1.1                          A bill for an act
  1.2             relating to retirement; various statewide and other 
  1.3             public pension plans; providing special benefit 
  1.4             coverage for privatized Glencoe area health center 
  1.5             employees; merging the pre-March 1, 1999, local police 
  1.6             and paid fire consolidation accounts into the public 
  1.7             employees police and fire plan; extending the minimum 
  1.8             volunteer firefighter fire state aid amount to 
  1.9             post-1993 relief association members; modifying 
  1.10            governance provisions for the Minneapolis fire 
  1.11            department relief association and the Minneapolis 
  1.12            police relief association; providing a targeted early 
  1.13            retirement incentive program for certain employees of 
  1.14            the metropolitan council; permitting the purchase of 
  1.15            service credit by various school district employees; 
  1.16            making miscellaneous changes in the legislators 
  1.17            retirement plan, the Minnesota state colleges and 
  1.18            university system individual retirement account plan, 
  1.19            the Minnesota state retirement system, and the 
  1.20            teachers retirement association; reducing the 
  1.21            membership of the legislative commission on pensions 
  1.22            and retirement; requiring a study; amending Minnesota 
  1.23            Statutes 1998, sections 3.85, subdivisions 3 and 12; 
  1.24            3A.02, subdivision 1b; 69.021, subdivisions 7 and 10; 
  1.25            69.031, subdivision 5; 122A.46, subdivision 2; 352.03, 
  1.26            subdivision 1; 353.01, subdivisions 2b, 10, and 16; 
  1.27            353.64, subdivision 1; 353.65, subdivisions 2 and 3; 
  1.28            354.05, subdivision 40; 354.06, subdivision 1; 354.10, 
  1.29            subdivision 4; 354C.11; 356.215, subdivision 4g; 
  1.30            423A.02, subdivisions 1b, 2, and by adding a 
  1.31            subdivision; and 423B.07; proposing coding for new law 
  1.32            in Minnesota Statutes, chapter 353; repealing 
  1.33            Minnesota Statutes 1998, section 353.65, subdivision 
  1.34            3a. 
  1.35  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.36                             ARTICLE 1 
  1.37                   BENEFIT COVERAGE MODIFICATIONS 
  1.38                       FOR PRIVATIZED GLENCOE 
  1.39                    AREA HEALTH CENTER EMPLOYEES  
  1.40     Section 1.  [GLENCOE AREA HEALTH CENTER EMPLOYEE 
  2.1   PRIVATIZATION PENSION BENEFIT ACCOMMODATION; PURPOSE.] 
  2.2      The purpose of this act is to ensure, to the extent 
  2.3   possible, that persons employed at the Glencoe area health 
  2.4   center will be entitled to receive future retirement benefits 
  2.5   under the general employees retirement plan of the public 
  2.6   employees retirement association commensurate with the prior 
  2.7   contributions made by them or on their behalf upon the 
  2.8   privatization of the Glencoe area health center. 
  2.9      Sec. 2.  [DEFINITIONS.] 
  2.10     Subdivision 1.  [GENERALLY.] As used in this act, unless 
  2.11  the context clearly indicates otherwise, each of the terms in 
  2.12  the following subdivisions has the meaning indicated. 
  2.13     Subd. 2.  [ALLOWABLE SERVICE.] "Allowable service" has the 
  2.14  meaning provided in Minnesota Statutes 1998, section 353.01, 
  2.15  subdivision 16. 
  2.16     Subd. 3.  [EFFECTIVE DATE.] "Effective date" means the date 
  2.17  that the operation of the Glencoe area health center is assumed 
  2.18  by another employer or the date that the Glencoe area health 
  2.19  center is purchased by another employer and active membership in 
  2.20  the public employees retirement association consequently 
  2.21  terminates. 
  2.22     Subd. 4.  [TERMINATED HEALTH CENTER EMPLOYEE.] "Terminated 
  2.23  health center employee" means a person who: 
  2.24     (1) was employed on the day before the effective date by 
  2.25  the Glencoe area health center; 
  2.26     (2) terminated employment with the Glencoe area health 
  2.27  center on the day before the effective date; and 
  2.28     (3) was a participant in the general employees retirement 
  2.29  plan of the public employees retirement association at the time 
  2.30  of termination of employment with the Glencoe area health center.
  2.31     Subd. 5.  [YEARS OF ALLOWABLE SERVICE.] "Years of allowable 
  2.32  service" means the total number of years of allowable service 
  2.33  under Minnesota Statutes 1998, section 353.01, subdivision 18. 
  2.34     Sec. 3.  [VESTING RULE FOR CERTAIN EMPLOYEES.] 
  2.35     Notwithstanding any provision of Minnesota Statutes, 
  2.36  chapter 353, to the contrary, a terminated health center 
  3.1   employee is eligible to receive a retirement annuity under 
  3.2   Minnesota Statutes 1998, section 353.29, without regard to the 
  3.3   requirement for three years of allowable service. 
  3.4      Sec. 4.  [AUGMENTATION INTEREST RATE FOR TERMINATED HEALTH 
  3.5   CENTER EMPLOYEES.] 
  3.6      The deferred annuity of a terminated health center employee 
  3.7   is subject to augmentation in accordance with Minnesota Statutes 
  3.8   1998, section 353.71, subdivision 2, except that the rate of 
  3.9   interest for this purpose is 5.5 percent compounded annually 
  3.10  until January 1 following the year in which such person attains 
  3.11  age 55.  From that date to the effective date of retirement, the 
  3.12  rate is 7.5 percent.  These increased augmentation rates are no 
  3.13  longer applicable for any time after the terminated health 
  3.14  center employee becomes covered again by a retirement fund 
  3.15  enumerated in Minnesota Statutes, section 356.30, subdivision 
  3.16  3.  These increased deferred annuity augmentation rates do not 
  3.17  apply to a terminated transferred health center employee who 
  3.18  begins receipt of a retirement annuity while employed by the 
  3.19  employer which assumed operations of the Glencoe area health 
  3.20  center or purchased the Glencoe area health center. 
  3.21     Sec. 5.  [AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE 
  3.22  FOR CERTAIN EARLY RETIREMENT PURPOSES.] 
  3.23     For the purpose of determining eligibility for early 
  3.24  retirement benefits provided under Minnesota Statutes 1998, 
  3.25  section 353.30, subdivision 1a, and notwithstanding any 
  3.26  provision of Minnesota Statutes, chapter 353, to the contrary, 
  3.27  the years of allowable service for a terminated health center 
  3.28  employee who transfers employment on the effective date and does 
  3.29  not apply for a refund of contributions under Minnesota Statutes 
  3.30  1998, section 353.34, subdivision 1, or any similar provision in 
  3.31  future Minnesota Statutes, includes service with the successor 
  3.32  employer to the Glencoe area health center following the 
  3.33  effective date.  The successor employer shall provide any 
  3.34  reports that the executive director of the public employees 
  3.35  retirement association may reasonably request to permit 
  3.36  calculation of benefits.  
  4.1      To be eligible for early retirement benefits under this 
  4.2   section, the individual must separate from service with the 
  4.3   successor employer to the Glencoe area health center.  The 
  4.4   terminated eligible individual, or an individual authorized to 
  4.5   act on behalf of that individual, may apply for an annuity 
  4.6   following application procedures under Minnesota Statutes, 
  4.7   section 353.29, subdivision 4. 
  4.8      Sec. 6.  [APPLICATION OF REEMPLOYED ANNUITANT EARNINGS 
  4.9   LIMITATIONS.] 
  4.10     The reemployed annuitant earnings limitations of Minnesota 
  4.11  Statutes, section 353.37, apply to any service by a terminated 
  4.12  health center employee as an employee of the successor employer 
  4.13  to the Glencoe area health center. 
  4.14     Sec. 7.  [EFFECT ON REFUND.] 
  4.15     Notwithstanding any provision of Minnesota Statutes, 
  4.16  chapter 353, to the contrary, terminated health center employees 
  4.17  may receive a refund of employee accumulated contributions plus 
  4.18  interest at the rate of six percent per year compounded annually 
  4.19  in accordance with Minnesota Statutes 1998, section 353.34, 
  4.20  subdivision 2, at any time after the transfer of employment to 
  4.21  the successor employer to the Glencoe area health center.  If a 
  4.22  terminated health center employee has received a refund from a 
  4.23  pension plan enumerated in Minnesota Statutes, section 356.30, 
  4.24  subdivision 3, the person may not repay that refund unless the 
  4.25  person again becomes a member of one of those enumerated plans 
  4.26  and complies with Minnesota Statutes, section 356.30, 
  4.27  subdivision 2. 
  4.28     Sec. 8.  [COUNSELING SERVICES.] 
  4.29     The Glencoe area health center and the executive director 
  4.30  of the public employees retirement association shall provide 
  4.31  terminated health center employees with counseling on their 
  4.32  benefits available under the general employees retirement plan 
  4.33  of the public employees retirement association. 
  4.34     Sec. 9.  [EFFECTIVE DATE.] 
  4.35     Sections 1 to 8 are effective on the day following final 
  4.36  enactment. 
  5.1                              ARTICLE 2 
  5.2                       MERGER INTO PERA-P&F OF 
  5.3                        LOCAL POLICE AND FIRE 
  5.4                        CONSOLIDATION ACCOUNTS 
  5.5      Section 1.  Minnesota Statutes 1998, section 3.85, 
  5.6   subdivision 12, is amended to read: 
  5.7      Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
  5.8   commission shall assess each retirement plan specified in 
  5.9   subdivision 11, paragraph (b), the compensation paid to the 
  5.10  actuary retained by the commission for the actuarial valuation 
  5.11  calculations, quadrennial projection valuations, and quadrennial 
  5.12  experience studies.  The assessment is 100 percent of the amount 
  5.13  of contract compensation for the actuarial consulting firm 
  5.14  retained by the commission for actuarial valuation calculations, 
  5.15  including the public employees police and fire plan 
  5.16  consolidation accounts of the public employees retirement 
  5.17  association established after March 1, 1999, annual experience 
  5.18  data collection and processing, and quadrennial experience 
  5.19  studies and quadrennial projection valuations.  
  5.20     The portion of the total assessment payable by each 
  5.21  retirement system or pension plan must be determined as follows: 
  5.22     (1) Each pension plan specified in subdivision 11, 
  5.23  paragraph (b), clauses (1) to (13), must pay the following 
  5.24  indexed amount based on its total active, deferred, inactive, 
  5.25  and benefit recipient membership: 
  5.26         up to 2,000 members, inclusive         $2.55 per member 
  5.27         2,001 through 10,000 members           $1.13 per member 
  5.28         over 10,000 members                    $0.11 per member  
  5.29     The amount specified is applicable for the assessment of 
  5.30  the July 1, 1991, to June 30, 1992, fiscal year actuarial 
  5.31  compensation amounts.  For the July 1, 1992, to June 30, 1993, 
  5.32  fiscal year and subsequent fiscal year actuarial compensation 
  5.33  amounts, the amount specified must be increased at the same 
  5.34  percentage increase rate as the implicit price deflator for 
  5.35  state and local government purchases of goods and services for 
  5.36  the 12-month period ending with the first quarter of the 
  6.1   calendar year following the completion date for the actuarial 
  6.2   valuation calculations, as published by the federal Department 
  6.3   of Commerce, and rounded upward to the nearest full cent. 
  6.4      (2) The total per-member portion of the allocation must be 
  6.5   determined, and that total per-member amount must be subtracted 
  6.6   from the total amount for allocation.  Of the remainder dollar 
  6.7   amount, the following per-retirement system and per-pension plan 
  6.8   charges must be determined and the charges must be paid by the 
  6.9   system or plan: 
  6.10     (i) 37.87 percent is the total additional per-retirement 
  6.11  system charge, of which one-seventh must be paid by each 
  6.12  retirement system specified in subdivision 11, paragraph (b), 
  6.13  clauses (1), (2), (6), (7), (9), (10), and (11). 
  6.14     (ii) 62.13 percent is the total additional per-pension plan 
  6.15  charge, of which one-thirteenth must be paid by each pension 
  6.16  plan specified in subdivision 11, paragraph (b), clauses (1) to 
  6.17  (13).  
  6.18     (b) The assessment must be made following the completion of 
  6.19  the actuarial valuation calculations and the experience 
  6.20  analysis.  The amount of the assessment is appropriated from the 
  6.21  retirement fund applicable to the retirement plan.  Receipts 
  6.22  from assessments must be deposited in the state treasury and 
  6.23  credited to the general fund. 
  6.24     Sec. 2.  Minnesota Statutes 1998, section 69.021, 
  6.25  subdivision 10, is amended to read: 
  6.26     Subd. 10.  [REDUCTION IN POLICE STATE AID APPORTIONMENT.] 
  6.27  (a) The commissioner of revenue shall reduce the apportionment 
  6.28  of police state aid under subdivisions 5, paragraph (b), 6, and 
  6.29  7a, for eligible employer units by any excess police state aid. 
  6.30     (b) "Excess police state aid" is: 
  6.31     (1) for counties and for municipalities in which police 
  6.32  retirement coverage is provided wholly by the public employees 
  6.33  police and fire fund and all police officers are members of the 
  6.34  plan governed by sections 353.63 to 353.657, the amount in 
  6.35  excess of the employer's total prior calendar year obligation as 
  6.36  defined in paragraph (c), as certified by the executive director 
  7.1   of the public employees retirement association; 
  7.2      (2) for municipalities in which police retirement coverage 
  7.3   is provided in part by the public employees police and fire fund 
  7.4   governed by sections 353.63 to 353.657 and in part by a local 
  7.5   police consolidation account governed by chapter 353A, and 
  7.6   established after March 1, 1999, the amount in excess of the 
  7.7   employer's total prior calendar year obligation as defined in 
  7.8   paragraph (c), plus the amount of the employer's total prior 
  7.9   calendar year obligation under section 353A.09, subdivision 5, 
  7.10  paragraphs (a) and (b), as certified by the executive director 
  7.11  of the public employees retirement association; 
  7.12     (3) for municipalities in which police retirement coverage 
  7.13  is provided by the public employees police and fire plan 
  7.14  governed by sections 353.63 to 353.657, in which police 
  7.15  retirement coverage was provided by a police consolidation 
  7.16  account under chapter 353A before July 1, 1999, and for which 
  7.17  the municipality has an additional municipal contribution under 
  7.18  section 353.665, subdivision 8, paragraph (b), the amount in 
  7.19  excess of the employer's total prior calendar year obligation as 
  7.20  defined in paragraph (c), plus the amount of any additional 
  7.21  municipal contribution under section 353.665, subdivision 8, 
  7.22  paragraph (b), until the year 2010, as certified by the 
  7.23  executive director of the public employees retirement 
  7.24  association; 
  7.25     (4) for municipalities in which police retirement coverage 
  7.26  is provided in part by the public employees police and fire fund 
  7.27  governed by sections 353.63 to 353.657 and in part by a local 
  7.28  police relief association governed by sections 69.77 and 
  7.29  423A.01, the amount in excess of the employer's total prior 
  7.30  calendar year obligation as defined in paragraph (c), as 
  7.31  certified by the executive director of the public employees 
  7.32  retirement association, plus the amount of the financial 
  7.33  requirements of the relief association certified to the 
  7.34  applicable municipality during the prior calendar year under 
  7.35  section 69.77, subdivisions 2b and 2c, reduced by the amount of 
  7.36  member contributions deducted from the covered salary of the 
  8.1   relief association during the prior calendar year under section 
  8.2   69.77, subdivision 2a, as certified by the chief administrative 
  8.3   officer of the applicable municipality; 
  8.4      (4) (5) for the metropolitan airports commission, if there 
  8.5   are police officers hired before July 1, 1978, with retirement 
  8.6   coverage by the Minneapolis employees retirement fund remaining, 
  8.7   the amount in excess of the commission's total prior calendar 
  8.8   year obligation as defined in paragraph (c), as certified by the 
  8.9   executive director of the public employees retirement 
  8.10  association, plus the amount determined by expressing the 
  8.11  commission's total prior calendar year contribution to the 
  8.12  Minneapolis employees retirement fund under section 422A.101, 
  8.13  subdivisions 2 and 2a, as a percentage of the commission's total 
  8.14  prior calendar year covered payroll for commission employees 
  8.15  covered by the Minneapolis employees retirement fund and 
  8.16  applying that percentage to the commission's total prior 
  8.17  calendar year covered payroll for commission police officers 
  8.18  covered by the Minneapolis employees retirement fund, as 
  8.19  certified by the chief administrative officer of the 
  8.20  metropolitan airports commission; and 
  8.21     (5) (6) for the department of natural resources and for the 
  8.22  department of public safety, the amount in excess of the 
  8.23  employer's total prior calendar year obligation under section 
  8.24  352B.02, subdivision 1c, for plan members who are peace officers 
  8.25  under section 69.011, subdivision 1, clause (g), as certified by 
  8.26  the executive director of the Minnesota state retirement system. 
  8.27     (c) The employer's total prior calendar year obligation 
  8.28  with respect to the public employees police and fire plan is the 
  8.29  total prior calendar year obligation under section 353.65, 
  8.30  subdivision 3, for police officers as defined in section 353.64, 
  8.31  subdivision 2, and the actual total prior calendar year 
  8.32  obligation under section 353.65, subdivision 3, for 
  8.33  firefighters, as defined in section 353.64, subdivision 3, but 
  8.34  not to exceed for those firefighters the applicable following 
  8.35  amounts: 
  8.36    Municipality                       Maximum Amount 
  9.1     Albert Lea                          $54,157.01
  9.2     Anoka                                10,399.31
  9.3     Apple Valley                          5,442.44 
  9.4     Austin                               49,864.73
  9.5     Bemidji                              27,671.38
  9.6     Brooklyn Center                       6,605.92
  9.7     Brooklyn Park                        24,002.26  
  9.8     Burnsville                           15,956.00 
  9.9     Cloquet                               4,260.49 
  9.10    Coon Rapids                          39,920.00 
  9.11    Cottage Grove                         8,588.48
  9.12    Crystal                               5,855.00
  9.13    East Grand Forks                     51,009.88
  9.14    Edina                                32,251.00
  9.15    Elk River                             5,216.55
  9.16    Ely                                  13,584.16
  9.17    Eveleth                              16,288.27
  9.18    Fergus Falls                          6,742.00
  9.19    Fridley                              33,420.64
  9.20    Golden Valley                        11,744.61 
  9.21    Hastings                             16,561.00 
  9.22    Hopkins                               4,324.23  
  9.23    International Falls                  14,400.69 
  9.24    Lakeville                               782.35 
  9.25    Lino Lakes                            5,324.00 
  9.26    Little Falls                          7,889.41 
  9.27    Maple Grove                           6,707.54 
  9.28    Maplewood                             8,476.69 
  9.29    Minnetonka                           10,403.00 
  9.30    Montevideo                            1,307.66 
  9.31    Moorhead                             68,069.26 
  9.32    New Hope                              6,739.72 
  9.33    North St. Paul                        4,241.14 
  9.34    Northfield                              770.63 
  9.35    Owatonna                             37,292.67 
  9.36    Plymouth                              6,754.71 
 10.1     Red Wing                              3,504.01 
 10.2     Richfield                            53,757.96 
 10.3     Rosemount                             1,712.55 
 10.4     Roseville                             9,854.51 
 10.5     St. Anthony                          33,055.00 
 10.6     St. Louis Park                       53,643.11 
 10.7     Thief River Falls                    28,365.04 
 10.8     Virginia                             31,164.46 
 10.9     Waseca                               11,135.17 
 10.10    West St. Paul                        15,707.20 
 10.11    White Bear Lake                       6,521.04 
 10.12    Woodbury                              3,613.00 
 10.13    any other municipality                    0.00 
 10.14     (d) The total amount of excess police state aid must be 
 10.15  deposited in the excess police state-aid account in the general 
 10.16  fund, administered and distributed as provided in subdivision 11.
 10.17     Sec. 3.  Minnesota Statutes 1998, section 69.031, 
 10.18  subdivision 5, is amended to read: 
 10.19     Subd. 5.  [DEPOSIT OF STATE AID.] (a) The municipal 
 10.20  treasurer shall, within 30 days after receipt, transmit the fire 
 10.21  state aid to the treasurer of the duly incorporated 
 10.22  firefighters' relief association if there is one organized and 
 10.23  the association has filed a financial report with the 
 10.24  municipality.  If the relief association has not filed a 
 10.25  financial report with the municipality, the municipal treasurer 
 10.26  shall delay transmission of the fire state aid to the relief 
 10.27  association until the complete financial report is filed.  If 
 10.28  there is no relief association organized, or if the association 
 10.29  has dissolved, or has been removed as trustees of state aid, 
 10.30  then the treasurer of the municipality shall deposit the money 
 10.31  in the municipal treasury as provided for in section 424A.08 and 
 10.32  the money may be disbursed only for the purposes and in the 
 10.33  manner set forth in that section. 
 10.34     (b) The municipal treasurer, upon receipt of the police 
 10.35  state aid, shall disburse the police state aid in the following 
 10.36  manner: 
 11.1      (1) For a municipality in which a local police relief 
 11.2   association exists and all peace officers are members of the 
 11.3   association, the total state aid must be transmitted to the 
 11.4   treasurer of the relief association within 30 days of the date 
 11.5   of receipt, and the treasurer of the relief association shall 
 11.6   immediately deposit the total state aid in the special fund of 
 11.7   the relief association; 
 11.8      (2) For a municipality in which police retirement coverage 
 11.9   is provided by the public employees police and fire fund and all 
 11.10  peace officers are members of the fund, including municipalities 
 11.11  covered by section 353.665, the total state aid must be applied 
 11.12  toward the municipality's employer contribution to the public 
 11.13  employees police and fire fund under section sections 353.65, 
 11.14  subdivision 3, and 353.665, subdivision 8, paragraph (b), if 
 11.15  applicable; or 
 11.16     (3) For a municipality other than a city of the first class 
 11.17  with a population of more than 300,000 in which both a police 
 11.18  relief association exists and police retirement coverage is 
 11.19  provided in part by the public employees police and fire fund, 
 11.20  the municipality may elect at its option to transmit the total 
 11.21  state aid to the treasurer of the relief association as provided 
 11.22  in clause (1), to use the total state aid to apply toward the 
 11.23  municipality's employer contribution to the public employees 
 11.24  police and fire fund subject to all the provisions set forth in 
 11.25  clause (2), or to allot the total state aid proportionately to 
 11.26  be transmitted to the police relief association as provided in 
 11.27  this subdivision and to apply toward the municipality's employer 
 11.28  contribution to the public employees police and fire fund 
 11.29  subject to the provisions of clause (2) on the basis of the 
 11.30  respective number of active full-time peace officers, as defined 
 11.31  in section 69.011, subdivision 1, clause (g). 
 11.32     For a city of the first class with a population of more 
 11.33  than 300,000, in addition, the city may elect to allot the 
 11.34  appropriate portion of the total police state aid to apply 
 11.35  toward the employer contribution of the city to the public 
 11.36  employees police and fire fund based on the covered salary of 
 12.1   police officers covered by the fund each payroll period and to 
 12.2   transmit the balance to the police relief association; or 
 12.3      (4) For a municipality in which police retirement coverage 
 12.4   is provided in part by the public employees police and fire fund 
 12.5   and in part by a local police consolidation account governed by 
 12.6   chapter 353A and established after March 1, 1999, the total 
 12.7   police state aid must be applied towards the municipality's 
 12.8   total employer contribution to the public employees police and 
 12.9   fire fund and to the local police consolidation account under 
 12.10  sections 353.65, subdivision 3, and 353A.09, subdivision 5. 
 12.11     (c) The county treasurer, upon receipt of the police state 
 12.12  aid for the county, shall apply the total state aid toward the 
 12.13  county's employer contribution to the public employees police 
 12.14  and fire fund under section 353.65, subdivision 3. 
 12.15     (d) The designated metropolitan airports commission 
 12.16  official, upon receipt of the police state aid for the 
 12.17  metropolitan airports commission, shall apply the total police 
 12.18  state aid first toward the commission's employer contribution 
 12.19  for police officers to the Minneapolis employees retirement fund 
 12.20  under section 422A.101, subdivision 2a, and, if there is any 
 12.21  amount of police state aid remaining, shall apply that remainder 
 12.22  toward the commission's employer contribution for police 
 12.23  officers to the public employees police and fire plan under 
 12.24  section 353.65, subdivision 3. 
 12.25     (e) The police state aid apportioned to the departments of 
 12.26  public safety and natural resources under section 69.021, 
 12.27  subdivision 7a, is appropriated to the commissioner of finance 
 12.28  for transfer to the funds and accounts from which the salaries 
 12.29  of peace officers certified under section 69.011, subdivision 
 12.30  2a, are paid.  The commissioner of revenue shall certify to the 
 12.31  commissioners of public safety, natural resources, and finance 
 12.32  the amounts to be transferred from the appropriation for police 
 12.33  state aid.  The commissioners of public safety and natural 
 12.34  resources shall certify to the commissioner of finance the 
 12.35  amounts to be credited to each of the funds and accounts from 
 12.36  which the peace officers employed by their respective 
 13.1   departments are paid.  Each commissioner must allocate the 
 13.2   police state aid first for employer contributions for employees 
 13.3   funded from the general fund and then for employer contributions 
 13.4   for employees funded from other funds.  For peace officers whose 
 13.5   salaries are paid from the general fund, the amounts transferred 
 13.6   from the appropriation for police state aid must be canceled to 
 13.7   the general fund. 
 13.8      Sec. 4.  Minnesota Statutes 1998, section 353.01, 
 13.9   subdivision 2b, is amended to read: 
 13.10     Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
 13.11  employees shall not participate as members of the association 
 13.12  with retirement coverage by the public employees retirement plan 
 13.13  or the public employees police and fire retirement plan: 
 13.14     (1) elected public officers, or persons appointed to fill a 
 13.15  vacancy in an elective office, who do not elect to participate 
 13.16  in the association by filing an application for membership; 
 13.17     (2) election officers; 
 13.18     (3) patient and inmate personnel who perform services in 
 13.19  charitable, penal, or correctional institutions of a 
 13.20  governmental subdivision; 
 13.21     (4) employees who are hired for a temporary position under 
 13.22  subdivision 12a, and employees who resign from a nontemporary 
 13.23  position and accept a temporary position within 30 days in the 
 13.24  same governmental subdivision, but not those employees who are 
 13.25  hired for an unlimited period but are serving a probationary 
 13.26  period.  If the period of employment extends beyond six 
 13.27  consecutive months and the employee earns more than $425 from 
 13.28  one governmental subdivision in any one calendar month, the 
 13.29  department head shall report the employee for membership and 
 13.30  require employee deductions be made on behalf of the employee 
 13.31  under section 353.27, subdivision 4. 
 13.32     Membership eligibility of an employee who resigns or is 
 13.33  dismissed from a temporary position and within 30 days accepts 
 13.34  another temporary position in the same governmental subdivision 
 13.35  is determined on the total length of employment rather than on 
 13.36  each separate position.  Membership eligibility of an employee 
 14.1   who holds concurrent temporary and nontemporary positions in one 
 14.2   governmental subdivision is determined by the length of 
 14.3   employment and salary of each separate position; 
 14.4      (5) employees whose actual salary from one governmental 
 14.5   subdivision does not exceed $425 per month, or whose annual 
 14.6   salary from one governmental subdivision does not exceed a 
 14.7   stipulation prepared in advance, in writing, that the salary 
 14.8   must not exceed $5,100 per calendar year or per school year for 
 14.9   school employees for employment expected to be of a full year's 
 14.10  duration or more than the prorated portion of $5,100 per 
 14.11  employment period for employment expected to be of less than a 
 14.12  full year's duration; 
 14.13     (6) employees who are employed by reason of work emergency 
 14.14  caused by fire, flood, storm, or similar disaster; 
 14.15     (7) employees who by virtue of their employment in one 
 14.16  governmental subdivision are required by law to be a member of 
 14.17  and to contribute to any of the plans or funds administered by 
 14.18  the Minnesota state retirement system, the teachers retirement 
 14.19  association, the Duluth teachers retirement fund association, 
 14.20  the Minneapolis teachers retirement association, the St. Paul 
 14.21  teachers retirement fund association, the Minneapolis employees 
 14.22  retirement fund, or any police or firefighters relief 
 14.23  association governed by section 69.77 that has not consolidated 
 14.24  with the public employees retirement association, or any local 
 14.25  police or firefighters relief association that has consolidated 
 14.26  with the public employees retirement association consolidation 
 14.27  account but whose members who have not elected the type of 
 14.28  benefit coverage provided by the public employees police and 
 14.29  fire fund under sections 353A.01 to 353A.10, or any persons 
 14.30  covered by section 353.665, subdivision 4, 5, or 6, who have not 
 14.31  elected public employees police and fire plan benefit coverage.  
 14.32  This clause must not be construed to prevent a person from being 
 14.33  a member of and contributing to the public employees retirement 
 14.34  association and also belonging to and contributing to another 
 14.35  public pension fund for other service occurring during the same 
 14.36  period of time.  A person who meets the definition of "public 
 15.1   employee" in subdivision 2 by virtue of other service occurring 
 15.2   during the same period of time becomes a member of the 
 15.3   association unless contributions are made to another public 
 15.4   retirement fund on the salary based on the other service or to 
 15.5   the teachers retirement association by a teacher as defined in 
 15.6   section 354.05, subdivision 2; 
 15.7      (8) persons who are excluded from coverage under the 
 15.8   federal Old Age, Survivors, Disability, and Health Insurance 
 15.9   Program for the performance of service as specified in United 
 15.10  States Code, title 42, section 410(a)(8)(A), as amended through 
 15.11  January 1, 1987, if no irrevocable election of coverage has been 
 15.12  made under section 3121(r) of the Internal Revenue Code of 1954, 
 15.13  as amended; 
 15.14     (9) full-time students who are enrolled and are regularly 
 15.15  attending classes at an accredited school, college, or 
 15.16  university and who are part-time employees as defined by a 
 15.17  governmental subdivision; 
 15.18     (10) resident physicians, medical interns, and pharmacist 
 15.19  residents and pharmacist interns who are serving in a degree or 
 15.20  residency program in public hospitals; 
 15.21     (11) students who are serving in an internship or residency 
 15.22  program sponsored by an accredited educational institution; 
 15.23     (12) persons who hold a part-time adult supplementary 
 15.24  technical college license who render part-time teaching service 
 15.25  in a technical college; 
 15.26     (13) foreign citizens working for a governmental 
 15.27  subdivision with a work permit of less than three years, or an 
 15.28  H-1b visa valid for less than three years of employment.  Upon 
 15.29  notice to the association that the work permit or visa extends 
 15.30  beyond the three-year period, the foreign citizens are eligible 
 15.31  for membership from the date of the extension; 
 15.32     (14) public hospital employees who elected not to 
 15.33  participate as members of the association before 1972 and who 
 15.34  did not elect to participate from July 1, 1988, to October 1, 
 15.35  1988; 
 15.36     (15) except as provided in section 353.86, volunteer 
 16.1   ambulance service personnel, as defined in subdivision 35, but 
 16.2   persons who serve as volunteer ambulance service personnel may 
 16.3   still qualify as public employees under subdivision 2 and may be 
 16.4   members of the public employees retirement association and 
 16.5   participants in the public employees retirement fund or the 
 16.6   public employees police and fire fund on the basis of 
 16.7   compensation received from public employment service other than 
 16.8   service as volunteer ambulance service personnel; 
 16.9      (16) except as provided in section 353.87, volunteer 
 16.10  firefighters, as defined in subdivision 36, engaging in 
 16.11  activities undertaken as part of volunteer firefighter duties; 
 16.12  provided that a person who is a volunteer firefighter may still 
 16.13  qualify as a public employee under subdivision 2 and may be a 
 16.14  member of the public employees retirement association and a 
 16.15  participant in the public employees retirement fund or the 
 16.16  public employees police and fire fund on the basis of 
 16.17  compensation received from public employment activities other 
 16.18  than those as a volunteer firefighter; and 
 16.19     (17) pipefitters and associated trades personnel employed 
 16.20  by independent school district No. 625, St. Paul, with coverage 
 16.21  by the pipefitters local 455 pension plan under a collective 
 16.22  bargaining agreement who were either first employed after May 1, 
 16.23  1997, or, if first employed before May 2, 1997, elected to be 
 16.24  excluded under Laws 1997, chapter 241, article 2, section 12. 
 16.25     Sec. 5.  Minnesota Statutes 1998, section 353.01, 
 16.26  subdivision 10, is amended to read: 
 16.27     Subd. 10.  [SALARY.] (a) "Salary" means:  
 16.28     (1) periodic compensation of a public employee, before 
 16.29  deductions for deferred compensation, supplemental retirement 
 16.30  plans, or other voluntary salary reduction programs, and also 
 16.31  means "wages" and includes net income from fees; and 
 16.32     (2) for a public employee who has prior service covered by 
 16.33  a local police or firefighters' relief association that has 
 16.34  consolidated with the public employees retirement association or 
 16.35  to which section 353.665 applies and who has elected 
 16.36  coverage either under the public employees police and fire fund 
 17.1   benefit plan under section 353A.08 following the 
 17.2   consolidation or under section 353.665, subdivision 4, "salary" 
 17.3   means the rate of salary upon which member contributions to the 
 17.4   special fund of the relief association were made prior to the 
 17.5   effective date of the consolidation as specified by law and by 
 17.6   bylaw provisions governing the relief association on the date of 
 17.7   the initiation of the consolidation procedure and the actual 
 17.8   periodic compensation of the public employee after the effective 
 17.9   date of consolidation. 
 17.10     (b) Salary does not mean: 
 17.11     (1) fees paid to district court reporters, unused annual or 
 17.12  sick leave payments, in lump-sum or periodic payments, severance 
 17.13  payments, reimbursement of expenses, lump-sum settlements not 
 17.14  attached to a specific earnings period, or workers' compensation 
 17.15  payments; 
 17.16     (2) employer-paid amounts used by an employee toward the 
 17.17  cost of insurance coverage, employer-paid fringe benefits, 
 17.18  flexible spending accounts, cafeteria plans, health care expense 
 17.19  accounts, day care expenses, or any payments in lieu of any 
 17.20  employer-paid group insurance coverage, including the difference 
 17.21  between single and family rates that may be paid to a member 
 17.22  with single coverage and certain amounts determined by the 
 17.23  executive director to be ineligible; 
 17.24     (3) the amount equal to that which the employing 
 17.25  governmental subdivision would otherwise pay toward single or 
 17.26  family insurance coverage for a covered employee when, through a 
 17.27  contract or agreement with some but not all employees, the 
 17.28  employer: 
 17.29     (i) discontinues, or for new hires does not provide, 
 17.30  payment toward the cost of the employee's selected insurance 
 17.31  coverages under a group plan offered by the employer; 
 17.32     (ii) makes the employee solely responsible for all 
 17.33  contributions toward the cost of the employee's selected 
 17.34  insurance coverages under a group plan offered by the employer, 
 17.35  including any amount the employer makes toward other employees' 
 17.36  selected insurance coverages under a group plan offered by the 
 18.1   employer; and 
 18.2      (iii) provides increased salary rates for employees who do 
 18.3   not have any employer-paid group insurance coverages; and 
 18.4      (4) except as provided in section 353.86 or 353.87, 
 18.5   compensation of any kind paid to volunteer ambulance service 
 18.6   personnel or volunteer firefighters, as defined in subdivisions 
 18.7   35 and 36.  
 18.8      Sec. 6.  Minnesota Statutes 1998, section 353.01, 
 18.9   subdivision 16, is amended to read: 
 18.10     Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
 18.11  means service during years of actual membership in the course of 
 18.12  which employee contributions were made, periods covered by 
 18.13  payments in lieu of salary deductions under section 353.35, and 
 18.14  service in years during which the public employee was not a 
 18.15  member but for which the member later elected, while a member, 
 18.16  to obtain credit by making payments to the fund as permitted by 
 18.17  any law then in effect. 
 18.18     (b) "Allowable service" also means a period of authorized 
 18.19  leave of absence with pay from which deductions for employee 
 18.20  contributions are made, deposited, and credited to the fund. 
 18.21     (c) "Allowable service" also means a period of authorized 
 18.22  leave of absence without pay that does not exceed one year, and 
 18.23  during or for which a member obtained credit by payments to the 
 18.24  fund made in place of salary deductions, provided that the 
 18.25  payments are made in an amount or amounts based on the member's 
 18.26  average salary on which deductions were paid for the last six 
 18.27  months of public service, or for that portion of the last six 
 18.28  months while the member was in public service, to apply to the 
 18.29  period in either case immediately preceding commencement of the 
 18.30  leave of absence.  If the employee elects to pay employee 
 18.31  contributions for the period of any leave of absence without 
 18.32  pay, or for any portion of the leave, the employee shall also, 
 18.33  as a condition to the exercise of the election, pay to the fund 
 18.34  an amount equivalent to both the required employer and 
 18.35  additional employer contributions for the employee.  The payment 
 18.36  must be made within one year from the expiration of the leave of 
 19.1   absence or within 20 days after termination of public service 
 19.2   under subdivision 11a.  The employer by appropriate action of 
 19.3   its governing body, made a part of its official records, before 
 19.4   the date of the first payment of the employee contribution, may 
 19.5   certify to the association in writing its commitment to pay the 
 19.6   employer and additional employer contributions from the proceeds 
 19.7   of a tax levy made under section 353.28.  Payments under this 
 19.8   paragraph must include interest at an annual rate of 8.5 percent 
 19.9   compounded annually from the date of the termination of the 
 19.10  leave of absence to the date payment is made.  An employee shall 
 19.11  return to public service and receive a minimum of three months 
 19.12  of allowable service to be eligible to pay employee and employer 
 19.13  contributions for a subsequent authorized leave of absence 
 19.14  without pay. 
 19.15     (d) "Allowable service" also means a periodic, repetitive 
 19.16  leave that is offered to all employees of a governmental 
 19.17  subdivision.  The leave program may not exceed 208 hours per 
 19.18  annual normal work cycle as certified to the association by the 
 19.19  employer.  A participating member obtains service credit by 
 19.20  making employee contributions in an amount or amounts based on 
 19.21  the member's average salary that would have been paid if the 
 19.22  leave had not been taken.  The employer shall pay the employer 
 19.23  and additional employer contributions on behalf of the 
 19.24  participating member.  The employee and the employer are 
 19.25  responsible to pay interest on their respective shares at the 
 19.26  rate of 8.5 percent a year, compounded annually, from the end of 
 19.27  the normal cycle until full payment is made.  An employer shall 
 19.28  also make the employer and additional employer contributions, 
 19.29  plus 8.5 percent interest, compounded annually, on behalf of an 
 19.30  employee who makes employee contributions but terminates public 
 19.31  service.  The employee contributions must be made within one 
 19.32  year after the end of the annual normal working cycle or within 
 19.33  20 days after termination of public service, whichever is 
 19.34  sooner.  The association shall prescribe the manner and forms to 
 19.35  be used by a governmental subdivision in administering a 
 19.36  periodic, repetitive leave. 
 20.1      (e) "Allowable service" also means a period during which a 
 20.2   member is on an authorized sick leave of absence, without pay, 
 20.3   limited to one year.  An employee who has received one year of 
 20.4   allowable service shall return to public service and receive a 
 20.5   minimum of three months of allowable service to receive 
 20.6   allowable service for a subsequent authorized sick leave of 
 20.7   absence. 
 20.8      (f) "Allowable service" also means an authorized temporary 
 20.9   layoff under subdivision 12, limited to three months allowable 
 20.10  service per authorized temporary layoff in one calendar year.  
 20.11  An employee who has received the maximum service allowed for an 
 20.12  authorized temporary layoff shall return to public service and 
 20.13  receive a minimum of three months of allowable service to 
 20.14  receive allowable service for a subsequent authorized temporary 
 20.15  layoff. 
 20.16     (g) Notwithstanding any law to the contrary, "allowable 
 20.17  service" also means a parental leave.  The association shall 
 20.18  grant a maximum of two months service credit for a parental 
 20.19  leave, within six months after the birth or adoption, upon 
 20.20  documentation from the member's governmental subdivision or 
 20.21  presentation of a birth certificate or other evidence of birth 
 20.22  or adoption to the association. 
 20.23     (h) "Allowable service" also means a period during which a 
 20.24  member is on an authorized leave of absence to enter military 
 20.25  service, provided that the member returns to public service upon 
 20.26  discharge from military service under section 192.262 and pays 
 20.27  into the fund employee contributions based upon the employee's 
 20.28  salary at the date of return from military service.  Payment 
 20.29  must be made within five years of the date of discharge from the 
 20.30  military service.  The amount of these contributions must be in 
 20.31  accord with the contribution rates and salary limitations, if 
 20.32  any, in effect during the leave, plus interest at an annual rate 
 20.33  of 8.5 percent compounded annually from the date of return to 
 20.34  public service to the date payment is made.  The matching 
 20.35  employer contribution and additional employer contribution under 
 20.36  section 353.27, subdivisions 3 and 3a, must be paid by the 
 21.1   governmental subdivision employing the member upon return to 
 21.2   public service if the member makes the employee contributions.  
 21.3   The governmental subdivision involved may appropriate money for 
 21.4   those payments.  A member may not receive credit for a voluntary 
 21.5   extension of military service at the instance of the member 
 21.6   beyond the initial period of enlistment, induction, or call to 
 21.7   active duty. 
 21.8      (i) For calculating benefits under sections 353.30, 353.31, 
 21.9   353.32, and 353.33 for state officers and employees displaced by 
 21.10  the Community Corrections Act, chapter 401, and transferred into 
 21.11  county service under section 401.04, "allowable service" means 
 21.12  combined years of allowable service as defined in paragraphs (a) 
 21.13  to (i) and section 352.01, subdivision 11.  
 21.14     (j) For a public employee who has prior service covered by 
 21.15  a local police or firefighters relief association that has 
 21.16  consolidated with the public employees retirement association or 
 21.17  to which section 353.665 applies, and who has elected the type 
 21.18  of benefit coverage provided by the public employees police and 
 21.19  fire fund either under section 353A.08 following the 
 21.20  consolidation or under section 353.665, subdivision 4, 
 21.21  "applicable service" is a period of service credited by the 
 21.22  local police or firefighters relief association as of the 
 21.23  effective date of the consolidation based on law and on bylaw 
 21.24  provisions governing the relief association on the date of the 
 21.25  initiation of the consolidation procedure. 
 21.26     Sec. 7.  Minnesota Statutes 1998, section 353.64, 
 21.27  subdivision 1, is amended to read: 
 21.28     Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
 21.29  person who prior to July 1, 1961, was a member of the police and 
 21.30  fire fund, by virtue of being a police officer or firefighter, 
 21.31  shall, as long as the person remains in either position, 
 21.32  continue membership in the fund.  
 21.33     (b) A person who was employed by a governmental subdivision 
 21.34  as a police officer and was a member of the police and fire fund 
 21.35  on July 1, 1978, by virtue of being a police officer as defined 
 21.36  by this section on that date, and if employed by the same 
 22.1   governmental subdivision in a position in the same department in 
 22.2   which the person was employed on that date, shall continue 
 22.3   membership in the fund whether or not that person has the power 
 22.4   of arrest by warrant after that date. 
 22.5      (c) A person who was employed by a governmental subdivision 
 22.6   as a police officer or a firefighter, whichever applies, was an 
 22.7   active member of the local police or salaried firefighters 
 22.8   relief association located in that governmental subdivision by 
 22.9   virtue of that employment as of the effective date of the 
 22.10  consolidation as authorized by sections 353A.01 to 353A.10, and 
 22.11  has elected coverage by the public employees police and fire 
 22.12  fund benefit plan, shall become a member of the police and fire 
 22.13  fund after that date if employed by the same governmental 
 22.14  subdivision in a position in the same department in which the 
 22.15  person was employed on that date. 
 22.16     (d) Any other employee serving on a full-time basis as a 
 22.17  police officer or firefighter on or after July 1, 1961, shall 
 22.18  become a member of the public employees police and fire fund.  
 22.19     (e) An employee serving on less than a full-time basis as a 
 22.20  police officer shall become a member of the public employees 
 22.21  police and fire fund only after a resolution stating that the 
 22.22  employee should be covered by the police and fire fund is 
 22.23  adopted by the governing body of the governmental subdivision 
 22.24  employing the person declaring that the position which the 
 22.25  person holds is that of a police officer. 
 22.26     (f) An employee serving on less than a full-time basis as a 
 22.27  firefighter shall become a member of the public employees police 
 22.28  and fire fund only after a resolution stating that the employee 
 22.29  should be covered by the police and fire fund is adopted by the 
 22.30  governing body of the governmental subdivision employing the 
 22.31  person declaring that the position which the person holds is 
 22.32  that of a firefighter. 
 22.33     (g) A police officer or firefighter employed by a 
 22.34  governmental subdivision who by virtue of that employment is 
 22.35  required by law to be a member of and to contribute to any 
 22.36  police or firefighter relief association governed by section 
 23.1   69.77 which has not consolidated with the public employees 
 23.2   police and fire fund and, any police officer or firefighter of a 
 23.3   relief association that has consolidated with the association 
 23.4   for which the employee has not elected coverage by the public 
 23.5   employees police and fire fund benefit plan as provided in 
 23.6   sections 353A.01 to 353A.10, or any police officer or 
 23.7   firefighter to whom section 353.665 applies who has not elected 
 23.8   coverage by the public employees police and fire fund benefit 
 23.9   plan as provided in section 353.665, subdivision 4, shall not 
 23.10  become a member of the public employees police and fire fund. 
 23.11     Sec. 8.  Minnesota Statutes 1998, section 353.65, 
 23.12  subdivision 2, is amended to read: 
 23.13     Subd. 2.  [EMPLOYEE CONTRIBUTION RATE.] The employee 
 23.14  contribution is an amount equal to 7.6 6.2 percent of the total 
 23.15  salary of the member.  This contribution must be made by 
 23.16  deduction from salary in the manner provided in subdivision 4.  
 23.17  Where any portion of a member's salary is paid from other than 
 23.18  public funds, the member's employee contribution is based on the 
 23.19  total salary received from all sources.  
 23.20     Sec. 9.  Minnesota Statutes 1998, section 353.65, 
 23.21  subdivision 3, is amended to read: 
 23.22     Subd. 3.  [EMPLOYER CONTRIBUTION RATE.] The employer 
 23.23  contribution shall be an amount equal to 11.4 9.3 percent of the 
 23.24  total salary of every member.  This contribution shall be made 
 23.25  from funds available to the employing subdivision by the means 
 23.26  and in the manner provided in section 353.28. 
 23.27     Sec. 10.  [353.665] [MERGER OF CERTAIN CONSOLIDATION 
 23.28  ACCOUNTS INTO PERA-P&F.] 
 23.29     Subdivision 1.  [MERGER REQUIRED.] (a) Notwithstanding any 
 23.30  provision of law to the contrary, unless the applicable 
 23.31  municipality elects otherwise under paragraph (b), every local 
 23.32  police and fire consolidation account under chapter 353A in 
 23.33  existence on March 1, 1999, becomes a part of the public 
 23.34  employees police and fire plan and fund governed by sections 
 23.35  353.63 to 353.659 on July 1, 1999. 
 23.36     (b) If a municipality desires to retain its consolidation 
 24.1   account or consolidation accounts, the governing body of the 
 24.2   municipality must adopt a resolution to that effect and must 
 24.3   file a copy of the resolution with the secretary of state, the 
 24.4   state auditor, the legislative auditor, the finance 
 24.5   commissioner, the revenue commissioner, the executive director 
 24.6   of the public employees retirement association, and the 
 24.7   executive director of the legislative commission on pensions and 
 24.8   retirement.  The retention resolution must be adopted and filed 
 24.9   with all recipients before June 15, 1999. 
 24.10     Subd. 2.  [TRANSFER OF LIABILITIES.] All current and future 
 24.11  liabilities of a former local police or fire consolidation 
 24.12  account are the liabilities of the public employees police and 
 24.13  fire fund as of July 1, 1999. 
 24.14     Subd. 3.  [TRANSFER OF ASSETS.] Upon transfer, the 
 24.15  actuarial value of the assets of a former local police or fire 
 24.16  consolidation account less an amount equal to the residual 
 24.17  assets as determined under subdivision 7, paragraph (f), are the 
 24.18  assets of the public employees police and fire fund as of July 
 24.19  1, 1999.  The participation of a consolidation account in the 
 24.20  Minnesota postretirement investment fund becomes part of the 
 24.21  participation of the public employees police and fire fund in 
 24.22  the Minnesota postretirement investment fund.  The remaining 
 24.23  assets, excluding the amounts for distribution under subdivision 
 24.24  7, paragraph (f), become an asset of the public employees police 
 24.25  and fire fund.  The public employees police and fire fund also 
 24.26  must be credited as an asset with the amount of receivable 
 24.27  assets under subdivision 7, paragraph (e). 
 24.28     Subd. 4.  [BENEFIT COVERAGE FOR ACTIVE MEMBERS.] (a) A 
 24.29  person who is a police officer or a firefighter who, as such, is 
 24.30  an active member of a local police or fire consolidation account 
 24.31  on June 30, 1999, and who has not previously elected benefit 
 24.32  coverage under the relevant provisions of the public employees 
 24.33  police and fire fund benefit plan under section 353A.08, 
 24.34  subdivision 3, may elect benefit coverage under the relevant 
 24.35  provisions of the public employees police and fire fund benefit 
 24.36  plan.  This election must be made in writing on a form 
 25.1   prescribed by the executive director before September 1, 1999, 
 25.2   and is irrevocable. 
 25.3      (b) If an eligible person makes no affirmative election of 
 25.4   benefit coverage before September 1, 1999, the person retains 
 25.5   the benefit coverage provided by the relief association benefit 
 25.6   plan in effect on the effective date of the consolidation of the 
 25.7   local police or fire consolidation account as reflected in the 
 25.8   applicable provisions of chapter 353B and may elect benefit 
 25.9   coverage under the relevant provisions of the public employees 
 25.10  police and fire fund benefit plan when the person terminates 
 25.11  active employment for purposes of receiving a service pension, 
 25.12  disability benefit, or within 90 days of the date the member 
 25.13  terminates active employment and defers receipt of a service 
 25.14  pension, whichever applies.  
 25.15     (c) Notwithstanding any provision of section 353A.083 and 
 25.16  any municipal action under authority of that statute to the 
 25.17  contrary, the provisions of the public employees police and fire 
 25.18  fund benefit plan applicable to active members of the local 
 25.19  police or fire consolidation accounts who elect public employees 
 25.20  police and fire fund benefit plan under section 353A.08, 
 25.21  subdivision 3, or paragraph (a), are the applicable provisions 
 25.22  of sections 353.63 to 353.659. 
 25.23     Subd. 5.  [BENEFIT COVERAGE FOR RETIREES AND BENEFIT 
 25.24  RECIPIENTS.] (a) A person who received a service pension, a 
 25.25  disability pension or benefit, or a survivor benefit from a 
 25.26  local police or fire consolidation account for the month of June 
 25.27  1999, and who has not previously elected participation in the 
 25.28  Minnesota postretirement investment fund for any future 
 25.29  postretirement adjustments rather than the postretirement 
 25.30  adjustment mechanism or mechanisms of the relief association 
 25.31  benefit plan under section 353A.08, subdivision 1, may elect 
 25.32  participation in the Minnesota postretirement investment fund 
 25.33  for any future postretirement adjustments or retention of the 
 25.34  postretirement adjustment mechanism or mechanisms of the relief 
 25.35  association benefit plan in effect on the effective date of the 
 25.36  consolidation of the local police or fire consolidation account 
 26.1   as reflected in the applicable provisions of chapter 353B.  This 
 26.2   election must be in writing on a form prescribed by the 
 26.3   executive director and must be made before September 1, 1999. 
 26.4      (b) If an eligible person is a minor, the election must be 
 26.5   made by the person's parent or legal guardian.  If the eligible 
 26.6   person makes no affirmative election under this subdivision, the 
 26.7   person retains the postretirement adjustment mechanism or 
 26.8   mechanisms of the relief association benefit plan in effect on 
 26.9   the effective date of the consolidation of the local police or 
 26.10  fire consolidation account as reflected in the applicable 
 26.11  provisions of chapter 353B. 
 26.12     (c) The survivor benefit payable on behalf of any service 
 26.13  pension or disability benefit recipient who elects participation 
 26.14  in the Minnesota postretirement investment fund must be 
 26.15  calculated under the relief association benefit plan in effect 
 26.16  on the effective date of consolidation under chapter 353A as 
 26.17  reflected in the applicable provisions of chapter 353B. 
 26.18     Subd. 6.  [BENEFIT COVERAGE FOR DEFERRED MEMBERS.] A person 
 26.19  who terminated active employment as a police officer or a 
 26.20  firefighter that gave rise to membership in a local relief 
 26.21  association that consolidated with the public employees police 
 26.22  and fire plan under chapter 353A before July 1, 1999, and had 
 26.23  sufficient service credit to entitle the person to an eventual 
 26.24  service pension retains the benefit plan in effect for the 
 26.25  applicable local police or paid fire relief association in 
 26.26  effect on the effective date of consolidation under chapter 353A 
 26.27  as reflected in the applicable provisions of chapter 353B, 
 26.28  except that the deferred member may elect before September 1, 
 26.29  1999, to participate, upon retirement, in the Minnesota 
 26.30  postretirement investment fund.  Any election to participate in 
 26.31  the Minnesota postretirement investment fund is applicable to 
 26.32  any survivor benefit attributable to a deferred member covered 
 26.33  by this subdivision. 
 26.34     Subd. 7.  [CALCULATION OF FINAL FUNDED STATUS.] (a) As of 
 26.35  June 30, 1999, the actuary retained by the legislative 
 26.36  commission on pensions and retirement shall determine the final 
 27.1   funded status of local police and fire consolidation accounts 
 27.2   under chapter 353A as provided in this subdivision. 
 27.3      (b) The final funded status calculation must be made using 
 27.4   the benefit plan provisions applicable to the consolidation 
 27.5   account and the actuarial assumptions used for the June 30, 
 27.6   1998, actuarial valuation of the account. 
 27.7      (c) The actuary must calculate the total actuarial accrued 
 27.8   liability of the consolidation account, which is the sum of the 
 27.9   actuarial accrued liability for all consolidation account 
 27.10  members who are not included in the participation of the account 
 27.11  in the Minnesota postretirement investment fund calculated by 
 27.12  the entry age normal actuarial cost method.  The actuary also 
 27.13  must calculate any account unfunded accrued liability or any 
 27.14  account funding surplus.  An account unfunded accrued liability 
 27.15  is the actuarial accrued liability reduced by the amount of the 
 27.16  current value of assets, if the resulting number is positive.  
 27.17  An account funding surplus is the actuarial accrued liability 
 27.18  reduced by the amount of the current value of assets, if the 
 27.19  resulting number is negative. 
 27.20     (d) The actuary also must calculate the amortizable base 
 27.21  for every consolidation account.  The amortizable base is the 
 27.22  present value of future benefits for all account members who are 
 27.23  not included in the participation of the account in the 
 27.24  Minnesota postretirement investment fund reduced by the present 
 27.25  value of 19 percent of future covered salary and further reduced 
 27.26  by the current value of account assets other than its 
 27.27  participation in the Minnesota postretirement investment fund, 
 27.28  after adjustment for fiscal year 1999 net mortality gains and 
 27.29  losses and for the net actuarial affect of the election of 
 27.30  postretirement adjustment coverage under subdivision 5. 
 27.31     (e) If the amortizable base under paragraph (d) is a 
 27.32  positive number, the receivable assets are an amount equal to 
 27.33  the amortizable base number. 
 27.34     (f) If the amortizable base under paragraph (d) is a 
 27.35  negative number, the actuary must calculate the residual asset 
 27.36  amount.  The residual asset amount is: 
 28.1      (1) one-half of the amount by which the current assets of 
 28.2   the account exceed 100 percent of the total actuarial accrued 
 28.3   liability up to that percentage of the total actuarial accrued 
 28.4   liability that equals the public employees police and fire fund 
 28.5   funded ratio on June 30, 1999; and 
 28.6      (2) the amount by which the current assets of the account 
 28.7   exceed that percentage of the total actuarial accrued liability 
 28.8   that equals the public employees police and fire fund funded 
 28.9   ratio on June 30, 1999.  Following the calculation of the 
 28.10  residual asset amount for each applicable municipality and the 
 28.11  verification of the amount by the legislative auditor, the 
 28.12  executive director of the public employees retirement 
 28.13  association shall pay the applicable residual asset amount with 
 28.14  interest equal to the average yield on the invested treasurer's 
 28.15  cash fund from July 1, 1999, to the first of the month in which 
 28.16  the payment is issued to each qualifying municipality.  The 
 28.17  residual asset amount must be used by the municipality to defray 
 28.18  fire department expenditure items if the residual asset amount 
 28.19  was derived from a fire consolidation account or to defray 
 28.20  police department expenditure items if the residual asset amount 
 28.21  was derived from a police consolidation account.  The residual 
 28.22  asset amount must be deposited in a special fund or account in 
 28.23  the municipal treasury established for that purpose.  The 
 28.24  special fund or account must be invested and any investment 
 28.25  return attributable to the residual asset amount must be 
 28.26  credited to that special fund or account and its disbursement 
 28.27  similarly restricted.  The special fund or account must be 
 28.28  audited periodically by the state auditor. 
 28.29     Subd. 8.  [MEMBER AND EMPLOYER CONTRIBUTIONS.] (a) 
 28.30  Effective for the first pay period following July 1, 1999, the 
 28.31  employee contribution rate for former consolidation account 
 28.32  active members is the rate specified in section 353.65, 
 28.33  subdivision 2, and the regular municipal contribution rate on 
 28.34  behalf of former consolidation account active members is the 
 28.35  rate specified in section 353.65, subdivision 3. 
 28.36     (b) The municipality associated with a former local 
 29.1   consolidation account that had a positive value amortizable base 
 29.2   calculation under subdivision 7, paragraph (d), must make an 
 29.3   additional municipal contribution to the public employees police 
 29.4   and fire plan for the period from January 1, 2000, to December 
 29.5   31, 2009.  The amount of the additional municipal contribution 
 29.6   is the amount calculated by the actuary retained by the 
 29.7   legislative commission on pensions and retirement and certified 
 29.8   by the executive director of the public employees retirement 
 29.9   association by which the amortizable base amount would be 
 29.10  amortized on a level dollar annual end-of-the-year contribution 
 29.11  basis, using an 8.5 percent interest rate assumption. 
 29.12     Subd. 9.  [BENEFIT PLAN COVERAGE.] Unless modified by an 
 29.13  election authorized under subdivision 4, 5, or 6, the benefit 
 29.14  plan election by any person or on behalf of any person under 
 29.15  section 353A.08 remains binding.  Former consolidation account 
 29.16  members who elected the entirety of the public employees police 
 29.17  and fire benefit plan are entitled to an applicable annuity or 
 29.18  benefit under the provisions of sections 353.63 to 353.68 in 
 29.19  effect on the day that the former consolidation account member 
 29.20  terminated active service as a police officer or firefighter, 
 29.21  whichever applies.  
 29.22     Subd. 10.  [CONSOLIDATION ACCOUNT TERMINATION.] Upon the 
 29.23  payment of all residual asset amounts under subdivision 7 and 
 29.24  the transfer of all liabilities and remaining assets under 
 29.25  subdivisions 2 and 3, the local consolidation accounts under 
 29.26  chapter 353A in existence on March 1, 1999, are terminated. 
 29.27     Sec. 11.  Minnesota Statutes 1998, section 356.215, 
 29.28  subdivision 4g, is amended to read: 
 29.29     Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
 29.30  the exhibit indicating the level normal cost, the actuarial 
 29.31  valuation must contain an exhibit indicating the additional 
 29.32  annual contribution sufficient to amortize the unfunded 
 29.33  actuarial accrued liability.  For funds governed by chapters 3A, 
 29.34  352, 352B, 352C, 353, 354, 354A, and 490, the additional 
 29.35  contribution must be calculated on a level percentage of covered 
 29.36  payroll basis by the established date for full funding in effect 
 30.1   when the valuation is prepared.  For funds governed by chapter 
 30.2   3A, sections 352.90 through 352.951, chapters 352B, 352C, 
 30.3   sections 353.63 through 353.68, and chapters 353C, 354A, and 
 30.4   490, the level percent additional contribution must be 
 30.5   calculated assuming annual payroll growth of 6.5 percent.  For 
 30.6   funds governed by sections 352.01 through 352.86 and chapter 
 30.7   354, the level percent additional contribution must be 
 30.8   calculated assuming an annual payroll growth of five percent.  
 30.9   For the fund governed by sections 353.01 through 353.46, the 
 30.10  level percent additional contribution must be calculated 
 30.11  assuming an annual payroll growth of six percent.  For all other 
 30.12  funds, the additional annual contribution must be calculated on 
 30.13  a level annual dollar amount basis. 
 30.14     (b) For any fund other than the Minneapolis employees 
 30.15  retirement fund, after the first actuarial valuation date 
 30.16  occurring after June 1, 1989, if there has not been a change in 
 30.17  the actuarial assumptions used for calculating the actuarial 
 30.18  accrued liability of the fund, a change in the benefit plan 
 30.19  governing annuities and benefits payable from the fund, a change 
 30.20  in the actuarial cost method used in calculating the actuarial 
 30.21  accrued liability of all or a portion of the fund, or a 
 30.22  combination of the three, which change or changes by themselves 
 30.23  without inclusion of any other items of increase or decrease 
 30.24  produce a net increase in the unfunded actuarial accrued 
 30.25  liability of the fund, the established date for full funding for 
 30.26  the first actuarial valuation made after June 1, 1989, and each 
 30.27  successive actuarial valuation is the first actuarial valuation 
 30.28  date occurring after June 1, 2020.  
 30.29     (c) For any fund or plan other than the Minneapolis 
 30.30  employees retirement fund, after the first actuarial valuation 
 30.31  date occurring after June 1, 1989, if there has been a change in 
 30.32  any or all of the actuarial assumptions used for calculating the 
 30.33  actuarial accrued liability of the fund, a change in the benefit 
 30.34  plan governing annuities and benefits payable from the fund, a 
 30.35  change in the actuarial cost method used in calculating the 
 30.36  actuarial accrued liability of all or a portion of the fund, or 
 31.1   a combination of the three, and the change or changes, by 
 31.2   themselves and without inclusion of any other items of increase 
 31.3   or decrease, produce a net increase in the unfunded actuarial 
 31.4   accrued liability in the fund, the established date for full 
 31.5   funding must be determined using the following procedure:  
 31.6      (i) the unfunded actuarial accrued liability of the fund 
 31.7   must be determined in accordance with the plan provisions 
 31.8   governing annuities and retirement benefits and the actuarial 
 31.9   assumptions in effect before an applicable change; 
 31.10     (ii) the level annual dollar contribution or level 
 31.11  percentage, whichever is applicable, needed to amortize the 
 31.12  unfunded actuarial accrued liability amount determined under 
 31.13  item (i) by the established date for full funding in effect 
 31.14  before the change must be calculated using the interest 
 31.15  assumption specified in subdivision 4d in effect before the 
 31.16  change; 
 31.17     (iii) the unfunded actuarial accrued liability of the fund 
 31.18  must be determined in accordance with any new plan provisions 
 31.19  governing annuities and benefits payable from the fund and any 
 31.20  new actuarial assumptions and the remaining plan provisions 
 31.21  governing annuities and benefits payable from the fund and 
 31.22  actuarial assumptions in effect before the change; 
 31.23     (iv) the level annual dollar contribution or level 
 31.24  percentage, whichever is applicable, needed to amortize the 
 31.25  difference between the unfunded actuarial accrued liability 
 31.26  amount calculated under item (i) and the unfunded actuarial 
 31.27  accrued liability amount calculated under item (iii) over a 
 31.28  period of 30 years from the end of the plan year in which the 
 31.29  applicable change is effective must be calculated using the 
 31.30  applicable interest assumption specified in subdivision 4d in 
 31.31  effect after any applicable change; 
 31.32     (v) the level annual dollar or level percentage 
 31.33  amortization contribution under item (iv) must be added to the 
 31.34  level annual dollar amortization contribution or level 
 31.35  percentage calculated under item (ii); 
 31.36     (vi) the period in which the unfunded actuarial accrued 
 32.1   liability amount determined in item (iii) is amortized by the 
 32.2   total level annual dollar or level percentage amortization 
 32.3   contribution computed under item (v) must be calculated using 
 32.4   the interest assumption specified in subdivision 4d in effect 
 32.5   after any applicable change, rounded to the nearest integral 
 32.6   number of years, but not to exceed 30 years from the end of the 
 32.7   plan year in which the determination of the established date for 
 32.8   full funding using the procedure set forth in this clause is 
 32.9   made and not to be less than the period of years beginning in 
 32.10  the plan year in which the determination of the established date 
 32.11  for full funding using the procedure set forth in this clause is 
 32.12  made and ending by the date for full funding in effect before 
 32.13  the change; and 
 32.14     (vii) the period determined under item (vi) must be added 
 32.15  to the date as of which the actuarial valuation was prepared and 
 32.16  the date obtained is the new established date for full funding.  
 32.17     (d) For the Minneapolis employees retirement fund, the 
 32.18  established date for full funding is June 30, 2020. 
 32.19     (e) For the following plans for which the annual actuarial 
 32.20  valuation indicates an excess of valuation assets over the 
 32.21  actuarial accrued liability, the valuation assets in excess of 
 32.22  the actuarial accrued liability must be recognized in the 
 32.23  following manner: 
 32.24     (1) the public employees retirement association police and 
 32.25  fire plan, the valuation assets in excess of the actuarial 
 32.26  accrued liability serve to reduce the current contribution 
 32.27  requirements by an amount equal to the amortization of the 
 32.28  excess expressed as a level percentage of pay over a 30-year 
 32.29  period beginning anew with each annual actuarial valuation of 
 32.30  the plan; and 
 32.31     (2) the correctional employees retirement plan of the 
 32.32  Minnesota state retirement system, and the state patrol 
 32.33  retirement plan, an excess of valuation assets over actuarial 
 32.34  accrued liability must be amortized in the same manner over the 
 32.35  same period as an unfunded actuarial accrued liability but must 
 32.36  serve to reduce the required contribution instead of increasing 
 33.1   it. 
 33.2      Sec. 12.  Minnesota Statutes 1998, section 423A.02, 
 33.3   subdivision 1b, is amended to read: 
 33.4      Subd. 1b.  [ADDITIONAL AMORTIZATION STATE AID.] (a) 
 33.5   Annually, on October 1, the commissioner of revenue shall 
 33.6   allocate the additional amortization state aid transferred under 
 33.7   section 69.021, subdivision 11, to: 
 33.8      (1) all police or salaried firefighter relief associations 
 33.9   governed by and in full compliance with the requirements of 
 33.10  section 69.77, that had an unfunded actuarial accrued liability 
 33.11  in the actuarial valuation prepared under sections 356.215 and 
 33.12  356.216 as of the preceding December 31; and 
 33.13     (2) all local police or salaried firefighter consolidation 
 33.14  accounts governed by chapter 353A that are certified by the 
 33.15  executive director of the public employees retirement 
 33.16  association as having for the current fiscal year an additional 
 33.17  municipal contribution amount under section 353A.09, subdivision 
 33.18  5, paragraph (b), and that have implemented section 353A.083, 
 33.19  subdivision 1, if the effective date of the consolidation 
 33.20  preceded May 24, 1993, and that have implemented section 
 33.21  353A.083, subdivision 2, if the effective date of the 
 33.22  consolidation preceded June 1, 1995.; and 
 33.23     (3) municipalities that received amortization aid in 1999 
 33.24  and are required to make an additional municipal contribution 
 33.25  under section 353.665, subdivision 8, for the duration of the 
 33.26  required additional contribution. 
 33.27     (b) The commissioner shall allocate the state aid on the 
 33.28  basis of the proportional share of the relief association or 
 33.29  consolidation account of the total unfunded actuarial accrued 
 33.30  liability of all recipient relief associations and consolidation 
 33.31  accounts as of December 31, 1993, for relief associations, and 
 33.32  as of June 30, 1994, for consolidation accounts. 
 33.33     (c) Beginning October 1, 2000, and annually thereafter, the 
 33.34  commissioner shall allocate the state aid on the basis of 64.5 
 33.35  percent to municipalities to which section 353.665, subdivision 
 33.36  8, paragraph (b), applies for distribution in accordance with 
 34.1   paragraph (b) and subject to the limitation in subdivision 4, 
 34.2   34.2 percent to the city of Minneapolis to fund any unfunded 
 34.3   actuarial accrued liability in the actuarial valuation prepared 
 34.4   under sections 356.215 and 356.216 as of the preceding December 
 34.5   31 for the Minneapolis police relief association or the 
 34.6   Minneapolis fire department relief association, and 1.3 percent 
 34.7   to the city of Virginia to fund any unfunded actuarial accrued 
 34.8   liability in the actuarial valuation prepared under sections 
 34.9   356.215 and 356.216 as of the preceding December 31 for the 
 34.10  Virginia fire department relief association.  In the event that 
 34.11  there is no unfunded actuarial accrued liability in either the 
 34.12  Minneapolis police relief association or the Minneapolis fire 
 34.13  department relief association, the commissioner shall allocate 
 34.14  that 34.2 percent of the aid as follows:  49 percent to the 
 34.15  Minneapolis teachers retirement fund association, provided that, 
 34.16  annually, beginning on July 1, 2005, if a teacher's association 
 34.17  five-year average time-weighted rate of investment return does 
 34.18  not equal or exceed the performance of a composite portfolio 
 34.19  assumed passively managed (indexed) invested ten percent in cash 
 34.20  equivalents, 60 percent bonds and similar debt securities, and 
 34.21  30 percent in domestic stock calculated using the formula under 
 34.22  section 11A.04, clause (11), the aid under this section ceases 
 34.23  until the five-year annual rate of return equals or exceeds the 
 34.24  performance of a composite portfolio, 21 percent to the St. Paul 
 34.25  teachers retirement fund association, provided that, annually, 
 34.26  beginning on July 1, 2005, if a teacher's association five-year 
 34.27  average time-weighted rate of investment return does not equal 
 34.28  or exceed the performance of a composite portfolio assumed 
 34.29  passively managed (indexed) invested ten percent in cash 
 34.30  equivalents, 60 percent bonds and similar debt securities, and 
 34.31  30 percent in domestic stock calculated using the formula under 
 34.32  section 11A.04, clause (11), the aid under this section ceases 
 34.33  until the five-year annual rate of return equals or exceeds the 
 34.34  performance of a composite portfolio, and 30 percent as 
 34.35  additional funding to support minimum fire state aid for 
 34.36  volunteer firefighter relief associations, with the allocation 
 35.1   made at the same time and under the same procedures in 
 35.2   subdivision 3.  In the event there is no actuarial accrued 
 35.3   unfunded liability in the Virginia fire department relief 
 35.4   association, the commissioner shall allocate that 1.3 percent of 
 35.5   the aid as follows:  49 percent to the Minneapolis teachers 
 35.6   retirement fund association, provided that, annually, beginning 
 35.7   on July 1, 2005, if a teacher's association five-year average 
 35.8   time-weighted rate of investment return does not equal or exceed 
 35.9   the performance of a composite portfolio assumed passively 
 35.10  managed (indexed) invested ten percent in cash equivalents, 60 
 35.11  percent bonds and similar debt securities, and 30 percent in 
 35.12  domestic stock calculated using the formula under section 
 35.13  11A.04, clause (11), the aid under this section ceases until the 
 35.14  five-year annual rate of return equals or exceeds the 
 35.15  performance of a composite portfolio, 21 percent to the St. Paul 
 35.16  teachers retirement fund association, provided that, annually, 
 35.17  beginning on July 1, 2005, if a teacher's association five-year 
 35.18  average time-weighted rate of investment return does not equal 
 35.19  or exceed the performance of a composite portfolio assumed 
 35.20  passively managed (indexed) invested ten percent in cash 
 35.21  equivalents, 60 percent bonds and similar debt securities, and 
 35.22  30 percent in domestic stock calculated using the formula under 
 35.23  section 11A.04, clause (11), the aid under this section ceases 
 35.24  until the five-year annual rate of return equals or exceeds the 
 35.25  performance of a composite portfolio, and 30 percent as 
 35.26  additional funding to support minimum fire state aid for 
 35.27  volunteer firefighter relief associations, with the allocation 
 35.28  made at the same time and under the same procedures in 
 35.29  subdivision 3.  
 35.30     (d) The amounts required under this subdivision are 
 35.31  annually appropriated to the commissioner of revenue. 
 35.32     Sec. 13.  Minnesota Statutes 1998, section 423A.02, 
 35.33  subdivision 2, is amended to read: 
 35.34     Subd. 2.  [CONTINUED ELIGIBILITY.] A municipality that has 
 35.35  qualified for amortization state aid under subdivision 1 on 
 35.36  December 31, 1984, and has an additional municipal contribution 
 36.1   payable under section 353A.09, subdivision 5, paragraph (b), as 
 36.2   of the most recent December 31, continues upon application to be 
 36.3   entitled to receive amortization state aid under subdivision 1 
 36.4   and supplementary amortization state aid under subdivision 1a, 
 36.5   after the local police or salaried firefighters' relief 
 36.6   association has been consolidated into the public employees 
 36.7   police and fire fund.  If a municipality loses entitlement for 
 36.8   amortization state aid and supplementary amortization state aid 
 36.9   in any year because of not having an additional municipal 
 36.10  contribution, the municipality is not entitled to the aid 
 36.11  amounts in any subsequent year.  If the actuarial assumptions 
 36.12  specified in section 356.215 are changed in 1997, and the change 
 36.13  results in a municipality having an additional municipal 
 36.14  contribution, and the municipality had previously lost 
 36.15  entitlement for amortization aid and supplementary amortization 
 36.16  due to not having an additional municipal contribution, then the 
 36.17  municipality is again entitled to receive amortization aid and 
 36.18  supplementary amortization aid in the same amount as it 
 36.19  previously received.  A municipality that received amortization 
 36.20  aid in 1999 and is required to make an additional municipal 
 36.21  contribution under section 353.665, subdivision 8, continues to 
 36.22  qualify for the amortization state aid and the supplemental 
 36.23  amortization aid for the duration of the required additional 
 36.24  contribution. 
 36.25     Sec. 14.  Minnesota Statutes 1998, section 423A.02, is 
 36.26  amended by adding a subdivision to read: 
 36.27     Subd. 4.  [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 
 36.28  total of amortization aid, supplemental amortization aid, and 
 36.29  additional amortization aid under this section payable to a 
 36.30  municipality to which section 353.665, subdivision 8, paragraph 
 36.31  (b), applies, may not exceed the amount of the additional 
 36.32  municipal contribution payable by an individual municipality 
 36.33  under section 353.665, subdivision 8, paragraph (b). 
 36.34     (b) Any aid amount in excess of the limit under this 
 36.35  subdivision for an individual municipality must be redistributed 
 36.36  to the other municipalities to which section 353.665, 
 37.1   subdivision 8, paragraph (b), applies.  The excess aid must be 
 37.2   distributed in proportion to each municipality's additional 
 37.3   municipal contribution under section 353.665, subdivision 8, 
 37.4   paragraph (b). 
 37.5      (c) When the total aid for each municipality under this 
 37.6   section equals the limit under paragraph (a), any aid in excess 
 37.7   of the limit must be redistributed under subdivisions 1, 1a, and 
 37.8   1b. 
 37.9      Sec. 15.  [1999 PERA-P&F ACTUARIAL VALUATION.] 
 37.10     (a) As of July 1, 1999, no actuarial valuations of the 
 37.11  local police and fire consolidation accounts in existence before 
 37.12  March 1, 1999, are required. 
 37.13     (b) The actuary retained by the legislative commission on 
 37.14  pensions and retirement shall prepare all calculations required 
 37.15  under Minnesota Statutes, section 353.665, and shall present 
 37.16  them to the commission in a separate report. 
 37.17     (c) The calculated actuarial accrued liability of the 
 37.18  public employees police and fire plan for July 1, 1999, must 
 37.19  contain all liabilities associated with the former local police 
 37.20  and fire consolidation accounts affected by Minnesota Statutes, 
 37.21  section 353.665. 
 37.22     (d) The asset value of the public employees police and fire 
 37.23  plan for July 1, 1999, is the sum of the following: 
 37.24     (1) the current assets of the public employees police and 
 37.25  fire plan as of June 30, 1999, without reference to any local 
 37.26  consolidation accounts in existence on March 1, 1999; 
 37.27     (2) the amount of assets transferred from the Minnesota 
 37.28  postretirement investment fund with respect to local 
 37.29  consolidation accounts under Minnesota Statutes, section 
 37.30  353.655, subdivision 3; 
 37.31     (3) that portion of the market value of assets of the local 
 37.32  consolidation accounts after subtracting the amount in clause (2)
 37.33  determined by multiplying the total by the ratio that the 
 37.34  current asset value of public employee police and fire fund 
 37.35  assets other than the participation in the Minnesota 
 37.36  postretirement investment fund as of June 30, 1999, without 
 38.1   reference to any local consolidation accounts in existence on 
 38.2   March 1, 1999, bears to the market value of the same assets; and 
 38.3      (4) a receivable amount equal to the present value of the 
 38.4   future additional municipal contributions required under 
 38.5   Minnesota Statutes, section 353.655, subdivision 8, paragraph 
 38.6   (b). 
 38.7      Sec. 16.  [REPEALER.] 
 38.8      Minnesota Statutes 1998, section 353.65, subdivision 3a, is 
 38.9   repealed. 
 38.10     Sec. 17.  [EFFECTIVE DATE.] 
 38.11     Sections 1 to 10 and 12 to 16 are effective on the day 
 38.12  following final enactment.  Section 11 is effective on July 1, 
 38.13  2000. 
 38.14                             ARTICLE 3  
 38.15                   MINIMUM VOLUNTEER FIREFIGHTER  
 38.16                      STATE AID AMOUNT CHANGES  
 38.17     Section 1.  Minnesota Statutes 1998, section 69.021, 
 38.18  subdivision 7, is amended to read: 
 38.19     Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
 38.20  MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 
 38.21  shall apportion the fire state aid relative to the premiums 
 38.22  reported on the Minnesota Firetown Premium Reports filed under 
 38.23  this chapter to each municipality and/or firefighters' relief 
 38.24  association.  
 38.25     (b) The commissioner shall calculate an initial fire state 
 38.26  aid allocation amount for each municipality or fire department 
 38.27  under paragraph (c) and a minimum fire state aid allocation 
 38.28  amount for each municipality or fire department under paragraph 
 38.29  (d).  The municipality or fire department must receive the 
 38.30  larger fire state aid amount. 
 38.31     (c) The initial fire state aid allocation amount is the 
 38.32  amount available for apportionment as fire state aid under 
 38.33  subdivision 5, without inclusion of any additional funding 
 38.34  amount to support a minimum fire state aid amount under section 
 38.35  423A.02, subdivision 3, allocated one-half in proportion to the 
 38.36  population as shown in the last official statewide federal 
 39.1   census for each fire town and one-half in proportion to the 
 39.2   market value of each fire town, including (1) the market value 
 39.3   of tax exempt property and (2) the market value of natural 
 39.4   resources lands receiving in lieu payments under sections 
 39.5   477A.11 to 477A.14, but excluding the market value of minerals.  
 39.6   In the case of incorporated or municipal fire departments 
 39.7   furnishing fire protection to other cities, towns, or townships 
 39.8   as evidenced by valid fire service contracts filed with the 
 39.9   commissioner, the distribution must be adjusted proportionately 
 39.10  to take into consideration the crossover fire protection 
 39.11  service.  Necessary adjustments shall be made to subsequent 
 39.12  apportionments.  In the case of municipalities or independent 
 39.13  fire departments qualifying for the aid, the commissioner shall 
 39.14  calculate the state aid for the municipality or relief 
 39.15  association on the basis of the population and the market value 
 39.16  of the area furnished fire protection service by the fire 
 39.17  department as evidenced by duly executed and valid fire service 
 39.18  agreements filed with the commissioner.  If one or more fire 
 39.19  departments are furnishing contracted fire service to a city, 
 39.20  town, or township, only the population and market value of the 
 39.21  area served by each fire department may be considered in 
 39.22  calculating the state aid and the fire departments furnishing 
 39.23  service shall enter into an agreement apportioning among 
 39.24  themselves the percent of the population and the market value of 
 39.25  each service area.  The agreement must be in writing and must be 
 39.26  filed with the commissioner. 
 39.27     (d) The minimum fire state aid allocation amount is the 
 39.28  amount in addition to the initial fire state allocation amount 
 39.29  that is derived from any additional funding amount to support a 
 39.30  minimum fire state aid amount under section 423A.02, subdivision 
 39.31  3, and allocated to municipalities with volunteer firefighter 
 39.32  relief associations based on the number of active volunteer 
 39.33  firefighters who are members of the relief association as 
 39.34  reported in the annual financial reporting for the calendar year 
 39.35  1993 to the office of the state auditor, but not to exceed 30 
 39.36  active volunteer firefighters, so that all municipalities or 
 40.1   fire departments with volunteer firefighter relief associations 
 40.2   receive in total at least a minimum fire state aid amount per 
 40.3   1993 active volunteer firefighter to a maximum of 30 
 40.4   firefighters.  If a relief association did not exist in calendar 
 40.5   year 1993, the number of active volunteer firefighters who are 
 40.6   members of the relief association as reported in the annual 
 40.7   financial reporting for calendar year 1998 to the office of the 
 40.8   state auditor, but not to exceed 30 active volunteer 
 40.9   firefighters, shall be used in this determination. 
 40.10     (e) The fire state aid must be paid to the treasurer of the 
 40.11  municipality where the fire department is located and the 
 40.12  treasurer of the municipality shall, within 30 days of receipt 
 40.13  of the fire state aid, transmit the aid to the relief 
 40.14  association if the relief association has filed a financial 
 40.15  report with the treasurer of the municipality and has met all 
 40.16  other statutory provisions pertaining to the aid apportionment. 
 40.17     (f) The commissioner may make rules to permit the 
 40.18  administration of the provisions of this section.  Any 
 40.19  adjustments needed to correct prior misallocations must be made 
 40.20  to subsequent apportionments. 
 40.21     Sec. 2.  [EFFECTIVE DATE.] 
 40.22     Section 1 is effective on the day following final enactment 
 40.23  and applies to the first fire state aid and minimum fire state 
 40.24  aid allocation occurring after that date. 
 40.25                             ARTICLE 4  
 40.26               MINNEAPOLIS POLICE AND FIRE DEPARTMENT  
 40.27                   RELIEF ASSOCIATIONS GOVERNANCE  
 40.28                              CHANGES 
 40.29     Section 1.  Minnesota Statutes 1998, section 423B.07, is 
 40.30  amended to read: 
 40.31     423B.07 [AUTHORIZED FUND DISBURSEMENTS.] 
 40.32     The police pension fund may be used only for the payment of:
 40.33     (1) service, disability, or dependency pensions; 
 40.34     (2) notwithstanding a contrary provision of section 69.80, 
 40.35  the salary of the secretary of the association in an amount not 
 40.36  to exceed 30 percent of the base salary of a first grade patrol 
 41.1   officer, the salary of the president of the association in an 
 41.2   amount not to exceed ten percent of the base salary of a first 
 41.3   grade patrol officer, and the salaries of the other elected 
 41.4   members of the board of trustees in an amount not to exceed 
 41.5   three units; 
 41.6      (3) expenses of officers and employees of the association 
 41.7   in connection with the protection of the fund; 
 41.8      (4) expenses of operating and maintaining the association, 
 41.9   including the administrative expenses related to the 
 41.10  administration of the insurance plan authorized in section 
 41.11  423B.08; and 
 41.12     (5) other expenses authorized by section 69.80, or other 
 41.13  applicable law. 
 41.14     Sec. 2.  [CONTINUATION OF BOARD.] 
 41.15     Notwithstanding Minnesota Statutes, section 423A.01, 
 41.16  subdivision 2, or any other law to the contrary, the board of 
 41.17  trustees of the Minneapolis firefighters relief association 
 41.18  shall continue to govern the association until there are fewer 
 41.19  than 100 benefit recipients of the relief association pension 
 41.20  fund.  The special fund thereafter must become a trust fund in 
 41.21  accordance with Minnesota Statutes, section 423A.01, subdivision 
 41.22  2. 
 41.23     Sec. 3.  [EFFECTIVE DATE.] 
 41.24     (a) Section 1 is effective on December 31, 1999. 
 41.25     (b) Section 2 is effective on the day following approval by 
 41.26  the Minneapolis city council and compliance with Minnesota 
 41.27  Statutes, section 645.021, subdivision 3. 
 41.28                             ARTICLE 5  
 41.29                   METROPOLITAN COUNCIL TARGETED  
 41.30                     EARLY RETIREMENT INCENTIVE  
 41.31     Section 1.  [RETIREMENT INCENTIVE.] 
 41.32     The metropolitan council may offer its eligible employees, 
 41.33  as specified in sections 2 and 3, the retirement incentive 
 41.34  provided in section 4. 
 41.35     Sec. 2.  [INCLUSION.] 
 41.36     If the metropolitan council chooses to offer the retirement 
 42.1   incentive under section 4, it must designate the positions or 
 42.2   group of positions within the council divisions specified in 
 42.3   section 3, clause (1), that will qualify for participation in 
 42.4   its retirement incentive program and may exclude otherwise 
 42.5   eligible employees.  After initially designating the qualified 
 42.6   positions or group of positions, the council may at any time 
 42.7   modify its designation in order to further limit the qualified 
 42.8   positions or group of positions. 
 42.9      Sec. 3.  [ELIGIBILITY.] 
 42.10     An employee of the metropolitan council is eligible to 
 42.11  participate in the retirement incentive program if the employee: 
 42.12     (1) was employed in the environmental services, community 
 42.13  development, or regional administration divisions of the council 
 42.14  on January 1, 1999; 
 42.15     (2) on or after the effective date of this act notifies the 
 42.16  council's regional administrator in writing of the employee's 
 42.17  intention to retire, the plan or plans from which the individual 
 42.18  will retire, and the employee's date of separation from 
 42.19  employment with the council; 
 42.20     (3) is, on the date the council receives the employee's 
 42.21  written notice of intention to retire, within the positions or 
 42.22  group of positions then currently designated by the council 
 42.23  under section 2; 
 42.24     (4) on the date of retirement has at least 25 years of 
 42.25  combined allowable service in any covered fund or funds listed 
 42.26  in Minnesota Statutes, section 356.30, subdivision 3; 
 42.27     (5) on the date of retirement is at least 55 years of age; 
 42.28     (6) upon retirement is immediately eligible for a 
 42.29  retirement annuity from a defined benefit plan listed in 
 42.30  Minnesota Statutes, section 356.30, subdivision 3; and 
 42.31     (7) has a retirement annuity accrual date in the applicable 
 42.32  plan or plans on or after July 1, 1999, and before July 1, 2000. 
 42.33     Sec. 4.  [RETIREMENT INCENTIVE.] 
 42.34     Subdivision 1.  [FORMULA INCREASE.] For an eligible 
 42.35  employee who elects to participate in the retirement incentive 
 42.36  program, the multiplier percentage or percentages used to 
 43.1   calculate the retirement annuity from each defined benefit plan 
 43.2   listed in Minnesota Statutes, section 356.30, subdivision 3, 
 43.3   from which the employee is eligible to receive a retirement 
 43.4   annuity must be increased by .25 percentage points for each year 
 43.5   of allowable service, and pro rata for completed months less 
 43.6   than a full year, in the applicable plan or plans.  If the 
 43.7   eligible employee has more than 30 years of combined service in 
 43.8   covered plans, the .25 percentage point increase applies only to 
 43.9   the first 30 years of allowable service in such covered funds. 
 43.10     Subd. 2.  [CERTIFICATION OF ELIGIBILITY.] Before applying 
 43.11  the formula increase in subdivision 1, the applicable retirement 
 43.12  plan or plans must receive a certification from the council's 
 43.13  regional administrator that the employee meets the eligibility 
 43.14  criteria in clauses (1), (2), and (3) of section 3. 
 43.15     Subd. 3.  [PAYMENT OF ENHANCED RETIREMENT COST.] (a) If the 
 43.16  metropolitan council chooses to offer a retirement incentive 
 43.17  under this section, it must make an additional employer 
 43.18  contribution or contributions as specified in paragraph (b) to 
 43.19  the applicable retirement plan or plans from which the eligible 
 43.20  individual retired under the incentive program. 
 43.21     (b) The additional employer contribution for the applicable 
 43.22  employee to each applicable plan is an amount equal to the 
 43.23  difference in the actuarial present value of the annuity payable 
 43.24  by the plan for the employee, with and without the retirement 
 43.25  incentive under subdivision 1. 
 43.26     (c) An additional employer contribution under paragraph (b) 
 43.27  must be paid within 60 days from the effective date of the 
 43.28  applicable annuity, for the eligible employee who elects to 
 43.29  participate in the retirement incentive.  
 43.30     Sec. 5.  [LIMIT ON REHIRING AND FUTURE SERVICES.] 
 43.31     The metropolitan council may not rehire or contract for 
 43.32  services from an employee who retires under this act. 
 43.33     Sec. 6.  [APPLICATION OF OTHER LAWS.] 
 43.34     Unilateral implementation of retirement incentives under 
 43.35  this act by the metropolitan council is not an unfair labor 
 43.36  practice for purposes of Minnesota Statutes, chapter 179A. 
 44.1      Sec. 7.  [EFFECTIVE DATE.] 
 44.2      Sections 1 to 6 are effective on the day following final 
 44.3   enactment. 
 44.4                              ARTICLE 6  
 44.5                     VARIOUS SMALL GROUP PENSION  
 44.6                               CHANGES 
 44.7      Section 1.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; 
 44.8   PURCHASE OF SERVICE CREDIT.] 
 44.9      (a) Notwithstanding Minnesota Statutes, section 353.01, 
 44.10  subdivision 16, or any other law to the contrary, an eligible 
 44.11  person described in paragraph (b) may purchase service credit in 
 44.12  the public employees retirement association for the period 
 44.13  described in paragraph (c). 
 44.14     (b) An eligible person is a person who: 
 44.15     (1) was born on October 28, 1948; 
 44.16     (2) was first employed by the Rush City school district in 
 44.17  September 1968; 
 44.18     (3) has received service credit from the public employees 
 44.19  retirement association for a period of leave for military 
 44.20  service from April 1969 through March 1970; 
 44.21     (4) has not received service credit from the public 
 44.22  employees retirement association for a period of leave for 
 44.23  military service from April 1970 through March 1971. 
 44.24     (c) The period for service credit purchase is the 
 44.25  uncredited portion of the period from April 1970 through March 
 44.26  1971. 
 44.27     (d) An eligible person may purchase service under this 
 44.28  section by making the payment determined under Minnesota 
 44.29  Statutes, section 356.55, for the period in paragraph (c). 
 44.30     (e) The person who desires to purchase service credit under 
 44.31  this section must apply with the executive director to make the 
 44.32  purchase.  The application must include all necessary 
 44.33  documentation of the person's qualifications to make the 
 44.34  purchase, signed written permission to allow the executive 
 44.35  director to request and receive necessary verification of 
 44.36  applicable facts and eligibility requirements, and any other 
 45.1   relevant information that the executive director may require. 
 45.2      (f) Service credit for the purchase period must be granted 
 45.3   by the public employees retirement association to the purchaser 
 45.4   on receipt of the purchase payment amount. 
 45.5      Sec. 2.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
 45.6   SERVICE CREDIT BY SCHOOL DISTRICT NO. 786 TEACHER FOR UNCREDITED 
 45.7   LEAVE.] 
 45.8      (a) An eligible teacher as defined in paragraph (b) is 
 45.9   entitled to purchase allowable and formula service credit from 
 45.10  the teachers retirement association for an uncredited leave 
 45.11  during the 1996-1997 school year under terms specified in 
 45.12  paragraph (c). 
 45.13     (b) An eligible teacher is a person who: 
 45.14     (1) was born on November 14, 1944; 
 45.15     (2) became a member of the teachers retirement association 
 45.16  on September 29, 1972; 
 45.17     (3) is employed by independent school district No. 786 
 45.18  (Bertha-Hewitt); and 
 45.19     (4) failed to obtain one year of service credit due to 
 45.20  classification of a 1996-1997 school year leave as an "other" 
 45.21  leave rather than an extended leave. 
 45.22     (c) Notwithstanding Minnesota Statutes, section 356.55, 
 45.23  subdivision 5, the eligible person may pay, before January 1, 
 45.24  2000, or the date of retirement, whichever is earlier, an amount 
 45.25  equal to the employee contribution rate or rates in effect 
 45.26  during the leave period specified in paragraph (b) applied to 
 45.27  the actual salary rate or rates in effect during that period, 
 45.28  plus any applicable employer contributions the employee agreed 
 45.29  to pay under an agreement with independent school district No. 
 45.30  786, plus annual compound interest at the rate of 8.5 percent 
 45.31  from June 30, 1997, to the date on which the payment is actually 
 45.32  made.  Independent school district No. 786 (Bertha-Hewitt) must 
 45.33  pay the remaining balance of the prior service credit purchase 
 45.34  payment amount calculated under Minnesota Statutes, section 
 45.35  356.55, within 30 days of the payment by the eligible person.  
 45.36  The executive director of the teachers retirement association 
 46.1   must notify the superintendent of independent school district 
 46.2   No. 786 of its payment amount and payment due date if the 
 46.3   eligible person makes the required payment. 
 46.4      (d) If independent school district No. 786 fails to pay its 
 46.5   portion of the required prior service credit purchase payment 
 46.6   amount, the executive director may notify the commissioner of 
 46.7   finance of that fact and the commissioner of finance may order 
 46.8   that the required employer payment be deducted from the next 
 46.9   subsequent payment or payments of state education aid to the 
 46.10  school district and be transmitted to the teachers retirement 
 46.11  association. 
 46.12     (e) An eligible teacher must provide any relevant 
 46.13  documentation required by the executive director to determine 
 46.14  eligibility for the prior service credit under this section. 
 46.15     (f) Service credit for the purchase period must be granted 
 46.16  by the teachers retirement association to the account of the 
 46.17  eligible teacher upon receipt of the purchase payment amount 
 46.18  specified in paragraph (c). 
 46.19     Sec. 3.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
 46.20  UNREQUESTED LEAVE PERIOD.] 
 46.21     (a) A qualified teacher described in paragraph (b) is 
 46.22  entitled to purchase one year of allowable and formula service 
 46.23  credit from the teachers retirement association for a one-year 
 46.24  portion of the period of unrequested leave from teaching service 
 46.25  specified in paragraph (b), clause (5), upon the payment of the 
 46.26  purchase price specified in paragraph (c). 
 46.27     (b) A qualified teacher is a person who: 
 46.28     (1) was born in 1943; 
 46.29     (2) is a current member of the teachers retirement 
 46.30  association; 
 46.31     (3) initially was employed as a teacher in 1966 by the 
 46.32  Alexandria school district; 
 46.33     (4) was subsequently employed as an industrial arts teacher 
 46.34  at the Virginia high school by the Virginia school district; and 
 46.35     (5) was placed on unrequested leave by the Virginia school 
 46.36  district for the 1983-1984 and 1984-1985 school years. 
 47.1      (c) The purchase payment amount must be determined as 
 47.2   provided in Minnesota Statutes, section 356.55. 
 47.3      (d) Payment of the prior service credit purchase amount 
 47.4   must be made by January 1, 2000.  
 47.5      Sec. 4.  [EFFECTIVE DATE.] 
 47.6      Sections 1 to 3 are effective on the day following final 
 47.7   enactment. 
 47.8                              ARTICLE 7 
 47.9                    MISCELLANEOUS PENSION CHANGES 
 47.10     Section 1.  Minnesota Statutes 1998, section 3A.02, 
 47.11  subdivision 1b, is amended to read: 
 47.12     Subd. 1b.  [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 
 47.13  separation from service after the beginning of the 1981 
 47.14  legislative session, a former member of the legislature who has 
 47.15  attained the age of at least 60 years set by the board of 
 47.16  directors of the Minnesota state retirement system and who is 
 47.17  otherwise qualified in accordance with subdivision 1 is entitled 
 47.18  upon making written application on forms supplied by the 
 47.19  director to a retirement allowance in an amount equal to the 
 47.20  retirement allowance specified in subdivision 1 reduced so that 
 47.21  the reduced annuity is the actuarial equivalent of the annuity 
 47.22  that would be payable if the former member of the legislature 
 47.23  deferred receipt of the annuity and the annuity amount were 
 47.24  augmented at an annual rate of three percent compounded annually 
 47.25  from the date the annuity begins to accrue until age 62. 
 47.26     (b) The age set by the board of directors under paragraph 
 47.27  (a) cannot be less than the early retirement age under section 
 47.28  352.116, subdivision 1a. 
 47.29     (c) If there is an actuarial cost to the plan of resetting 
 47.30  the early retirement age under paragraph (a), the retired 
 47.31  legislator is required to pay an additional amount to cover the 
 47.32  full actuarial value. 
 47.33     (d) The executive director of the Minnesota state 
 47.34  retirement system shall report to the legislative commission on 
 47.35  pensions and retirement on the utilization of this provision on 
 47.36  or before September 1, 2000. 
 48.1      Sec. 2.  Minnesota Statutes 1998, section 122A.46, 
 48.2   subdivision 2, is amended to read: 
 48.3      Subd. 2.  [LEAVE OF ABSENCE.] The board of any district may 
 48.4   grant an extended leave of absence without salary to any full- 
 48.5   or part-time elementary or secondary teacher who has been 
 48.6   employed by the district for at least five years and has at 
 48.7   least ten years of allowable service, as defined in section 
 48.8   354.05, subdivision 13, or the bylaws of the appropriate 
 48.9   retirement association or ten years of full-time teaching 
 48.10  service in Minnesota public elementary and secondary schools.  
 48.11  The maximum duration of an extended leave of absence pursuant to 
 48.12  under this section must be determined by mutual agreement of the 
 48.13  board and the teacher at the time the leave is granted and shall 
 48.14  be at least three but no more than five years.  An extended 
 48.15  leave of absence pursuant to under this section shall be taken 
 48.16  by mutual consent of the board and the teacher.  If the school 
 48.17  board denies a teacher's request, it must provide reasonable 
 48.18  justification for the denial. 
 48.19     Sec. 3.  Minnesota Statutes 1998, section 352.03, 
 48.20  subdivision 1, is amended to read: 
 48.21     Subdivision 1.  [MEMBERSHIP OF BOARD; ELECTION; TERM.] The 
 48.22  policy-making function of the system is vested in a board of 11 
 48.23  members, who must be known as the board of directors.  This 
 48.24  board shall consist of three members appointed by the governor, 
 48.25  one of whom must be a constitutional officer or appointed state 
 48.26  official and two of whom must be public members knowledgeable in 
 48.27  pension matters, four state employees elected by state employees 
 48.28  covered by the system excluding employees in categories 
 48.29  specifically authorized to designate or elect a member by this 
 48.30  subdivision, one employee of the transit operating division of 
 48.31  the metropolitan council's transit commission operations or its 
 48.32  successor agency designated by the executive committee of the 
 48.33  labor organization that is the exclusive bargaining agent 
 48.34  representing employees of the transit division, one member of 
 48.35  the state patrol retirement fund elected by members of that fund 
 48.36  at a time and in a manner fixed by the board, one employee 
 49.1   covered by the correctional employees plan elected by employees 
 49.2   covered by that plan, and one retired employee elected by 
 49.3   disabled and retired employees of all plans administered by the 
 49.4   system at a time and in a manner to be fixed by the board.  Two 
 49.5   state employee members, whose terms of office begin on the first 
 49.6   Monday in May after their election, must be elected biennially.  
 49.7   Elected members and the appointed member of the metropolitan 
 49.8   council's office of transit operations hold office for a term of 
 49.9   four years, except the retired member whose term is two years, 
 49.10  and until their successors are elected or appointed, and have 
 49.11  qualified.  An employee of the system is not eligible for 
 49.12  membership on the board of directors.  A state employee on leave 
 49.13  of absence is not eligible for election or reelection to 
 49.14  membership on the board of directors.  The term of any board 
 49.15  member who is on leave for more than six months automatically 
 49.16  ends on expiration of this period the term of office. 
 49.17     Sec. 4.  Minnesota Statutes 1998, section 354.05, 
 49.18  subdivision 40, is amended to read: 
 49.19     Subd. 40.  [TIMELY RECEIPT.] An application, payment, 
 49.20  return, claim, or other document that is not personally 
 49.21  delivered to the association on or before the applicable due 
 49.22  date is considered to be a timely receipt if officially 
 49.23  postmarked received on or before the due date or if delivered or 
 49.24  filed under section 645.151. 
 49.25     Sec. 5.  Minnesota Statutes 1998, section 354.06, 
 49.26  subdivision 1, is amended to read: 
 49.27     Subdivision 1.  The management of the association is vested 
 49.28  in a board of eight trustees known as the board of trustees of 
 49.29  the teachers retirement association.  It is composed of the 
 49.30  following persons:  the commissioner of children, families, and 
 49.31  learning, the commissioner of finance, a representative of the 
 49.32  Minnesota school boards association, four members of the 
 49.33  association elected by the members of the association, and one 
 49.34  retiree elected by the retirees of the association.  The five 
 49.35  elected members of the board of trustees must be chosen by mail 
 49.36  ballot in a manner fixed by the board of trustees of the 
 50.1   association.  In every odd-numbered year there shall be elected 
 50.2   two members of the association to the board of trustees for 
 50.3   terms of four years commencing on the first of July next 
 50.4   succeeding their election.  In every other odd-numbered year one 
 50.5   retiree of the association must be elected to the board of 
 50.6   trustees for a term of two four years commencing on the first of 
 50.7   July next succeeding the election.  The filing of candidacy for 
 50.8   a retiree election must include a petition of endorsement signed 
 50.9   by at least ten retirees of the association.  Each election must 
 50.10  be completed by June first of each succeeding odd-numbered 
 50.11  year.  In the case of elective members, any vacancy must be 
 50.12  filled by appointment by the remainder of the board, and the 
 50.13  appointee shall serve until the members or retirees of the 
 50.14  association at the next regular election have elected a trustee 
 50.15  to serve for the unexpired term caused by the vacancy.  No 
 50.16  member or retiree may be appointed by the board, or elected by 
 50.17  the members of the association as a trustee, if the person is 
 50.18  not a member or retiree of the association in good standing at 
 50.19  the time of the appointment or election.  
 50.20     Sec. 6.  Minnesota Statutes 1998, section 354.10, 
 50.21  subdivision 4, is amended to read: 
 50.22     Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any 
 50.23  beneficiary designated by a retiree or member under section 
 50.24  354.05, subdivision 22, may be changed or revoked by the retiree 
 50.25  or member on a form provided by the executive director.  A 
 50.26  change or revocation made under this subdivision is valid only 
 50.27  if the properly completed form is received by the association 
 50.28  postmarked on or before the date of death of the retiree or the 
 50.29  member.  If a designated beneficiary dies before the retiree or 
 50.30  member designating the beneficiary, and a new beneficiary is not 
 50.31  designated, the retiree's or member's estate is the beneficiary. 
 50.32     Sec. 7.  Minnesota Statutes 1998, section 354C.11, is 
 50.33  amended to read: 
 50.34     354C.11 [COVERAGE.] 
 50.35     Subdivision 1.  [AUTHORIZATION.] Personnel Individuals 
 50.36  employed by the board of trustees of the Minnesota state 
 51.1   colleges and universities who are in the unclassified service of 
 51.2   the state, and who have completed at least two years of 
 51.3   employment by the board or a predecessor board with a full-time 
 51.4   contract are participants authorized to participate in the 
 51.5   supplemental retirement plan, effective on the next following 
 51.6   July 1, if the person is employed in an eligible after meeting 
 51.7   eligibility requirements specified in subdivision 2. 
 51.8      Subd. 2.  [ELIGIBILITY.] (a) Individuals are participants 
 51.9   in the supplemental retirement plan if the individual is 
 51.10  employed by the board of trustees in the unclassified service of 
 51.11  the state, has completed at least two years with a full time 
 51.12  contract of applicable unclassified employment with the board or 
 51.13  an applicable predecessor board in any of the positions 
 51.14  specified in paragraph (b). 
 51.15     (b) Eligible positions or employment classifications are: 
 51.16     (1) an unclassified administrative position as defined in 
 51.17  section 354B.20, subdivision 6, or is employed in; 
 51.18     (2) an employment classification included in one of the 
 51.19  following collective bargaining units under section 179A.10, 
 51.20  subdivision 2: 
 51.21     (1) (a) the state university instructional unit; 
 51.22     (2) (b) the community college instructional unit; 
 51.23     (3) (c) the technical college instructional unit; and 
 51.24     (4) (d) the state university administrative unit; or 
 51.25     (3) an unclassified employee of the board included in the 
 51.26  general professional unit or supervisory employees unit under 
 51.27  section 179A.10, subdivision 2. 
 51.28     Subd. 3.  [CONTINUING ELIGIBILITY AUTHORIZATION.] Once a 
 51.29  person qualifies for participation in the 
 51.30  supplemental retirement plan, all subsequent service by the 
 51.31  person as an unclassified employee of the state university 
 51.32  board, the state board for community colleges, the higher 
 51.33  education board, or the technical colleges board of trustees in 
 51.34  a position or employment classification listed in subdivision 2, 
 51.35  paragraph (b), is covered by the supplemental retirement plan. 
 51.36     Sec. 8.  [EFFECTIVE DATE.] 
 52.1      Sections 1 and 3 to 7 are effective on the day following 
 52.2   final enactment.  Section 2 is effective on July 1, 1999. 
 52.3                              ARTICLE 8 
 52.4                            OTHER CHANGES 
 52.5      Section 1.  Minnesota Statutes 1998, section 3.85, 
 52.6   subdivision 3, is amended to read: 
 52.7      Subd. 3.  [MEMBERSHIP.] The commission consists of six five 
 52.8   members of the senate appointed by the subcommittee on 
 52.9   committees of the committee on rules and administration and six 
 52.10  five members of the house of representatives appointed by the 
 52.11  speaker.  Members shall be appointed at the commencement of each 
 52.12  regular session of the legislature for a two-year term beginning 
 52.13  January 16 of the first year of the regular session.  Vacancies 
 52.14  that occur while the legislature is in session shall be filled 
 52.15  like regular appointments.  If the legislature is not in 
 52.16  session, senate vacancies shall be filled by the last 
 52.17  subcommittee on committees of the senate committee on rules and 
 52.18  administration or other appointing authority designated by the 
 52.19  senate rules, and house vacancies shall be filled by the last 
 52.20  speaker of the house, or if the speaker is not available, by the 
 52.21  last chair of the house rules committee. 
 52.22     Sec. 2.  [STUDY.] 
 52.23     The legislative commission on pensions and retirement shall 
 52.24  study the feasibility and cost-effectiveness of converting 
 52.25  public employee retirement plans to defined-contribution plans, 
 52.26  projecting the cost and benefit implications to 2020, and shall 
 52.27  report to the legislature by February 15, 2000. 
 52.28     Sec. 3.  [EFFECTIVE DATE.] 
 52.29     Sections 1 and 2 are effective on the day following final 
 52.30  enactment.