrol retirement fund. 
 23.21     (5) Minneapolis teachers retirement fund association. 
 23.22     (6) St. Paul teachers retirement fund association. 
 23.23     (7) Duluth teachers retirement fund association. 
 23.24     (8) Minneapolis employees retirement fund. 
 23.25     (9) University of Minnesota faculty retirement plan. 
 23.26     (10) University of Minnesota faculty supplemental 
 23.27  retirement plan. 
 23.28     (11) Judges retirement fund. 
 23.29     (12) Any police or firefighter's relief association 
 23.30  enumerated in section 69.77, subdivision 1a, or 69.771, 
 23.31  subdivision 1. 
 23.32     (13) Public employees police and fire fund.  
 23.33     (14) Minnesota state retirement system correctional 
 23.34  officers retirement fund.  
 23.35     (15) Public employees local government correctional service 
 23.36  retirement plan. 
 24.1      Sec. 17.  Minnesota Statutes 1998, section 356.30, 
 24.2   subdivision 3, is amended to read: 
 24.3      Subd. 3.  [COVERED FUNDS.] This section applies to the 
 24.4   following retirement funds: 
 24.5      (1) state employees retirement fund, established pursuant 
 24.6   to chapter 352; 
 24.7      (2) correctional employees retirement program, established 
 24.8   pursuant to chapter 352; 
 24.9      (3) unclassified employees retirement plan, established 
 24.10  pursuant to chapter 352D; 
 24.11     (4) state patrol retirement fund, established pursuant to 
 24.12  chapter 352B; 
 24.13     (5) legislators retirement plan, established pursuant to 
 24.14  chapter 3A; 
 24.15     (6) elective state officers' retirement plan, established 
 24.16  pursuant to chapter 352C; 
 24.17     (7) public employees retirement association, established 
 24.18  pursuant to chapter 353; 
 24.19     (8) public employees police and fire fund, established 
 24.20  pursuant to chapter 353; 
 24.21     (9) public employees local government correctional service 
 24.22  retirement plan, established pursuant to chapter 353E; 
 24.23     (10) teachers retirement association, established pursuant 
 24.24  to chapter 354; 
 24.25     (10) (11) Minneapolis employees retirement fund, 
 24.26  established pursuant to chapter 422A; 
 24.27     (11) (12) Minneapolis teachers retirement fund association, 
 24.28  established pursuant to chapter 354A; 
 24.29     (12) (13) St. Paul teachers retirement fund association, 
 24.30  established pursuant to chapter 354A; 
 24.31     (13) (14) Duluth teachers retirement fund association, 
 24.32  established pursuant to chapter 354A; and 
 24.33     (14) (15) judges' retirement fund, established by sections 
 24.34  490.121 to 490.132. 
 24.35     Sec. 18.  Minnesota Statutes 1998, section 356.302, 
 24.36  subdivision 7, is amended to read: 
 25.1      Subd. 7.  [COVERED RETIREMENT PLANS.] This section applies 
 25.2   to the following retirement plans: 
 25.3      (1) state employees retirement fund, established by chapter 
 25.4   352; 
 25.5      (2) unclassified employees retirement plan, established by 
 25.6   chapter 352D; 
 25.7      (3) public employees retirement association, established by 
 25.8   chapter 353; 
 25.9      (4) teachers retirement association, established by chapter 
 25.10  354; 
 25.11     (5) Duluth teachers retirement fund association, 
 25.12  established by chapter 354A; 
 25.13     (6) Minneapolis teachers retirement fund association, 
 25.14  established by chapter 354A; 
 25.15     (7) St. Paul teachers retirement fund association, 
 25.16  established by chapter 354A; 
 25.17     (8) Minneapolis employees retirement fund, established by 
 25.18  chapter 422A; 
 25.19     (9) correctional employees retirement plan, established by 
 25.20  chapter 352; 
 25.21     (10) state patrol retirement fund, established by chapter 
 25.22  352B; 
 25.23     (11) public employees police and fire fund, established by 
 25.24  chapter 353; and 
 25.25     (12) public employees local government correctional service 
 25.26  retirement plan, established by chapter 353E; and 
 25.27     (13) judges' retirement fund, established by sections 
 25.28  490.121 to 490.132. 
 25.29     Sec. 19.  Minnesota Statutes 1998, section 356.303, 
 25.30  subdivision 4, is amended to read: 
 25.31     Subd. 4.  [COVERED RETIREMENT PLANS.] This section applies 
 25.32  to the following retirement plans: 
 25.33     (1) legislators retirement plan, established by chapter 3A; 
 25.34     (2) state employees retirement fund, established by chapter 
 25.35  352; 
 25.36     (3) correctional employees retirement plan, established by 
 26.1   chapter 352; 
 26.2      (4) state patrol retirement fund, established by chapter 
 26.3   352B; 
 26.4      (5) elective state officers retirement plan, established by 
 26.5   chapter 352C; 
 26.6      (6) unclassified employees retirement plan, established by 
 26.7   chapter 352D; 
 26.8      (7) public employees retirement association, established by 
 26.9   chapter 353; 
 26.10     (8) public employees police and fire fund, established by 
 26.11  chapter 353; 
 26.12     (9) public employees local government correctional service 
 26.13  retirement plan, established by chapter 353E; 
 26.14     (10) teachers retirement association, established by 
 26.15  chapter 354; 
 26.16     (10) (11) Duluth teachers retirement fund association, 
 26.17  established by chapter 354A; 
 26.18     (11) (12) Minneapolis teachers retirement fund association, 
 26.19  established by chapter 354A; 
 26.20     (12) (13) St. Paul teachers retirement fund association, 
 26.21  established by chapter 354A; 
 26.22     (13) (14) Minneapolis employees retirement fund, 
 26.23  established by chapter 422A; and 
 26.24     (14) (15) judges' retirement fund, established by sections 
 26.25  490.121 to 490.132. 
 26.26     Sec. 20.  [REPEALER.] 
 26.27     Minnesota Statutes 1998, section 353.33, subdivision 3a, is 
 26.28  repealed. 
 26.29     Sec. 21.  [EFFECTIVE DATE.] 
 26.30     Sections 1 to 8 and 10 to 20 are effective on July 1, 1999. 
 26.31  Section 9 is effective on the first day of the first payroll 
 26.32  period beginning after June 30, 1999. 
 26.33                             ARTICLE 3 
 26.34                 LOCAL POLICE AND PAID FIRE RELIEF 
 26.35                 ASSOCIATION BENEFIT MODIFICATIONS
 26.36     Section 1. Laws 1977, chapter 61, section 6, as amended by 
 27.1   Laws 1981, chapter 68, section 39, and Laws 1998, chapter 390, 
 27.2   article 7, section 3, is amended to read: 
 27.3      Sec. 6. [EVELETH RETIRED POLICE AND FIRE TRUST FUND; 
 27.4   FINANCIAL REQUIREMENTS OF THE TRUST FUND.] 
 27.5      (a) The city of Eveleth shall provide by annual levy an 
 27.6   amount sufficient to pay an amount which when added to the 
 27.7   investment income of the trust fund is sufficient to pay the 
 27.8   benefits provided under the trust fund for the succeeding year 
 27.9   as certified by the board of trustees of the trust fund. 
 27.10     (b) If the city of Eveleth fails to contribute the amount 
 27.11  required in paragraph (a) in a given year, no postretirement 
 27.12  adjustment granted under Laws 1995, chapter 262, article 10, 
 27.13  section 1, or Laws 1997, chapter 241, article 2, section 19 is 
 27.14  payable in the following year. 
 27.15     Sec. 2.  [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 
 27.16  HOC POSTRETIREMENT ADJUSTMENT.] 
 27.17     In addition to the current pensions and other retirement 
 27.18  benefits payable, the pensions and retirement benefits payable 
 27.19  to retired police officers and firefighters and their surviving 
 27.20  spouses by the Eveleth police and fire trust fund are increased 
 27.21  by $100 a month.  Increases are retroactive to January 1, 1999. 
 27.22     Sec. 3.  [FAIRMONT POLICE RELIEF ASSOCIATION; ADDITIONAL 
 27.23  ANNUAL POSTRETIREMENT ADJUSTMENT.] 
 27.24     (a) If the requirement of paragraph (f) is met, every 
 27.25  recipient of a pension or benefit from the Fairmont police 
 27.26  relief association on June 30, annually, is entitled to receive 
 27.27  a postretirement adjustment as provided in this section in 
 27.28  addition to any pension or benefit increase payable by virtue of 
 27.29  an increase in the salary of active patrol officers in the city 
 27.30  of Fairmont on the following July 1. 
 27.31     (b) If the value of current assets of the relief 
 27.32  association is equal to at least 102 percent of the actuarial 
 27.33  accrued liability of the Fairmont police relief association as 
 27.34  of December 31 in the prior calendar year as calculated under 
 27.35  Minnesota Statutes, sections 356.215 and 356.216, one percent of 
 27.36  the value of current assets of the relief association is 
 28.1   available for the payment of the postretirement adjustment under 
 28.2   this section. 
 28.3      (c) The amount of the postretirement adjustment must be 
 28.4   calculated by the chief administrative officer of the relief 
 28.5   association.  The postretirement adjustment amount is payable 
 28.6   monthly.  The total amount of all service pensions, disability 
 28.7   pensions, and survivor benefits, without inclusion of any 
 28.8   postretirement adjustment paid previously under this section 
 28.9   must be calculated and the percentage amount of each recipient's 
 28.10  annual pension or benefit of the total amount, expressed as four 
 28.11  digits beyond the decimal point, must be determined.  The 
 28.12  monthly postretirement adjustment payable to each pension or 
 28.13  benefit recipient is 1/12 of the dollar amount determined by 
 28.14  applying each recipient's determined percentage of the total 
 28.15  amount of pensions and benefits to the total dollar amount 
 28.16  available for payment as a postretirement adjustment. 
 28.17     (d) The postretirement adjustment amount paid in any year 
 28.18  under this section does not compound and must not be added to 
 28.19  the pension base for the calculation of a subsequent 
 28.20  postretirement adjustment.  If a pension or benefit recipient 
 28.21  dies before the 12 monthly postretirement adjustments under this 
 28.22  section have been paid, the remaining monthly postretirement 
 28.23  adjustment payments cancel to the special fund of the relief 
 28.24  association.  Nothing in this section authorizes the payment of 
 28.25  the postretirement adjustment to an estate or to a person who 
 28.26  did not qualify for a postretirement adjustment in the person's 
 28.27  own right. 
 28.28     (e) The chief administrative officer of the relief 
 28.29  association will report the total amount of benefits paid under 
 28.30  this section to the executive director of the legislative 
 28.31  commission on pensions and retirement, the city clerk, and the 
 28.32  state auditor. 
 28.33     (f) Payment of the postretirement adjustment amount 
 28.34  provided under this section may be made in a given year only if 
 28.35  the average time-weighted total rate of return for the total 
 28.36  portfolio for the most recent five-year period exceeds by at 
 29.1   least two percent the actual average percent increase in the 
 29.2   current monthly salary of a first class patrol officer in the 
 29.3   most recent prior five fiscal years. 
 29.4      Sec. 4.  [FAIRMONT POLICE RELIEF ASSOCIATION; RETROACTIVITY 
 29.5   OF SURVIVING SPOUSE BENEFIT INCREASE.] 
 29.6      (a) The surviving spouse benefit amount under Laws 1963, 
 29.7   chapter 423, is payable to all surviving spouses receiving 
 29.8   benefits as of the date of the approval of this act. 
 29.9      (b) Any surviving spouse benefit increase under this 
 29.10  section is first payable on the first day of the month next 
 29.11  following the effective date of this section. 
 29.12     Sec. 5.  [FAIRMONT POLICE RELIEF ASSOCIATION; BYLAWS 
 29.13  AMENDMENTS REQUIRED.] 
 29.14     Sections 3 and 4 must be implemented by the appropriate 
 29.15  amendments to the bylaws of the Fairmont police relief 
 29.16  association. 
 29.17     Sec. 6.  [ST. CLOUD POLICE CONSOLIDATION ACCOUNT; SPECIAL 
 29.18  ONE-TIME POSTRETIREMENT ADJUSTMENT.] 
 29.19     (a) Notwithstanding any provision of general or special law 
 29.20  to the contrary, all service pensioners, disability pensioners, 
 29.21  and survivor benefit recipients of the St. Cloud police 
 29.22  consolidation account who had begun the receipt of pensions or 
 29.23  benefits before December 31, 1997, the effective date of the St. 
 29.24  Cloud police consolidation process under Minnesota Statutes, 
 29.25  chapter 353A, that began in April 1997, are entitled to receive 
 29.26  the pension or benefit increase granted under Laws 1997, chapter 
 29.27  233, article 1, section 72. 
 29.28     (b) The special one-time postretirement adjustment under 
 29.29  paragraph (a) is effective retroactive to January 1, 1998.  The 
 29.30  first payment of pensions and benefits next following the 
 29.31  effective date of this section must include any back payments of 
 29.32  the retroactive postretirement adjustment. 
 29.33     (c) Nothing in this section authorizes the payment of a 
 29.34  special postretirement adjustment to an estate. 
 29.35     Sec. 7. [EFFECTIVE DATE.] 
 29.36     (a) Sections 1 and 2 are effective on approval by the 
 30.1   Eveleth city council and compliance with Minnesota Statutes, 
 30.2   section 645.021. 
 30.3      (b) Sections 3, 4, and 5 are effective on the day following 
 30.4   approval by the Fairmont city council and compliance with 
 30.5   Minnesota Statutes, section 645.021. 
 30.6      (c) Section 6 is effective on the day following approval by 
 30.7   the St. Cloud city council and compliance with Minnesota 
 30.8   Statutes, section 645.021. 
 30.9                              ARTICLE 4
 30.10                      MERGER INTO PERA-P&F OF 
 30.11                       LOCAL POLICE AND FIRE 
 30.12                       CONSOLIDATION ACCOUNTS 
 30.13     Section 1.  Minnesota Statutes 1998, section 3.85, 
 30.14  subdivision 12, is amended to read: 
 30.15     Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
 30.16  commission shall assess each retirement plan specified in 
 30.17  subdivision 11, paragraph (b), the compensation paid to the 
 30.18  actuary retained by the commission for the actuarial valuation 
 30.19  calculations, quadrennial projection valuations, and quadrennial 
 30.20  experience studies.  The assessment is 100 percent of the amount 
 30.21  of contract compensation for the actuarial consulting firm 
 30.22  retained by the commission for actuarial valuation calculations, 
 30.23  including the public employees police and fire plan 
 30.24  consolidation accounts of the public employees retirement 
 30.25  association established before March 2, 1999, for which the 
 30.26  municipality declined merger under section 353.665, subdivision 
 30.27  1, or established after March 1, 1999, annual experience data 
 30.28  collection and processing, and quadrennial experience 
 30.29  studies and quadrennial projection valuations.  
 30.30     The portion of the total assessment payable by each 
 30.31  retirement system or pension plan must be determined as follows: 
 30.32     (1) Each pension plan specified in subdivision 11, 
 30.33  paragraph (b), clauses (1) to (13), must pay the following 
 30.34  indexed amount based on its total active, deferred, inactive, 
 30.35  and benefit recipient membership: 
 30.36         up to 2,000 members, inclusive         $2.55 per member 
 31.1          2,001 through 10,000 members           $1.13 per member 
 31.2          over 10,000 members                    $0.11 per member  
 31.3      The amount specified is applicable for the assessment of 
 31.4   the July 1, 1991, to June 30, 1992, fiscal year actuarial 
 31.5   compensation amounts.  For the July 1, 1992, to June 30, 1993, 
 31.6   fiscal year and subsequent fiscal year actuarial compensation 
 31.7   amounts, the amount specified must be increased at the same 
 31.8   percentage increase rate as the implicit price deflator for 
 31.9   state and local government purchases of goods and services for 
 31.10  the 12-month period ending with the first quarter of the 
 31.11  calendar year following the completion date for the actuarial 
 31.12  valuation calculations, as published by the federal Department 
 31.13  of Commerce, and rounded upward to the nearest full cent. 
 31.14     (2) The total per-member portion of the allocation must be 
 31.15  determined, and that total per-member amount must be subtracted 
 31.16  from the total amount for allocation.  Of the remainder dollar 
 31.17  amount, the following per-retirement system and per-pension plan 
 31.18  charges must be determined and the charges must be paid by the 
 31.19  system or plan: 
 31.20     (i) 37.87 percent is the total additional per-retirement 
 31.21  system charge, of which one-seventh must be paid by each 
 31.22  retirement system specified in subdivision 11, paragraph (b), 
 31.23  clauses (1), (2), (6), (7), (9), (10), and (11). 
 31.24     (ii) 62.13 percent is the total additional per-pension plan 
 31.25  charge, of which one-thirteenth must be paid by each pension 
 31.26  plan specified in subdivision 11, paragraph (b), clauses (1) to 
 31.27  (13).  
 31.28     (b) The assessment must be made following the completion of 
 31.29  the actuarial valuation calculations and the experience 
 31.30  analysis.  The amount of the assessment is appropriated from the 
 31.31  retirement fund applicable to the retirement plan.  Receipts 
 31.32  from assessments must be deposited in the state treasury and 
 31.33  credited to the general fund. 
 31.34     Sec. 2.  Minnesota Statutes 1998, section 69.021, 
 31.35  subdivision 10, is amended to read: 
 31.36     Subd. 10.  [REDUCTION IN POLICE STATE AID APPORTIONMENT.] 
 32.1   (a) The commissioner of revenue shall reduce the apportionment 
 32.2   of police state aid under subdivisions 5, paragraph (b), 6, and 
 32.3   7a, for eligible employer units by any excess police state aid. 
 32.4      (b) "Excess police state aid" is: 
 32.5      (1) for counties and for municipalities in which police 
 32.6   retirement coverage is provided wholly by the public employees 
 32.7   police and fire fund and all police officers are members of the 
 32.8   plan governed by sections 353.63 to 353.657, the amount in 
 32.9   excess of the employer's total prior calendar year obligation as 
 32.10  defined in paragraph (c), as certified by the executive director 
 32.11  of the public employees retirement association; 
 32.12     (2) for municipalities in which police retirement coverage 
 32.13  is provided in part by the public employees police and fire fund 
 32.14  governed by sections 353.63 to 353.657 and in part by a local 
 32.15  police consolidation account governed by chapter 353A, and 
 32.16  established before March 2, 1999, for which the municipality 
 32.17  declined merger under section 353.665, subdivision 1, or 
 32.18  established after March 1, 1999, the amount in excess of the 
 32.19  employer's total prior calendar year obligation as defined in 
 32.20  paragraph (c), plus the amount of the employer's total prior 
 32.21  calendar year obligation under section 353A.09, subdivision 5, 
 32.22  paragraphs (a) and (b), as certified by the executive director 
 32.23  of the public employees retirement association; 
 32.24     (3) for municipalities in which police retirement coverage 
 32.25  is provided by the public employees police and fire plan 
 32.26  governed by sections 353.63 to 353.657, in which police 
 32.27  retirement coverage was provided by a police consolidation 
 32.28  account under chapter 353A before July 1, 1999, and for which 
 32.29  the municipality has an additional municipal contribution under 
 32.30  section 353.665, subdivision 8, paragraph (b), the amount in 
 32.31  excess of the employer's total prior calendar year obligation as 
 32.32  defined in paragraph (c), plus the amount of any additional 
 32.33  municipal contribution under section 353.665, subdivision 8, 
 32.34  paragraph (b), until the year 2010, as certified by the 
 32.35  executive director of the public employees retirement 
 32.36  association; 
 33.1      (4) for municipalities in which police retirement coverage 
 33.2   is provided in part by the public employees police and fire fund 
 33.3   governed by sections 353.63 to 353.657 and in part by a local 
 33.4   police relief association governed by sections 69.77 and 
 33.5   423A.01, the amount in excess of the employer's total prior 
 33.6   calendar year obligation as defined in paragraph (c), as 
 33.7   certified by the executive director of the public employees 
 33.8   retirement association, plus the amount of the financial 
 33.9   requirements of the relief association certified to the 
 33.10  applicable municipality during the prior calendar year under 
 33.11  section 69.77, subdivisions 2b and 2c, reduced by the amount of 
 33.12  member contributions deducted from the covered salary of the 
 33.13  relief association during the prior calendar year under section 
 33.14  69.77, subdivision 2a, as certified by the chief administrative 
 33.15  officer of the applicable municipality; 
 33.16     (4) (5) for the metropolitan airports commission, if there 
 33.17  are police officers hired before July 1, 1978, with retirement 
 33.18  coverage by the Minneapolis employees retirement fund remaining, 
 33.19  the amount in excess of the commission's total prior calendar 
 33.20  year obligation as defined in paragraph (c), as certified by the 
 33.21  executive director of the public employees retirement 
 33.22  association, plus the amount determined by expressing the 
 33.23  commission's total prior calendar year contribution to the 
 33.24  Minneapolis employees retirement fund under section 422A.101, 
 33.25  subdivisions 2 and 2a, as a percentage of the commission's total 
 33.26  prior calendar year covered payroll for commission employees 
 33.27  covered by the Minneapolis employees retirement fund and 
 33.28  applying that percentage to the commission's total prior 
 33.29  calendar year covered payroll for commission police officers 
 33.30  covered by the Minneapolis employees retirement fund, as 
 33.31  certified by the chief administrative officer of the 
 33.32  metropolitan airports commission; and 
 33.33     (5) (6) for the department of natural resources and for the 
 33.34  department of public safety, the amount in excess of the 
 33.35  employer's total prior calendar year obligation under section 
 33.36  352B.02, subdivision 1c, for plan members who are peace officers 
 34.1   under section 69.011, subdivision 1, clause (g), as certified by 
 34.2   the executive director of the Minnesota state retirement system. 
 34.3      (c) The employer's total prior calendar year obligation 
 34.4   with respect to the public employees police and fire plan is the 
 34.5   total prior calendar year obligation under section 353.65, 
 34.6   subdivision 3, for police officers as defined in section 353.64, 
 34.7   subdivision 2, and the actual total prior calendar year 
 34.8   obligation under section 353.65, subdivision 3, for 
 34.9   firefighters, as defined in section 353.64, subdivision 3, but 
 34.10  not to exceed for those firefighters the applicable following 
 34.11  amounts: 
 34.12    Municipality                       Maximum Amount 
 34.13    Albert Lea                          $54,157.01
 34.14    Anoka                                10,399.31
 34.15    Apple Valley                          5,442.44 
 34.16    Austin                               49,864.73
 34.17    Bemidji                              27,671.38
 34.18    Brooklyn Center                       6,605.92
 34.19    Brooklyn Park                        24,002.26  
 34.20    Burnsville                           15,956.00 
 34.21    Cloquet                               4,260.49 
 34.22    Coon Rapids                          39,920.00 
 34.23    Cottage Grove                         8,588.48
 34.24    Crystal                               5,855.00
 34.25    East Grand Forks                     51,009.88
 34.26    Edina                                32,251.00
 34.27    Elk River                             5,216.55
 34.28    Ely                                  13,584.16
 34.29    Eveleth                              16,288.27
 34.30    Fergus Falls                          6,742.00
 34.31    Fridley                              33,420.64
 34.32    Golden Valley                        11,744.61 
 34.33    Hastings                             16,561.00 
 34.34    Hopkins                               4,324.23  
 34.35    International Falls                  14,400.69 
 34.36    Lakeville                               782.35 
 35.1     Lino Lakes                            5,324.00 
 35.2     Little Falls                          7,889.41 
 35.3     Maple Grove                           6,707.54 
 35.4     Maplewood                             8,476.69 
 35.5     Minnetonka                           10,403.00 
 35.6     Montevideo                            1,307.66 
 35.7     Moorhead                             68,069.26 
 35.8     New Hope                              6,739.72 
 35.9     North St. Paul                        4,241.14 
 35.10    Northfield                              770.63 
 35.11    Owatonna                             37,292.67 
 35.12    Plymouth                              6,754.71 
 35.13    Red Wing                              3,504.01 
 35.14    Richfield                            53,757.96 
 35.15    Rosemount                             1,712.55 
 35.16    Roseville                             9,854.51 
 35.17    St. Anthony                          33,055.00 
 35.18    St. Louis Park                       53,643.11 
 35.19    Thief River Falls                    28,365.04 
 35.20    Virginia                             31,164.46 
 35.21    Waseca                               11,135.17 
 35.22    West St. Paul                        15,707.20 
 35.23    White Bear Lake                       6,521.04 
 35.24    Woodbury                              3,613.00 
 35.25    any other municipality                    0.00 
 35.26     (d) The total amount of excess police state aid must be 
 35.27  deposited in the excess police state-aid account in the general 
 35.28  fund, administered and distributed as provided in subdivision 11.
 35.29     Sec. 3.  Minnesota Statutes 1998, section 69.031, 
 35.30  subdivision 5, is amended to read: 
 35.31     Subd. 5.  [DEPOSIT OF STATE AID.] (a) The municipal 
 35.32  treasurer shall, within 30 days after receipt, transmit the fire 
 35.33  state aid to the treasurer of the duly incorporated 
 35.34  firefighters' relief association if there is one organized and 
 35.35  the association has filed a financial report with the 
 35.36  municipality.  If the relief association has not filed a 
 36.1   financial report with the municipality, the municipal treasurer 
 36.2   shall delay transmission of the fire state aid to the relief 
 36.3   association until the complete financial report is filed.  If 
 36.4   there is no relief association organized, or if the association 
 36.5   has dissolved, or has been removed as trustees of state aid, 
 36.6   then the treasurer of the municipality shall deposit the money 
 36.7   in the municipal treasury as provided for in section 424A.08 and 
 36.8   the money may be disbursed only for the purposes and in the 
 36.9   manner set forth in that section. 
 36.10     (b) The municipal treasurer, upon receipt of the police 
 36.11  state aid, shall disburse the police state aid in the following 
 36.12  manner: 
 36.13     (1) For a municipality in which a local police relief 
 36.14  association exists and all peace officers are members of the 
 36.15  association, the total state aid must be transmitted to the 
 36.16  treasurer of the relief association within 30 days of the date 
 36.17  of receipt, and the treasurer of the relief association shall 
 36.18  immediately deposit the total state aid in the special fund of 
 36.19  the relief association; 
 36.20     (2) For a municipality in which police retirement coverage 
 36.21  is provided by the public employees police and fire fund and all 
 36.22  peace officers are members of the fund, including municipalities 
 36.23  covered by section 353.665, the total state aid must be applied 
 36.24  toward the municipality's employer contribution to the public 
 36.25  employees police and fire fund under section sections 353.65, 
 36.26  subdivision 3, and 353.665, subdivision 8, paragraph (b), if 
 36.27  applicable; or 
 36.28     (3) For a municipality other than a city of the first class 
 36.29  with a population of more than 300,000 in which both a police 
 36.30  relief association exists and police retirement coverage is 
 36.31  provided in part by the public employees police and fire fund, 
 36.32  the municipality may elect at its option to transmit the total 
 36.33  state aid to the treasurer of the relief association as provided 
 36.34  in clause (1), to use the total state aid to apply toward the 
 36.35  municipality's employer contribution to the public employees 
 36.36  police and fire fund subject to all the provisions set forth in 
 37.1   clause (2), or to allot the total state aid proportionately to 
 37.2   be transmitted to the police relief association as provided in 
 37.3   this subdivision and to apply toward the municipality's employer 
 37.4   contribution to the public employees police and fire fund 
 37.5   subject to the provisions of clause (2) on the basis of the 
 37.6   respective number of active full-time peace officers, as defined 
 37.7   in section 69.011, subdivision 1, clause (g). 
 37.8      For a city of the first class with a population of more 
 37.9   than 300,000, in addition, the city may elect to allot the 
 37.10  appropriate portion of the total police state aid to apply 
 37.11  toward the employer contribution of the city to the public 
 37.12  employees police and fire fund based on the covered salary of 
 37.13  police officers covered by the fund each payroll period and to 
 37.14  transmit the balance to the police relief association; or 
 37.15     (4) For a municipality in which police retirement coverage 
 37.16  is provided in part by the public employees police and fire fund 
 37.17  and in part by a local police consolidation account governed by 
 37.18  chapter 353A and established before March 2, 1999, for which the 
 37.19  municipality declined merger under section 353.665, subdivision 
 37.20  1, or established after March 1, 1999, the total police state 
 37.21  aid must be applied towards the municipality's total employer 
 37.22  contribution to the public employees police and fire fund and to 
 37.23  the local police consolidation account under sections 353.65, 
 37.24  subdivision 3, and 353A.09, subdivision 5. 
 37.25     (c) The county treasurer, upon receipt of the police state 
 37.26  aid for the county, shall apply the total state aid toward the 
 37.27  county's employer contribution to the public employees police 
 37.28  and fire fund under section 353.65, subdivision 3. 
 37.29     (d) The designated metropolitan airports commission 
 37.30  official, upon receipt of the police state aid for the 
 37.31  metropolitan airports commission, shall apply the total police 
 37.32  state aid first toward the commission's employer contribution 
 37.33  for police officers to the Minneapolis employees retirement fund 
 37.34  under section 422A.101, subdivision 2a, and, if there is any 
 37.35  amount of police state aid remaining, shall apply that remainder 
 37.36  toward the commission's employer contribution for police 
 38.1   officers to the public employees police and fire plan under 
 38.2   section 353.65, subdivision 3. 
 38.3      (e) The police state aid apportioned to the departments of 
 38.4   public safety and natural resources under section 69.021, 
 38.5   subdivision 7a, is appropriated to the commissioner of finance 
 38.6   for transfer to the funds and accounts from which the salaries 
 38.7   of peace officers certified under section 69.011, subdivision 
 38.8   2a, are paid.  The commissioner of revenue shall certify to the 
 38.9   commissioners of public safety, natural resources, and finance 
 38.10  the amounts to be transferred from the appropriation for police 
 38.11  state aid.  The commissioners of public safety and natural 
 38.12  resources shall certify to the commissioner of finance the 
 38.13  amounts to be credited to each of the funds and accounts from 
 38.14  which the peace officers employed by their respective 
 38.15  departments are paid.  Each commissioner must allocate the 
 38.16  police state aid first for employer contributions for employees 
 38.17  funded from the general fund and then for employer contributions 
 38.18  for employees funded from other funds.  For peace officers whose 
 38.19  salaries are paid from the general fund, the amounts transferred 
 38.20  from the appropriation for police state aid must be canceled to 
 38.21  the general fund. 
 38.22     Sec. 4.  Minnesota Statutes 1998, section 353.01, 
 38.23  subdivision 2b, is amended to read: 
 38.24     Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
 38.25  employees shall not participate as members of the association 
 38.26  with retirement coverage by the public employees retirement plan 
 38.27  or the public employees police and fire retirement plan: 
 38.28     (1) elected public officers, or persons appointed to fill a 
 38.29  vacancy in an elective office, who do not elect to participate 
 38.30  in the association by filing an application for membership; 
 38.31     (2) election officers; 
 38.32     (3) patient and inmate personnel who perform services in 
 38.33  charitable, penal, or correctional institutions of a 
 38.34  governmental subdivision; 
 38.35     (4) employees who are hired for a temporary position under 
 38.36  subdivision 12a, and employees who resign from a nontemporary 
 39.1   position and accept a temporary position within 30 days in the 
 39.2   same governmental subdivision, but not those employees who are 
 39.3   hired for an unlimited period but are serving a probationary 
 39.4   period.  If the period of employment extends beyond six 
 39.5   consecutive months and the employee earns more than $425 from 
 39.6   one governmental subdivision in any one calendar month, the 
 39.7   department head shall report the employee for membership and 
 39.8   require employee deductions be made on behalf of the employee 
 39.9   under section 353.27, subdivision 4. 
 39.10     Membership eligibility of an employee who resigns or is 
 39.11  dismissed from a temporary position and within 30 days accepts 
 39.12  another temporary position in the same governmental subdivision 
 39.13  is determined on the total length of employment rather than on 
 39.14  each separate position.  Membership eligibility of an employee 
 39.15  who holds concurrent temporary and nontemporary positions in one 
 39.16  governmental subdivision is determined by the length of 
 39.17  employment and salary of each separate position; 
 39.18     (5) employees whose actual salary from one governmental 
 39.19  subdivision does not exceed $425 per month, or whose annual 
 39.20  salary from one governmental subdivision does not exceed a 
 39.21  stipulation prepared in advance, in writing, that the salary 
 39.22  must not exceed $5,100 per calendar year or per school year for 
 39.23  school employees for employment expected to be of a full year's 
 39.24  duration or more than the prorated portion of $5,100 per 
 39.25  employment period for employment expected to be of less than a 
 39.26  full year's duration; 
 39.27     (6) employees who are employed by reason of work emergency 
 39.28  caused by fire, flood, storm, or similar disaster; 
 39.29     (7) employees who by virtue of their employment in one 
 39.30  governmental subdivision are required by law to be a member of 
 39.31  and to contribute to any of the plans or funds administered by 
 39.32  the Minnesota state retirement system, the teachers retirement 
 39.33  association, the Duluth teachers retirement fund association, 
 39.34  the Minneapolis teachers retirement association, the St. Paul 
 39.35  teachers retirement fund association, the Minneapolis employees 
 39.36  retirement fund, or any police or firefighters relief 
 40.1   association governed by section 69.77 that has not consolidated 
 40.2   with the public employees retirement association, or any local 
 40.3   police or firefighters relief association that has consolidated 
 40.4   with the public employees retirement association consolidation 
 40.5   account but whose members who have not elected the type of 
 40.6   benefit coverage provided by the public employees police and 
 40.7   fire fund under sections 353A.01 to 353A.10, or any persons 
 40.8   covered by section 353.665, subdivision 4, 5, or 6, who have not 
 40.9   elected public employees police and fire plan benefit coverage.  
 40.10  This clause must not be construed to prevent a person from being 
 40.11  a member of and contributing to the public employees retirement 
 40.12  association and also belonging to and contributing to another 
 40.13  public pension fund for other service occurring during the same 
 40.14  period of time.  A person who meets the definition of "public 
 40.15  employee" in subdivision 2 by virtue of other service occurring 
 40.16  during the same period of time becomes a member of the 
 40.17  association unless contributions are made to another public 
 40.18  retirement fund on the salary based on the other service or to 
 40.19  the teachers retirement association by a teacher as defined in 
 40.20  section 354.05, subdivision 2; 
 40.21     (8) persons who are excluded from coverage under the 
 40.22  federal Old Age, Survivors, Disability, and Health Insurance 
 40.23  Program for the performance of service as specified in United 
 40.24  States Code, title 42, section 410(a)(8)(A), as amended through 
 40.25  January 1, 1987, if no irrevocable election of coverage has been 
 40.26  made under section 3121(r) of the Internal Revenue Code of 1954, 
 40.27  as amended; 
 40.28     (9) full-time students who are enrolled and are regularly 
 40.29  attending classes at an accredited school, college, or 
 40.30  university and who are part-time employees as defined by a 
 40.31  governmental subdivision; 
 40.32     (10) resident physicians, medical interns, and pharmacist 
 40.33  residents and pharmacist interns who are serving in a degree or 
 40.34  residency program in public hospitals; 
 40.35     (11) students who are serving in an internship or residency 
 40.36  program sponsored by an accredited educational institution; 
 41.1      (12) persons who hold a part-time adult supplementary 
 41.2   technical college license who render part-time teaching service 
 41.3   in a technical college; 
 41.4      (13) foreign citizens working for a governmental 
 41.5   subdivision with a work permit of less than three years, or an 
 41.6   H-1b visa valid for less than three years of employment.  Upon 
 41.7   notice to the association that the work permit or visa extends 
 41.8   beyond the three-year period, the foreign citizens are eligible 
 41.9   for membership from the date of the extension; 
 41.10     (14) public hospital employees who elected not to 
 41.11  participate as members of the association before 1972 and who 
 41.12  did not elect to participate from July 1, 1988, to October 1, 
 41.13  1988; 
 41.14     (15) except as provided in section 353.86, volunteer 
 41.15  ambulance service personnel, as defined in subdivision 35, but 
 41.16  persons who serve as volunteer ambulance service personnel may 
 41.17  still qualify as public employees under subdivision 2 and may be 
 41.18  members of the public employees retirement association and 
 41.19  participants in the public employees retirement fund or the 
 41.20  public employees police and fire fund on the basis of 
 41.21  compensation received from public employment service other than 
 41.22  service as volunteer ambulance service personnel; 
 41.23     (16) except as provided in section 353.87, volunteer 
 41.24  firefighters, as defined in subdivision 36, engaging in 
 41.25  activities undertaken as part of volunteer firefighter duties; 
 41.26  provided that a person who is a volunteer firefighter may still 
 41.27  qualify as a public employee under subdivision 2 and may be a 
 41.28  member of the public employees retirement association and a 
 41.29  participant in the public employees retirement fund or the 
 41.30  public employees police and fire fund on the basis of 
 41.31  compensation received from public employment activities other 
 41.32  than those as a volunteer firefighter; and 
 41.33     (17) pipefitters and associated trades personnel employed 
 41.34  by independent school district No. 625, St. Paul, with coverage 
 41.35  by the pipefitters local 455 pension plan under a collective 
 41.36  bargaining agreement who were either first employed after May 1, 
 42.1   1997, or, if first employed before May 2, 1997, elected to be 
 42.2   excluded under Laws 1997, chapter 241, article 2, section 12. 
 42.3      Sec. 5.  Minnesota Statutes 1998, section 353.01, 
 42.4   subdivision 10, is amended to read: 
 42.5      Subd. 10.  [SALARY.] (a) "Salary" means:  
 42.6      (1) periodic compensation of a public employee, before 
 42.7   deductions for deferred compensation, supplemental retirement 
 42.8   plans, or other voluntary salary reduction programs, and also 
 42.9   means "wages" and includes net income from fees; and 
 42.10     (2) for a public employee who has prior service covered by 
 42.11  a local police or firefighters' relief association that has 
 42.12  consolidated with the public employees retirement association or 
 42.13  to which section 353.665 applies and who has elected 
 42.14  coverage either under the public employees police and fire fund 
 42.15  benefit plan under section 353A.08 following the 
 42.16  consolidation or under section 353.665, subdivision 4, "salary" 
 42.17  means the rate of salary upon which member contributions to the 
 42.18  special fund of the relief association were made prior to the 
 42.19  effective date of the consolidation as specified by law and by 
 42.20  bylaw provisions governing the relief association on the date of 
 42.21  the initiation of the consolidation procedure and the actual 
 42.22  periodic compensation of the public employee after the effective 
 42.23  date of consolidation. 
 42.24     (b) Salary does not mean: 
 42.25     (1) fees paid to district court reporters, unused annual or 
 42.26  sick leave payments, in lump-sum or periodic payments, severance 
 42.27  payments, reimbursement of expenses, lump-sum settlements not 
 42.28  attached to a specific earnings period, or workers' compensation 
 42.29  payments; 
 42.30     (2) employer-paid amounts used by an employee toward the 
 42.31  cost of insurance coverage, employer-paid fringe benefits, 
 42.32  flexible spending accounts, cafeteria plans, health care expense 
 42.33  accounts, day care expenses, or any payments in lieu of any 
 42.34  employer-paid group insurance coverage, including the difference 
 42.35  between single and family rates that may be paid to a member 
 42.36  with single coverage and certain amounts determined by the 
 43.1   executive director to be ineligible; 
 43.2      (3) the amount equal to that which the employing 
 43.3   governmental subdivision would otherwise pay toward single or 
 43.4   family insurance coverage for a covered employee when, through a 
 43.5   contract or agreement with some but not all employees, the 
 43.6   employer: 
 43.7      (i) discontinues, or for new hires does not provide, 
 43.8   payment toward the cost of the employee's selected insurance 
 43.9   coverages under a group plan offered by the employer; 
 43.10     (ii) makes the employee solely responsible for all 
 43.11  contributions toward the cost of the employee's selected 
 43.12  insurance coverages under a group plan offered by the employer, 
 43.13  including any amount the employer makes toward other employees' 
 43.14  selected insurance coverages under a group plan offered by the 
 43.15  employer; and 
 43.16     (iii) provides increased salary rates for employees who do 
 43.17  not have any employer-paid group insurance coverages; and 
 43.18     (4) except as provided in section 353.86 or 353.87, 
 43.19  compensation of any kind paid to volunteer ambulance service 
 43.20  personnel or volunteer firefighters, as defined in subdivisions 
 43.21  35 and 36.  
 43.22     Sec. 6.  Minnesota Statutes 1998, section 353.01, 
 43.23  subdivision 16, is amended to read: 
 43.24     Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
 43.25  means service during years of actual membership in the course of 
 43.26  which employee contributions were made, periods covered by 
 43.27  payments in lieu of salary deductions under section 353.35, and 
 43.28  service in years during which the public employee was not a 
 43.29  member but for which the member later elected, while a member, 
 43.30  to obtain credit by making payments to the fund as permitted by 
 43.31  any law then in effect. 
 43.32     (b) "Allowable service" also means a period of authorized 
 43.33  leave of absence with pay from which deductions for employee 
 43.34  contributions are made, deposited, and credited to the fund. 
 43.35     (c) "Allowable service" also means a period of authorized 
 43.36  leave of absence without pay that does not exceed one year, and 
 44.1   during or for which a member obtained credit by payments to the 
 44.2   fund made in place of salary deductions, provided that the 
 44.3   payments are made in an amount or amounts based on the member's 
 44.4   average salary on which deductions were paid for the last six 
 44.5   months of public service, or for that portion of the last six 
 44.6   months while the member was in public service, to apply to the 
 44.7   period in either case immediately preceding commencement of the 
 44.8   leave of absence.  If the employee elects to pay employee 
 44.9   contributions for the period of any leave of absence without 
 44.10  pay, or for any portion of the leave, the employee shall also, 
 44.11  as a condition to the exercise of the election, pay to the fund 
 44.12  an amount equivalent to both the required employer and 
 44.13  additional employer contributions for the employee.  The payment 
 44.14  must be made within one year from the expiration of the leave of 
 44.15  absence or within 20 days after termination of public service 
 44.16  under subdivision 11a.  The employer by appropriate action of 
 44.17  its governing body, made a part of its official records, before 
 44.18  the date of the first payment of the employee contribution, may 
 44.19  certify to the association in writing its commitment to pay the 
 44.20  employer and additional employer contributions from the proceeds 
 44.21  of a tax levy made under section 353.28.  Payments under this 
 44.22  paragraph must include interest at an annual rate of 8.5 percent 
 44.23  compounded annually from the date of the termination of the 
 44.24  leave of absence to the date payment is made.  An employee shall 
 44.25  return to public service and receive a minimum of three months 
 44.26  of allowable service to be eligible to pay employee and employer 
 44.27  contributions for a subsequent authorized leave of absence 
 44.28  without pay. 
 44.29     (d) "Allowable service" also means a periodic, repetitive 
 44.30  leave that is offered to all employees of a governmental 
 44.31  subdivision.  The leave program may not exceed 208 hours per 
 44.32  annual normal work cycle as certified to the association by the 
 44.33  employer.  A participating member obtains service credit by 
 44.34  making employee contributions in an amount or amounts based on 
 44.35  the member's average salary that would have been paid if the 
 44.36  leave had not been taken.  The employer shall pay the employer 
 45.1   and additional employer contributions on behalf of the 
 45.2   participating member.  The employee and the employer are 
 45.3   responsible to pay interest on their respective shares at the 
 45.4   rate of 8.5 percent a year, compounded annually, from the end of 
 45.5   the normal cycle until full payment is made.  An employer shall 
 45.6   also make the employer and additional employer contributions, 
 45.7   plus 8.5 percent interest, compounded annually, on behalf of an 
 45.8   employee who makes employee contributions but terminates public 
 45.9   service.  The employee contributions must be made within one 
 45.10  year after the end of the annual normal working cycle or within 
 45.11  20 days after termination of public service, whichever is 
 45.12  sooner.  The association shall prescribe the manner and forms to 
 45.13  be used by a governmental subdivision in administering a 
 45.14  periodic, repetitive leave. 
 45.15     (e) "Allowable service" also means a period during which a 
 45.16  member is on an authorized sick leave of absence, without pay, 
 45.17  limited to one year.  An employee who has received one year of 
 45.18  allowable service shall return to public service and receive a 
 45.19  minimum of three months of allowable service to receive 
 45.20  allowable service for a subsequent authorized sick leave of 
 45.21  absence. 
 45.22     (f) "Allowable service" also means an authorized temporary 
 45.23  layoff under subdivision 12, limited to three months allowable 
 45.24  service per authorized temporary layoff in one calendar year.  
 45.25  An employee who has received the maximum service allowed for an 
 45.26  authorized temporary layoff shall return to public service and 
 45.27  receive a minimum of three months of allowable service to 
 45.28  receive allowable service for a subsequent authorized temporary 
 45.29  layoff. 
 45.30     (g) Notwithstanding any law to the contrary, "allowable 
 45.31  service" also means a parental leave.  The association shall 
 45.32  grant a maximum of two months service credit for a parental 
 45.33  leave, within six months after the birth or adoption, upon 
 45.34  documentation from the member's governmental subdivision or 
 45.35  presentation of a birth certificate or other evidence of birth 
 45.36  or adoption to the association. 
 46.1      (h) "Allowable service" also means a period during which a 
 46.2   member is on an authorized leave of absence to enter military 
 46.3   service, provided that the member returns to public service upon 
 46.4   discharge from military service under section 192.262 and pays 
 46.5   into the fund employee contributions based upon the employee's 
 46.6   salary at the date of return from military service.  Payment 
 46.7   must be made within five years of the date of discharge from the 
 46.8   military service.  The amount of these contributions must be in 
 46.9   accord with the contribution rates and salary limitations, if 
 46.10  any, in effect during the leave, plus interest at an annual rate 
 46.11  of 8.5 percent compounded annually from the date of return to 
 46.12  public service to the date payment is made.  The matching 
 46.13  employer contribution and additional employer contribution under 
 46.14  section 353.27, subdivisions 3 and 3a, must be paid by the 
 46.15  governmental subdivision employing the member upon return to 
 46.16  public service if the member makes the employee contributions.  
 46.17  The governmental subdivision involved may appropriate money for 
 46.18  those payments.  A member may not receive credit for a voluntary 
 46.19  extension of military service at the instance of the member 
 46.20  beyond the initial period of enlistment, induction, or call to 
 46.21  active duty. 
 46.22     (i) For calculating benefits under sections 353.30, 353.31, 
 46.23  353.32, and 353.33 for state officers and employees displaced by 
 46.24  the Community Corrections Act, chapter 401, and transferred into 
 46.25  county service under section 401.04, "allowable service" means 
 46.26  combined years of allowable service as defined in paragraphs (a) 
 46.27  to (i) and section 352.01, subdivision 11.  
 46.28     (j) For a public employee who has prior service covered by 
 46.29  a local police or firefighters relief association that has 
 46.30  consolidated with the public employees retirement association or 
 46.31  to which section 353.665 applies, and who has elected the type 
 46.32  of benefit coverage provided by the public employees police and 
 46.33  fire fund either under section 353A.08 following the 
 46.34  consolidation or under section 353.665, subdivision 4, 
 46.35  "applicable service" is a period of service credited by the 
 46.36  local police or firefighters relief association as of the 
 47.1   effective date of the consolidation based on law and on bylaw 
 47.2   provisions governing the relief association on the date of the 
 47.3   initiation of the consolidation procedure. 
 47.4      Sec. 7.  Minnesota Statutes 1998, section 353.64, 
 47.5   subdivision 1, is amended to read: 
 47.6      Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
 47.7   person who prior to July 1, 1961, was a member of the police and 
 47.8   fire fund, by virtue of being a police officer or firefighter, 
 47.9   shall, as long as the person remains in either position, 
 47.10  continue membership in the fund.  
 47.11     (b) A person who was employed by a governmental subdivision 
 47.12  as a police officer and was a member of the police and fire fund 
 47.13  on July 1, 1978, by virtue of being a police officer as defined 
 47.14  by this section on that date, and if employed by the same 
 47.15  governmental subdivision in a position in the same department in 
 47.16  which the person was employed on that date, shall continue 
 47.17  membership in the fund whether or not that person has the power 
 47.18  of arrest by warrant after that date. 
 47.19     (c) A person who was employed by a governmental subdivision 
 47.20  as a police officer or a firefighter, whichever applies, was an 
 47.21  active member of the local police or salaried firefighters 
 47.22  relief association located in that governmental subdivision by 
 47.23  virtue of that employment as of the effective date of the 
 47.24  consolidation as authorized by sections 353A.01 to 353A.10, and 
 47.25  has elected coverage by the public employees police and fire 
 47.26  fund benefit plan, shall become a member of the police and fire 
 47.27  fund after that date if employed by the same governmental 
 47.28  subdivision in a position in the same department in which the 
 47.29  person was employed on that date. 
 47.30     (d) Any other employee serving on a full-time basis as a 
 47.31  police officer or firefighter on or after July 1, 1961, shall 
 47.32  become a member of the public employees police and fire fund.  
 47.33     (e) An employee serving on less than a full-time basis as a 
 47.34  police officer shall become a member of the public employees 
 47.35  police and fire fund only after a resolution stating that the 
 47.36  employee should be covered by the police and fire fund is 
 48.1   adopted by the governing body of the governmental subdivision 
 48.2   employing the person declaring that the position which the 
 48.3   person holds is that of a police officer. 
 48.4      (f) An employee serving on less than a full-time basis as a 
 48.5   firefighter shall become a member of the public employees police 
 48.6   and fire fund only after a resolution stating that the employee 
 48.7   should be covered by the police and fire fund is adopted by the 
 48.8   governing body of the governmental subdivision employing the 
 48.9   person declaring that the position which the person holds is 
 48.10  that of a firefighter. 
 48.11     (g) A police officer or firefighter employed by a 
 48.12  governmental subdivision who by virtue of that employment is 
 48.13  required by law to be a member of and to contribute to any 
 48.14  police or firefighter relief association governed by section 
 48.15  69.77 which has not consolidated with the public employees 
 48.16  police and fire fund and, any police officer or firefighter of a 
 48.17  relief association that has consolidated with the association 
 48.18  for which the employee has not elected coverage by the public 
 48.19  employees police and fire fund benefit plan as provided in 
 48.20  sections 353A.01 to 353A.10, or any police officer or 
 48.21  firefighter to whom section 353.665 applies who has not elected 
 48.22  coverage by the public employees police and fire fund benefit 
 48.23  plan as provided in section 353.665, subdivision 4, shall not 
 48.24  become a member of the public employees police and fire fund. 
 48.25     Sec. 8.  Minnesota Statutes 1998, section 353.65, 
 48.26  subdivision 2, is amended to read: 
 48.27     Subd. 2.  [EMPLOYEE CONTRIBUTION RATE.] The employee 
 48.28  contribution is an amount equal to 7.6 6.2 percent of the total 
 48.29  salary of the member.  This contribution must be made by 
 48.30  deduction from salary in the manner provided in subdivision 4.  
 48.31  Where any portion of a member's salary is paid from other than 
 48.32  public funds, the member's employee contribution is based on the 
 48.33  total salary received from all sources.  
 48.34     Sec. 9.  Minnesota Statutes 1998, section 353.65, 
 48.35  subdivision 3, is amended to read: 
 48.36     Subd. 3.  [EMPLOYER CONTRIBUTION RATE.] The employer 
 49.1   contribution shall be an amount equal to 11.4 9.3 percent of the 
 49.2   total salary of every member.  This contribution shall be made 
 49.3   from funds available to the employing subdivision by the means 
 49.4   and in the manner provided in section 353.28. 
 49.5      Sec. 10.  [353.665] [MERGER OF CERTAIN CONSOLIDATION 
 49.6   ACCOUNTS INTO PERA-P&F.] 
 49.7      Subdivision 1.  [MERGER AUTHORIZED.] (a) Notwithstanding 
 49.8   any provision of law to the contrary, unless the applicable 
 49.9   municipality elects otherwise under paragraph (b), every local 
 49.10  police and fire consolidation account under chapter 353A in 
 49.11  existence on March 1, 1999, becomes a part of the public 
 49.12  employees police and fire plan and fund governed by sections 
 49.13  353.63 to 353.659 on July 1, 1999. 
 49.14     (b) If a municipality desires to retain its consolidation 
 49.15  account or consolidation accounts, whichever applies, the 
 49.16  governing body of the municipality must adopt a resolution to 
 49.17  that effect and must file a copy of the resolution with the 
 49.18  secretary of state, the state auditor, the legislative auditor, 
 49.19  the finance commissioner, the revenue commissioner, the 
 49.20  executive director of the public employees retirement 
 49.21  association, and the executive director of the legislative 
 49.22  commission on pensions and retirement.  The retention election 
 49.23  must apply to both consolidation accounts if the municipality is 
 49.24  associated with more than one consolidation account.  The 
 49.25  retention resolution must be adopted and filed with all 
 49.26  recipients before June 15, 1999. 
 49.27     Subd. 2.  [TRANSFER OF LIABILITIES.] Unless the 
 49.28  municipality has elected to retain the consolidation account 
 49.29  under subdivision 1, paragraph (b), all current and future 
 49.30  liabilities of a former local police or fire consolidation 
 49.31  account are the liabilities of the public employees police and 
 49.32  fire fund as of July 1, 1999, and the accrued benefits of the 
 49.33  members are the obligation of the public employees police and 
 49.34  fire fund. 
 49.35     Subd. 3.  [TRANSFER OF ASSETS.] Unless the municipality has 
 49.36  elected to retain the consolidation account under subdivision 1, 
 50.1   paragraph (b), the assets of the former local police or fire 
 50.2   consolidation account must be transferred and upon transfer, the 
 50.3   actuarial value of the assets of a former local police or fire 
 50.4   consolidation account less an amount equal to the residual 
 50.5   assets as determined under subdivision 7, paragraph (f), are the 
 50.6   assets of the public employees police and fire fund as of July 
 50.7   1, 1999.  The participation of a consolidation account in the 
 50.8   Minnesota postretirement investment fund becomes part of the 
 50.9   participation of the public employees police and fire fund in 
 50.10  the Minnesota postretirement investment fund.  The remaining 
 50.11  assets, excluding the amounts for distribution under subdivision 
 50.12  7, paragraph (f), become an asset of the public employees police 
 50.13  and fire fund.  The public employees police and fire fund also 
 50.14  must be credited as an asset with the amount of receivable 
 50.15  assets under subdivision 7, paragraph (e). 
 50.16     Subd. 4.  [BENEFIT COVERAGE FOR ACTIVE MEMBERS.] (a) A 
 50.17  person who is a police officer or a firefighter who, as such, is 
 50.18  an active member of a merging local police or fire consolidation 
 50.19  account on June 30, 1999, and who has not previously elected 
 50.20  benefit coverage under the relevant provisions of the public 
 50.21  employees police and fire fund benefit plan under section 
 50.22  353A.08, subdivision 3, may elect benefit coverage under the 
 50.23  relevant provisions of the public employees police and fire fund 
 50.24  benefit plan.  This election must be made in writing on a form 
 50.25  prescribed by the executive director before September 1, 1999, 
 50.26  and is irrevocable. 
 50.27     (b) If an eligible person makes no affirmative election of 
 50.28  benefit coverage before September 1, 1999, the person retains 
 50.29  the benefit coverage provided by the relief association benefit 
 50.30  plan as reflected in the applicable provisions of chapter 353B 
 50.31  and may elect benefit coverage under the relevant provisions of 
 50.32  the public employees police and fire fund benefit plan when the 
 50.33  person terminates active employment for purposes of receiving a 
 50.34  service pension, disability benefit, or within 90 days of the 
 50.35  date the member terminates active employment and defers receipt 
 50.36  of a service pension, whichever applies.  
 51.1      (c) Notwithstanding any provision of section 353A.083 and 
 51.2   any municipal action under authority of that statute to the 
 51.3   contrary, the provisions of the public employees police and fire 
 51.4   fund benefit plan applicable to active members of the merging 
 51.5   local police or fire consolidation accounts who elect the public 
 51.6   employees police and fire fund benefit plan under section 
 51.7   353A.08, subdivision 3, or paragraph (a), are the applicable 
 51.8   provisions of sections 353.63 to 353.659. 
 51.9      Subd. 5.  [BENEFIT COVERAGE FOR RETIREES AND BENEFIT 
 51.10  RECIPIENTS.] (a) A person who received a service pension, a 
 51.11  disability pension or benefit, or a survivor benefit from a 
 51.12  merging local police or fire consolidation account for the month 
 51.13  of June 1999, and who has not previously elected participation 
 51.14  in the Minnesota postretirement investment fund for any future 
 51.15  postretirement adjustments rather than the postretirement 
 51.16  adjustment mechanism or mechanisms of the relief association 
 51.17  benefit plan under section 353A.08, subdivision 1, may elect 
 51.18  participation in the Minnesota postretirement investment fund 
 51.19  for any future postretirement adjustments or retention of the 
 51.20  postretirement adjustment mechanism or mechanisms of the relief 
 51.21  association benefit plan as reflected in the applicable 
 51.22  provisions of chapter 353B.  This election must be in writing on 
 51.23  a form prescribed by the executive director and must be made 
 51.24  before September 1, 1999. 
 51.25     (b) If an eligible person is a minor, the election must be 
 51.26  made by the person's parent or legal guardian.  If the eligible 
 51.27  person makes no affirmative election under this subdivision, the 
 51.28  person retains the postretirement adjustment mechanism or 
 51.29  mechanisms of the relief association benefit plan as reflected 
 51.30  in the applicable provisions of chapter 353B. 
 51.31     (c) The survivor benefit payable on behalf of any service 
 51.32  pension or disability benefit recipient who elects participation 
 51.33  in the Minnesota postretirement investment fund must be 
 51.34  calculated under the relief association benefit plan in effect 
 51.35  on the effective date of consolidation under chapter 353A as 
 51.36  reflected in the applicable provisions of chapter 353B. 
 52.1      Subd. 6.  [BENEFIT COVERAGE FOR DEFERRED MEMBERS.] A person 
 52.2   who terminated before July 1, 1999, active employment as a 
 52.3   police officer or a firefighter that gave rise to membership in 
 52.4   a local relief association that has consolidated with the public 
 52.5   employees police and fire plan under chapter 353A and is merging 
 52.6   under this section and who had sufficient service credit to 
 52.7   entitle the person to an eventual service pension retains the 
 52.8   benefit plan as reflected in the applicable provisions of 
 52.9   chapter 353B, except that the deferred member may elect before 
 52.10  September 1, 1999, to participate, upon retirement, in the 
 52.11  Minnesota postretirement investment fund.  Any election to 
 52.12  participate in the Minnesota postretirement investment fund is 
 52.13  applicable to any survivor benefit attributable to a deferred 
 52.14  member covered by this subdivision. 
 52.15     Subd. 7.  [CALCULATION OF FINAL FUNDED STATUS.] (a) As of 
 52.16  June 30, 1999, the actuary retained by the legislative 
 52.17  commission on pensions and retirement shall determine the final 
 52.18  funded status of local police and fire consolidation accounts 
 52.19  under chapter 353A that the applicable municipality has not 
 52.20  elected to retain under subdivision 1, paragraph (b), as 
 52.21  provided in this subdivision. 
 52.22     (b) The final funded status calculation must be made using 
 52.23  the benefit plan provisions applicable to the consolidation 
 52.24  account and the actuarial assumptions used for the June 30, 
 52.25  1998, actuarial valuation of the account. 
 52.26     (c) The actuary must calculate the total actuarial accrued 
 52.27  liability of the consolidation account, which is the sum of the 
 52.28  actuarial accrued liability for all consolidation account 
 52.29  members who are not included in the participation of the account 
 52.30  in the Minnesota postretirement investment fund calculated using 
 52.31  the entry age normal actuarial cost method.  If local 
 52.32  legislation enacted during the 1999 regular session or any 
 52.33  special session occurring before October 1, 1999, provides a 
 52.34  benefit increase for one consolidation account member or more, 
 52.35  whether the applicable municipality has given final approval to 
 52.36  the local legislation yet or not, the total actuarial accrued 
 53.1   liability calculation must include that benefit increase.  The 
 53.2   actuary also must calculate any account unfunded accrued 
 53.3   liability or any account funding surplus.  An account unfunded 
 53.4   accrued liability is the actuarial accrued liability reduced by 
 53.5   the amount of the current value of assets, if the resulting 
 53.6   number is positive.  An account funding surplus is the actuarial 
 53.7   accrued liability reduced by the amount of the current value of 
 53.8   assets, if the resulting number is negative.  If a municipality 
 53.9   is associated with two consolidation accounts and one has an 
 53.10  account funding surplus and one has an account unfunded accrued 
 53.11  liability in the preliminary calculation under this paragraph, 
 53.12  the actuary must make a second calculation for the account with 
 53.13  a preliminary account unfunded accrued liability, after 
 53.14  crediting to that account an amount up to 75 percent of the 
 53.15  one-half of the market value of the assets of the account with 
 53.16  an account funding surplus that are in excess of 100 percent of 
 53.17  the account actuarial accrued liability and that are less than 
 53.18  that percentage of the total actuarial accrued liability that 
 53.19  equals the public employees police and fire fund funded ratio as 
 53.20  of June 30, 1999, but not to exceed the account's unfunded 
 53.21  actuarial accrued liability. 
 53.22     (d) The actuary also must calculate the amortizable base 
 53.23  for every consolidation account.  The amortizable base is the 
 53.24  present value of future benefits for all account members who are 
 53.25  not included in the participation of the account in the 
 53.26  Minnesota postretirement investment fund reduced by the present 
 53.27  value of 19 percent of future covered salary and further reduced 
 53.28  by the current value of account assets other than its 
 53.29  participation in the Minnesota postretirement investment fund, 
 53.30  after adjustment for fiscal year 1999 net mortality gains and 
 53.31  losses and for the net actuarial affect of the election of 
 53.32  postretirement adjustment coverage under subdivision 5. 
 53.33     (e) If the amortizable base under paragraph (d) is a 
 53.34  positive number, the receivable assets are an amount equal to 
 53.35  the amortizable base number. 
 53.36     (f) If the amortizable base under paragraph (d) is a 
 54.1   negative number, the actuary must calculate the residual asset 
 54.2   amount.  The residual asset amount is: 
 54.3      (1) one-half of the amount by which the current assets of 
 54.4   the account exceed 100 percent of the total actuarial accrued 
 54.5   liability up to that percentage of the total actuarial accrued 
 54.6   liability that equals the public employees police and fire fund 
 54.7   funded ratio on June 30, 1999; and 
 54.8      (2) the amount by which the current assets of the account 
 54.9   exceed that percentage of the total actuarial accrued liability 
 54.10  that equals the public employees police and fire fund funded 
 54.11  ratio on June 30, 1999.  Following the calculation of the 
 54.12  residual asset amount for each applicable municipality and the 
 54.13  verification of the amount by the legislative auditor, the 
 54.14  executive director of the public employees retirement 
 54.15  association shall pay the applicable residual asset amount with 
 54.16  interest equal to the average yield on the invested treasurer's 
 54.17  cash fund from July 1, 1999, to the first of the month in which 
 54.18  the payment is issued to each qualifying municipality.  The 
 54.19  residual asset amount must be used by the municipality to defray 
 54.20  fire department expenditure items if the residual asset amount 
 54.21  was derived from a fire consolidation account or to defray 
 54.22  police department expenditure items if the residual asset amount 
 54.23  was derived from a police consolidation account.  Before the 
 54.24  residual asset amount payment is made by the public employees 
 54.25  retirement association, the governing body of the applicable 
 54.26  municipality, following a public hearing on the issue, must 
 54.27  formulate and adopt a plan for the expenditure of the residual 
 54.28  amount and must file that plan in the form of a municipal 
 54.29  resolution with the state auditor.  The residual asset amount 
 54.30  must be deposited in a special fund or account in the municipal 
 54.31  treasury established for that purpose.  The special fund or 
 54.32  account must be invested and any investment return attributable 
 54.33  to the residual asset amount must be credited to that special 
 54.34  fund or account and its disbursement similarly restricted.  The 
 54.35  special fund or account must be audited periodically by the 
 54.36  state auditor. 
 55.1      Subd. 8.  [MEMBER AND EMPLOYER CONTRIBUTIONS.] (a) 
 55.2   Effective on the first day of the first full pay period 
 55.3   following June 30, 1999, the employee contribution rate for 
 55.4   merging former consolidation account active members is the rate 
 55.5   specified in section 353.65, subdivision 2, and the regular 
 55.6   municipal contribution rate on behalf of former consolidation 
 55.7   account active members is the rate specified in section 353.65, 
 55.8   subdivision 3. 
 55.9      (b) The municipality associated with a merging former local 
 55.10  consolidation account that had a positive value amortizable base 
 55.11  calculation under subdivision 7, paragraph (d), after the 
 55.12  preliminary calculation or the second calculation, whichever 
 55.13  applies, must make an additional municipal contribution to the 
 55.14  public employees police and fire plan for the period from 
 55.15  January 1, 2000, to December 31, 2009.  The amount of the 
 55.16  additional municipal contribution is the amount calculated by 
 55.17  the actuary retained by the legislative commission on pensions 
 55.18  and retirement and certified by the executive director of the 
 55.19  public employees retirement association by which the amortizable 
 55.20  base amount would be amortized on a level dollar annual 
 55.21  end-of-the-year contribution basis, using an 8.5 percent 
 55.22  interest rate assumption.  The additional municipal contribution 
 55.23  is payable during the month of January, is without any interest, 
 55.24  or if made after January 31, but before the next following 
 55.25  December 31, is payable with interest for the period since 
 55.26  January 1 at a rate which is equal to the preretirement interest 
 55.27  rate assumption specified in section 356.215, subdivision 4d, 
 55.28  applicable to the public employees police and fire fund 
 55.29  expressed as a monthly rate and compounded on a monthly basis or 
 55.30  if made after December 31 of the year in which the additional 
 55.31  municipal contribution is due is payable with interest at a rate 
 55.32  which is four percent greater than the highest interest rate 
 55.33  assumption specified in section 356.215, subdivision 4d, 
 55.34  expressed as a monthly rate and compounded monthly from January 
 55.35  1 of the year in which the additional municipal contribution is 
 55.36  due until the date on which payment is made. 
 56.1      Subd. 9.  [BENEFIT PLAN COVERAGE.] Unless modified by an 
 56.2   election authorized under subdivision 4, 5, or 6, the benefit 
 56.3   plan election by any person or on behalf of any person under 
 56.4   section 353A.08 remains binding.  Merging former consolidation 
 56.5   account members who elected the entirety of the public employees 
 56.6   police and fire benefit plan are entitled to an applicable 
 56.7   annuity or benefit under the provisions of sections 353.63 to 
 56.8   353.68 in effect on the day that the merging former 
 56.9   consolidation account member terminated active service as a 
 56.10  police officer or firefighter, whichever applies.  
 56.11     Subd. 10.  [CONSOLIDATION ACCOUNT TERMINATION.] Unless the 
 56.12  municipality has elected to retain the consolidation account 
 56.13  under subdivision 1, paragraph (b), upon the payment of all 
 56.14  residual asset amounts under subdivision 7 and the transfer of 
 56.15  all liabilities and remaining assets under subdivisions 2 and 3, 
 56.16  the local consolidation accounts under chapter 353A in existence 
 56.17  on March 1, 1999, are terminated, and all benefits accrued up to 
 56.18  the date of termination are the obligation of the public 
 56.19  employees police and fire fund. 
 56.20     Sec. 11.  Minnesota Statutes 1998, section 353A.09, 
 56.21  subdivision 4, is amended to read: 
 56.22     Subd. 4.  [MEMBER CONTRIBUTIONS.] Following the effective 
 56.23  date of consolidation, the applicable member contribution rate 
 56.24  and applicable salary rate to which the member contribution rate 
 56.25  applies for persons who were formerly members of the relief 
 56.26  association shall be determined as follows:  
 56.27     (1) if the person has elected coverage by the public 
 56.28  employees police and fire fund benefit plan under section 
 56.29  353A.08, the applicable member contribution rate shall be that 
 56.30  rate specified in Minnesota Statutes 1998, section 353.65, 
 56.31  subdivision 2, and the applicable salary rate to which the 
 56.32  member contribution rate applies shall be the actual salary of 
 56.33  the person, as defined in section 353.01, subdivision 10; and 
 56.34     (2) if the person has not elected coverage by the public 
 56.35  employees police and fire fund benefit plan under section 
 56.36  353A.08, the applicable member contribution rate shall be the 
 57.1   rate specified in section 69.77, subdivision 2a, or the rate 
 57.2   specified in the applicable general law, special law, or bylaw 
 57.3   provision governing the relief association as of the date of the 
 57.4   initiation of consolidation, whichever is greater, and the 
 57.5   applicable salary rate to which the member contribution rate 
 57.6   applies shall be the salary rate specified in the applicable 
 57.7   general law, special law, or bylaw provision governing the 
 57.8   relief association as of the date of the initiation of 
 57.9   consolidation or the actual salary of the person, including 
 57.10  overtime pay and any regularly occurring special payments but 
 57.11  excluding lump sum annual leave payments, worker's compensation 
 57.12  payments, and severance payments, whichever salary rate is 
 57.13  greater.  
 57.14     The member contribution rate and applicable salary rate to 
 57.15  which the member contribution rate applies shall be effective as 
 57.16  of the first day of the first pay period occurring after the 
 57.17  effective date of consolidation.  
 57.18     The chief administrative officer of the municipal police 
 57.19  department or municipal fire department, whichever applies, 
 57.20  shall cause the member contributions required under this 
 57.21  subdivision to be deducted in the manner and subject to the 
 57.22  terms provided in section 353.27, subdivision 4.  
 57.23     Sec. 12.  Minnesota Statutes 1998, section 353A.09, 
 57.24  subdivision 5, is amended to read: 
 57.25     Subd. 5.  [REGULAR AND ADDITIONAL MUNICIPAL CONTRIBUTIONS.] 
 57.26  (a) Following the effective date of consolidation, the 
 57.27  applicable regular municipal contribution rate and applicable 
 57.28  salary rate to which the regular municipal contribution rate 
 57.29  applies on behalf of persons who were formerly members of the 
 57.30  relief association shall be as follows:  
 57.31     (1) on behalf of persons who have elected coverage by the 
 57.32  public employees police and fire fund benefit plan under section 
 57.33  353A.08, the applicable regular municipal contribution rate 
 57.34  shall be that specified in Minnesota Statutes 1998, section 
 57.35  353.65, subdivision 3, and the applicable salary rate to which 
 57.36  the regular municipal contribution rate applies shall be that 
 58.1   specified in subdivision 4, clause (1); and 
 58.2      (2) on behalf of persons who have not elected coverage by 
 58.3   the public employees police and fire fund benefit plan under 
 58.4   section 353A.08, the applicable regular municipal contribution 
 58.5   rate shall be 12 percent and the applicable salary rate to which 
 58.6   the regular municipal contribution rate applies shall be that 
 58.7   specified in subdivision 4, clause (2).  
 58.8      (b) Following the effective date of consolidation, the 
 58.9   applicable additional municipal contribution amount shall be the 
 58.10  sum of the following:  
 58.11     (1) the annual level dollar contribution as calculated by 
 58.12  the actuary retained by the commission as of the effective date 
 58.13  of consolidation which is required to amortize by December 31, 
 58.14  2010, that portion of the present value of future benefits 
 58.15  computed on the basis of the benefit plan producing the largest 
 58.16  present value of future benefits for each individual which 
 58.17  remains after subtracting the present value of future member 
 58.18  contributions as provided in subdivision 4, the present value of 
 58.19  future regular municipal contributions as provided in clause 
 58.20  (a), and the market value of the assets of the relief 
 58.21  association transferred to the fund; and 
 58.22     (2) the amount of the annual contribution as calculated by 
 58.23  the actuary retained by the commission as of the most recent 
 58.24  actuarial valuation date which is required to amortize on a 
 58.25  level annual dollar basis the amount of any net actuarial 
 58.26  experience loss incurred during the year which ended as of the 
 58.27  day immediately before the most recent actuarial valuation date 
 58.28  by December 31 of the year occurring 15 years later. 
 58.29     (c) Regular municipal contributions shall be made in the 
 58.30  manner provided in section 353.28.  Additional municipal 
 58.31  contributions shall be paid during the calendar year following 
 58.32  the annual certification of the amount of the annual additional 
 58.33  municipal contribution by the executive director of the public 
 58.34  employees retirement association and, if made during the month 
 58.35  of January, shall be payable without any interest, or if made 
 58.36  after January 31, but before the next following December 31, 
 59.1   shall be payable with interest for the period since January 1 at 
 59.2   a rate which is equal to the preretirement interest rate 
 59.3   assumption specified in section 356.215, subdivision 4d, 
 59.4   applicable to the fund expressed as a monthly rate and 
 59.5   compounded on a monthly basis or if made after December 31 of 
 59.6   the year in which the additional municipal contribution is due 
 59.7   shall be payable with interest at a rate which is four percent 
 59.8   greater than the highest interest rate assumption specified in 
 59.9   section 356.215, subdivision 4d, expressed as a monthly rate and 
 59.10  compounded monthly from January 1 of the year in which the 
 59.11  additional municipal contribution is due until the date on which 
 59.12  payment is made.  
 59.13     Sec. 13.  Minnesota Statutes 1998, section 353A.09, is 
 59.14  amended by adding a subdivision to read: 
 59.15     Subd. 5a.  [AUTHORITY TO MODIFY CONTRIBUTION RATES.] (a) 
 59.16  Notwithstanding subdivisions 4 and 5, a municipality associated 
 59.17  with a consolidation account, with municipal governing body 
 59.18  approval, may implement the contribution rates specified in 
 59.19  section 353.65, subdivisions 2 and 3, rather than the rates 
 59.20  specified in subdivisions 4 and 5. 
 59.21     (b) If the contribution rates specified in section 353.65, 
 59.22  subdivisions 2 and 3, are subsequently modified, the applicable 
 59.23  municipal governing body must approve that subsequent 
 59.24  modification. 
 59.25     (c) The municipal governing body approval must be in the 
 59.26  form of a municipal resolution.  The municipal resolution must 
 59.27  specify the effective date for the contribution rate 
 59.28  modification.  The municipal resolution must be filed with the 
 59.29  executive director of the public employees retirement 
 59.30  association, the state auditor, the secretary of state, and the 
 59.31  executive director of the legislative commission on pensions and 
 59.32  retirement. 
 59.33     Sec. 14.  Minnesota Statutes 1998, section 356.215, 
 59.34  subdivision 4g, is amended to read: 
 59.35     Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
 59.36  the exhibit indicating the level normal cost, the actuarial 
 60.1   valuation must contain an exhibit indicating the additional 
 60.2   annual contribution sufficient to amortize the unfunded 
 60.3   actuarial accrued liability.  For funds governed by chapters 3A, 
 60.4   352, 352B, 352C, 353, 354, 354A, and 490, the additional 
 60.5   contribution must be calculated on a level percentage of covered 
 60.6   payroll basis by the established date for full funding in effect 
 60.7   when the valuation is prepared.  For funds governed by chapter 
 60.8   3A, sections 352.90 through 352.951, chapters 352B, 352C, 
 60.9   sections 353.63 through 353.68, and chapters 353C, 354A, and 
 60.10  490, the level percent additional contribution must be 
 60.11  calculated assuming annual payroll growth of 6.5 percent.  For 
 60.12  funds governed by sections 352.01 through 352.86 and chapter 
 60.13  354, the level percent additional contribution must be 
 60.14  calculated assuming an annual payroll growth of five percent.  
 60.15  For the fund governed by sections 353.01 through 353.46, the 
 60.16  level percent additional contribution must be calculated 
 60.17  assuming an annual payroll growth of six percent.  For all other 
 60.18  funds, the additional annual contribution must be calculated on 
 60.19  a level annual dollar amount basis. 
 60.20     (b) For any fund other than the Minneapolis employees 
 60.21  retirement fund, after the first actuarial valuation date 
 60.22  occurring after June 1, 1989, if there has not been a change in 
 60.23  the actuarial assumptions used for calculating the actuarial 
 60.24  accrued liability of the fund, a change in the benefit plan 
 60.25  governing annuities and benefits payable from the fund, a change 
 60.26  in the actuarial cost method used in calculating the actuarial 
 60.27  accrued liability of all or a portion of the fund, or a 
 60.28  combination of the three, which change or changes by themselves 
 60.29  without inclusion of any other items of increase or decrease 
 60.30  produce a net increase in the unfunded actuarial accrued 
 60.31  liability of the fund, the established date for full funding for 
 60.32  the first actuarial valuation made after June 1, 1989, and each 
 60.33  successive actuarial valuation is the first actuarial valuation 
 60.34  date occurring after June 1, 2020.  
 60.35     (c) For any fund or plan other than the Minneapolis 
 60.36  employees retirement fund, after the first actuarial valuation 
 61.1   date occurring after June 1, 1989, if there has been a change in 
 61.2   any or all of the actuarial assumptions used for calculating the 
 61.3   actuarial accrued liability of the fund, a change in the benefit 
 61.4   plan governing annuities and benefits payable from the fund, a 
 61.5   change in the actuarial cost method used in calculating the 
 61.6   actuarial accrued liability of all or a portion of the fund, or 
 61.7   a combination of the three, and the change or changes, by 
 61.8   themselves and without inclusion of any other items of increase 
 61.9   or decrease, produce a net increase in the unfunded actuarial 
 61.10  accrued liability in the fund, the established date for full 
 61.11  funding must be determined using the following procedure:  
 61.12     (i) the unfunded actuarial accrued liability of the fund 
 61.13  must be determined in accordance with the plan provisions 
 61.14  governing annuities and retirement benefits and the actuarial 
 61.15  assumptions in effect before an applicable change; 
 61.16     (ii) the level annual dollar contribution or level 
 61.17  percentage, whichever is applicable, needed to amortize the 
 61.18  unfunded actuarial accrued liability amount determined under 
 61.19  item (i) by the established date for full funding in effect 
 61.20  before the change must be calculated using the interest 
 61.21  assumption specified in subdivision 4d in effect before the 
 61.22  change; 
 61.23     (iii) the unfunded actuarial accrued liability of the fund 
 61.24  must be determined in accordance with any new plan provisions 
 61.25  governing annuities and benefits payable from the fund and any 
 61.26  new actuarial assumptions and the remaining plan provisions 
 61.27  governing annuities and benefits payable from the fund and 
 61.28  actuarial assumptions in effect before the change; 
 61.29     (iv) the level annual dollar contribution or level 
 61.30  percentage, whichever is applicable, needed to amortize the 
 61.31  difference between the unfunded actuarial accrued liability 
 61.32  amount calculated under item (i) and the unfunded actuarial 
 61.33  accrued liability amount calculated under item (iii) over a 
 61.34  period of 30 years from the end of the plan year in which the 
 61.35  applicable change is effective must be calculated using the 
 61.36  applicable interest assumption specified in subdivision 4d in 
 62.1   effect after any applicable change; 
 62.2      (v) the level annual dollar or level percentage 
 62.3   amortization contribution under item (iv) must be added to the 
 62.4   level annual dollar amortization contribution or level 
 62.5   percentage calculated under item (ii); 
 62.6      (vi) the period in which the unfunded actuarial accrued 
 62.7   liability amount determined in item (iii) is amortized by the 
 62.8   total level annual dollar or level percentage amortization 
 62.9   contribution computed under item (v) must be calculated using 
 62.10  the interest assumption specified in subdivision 4d in effect 
 62.11  after any applicable change, rounded to the nearest integral 
 62.12  number of years, but not to exceed 30 years from the end of the 
 62.13  plan year in which the determination of the established date for 
 62.14  full funding using the procedure set forth in this clause is 
 62.15  made and not to be less than the period of years beginning in 
 62.16  the plan year in which the determination of the established date 
 62.17  for full funding using the procedure set forth in this clause is 
 62.18  made and ending by the date for full funding in effect before 
 62.19  the change; and 
 62.20     (vii) the period determined under item (vi) must be added 
 62.21  to the date as of which the actuarial valuation was prepared and 
 62.22  the date obtained is the new established date for full funding.  
 62.23     (d) For the Minneapolis employees retirement fund, the 
 62.24  established date for full funding is June 30, 2020. 
 62.25     (e) For the following plans for which the annual actuarial 
 62.26  valuation indicates an excess of valuation assets over the 
 62.27  actuarial accrued liability, the valuation assets in excess of 
 62.28  the actuarial accrued liability must be recognized in the 
 62.29  following manner: 
 62.30     (1) the public employees retirement association police and 
 62.31  fire plan, the valuation assets in excess of the actuarial 
 62.32  accrued liability serve to reduce the current contribution 
 62.33  requirements by an amount equal to the amortization of the 
 62.34  excess expressed as a level percentage of pay over a 30-year 
 62.35  period beginning anew with each annual actuarial valuation of 
 62.36  the plan; and 
 63.1      (2) the correctional employees retirement plan of the 
 63.2   Minnesota state retirement system, and the state patrol 
 63.3   retirement plan, an excess of valuation assets over actuarial 
 63.4   accrued liability must be amortized in the same manner over the 
 63.5   same period as an unfunded actuarial accrued liability but must 
 63.6   serve to reduce the required contribution instead of increasing 
 63.7   it. 
 63.8      Sec. 15.  Minnesota Statutes 1998, section 423A.02, 
 63.9   subdivision 1b, is amended to read: 
 63.10     Subd. 1b.  [ADDITIONAL AMORTIZATION STATE AID.] (a) 
 63.11  Annually, on October 1, the commissioner of revenue shall 
 63.12  allocate the additional amortization state aid transferred under 
 63.13  section 69.021, subdivision 11, to: 
 63.14     (1) all police or salaried firefighter relief associations 
 63.15  governed by and in full compliance with the requirements of 
 63.16  section 69.77, that had an unfunded actuarial accrued liability 
 63.17  in the actuarial valuation prepared under sections 356.215 and 
 63.18  356.216 as of the preceding December 31; and 
 63.19     (2) all local police or salaried firefighter consolidation 
 63.20  accounts governed by chapter 353A that are certified by the 
 63.21  executive director of the public employees retirement 
 63.22  association as having for the current fiscal year an additional 
 63.23  municipal contribution amount under section 353A.09, subdivision 
 63.24  5, paragraph (b), and that have implemented section 353A.083, 
 63.25  subdivision 1, if the effective date of the consolidation 
 63.26  preceded May 24, 1993, and that have implemented section 
 63.27  353A.083, subdivision 2, if the effective date of the 
 63.28  consolidation preceded June 1, 1995.; and 
 63.29     (3) the public employees police and fire fund on behalf of 
 63.30  municipalities that received amortization aid in 1999 and are 
 63.31  required to make an additional municipal contribution under 
 63.32  section 353.665, subdivision 8, for the duration of the required 
 63.33  additional contribution. 
 63.34     (b) The commissioner shall allocate the state aid on the 
 63.35  basis of the proportional share of the relief association or 
 63.36  consolidation account of the total unfunded actuarial accrued 
 64.1   liability of all recipient relief associations and consolidation 
 64.2   accounts as of December 31, 1993, for relief associations, and 
 64.3   as of June 30, 1994, for consolidation accounts. 
 64.4      (c) Beginning October 1, 2000, and annually thereafter, the 
 64.5   commissioner shall allocate the state aid on the basis of 64.5 
 64.6   percent to the public employees police and fire fund or local 
 64.7   consolidation account, whichever applies, on behalf of 
 64.8   municipalities to which section 353.665, subdivision 8, 
 64.9   paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply 
 64.10  for distribution in accordance with paragraph (b) and subject to 
 64.11  the limitation in subdivision 4, 34.2 percent to the city of 
 64.12  Minneapolis to fund any unfunded actuarial accrued liability in 
 64.13  the actuarial valuation prepared under sections 356.215 and 
 64.14  356.216 as of the preceding December 31 for the Minneapolis 
 64.15  police relief association or the Minneapolis fire department 
 64.16  relief association, and 1.3 percent to the city of Virginia to 
 64.17  fund any unfunded actuarial accrued liability in the actuarial 
 64.18  valuation prepared under sections 356.215 and 356.216 as of the 
 64.19  preceding December 31 for the Virginia fire department relief 
 64.20  association.  In the event that there is no unfunded actuarial 
 64.21  accrued liability in both the Minneapolis police relief 
 64.22  association and the Minneapolis fire department relief 
 64.23  association, the commissioner shall allocate that 34.2 percent 
 64.24  of the aid as follows:  49 percent to the Minneapolis teachers 
 64.25  retirement fund association, provided that, annually, beginning 
 64.26  on July 1, 2005, if a teacher's association five-year average 
 64.27  time-weighted rate of investment return does not equal or exceed 
 64.28  the performance of a composite portfolio assumed passively 
 64.29  managed (indexed) invested ten percent in cash equivalents, 60 
 64.30  percent bonds and similar debt securities, and 30 percent in 
 64.31  domestic stock calculated using the formula under section 
 64.32  11A.04, clause (11), the aid under this section ceases until the 
 64.33  five-year annual rate of return equals or exceeds the 
 64.34  performance of a composite portfolio, 21 percent to the St. Paul 
 64.35  teachers retirement fund association, provided that, annually, 
 64.36  beginning on July 1, 2005, if a teacher's association five-year 
 65.1   average time-weighted rate of investment return does not equal 
 65.2   or exceed the performance of a composite portfolio assumed 
 65.3   passively managed (indexed) invested ten percent in cash 
 65.4   equivalents, 60 percent bonds and similar debt securities, and 
 65.5   30 percent in domestic stock calculated using the formula under 
 65.6   section 11A.04, clause (11), the aid under this section ceases 
 65.7   until the five-year annual rate of return equals or exceeds the 
 65.8   performance of a composite portfolio, and 30 percent as 
 65.9   additional funding to support minimum fire state aid for 
 65.10  volunteer firefighter relief associations, with the allocation 
 65.11  made at the same time and under the same procedures in 
 65.12  subdivision 3.  In the event there is no actuarial accrued 
 65.13  unfunded liability in the Virginia fire department relief 
 65.14  association, the commissioner shall allocate that 1.3 percent of 
 65.15  the aid as follows:  49 percent to the Minneapolis teachers 
 65.16  retirement fund association, provided that, annually, beginning 
 65.17  on July 1, 2005, if a teacher's association five-year average 
 65.18  time-weighted rate of investment return does not equal or exceed 
 65.19  the performance of a composite portfolio assumed passively 
 65.20  managed (indexed) invested ten percent in cash equivalents, 60 
 65.21  percent bonds and similar debt securities, and 30 percent in 
 65.22  domestic stock calculated using the formula under section 
 65.23  11A.04, clause (11), the aid under this section ceases until the 
 65.24  five-year annual rate of return equals or exceeds the 
 65.25  performance of a composite portfolio, 21 percent to the St. Paul 
 65.26  teachers retirement fund association, provided that, annually, 
 65.27  beginning on July 1, 2005, if a teacher's association five-year 
 65.28  average time-weighted rate of investment return does not equal 
 65.29  or exceed the performance of a composite portfolio assumed 
 65.30  passively managed (indexed) invested ten percent in cash 
 65.31  equivalents, 60 percent bonds and similar debt securities, and 
 65.32  30 percent in domestic stock calculated using the formula under 
 65.33  section 11A.04, clause (11), the aid under this section ceases 
 65.34  until the five-year annual rate of return equals or exceeds the 
 65.35  performance of a composite portfolio, and 30 percent as 
 65.36  additional funding to support minimum fire state aid for 
 66.1   volunteer firefighter relief associations, with the allocation 
 66.2   made at the same time and under the same procedures in 
 66.3   subdivision 3.  
 66.4      (d) Additional amortization state aid payable to the public 
 66.5   employees retirement association on behalf of a municipality 
 66.6   must be credited by the executive director of the public 
 66.7   employees retirement association against any additional 
 66.8   municipal contribution to which the applicable municipality is 
 66.9   obligated to make under section 353A.09, subdivision 5, or under 
 66.10  section 353.665, subdivision 8. 
 66.11     (e) The amounts required under this subdivision are 
 66.12  annually appropriated to the commissioner of revenue. 
 66.13     Sec. 16.  Minnesota Statutes 1998, section 423A.02, 
 66.14  subdivision 2, is amended to read: 
 66.15     Subd. 2.  [CONTINUED ELIGIBILITY.] A municipality that has 
 66.16  qualified for amortization state aid under subdivision 1 on 
 66.17  December 31, 1984, and has an additional municipal contribution 
 66.18  payable under section 353A.09, subdivision 5, paragraph (b), as 
 66.19  of the most recent December 31, continues upon application to be 
 66.20  entitled to receive amortization state aid under subdivision 1 
 66.21  and supplementary amortization state aid under subdivision 1a, 
 66.22  after the local police or salaried firefighters' relief 
 66.23  association has been consolidated into the public employees 
 66.24  police and fire fund.  If a municipality loses entitlement for 
 66.25  amortization state aid and supplementary amortization state aid 
 66.26  in any year because of not having an additional municipal 
 66.27  contribution under section 353A.09, subdivision 5, paragraph 
 66.28  (b), the municipality is not entitled to the aid amounts in any 
 66.29  subsequent year.  If the actuarial assumptions specified in 
 66.30  section 356.215 are changed in 1997, and the change results in a 
 66.31  municipality having an additional municipal contribution, and 
 66.32  the municipality had previously lost entitlement for 
 66.33  amortization aid and supplementary amortization due to not 
 66.34  having an additional municipal contribution, then the 
 66.35  municipality is again entitled to receive amortization aid and 
 66.36  supplementary amortization aid in the same amount as it 
 67.1   previously received.  A municipality that received amortization 
 67.2   aid in 1999 and is required to make an additional municipal 
 67.3   contribution under section 353.665, subdivision 8, continues to 
 67.4   qualify for the amortization state aid and the supplemental 
 67.5   amortization aid until December 31, 2009. 
 67.6      Sec. 17.  Minnesota Statutes 1998, section 423A.02, is 
 67.7   amended by adding a subdivision to read: 
 67.8      Subd. 4.  [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 
 67.9   total of amortization aid, supplemental amortization aid, and 
 67.10  additional amortization aid under this section payable to the 
 67.11  executive director of the public employees retirement 
 67.12  association on behalf of a municipality to which section 
 67.13  353.665, subdivision 8, paragraph (b), applies, may not exceed 
 67.14  the amount of the additional municipal contribution payable by 
 67.15  an individual municipality under section 353.665, subdivision 8, 
 67.16  paragraph (b). 
 67.17     (b) Any aid amount in excess of the limit under this 
 67.18  subdivision for an individual municipality must be redistributed 
 67.19  to the other municipalities to which section 353.665, 
 67.20  subdivision 8, paragraph (b), applies.  The excess aid must be 
 67.21  distributed in proportion to each municipality's additional 
 67.22  municipal contribution under section 353.665, subdivision 8, 
 67.23  paragraph (b). 
 67.24     (c) When the total aid for each municipality under this 
 67.25  section equals the limit under paragraph (a), any aid in excess 
 67.26  of the limit must be redistributed under subdivisions 1, 1a, and 
 67.27  1b. 
 67.28     Sec. 18.  Minnesota Statutes 1998, section 423A.02, is 
 67.29  amended by adding a subdivision to read: 
 67.30     Subd. 5.  [TERMINATION OF STATE AID PROGRAMS.] The 
 67.31  amortization state aid, supplemental amortization state aid, and 
 67.32  additional amortization state aid programs terminate when the 
 67.33  assets of the Minneapolis teachers retirement fund association 
 67.34  equal the actuarial accrued liability of that plan and when the 
 67.35  assets of the St. Paul teachers retirement fund association 
 67.36  equal the actuarial accrued liability of that plan. 
 68.1      Sec. 19.  [1999 PERA-P&F ACTUARIAL VALUATION.] 
 68.2      (a) As of July 1, 1999, no actuarial valuations are 
 68.3   required of the local police and fire consolidation accounts 
 68.4   which were in existence before March 1, 1999, and have not been 
 68.5   retained under Minnesota Statutes, section 353.655, subdivision 
 68.6   1, paragraph (b). 
 68.7      (b) The actuary retained by the legislative commission on 
 68.8   pensions and retirement shall prepare all calculations required 
 68.9   under Minnesota Statutes, section 353.665, and shall present 
 68.10  them to the commission in a separate report. 
 68.11     (c) The calculated actuarial accrued liability of the 
 68.12  public employees police and fire plan for July 1, 1999, must 
 68.13  contain all liabilities associated with the former local police 
 68.14  and fire consolidation accounts affected by Minnesota Statutes, 
 68.15  section 353.665. 
 68.16     (d) The asset value of the public employees police and fire 
 68.17  plan for July 1, 1999, is the sum of the following: 
 68.18     (1) the current assets of the public employees police and 
 68.19  fire plan as of June 30, 1999, without reference to any local 
 68.20  consolidation accounts in existence on March 1, 1999; 
 68.21     (2) the amount of assets transferred from the Minnesota 
 68.22  postretirement investment fund with respect to local 
 68.23  consolidation accounts under Minnesota Statutes, section 
 68.24  353.655, subdivision 3; 
 68.25     (3) that portion of the market value of assets of the local 
 68.26  consolidation accounts affected by Minnesota Statutes, section 
 68.27  353.665, and not retained under Minnesota Statutes, section 
 68.28  353.665, subdivision 1, paragraph (b), after subtracting the 
 68.29  amount in clause (2) determined by multiplying the total by the 
 68.30  ratio that the current asset value of public employee police and 
 68.31  fire fund assets other than the participation in the Minnesota 
 68.32  postretirement investment fund as of June 30, 1999, without 
 68.33  reference to any local consolidation accounts in existence on 
 68.34  March 1, 1999, bears to the market value of the same assets; and 
 68.35     (4) a receivable amount equal to the present value of the 
 68.36  future additional municipal contributions required under 
 69.1   Minnesota Statutes, section 353.655, subdivision 8, paragraph 
 69.2   (b). 
 69.3      Sec. 20.  [REPEALER.] 
 69.4      Minnesota Statutes 1998, section 353.65, subdivision 3a, is 
 69.5   repealed. 
 69.6      Sec. 21.  [EFFECTIVE DATE.] 
 69.7      Sections 1 to 7, 10, 11, 12, 13, and 15 to 20 are effective 
 69.8   on the day following final enactment.  Sections 8 and 9 are 
 69.9   effective on the first day of the first full pay period that 
 69.10  begins after June 30, 1999.  Section 14 is effective on July 1, 
 69.11  2000. 
 69.12                             ARTICLE 5
 69.13                   MINIMUM VOLUNTEER FIREFIGHTER  
 69.14                      STATE AID AMOUNT CHANGES  
 69.15     Section 1.  Minnesota Statutes 1998, section 69.021, 
 69.16  subdivision 7, is amended to read: 
 69.17     Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
 69.18  MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 
 69.19  shall apportion the fire state aid relative to the premiums 
 69.20  reported on the Minnesota Firetown Premium Reports filed under 
 69.21  this chapter to each municipality and/or firefighters' relief 
 69.22  association.  
 69.23     (b) The commissioner shall calculate an initial fire state 
 69.24  aid allocation amount for each municipality or fire department 
 69.25  under paragraph (c) and a minimum fire state aid allocation 
 69.26  amount for each municipality or fire department under paragraph 
 69.27  (d).  The municipality or fire department must receive the 
 69.28  larger fire state aid amount. 
 69.29     (c) The initial fire state aid allocation amount is the 
 69.30  amount available for apportionment as fire state aid under 
 69.31  subdivision 5, without inclusion of any additional funding 
 69.32  amount to support a minimum fire state aid amount under section 
 69.33  423A.02, subdivision 3, allocated one-half in proportion to the 
 69.34  population as shown in the last official statewide federal 
 69.35  census for each fire town and one-half in proportion to the 
 69.36  market value of each fire town, including (1) the market value 
 70.1   of tax exempt property and (2) the market value of natural 
 70.2   resources lands receiving in lieu payments under sections 
 70.3   477A.11 to 477A.14, but excluding the market value of minerals.  
 70.4   In the case of incorporated or municipal fire departments 
 70.5   furnishing fire protection to other cities, towns, or townships 
 70.6   as evidenced by valid fire service contracts filed with the 
 70.7   commissioner, the distribution must be adjusted proportionately 
 70.8   to take into consideration the crossover fire protection 
 70.9   service.  Necessary adjustments shall be made to subsequent 
 70.10  apportionments.  In the case of municipalities or independent 
 70.11  fire departments qualifying for the aid, the commissioner shall 
 70.12  calculate the state aid for the municipality or relief 
 70.13  association on the basis of the population and the market value 
 70.14  of the area furnished fire protection service by the fire 
 70.15  department as evidenced by duly executed and valid fire service 
 70.16  agreements filed with the commissioner.  If one or more fire 
 70.17  departments are furnishing contracted fire service to a city, 
 70.18  town, or township, only the population and market value of the 
 70.19  area served by each fire department may be considered in 
 70.20  calculating the state aid and the fire departments furnishing 
 70.21  service shall enter into an agreement apportioning among 
 70.22  themselves the percent of the population and the market value of 
 70.23  each service area.  The agreement must be in writing and must be 
 70.24  filed with the commissioner. 
 70.25     (d) The minimum fire state aid allocation amount is the 
 70.26  amount in addition to the initial fire state allocation amount 
 70.27  that is derived from any additional funding amount to support a 
 70.28  minimum fire state aid amount under section 423A.02, subdivision 
 70.29  3, and allocated to municipalities with volunteer firefighter 
 70.30  relief associations based on the number of active volunteer 
 70.31  firefighters who are members of the relief association as 
 70.32  reported in the annual financial reporting for the calendar year 
 70.33  1993 to the office of the state auditor, but not to exceed 30 
 70.34  active volunteer firefighters, so that all municipalities or 
 70.35  fire departments with volunteer firefighter relief associations 
 70.36  receive in total at least a minimum fire state aid amount per 
 71.1   1993 active volunteer firefighter to a maximum of 30 
 71.2   firefighters.  If a relief association did not exist in calendar 
 71.3   year 1993, the number of active volunteer firefighters who are 
 71.4   members of the relief association as reported in the annual 
 71.5   financial reporting for calendar year 1998 to the office of the 
 71.6   state auditor, but not to exceed 30 active volunteer 
 71.7   firefighters, shall be used in this determination. 
 71.8      (e) The fire state aid must be paid to the treasurer of the 
 71.9   municipality where the fire department is located and the 
 71.10  treasurer of the municipality shall, within 30 days of receipt 
 71.11  of the fire state aid, transmit the aid to the relief 
 71.12  association if the relief association has filed a financial 
 71.13  report with the treasurer of the municipality and has met all 
 71.14  other statutory provisions pertaining to the aid apportionment. 
 71.15     (f) The commissioner may make rules to permit the 
 71.16  administration of the provisions of this section.  Any 
 71.17  adjustments needed to correct prior misallocations must be made 
 71.18  to subsequent apportionments. 
 71.19     Sec. 2.  [EFFECTIVE DATE.] 
 71.20     Section 1 is effective on the day following final enactment 
 71.21  and applies to the first fire state aid and minimum fire state 
 71.22  aid allocation occurring after that date. 
 71.23                             ARTICLE 6
 71.24               MINNEAPOLIS POLICE AND FIRE DEPARTMENT  
 71.25                   RELIEF ASSOCIATIONS GOVERNANCE  
 71.26                              CHANGES 
 71.27     Section 1.  Minnesota Statutes 1998, section 423B.07, is 
 71.28  amended to read: 
 71.29     423B.07 [AUTHORIZED FUND DISBURSEMENTS.] 
 71.30     The police pension fund may be used only for the payment of:
 71.31     (1) service, disability, or dependency pensions; 
 71.32     (2) notwithstanding a contrary provision of section 69.80, 
 71.33  the salary of the secretary of the association in an amount not 
 71.34  to exceed 30 percent of the base salary of a first grade patrol 
 71.35  officer, the salary of the president of the association in an 
 71.36  amount not to exceed ten percent of the base salary of a first 
 72.1   grade patrol officer, and the salaries of the other elected 
 72.2   members of the board of trustees in an amount not to exceed 
 72.3   three units; 
 72.4      (3) expenses of officers and employees of the association 
 72.5   in connection with the protection of the fund; 
 72.6      (4) expenses of operating and maintaining the association, 
 72.7   including the administrative expenses related to the 
 72.8   administration of the insurance plan authorized in section 
 72.9   423B.08; and 
 72.10     (5) other expenses authorized by section 69.80, or other 
 72.11  applicable law. 
 72.12     Sec. 2.  [CONTINUATION OF BOARD.] 
 72.13     Notwithstanding Minnesota Statutes, section 423A.01, 
 72.14  subdivision 2, or any other law to the contrary, the board of 
 72.15  trustees of the Minneapolis firefighters relief association 
 72.16  shall continue to govern the association until there are fewer 
 72.17  than 100 benefit recipients of the relief association pension 
 72.18  fund.  The special fund thereafter must become a trust fund in 
 72.19  accordance with Minnesota Statutes, section 423A.01, subdivision 
 72.20  2. 
 72.21     Sec. 3.  [EFFECTIVE DATE.] 
 72.22     (a) Section 1 is effective on December 31, 1999. 
 72.23     (b) Section 2 is effective on the day following approval by 
 72.24  the Minneapolis city council and compliance with Minnesota 
 72.25  Statutes, section 645.021, subdivision 3. 
 72.26                             ARTICLE 7
 72.27                   METROPOLITAN COUNCIL TARGETED  
 72.28                     EARLY RETIREMENT INCENTIVE  
 72.29     Section 1.  [RETIREMENT INCENTIVE.] 
 72.30     The metropolitan council may offer its eligible employees, 
 72.31  as specified in sections 2 and 3, the retirement incentive 
 72.32  provided in section 4. 
 72.33     Sec. 2.  [INCLUSION.] 
 72.34     If the metropolitan council chooses to offer the retirement 
 72.35  incentive under section 4, it must designate the positions or 
 72.36  group of positions within the council divisions specified in 
 73.1   section 3, clause (1), that will qualify for participation in 
 73.2   its retirement incentive program and may exclude otherwise 
 73.3   eligible employees.  After initially designating the qualified 
 73.4   positions or group of positions, the council may at any time 
 73.5   modify its designation in order to further limit the qualified 
 73.6   positions or group of positions. 
 73.7      Sec. 3.  [ELIGIBILITY.] 
 73.8      An employee of the metropolitan council is eligible to 
 73.9   participate in the retirement incentive program if the employee: 
 73.10     (1) was employed in the environmental services, community 
 73.11  development, or regional administration divisions of the council 
 73.12  on January 1, 1999; 
 73.13     (2) on or after the effective date of this article notifies 
 73.14  the council's regional administrator in writing of the 
 73.15  employee's intention to retire, the plan or plans from which the 
 73.16  individual will retire, and the employee's date of separation 
 73.17  from employment with the council; 
 73.18     (3) is, on the date the council receives the employee's 
 73.19  written notice of intention to retire, within the positions or 
 73.20  group of positions then currently designated by the council 
 73.21  under section 2; 
 73.22     (4) on the date of retirement has at least 25 years of 
 73.23  combined allowable service in any covered fund or funds listed 
 73.24  in Minnesota Statutes, section 356.30, subdivision 3; 
 73.25     (5) on the date of retirement is at least 55 years of age; 
 73.26     (6) upon retirement is immediately eligible for a 
 73.27  retirement annuity from a defined benefit plan listed in 
 73.28  Minnesota Statutes, section 356.30, subdivision 3; and 
 73.29     (7) has a retirement annuity accrual date in the applicable 
 73.30  plan or plans on or after July 1, 1999, and before July 1, 2000. 
 73.31     Sec. 4.  [RETIREMENT INCENTIVE.] 
 73.32     Subdivision 1.  [FORMULA INCREASE.] For an eligible 
 73.33  employee who elects to participate in the retirement incentive 
 73.34  program, the benefit accrual rate multiplier percentage or 
 73.35  percentages used to calculate the retirement annuity from each 
 73.36  defined benefit plan listed in Minnesota Statutes, section 
 74.1   356.30, subdivision 3, from which the employee is eligible to 
 74.2   receive a retirement annuity must be increased by .25 percentage 
 74.3   point for each year of allowable service, and pro rata for 
 74.4   completed months less than a full year, in the applicable plan 
 74.5   or plans.  If the eligible employee has more than 30 years of 
 74.6   combined service in covered plans, the .25 percentage point 
 74.7   increase applies only to the first 30 years of allowable service 
 74.8   in such covered funds. 
 74.9      Subd. 2.  [CERTIFICATION OF ELIGIBILITY.] Before applying 
 74.10  the formula increase in subdivision 1, the applicable retirement 
 74.11  plan or plans must receive a certification from the council's 
 74.12  regional administrator that the employee meets the eligibility 
 74.13  criteria in clauses (1), (2), and (3) of section 3. 
 74.14     Subd. 3.  [PAYMENT OF ENHANCED RETIREMENT COST.] (a) If the 
 74.15  metropolitan council chooses to offer a retirement incentive 
 74.16  under this section, it must make an additional employer 
 74.17  contribution or contributions as specified in paragraph (b) to 
 74.18  the applicable retirement plan or plans from which the eligible 
 74.19  individual retired under the incentive program. 
 74.20     (b) The additional employer contribution for the applicable 
 74.21  employee to each applicable plan is an amount equal to the 
 74.22  difference in the actuarial present value of the annuity payable 
 74.23  by the plan for the employee, with and without the retirement 
 74.24  incentive under subdivision 1.  The actuarial present value 
 74.25  calculations must be made by the chief administrative officer of 
 74.26  the applicable retirement plan. 
 74.27     (c) An additional employer contribution under paragraph (b) 
 74.28  must be paid within 60 days from the effective date of the 
 74.29  applicable annuity for the eligible employee who elects to 
 74.30  participate in the retirement incentive.  
 74.31     Sec. 5.  [LIMIT ON REHIRING AND FUTURE SERVICES.] 
 74.32     The metropolitan council may not rehire or contract for 
 74.33  services from a former employee who retires with an early 
 74.34  retirement incentive under this article. 
 74.35     Sec. 6.  [APPLICATION OF OTHER LAWS.] 
 74.36     Unilateral implementation of retirement incentives under 
 75.1   this article by the metropolitan council is not an unfair labor 
 75.2   practice for purposes of Minnesota Statutes, chapter 179A. 
 75.3      Sec. 7.  [EFFECTIVE DATE.] 
 75.4      Sections 1 to 6 are effective on the day following final 
 75.5   enactment. 
 75.6                              ARTICLE 8
 75.7                 VARIOUS SMALL GROUP PENSION CHANGES
 75.8      Section 1.  Minnesota Statutes 1998, section 354.66, 
 75.9   subdivision 5, is amended to read: 
 75.10     Subd. 5.  [OTHER MEMBERSHIP PRECLUDED.] A teacher entitled 
 75.11  to full accrual of allowable service credit and employee 
 75.12  contributions for part time teaching service pursuant to this 
 75.13  section shall not be entitled during the same period of time to 
 75.14  be a member of, accrue allowable service credit in or make 
 75.15  employee contributions to any other Minnesota public employee 
 75.16  pension plan, except the plan established in chapter 3A, the 
 75.17  plan established in chapter 352D if the teacher also is a 
 75.18  legislator, or a volunteer firefighters' relief association 
 75.19  governed by sections 69.771 to 69.776. 
 75.20     Sec. 2.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; PURCHASE 
 75.21  OF SERVICE CREDIT BY RUSH CITY SCHOOL DISTRICT EMPLOYEE.] 
 75.22     (a) Notwithstanding Minnesota Statutes, section 353.01, 
 75.23  subdivision 16, or any other law to the contrary, an eligible 
 75.24  person described in paragraph (b) may purchase service credit in 
 75.25  the public employees retirement association for the period 
 75.26  described in paragraph (c). 
 75.27     (b) An eligible person is a person who: 
 75.28     (1) was born on October 28, 1948; 
 75.29     (2) was first employed by the Rush City school district in 
 75.30  September 1968; 
 75.31     (3) has received service credit from the public employees 
 75.32  retirement association for a period of leave for military 
 75.33  service from April 1969 through March 1970; and 
 75.34     (4) has not received service credit from the public 
 75.35  employees retirement association for a period of leave for 
 75.36  military service from April 1970 through March 1971. 
 76.1      (c) The period for service credit purchase is the 
 76.2   uncredited portion of the period from April 1970 through March 
 76.3   1971. 
 76.4      (d) An eligible person may purchase service credit under 
 76.5   this section by making the payment determined under Minnesota 
 76.6   Statutes, section 356.55, for the period in paragraph (c). 
 76.7      (e) The person who desires to purchase service credit under 
 76.8   this section must apply with the executive director to make the 
 76.9   purchase.  The application must include all necessary 
 76.10  documentation of the person's qualifications to make the 
 76.11  purchase, signed written permission to allow the executive 
 76.12  director to request and receive necessary verification of 
 76.13  applicable facts and eligibility requirements, and any other 
 76.14  relevant information that the executive director may require. 
 76.15     (f) Service credit for the purchase period must be granted 
 76.16  by the public employees retirement association to the purchaser 
 76.17  on receipt of the purchase payment amount. 
 76.18     Sec. 3.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
 76.19  SERVICE CREDIT BY SCHOOL DISTRICT NO. 786 TEACHER FOR UNCREDITED 
 76.20  LEAVE.] 
 76.21     (a) An eligible teacher as defined in paragraph (b) is 
 76.22  entitled to purchase allowable and formula service credit from 
 76.23  the teachers retirement association for an uncredited leave 
 76.24  during the 1996-1997 school year under terms specified in 
 76.25  paragraph (c). 
 76.26     (b) An eligible teacher is a person who: 
 76.27     (1) was born on November 14, 1944; 
 76.28     (2) became a member of the teachers retirement association 
 76.29  on September 29, 1972; 
 76.30     (3) is employed by independent school district No. 786 
 76.31  (Bertha-Hewitt); and 
 76.32     (4) failed to obtain one year of service credit due to the 
 76.33  classification of a 1996-1997 school year leave as an "other" 
 76.34  leave rather than an extended leave. 
 76.35     (c) Notwithstanding Minnesota Statutes, section 356.55, 
 76.36  subdivision 5, the eligible person may pay, before January 1, 
 77.1   2000, or the date of retirement, whichever is earlier, an amount 
 77.2   equal to the employee contribution rate or rates in effect 
 77.3   during the leave period specified in paragraph (b) applied to 
 77.4   the actual salary rate or rates in effect during that period, 
 77.5   plus any applicable employer contributions the employee agreed 
 77.6   to pay under an agreement with independent school district No. 
 77.7   786 (Bertha-Hewitt), plus annual compound interest at the rate 
 77.8   of 8.5 percent from June 30, 1997, to the date on which the 
 77.9   payment is actually made.  Independent school district No. 786 
 77.10  (Bertha-Hewitt) must pay the remaining balance of the prior 
 77.11  service credit purchase payment amount calculated under 
 77.12  Minnesota Statutes, section 356.55, within 30 days of the 
 77.13  payment by the eligible person.  The executive director of the 
 77.14  teachers retirement association must notify the superintendent 
 77.15  of independent school district No. 786 (Bertha-Hewitt) of its 
 77.16  payment amount and payment due date if the eligible person makes 
 77.17  the required payment. 
 77.18     (d) If independent school district No. 786 (Bertha-Hewitt) 
 77.19  fails to pay its portion of the required prior service credit 
 77.20  purchase payment amount, the executive director may notify the 
 77.21  commissioner of finance of that fact and the commissioner of 
 77.22  finance may order that the required employer payment be deducted 
 77.23  from the next subsequent payment or payments of state education 
 77.24  aid to the school district and be transmitted to the teachers 
 77.25  retirement association. 
 77.26     (e) An eligible teacher must provide any relevant 
 77.27  documentation required by the executive director to determine 
 77.28  eligibility for the prior service credit under this section. 
 77.29     (f) Service credit for the purchase period must be granted 
 77.30  by the teachers retirement association to the account of the 
 77.31  eligible teacher upon receipt of the purchase payment amount 
 77.32  specified in paragraph (c). 
 77.33     Sec. 4.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
 77.34  UNREQUESTED LEAVE PERIOD BY VIRGINIA TEACHER.] 
 77.35     (a) A qualified teacher described in paragraph (b) is 
 77.36  entitled to purchase one year of allowable and formula service 
 78.1   credit from the teachers retirement association for a one-year 
 78.2   portion of the period of unrequested leave from teaching service 
 78.3   specified in paragraph (b), clause (5), upon the payment of the 
 78.4   purchase price specified in paragraph (c). 
 78.5      (b) A qualified teacher is a person who: 
 78.6      (1) was born in 1943; 
 78.7      (2) is a current member of the teachers retirement 
 78.8   association; 
 78.9      (3) initially was employed as a teacher in 1966 by the 
 78.10  Alexandria school district; 
 78.11     (4) was subsequently employed as an industrial arts teacher 
 78.12  at the Virginia high school by the Virginia school district; and 
 78.13     (5) was placed on unrequested leave by the Virginia school 
 78.14  district for the 1983-1984 and 1984-1985 school years. 
 78.15     (c) The purchase payment amount must be determined as 
 78.16  provided in Minnesota Statutes, section 356.55. 
 78.17     (d) Payment of the prior service credit purchase amount 
 78.18  must be made by January 1, 2000. 
 78.19     Sec. 5.  [PURCHASE OF SERVICE CREDIT; PRIOR SAINT PAUL 
 78.20  BUREAU OF HEALTH EMPLOYEE.] 
 78.21     (a) An eligible person, as described in paragraph (b), is 
 78.22  entitled to purchase coordinated service credit in the public 
 78.23  employees retirement association general plan for the period of 
 78.24  employment described in paragraph (b), clause (2), by making 
 78.25  payment as specified in paragraph (c). 
 78.26     (b) An eligible person is a person who: 
 78.27     (1) was born on May 22, 1932; 
 78.28     (2) was employed by the St. Paul Bureau of Health from 
 78.29  March 17, 1958, to September 21, 1962, was covered by the St. 
 78.30  Paul bureau of health relief association as a result of that 
 78.31  employment, and who forfeited all service credit in that relief 
 78.32  association upon leaving that employment; and 
 78.33     (3) later became a coordinated member of the general plan 
 78.34  of the public employees retirement association and currently is 
 78.35  a coordinated member of that plan. 
 78.36     (c) An eligible person described in paragraph (b) may 
 79.1   purchase service credit from the public employees retirement 
 79.2   association by paying the amount specified in Minnesota 
 79.3   Statutes, section 356.55, prior to termination of public 
 79.4   employees retirement association covered employment or prior to 
 79.5   July 1, 2000, whichever is earlier.  If the city of St. Paul 
 79.6   agrees to make a payment under Minnesota Statutes, section 
 79.7   356.55, subdivision 5, an eligible person must make the employee 
 79.8   payments prior to termination of public employees retirement 
 79.9   association covered employment or prior to July 1, 2000, 
 79.10  whichever is earlier.  If the employee payment is made in a 
 79.11  timely fashion, the city payment must be remitted 60 days 
 79.12  thereafter. 
 79.13     (d) An eligible person must provide any relevant 
 79.14  documentation required by the executive director to determine 
 79.15  eligibility for the prior service credit under this section. 
 79.16     (e) Service credit for the purchase period must be granted 
 79.17  by the public employees retirement association to the account of 
 79.18  the eligible person upon receipt of the purchase payment amount 
 79.19  specified in paragraph (c). 
 79.20     Sec. 6.  [INDEPENDENT SCHOOL DISTRICT NO. 276, MINNETONKA, 
 79.21  TEACHER; PRIOR SERVICE CREDIT PURCHASE.] 
 79.22     (a) Notwithstanding Minnesota Statutes, section 354.095, an 
 79.23  eligible person described in paragraph (b) is entitled to 
 79.24  purchase allowable and formula service credit in the teachers 
 79.25  retirement association for the period described in paragraph (c) 
 79.26  by paying the amount specified in Minnesota Statutes, section 
 79.27  356.55, subdivision 2. 
 79.28     (b) An eligible person is a person who: 
 79.29     (1) was on medical leave for a period that includes the 
 79.30  1994-1995 and the 1995-1996 school years; 
 79.31     (2) was employed by independent school district No. 276, 
 79.32  Minnetonka, during the period that the medical leave was taken; 
 79.33  and 
 79.34     (3) due to the failure of independent school district No. 
 79.35  276, Minnetonka, to file certain papers with the teachers 
 79.36  retirement association was not able to obtain service credit for 
 80.1   the 1994-1995 and 1995-1996 school year portions of the medical 
 80.2   leave. 
 80.3      (c) The period for service credit purchase is the 1994-1995 
 80.4   and 1995-1996 school years. 
 80.5      (d) Notwithstanding Minnesota Statutes, section 356.55, 
 80.6   subdivision 5, the eligible person must pay, on or before 
 80.7   September 1, 1999, an amount equal to the employee, employer, 
 80.8   and employer additional contribution rates in effect during the 
 80.9   prior service period applied to the actual salary rates in 
 80.10  effect during the prior service period, plus annual compound 
 80.11  interest at the rate of 8.5 percent from the date on which the 
 80.12  contributions would have been made if made contemporaneous with 
 80.13  the service period to the date on which the payment is actually 
 80.14  made.  Independent school district No. 276, Minnetonka, must pay 
 80.15  one-half of the remaining balance of the prior service credit 
 80.16  purchase payment amount calculated under Minnesota Statutes, 
 80.17  section 356.55, within 30 days of the payment by the eligible 
 80.18  person.  Recognizing that the teachers retirement association 
 80.19  failed to provide adequate information on the opportunity of the 
 80.20  eligible person to make timely payments for the 1995-1996 school 
 80.21  year following receipt of the medical leave of absence forms on 
 80.22  August 16, 1996, the teachers retirement association is 
 80.23  responsible for one-half of the remaining balance of the prior 
 80.24  service credit purchase payment amount calculated under 
 80.25  Minnesota Statutes, section 356.55.  The executive director of 
 80.26  the teachers retirement association must notify the 
 80.27  superintendent of independent school district No. 276, 
 80.28  Minnetonka, of its payment amount and payment due date if the 
 80.29  eligible person makes the required payment. 
 80.30     (e) If independent school district No. 276, Minnetonka, 
 80.31  fails to pay its portion of the required prior service credit 
 80.32  purchase payment amount, the executive director may notify the 
 80.33  commissioner of finance of that fact and the commissioner of 
 80.34  finance may order that the required school district payment be 
 80.35  deducted from the next subsequent payment or payments of state 
 80.36  education aid to the school district and be transmitted to the 
 81.1   teachers retirement association.  
 81.2      Sec. 7.  [HOPKINS SCHOOL DISTRICT; REPAYMENT OF INTEREST 
 81.3   CHARGE ON CERTAIN MEMBER CONTRIBUTION SHORTAGE PAYMENTS.] 
 81.4      (a) Independent school district No. 270, Hopkins, shall pay 
 81.5   the amount of $1,004.08, plus compound interest on the amount at 
 81.6   the annual rate of six percent from June 1, 1997, to the date of 
 81.7   payment, to an eligible person described in paragraph (b) to 
 81.8   compensate the person for a past overcharge in a member 
 81.9   contribution shortage payment.  The shortage was caused by the 
 81.10  failure of the school district to make the required member 
 81.11  contribution deductions during the 1968-1969 school year and the 
 81.12  overpayment was caused by the failure of the teachers retirement 
 81.13  association to notify the eligible person in a timely fashion of 
 81.14  the shortage. 
 81.15     (b) An eligible person is a person who: 
 81.16     (1) was employed by independent school district No. 270, 
 81.17  Hopkins, during the 1968-1969 school year and suffered an under 
 81.18  deduction by the school district of $114.66; 
 81.19     (2) took a member contribution refund in the early 1970's 
 81.20  and repaid the refund in November 1974; and 
 81.21     (3) had an appeal denied by the teachers retirement 
 81.22  association board of trustees at a May 8, 1998, hearing, 
 81.23  reflected in a May 21, 1998, findings and final order. 
 81.24     (c) The payment must be made within 30 days of the 
 81.25  effective date of this section.  If independent school district 
 81.26  No. 270, Hopkins, fails to make a timely payment of its 
 81.27  obligation, the teachers retirement association must make the 
 81.28  payment and may notify the commissioner of finance of the school 
 81.29  district's failure to pay.  In that event, the commissioner of 
 81.30  finance may order that the required school district payment be 
 81.31  deducted from the next subsequent payment of state education aid 
 81.32  to the school district and transmitted to the teachers 
 81.33  retirement association. 
 81.34     Sec. 8.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
 81.35  SERVICE CREDIT FOR CERTAIN SABBATICAL LEAVES.] 
 81.36     (a) Notwithstanding any provision of Minnesota Statutes, 
 82.1   chapter 354, to the contrary, an eligible teacher as defined in 
 82.2   paragraph (b) is entitled to purchase allowable and formula 
 82.3   service credit from the teachers retirement association for the 
 82.4   uncredited portion of a sabbatical leave during the 1976-1977 
 82.5   school year under paragraph (c). 
 82.6      (b) An eligible teacher is a person who was born on 
 82.7   September 10, 1942, became a member of the teachers retirement 
 82.8   association on October 31, 1968, is employed by independent 
 82.9   school district No. 16, Spring Lake Park, and will qualify for 
 82.10  an early normal retirement annuity under the "rule of 90" on 
 82.11  September 16, 2000. 
 82.12     (c) Notwithstanding Minnesota Statutes, section 356.55, 
 82.13  subdivision 5, the eligible person may pay, before January 1, 
 82.14  2000, or the date of retirement, whichever is earlier, an amount 
 82.15  equal to the employee contribution rate or rates in effect 
 82.16  during the prior service period applied to the actual salary 
 82.17  rates in effect during the prior service period, plus annual 
 82.18  compound interest at the rate of 8.5 percent from the date on 
 82.19  which the contributions would have been made if made 
 82.20  contemporaneous with the service period to the date on which the 
 82.21  payment is actually made.  Independent school district No. 16, 
 82.22  Spring Lake Park, must pay the balance of the prior service 
 82.23  credit purchase payment amount calculated under Minnesota 
 82.24  Statutes, section 356.55, within 30 days of the payment by the 
 82.25  eligible person.  The executive director of the teachers 
 82.26  retirement association must notify the superintendent of 
 82.27  independent school district No. 16, Spring Lake Park, of its 
 82.28  payment amount and payment due date if the eligible person makes 
 82.29  the required payment. 
 82.30     (d) If independent school district No. 16, Spring Lake 
 82.31  Park, fails to pay its portion of the required prior service 
 82.32  credit purchase payment amount, the executive director may 
 82.33  notify the commissioner of finance of that fact and the 
 82.34  commissioner of finance may order that the required employer 
 82.35  payment be deducted from the next subsequent payment or payments 
 82.36  of state education aid to the school district and be transmitted 
 83.1   to the teachers retirement association. 
 83.2      (e) An eligible teacher must provide any relevant 
 83.3   documentation required by the executive director to determine 
 83.4   eligibility for the prior service credit under this section. 
 83.5      (f) Service credit for the purchase period must be granted 
 83.6   by the teachers retirement association to the account of the 
 83.7   eligible teacher upon receipt of the purchase payment amount 
 83.8   specified in paragraph (c). 
 83.9      Sec. 9.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; STATE 
 83.10  BOARD OF PUBLIC DEFENSE EMPLOYEE PRIOR SERVICE CREDIT PURCHASE.] 
 83.11     (a) An eligible person described in paragraph (b) is 
 83.12  entitled to purchase service credit from the public employees 
 83.13  retirement association for the period of omitted deductions 
 83.14  December 19, 1992, through December 27, 1994. 
 83.15     (b) An eligible person for purposes of paragraph (a) is a 
 83.16  person who: 
 83.17     (1) was born on August 17, 1950; 
 83.18     (2) was employed through Winona county until 1992; 
 83.19     (3) is currently employed by the state board of public 
 83.20  defense in the third judicial district public defender's office; 
 83.21  and 
 83.22     (4) had omitted member contributions for public employment 
 83.23  during the period December 19, 1992, through December 27, 1994. 
 83.24     (c) The prior service credit purchase payment amount is 
 83.25  governed by Minnesota Statutes, section 356.55.  Authority to 
 83.26  purchase the service credit expires on July 1, 2000. 
 83.27     (d) Notwithstanding Minnesota Statutes, section 356.55, 
 83.28  subdivision 5, the eligible person must pay, on or before 
 83.29  September 1, 1999, an amount equal to the employee contribution 
 83.30  rate in effect during the prior service period applied to the 
 83.31  actual salary rates in effect during the prior service period, 
 83.32  plus annual compound interest at the rate of 8.5 percent from 
 83.33  the date on which the contributions would have been made if made 
 83.34  contemporaneous with the service period to the date on which the 
 83.35  payment is actually made.  The state board of public defense 
 83.36  must pay the balance of the prior service credit purchase 
 84.1   payment amount calculated under Minnesota Statutes, section 
 84.2   356.55, within 30 days of the payment by the eligible person. 
 84.3      (e) A person purchasing service credit under this section 
 84.4   must provide sufficient documentation of eligibility to the 
 84.5   executive director of the public employees retirement 
 84.6   association. 
 84.7      Sec. 10.  [TRA; PURCHASE OF SERVICE CREDIT FOR FINAL 
 84.8   PORTION OF EXTENDED LEAVE OF ABSENCE BY ANOKA-HENNEPIN TEACHER.] 
 84.9      (a) An eligible person, as described in paragraph (b), is 
 84.10  entitled to purchase allowable and formula service credit in the 
 84.11  teachers retirement association for the period specified in 
 84.12  paragraph (c) by making the payment specified in Minnesota 
 84.13  Statutes, section 356.55. 
 84.14     (b) An eligible person is a person who: 
 84.15     (1) was born February 1, 1943; 
 84.16     (2) was initially employed as a teacher by the Richfield 
 84.17  school district in 1966; 
 84.18     (3) is currently employed as an elementary school principal 
 84.19  by independent school district No. 11 (Anoka-Hennepin); and 
 84.20     (4) was on an extended leave of absence from June 29, 1984, 
 84.21  to June 28, 1989, but failed to obtain service credit for the 
 84.22  final two years of the leave. 
 84.23     (c) The prior service credit purchase period is July 1, 
 84.24  1987, through June 28, 1989. 
 84.25     Sec. 11.  [EFFECTIVE DATE.] 
 84.26     Section 1 is effective on January 2, 2001.  Sections 2 to 
 84.27  10 are effective on the day following final enactment. 
 84.28                             ARTICLE 9
 84.29                   MISCELLANEOUS PENSION CHANGES 
 84.30     Section 1.  Minnesota Statutes 1998, section 3A.02, 
 84.31  subdivision 1b, is amended to read: 
 84.32     Subd. 1b.  [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 
 84.33  separation from service after the beginning of the 1981 
 84.34  legislative session, a former member of the legislature who has 
 84.35  attained the age of at least 60 years set by the board of 
 84.36  directors of the Minnesota state retirement system and who is 
 85.1   otherwise qualified in accordance with subdivision 1 is entitled 
 85.2   upon making written application on forms supplied by the 
 85.3   director to a retirement allowance in an amount equal to the 
 85.4   retirement allowance specified in subdivision 1 reduced so that 
 85.5   the reduced annuity is the actuarial equivalent of the annuity 
 85.6   that would be payable if the former member of the legislature 
 85.7   deferred receipt of the annuity and the annuity amount were 
 85.8   augmented at an annual rate of three percent compounded annually 
 85.9   from the date the annuity begins to accrue until age 62. 
 85.10     (b) The age set by the board of directors under paragraph 
 85.11  (a) cannot be less than the early retirement age under section 
 85.12  352.116, subdivision 1a. 
 85.13     (c) If there is an actuarial cost to the plan of resetting 
 85.14  the early retirement age under paragraph (a), the retired 
 85.15  legislator is required to pay an additional amount to cover the 
 85.16  full actuarial value.  The additional amount must be paid in a 
 85.17  lump sum within 30 days of the certification of the amount by 
 85.18  the executive director.  
 85.19     (d) The executive director of the Minnesota state 
 85.20  retirement system shall report to the legislative commission on 
 85.21  pensions and retirement on the utilization of this provision on 
 85.22  or before September 1, 2000. 
 85.23     Sec. 2.  Minnesota Statutes 1998, section 122A.46, 
 85.24  subdivision 2, is amended to read: 
 85.25     Subd. 2.  [LEAVE OF ABSENCE.] The board of any district may 
 85.26  grant an extended leave of absence without salary to any full- 
 85.27  or part-time elementary or secondary teacher who has been 
 85.28  employed by the district for at least five years and has at 
 85.29  least ten years of allowable service, as defined in section 
 85.30  354.05, subdivision 13, or the bylaws of the appropriate 
 85.31  retirement association or ten years of full-time teaching 
 85.32  service in Minnesota public elementary and secondary schools.  
 85.33  The maximum duration of an extended leave of absence pursuant to 
 85.34  under this section must be determined by mutual agreement of the 
 85.35  board and the teacher at the time the leave is granted and shall 
 85.36  be at least three but no more than five years.  An extended 
 86.1   leave of absence pursuant to under this section shall be taken 
 86.2   by mutual consent of the board and the teacher.  If the school 
 86.3   board denies a teacher's request, it must provide reasonable 
 86.4   justification for the denial. 
 86.5      Sec. 3.  Minnesota Statutes 1998, section 352.03, 
 86.6   subdivision 1, is amended to read: 
 86.7      Subdivision 1.  [MEMBERSHIP OF BOARD; ELECTION; TERM.] The 
 86.8   policy-making function of the system is vested in a board of 11 
 86.9   members, who must be known as the board of directors.  This 
 86.10  board shall consist of three members appointed by the governor, 
 86.11  one of whom must be a constitutional officer or appointed state 
 86.12  official and two of whom must be public members knowledgeable in 
 86.13  pension matters, four state employees elected by state employees 
 86.14  covered by the system excluding employees in categories 
 86.15  specifically authorized to designate or elect a member by this 
 86.16  subdivision, one employee of the transit operating division of 
 86.17  the metropolitan council's transit commission operations or its 
 86.18  successor agency designated by the executive committee of the 
 86.19  labor organization that is the exclusive bargaining agent 
 86.20  representing employees of the transit division, one member of 
 86.21  the state patrol retirement fund elected by members of that fund 
 86.22  at a time and in a manner fixed by the board, one employee 
 86.23  covered by the correctional employees plan elected by employees 
 86.24  covered by that plan, and one retired employee elected by 
 86.25  disabled and retired employees of all plans administered by the 
 86.26  system at a time and in a manner to be fixed by the board.  Two 
 86.27  state employee members, whose terms of office begin on the first 
 86.28  Monday in May after their election, must be elected biennially.  
 86.29  Elected members and the appointed member of the metropolitan 
 86.30  council's office of transit operations hold office for a term of 
 86.31  four years, except the retired member whose term is two years, 
 86.32  and until their successors are elected or appointed, and have 
 86.33  qualified.  An employee of the system is not eligible for 
 86.34  membership on the board of directors.  A state employee on leave 
 86.35  of absence is not eligible for election or reelection to 
 86.36  membership on the board of directors.  The term of any board 
 87.1   member who is on leave for more than six months automatically 
 87.2   ends on expiration of this period the term of office. 
 87.3      Sec. 4.  Minnesota Statutes 1998, section 354.05, 
 87.4   subdivision 40, is amended to read: 
 87.5      Subd. 40.  [TIMELY RECEIPT.] An application, payment, 
 87.6   return, claim, or other document that is not personally 
 87.7   delivered to the association on or before the applicable due 
 87.8   date is considered to be a timely receipt if officially 
 87.9   postmarked received on or before the due date or if delivered or 
 87.10  filed under section 645.151. 
 87.11     Sec. 5.  Minnesota Statutes 1998, section 354.06, 
 87.12  subdivision 1, is amended to read: 
 87.13     Subdivision 1.  The management of the association is vested 
 87.14  in a board of eight trustees known as the board of trustees of 
 87.15  the teachers retirement association.  It is composed of the 
 87.16  following persons:  the commissioner of children, families, and 
 87.17  learning, the commissioner of finance, a representative of the 
 87.18  Minnesota school boards association, four members of the 
 87.19  association elected by the members of the association, and one 
 87.20  retiree elected by the retirees of the association.  The five 
 87.21  elected members of the board of trustees must be chosen by mail 
 87.22  ballot in a manner fixed by the board of trustees of the 
 87.23  association.  In every odd-numbered year there shall be elected 
 87.24  two members of the association to the board of trustees for 
 87.25  terms of four years commencing on the first of July next 
 87.26  succeeding their election.  In every other odd-numbered year one 
 87.27  retiree of the association must be elected to the board of 
 87.28  trustees for a term of two four years commencing on the first of 
 87.29  July next succeeding the election.  The filing of candidacy for 
 87.30  a retiree election must include a petition of endorsement signed 
 87.31  by at least ten retirees of the association.  Each election must 
 87.32  be completed by June first of each succeeding odd-numbered 
 87.33  year.  In the case of elective members, any vacancy must be 
 87.34  filled by appointment by the remainder of the board, and the 
 87.35  appointee shall serve until the members or retirees of the 
 87.36  association at the next regular election have elected a trustee 
 88.1   to serve for the unexpired term caused by the vacancy.  No 
 88.2   member or retiree may be appointed by the board, or elected by 
 88.3   the members of the association as a trustee, if the person is 
 88.4   not a member or retiree of the association in good standing at 
 88.5   the time of the appointment or election.  
 88.6      Sec. 6.  Minnesota Statutes 1998, section 354.10, 
 88.7   subdivision 4, is amended to read: 
 88.8      Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any 
 88.9   beneficiary designated by a retiree or member under section 
 88.10  354.05, subdivision 22, may be changed or revoked by the retiree 
 88.11  or member on a form provided by the executive director.  A 
 88.12  change or revocation made under this subdivision is valid only 
 88.13  if the properly completed form is received by the association 
 88.14  postmarked on or before the date of death of the retiree or the 
 88.15  member.  If a designated beneficiary dies before the retiree or 
 88.16  member designating the beneficiary, and a new beneficiary is not 
 88.17  designated, the retiree's or member's estate is the beneficiary. 
 88.18     Sec. 7.  Minnesota Statutes 1998, section 354C.11, is 
 88.19  amended to read: 
 88.20     354C.11 [COVERAGE.] 
 88.21     Subdivision 1.  [AUTHORIZATION.] Personnel Individuals 
 88.22  employed by the board of trustees of the Minnesota state 
 88.23  colleges and universities who are in the unclassified service of 
 88.24  the state, and who have completed at least two years of 
 88.25  employment by the board or a predecessor board with a full-time 
 88.26  contract are participants authorized to participate in the 
 88.27  supplemental retirement plan, effective on the next following 
 88.28  July 1, if the person is employed in an eligible after meeting 
 88.29  eligibility requirements specified in subdivision 2. 
 88.30     Subd. 2.  [ELIGIBILITY.] (a) An individual must participate 
 88.31  in the supplemental retirement plan if the individual is 
 88.32  employed by the board of trustees in the unclassified service of 
 88.33  the state and has completed at least two years with a full time 
 88.34  contract of applicable unclassified employment with the board or 
 88.35  an applicable predecessor board in any of the positions 
 88.36  specified in paragraph (b). 
 89.1      (b) Eligible positions or employment classifications are: 
 89.2      (1) an unclassified administrative position as defined in 
 89.3   section 354B.20, subdivision 6, or is employed in; 
 89.4      (2) an employment classification included in one of the 
 89.5   following collective bargaining units under section 179A.10, 
 89.6   subdivision 2: 
 89.7      (1) (i) the state university instructional unit; 
 89.8      (2) (ii) the community college instructional unit; 
 89.9      (3) (iii) the technical college instructional unit; and 
 89.10     (4) (iv) the state university administrative unit; or 
 89.11     (3) an unclassified employee of the board included in the 
 89.12  general professional unit or supervisory employees unit under 
 89.13  section 179A.10, subdivision 2. 
 89.14     Subd. 3.  [CONTINUING ELIGIBILITY AUTHORIZATION.] Once a 
 89.15  person qualifies for participation in the 
 89.16  supplemental retirement plan, all subsequent service by the 
 89.17  person as an unclassified employee of the state university 
 89.18  board, the state board for community colleges, the higher 
 89.19  education board, or the technical colleges board of trustees in 
 89.20  a position or employment classification listed in subdivision 2, 
 89.21  paragraph (b), is covered by the supplemental retirement plan. 
 89.22     Sec. 8.  [EFFECTIVE DATE.] 
 89.23     Sections 1 and 3 to 7 are effective on the day following 
 89.24  final enactment.  Section 2 is effective on July 1, 1999. 
 89.25                             ARTICLE 10
 89.26               INCLUSION OF SUPPLEMENTAL NEEDS TRUSTS 
 89.27                AS OPTIONAL ANNUITY FORM RECIPIENTS 
 89.28     Section 1.  [356.372] [SUPPLEMENTAL NEEDS TRUST AS OPTIONAL 
 89.29  ANNUITY FORM RECIPIENT.] 
 89.30     Subdivision 1.  [INCLUSION AS RECIPIENT.] Notwithstanding 
 89.31  any provision to the contrary of the laws, articles of 
 89.32  incorporation, or bylaws governing a covered retirement plan 
 89.33  specified in subdivision 3, a retiring member may designate a 
 89.34  qualified supplemental needs trust under subdivision 2 as the 
 89.35  remainder recipient on an optional retirement annuity form for a 
 89.36  period not to exceed the lifetime of the beneficiary of the 
 90.1   supplemental needs trust. 
 90.2      Subd. 2.  [QUALIFIED SUPPLEMENTAL NEEDS TRUST.] A qualified 
 90.3   supplemental needs trust is a trust that: 
 90.4      (1) was established on or after July 1, 1992; 
 90.5      (2) was established solely for the benefit of one person 
 90.6   who has a disability under federal Social Security 
 90.7   Administration supplemental security income or retirement, 
 90.8   survivors, and disability insurance disability determination 
 90.9   standards and who was determined as such before the creation of 
 90.10  the trust; 
 90.11     (3) is funded, in whole or in part, by the primary 
 90.12  recipient of the optional annuity form and, unless the trust is 
 90.13  a Zebley trust, is not funded by the beneficiary, the 
 90.14  beneficiary's spouse, or a person who is required to pay a sum 
 90.15  to or for the trust beneficiary under the terms of litigation or 
 90.16  a litigation settlement; 
 90.17     (4) is established to cover reasonable living expenses and 
 90.18  other basic needs of the disabilitant, in whole or in part, in 
 90.19  instances when public assistance does not provide sufficiently 
 90.20  for these needs; 
 90.21     (5) is not permitted to make disbursement to replace or 
 90.22  reduce public assistance otherwise available; 
 90.23     (6) is irrevocable; 
 90.24     (7) terminates upon the death of the disabled person for 
 90.25  whose benefit it was established; and 
 90.26     (8) is determined by the executive director to be a trust 
 90.27  that contains excluded assets for purposes of the qualification 
 90.28  for public entitlement benefits under the applicable federal and 
 90.29  state laws and regulations. 
 90.30     Subd. 3.  [COVERED RETIREMENT PLAN.] The provisions of this 
 90.31  section apply to the following retirement plans: 
 90.32     (1) general state employees retirement plan of the 
 90.33  Minnesota state retirement system, established under chapter 
 90.34  352; 
 90.35     (2) correctional employees retirement plan of the Minnesota 
 90.36  state retirement system, established under chapter 352; 
 91.1      (3) state patrol retirement plan, established under chapter 
 91.2   352B; 
 91.3      (4) legislators retirement plan, established under chapter 
 91.4   3A; 
 91.5      (5) judges retirement plan, established under chapter 490; 
 91.6      (6) public employees retirement plan, established under 
 91.7   chapter 353; 
 91.8      (7) public employees police and fire plan, established 
 91.9   under chapter 353; 
 91.10     (8) teachers retirement plan, established under chapter 
 91.11  354; 
 91.12     (9) Duluth teachers retirement fund association, 
 91.13  established under chapter 354A; 
 91.14     (10) St. Paul teachers retirement fund association, 
 91.15  established under chapter 354A; 
 91.16     (11) Minneapolis teachers retirement fund association, 
 91.17  established under chapter 354A; 
 91.18     (12) Minneapolis employees retirement plan, established 
 91.19  under chapter 422A; 
 91.20     (13) Minneapolis firefighters relief association, 
 91.21  established under chapter 69; 
 91.22     (14) Minneapolis police relief association, established 
 91.23  under chapter 423B; and 
 91.24     (15) public employees local government correctional service 
 91.25  retirement plan, established under chapter 353E. 
 91.26     Sec. 2.  [EFFECTIVE DATE.] 
 91.27     Section 1 is effective on the day following final enactment.
 91.28                             ARTICLE 11
 91.29             VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES 
 91.30     Section 1.  [REPEALER.] 
 91.31     Minnesota Statutes 1998, section 424A.02, subdivision 5, is 
 91.32  repealed. 
 91.33     Sec. 2.  [EFFECTIVE DATE.] 
 91.34     Section 1 is effective July 1, 1999. 
 91.35                             ARTICLE 12 
 91.36                           ANNUITY LIMITS 
 92.1      Section 1.  Minnesota Statutes 1998, section 356.61, is 
 92.2   amended to read: 
 92.3      356.61 [LIMITATION ON PUBLIC EMPLOYEE RETIREMENT 
 92.4   ANNUITIES.] 
 92.5      Notwithstanding any provision of law, bylaws, articles of 
 92.6   incorporation, retirement and disability allowance plan 
 92.7   agreements or retirement plan contracts to the contrary, no 
 92.8   person who has pension or retirement coverage by a public 
 92.9   pension plan is entitled to receive a monthly retirement annuity 
 92.10  or disability benefit which, at the time of commencement of the 
 92.11  retirement annuity or disability benefit, exceeds 1/12 of the 
 92.12  amount of the annual benefit permitted by the terms of section 
 92.13  415 of the Internal Revenue Code with respect to a participant 
 92.14  in a plan qualified under section 401(a) of the Internal Revenue 
 92.15  Code, as amended through December 31, 1982.  
 92.16     The benefit limitation is to be determined on the date the 
 92.17  benefit is initially payable or on the date the employee 
 92.18  terminated employment, if earlier.  The benefit limitation on 
 92.19  any date is the benefit limitation for the limitation year in 
 92.20  which the date occurs.  The limitations apply only to the annual 
 92.21  benefit which is derived from employer contributions.  Mandatory 
 92.22  and voluntary employee contributions, if any, are treated as a 
 92.23  separate defined contribution plan maintained by the employer 
 92.24  which is subject to the limitations placed on annual additions 
 92.25  to defined contribution plans.  
 92.26     The maximum annual benefit for any limitation year is the 
 92.27  lesser of (1) or (2) below:  
 92.28     (1) A dollar limitation of $90,000, adjusted as of January 
 92.29  1 of each calendar year to the dollar limitation as determined 
 92.30  for that year by the commissioner of Internal Revenue.  The 
 92.31  amount determined for any year will apply to limitation years 
 92.32  ending with or within that calendar year.  
 92.33     (2) A compensation limitation of 100 percent of the average 
 92.34  of compensation paid or made available to the participant by the 
 92.35  employer during those three consecutive calendar years of 
 92.36  employment, or actual number of consecutive calendar years of 
 93.1   employment if employed less than three consecutive years, which 
 93.2   give the highest average.  Compensation means any compensation 
 93.3   which is includable in the employee's gross income, plus any 
 93.4   elective deferral as defined in section 402(g)(3) of the federal 
 93.5   Internal Revenue Code of 1986, as amended through May 15, 1999, 
 93.6   and any amount which was contributed or deferred by the employer 
 93.7   at the election of the employee and which is not includable in 
 93.8   the gross income of the employee by reason of section 125 or 457 
 93.9   of the federal Internal Revenue Code.  
 93.10     A benefit is deemed not to exceed the maximum benefit 
 93.11  limitation if: 
 93.12     (1) the retirement benefits payable under the plan and 
 93.13  under any other defined benefit plans of the employer do not 
 93.14  exceed the $10,000 limit set in section 415(b)(4) of the 
 93.15  Internal Revenue Code for the plan year, or for any prior plan 
 93.16  year, and 
 93.17     (2) the employer has not at any time maintained a defined 
 93.18  contribution plan in which the employee participated.  
 93.19     A public pension plan is any Minnesota public pension plan 
 93.20  or fund which provides pension or retirement coverage for public 
 93.21  employees other than volunteer firefighters, including any plan 
 93.22  or fund enumerated in sections 356.20, subdivision 2, or 356.30, 
 93.23  subdivision 3, any local police or firefighter's relief 
 93.24  association to which section 69.77 applies, or any retirement or 
 93.25  pension plan or fund, including a supplemental retirement plan 
 93.26  or fund, established, maintained or supported by any 
 93.27  governmental subdivision or public body whose revenues are 
 93.28  derived from taxation, fees, assessments or from other public 
 93.29  sources.  
 93.30     The figure for the monthly retirement annuity or disability 
 93.31  benefit to be used for the calculation of this limitation must 
 93.32  not include any reduction or adjustment required for retirement 
 93.33  prior to the normal retirement age or required for the election 
 93.34  of an optional annuity.  
 93.35     If the figure for the monthly retirement annuity or 
 93.36  disability benefit exceeds the limit contained in this section, 
 94.1   the annuity or benefit payable must be reduced appropriately.  
 94.2      The managing board of each public pension plan from which a 
 94.3   retirement annuity or disability benefit is payable shall, at 
 94.4   the time that the retirement annuity or disability benefit 
 94.5   commences, contact all other public pension plans to determine 
 94.6   whether or not the recipient of the retirement annuity or 
 94.7   disability benefit is also receiving or is entitled to receive a 
 94.8   retirement annuity or disability benefit from any other public 
 94.9   pension plan.  If a person is entitled to receive or is 
 94.10  receiving a retirement annuity or disability benefit from more 
 94.11  than one public pension plan, all retirement annuities or 
 94.12  disability benefits from all public pension plans must be 
 94.13  totaled in determining whether or not the limitation applies.  A 
 94.14  reduction in the amount of the retirement annuity or disability 
 94.15  benefit required under this section is made by the public 
 94.16  pension plan which provided retirement coverage for the most 
 94.17  recent period of service. 
 94.18     Sec. 2.  [EFFECTIVE DATE.] 
 94.19     Section 1 is effective the day following final enactment. 
 94.20                             ARTICLE 13
 94.21           CORRECTIONAL EMPLOYEES RETIREMENT PLAN CHANGES 
 94.22     Section 1.  Minnesota Statutes 1998, section 352.90, is 
 94.23  amended to read: 
 94.24     352.90 [POLICY.] 
 94.25     It is the policy of the legislature to provide special 
 94.26  retirement benefits and contributions for certain correctional 
 94.27  employees who may be required to retire at an early age because 
 94.28  they lose the mental or physical capacity required to maintain 
 94.29  the safety, security, discipline, and custody of inmates at 
 94.30  state correctional facilities or of patients at the Minnesota 
 94.31  security hospital or at the Minnesota sexual psychopathic 
 94.32  personality treatment center or of patients in the Minnesota 
 94.33  extended treatment options on-campus program at the Cambridge 
 94.34  regional human services center.  
 94.35     Sec. 2.  Minnesota Statutes 1998, section 352.91, is 
 94.36  amended by adding a subdivision to read: 
 95.1      Subd. 3e.  [MINNESOTA EXTENDED TREATMENT OPTIONS PROGRAM; 
 95.2   CAMBRIDGE.] "Covered correctional service" means service by a 
 95.3   state employee in one of the following employment positions with 
 95.4   the Minnesota extended treatment options on-campus program at 
 95.5   the Cambridge regional human services center if at least 75 
 95.6   percent of the employee's working time is spent in direct 
 95.7   contact with patients who are in the Minnesota extended 
 95.8   treatment options program and if service in such a position is 
 95.9   certified to the executive director by the commissioner of human 
 95.10  services, unless the person elects to retain current retirement 
 95.11  coverage under section 6: 
 95.12     (1) behavior analyst I ; 
 95.13     (2) human services support specialist; 
 95.14     (3) mental retardation residential program lead; 
 95.15     (4) psychologist 2; 
 95.16     (5) recreation program assistant; 
 95.17     (6) recreation therapist senior; 
 95.18     (7) registered nurse senior; 
 95.19     (8) skills development specialist; and 
 95.20     (9) social worker senior. 
 95.21     Sec. 3.  Minnesota Statutes 1998, section 352.92, 
 95.22  subdivision 1, is amended to read: 
 95.23     Subdivision 1.  [EMPLOYEE CONTRIBUTIONS.] Employee 
 95.24  contributions of covered correctional employees must be in an 
 95.25  amount equal to 5.50 5.69 percent of salary.  
 95.26     Sec. 4.  Minnesota Statutes 1998, section 352.92, 
 95.27  subdivision 2, is amended to read: 
 95.28     Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
 95.29  contribute for covered correctional employees an amount equal to 
 95.30  7.70 7.98 percent of salary. 
 95.31     Sec. 5.  Minnesota Statutes 1998, section 352.93, 
 95.32  subdivision 2a, is amended to read: 
 95.33     Subd. 2a.  [EARLY RETIREMENT.] Any covered correctional 
 95.34  employee, or former employee if service ended after June 30, 
 95.35  1989, who becomes at least 50 years old and who has at least 
 95.36  three years of allowable service is entitled upon application to 
 96.1   a reduced retirement annuity equal to the annuity calculated 
 96.2   under subdivision 2, reduced so that the reduced annuity is the 
 96.3   actuarial equivalent of the annuity that would be payable if the 
 96.4   employee deferred receipt of the annuity from the day the 
 96.5   annuity begins to accrue to age 55 by two-tenths of one percent 
 96.6   for each month that the correctional employee is under age 55 at 
 96.7   the time of retirement. 
 96.8      Sec. 6.  [TEMPORARY PROVISION; ELECTION TO RETAIN 
 96.9   RETIREMENT COVERAGE.] 
 96.10     (a) An employee in a position specified as qualifying under 
 96.11  section 2 may elect to retain coverage under the general 
 96.12  employees retirement plan of the Minnesota state retirement 
 96.13  system or may elect to transfer coverage and contribute to the 
 96.14  correctional employees retirement plan.  An employee electing to 
 96.15  participate in the correctional employees retirement plan shall 
 96.16  begin making contributions to the correctional plan beginning 
 96.17  the first full pay period after July 1, 1999, or the first full 
 96.18  pay period following filing of their election to transfer 
 96.19  coverage to the correctional employees retirement plan, 
 96.20  whichever is later.  The election to retain coverage or to 
 96.21  transfer coverage must be made in writing by the person on a 
 96.22  form prescribed by the executive director of the Minnesota state 
 96.23  retirement system and must be filed with the executive director 
 96.24  no later than December 31, 1999. 
 96.25     (b) An employee failing to make an election by December 15, 
 96.26  1999, must be notified by certified mail by the executive 
 96.27  director of the Minnesota state retirement system of the 
 96.28  deadline to make a choice.  A person who does not submit an 
 96.29  election form must continue coverage in the general employees 
 96.30  retirement plan and forfeits all rights to transfer retirement 
 96.31  coverage to the correctional employees retirement plan. 
 96.32     (c) The election to retain coverage in the general 
 96.33  employees retirement plan or the election to transfer retirement 
 96.34  coverage to the correctional employees retirement plan is 
 96.35  irrevocable once it is filed with the executive director. 
 96.36     Sec. 7.  [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 
 97.1   PERSONS.] 
 97.2      Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 
 97.3   (a) An employee who has future retirement coverage transferred 
 97.4   to the correctional employees retirement plan under section 6, 
 97.5   and who does not elect to retain general state employees 
 97.6   retirement plan coverage, is entitled to elect to obtain prior 
 97.7   service credit for eligible state service performed on or after 
 97.8   July 1, 1997, and before the first day of the first full pay 
 97.9   period beginning after December 31, 1999.  All prior service 
 97.10  credit must be purchased. 
 97.11     (b) Eligible state service is any period of service on or 
 97.12  after the date which the employee started employment with the 
 97.13  Minnesota extended treatment options program in a position 
 97.14  specified in Minnesota Statutes, section 352.91, subdivision 3e, 
 97.15  in which at least 75 percent of the employee's working time is 
 97.16  determined to have been spent in direct contact with Minnesota 
 97.17  extended treatment options program patients or July 1, 1997, 
 97.18  whichever is later, and the date the employee joined the 
 97.19  correctional employees plan.  
 97.20     (c) The department of human services shall certify eligible 
 97.21  state service to the executive director of the Minnesota 
 97.22  retirement system. 
 97.23     Subd. 2.  [PAYMENT FOR PRIOR SERVICE.] (a) An employee 
 97.24  electing to obtain prior service credit under subdivision 1 must 
 97.25  pay an additional employee contribution for that prior service.  
 97.26  The additional member contribution is the contribution 
 97.27  differential percentage applied to the actual salary paid to the 
 97.28  employee during the period of the prior eligible state service, 
 97.29  plus interest at the rate of six percent per annum, compounded 
 97.30  annually.  The contribution differential percentage is the 
 97.31  difference between 5.5 percent of salary and the applicable 
 97.32  employee contribution rate of the general state employees 
 97.33  retirement plan during the prior eligible state service. 
 97.34     (b) The additional member contribution must be paid only in 
 97.35  a lump sum.  Payment must accompany the election to obtain prior 
 97.36  service credit.  No election or payment may be made by the 
 98.1   person or accepted by the executive director after June 30, 2001.
 98.2      Subd. 3.  [TRANSFER OF ASSETS.] Assets must be transferred 
 98.3   from the general state employees retirement plan to the 
 98.4   correctional employees retirement plan in an amount equal to the 
 98.5   present value of benefits earned under the general employees 
 98.6   retirement plan for each employee transferring to the 
 98.7   correctional employees retirement plan, as determined by the 
 98.8   actuary retained by the legislative commission on pensions and 
 98.9   retirement in accordance with Minnesota Statutes, section 
 98.10  356.215, multiplied by the accrued liability funding ratio of 
 98.11  active members as derived from the most recent actuarial 
 98.12  valuation prepared by the commission-retained actuary.  The 
 98.13  transfer of assets must be made within 45 days after the 
 98.14  employee elects to transfer coverage to the correctional 
 98.15  employees retirement plan. 
 98.16     Subd. 4.  [EFFECT OF THE ASSET TRANSFER.] Upon the transfer 
 98.17  of assets in subdivision 3, service credit in the general state 
 98.18  employees plan of the Minnesota state retirement system is 
 98.19  forfeited and may not be reinstated.  The service credit and 
 98.20  transferred assets must be credited to the correctional 
 98.21  employees retirement plan. 
 98.22     Subd. 5.  [COUNSELING.] (a) The commissioners of human 
 98.23  services and employee relations, and the executive director of 
 98.24  the Minnesota state retirement system have the joint 
 98.25  responsibility of providing affected employees with appropriate 
 98.26  and timely retirement and related benefit counseling. 
 98.27     (b) Counseling must include the anticipated impact of the 
 98.28  retirement coverage change on the person's future retirement 
 98.29  benefit amounts, future retirement eligibility, future 
 98.30  applicability of mandatory retirement laws, and future 
 98.31  postemployment insurance coverage. 
 98.32     (c) The commissioner of human services must consult with 
 98.33  the appropriate collective bargaining agents of the affected 
 98.34  employees regarding the content, form, and timing of the 
 98.35  counseling required by this section. 
 98.36     Sec. 8.  [TRANSITIONAL PROVISION; RETENTION OF CERTAIN 
 99.1   RIGHTS.] 
 99.2      (a) Nothing in sections 1, 2, and 6 to 9 may be considered 
 99.3   to restrict the entitlement of a person under state law to repay 
 99.4   a previously taken refund of employee or member contributions to 
 99.5   a Minnesota public pension plan if all qualifying requirements 
 99.6   are met. 
 99.7      (b) The period of correctional employees retirement plan 
 99.8   contributions, plus interest, must be restored upon the 
 99.9   repayment of the appropriate refund amount if the service was 
 99.10  correctional employees retirement plan covered service on the 
 99.11  date when the service was rendered or on the date when the 
 99.12  refund was taken. 
 99.13     Sec. 9.  [EARLY RETIREMENT INCENTIVE.] 
 99.14     This section applies to an employee who has future 
 99.15  retirement coverage transferred to the correctional employee 
 99.16  retirement plan under section 6 and who is at least 55 years old 
 99.17  on the effective date of section 6.  That employee may 
 99.18  participate in a health insurance early retirement incentive 
 99.19  available under the terms of a collective bargaining agreement, 
 99.20  notwithstanding any provision of the collective bargaining 
 99.21  agreement that limits participation to persons who select the 
 99.22  option during the payroll period in which they become 55 years 
 99.23  old.  A person selecting the health insurance early retirement 
 99.24  incentive under this section must retire by the later of 
 99.25  December 31, 2000, or within the pay period following the time 
 99.26  at which the person has at least three years of covered 
 99.27  correctional service, including any purchased service credit.  
 99.28  An employee meeting this criteria who wishes to extend the 
 99.29  person's employment must do so under Minnesota Statutes, section 
 99.30  43A.34, subdivision 3. 
 99.31     Sec. 10.  [EFFECTIVE DATE.] 
 99.32     Sections 1, 2, 3, 4, and 6 to 9 are effective on the first 
 99.33  day of the first full pay period beginning after July 1, 1999.  
 99.34  Section 5 is effective July 1, 1999. 
 99.35                             ARTICLE 14
 99.36                   PUBLIC SAFETY EMPLOYEE PENSION 
100.1                             PLAN CHANGES 
100.2      Section 1.  Minnesota Statutes 1998, section 352B.08, 
100.3   subdivision 2a, is amended to read: 
100.4      Subd. 2a.  [EARLY RETIREMENT.] Any member who has become at 
100.5   least 50 years old and who has at least three years of allowable 
100.6   service is entitled upon application to a reduced retirement 
100.7   annuity equal to the annuity calculated under subdivision 2, 
100.8   reduced by two-tenths one-tenth of one percent for each month 
100.9   that the member is under age 55 at the time of retirement. 
100.10     Sec. 2.  Minnesota Statutes 1998, section 353.64, 
100.11  subdivision 1, is amended to read: 
100.12     Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
100.13  person who prior to July 1, 1961, was a member of the police and 
100.14  fire fund, by virtue of being a police officer or firefighter, 
100.15  shall, as long as the person remains in either position, 
100.16  continue membership in the fund.  
100.17     (b) A person who was employed by a governmental subdivision 
100.18  as a police officer and was a member of the police and fire fund 
100.19  on July 1, 1978, by virtue of being a police officer as defined 
100.20  by this section on that date, and if employed by the same 
100.21  governmental subdivision in a position in the same department in 
100.22  which the person was employed on that date, shall continue 
100.23  membership in continues to be a member of the fund, whether or 
100.24  not that person has the power of arrest by warrant and is 
100.25  licensed by the peace officers standards and training board 
100.26  after that date.  A person who was employed as a correctional 
100.27  officer by Rice county before July 1, 1998, for the duration of 
100.28  employment in the correctional position held on July 1, 1998, 
100.29  continues to be a member of the public employees police and fire 
100.30  plan, whether or not the person has the power of arrest by 
100.31  warrant and is licensed by the peace officers standards and 
100.32  training board after that date. 
100.33     (c) A person who was employed by a governmental subdivision 
100.34  as a police officer or a firefighter, whichever applies, was an 
100.35  active member of the local police or salaried firefighters 
100.36  relief association located in that governmental subdivision by 
101.1   virtue of that employment as of the effective date of the 
101.2   consolidation as authorized by sections 353A.01 to 353A.10, and 
101.3   has elected coverage by the public employees police and fire 
101.4   fund benefit plan, shall become a member of the police and fire 
101.5   fund after that date if employed by the same governmental 
101.6   subdivision in a position in the same department in which the 
101.7   person was employed on that date. 
101.8      (d) Any other employee serving on a full-time basis as a 
101.9   police officer as defined in subdivision 2 or as a firefighter 
101.10  as defined in subdivision 3 on or after July 1, 1961, shall 
101.11  become a member of the public employees police and fire fund.  
101.12     (e) An employee serving on less than a full-time basis as a 
101.13  police officer shall become a member of the public employees 
101.14  police and fire fund only after a resolution stating that the 
101.15  employee should be covered by the police and fire fund is 
101.16  adopted by the governing body of the governmental subdivision 
101.17  employing the person declaring that the position which the 
101.18  person holds is that of a police officer. 
101.19     (f) An employee serving on less than a full-time basis as a 
101.20  firefighter shall become a member of the public employees police 
101.21  and fire fund only after a resolution stating that the employee 
101.22  should be covered by the police and fire fund is adopted by the 
101.23  governing body of the governmental subdivision employing the 
101.24  person declaring that the position which the person holds is 
101.25  that of a firefighter. 
101.26     (g) A police officer or firefighter employed by a 
101.27  governmental subdivision who by virtue of that employment is 
101.28  required by law to be a member of and to contribute to any 
101.29  police or firefighter relief association governed by section 
101.30  69.77 which has not consolidated with the public employees 
101.31  police and fire fund and any police officer or firefighter of a 
101.32  relief association that has consolidated with the association 
101.33  for which the employee has not elected coverage by the public 
101.34  employees police and fire fund benefit plan as provided in 
101.35  sections 353A.01 to 353A.10 shall not become a member of the 
101.36  public employees police and fire fund. 
102.1      Sec. 3.  Minnesota Statutes 1998, section 353.651, 
102.2   subdivision 4, is amended to read: 
102.3      Subd. 4.  [EARLY RETIREMENT.] Any police officer or 
102.4   firefighter member who has become at least 50 years old and who 
102.5   has at least three years of allowable service is entitled upon 
102.6   application to a retirement annuity equal to the normal annuity 
102.7   calculated under subdivision 3, reduced by two-tenths one-tenth 
102.8   of one percent for each month that the member is under age 55 at 
102.9   the time of retirement. 
102.10     Sec. 4.  [353.652] [SOCIAL SECURITY BENEFIT OFFSET IN 
102.11  CERTAIN INSTANCES.] 
102.12     (a) If a public employee continues in retirement plan 
102.13  coverage by the public employees police and fire retirement plan 
102.14  by virtue of this article and subsequently is covered by the 
102.15  federal old age, survivors, and disability insurance program for 
102.16  service as a Rice county correctional officer, the retirement 
102.17  annuity of the person under section 353.651 or the disability 
102.18  benefit of the person under section 353.656 must be reduced 
102.19  dollar for dollar for the social security benefit that the 
102.20  person is entitled to receive by virtue of Rice county 
102.21  correctional service rendered after the effective date of 
102.22  section 1. 
102.23     (b) To be effective, the retirement annuity or disability 
102.24  benefit application form for a Rice county correctional employee 
102.25  must include signed written permission by the person for the 
102.26  public employees retirement association to obtain the necessary 
102.27  information from the federal old age, survivors, and disability 
102.28  insurance program to implement the offset provision in paragraph 
102.29  (a). 
102.30     Sec. 5.  [353.90] [PENALTY FOR MEMBERSHIP MISCERTIFICATIONS 
102.31  AND CERTIFICATION FAILURES.] 
102.32     (a) If the board of trustees of the public employees 
102.33  retirement association, upon the recommendation of the executive 
102.34  director, determines that a governmental subdivision has 
102.35  certified a public employee for membership in the public 
102.36  employees police and fire retirement plan when the public 
103.1   employee was not eligible for that retirement plan coverage, the 
103.2   public employee must be covered by the correct retirement plan 
103.3   for subsequent service, the public employee retains the coverage 
103.4   for the period of the misclassification, and the governmental 
103.5   subdivision shall pay in a lump sum the difference in the 
103.6   actuarial present value of the retirement annuities to which the 
103.7   public employee would have been entitled if the public employee 
103.8   was properly classified.  The governmental subdivision payment 
103.9   is payable within 30 days of the board's determination.  If 
103.10  unpaid, it must be collected under section 353.28.  The lump sum 
103.11  payment must be deposited in the public employees retirement 
103.12  fund. 
103.13     (b) If the executive director of the public employees 
103.14  retirement association determines that a governmental 
103.15  subdivision has failed to certify a person for retirement plan 
103.16  membership and coverage under this chapter, in addition to the 
103.17  procedures under section 353.27, subdivision 4, 9, 10, 11, 12, 
103.18  12a, or 12b, the director shall charge a fine of $25 for each 
103.19  membership certification failure. 
103.20     Sec. 6.  Minnesota Statutes 1998, section 353A.083, is 
103.21  amended by adding a subdivision to read: 
103.22     Subd. 4.  [PRE-1999 CONSOLIDATIONS.] For any consolidation 
103.23  account in effect on July 1, 1999, the public employees police 
103.24  and fire fund benefit plan applicable to consolidation account 
103.25  members who have elected or will elect that benefit plan 
103.26  coverage under section 353A.08 is the most recent change adopted 
103.27  by the applicable municipality under subdivision 1, 2, or 3, 
103.28  unless the applicable municipality approves the extension of the 
103.29  post-June 30, 1999, public employees police and fire fund 
103.30  benefit plan to the consolidation account. 
103.31     Sec. 7.  [COLLECTION OF POLICE STATE OVERPAYMENTS.] 
103.32     (a) As police state aid that was received by Rice county on 
103.33  account of correctional officers who were improperly included in 
103.34  retirement coverage by the public employees police and fire 
103.35  plan, the total of the following amounts must be deducted in 20 
103.36  equal annual installments from any police state aid payable to 
104.1   Rice county under Minnesota Statutes, chapter 69: 
104.2             amount                 year  
104.3            $11,543                 1994
104.4             19,096                 1995 
104.5             39,111                 1996  
104.6             19,170                 1997 
104.7             13,764                 1998.  
104.8      (b) Rice county correctional officers who are members of 
104.9   the public employees police and fire plan may not be included in 
104.10  the police officer certification under Minnesota Statutes, 
104.11  section 69.011, subdivision 2, paragraph (b), and the employer 
104.12  contributions to the public employees police and fire fund on 
104.13  behalf of those correctional employees may not be included in 
104.14  the employer police retirement coverage prior calendar year 
104.15  obligation for the determination of excess police state aid 
104.16  under Minnesota Statutes, section 69.021, subdivision 10, unless 
104.17  the correctional officer is a peace officer as defined in 
104.18  Minnesota Statutes, section 69.011, subdivision 1, paragraph (g).
104.19     Sec. 8.  [EFFECTIVE DATE.] 
104.20     (a) Sections 1, 3, and 7 are effective on July 1, 1999.  
104.21  Sections 2, 4, and 6 are effective on the day following final 
104.22  enactment.  Section 5 is effective on August 1, 2000. 
104.23     (b) If all consolidation accounts in effect on March 1, 
104.24  1999, are merged with the public employees police and fire fund 
104.25  after July 1, 1999, section 6 is repealed as of June 30, 1999. 
104.26                             ARTICLE 15
104.27                    SPECIAL RETIREMENT COVERAGE  
104.28                       FOR CERTAIN STATE FIRE 
104.29                         MARSHAL EMPLOYEES
104.30     Section 1.  [352.87] [STATE FIRE MARSHAL DIVISION 
104.31  EMPLOYEES.] 
104.32     Subdivision 1.  [ELIGIBILITY.] A member of the general plan 
104.33  who is employed by the department of public safety, state fire 
104.34  marshal division, as a deputy state fire marshal, fire/arson 
104.35  investigator, who elects special benefit coverage under 
104.36  subdivision 8, is entitled to retirement benefits or disability 
105.1   benefits, as applicable, as stated in this section for eligible 
105.2   service under this section rendered after July 1, 1999, for 
105.3   which allowable service credit is received.  The covered member 
105.4   must be at least age 55 to qualify for the retirement annuity 
105.5   specified in subdivision 3. 
105.6      Subd. 2.  [RETIREMENT ANNUITY ELIGIBILITY.] A person 
105.7   specified in subdivision 1 who meets all eligibility 
105.8   requirements specified in this chapter applicable to general 
105.9   plan members is eligible for retirement benefits as specified in 
105.10  subdivision 3. 
105.11     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] A person specified 
105.12  in subdivision 1 will have a retirement annuity applicable for 
105.13  allowable service credit under this section calculated by 
105.14  multiplying the employee's average salary, as defined in section 
105.15  352.115, subdivision 2, by the percent specified in section 
105.16  356.19, subdivision 2a, for each year or portions of a year of 
105.17  allowable service credit.  No reduction for retirement prior to 
105.18  normal retirement age, as specified in section 352.01, 
105.19  subdivision 25, applies to service to which this section applies.
105.20     Subd. 4.  [NON-JOB-RELATED DISABILITY BENEFITS.] An 
105.21  eligible member described in subdivision 1, who is less than 55 
105.22  years of age and who becomes disabled and physically or mentally 
105.23  unfit to perform the duties of the position because of sickness 
105.24  or injury while not engaged in covered employment, is entitled 
105.25  to a disability benefit amount equivalent to an annuity computed 
105.26  under subdivision 3 assuming the member has 15 years of service 
105.27  qualifying under this section and waiving the minimum age 
105.28  requirement.  If the eligible member becomes disabled under this 
105.29  subdivision with more than 15 years of service covered under 
105.30  this section, the eligible member is entitled to a disability 
105.31  benefit amount equivalent to an annuity computed under 
105.32  subdivision 3 based on all years of service credited under this 
105.33  section and waiving the minimum age requirement. 
105.34     Subd. 5.  [JOB-RELATED DISABILITY BENEFITS.] An eligible 
105.35  member defined in subdivision 1, who is less than 55 years of 
105.36  age and who becomes disabled and physically or mentally unfit to 
106.1   perform the duties of the position because of sickness or injury 
106.2   while engaged in covered employment, is entitled to a disability 
106.3   benefit amount equivalent to an annuity computed under 
106.4   subdivision 3 assuming the member has 20 years of service 
106.5   qualifying under this section and waiving the minimum age 
106.6   requirement.  An eligible member who becomes disabled under this 
106.7   subdivision with more than 20 years of service credited under 
106.8   this section is entitled to a disability benefit amount 
106.9   equivalent to an annuity computed under subdivision 3 based on 
106.10  all years of service credited under this section and waiving the 
106.11  age requirement. 
106.12     Subd. 6.  [DISABILITY BENEFIT COORDINATION.] If the 
106.13  eligible employee is entitled to receive a disability benefit as 
106.14  provided in subdivision 4 or 5 and has allowable service credit 
106.15  under this section for less service than the length of service 
106.16  upon which the disability benefit in subdivision 4 or 5 is 
106.17  based, and also has allowable service in the general plan not 
106.18  includable in this section, the employee is entitled to a 
106.19  disability benefit or deferred retirement annuity based on the 
106.20  general plan service not includable in this section only for the 
106.21  service that, when combined with the service includable in this 
106.22  section, exceeds the number of years on which the disability 
106.23  benefit provided in subdivision 4 or 5 is based.  The benefit 
106.24  recipient under subdivision 4 or 5 who also has credit for 
106.25  regular plan service must in all respects qualify under section 
106.26  352.113 to be entitled to receive a disability benefit based on 
106.27  the general plan service not includable in this section, except 
106.28  that the service may be combined to satisfy length of service 
106.29  requirements.  Any deferred annuity to which the employee may be 
106.30  entitled based on general plan service not includable in this 
106.31  section must be augmented as provided in section 352.72, 
106.32  subdivision 2, while the employee is receiving a disability 
106.33  benefit under this section. 
106.34     Subd. 7.  [ADDITIONAL CONTRIBUTIONS.] The special 
106.35  retirement annuity and disability coverage under this section 
106.36  must be financed by an employee contribution of 2.78 percent of 
107.1   covered salary and an employer contribution of 4.20 percent of 
107.2   covered salary.  These contributions are in addition to the 
107.3   contributions required by section 352.04, subdivisions 2 and 3, 
107.4   and must be made in the manner provided for in section 352.04, 
107.5   subdivisions 4, 5, and 6. 
107.6      Subd. 8.  [ELECTION OF COVERAGE.] To be covered by this 
107.7   section, an employee of the department of public safety 
107.8   described in subdivision 1 who is employed in a position 
107.9   described in that subdivision on or after July 1, 1999, must 
107.10  file a notice with the executive director of the Minnesota state 
107.11  retirement system on a form prescribed by the executive director 
107.12  stating whether or not the employee elects to be covered by this 
107.13  section.  Notice must be filed by September 1, 1999, or within 
107.14  90 days of employment, whichever is later.  Elections are 
107.15  irrevocable during any period of covered employment.  A failure 
107.16  to file a timely notice shall be deemed a waiver of coverage by 
107.17  this section. 
107.18     Sec. 2.  Minnesota Statutes 1998, section 356.19, is 
107.19  amended by adding a subdivision to read: 
107.20     Subd. 2a.  [COORDINATED MEMBERS.] The applicable benefit 
107.21  accrual rate is 2.0 percent. 
107.22     Sec. 3.  [EFFECTIVE DATE.] 
107.23     Sections 1 and 2 are effective the day following final 
107.24  enactment. 
107.25                             ARTICLE 16
107.26                      TEACHER RETIREMENT PLANS  
107.27                   PRIOR SERVICE CREDIT PURCHASE  
107.28                           AUTHORIZATION  
107.29     Section 1.  [354.533] [PRIOR OR UNCREDITED MILITARY SERVICE 
107.30  CREDIT PURCHASE.] 
107.31     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
107.32  teacher who has at least three years of allowable service credit 
107.33  with the teachers retirement association and who performed 
107.34  service in the United States armed forces before becoming a 
107.35  teacher as defined in section 354.05, subdivision 2, or who 
107.36  failed to obtain service credit for a military leave of absence 
108.1   under the provisions of section 354.53, is entitled to purchase 
108.2   allowable and formula service credit for the initial period of 
108.3   enlistment, induction, or call to active duty without any 
108.4   voluntary extension by making payment under section 356.55 
108.5   provided the teacher is not entitled to receive a current or 
108.6   deferred retirement annuity from a United States armed forces 
108.7   pension plan and has not purchased service credit from any other 
108.8   defined benefit public employee pension plan for the same period 
108.9   of service. 
108.10     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
108.11  desires to purchase service credit under subdivision 1 must 
108.12  apply with the executive director to make the purchase.  The 
108.13  application must include all necessary documentation of the 
108.14  teacher's qualifications to make the purchase, signed written 
108.15  permission to allow the executive director to request and 
108.16  receive necessary verification of applicable facts and 
108.17  eligibility requirements, and any other relevant information 
108.18  that the executive director may require. 
108.19     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
108.20  service credit for the purchase period must be granted by the 
108.21  teachers retirement association to the purchasing teacher upon 
108.22  receipt of the purchase payment amount.  Payment must be made 
108.23  before the teacher's effective date of retirement.  
108.24     Sec. 2.  [354.534] [PRIOR OUT-OF-STATE TEACHING SERVICE 
108.25  CREDIT PURCHASE.] 
108.26     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
108.27  teacher who has at least three years of allowable service credit 
108.28  with the teachers retirement association is entitled to purchase 
108.29  up to ten years of allowable and formula service credit for 
108.30  out-of-state teaching service by making payment under section 
108.31  356.55, provided the out-of-state teaching service was performed 
108.32  for an educational institution established and operated by 
108.33  another state, governmental subdivision of another state, or the 
108.34  federal government and the teacher is not entitled to receive a 
108.35  current or deferred age and service retirement annuity or 
108.36  disability benefit and has not purchased service credit from 
109.1   another defined benefit public employee pension plan for that 
109.2   out-of-state teaching service. 
109.3      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
109.4   desires to purchase service credit under subdivision 1 must 
109.5   apply with the executive director to make the purchase.  The 
109.6   application must include all necessary documentation of the 
109.7   teacher's qualifications to make the purchase, signed written 
109.8   permission to allow the executive director to request and 
109.9   receive necessary verification of applicable facts and 
109.10  eligibility requirements, and any other relevant information 
109.11  that the executive director may require.  Payment must be made 
109.12  before the teacher's effective date of retirement.  
109.13     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
109.14  service credit for the purchase period must be granted by the 
109.15  teachers retirement association to the purchasing teacher on 
109.16  receipt of the purchase payment amount. 
109.17     Sec. 3.  [354.535] [MATERNITY LEAVE OF ABSENCE AND BREAK IN 
109.18  SERVICE PURCHASES.] 
109.19     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
109.20  teacher who has at least three years of allowable service credit 
109.21  with the teachers retirement association and who was granted a 
109.22  maternity leave of absence by a school district or other 
109.23  employing unit covered by the teachers retirement association 
109.24  for which the teacher did not previously receive allowable and 
109.25  formula service credit, or who had a maternity break in teaching 
109.26  service for which the teacher did not receive or purchase 
109.27  service credit from another defined benefit public employee 
109.28  pension plan is entitled to purchase the actual period of the 
109.29  leave or of the break in teaching service, up to five years, of 
109.30  allowable and formula service credit for applicable maternity 
109.31  leaves of absence or applicable maternity break in teaching 
109.32  service periods by making payment under section 356.55. 
109.33     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
109.34  desires to purchase service credit under subdivision 1 must 
109.35  apply with the executive director to make the purchase.  The 
109.36  application must include all necessary documentation of the 
110.1   teacher's qualifications to make the purchase, signed written 
110.2   permission to allow the executive director to request and 
110.3   receive necessary verification of applicable facts and 
110.4   eligibility requirements, and any other relevant information 
110.5   that the executive director may require.  Payment must be made 
110.6   before the teacher's effective date of retirement.  
110.7      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
110.8   service credit for the purchase period must be granted by the 
110.9   teachers retirement association to the purchasing teacher on 
110.10  receipt of the purchase payment amount. 
110.11     Sec. 4.  [354.536] [PRIVATE OR PAROCHIAL TEACHING SERVICE 
110.12  CREDIT PURCHASE.] 
110.13     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
110.14  teacher who has at least three years of allowable service credit 
110.15  with the teachers retirement association is entitled to purchase 
110.16  up to ten years of allowable and formula service credit for 
110.17  private or parochial school teaching service by making payment 
110.18  under section 356.55, provided that the teacher is not entitled 
110.19  to receive a current or deferred age and service retirement 
110.20  annuity or disability benefit from the applicable 
110.21  employer-sponsored pension plan and has not purchased service 
110.22  credit from the applicable defined benefit employer-sponsored 
110.23  pension plan for that service. 
110.24     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
110.25  desires to purchase service credit under subdivision 1 must 
110.26  apply with the executive director to make the purchase.  The 
110.27  application must include all necessary documentation of the 
110.28  teacher's qualifications to make the purchase, signed written 
110.29  permission to allow the executive director to request and 
110.30  receive necessary verification of applicable facts and 
110.31  eligibility requirements, and any other relevant information 
110.32  that the executive director may require.  Payment must be made 
110.33  before the teacher's effective date of retirement.  
110.34     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
110.35  service credit for the purchase period must be granted by the 
110.36  teachers retirement association to the purchasing teacher on 
111.1   receipt of the purchase payment amount. 
111.2      Sec. 5.  [354.537] [PEACE CORPS OR VISTA SERVICE CREDIT 
111.3   PURCHASE.] 
111.4      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
111.5   teacher who has at least three years of allowable service credit 
111.6   with the teachers retirement association is entitled to purchase 
111.7   up to ten years of allowable and formula service credit for 
111.8   service rendered in the federal peace corps program or in the 
111.9   federal volunteers in service to America program by making 
111.10  payment under section 356.55, provided that the teacher has not 
111.11  purchased service credit from any defined benefit pension plan 
111.12  for that service. 
111.13     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
111.14  desires to purchase service credit under subdivision 1 must 
111.15  apply with the executive director to make the purchase.  The 
111.16  application must include all necessary documentation of the 
111.17  teacher's qualifications to make the purchase, signed written 
111.18  permission to allow the executive director to request and 
111.19  receive necessary verification of applicable facts and 
111.20  eligibility requirements, and any other relevant information 
111.21  that the executive director may require.  Payment must be made 
111.22  before the teacher's effective date of retirement.  
111.23     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
111.24  service credit for the purchase period must be granted by the 
111.25  teachers retirement association to the purchasing teacher on 
111.26  receipt of the purchase payment amount. 
111.27     Sec. 6.  [354.538] [CHARTER SCHOOL TEACHING SERVICE CREDIT 
111.28  PURCHASE.] 
111.29     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
111.30  teacher who has at least three years of allowable service credit 
111.31  with the teachers retirement association is entitled to purchase 
111.32  up to ten years of allowable and formula service credit for 
111.33  charter school teaching service by making payment under section 
111.34  356.55, provided that the teacher is not entitled to receive a 
111.35  current or deferred age and service retirement annuity or 
111.36  disability benefit from the applicable employer-sponsored 
112.1   pension plan and has not purchased service credit from the 
112.2   applicable defined benefit employer-sponsored pension plan for 
112.3   that service. 
112.4      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
112.5   desires to purchase service credit under subdivision 1 must 
112.6   apply with the executive director to make the purchase.  The 
112.7   application must include all necessary documentation of the 
112.8   teacher's qualifications to make the purchase, signed written 
112.9   permission to allow the executive director to request and 
112.10  receive necessary verification of applicable facts and 
112.11  eligibility requirements, and any other relevant information 
112.12  that the executive director may require.  Payment must be made 
112.13  before the teacher's effective date of retirement. 
112.14     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
112.15  service credit for the purchase period must be granted by the 
112.16  teachers retirement association to the purchasing teacher on 
112.17  receipt of the purchase payment amount. 
112.18     Sec. 7.  [354A.097] [PRIOR OR UNCREDITED MILITARY SERVICE 
112.19  CREDIT PURCHASE.] 
112.20     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
112.21  teacher who has at least three years of allowable service credit 
112.22  with the teachers retirement fund association and who performed 
112.23  service in the United States armed forces before becoming a 
112.24  teacher as defined in section 354A.011, subdivision 27, or who 
112.25  failed to obtain service credit for a military leave of absence 
112.26  period under section 354A.093, is entitled to purchase allowable 
112.27  service credit for the initial period of enlistment, induction, 
112.28  or call to active duty without any voluntary extension by making 
112.29  payment under section 356.55 provided the teacher is not 
112.30  entitled to receive a current or deferred retirement annuity 
112.31  from a United States armed forces pension plan and has not 
112.32  purchased service credit from another defined benefit public 
112.33  employee pension plan for the same period of service. 
112.34     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
112.35  desires to purchase service credit under subdivision 1 must 
112.36  apply with the executive director or secretary of the respective 
113.1   teachers retirement fund association to make the purchase.  The 
113.2   application must include all necessary documentation of the 
113.3   teacher's qualifications to make the purchase, signed written 
113.4   permission to allow the executive director or secretary to 
113.5   request and receive necessary verification of applicable facts 
113.6   and eligibility requirements, and any other relevant information 
113.7   that the executive director or secretary may require.  Payment 
113.8   must be made before the teacher's effective date of retirement.  
113.9      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
113.10  for the purchase period must be granted by the applicable 
113.11  teachers retirement fund association to the purchasing teacher 
113.12  on receipt of the purchase payment amount. 
113.13     Sec. 8.  [354A.098] [PRIOR OUT-OF-STATE TEACHING SERVICE 
113.14  CREDIT PURCHASE.] 
113.15     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
113.16  teacher who has at least three years of allowable service credit 
113.17  with one of the retirement fund associations under this chapter 
113.18  and who rendered out-of-state teaching service for an 
113.19  educational institution established and operated by another 
113.20  state, governmental subdivision of another state, or the federal 
113.21  government, is entitled to purchase up to ten years of allowable 
113.22  service credit for that out-of-state service by making payment 
113.23  under section 356.55, provided the teacher is not entitled to 
113.24  receive a current or deferred age and service retirement annuity 
113.25  or disability benefit and has not purchased service credit from 
113.26  another defined benefit public employee pension plan for that 
113.27  out-of-state teaching service.  Payment must be made before the 
113.28  teacher's effective date of retirement.  
113.29     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
113.30  desires to purchase service credit under subdivision 1 must 
113.31  apply with the executive director or secretary of the respective 
113.32  teachers retirement fund association to make the purchase.  The 
113.33  application must include all necessary documentation of the 
113.34  teacher's qualifications to make the purchase, signed written 
113.35  permission to allow the executive director or secretary to 
113.36  request and receive necessary verification of applicable facts 
114.1   and eligibility requirements, and any other relevant information 
114.2   that the executive director or secretary may require. 
114.3      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
114.4   for the purchase period must be granted by the applicable 
114.5   teachers retirement fund association to the purchasing teacher 
114.6   on receipt of the purchase payment amount. 
114.7      Sec. 9.  [354A.099] [MATERNITY BREAK IN SERVICE OR LEAVE 
114.8   SERVICE CREDIT PURCHASE.] 
114.9      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
114.10  teacher who has at least three years of allowable service credit 
114.11  with the teachers retirement fund association and who was 
114.12  granted a maternity leave of absence by a school district or 
114.13  other employing unit covered by the teachers retirement 
114.14  association for which the teacher did not previously receive 
114.15  allowable service credit or who had a maternity break in 
114.16  teaching service for which the teacher did not receive or 
114.17  purchase service credit from another defined benefit public 
114.18  employee pension plan is entitled to purchase the actual period 
114.19  of the leave or of the break in teaching service, up to five 
114.20  years, of allowable service credit for applicable maternity 
114.21  leaves of absence or applicable maternity break in teaching 
114.22  service periods by making payment under section 356.55. 
114.23     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
114.24  desires to purchase service credit under subdivision 1 must 
114.25  apply with the executive director or secretary of the respective 
114.26  retirement fund association to make the purchase.  The 
114.27  application must include all necessary documentation of the 
114.28  teacher's qualifications to make the purchase, signed written 
114.29  permission to allow the executive director or secretary to 
114.30  request and receive any necessary verification of applicable 
114.31  facts and eligibility requirements, and any other relevant 
114.32  information that the executive director or secretary may require.
114.33  Payment must be made before the teacher's effective date of 
114.34  retirement.  
114.35     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
114.36  for the purchase period must be granted by the applicable 
115.1   teachers retirement fund association to the purchasing teacher 
115.2   on receipt of the purchase payment amount. 
115.3      Sec. 10.  [354A.101] [PRIVATE OR PAROCHIAL TEACHING SERVICE 
115.4   CREDIT PURCHASE.] 
115.5      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
115.6   teacher who has at least three years of allowable service credit 
115.7   with the teachers retirement fund association is entitled to 
115.8   purchase up to ten years of allowable service credit for private 
115.9   or parochial school teaching service by making payment under 
115.10  section 356.55, provided that the teacher is not entitled to 
115.11  receive a current or deferred age and service retirement annuity 
115.12  or disability benefit from the applicable employer-sponsored 
115.13  pension plan and has not purchased service credit from the 
115.14  applicable defined benefit employer-sponsored pension plan for 
115.15  that service. 
115.16     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
115.17  desires to purchase service credit under subdivision 1 must 
115.18  apply with the executive director to make the purchase.  The 
115.19  application must include all necessary documentation of the 
115.20  teacher's qualifications to make the purchase, signed written 
115.21  permission to allow the executive director to request and 
115.22  receive necessary verification of applicable facts and 
115.23  eligibility requirements, and any other relevant information 
115.24  that the executive director may require.  Payment must be made 
115.25  before the teacher's effective date of retirement.  
115.26     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
115.27  for the purchase period must be granted by the teachers 
115.28  retirement fund association to the purchasing teacher on receipt 
115.29  of the purchase payment amount. 
115.30     Sec. 11.  [354A.102] [PEACE CORPS OR VISTA SERVICE CREDIT 
115.31  PURCHASE.] 
115.32     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
115.33  teacher who has at least three years of allowable service credit 
115.34  with the teachers retirement fund association is entitled to 
115.35  purchase up to ten years of allowable service credit for service 
115.36  rendered in the federal Peace Corps program or in the federal 
116.1   Volunteers in Service to America program by making payment under 
116.2   section 356.55, provided that the teacher has not purchased 
116.3   service credit from any defined benefit pension plan for that 
116.4   service. 
116.5      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
116.6   desires to purchase service credit under subdivision 1 must 
116.7   apply with the executive director to make the purchase.  The 
116.8   application must include all necessary documentation of the 
116.9   teacher's qualifications to make the purchase, signed written 
116.10  permission to allow the executive director to request and 
116.11  receive necessary verification of applicable facts and 
116.12  eligibility requirements, and any other relevant information 
116.13  that the executive director may require.  Payment must be made 
116.14  before the teacher's effective date of retirement.  
116.15     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
116.16  for the purchase period must be granted by the teachers 
116.17  retirement fund association to the purchasing teacher on receipt 
116.18  of the purchase payment amount. 
116.19     Sec. 12.  [354A.103] [CHARTER SCHOOL TEACHING SERVICE 
116.20  CREDIT PURCHASE.] 
116.21     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
116.22  teacher who has at least three years of allowable service credit 
116.23  with the teachers retirement fund association is entitled to 
116.24  purchase up to ten years of allowable service credit for charter 
116.25  school teaching service by making payment under section 356.55, 
116.26  provided that the teacher is not entitled to receive a current 
116.27  or deferred age and service retirement annuity or disability 
116.28  benefit from the applicable employer-sponsored pension plan and 
116.29  has not purchased service credit from the applicable defined 
116.30  benefit employer-sponsored pension plan for that service. 
116.31     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
116.32  desires to purchase service credit under subdivision 1 must 
116.33  apply with the executive director to make the purchase.  The 
116.34  application must include all necessary documentation of the 
116.35  teacher's qualifications to make the purchase, signed written 
116.36  permission to allow the executive director to request and 
117.1   receive necessary verification of applicable facts and 
117.2   eligibility requirements, and any other relevant information 
117.3   that the executive director may require.  Payment must be made 
117.4   before the teacher's effective date of retirement. 
117.5      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
117.6   for the purchase period must be granted by the teachers 
117.7   retirement fund association to the purchasing teacher on receipt 
117.8   of the purchase payment amount. 
117.9      Sec. 13.  [354A.104] [PREVIOUSLY UNCREDITED PART-TIME 
117.10  TEACHING SERVICE CREDIT PURCHASE.] 
117.11     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
117.12  teacher who has at least three years of allowable service credit 
117.13  with the teachers retirement fund association and who performed 
117.14  part-time teaching service in the applicable school district and 
117.15  was not eligible previously for service credit for that service 
117.16  is entitled to purchase the previously uncredited service by 
117.17  making payment under section 356.55. 
117.18     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
117.19  desires to purchase service credit under subdivision 1 must 
117.20  apply with the executive director to make the purchase.  The 
117.21  application must include all necessary documentation of the 
117.22  teacher's qualifications to make the purchase, signed written 
117.23  permission to allow the executive director to request and 
117.24  receive necessary verification of applicable facts and 
117.25  eligibility requirements, and any other relevant information 
117.26  that the executive director may require.  Payment must be made 
117.27  before the teacher's effective date of retirement.  
117.28     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
117.29  for the purchase period must be granted by the teachers 
117.30  retirement fund association to the purchasing teacher on receipt 
117.31  of the purchase payment amount. 
117.32     Sec. 14.  Minnesota Statutes 1998, section 356.55, 
117.33  subdivision 1, is amended to read: 
117.34     Subdivision 1.  [APPLICATION.] Unless the prior service 
117.35  credit purchase authorization special law or general statute 
117.36  provision explicitly specifies a different purchase payment 
118.1   amount determination procedure, this section governs the 
118.2   determination of the prior service credit purchase payment 
118.3   amount of any prior service credit purchase.  The purchase 
118.4   payment amount determination procedure must recognize any 
118.5   service credit accrued to the purchaser in a pension plan listed 
118.6   in section 356.30, subdivision 3.  Any service credit in a 
118.7   Minnesota defined benefit public employee pension plan available 
118.8   to be reinstated by the purchaser through the repayment of a 
118.9   refund of member or employee contributions previously received 
118.10  must be repaid in full before any purchase of prior service 
118.11  credit payment is made under this section. 
118.12     Sec. 15.  Minnesota Statutes 1998, section 356.55, 
118.13  subdivision 6, is amended to read: 
118.14     Subd. 6.  [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 
118.15  As part of the regular data reporting to the consulting actuary 
118.16  retained by the legislative commission on pensions and 
118.17  retirement annually, the chief administrative officer of each 
118.18  public pension plan that has accepted a prior service credit 
118.19  purchase payment under this section shall report for any 
118.20  purchase, the purchaser, the purchaser's employer, the age of 
118.21  the purchaser, the period of the purchase, the purchaser's 
118.22  prepurchase accrued service credit, the purchaser's postpurchase 
118.23  accrued service credit, the purchaser's prior service credit 
118.24  payment, the prior service credit payment made by the 
118.25  purchaser's employer, and the amount of the additional benefit 
118.26  or annuity purchased. 
118.27     (b) As part of a supplemental report to the regular annual 
118.28  actuarial valuation for the applicable public pension plan 
118.29  prepared by the consulting actuary retained by the legislative 
118.30  commission on pensions and retirement, there must be an exhibit 
118.31  comparing a comparison for each purchase showing the total prior 
118.32  service credit payment received from all sources and the 
118.33  increased public pension plan actuarial accrued liability 
118.34  resulting from each purchase. 
118.35     Sec. 16.  [REPEALER.] 
118.36     Sections 1 to 13 are repealed on May 16, 2002. 
119.1      Sec. 17.  [INSTRUCTION TO REVISOR.] 
119.2      The revisor of statutes shall replace the current headnote 
119.3   for Minnesota Statutes, section 354.53, with the headnote 
119.4   "CREDIT FOR MILITARY SERVICE LEAVE OF ABSENCE." 
119.5      Sec. 18.  [EFFECTIVE DATE.] 
119.6      (a) This article is effective on May 16, 1999.  
119.7      (b) A teacher who retires on or before May 16, 1999, is not 
119.8   eligible to purchase service credit under the provisions of this 
119.9   article.  A teacher who has rendered teaching service after May 
119.10  16, 1999, and who has filed an application for retirement that 
119.11  is effective on or before July 1, 1999, may purchase service 
119.12  credit under this article on or before September 1, 1999, 
119.13  notwithstanding that the person is not a teacher rendering 
119.14  active teaching service on the date of the payment.  Payment 
119.15  must be received on or before September 1, 1999.  If this 
119.16  payment is received on or after the effective date of 
119.17  retirement, the increased benefit resulting from the purchase is 
119.18  effective on the first day of the month following the month 
119.19  during which payment is received. 
119.20                             ARTICLE 17
119.21                  MINNEAPOLIS EMPLOYEES RETIREMENT  
119.22                            PLAN CHANGES  
119.23     Section 1.  Minnesota Statutes 1998, section 422A.06, 
119.24  subdivision 3, is amended to read: 
119.25     Subd. 3.  [DEPOSIT ACCUMULATION FUND.] The deposit 
119.26  accumulation fund consists of the assets held in the fund, 
119.27  increased by including amounts contributed by or for employees, 
119.28  amounts contributed by the city, amounts contributed by 
119.29  municipal activities supported in whole or in part by revenues 
119.30  other than taxes and amounts contributed by any public 
119.31  corporation, amounts paid by the state, and by income from 
119.32  investments.  There must be paid from the fund the amounts 
119.33  required to be transferred to the retirement benefit fund, or 
119.34  the disability benefit fund, refunds of contributions, death 
119.35  benefits payable on death before retirement that are not payable 
119.36  from the survivors' benefit fund including the 
120.1   death-while-active refund specified in section 422A.22, 
120.2   subdivision 4, postretirement increases in retirement allowances 
120.3   granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 
120.4   and expenses of the administration of the retirement fund which 
120.5   were not charged by the retirement board against the income of 
120.6   the retirement benefit fund from investments as the cost of 
120.7   handling the investments of the retirement benefit fund. 
120.8      Sec. 2.  Minnesota Statutes 1998, section 422A.06, 
120.9   subdivision 6, is amended to read: 
120.10     Subd. 6.  [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 
120.11  fund shall consist consists of the amount held for survivor 
120.12  benefits, increased by contributions for survivor benefits made 
120.13  by and for employees, including contributions made by the 
120.14  employer, by any municipal activity supported in whole or in 
120.15  part by revenue other than taxes or by any public corporation.  
120.16  A proportionate share of income from investments shall must be 
120.17  allocated to this fund.  There shall be paid from such fund the 
120.18  Survivor benefits specified in section 422A.23 except that the 
120.19  refund of net accumulated deductions from the salary of a 
120.20  contributing member shall upon death in service be paid from the 
120.21  deposit accumulation fund must be paid from this fund. 
120.22     Sec. 3.  Minnesota Statutes 1998, section 422A.101, 
120.23  subdivision 4, is amended to read: 
120.24     Subd. 4.  [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 
120.25  INSTANCES.] (a) If a participating employing unit, other than 
120.26  the state, has a negative asset balance in the deposit 
120.27  accumulation fund, the executive director shall bill the 
120.28  employing unit for the amount of the deficiency.  Any amount 
120.29  billed must include six percent interest, compounded annually, 
120.30  for any year or portion of a year from the billing date until 
120.31  the date of payment. 
120.32     (b) If assets in the deposit accumulation fund are 
120.33  insufficient to make a transfer to the retirement benefit fund, 
120.34  the city of Minneapolis shall pay the amount of that 
120.35  insufficiency to the retirement benefit fund within three days 
120.36  of certification of the insufficiency by the executive director 
121.1   of the fund.  The city of Minneapolis may bill any other 
121.2   participating employing unit other than the state for its 
121.3   proportion of the amount paid.  Any amount billed by the city 
121.4   under this paragraph must include interest as specified in 
121.5   paragraph (a).  
121.6      Sec. 4.  Minnesota Statutes 1998, section 422A.18, 
121.7   subdivision 2, is amended to read: 
121.8      Subd. 2.  [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 
121.9   disability allowance under this section shall be the amount of 
121.10  service allowance to which the employee would be entitled under 
121.11  section 422A.15, notwithstanding the age requirements expressed 
121.12  therein; or the lesser of the following amounts:  50 percent of 
121.13  the final average compensation, or an amount equal to two 
121.14  percent of final average compensation for each year of allowable 
121.15  service for the first ten years, and thereafter 2.5 percent of 
121.16  final average compensation per year of allowable service, 
121.17  including in the latter assumed service between the date the 
121.18  disability occurred and the 60th birthday of the employee. 
121.19     If the amount of annuity (b) Annuities payable from the 
121.20  Minnesota postretirement investment fund to any class of 
121.21  annuitants is adjusted pursuant to section 11A.18, the amount of 
121.22  benefits payable from the disability benefit fund for that class 
121.23  of annuitants under this section shall also be adjusted at the 
121.24  same time and rate as retirement annuities in the retirement 
121.25  benefit fund. 
121.26     Sec. 5.  Minnesota Statutes 1998, section 422A.22, 
121.27  subdivision 4, is amended to read: 
121.28     Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
121.29  of a contributing an active member while still in the service of 
121.30  the city, and before reaching the compulsory age of 
121.31  retirement prior to termination of service, there shall be paid 
121.32  to such person the beneficiary or persons as beneficiaries 
121.33  designated by the member shall have nominated by written 
121.34  designation on a form specified by the executive director and 
121.35  filed with the retirement board, in such form as the retirement 
121.36  board shall require, the net accumulated amount of employee 
122.1   deductions from salary, pay, or compensation, including interest 
122.2   , to the member's credit on date of compounded annually to the 
122.3   date of the member's death.  The amount must not include any 
122.4   contributions made by the employee or on the employee's behalf, 
122.5   or any interest or investment earnings on those contributions, 
122.6   which were allocated to the survivor benefit fund under section 
122.7   422A.06, subdivision 6. 
122.8      (b) If the employee fails to make a designation, or if 
122.9   the person or persons beneficiary or beneficiaries designated by 
122.10  such the employee predeceases such the employee, the net 
122.11  accumulated amount of deductions from salary, pay, or 
122.12  compensation including interest, to the credit of such employee 
122.13  on date of death shall benefit specified in paragraph (a) must 
122.14  be paid to such the deceased employee's estate. 
122.15     (c) A benefit payable under this subdivision is in addition 
122.16  to any applicable survivor benefit under section 422A.23. 
122.17     Sec. 6.  Minnesota Statutes 1998, section 422A.22, 
122.18  subdivision 5, is amended to read: 
122.19     Subd. 5.  [REPAYMENT OF REFUND.] Upon reinstatement 
122.20  reemployment of a former covered employee to the service, in 
122.21  employment covered by the Minneapolis employees retirement fund, 
122.22  service credit for such past service or for any part thereof 
122.23  shall which was forfeited by taking a refund must be granted 
122.24  reinstated only upon repayment of the amount of the separation 
122.25  refund, with interest, from the time of separation payment of 
122.26  the refund until the date repaid.  
122.27     Sec. 7.  Minnesota Statutes 1998, section 422A.23, is 
122.28  amended to read: 
122.29     422A.23 [SURVIVOR BENEFITS.] 
122.30     Subdivision 1.  [PAYMENT OF CITY INSTALLMENT ACCUMULATED 
122.31  AMOUNT.] (a) If a contributing an active or deferred member dies 
122.32  after having been in the service with ten or more years of 
122.33  service credit, and before actual retirement, as determined by 
122.34  the retirement board, the present worth of the city's annual 
122.35  installments of $60 then to the credit of the contributing 
122.36  member, shall be paid to a beneficiary designated by such 
123.1   contributing member in such form as the retirement board shall 
123.2   require, who shall be the surviving spouse, or surviving child, 
123.3   or children of such member or, if there be no surviving spouse 
123.4   or surviving child or children, then to a person actually 
123.5   dependent on and receiving principal support from such member, 
123.6   or surviving mother or father, or grandchildren, or surviving 
123.7   brother or sister, or surviving children of the deceased brother 
123.8   or sister of such member except as noted in paragraph (d), the 
123.9   individual specified in paragraph (b) is eligible to receive the 
123.10  benefit specified in paragraph (c). 
123.11     (b) An individual eligible for the benefit specified in 
123.12  paragraph (c) is a beneficiary designated by the member on a 
123.13  form specified by the executive director.  If the beneficiary 
123.14  designated by the member is not one of the class of persons 
123.15  named in the preceding sentence, such benefit from the 
123.16  accumulation of city deposits shall be paid in the following 
123.17  order:  (1) to the surviving spouse, the whole thereof; (2) if 
123.18  there be no surviving spouse, to the surviving children, share 
123.19  and share alike; (3) if there be no surviving spouse or child or 
123.20  children, to the dependent or dependents as those terms are 
123.21  herein defined, of the member, share and share alike; (4) if 
123.22  there be no surviving spouse, child or children, or dependents, 
123.23  to the surviving mother and father, share and share alike; (5) 
123.24  if there be no surviving mother and father, to the 
123.25  grandchildren, in equal shares; if there be no grandchildren, to 
123.26  the surviving brothers and sisters of the member, in equal 
123.27  shares; (6) if there be no surviving brothers and sisters, to 
123.28  the surviving children of the deceased brothers and sisters of 
123.29  the member, in equal shares; or (7) if there is none of the 
123.30  foregoing persons who survives the member, the accumulation of 
123.31  the city deposits shall be applied to the funeral expenses of 
123.32  the member failed to designate a beneficiary, or if the 
123.33  beneficiary or beneficiaries designated by the employee 
123.34  predecease the employee, the benefit in paragraph (c) is payable 
123.35  to the deceased employee's estate. 
123.36     (c) The benefit is a lump-sum payment of the present value 
124.1   of the city's or other contributing employer's annual 
124.2   installments of $60 to the credit of the member. 
124.3      (d) No benefit is payable under this subdivision if a 
124.4   monthly survivor benefit is paid on behalf of the deceased 
124.5   employee under another subdivision of this section. 
124.6      Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 
124.7   active member dies prior to termination of service with at least 
124.8   18 months but less than 20 years of service credit, the 
124.9   surviving spouse or surviving child or children is eligible to 
124.10  receive the survivor benefit specified in paragraph (b) or (c), 
124.11  as applicable.  Payment of a benefit for any surviving child 
124.12  under the age of 18 years shall be made to the surviving parent, 
124.13  or if there be none, to the legal guardian of the surviving 
124.14  child.  For purposes of this subdivision, a surviving child is 
124.15  an unmarried child of the deceased member under the age of 18, 
124.16  or under the age of 22 if a full-time student at an accredited 
124.17  school, college, or university. 
124.18     (b) If the surviving spouse or surviving child benefit 
124.19  commenced before July 1, 1983, the surviving spouse benefit is 
124.20  increased from $500 per month to $750 per month and the 
124.21  surviving child benefit is $225 per month, beginning with the 
124.22  first monthly payment payable after May 28, 1998.  The sum of 
124.23  surviving spouse and surviving child benefits payable under this 
124.24  paragraph shall not exceed $900 per month.  The increased cost 
124.25  resulting from the benefit increases under this paragraph must 
124.26  be allocated to each employing unit listed in section 422A.101, 
124.27  subdivisions 1a, 2, and 2a, on the basis of the additional 
124.28  accrued liability resulting from increased benefits paid to the 
124.29  survivors of employees from that unit. 
124.30     (c) If the surviving spouse or surviving child benefit 
124.31  commences after June 30, 1983, the surviving spouse benefit is 
124.32  30 percent of the member's average salary in effect over the 
124.33  last six months of allowable service preceding the month in 
124.34  which death occurs.  The surviving child benefit is ten percent 
124.35  of the member's average salary in effect over the last six 
124.36  months of allowable service preceding the month in which death 
125.1   occurs.  The sum of surviving spouse and surviving child 
125.2   benefits payable under this paragraph shall not exceed 50 
125.3   percent of the member's average salary in effect over the last 
125.4   six months of allowable service. 
125.5      (d) Any surviving child benefit or surviving spouse benefit 
125.6   computed under paragraph (c) and in effect for the month 
125.7   immediately prior to May 28, 1998, is increased by 15 percent as 
125.8   of the first payment on or after May 28, 1998. 
125.9      (e) Surviving child benefits under this subdivision 
125.10  terminate when the child no longer meets the definition of 
125.11  surviving child. 
125.12     Subd. 5.  [ADMINISTRATION.] Benefits herein provided shall 
125.13  in this section following the death of an active employee or 
125.14  deferred member, as applicable, commence with on the first day 
125.15  of the month following the month in which the active employee or 
125.16  deferred member dies and shall end with the last day of the 
125.17  month preceding the month in which eligibility 
125.18  ceases.  Eligibility for the benefits herein provided shall be 
125.19  determined by the retirement board and its determination shall 
125.20  be final.  Each beneficiary or parent or guardian of a dependent 
125.21  child or legal representative shall furnish such Information as 
125.22  the board may deem deemed necessary by the executive director to 
125.23  determine eligibility for the benefits provided by this section, 
125.24  and must be submitted.  Failure to furnish any required 
125.25  information shall be sufficient grounds for the denial or 
125.26  discontinuance of benefits.  A determination made by the 
125.27  executive director may be appealed to the retirement board, 
125.28  whose determination is final.  If the surviving spouse of the 
125.29  deceased active employee or deferred member becomes entitled to 
125.30  a retirement allowance by reason of membership in this fund, the 
125.31  surviving spouse shall is authorized to receive the retirement 
125.32  allowance in addition to the all applicable surviving spouse's 
125.33  benefit spouse benefits to which the surviving spouse is 
125.34  entitled as specified in this section and section 422A.22, 
125.35  subdivision 4, if applicable.  The cost of all monthly 
125.36  survivor's benefits provided in this section shall be is an 
126.1   obligation of the members and of the city, any of its boards, 
126.2   departments, commissions or public corporations or other 
126.3   applicable employing units. 
126.4      Subd. 6.  [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 
126.5   retirement board shall create a reserve account for survivor's 
126.6   benefits from which shall be paid on an actuarial basis all 
126.7   survivor benefits due and payable.  At the end of each fiscal 
126.8   year, as part of the annual actuarial valuation of the fund 
126.9   prepared by the commission-retained actuary, a determination of 
126.10  the normal cost of the benefits payable from the survivor's 
126.11  benefit account shall be made and the board shall reduce or 
126.12  increase the employee contribution rate of one-fourth of one 
126.13  percent if and when it is determined based on the annual 
126.14  actuarial valuation that the member contribution rate is in 
126.15  excess of or is less than the amount necessary to pay for 50 
126.16  percent of the calculated normal cost of the survivor benefits 
126.17  provided in this section. 
126.18     Subd. 7.  [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 
126.19  COVERAGE.] (a) If the contributing active or deferred member 
126.20  dies after having been in the service of the city 20 or more 
126.21  years, and before the effective date of retirement, as 
126.22  determined by the retirement board, the board shall pay with 20 
126.23  or more years of service credit, a beneficiary as defined in 
126.24  paragraph (b) is eligible to receive the benefit specified in 
126.25  paragraph (c). 
126.26     (b) The beneficiary eligible for a benefit under paragraph 
126.27  (c) is the surviving spouse of the deceased employee.  If there 
126.28  is no surviving spouse, the beneficiary may be a dependent 
126.29  surviving child of the member or dependent parent designated by 
126.30  the employee on a form prescribed by the executive director. 
126.31     (c) The benefit payable to the beneficiary designated in 
126.32  paragraph (b) is a monthly allowance for life to the designated 
126.33  beneficiary of the employee.  The monthly allowance herein 
126.34  provided for shall be is the actuarial equivalent of a single 
126.35  life service allowance specified in section 422A.15, subdivision 
126.36  1, which would have been payable to the employee on the date of 
127.1   death, notwithstanding the age requirement stated in section 
127.2   422A.15, subdivision 1.  For purposes of this section, the 
127.3   amount of any excess contributions or voluntary additions by the 
127.4   member shall not be included in the calculations in determining 
127.5   the monthly allowance.  
127.6      The survivor allowance under this subdivision shall be 
127.7   computed and determined under a procedure specified by the 
127.8   commission-retained actuary utilizing the appropriate mortality 
127.9   table established by the board of trustees based on the 
127.10  experience of the fund as recommended by the commission-retained 
127.11  actuary and using the applicable postretirement interest rate 
127.12  assumption specified in section 356.215, subdivision 4d. 
127.13     (d) For benefits payable under this subdivision following 
127.14  the death of a deferred member, the benefit must be calculated 
127.15  as of the date of termination from service and increased by five 
127.16  percent per year until January 1, 1981, and by three percent per 
127.17  year thereafter, compounded annually. 
127.18     Subd. 8.  [SURVIVING CHILD; DEPENDENT DEFINITION.] The 
127.19  beneficiary designated by the employee shall be the surviving 
127.20  spouse of such employee.  If there is no surviving spouse, the 
127.21  designated beneficiary may be a dependent surviving child or 
127.22  dependent parent of such employee as dependency is defined in 
127.23  sections 422A.01 to 422A.25.  If the beneficiary designated by 
127.24  the employee is not of the class of persons provided for in this 
127.25  subdivision, or if the designated beneficiary predeceases the 
127.26  employee, a refund shall be made as provided for in section 
127.27  422A.22, in lieu of a life income.  If the employee does not 
127.28  elect to designate a beneficiary to receive a life income as 
127.29  herein provided, the designated beneficiary, if of the class of 
127.30  persons set forth in this subdivision, may elect within 60 days 
127.31  after the date of death of the employee to receive a life income 
127.32  computed and determined as though the employee had retired on 
127.33  the date of death under the option 2 plan of retirement, as 
127.34  provided for in sections 422A.01 to 422A.25, and had designated 
127.35  such person as beneficiary.  For purposes of subdivision 2, a 
127.36  surviving child is an unmarried child of the deceased member 
128.1   under the age of 18, or under the age of 22 if a full-time 
128.2   student at an accredited school, college, or university.  For 
128.3   purposes of subdivision 7, a dependent surviving child or 
128.4   dependent parent must meet the definition of dependent, as 
128.5   defined in section 422A.01, subdivision 12, at the time of the 
128.6   active or deferred member's death. 
128.7      Subd. 9.  [LUMP-SUM DEATH BENEFIT.] If any employee who has 
128.8   contributed to the survivor's benefit account as herein provided 
128.9   dies before the effective date of retirement on a service or 
128.10  disability pension and is not survived by a beneficiary eligible 
128.11  to receive a monthly allowance as herein provided If no monthly 
128.12  survivor benefit is payable under subdivision 2 or 7, there 
128.13  shall be paid from the survivor's survivor benefit account to a 
128.14  beneficiary designated by the employee on a form prescribed by 
128.15  the executive director a lump-sum death benefit of $750 if death 
128.16  occurs prior to the end of the employee's tenth year of 
128.17  service credit or of $1500 if the employee had prior to death 
128.18  completed ten or more calendar years of service credit.  Upon 
128.19  reinstatement of a former employee to the service, credit for 
128.20  such past service or for any part thereof shall be granted only 
128.21  upon repayment of the amount of the separation refund, with 
128.22  interest, from the time of separation Any benefit under this 
128.23  subdivision may be paid in addition to a benefit payable under 
128.24  subdivision 1. 
128.25     Subd. 10.  [BENEFIT INCREASES.] If the amount of annuity 
128.26  payable from the Minnesota postretirement investment fund to any 
128.27  class of annuitants is adjusted pursuant to section 11A.18, the 
128.28  amount of benefits payable from the survivor's benefit fund 
128.29  pursuant to subdivisions 7 or 8 for that class of annuitants 
128.30  shall also be adjusted at the same time and rate.  Annuities 
128.31  payable under this section must be adjusted at the same time and 
128.32  rate as retirement annuities in the retirement benefit fund. 
128.33     Subd. 11.  [EFFECT OF SPOUSE REMARRIAGE.] A monthly 
128.34  survivor benefit is must not suspended, be discontinued or 
128.35  terminated, or otherwise stopped due to a surviving spouse's 
128.36  remarriage. 
129.1      Subd. 12.  [DETERMINATION OF ANNUITY.] The survivor 
129.2   annuities payable under this section must be computed and 
129.3   determined under a procedure specified by the actuary retained 
129.4   by the legislative commission on pensions and retirement 
129.5   utilizing the appropriate mortality table based on the 
129.6   experience of the fund as recommended by that actuary and 
129.7   approved by the legislative commission on pensions and 
129.8   retirement and using the applicable postretirement interest rate 
129.9   assumption specified in section 356.215, subdivision 4d. 
129.10     Sec. 8.  [422A.231] [COST ALLOCATION.] 
129.11     (a) Notwithstanding any law to the contrary, all current 
129.12  and future contribution requirements due to this article are 
129.13  payable by the participating contributing employing units other 
129.14  than the state. 
129.15     (b) In each actuarial valuation of the retirement fund, the 
129.16  actuary retained by the legislative commission on pensions and 
129.17  retirement shall include an exhibit on the impact of the benefit 
129.18  increases contained in this article on the survivor benefit 
129.19  fund.  The actuary shall calculate the expected change in the 
129.20  present value of the future benefits payable from the survivor 
129.21  benefit fund attributable to this article, using the actuarial 
129.22  method and assumptions applicable to the Minneapolis employees 
129.23  retirement fund, from the prior actuarial valuation and shall 
129.24  compare that result with the actual change in the present value 
129.25  of future benefits payable from the survivor benefit fund 
129.26  attributable to this article from the prior actuarial valuation. 
129.27     (c) The executive director shall assess each participating 
129.28  employer, other than the state, its proportional share of the 
129.29  net increase amount calculated under paragraph (b).  The 
129.30  assessment must be made on the first business day of the 
129.31  following February, plus compound interest at an annual rate of 
129.32  six percent on the amount from the actuarial valuation date to 
129.33  the date of payment. 
129.34     Sec. 9.  [REPEALER.] 
129.35     Minnesota Statutes 1998, section 422A.16, subdivision 3a, 
129.36  is repealed. 
130.1      Sec. 10.  [EFFECTIVE DATE.] 
130.2      (a) This article is effective upon approval by the 
130.3   Minneapolis city council and compliance with Minnesota Statutes, 
130.4   section 645.021. 
130.5      (b) All sections of this article must be approved for the 
130.6   approval of any section to be effective. 
130.7                              ARTICLE 18
130.8                    EMPLOYER MATCHING CONTRIBUTION  
130.9                        TAX-SHELTERED ANNUITY  
130.10                              CHANGES 
130.11     Section 1.  Minnesota Statutes 1998, section 356.24, 
130.12  subdivision 1, is amended to read: 
130.13     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] (a) It is 
130.14  unlawful for a school district or other governmental subdivision 
130.15  or state agency to levy taxes for, or contribute public funds to 
130.16  a supplemental pension or deferred compensation plan that is 
130.17  established, maintained, and operated in addition to a primary 
130.18  pension program for the benefit of the governmental subdivision 
130.19  employees other than: 
130.20     (1) to a supplemental pension plan that was established, 
130.21  maintained, and operated before May 6, 1971; 
130.22     (2) to a plan that provides solely for group health, 
130.23  hospital, disability, or death benefits; 
130.24     (3) to the individual retirement account plan established 
130.25  by chapter 354B; 
130.26     (4) to a plan that provides solely for severance pay under 
130.27  section 465.72 to a retiring or terminating employee; 
130.28     (5) for employees other than personnel employed by the 
130.29  state university board or the community college board and 
130.30  covered by the board of trustees of the Minnesota state colleges 
130.31  and universities supplemental retirement plan under chapter 
130.32  354C, if provided for in a personnel policy of the public 
130.33  employer or in the collective bargaining agreement between the 
130.34  public employer and the exclusive representative of public 
130.35  employees in an appropriate unit, in an amount matching employee 
130.36  contributions on a dollar for dollar basis, but not to exceed an 
131.1   employer contribution of $2,000 a year per employee; 
131.2      (i) to the state of Minnesota deferred compensation plan 
131.3   under section 352.96; or 
131.4      (ii) in payment of the applicable portion of the premium on 
131.5   a tax-sheltered annuity contract qualified under section 403(b) 
131.6   of the Internal Revenue Code, if purchased from a qualified 
131.7   insurance company, or to a qualified investment entity, as 
131.8   defined in subdivision 1a, and, in either case, if the employing 
131.9   unit has complied with any applicable pension plan provisions of 
131.10  the Internal Revenue Code with respect to the tax-sheltered 
131.11  annuity program during the preceding calendar year; or 
131.12     (6) for personnel employed by the state university board or 
131.13  the community college board and not covered by clause (5), to 
131.14  the supplemental retirement plan under chapter 354C, if provided 
131.15  for in a personnel policy or in the collective bargaining 
131.16  agreement of the public employer with the exclusive 
131.17  representative of the covered employees in an appropriate unit, 
131.18  in an amount matching employee contributions on a dollar for 
131.19  dollar basis, but not to exceed an employer contribution of 
131.20  $2,000 a year for each employee.  
131.21     (b) Subd. 1a.  [QUALIFIED INSURANCE COMPANY; QUALIFIED 
131.22  INVESTMENT ENTITIES; DEFINITIONS.] (a) A qualified insurance 
131.23  company is a company that: 
131.24     (1) meets the definition in section 60A.02, subdivision 4; 
131.25     (2) is licensed to engage in life insurance or annuity 
131.26  business in the state; 
131.27     (3) is determined by the commissioner of commerce to have a 
131.28  rating within the top two rating categories by a recognized 
131.29  national rating agency or organization that regularly rates 
131.30  insurance companies; and 
131.31     (4) is determined by the state board of investment to be 
131.32  among the ten up to 20 applicant insurance companies with 
131.33  competitive investment options and investment returns on annuity 
131.34  products. 
131.35     (b) A qualified investment entity is an open-end investment 
131.36  company that: 
132.1      (1) is registered under the federal Investment Company Act 
132.2   of 1940; 
132.3      (2) is licensed to do business in the state; 
132.4      (3) is determined by the commissioner of commerce to be in 
132.5   sound financial standing; and 
132.6      (4) is determined by the state board of investment to be 
132.7   among up to five applicant investment entities with competitive 
132.8   investment options and investment returns. 
132.9      (c) The state board of investment determination must be 
132.10  made on or before January 1, 1993 July 1, 2000, and must be 
132.11  reviewed periodically.  The state board of investment may retain 
132.12  actuarial services to assist it in this determination and in its 
132.13  periodic review.  The state board of investment may annually 
132.14  establish a budget for its costs in any determination and 
132.15  periodic review processes.  The state board of investment may 
132.16  charge a proportional share of all costs related to the periodic 
132.17  review to those qualified insurance companies and qualified 
132.18  investment entities currently under contract and may charge a 
132.19  proportional share of all costs related to soliciting and 
132.20  evaluating bids in a determination process to each company and 
132.21  investment entity selected by the state board of investment.  
132.22  All contracts must be approved before execution by the state 
132.23  board of investment.  The state board of investment shall 
132.24  establish policies and procedures under section 11A.04, clause 
132.25  (2), to carry out this paragraph. 
132.26     (c) Subd. 1b.  [VENDOR RESTRICTIONS.] A personnel policy 
132.27  for unrepresented employees or a collective bargaining agreement 
132.28  may establish limits on the number of vendors under paragraph 
132.29  (b), clause (5), subdivision 1 that it will utilize and 
132.30  conditions under which the vendors may contact employees both 
132.31  during working hours and after working hours. 
132.32     Sec. 2.  [COMMISSION STUDY.] 
132.33     The legislative commission on pensions and retirement shall 
132.34  study the issue of the appropriate means to provide partially 
132.35  employer-funded tax-sheltered savings opportunities for 
132.36  educational employees, including the establishment of a single 
133.1   comprehensive program structure for all applicable educational 
133.2   employers and the elimination of any restriction on investment 
133.3   vendors in providing partially employer-funded investment 
133.4   opportunities to educational employees. 
133.5      Sec. 3.  [EFFECTIVE DATE.] 
133.6      Section 1 is effective May 15, 2000.  Section 2 is 
133.7   effective on the day following final enactment. 
133.8                              ARTICLE 19
133.9                     MNSCU INDIVIDUAL RETIREMENT  
133.10                        ACCOUNT PLAN CHANGES  
133.11     Section 1.  Minnesota Statutes 1998, section 43A.27, 
133.12  subdivision 3, is amended to read:  
133.13     Subd. 3.  [RETIRED EMPLOYEES.] (a) A person may elect to 
133.14  purchase at personal expense individual and dependent hospital, 
133.15  medical, and dental coverages if the person is: 
133.16     (1) a retired employee of the state or an organization 
133.17  listed in subdivision 2 or section 43A.24, subdivision 2, who, 
133.18  at separation of service: 
133.19     (i) is immediately eligible to receive a retirement benefit 
133.20  under chapter 354B or an annuity under a retirement program 
133.21  sponsored by the state or such organization of the state and; 
133.22     (ii) immediately meets the age and service requirements in 
133.23  section 352.115, subdivision 1; and 
133.24     (ii) (iii) has five years of service or meets the service 
133.25  requirement of the collective bargaining agreement or plan, 
133.26  whichever is greater; or 
133.27     (2) a retired employee of the state who is at least 50 
133.28  years of age and has at least 15 years of state service.  
133.29     (b) The commissioner shall offer at least one plan which is 
133.30  actuarially equivalent to those made available through 
133.31  collective bargaining agreements or plans established pursuant 
133.32  to under section 43A.18 to employees in positions equivalent to 
133.33  that from which retired. 
133.34     (c) A spouse of a deceased retired employee who received an 
133.35  annuity under a state retirement program person eligible under 
133.36  paragraph (a) may purchase the coverage listed in this 
134.1   subdivision if the spouse was a dependent under the retired 
134.2   employee's coverage at the time of the employee's retiree's 
134.3   death. 
134.4      (d) Coverages must be coordinated with relevant health 
134.5   insurance benefits provided through the federally sponsored 
134.6   Medicare program.  Until the retired employee reaches age 65, 
134.7   the retired employee and dependents must be pooled in the same 
134.8   group as active employees for purposes of establishing premiums 
134.9   and coverage for hospital, medical, and dental insurance.  
134.10  Coverage for retired employees and their dependents may not 
134.11  discriminate on the basis of evidence of insurability or 
134.12  preexisting conditions unless identical conditions are imposed 
134.13  on active employees in the group that the employee left.  
134.14  Appointing authorities shall provide notice to employees no 
134.15  later than the effective date of their retirement of the right 
134.16  to exercise the option provided in this subdivision.  The 
134.17  retired employee must notify the commissioner or designee of the 
134.18  commissioner within 30 days after the effective date of the 
134.19  retirement of intent to exercise this option. 
134.20     Sec. 2.  Minnesota Statutes 1998, section 136F.48, is 
134.21  amended to read: 
134.22     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
134.23     (a) This section applies to a person who:  
134.24     (1) retires from the Minnesota state university colleges 
134.25  and universities system, the technical college system, or the 
134.26  community college system, or from a successor system employing 
134.27  state university, technical college, or community college 
134.28  faculty, with at least ten years of combined service credit in a 
134.29  system under the jurisdiction of the board of trustees of the 
134.30  Minnesota state colleges and universities; 
134.31     (2) was employed on a full-time basis immediately preceding 
134.32  retirement as a state university, technical college, or 
134.33  community college faculty member or as an unclassified 
134.34  administrator in one of those systems the Minnesota state 
134.35  colleges and universities system; 
134.36     (3) begins drawing a retirement benefit from the individual 
135.1   retirement account plan or an annuity from the teachers 
135.2   retirement association, from the general state employees 
135.3   retirement plan or the unclassified state employees retirement 
135.4   program of the Minnesota state retirement system, or from a 
135.5   first class city teacher retirement plan; and 
135.6      (4) returns to work on not less than a one-third time basis 
135.7   and not more than a two-thirds time basis in the system from 
135.8   which the person retired under an agreement in which the person 
135.9   may not earn a salary of more than $35,000 in a calendar year 
135.10  from employment after retirement in the system from which the 
135.11  person retired.  
135.12     (b) Initial participation, the amount of time worked, and 
135.13  the duration of participation under this section must be 
135.14  mutually agreed upon by the president of the institution where 
135.15  the person returns to work and the employee.  The president may 
135.16  require up to one-year notice of intent to participate in the 
135.17  program as a condition of participation under this section.  The 
135.18  president shall determine the time of year the employee shall 
135.19  work.  The employer or the president may not require a person to 
135.20  waive any rights under a collective bargaining agreement as a 
135.21  condition of participation under this section.  
135.22     (c) For a person eligible under paragraphs (a) and (b), the 
135.23  employing board shall make the same employer contribution for 
135.24  hospital, medical, and dental benefits as would be made if the 
135.25  person were employed full time.  
135.26     (d) For work under paragraph (a), a person must receive a 
135.27  percentage of the person's salary at the time of retirement that 
135.28  is equal to the percentage of time the person works compared to 
135.29  full-time work.  
135.30     (e) If a collective bargaining agreement covering a person 
135.31  provides for an early retirement incentive that is based on age, 
135.32  the incentive provided to the person must be based on the 
135.33  person's age at the time employment under this section ends.  
135.34  However, the salary used to determine the amount of the 
135.35  incentive must be the salary that would have been paid if the 
135.36  person had been employed full time for the year immediately 
136.1   preceding the time employment under this section ends. 
136.2      (f) A person who returns to work under this section is a 
136.3   member of the appropriate bargaining unit and is covered by the 
136.4   appropriate collective bargaining contract.  Except as provided 
136.5   in this section, the person's coverage is subject to any part of 
136.6   the contract limiting rights of part-time employees. 
136.7      Sec. 3.  [352.1155] [NO ANNUITY REDUCTION.] 
136.8      Subdivision 1.  [ELIGIBILITY.] Except as indicated in 
136.9   subdivision 4, the annuity reduction provisions of section 
136.10  352.115, subdivision 10, do not apply to a person who: 
136.11     (1) retires from the Minnesota state colleges and 
136.12  universities system with at least ten years of combined service 
136.13  credit in a system under the jurisdiction of the board of 
136.14  trustees of the Minnesota state colleges and universities; 
136.15     (2) was employed on a full-time basis immediately preceding 
136.16  retirement as a faculty member or as an unclassified 
136.17  administrator in that system; 
136.18     (3) begins drawing an annuity from the general state 
136.19  employees retirement plan of the Minnesota state retirement 
136.20  system; and 
136.21     (4) returns to work on not less than a one-third time basis 
136.22  and not more than a two-thirds time basis in the system from 
136.23  which the person retired under an agreement in which the person 
136.24  may not earn a salary of more than $35,000 in a calendar year 
136.25  from employment after retirement in the system from which the 
136.26  person retired. 
136.27     Subd. 2.  [APPROVAL REQUIREMENTS.] Initial participation, 
136.28  the amount of time worked, and the duration of participation 
136.29  under this section must be mutually agreed upon by the president 
136.30  of the institution where the person returns to work and the 
136.31  employee.  The president may require up to one-year notice of 
136.32  intent to participate in the program as a condition of 
136.33  participation under this section.  The president shall determine 
136.34  the time of year the employee shall work.  The employer or the 
136.35  president may not require a person to waive any rights under a 
136.36  collective bargaining agreement as a condition of participation 
137.1   under this section.  
137.2      Subd. 3.  [SERVICE CREDIT PROHIBITION.] Notwithstanding any 
137.3   law to the contrary, a person eligible under this section may 
137.4   not, based on employment to which the waiver in this section 
137.5   applies, earn further service credit in a Minnesota public 
137.6   defined benefit plan and is not eligible to participate in a 
137.7   Minnesota public defined contribution plan, other than a 
137.8   volunteer fire plan governed by chapter 424A.  No employer or 
137.9   employee contribution to any of these plans may be made on 
137.10  behalf of such a person. 
137.11     Subd. 4.  [EXEMPTION LIMIT.] For a person eligible under 
137.12  this section who earns more than $35,000 in a calendar year from 
137.13  reemployment in the Minnesota state colleges and universities 
137.14  system following retirement, the annuity reduction provisions of 
137.15  section 352.115, subdivision 10, apply only to income over 
137.16  $35,000. 
137.17     Subd. 5.  [CONTINUING RIGHTS.] A person who returns to work 
137.18  under this section is a member of the appropriate bargaining 
137.19  unit and is covered by the appropriate collective bargaining 
137.20  contract.  Except as provided in this section, the person's 
137.21  coverage is subject to any part of the contract limiting rights 
137.22  of part-time employees. 
137.23     Sec. 4.  Minnesota Statutes 1998, section 354.445, is 
137.24  amended to read: 
137.25     354.445 [NO ANNUITY REDUCTION.] 
137.26     (a) The annuity reduction provisions of section 354.44, 
137.27  subdivision 5, do not apply to a person who: 
137.28     (1) retires from the Minnesota state university colleges 
137.29  and universities system, technical college system, or the 
137.30  community college system, or from a successor system employing 
137.31  state university, technical college, or community college 
137.32  faculty, with at least ten years of combined service credit in a 
137.33  system under the jurisdiction of the board of trustees of the 
137.34  Minnesota state colleges and universities; 
137.35     (2) was employed on a full-time basis immediately preceding 
137.36  retirement as a state university, technical college, or 
138.1   community college faculty member or as an unclassified 
138.2   administrator in one of these systems that system; 
138.3      (3) begins drawing an annuity from the teachers retirement 
138.4   association; and 
138.5      (4) returns to work on not less than a one-third time basis 
138.6   and not more than a two-thirds time basis in the system from 
138.7   which the person retired under an agreement in which the person 
138.8   may not earn a salary of more than $35,000 in a calendar year 
138.9   from employment after retirement in the system from which the 
138.10  person retired. 
138.11     (b) Initial participation, the amount of time worked, and 
138.12  the duration of participation under this section must be 
138.13  mutually agreed upon by the president of the institution where 
138.14  the person returns to work and the employee.  The president may 
138.15  require up to one-year notice of intent to participate in the 
138.16  program as a condition of participation under this section.  The 
138.17  president shall determine the time of year the employee shall 
138.18  work.  The employer or the president may not require a person to 
138.19  waive any rights under a collective bargaining agreement as a 
138.20  condition of participation under this section.  
138.21     (c) Notwithstanding any law to the contrary, a person 
138.22  eligible under paragraphs (a) and (b) may not, based on 
138.23  employment to which the waiver in this section applies, earn 
138.24  further service credit in the teachers retirement association 
138.25  and is not eligible to participate in the individual retirement 
138.26  account plan or the supplemental retirement plan established in 
138.27  chapter 354B as a result of service under this section a 
138.28  Minnesota public defined benefit plan and is not eligible to 
138.29  participate in a Minnesota public defined contribution plan, 
138.30  other than a volunteer fire plan governed by chapter 424A.  No 
138.31  employer or employee contribution to any of these plans may be 
138.32  made on behalf of such a person. 
138.33     (d) For a person eligible under paragraphs (a) and (b) who 
138.34  earns more than $35,000 in a calendar year from employment after 
138.35  retirement in the system from which the person retired due to 
138.36  employment by the Minnesota state colleges and universities 
139.1   system, the annuity reduction provisions of section 354.44, 
139.2   subdivision 5, apply only to income over $35,000. 
139.3      (e) A person who returns to work under this section is a 
139.4   member of the appropriate bargaining unit and is covered by the 
139.5   appropriate collective bargaining contract.  Except as provided 
139.6   in this section, the person's coverage is subject to any part of 
139.7   the contract limiting rights of part-time employees. 
139.8      Sec. 5.  Minnesota Statutes 1998, section 354.66, 
139.9   subdivision 1b, is amended to read: 
139.10     Subd. 1b.  [DISTRICT, DEFINED.] For purposes of this 
139.11  section, the term "district" means a school district, the 
139.12  community or the Minnesota state college colleges system and 
139.13  the state university universities system. 
139.14     Sec. 6.  Minnesota Statutes 1998, section 354.66, 
139.15  subdivision 1c, is amended to read: 
139.16     Subd. 1c.  [PARTICIPATION.] (a) Except as indicated in 
139.17  paragraph (b), participation in the part-time mobility program 
139.18  must be based on a full fiscal year and the employment pattern 
139.19  of the teacher during the most recent fiscal year.  
139.20     (b) For a teacher in the Minnesota state colleges and 
139.21  universities system who teaches only during the first semester 
139.22  in an academic year and retires immediately after the first 
139.23  semester, participation in the part-time mobility program must 
139.24  be based on one-half of a full fiscal year and the employment 
139.25  pattern of the teacher during the most recent one-half of the 
139.26  most recent fiscal year. 
139.27     Sec. 7.  Minnesota Statutes 1998, section 354.66, 
139.28  subdivision 3, is amended to read: 
139.29     Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] (a) For 
139.30  purposes of this section, the term "part-time teaching position" 
139.31  shall mean means a teaching position within the district in 
139.32  which the teacher is employed for at least 50 full days or a 
139.33  fractional equivalent thereof as prescribed in section 354.091, 
139.34  and for which the teacher is compensated in an amount not 
139.35  exceeding 80 percent of the compensation established by the 
139.36  board for a full-time teacher with identical education and 
140.1   experience with the employing unit.  
140.2      (b) The compensation of a teacher in the state colleges and 
140.3   universities system may exceed the 80 percent limit if the 
140.4   teacher does not teach just one of the three quarters in the 
140.5   system's full school year, provided no additional services are 
140.6   performed while the teacher participates in the program.  For a 
140.7   teacher to which subdivision 1c, paragraph (b), applies, the 
140.8   term "part-time teaching position" means a teaching position 
140.9   within the district in which the teacher is employed for at 
140.10  least 25 full days or a fractional equivalent thereof as 
140.11  prescribed in section 354.091, and for which the teacher is 
140.12  compensated in an amount not exceeding 40 percent of the 
140.13  compensation established by the board for a full-time teacher, 
140.14  with identical education and experience with the employing unit. 
140.15     Sec. 8.  Minnesota Statutes 1998, section 354B.24, 
140.16  subdivision 3, is amended to read: 
140.17     Subd. 3.  [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) In 
140.18  addition to contributions required by subdivision 2, a plan 
140.19  participant on an approved sabbatical leave may shall make an 
140.20  optional additional a member contribution.  The optional 
140.21  additional member may not exceed based on the applicable member 
140.22  contribution rate specified in section 354B.23, subdivision 1, 
140.23  applied to the difference between the amount of salary actually 
140.24  received during the sabbatical leave and the amount of full-time 
140.25  salary actually received for a comparable period of an identical 
140.26  length to the member would have received if not on sabbatical 
140.27  leave that occurred during the fiscal year immediately preceding 
140.28  the sabbatical leave.  
140.29     (b) Any optional additional member contribution must be 
140.30  made before the last day of the fiscal year next following the 
140.31  fiscal year in which the sabbatical leave terminates.  The 
140.32  optional additional member contribution may not include interest 
140.33  through payroll deduction as though the member were employed 
140.34  full-time.  
140.35     (c) When an optional additional member contribution is 
140.36  made, the employing unit must make the employer contribution at 
141.1   the rate set forth specified in section 354B.23, subdivision 3, 
141.2   on the salary that was the basis for the optional additional 
141.3   member contribution under paragraph (a). 
141.4      (d) An employer contribution required under this section 
141.5   must be made no later than 60 days after the date on which the 
141.6   optional additional member contribution was made.  
141.7      Sec. 9.  Minnesota Statutes 1998, section 354B.25, 
141.8   subdivision 2, is amended to read: 
141.9      Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS 
141.10  INVESTMENT OPTIONS.] (a) The plan administrator shall arrange 
141.11  for the purchase of fixed annuity contracts, variable annuity 
141.12  contracts, a combination of fixed and variable annuity 
141.13  contracts, or custodial accounts from financial institutions 
141.14  which have been selected by the state board of investment under 
141.15  subdivision 3, as the investment vehicle for the retirement 
141.16  coverage of plan participants and to provide retirement benefits 
141.17  to plan participants.  Custodial accounts from financial 
141.18  institutions shall include open-end investment companies 
141.19  registered under the federal Investment Company Act of 1940, as 
141.20  amended investment products. 
141.21     (b) The annuity contracts or accounts investment products 
141.22  must be purchased with contributions under section 354B.23 or 
141.23  with money or assets otherwise provided by law by authority of 
141.24  the board and deemed acceptable by the applicable financial 
141.25  institution. 
141.26     (c) In addition to contracts and accounts from financial 
141.27  institutions, The Minnesota supplemental investment fund 
141.28  established under section 11A.17 and administered by the state 
141.29  board of investment is one of the investment options products 
141.30  for the individual retirement account plan.  Direct access must 
141.31  also be provided to lower expense and no load mutual funds, as 
141.32  those terms are defined by the federal securities and exchange 
141.33  commission, including stock funds, bond funds, and balanced 
141.34  funds.  Other investment products or combination of investment 
141.35  products which may be included are: 
141.36     (1) savings accounts at federally insured financial 
142.1   institutions; 
142.2      (2) life insurance contracts, fixed and variable annuity 
142.3   contracts from companies that are subject to regulation by the 
142.4   commerce commissioner; 
142.5      (3) investment options from open ended investment companies 
142.6   registered under the federal Investment Company Act of 1940, 
142.7   United States Code, title 15, sections 80a-1 to 80a-64; 
142.8      (4) investment options from a firm that is a registered 
142.9   investment advisor under the federal Investment Advisors Act of 
142.10  1940, United States Code, title 15, sections 80b-1 to 80b-21; 
142.11  and 
142.12     (5) investment options of a bank as defined in United 
142.13  States Code, title 15, section 80b-2, subsection (a), paragraph 
142.14  2, or a bank holding company as defined in the Bank Holding 
142.15  Company Act of 1956, United States Code, title 12, section 1841, 
142.16  subsection (a), paragraph (1). 
142.17     Sec. 10.  Minnesota Statutes 1998, section 354B.25, 
142.18  subdivision 3, is amended to read: 
142.19     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] (a) 
142.20  The financial institutions investment options provided for under 
142.21  subdivision 2 must be selected by the state board of 
142.22  investment.  Financial institutions include open-end investment 
142.23  companies registered under the federal Investment Company Act of 
142.24  1940, as amended. 
142.25     (b) The state board of investment may select up to five 
142.26  financial institutions to provide annuity contracts, custodial 
142.27  accounts, or a combination, as investment options for the 
142.28  individual retirement account plan in addition to the Minnesota 
142.29  supplemental investment fund.  In making its selection, at a 
142.30  minimum, the state board of investment shall consider at least 
142.31  the following: 
142.32     (1) the experience and ability of the financial institution 
142.33  to provide retirement and death benefits and products that are 
142.34  suited to meet the needs of plan participants; 
142.35     (2) the relationship of those retirement and death benefits 
142.36  and products provided by the financial institution to their 
143.1   cost; and 
143.2      (3) the financial strength and stability of the financial 
143.3   institution; and 
143.4      (4) the fees and expenses associated with the investment 
143.5   products in comparison to other products of similar risk and 
143.6   rates of return. 
143.7      (c) (b) After selecting a financial institution, the state 
143.8   board of investment must periodically review each financial 
143.9   institution selected under paragraph (b) and the offered 
143.10  products.  The periodic review must occur at least every three 
143.11  years.  In making its review, the state board of investment may 
143.12  retain appropriate consulting services to assist it in its 
143.13  periodic review, establish a budget for the cost of the periodic 
143.14  review process, and charge a proportional share of these costs 
143.15  to the reviewed financial institution. 
143.16     (d) (c) Contracts with financial institutions under this 
143.17  section must be executed by the board and must be approved by 
143.18  the state board of investment before execution. 
143.19     (e) (d) The state board of investment shall also establish 
143.20  policies and procedures under section 11A.04, clause (2), to 
143.21  carry out the provisions of this subdivision. 
143.22     Sec. 11.  Minnesota Statutes 1998, section 354B.25, 
143.23  subdivision 5, is amended to read: 
143.24     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
143.25  ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
143.26  administrative expenses of the individual retirement account 
143.27  plan must may be paid by charged to plan participants by the 
143.28  plan sponsor in the following manner: 
143.29     (1) from plan participants with amounts invested in the 
143.30  Minnesota supplemental investment fund, the plan administrator 
143.31  may charge an administrative expense assessment in an amount 
143.32  such that annual total fees charged for plan administration 
143.33  cannot exceed 40/100 of one percent of the assets of the 
143.34  Minnesota supplemental investment funds; and 
143.35     (2) from plan participants with amounts through annuity 
143.36  contracts and custodial accounts purchased under subdivision 2, 
144.1   paragraph (a), the plan administrator may charge an 
144.2   administrative expense assessment of a designated amount, not to 
144.3   exceed two percent of member and employer contributions, as 
144.4   those contributions are made form of an annual fee, an asset 
144.5   based fee, a percentage of the contributions to the plan, or a 
144.6   combination thereof. 
144.7      (b) Any administrative expense charge that is not actually 
144.8   needed for the administrative expenses of the individual 
144.9   retirement account plan must be refunded to member accounts. 
144.10     (c) The board of trustees shall report annually, before 
144.11  October 1, to the advisory committee created in subdivision 1a 
144.12  on administrative expenses of the plan.  The report must include 
144.13  a detailed accounting of charges for administrative expenses 
144.14  collected from plan participants and expenditure of the 
144.15  administrative expense charges.  The administrative expense 
144.16  charges collected from plan participants must be kept in a 
144.17  separate account from any other funds under control of the board 
144.18  of trustees and may be used only for the necessary and 
144.19  reasonable administrative expenses of the plan. 
144.20     Sec. 12.  [354B.31] [IRAP PART-TIME TEACHER MOBILITY 
144.21  PROGRAM.] 
144.22     Subdivision 1.  [PARTICIPATION REQUIREMENTS.] A faculty 
144.23  member who has three years or more of service in the Minnesota 
144.24  state colleges and universities system, by agreement with the 
144.25  board or with the authorized representative of the board, may be 
144.26  assigned to teaching service in a part-time teaching position 
144.27  under subdivision 2. 
144.28     Subd. 2.  [PART-TIME TEACHING POSITION; DEFINED.] For 
144.29  purposes of this section, "part-time teaching position" means a 
144.30  teaching position within the Minnesota state colleges and 
144.31  universities system in which the teacher is employed for at 
144.32  least 50 full days or a fractional equivalent as prescribed in 
144.33  section 354.091, and for which the faculty member is compensated 
144.34  in an amount not exceeding 80 percent of the compensation 
144.35  established by the board for a full-time faculty member with 
144.36  identical education and experience with the employing unit. 
145.1      Subd. 3.  [RETIREMENT CONTRIBUTIONS.] A faculty member 
145.2   assigned to a part-time position under this section shall 
145.3   continue to make employee contributions to the individual 
145.4   retirement account plan during the period of part-time 
145.5   employment on the same basis and in the same amounts as would 
145.6   have been paid if the person had been employed on a full-time 
145.7   basis provided that, prior to June 30 each year the member and 
145.8   the board make that portion of the required employer 
145.9   contribution to the plan, in any proportion which they may agree 
145.10  upon, that is based on the difference between the amount of 
145.11  compensation that would have been paid if the person had been 
145.12  employed on a full-time basis and the amount of compensation 
145.13  actually received by the person for the services rendered in the 
145.14  part-time assignment.  The employing unit shall make that 
145.15  portion of the required employer contributions to the plan on 
145.16  behalf of the person that is based on the amount of compensation 
145.17  actually received by the person for the services rendered in the 
145.18  part-time assignment.  The employee and employer contributions 
145.19  shall be based upon the rates of contribution prescribed by 
145.20  section 354B.23.  Employee contributions for part-time teaching 
145.21  service pursuant to this section shall not continue for more 
145.22  than ten years. 
145.23     Subd. 4.  [OTHER MEMBERSHIP PRECLUDED.] A faculty member 
145.24  entitled to make employee contributions for part-time teaching 
145.25  service pursuant to this section shall not be entitled during 
145.26  the same period of time to be a member of, accrue allowable 
145.27  service credit in or make employee contributions to any other 
145.28  Minnesota public employee pension plan, except a volunteer 
145.29  firefighters relief association governed by sections 69.771 to 
145.30  69.776. 
145.31     Subd. 5.  [INSURANCE.] If the board enters into an 
145.32  agreement authorized by this section, the board shall continue 
145.33  any insurance programs furnished or authorized a full-time 
145.34  teacher on an identical basis and with identical sharing of 
145.35  costs for a part-time teacher pursuant to this section.  
145.36  However, the requirements of this subdivision may be modified by 
146.1   a collective bargaining agreement between a board and an 
146.2   exclusive representative pursuant to chapter 179A.  Teachers as 
146.3   defined in section 136F.43 employed on a less than 75 percent 
146.4   time basis pursuant to this section are eligible for state paid 
146.5   insurance benefits as if the teachers were employed full-time. 
146.6      Subd. 6.  [ELIGIBILITY FOR CREDIT.] Only teachers who are 
146.7   public employees as defined in section 179A.03, subdivision 14, 
146.8   during the school year preceding the period of part-time 
146.9   employment pursuant to this section qualify for employee 
146.10  contributions to the retirement plan for part-time teaching 
146.11  service under subdivision 4.  Notwithstanding section 179A.03, 
146.12  subdivision 14, clauses (e) and (f), teachers who are employed 
146.13  on a part-time basis for purposes of this section and who would 
146.14  therefore be disqualified from the bargaining unit by one or 
146.15  both of those provisions, continue to be in the bargaining unit 
146.16  during the period of part-time employment under this section for 
146.17  purposes of compensation, fringe benefits, and the grievance 
146.18  procedure. 
146.19     Subd. 7.  [BOARD POWER NOT RESTRICTED.] This section does 
146.20  not limit the authority of the board to assign a teacher to a 
146.21  part-time teaching position which does not qualify for full 
146.22  accrual of service credit from and employee contributions to the 
146.23  retirement fund under this section. 
146.24     Subd. 8.  [SUBSTITUTE TEACHING.] Subdivision 4 does not 
146.25  prohibit a teacher who qualifies for full accrual of service 
146.26  credit from and employee contributions to the retirement fund 
146.27  pursuant to this section in any year from being employed as a 
146.28  substitute teacher by any school district during that year.  
146.29  Notwithstanding sections 354.091 and 354.42, a teacher may not 
146.30  qualify for full accrual of service credit from and employee 
146.31  contributions to the retirement fund for other teaching service 
146.32  rendered for any part of any year for which the teacher 
146.33  qualifies for employee contributions to the retirement plan 
146.34  pursuant to this section. 
146.35     Sec. 13.  Minnesota Statutes 1998, section 354C.12, 
146.36  subdivision 4, is amended to read: 
147.1      Subd. 4.  [ADMINISTRATIVE EXPENSES.] (a) The board of 
147.2   trustees of the Minnesota state colleges and universities is 
147.3   authorized to pay the necessary and reasonable administrative 
147.4   expenses of the supplemental retirement plan and may bill 
147.5   participants to recover these expenses.  The administrative fees 
147.6   or charges must may be paid by charged to participants in the 
147.7   following manner: as an annual fee, an asset based fee, a 
147.8   percentage of contributions to the plan, or a contribution 
147.9   thereof. 
147.10     (1) from participants whose contributions are invested with 
147.11  the state board of investment, the plan administrator may 
147.12  recover administrative expenses in the manner authorized by the 
147.13  Minnesota state colleges and universities in an amount such that 
147.14  annual total fees charged for plan administration cannot exceed 
147.15  40/100 of one percent of the assets of the Minnesota 
147.16  supplemental investment funds; or 
147.17     (2) from participants where contributions are invested 
147.18  through contracts purchased from any other authorized source, 
147.19  the plan administrator may assess an amount of up to two percent 
147.20  of the employee and employer contributions.  
147.21     (b) Any recovered or assessed amounts that are not needed 
147.22  for the necessary and reasonable administrative expenses of the 
147.23  plan must be refunded to member accounts. 
147.24     (c) The board of trustees shall report annually, before 
147.25  October 1, to the advisory committee created in section 354B.25, 
147.26  subdivision 1a, on administrative expenses of the plan.  The 
147.27  report must include a detailed accounting of charges for 
147.28  administrative expenses collected from plan participants and 
147.29  expenditure of the administrative expense charges.  The 
147.30  administrative expense charges collected from plan participants 
147.31  must be kept in a separate account from any other funds under 
147.32  control of the board of trustees and may be used only for the 
147.33  necessary and reasonable administrative expenses of the plan. 
147.34     Sec. 14.  [EFFECTIVE DATE.] 
147.35     Sections 1 to 13 are effective on July 1, 1999. 
147.36                             ARTICLE 20
148.1                            OTHER CHANGES 
148.2      Section 1.  Minnesota Statutes 1998, section 3.85, 
148.3   subdivision 3, is amended to read: 
148.4      Subd. 3.  [MEMBERSHIP.] The commission consists of six five 
148.5   members of the senate appointed by the subcommittee on 
148.6   committees of the committee on rules and administration and six 
148.7   five members of the house of representatives appointed by the 
148.8   speaker.  Members shall be appointed at the commencement of each 
148.9   regular session of the legislature for a two-year term beginning 
148.10  January 16 of the first year of the regular session.  Vacancies 
148.11  that occur while the legislature is in session shall be filled 
148.12  like regular appointments.  If the legislature is not in 
148.13  session, senate vacancies shall be filled by the last 
148.14  subcommittee on committees of the senate committee on rules and 
148.15  administration or other appointing authority designated by the 
148.16  senate rules, and house vacancies shall be filled by the last 
148.17  speaker of the house, or if the speaker is not available, by the 
148.18  last chair of the house rules committee. 
148.19     Sec. 2.  [EFFECTIVE DATE.] 
148.20     Section 1 is effective on the day following final enactment.
148.21                             ARTICLE 21
148.22                KANDIYOHI COUNTY AND LITCHFIELD CITY 
148.23              VOLUNTEER RESCUE SQUAD MEMBERS ADDED TO 
148.24             PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN 
148.25     Section 1.  Minnesota Statutes 1998, section 353D.01, 
148.26  subdivision 2, is amended to read: 
148.27     Subd. 2.  [ELIGIBILITY.] (a) Eligibility to participate in 
148.28  the defined contribution plan is available to: 
148.29     (1) elected local government officials of a governmental 
148.30  subdivision who elect to participate in the plan under section 
148.31  353D.02, subdivision 1, and who, for the elected service 
148.32  rendered to a governmental subdivision, are not members of the 
148.33  public employees retirement association within the meaning of 
148.34  section 353.01, subdivision 7; 
148.35     (2) physicians who, if they did not elect to participate in 
148.36  the plan under section 353D.02, subdivision 2, would meet the 
149.1   definition of member under section 353.01, subdivision 7; and 
149.2      (3) basic and advanced life support emergency medical 
149.3   service personnel employed by or providing services for any 
149.4   public ambulance service or privately operated ambulance service 
149.5   that receives an operating subsidy from a governmental entity 
149.6   that elects to participate under section 353D.02, subdivision 
149.7   3.; and 
149.8      (4) members of a municipal rescue squad associated with 
149.9   Litchfield in Meeker county, or of a county rescue squad 
149.10  associated with Kandiyohi county, if an independent nonprofit 
149.11  rescue squad corporation, incorporated under chapter 317A, 
149.12  performing emergency management services, and if not affiliated 
149.13  with a fire department or ambulance service and if its members 
149.14  are not eligible for membership in that fire department's or 
149.15  ambulance service's relief association or comparable pension 
149.16  plan. 
149.17     (b) For purposes of this chapter, an elected local 
149.18  government official includes a person appointed to fill a 
149.19  vacancy in an elective office.  Service as an elected local 
149.20  government official only includes service for the governmental 
149.21  subdivision for which the official was elected by the 
149.22  public-at-large.  Service as an elected local government 
149.23  official ceases and eligibility to participate terminates when 
149.24  the person ceases to be an elected official.  An elected local 
149.25  government official does not include an elected county sheriff.  
149.26     (c) Elected local government officials, physicians, and 
149.27  first response personnel and emergency medical service 
149.28  personnel, and rescue squad personnel who are currently covered 
149.29  by a public or private pension plan because of their employment 
149.30  or provision of services are not eligible to participate in the 
149.31  public employees defined contribution plan.  
149.32     (d) A former participant is a person who has terminated 
149.33  eligible employment or service and has not withdrawn the value 
149.34  of the person's individual account. 
149.35     Sec. 2.  Minnesota Statutes 1998, section 353D.02, is 
149.36  amended by adding a subdivision to read: 
150.1      Subd. 4.  [ELIGIBLE RESCUE SQUAD PERSONNEL.] The 
150.2   municipality or county, as applicable, associated with a rescue 
150.3   squad under section 353D.01, subdivision 2, paragraph (a), 
150.4   clause (4), may elect to participate in the plan.  If the 
150.5   municipality or county, as applicable, elects to participate, 
150.6   the eligible personnel may elect to participate or decline to 
150.7   participate.  An eligible individual's election must be made 
150.8   within 30 days of the service's election to participate or 30 
150.9   days of the date on which the individual begins to provide 
150.10  service to the rescue squad, whichever is later.  Elections 
150.11  under this subdivision by a government unit or individual are 
150.12  irrevocable.  The municipality or county, as applicable, must 
150.13  specify by resolution eligibility requirements for rescue squad 
150.14  personnel which must be satisfied if the individual is to be 
150.15  authorized to make the election under this subdivision. 
150.16     Sec. 3.  Minnesota Statutes 1998, section 353D.03, 
150.17  subdivision 3, is amended to read: 
150.18     Subd. 3.  [AMBULANCE SERVICE, RESCUE SQUAD PERSONNEL 
150.19  CONTRIBUTION.] A public ambulance service or privately operated 
150.20  ambulance service that receives an operating subsidy from a 
150.21  governmental entity that elects to participate in the plan shall 
150.22  fund benefits for its qualified personnel who individually elect 
150.23  to participate.  Personnel who are paid for their services may 
150.24  elect to make member contributions in an amount not to exceed 
150.25  the service's contribution on their behalf.  Ambulance service 
150.26  contributions on behalf of salaried employees must be a fixed 
150.27  percentage of salary.  An ambulance service making contributions 
150.28  for volunteer or largely uncompensated personnel, or a 
150.29  municipality or county making contributions on behalf of rescue 
150.30  squad members who are volunteers or largely uncompensated 
150.31  personnel, may assign a unit value for each call or each period 
150.32  of alert duty for the purpose of calculating ambulance 
150.33  service or rescue squad service contributions, as applicable. 
150.34     Sec. 4.  [EFFECTIVE DATE.] 
150.35     Sections 1 to 3 are effective on the day following final 
150.36  enactment. 
151.1                              ARTICLE 22
151.2                      PUBLIC PENSION FACILITIES
151.3      Section 1.  Minnesota Statutes 1998, section 3.751, 
151.4   subdivision 1, is amended to read: 
151.5      Subdivision 1.  [WAIVER OF IMMUNITY.] When a controversy 
151.6   arises out of a contract for work, services, the delivery of 
151.7   goods, or debt obligations of the state incurred under article 
151.8   XI of the Minnesota Constitution, or revenue obligations of a 
151.9   retirement fund incurred under section 356.89 entered into by a 
151.10  state agency through established procedure, in respect to which 
151.11  controversy a party to the contract would be entitled to redress 
151.12  against the state in a court, if the state were suable, and no 
151.13  claim against the state has been made in a bill pending in the 
151.14  legislature for the same redress against it, the state waives 
151.15  immunity from suit in connection with the controversy and 
151.16  confers jurisdiction on the district court to determine it in 
151.17  the manner provided for civil actions in the district court.  
151.18  Only a party to the contract may bring action against the state. 
151.19     Sec. 2.  Minnesota Statutes 1998, section 353.03, 
151.20  subdivision 4, is amended to read: 
151.21     Subd. 4.  [OFFICES.] The commissioner of administration 
151.22  shall make provision for suitable office space in the state 
151.23  capitol or other state office buildings, or at such other 
151.24  location in St. Paul as is determined by the commissioner for 
151.25  the use of the board of trustees and its executive director.  
151.26  The commissioner shall give the board at least four months 
151.27  notice for any proposed removal from their present location.  
151.28  Any and all rental charges shall be paid by the trustees from 
151.29  the public employees retirement fund. 
151.30     Sec. 3.  [356.89] [PUBLIC PENSION FACILITIES.] 
151.31     Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
151.32  subdivision apply to this section. 
151.33     (b) "Boards" mean the board of directors of the Minnesota 
151.34  state retirement system, the board of trustees of the public 
151.35  employees retirement association, and the board of trustees of 
151.36  the teachers retirement association. 
152.1      (b) "Commissioner" means the commissioner of administration.
152.2      Subd. 2.  [BUILDING; RELATED FACILITIES.] (a) The 
152.3   commissioner of administration may provide a building and 
152.4   related facilities to be jointly occupied by the board of 
152.5   directors of the Minnesota state retirement system, the board of 
152.6   trustees of the public employees retirement association, and the 
152.7   board of trustees of the teachers retirement association for the 
152.8   administration of their public pension systems.  
152.9      (b) Design of the facilities is not subject to section 
152.10  16B.33.  The competitive acquisition process set forth in 
152.11  chapter 16C does not apply if the process set forth in 
152.12  subdivision 3 is followed.  
152.13     (c) The boards and the commissioner must submit the plans 
152.14  for a public pension facility under this section to the chair of 
152.15  the house ways and means committee and to the chair of the 
152.16  senate state government finance committee for their approval 
152.17  before the plans are implemented.  
152.18     Subd. 3.  [CONTRACTING PROCEDURES.] (a) The commissioner 
152.19  may enter into a contract for facilities with a contractor to 
152.20  furnish the architectural, engineering, and related services as 
152.21  well as the labor, materials, supplies, equipment, and related 
152.22  construction services on the basis of a request for 
152.23  qualifications and competitive responses received through a 
152.24  request for proposals process that must include the items listed 
152.25  in paragraphs (b) to (i). 
152.26     (b) Before issuing a request for qualifications and a 
152.27  request for proposals, the commissioner, with the assistance of 
152.28  the boards, shall prepare performance criteria and 
152.29  specifications that include: 
152.30     (1) a general floor plan or layout indicating the general 
152.31  dimensions of the public building and space requirements; 
152.32     (2) design criteria for the exterior and site area; 
152.33     (3) performance specifications for all building systems and 
152.34  components to ensure quality and cost efficiencies; 
152.35     (4) conceptual floor plans for systems space; 
152.36     (5) preferred types of interior finishes, styles of 
153.1   windows, lighting and outlets, doors, and features such as 
153.2   built-in counters and telephone wiring; 
153.3      (6) mechanical and electrical requirements; 
153.4      (7) special interior features required; and 
153.5      (8) a completion schedule. 
153.6      (c) The commissioner shall first solicit statements of 
153.7   qualifications from eligible contractors and select more than 
153.8   one qualified contractor based upon experience, technical 
153.9   competence, past performance, capability to perform, and other 
153.10  appropriate facts.  Contractors selected under this process must 
153.11  be, employ, or have as a partner, member, coventurer, or 
153.12  subcontractor, persons licensed and registered under chapter 326 
153.13  to provide the services required to design and complete the 
153.14  project.  The commissioner does not have to select any of the 
153.15  respondents if none reasonably fulfill the criteria set forth in 
153.16  this paragraph. 
153.17     (d) The contractors selected shall be asked to respond to a 
153.18  request for proposals.  Responses must include site plans, 
153.19  design concept, elevation, statement of material to be used, 
153.20  floor layouts, a detailed development budget, and a total cost 
153.21  to complete the project.  The proposal must indicate that the 
153.22  contractor obtained at least two proposals from subcontractors 
153.23  for each item of work and must set forth how the subcontractors 
153.24  were selected.  The commissioner, with the assistance of the 
153.25  boards, shall evaluate the proposals based upon design, cost, 
153.26  quality, aesthetics, and the best overall value to the state 
153.27  pension funds.  The commissioner need not select any of the 
153.28  proposals submitted and reserves the right to reject any and all 
153.29  proposals, and may terminate the process or revise the request 
153.30  for proposals and solicit new proposals if the commissioner 
153.31  determines that the best interests of the pension funds would be 
153.32  better served by doing so.  Proposals submitted are nonpublic 
153.33  data until the contract is awarded. 
153.34     (e) The contractor selected must comply with sections 
153.35  574.26 to 574.261.  Before executing a final contract, the 
153.36  contractor selected shall certify a firm construction price and 
154.1   completion date. 
154.2      (f) The commissioner may consider building sites in the 
154.3   city of St. Paul and surrounding suburbs. 
154.4      (g) Any land, building, or facility leased, constructed, or 
154.5   acquired and any leasehold interest acquired under this section 
154.6   must be held by the state in trust for the three retirement 
154.7   systems as tenants in common.  Each retirement system fund must 
154.8   consider its interest as a fixed asset of its pension fund in 
154.9   accordance with governmental accounting standards. 
154.10     (h) The commissioner may lease to another governmental 
154.11  subdivision any portion of the funds' building and lands that is 
154.12  not required for their direct use upon terms and conditions they 
154.13  deem to be in the best interest of the pension funds.  Any 
154.14  income accruing from the rentals must be separately accounted 
154.15  for and utilized to offset ongoing administrative expenses and 
154.16  any excess must be carried forward for future administrative 
154.17  expenses.  The commissioner may also enter into lease agreements 
154.18  for the establishment of satellite offices should the boards 
154.19  find them to be necessary in order to assure their members 
154.20  reasonable access to their services.  The commissioner may lease 
154.21  under section 16B.24 any portion of the facilities not required 
154.22  for the direct use of the boards. 
154.23     (i) The boards shall formulate and adopt a written working 
154.24  agreement that sets forth the nature of each retirement system's 
154.25  ownership interest, the duties and obligations of each system 
154.26  toward the construction, operation, and maintenance costs of its 
154.27  facilities, and identifies one retirement fund to serve as 
154.28  manager for operating and maintenance purposes.  The boards may 
154.29  contract with independent third parties for maintenance-related 
154.30  activities, services, and supplies, and may use the services of 
154.31  the department of administration where economically feasible to 
154.32  do so.  If the boards cannot agree or resolve a dispute about 
154.33  operations or maintenance of the facilities, they may request 
154.34  the commissioner of administration to appoint a representative 
154.35  from the department's real estate management division to serve 
154.36  as arbitrator of the dispute with authority to issue a written 
155.1   resolution of the dispute. 
155.2      Subd. 4.  [REVENUE BONDS.] The commissioner of finance, on 
155.3   request of the governor, may sell and issue revenue bonds in an 
155.4   aggregate principal amount up to $38,000,000 to achieve the 
155.5   purposes described in subdivisions 1 and 2, plus the amount 
155.6   needed to pay issuance costs and interest costs and to establish 
155.7   necessary reserves to secure the bonds.  The commissioner of 
155.8   finance may issue bonds for the purpose of refunding bonds 
155.9   issued under this subdivision.  The bonds may be sold and issued 
155.10  on terms and in a manner the commissioner of finance determines 
155.11  to be in the best interests of the state.  The proceeds of the 
155.12  bonds must be credited to a bond proceeds account in the pension 
155.13  building fund, which the commissioner of finance must create in 
155.14  the state treasury. 
155.15     Subd. 5.  [SECURITY.] The boards may pledge any or all 
155.16  assets of the boards as security for the bonds.  The bonds and 
155.17  the interest on them must be paid solely from and secured by all 
155.18  assets of the boards pledged and appropriated for these purposes 
155.19  to the debt service fund created in subdivision 6 and any 
155.20  investment income thereon and any reserve established for this 
155.21  purpose.  The bonds are not public debt, and the full faith, 
155.22  credit, and taxing powers of the state are not pledged for their 
155.23  payment.  The bonds and the interest on them must not be paid, 
155.24  directly or indirectly, in whole or in part, from a tax of 
155.25  statewide application on any class of property, income, 
155.26  transaction, or privilege. 
155.27     Subd. 6.  [DEBT SERVICE FUND.] There is established in the 
155.28  state treasury a separate and special pension building debt 
155.29  service fund.  Money in the funds managed by the boards is 
155.30  appropriated to the boards for transfer to the pension building 
155.31  debt service fund.  Money appropriated and transferred to the 
155.32  fund and investment income thereon on hand or required to be 
155.33  transferred to the fund must be used and is irrevocably 
155.34  appropriated to pay when due the principal of and interest on 
155.35  the bonds authorized in subdivision 4.  
155.36     Subd. 7.  [COVENANTS; AGREEMENTS.] The commissioner of 
156.1   finance may, for and on behalf of the state, enter into 
156.2   covenants and agreements not inconsistent with subdivisions 1 to 
156.3   6 as may be necessary or desirable to facilitate the sale and 
156.4   issuance of the bonds on terms favorable to the state, 
156.5   including, but not limited to, covenants and agreements relating 
156.6   to the payment of and security for the bonds, tax exemption, and 
156.7   disclosure of information required by federal and state 
156.8   securities laws.  The covenants and agreements of the 
156.9   commissioner of finance constitute an enforceable contract of 
156.10  the state and the state pledges and agrees with the holders of 
156.11  any bonds that the state will not limit or alter the rights 
156.12  vested in the commissioner of finance to fulfill the terms of 
156.13  the covenants or agreements made with the holders of the bonds, 
156.14  or in any way impair the rights and remedies of the holders 
156.15  until the bonds, together with the interest thereon, with 
156.16  interest on any unpaid installments of interest, and all costs 
156.17  and expenses in connection with any action or proceeding by or 
156.18  on behalf of the holders, are fully met and discharged.  The 
156.19  commissioner of finance may include this pledge and agreement of 
156.20  the state in any covenant or agreement with the holders of the 
156.21  bonds.  Sections 16A.672 and 16A.675 apply to the bonds. 
156.22     Sec. 4.  [APPROPRIATION.] 
156.23     $38,000,000 is appropriated from the pension building fund 
156.24  created in Minnesota Statutes, section 356.89, to design, 
156.25  construct, furnish, and equip a new facility to be jointly 
156.26  occupied by the Minnesota state retirement system, the public 
156.27  employees retirement association, and the teachers retirement 
156.28  association, as provided in section 356.89. 
156.29     Sec. 5.  [REPORT.] 
156.30     The executive directors of the Minnesota state retirement 
156.31  system, the public employees retirement association, and the 
156.32  teachers retirement association must jointly report to the 
156.33  legislature by July 15, 2001, on a plan to consolidate 
156.34  administrative services for the three pension systems if the 
156.35  systems share a building. 
156.36     Sec. 6.  [EFFECTIVE DATE.] 
157.1      Sections 1 to 5 are effective the day following final 
157.2   enactment.