1.1 	A bill for an act
1.2 	relating to retirement; implementing the
1.3 	recommendations of the Volunteer Firefighter Relief
1.4 	Association working group of the state auditor;
1.5 	modifying the trigger date for filing financial
1.6 	reports; revising the per firefighter financing
1.7 	requirements for monthly benefit service pensions;
1.8 	modifying the options for crediting interest on
1.9 	deferred service pensions; clarifying the deferred
1.10 	service pension options available to defined
1.11 	contribution plans; providing for the crediting of
1.12 	service during military service leaves; requiring the
1.13 	amortization of experience losses; clarifying the
1.14 	compliance requirements for the qualification for fire
1.15 	state aid; modifying a limit on mutual fund
1.16 	investments; clarifying corporate stock and
1.17 	exchange-traded funds investment authority; modifying
1.18 	the municipal representation requirements on relief
1.19 	association governing boards; amending Minnesota
1.20 	Statutes 2004, sections 69.051, subdivisions 1, 1a;
1.21 	69.771; 69.772, subdivisions 3, 4; 69.773,
1.22 	subdivisions 4, 5; 69.775; 356A.06, subdivision 7;
1.23 	424A.02, subdivisions 3, 4, 7; 424A.04, subdivision 1;
1.24 	proposing coding for new law in Minnesota Statutes,
1.25 	chapter 424A.
1.26 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.27 	Section 1. Minnesota Statutes 2004, section 69.051,
1.28 	subdivision 1, is amended to read:
1.29 		Subdivision 1.Financial report and audit.  The board of
1.30 	each salaried firefighters' relief association, police relief
1.31 	association, and volunteer firefighters' relief association as
1.32 	defined in section 424A.001, subdivision 4, with assets of at
1.33 	least $200,000 or liabilities of at least $200,000 in the prior
1.34 	year or in any previous year, according to the most recent 
1.35 	applicable actuarial valuation or financial report if no
2.1 	valuation is required, shall:
2.2 	(1) prepare a financial report covering the special and
2.3 	general funds of the relief association for the preceding fiscal
2.4 	year on a form prescribed by the state auditor.  The financial
2.5 	report shall must contain financial statements and disclosures
2.6 	which present the true financial condition of the relief
2.7 	association and the results of relief association operations in
2.8 	conformity with generally accepted accounting principles and in
2.9 	compliance with the regulatory, financing and funding provisions
2.10 	of this chapter and any other applicable laws.  The financial
2.11 	report shall must be countersigned by the municipal clerk or
2.12 	clerk-treasurer of the municipality in which the relief
2.13 	association is located if the relief association is a
2.14 	firefighters' relief association which is directly associated
2.15 	with a municipal fire department or is a police relief
2.16 	association, or countersigned by the secretary of the
2.17 	independent nonprofit firefighting corporation and by the
2.18 	municipal clerk or clerk-treasurer of the largest municipality
2.19 	in population which contracts with the independent nonprofit
2.20 	firefighting corporation if the Volunteer Firefighter Relief
2.21 	Association is a subsidiary of an independent nonprofit
2.22 	firefighting corporation;
2.23 	(2) file the financial report in its office for public
2.24 	inspection and present it to the city council after the close of
2.25 	the fiscal year.  One copy of the financial report shall must be
2.26 	furnished to the state auditor after the close of the fiscal
2.27 	year; and
2.28 	(3) submit to the state auditor audited financial
2.29 	statements which have been attested to by a certified public
2.30 	accountant, public accountant, or the state auditor within 180
2.31 	days after the close of the fiscal year.  The state auditor may
2.32 	accept this report in lieu of the report required in clause (2).

2.33 	Sec. 2. Minnesota Statutes 2004, section 69.051,
2.34 	subdivision 1a, is amended to read:
2.35 		Subd. 1a.Financial statement.  (a) The board of each
2.36 	volunteer firefighters' relief association, as defined in
2.37 	section 424A.001, subdivision 4, with assets of less than
3.1 	$200,000 and liabilities less than $200,000, according to the
3.2 	most recent financial report, shall that is not required to file
3.3 	a financial report and audit under subdivision 1 must prepare a
3.4 	detailed statement of the financial affairs for the preceding
3.5 	fiscal year of the relief association's special and general
3.6 	funds in the style and form prescribed by the state auditor.
3.7 	The detailed statement must show the sources and amounts of all
3.8 	money received; all disbursements, accounts payable and accounts
3.9 	receivable; the amount of money remaining in the treasury; total
3.10 	assets including a listing of all investments; the accrued
3.11 	liabilities; and all items necessary to show accurately the
3.12 	revenues and expenditures and financial position of the relief
3.13 	association.
3.14 	(b) The detailed financial statement required under
3.15 	paragraph (a) must be certified by an independent public
3.16 	accountant or auditor or by the auditor or accountant who
3.17 	regularly examines or audits the financial transactions of the
3.18 	municipality.  In addition to certifying the financial condition
3.19 	of the special and general funds of the relief association, the
3.20 	accountant or auditor conducting the examination shall give an
3.21 	opinion as to the condition of the special and general funds of
3.22 	the relief association, and shall comment upon any exceptions to
3.23 	the report.  The independent accountant or auditor shall must 
3.24 	have at least five years of public accounting, auditing, or
3.25 	similar experience, and shall must not be an active, inactive,
3.26 	or retired member of the relief association or the fire or
3.27 	police department.
3.28 	(c) The detailed statement required under paragraph (a)
3.29 	must be countersigned by the municipal clerk or clerk-treasurer
3.30 	of the municipality, or, where applicable, by the secretary of
3.31 	the independent nonprofit firefighting corporation and by the
3.32 	municipal clerk or clerk-treasurer of the largest municipality
3.33 	in population which contracts with the independent nonprofit
3.34 	firefighting corporation if the relief association is a
3.35 	subsidiary of an independent nonprofit firefighting corporation.
3.36 	(d) The volunteer firefighters' relief association board
4.1 	must file the detailed statement required under paragraph (a) in
4.2 	the relief association office for public inspection and present
4.3 	it to the city council within 45 days after the close of the
4.4 	fiscal year, and must submit a copy of the detailed statement to
4.5 	the state auditor within 90 days of the close of the fiscal year.

4.6 	Sec. 3. Minnesota Statutes 2004, section 69.771, is
4.7 	amended to read:
4.8 	69.771 VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION
4.9 	FINANCING GUIDELINES ACT; APPLICATION.
4.10 		Subdivision 1.Covered relief associations. The
4.11 	applicable provisions of sections 69.771 to 69.776shall apply
4.12 	to any firefighters' relief association other than a relief
4.13 	association enumerated in section 69.77, subdivision 1a, which
4.14 	is organized under any laws of this state, which is composed of
4.15 	volunteer firefighters or is composed partially of volunteer
4.16 	firefighters and partially of salaried firefighters with
4.17 	retirement coverage provided by the public employees police and
4.18 	fire fund and which, in either case,operates subject to the
4.19 	service pension minimum requirements for entitlement and
4.20 	maximums contained in section 424A.02, or subject to a special
4.21 	law modifying those requirements or maximums.
4.22 		Subd. 2.Authorized employer support for a relief
4.23 	association. Notwithstanding any law to the contrary, a
4.24 	municipality may lawfully contribute public funds, including the
4.25 	transfer of any applicable fire state aid, or may levy property
4.26 	taxes for the support of a firefighters' relief association
4.27 	specified in subdivision 1, however organized, which provides
4.28 	retirement coverage or pays a service pension to retired
4.29 	firefighter or a retirement benefit to a disabled firefighter or
4.30 	a surviving dependent of either an active or retired firefighter
4.31 	for the operation and maintenance of the relief association only
4.32 	if the municipality and the relief association both comply with
4.33 	the applicable provisions of sections 69.771 to 69.776.
4.34 		Subd. 3.Remedy for noncompliance; determination.
 4.35 	Any (a) A municipality in which there exists a firefighters'
4.36 	relief association as specified in subdivision 1 which does not
5.1 	comply with the applicable provisions of sections 69.771 to
5.2 	69.776 or the provisions of any applicable special law relating
5.3 	to the funding or financing of the association shall does not
5.4 	qualify initially to receive, or be and is not entitled
5.5 	subsequently to retain, fire state aid pursuant to under 
5.6 	sections 69.011 to 69.051 until the reason for the 
5.7 	disqualification specified by the state auditor is remedied,
5.8 	whereupon the municipality or relief association, if otherwise
5.9 	qualified, shall be is entitled to again receive fire state aid
5.10 	for the year occurring immediately subsequent to the year in
5.11 	which the disqualification is remedied.
5.12 	(b) The state auditor shall determine if a municipality to
5.13 	which a firefighters' relief association is directly associated
5.14 	or a firefighters' relief association fails to comply with the
5.15 	provisions of sections 69.771 to 69.776 or the funding or
5.16 	financing provisions of any applicable special law based upon
5.17 	the information contained in the annual financial report of the
5.18 	firefighters' relief association required pursuant to under 
5.19 	section 69.051., the actuarial valuation of the relief
5.20 	association, if applicable, the relief association officers'
5.21 	financial requirements of the relief association and minimum
5.22 	municipal obligation determination documentation under section
5.23 	69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or
5.24 	69.774, subdivision 2, if requested to be filed by the state
5.25 	auditor, the applicable municipal or nonprofit firefighting
5.26 	corporation budget, if requested to be filed by the state
5.27 	auditor, and any other relevant documents or reports obtained by
5.28 	the state auditor.
5.29 	(c) The municipality or nonprofit firefighting corporation
5.30 	and the associated relief association are not eligible to
5.31 	receive or to retain fire state aid if:
5.32 	(1) the relief association fails to prepare or to file the
5.33 	financial report or financial statement under section 69.051;
5.34 	(2) the relief association treasurer is not bonded in the
5.35 	manner and in the amount required by section 69.051, subdivision
5.36 	2;
6.1 	(3) the relief association officers fail to determine or
6.2 	improperly determine the accrued liability and the annual
6.3 	accruing liability of the relief association under section
6.4 	69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if
6.5 	applicable;
6.6 	(4) if applicable, the relief association officers fail to
6.7 	obtain and file a required actuarial valuation or the officers
6.8 	file an actuarial valuation that does not contain the special
6.9 	fund actuarial liability calculated under the entry age normal
6.10 	actuarial cost method, the special fund current assets, the
6.11 	special fund unfunded actuarial accrued liability, the special
6.12 	fund normal cost under the entry age normal actuarial cost
6.13 	method, the amortization requirement for the special fund
6.14 	unfunded actuarial accrued liability by the applicable target
6.15 	date, a summary of the applicable benefit plan, a summary of the
6.16 	membership of the relief association, a summary of the actuarial
6.17 	assumptions used in preparing the valuation, and a signed
6.18 	statement by the actuary attesting to its results and certifying
6.19 	to the qualifications of the actuary as an approved actuary
6.20 	under section 356.215, subdivision 1, paragraph (c);
6.21 	(5) the municipality failed to provide a municipal
6.22 	contribution, or the nonprofit firefighting corporation failed
6.23 	to provide a corporate contribution, in the amount equal to the
6.24 	minimum municipal obligation if the relief association is
6.25 	governed under section 69.772, or the amount necessary, when
6.26 	added to the fire state aid actually received in the plan year
6.27 	in question, to at least equal in total the calculated annual
6.28 	financial requirements of the special fund of the relief
6.29 	association if the relief association is governed under section
6.30 	69.773, and, if the municipal or corporate contribution is
6.31 	deficient, the municipality failed to include the minimum
6.32 	municipal obligation certified under section 69.772, subdivision
6.33 	3, or 69.773, subdivision 5, in its budget and tax levy or the
6.34 	nonprofit firefighting corporation failed to include the minimum
6.35 	corporate obligation certified under section 69.774, subdivision
6.36 	2, in the corporate budget;
7.1 	(6) the relief association did not receive municipal
7.2 	ratification for the most recent plan amendment when municipal
7.3 	ratification was required under section 69.772, subdivision 6;
7.4 	69.773, subdivision 6; or 424A.02, subdivision 10;
7.5 	(7) the relief association invested special fund assets in
7.6 	an investment security that is not authorized under section
7.7 	69.775;
7.8 	(8) the relief association had an administrative expense
7.9 	that is not authorized under section 69.80 or 424A.05,
7.10 	subdivision 3, or the municipality had an expenditure that is
7.11 	not authorized under section 424A.08;
7.12 	(9) the relief association officers fail to provide a
7.13 	complete and accurate public pension plan investment portfolio
7.14 	and performance disclosure under section 356.219;
7.15 	(10) the relief association fails to obtain the
7.16 	acknowledgment from a broker of the statement of investment
7.17 	restrictions under section 356A.06, subdivision 8b;
7.18 	(11) the relief association officers permitted to occur a
7.19 	prohibited transaction under section 356A.06, subdivision 9, or
7.20 	424A.001, subdivision 7, or failed to undertake correction of a
7.21 	prohibited transaction that did occur; or 
7.22 	(12) the relief association pays a defined benefit service
7.23 	pension in an amount that is in excess of the applicable service
7.24 	pension maximum under section 424A.02, subdivision 3.

7.25 	Sec. 4. Minnesota Statutes 2004, section 69.772,
7.26 	subdivision 3, is amended to read:
7.27 		Subd. 3.Financial requirements of relief association;
7.28 	minimum obligation of municipality. (a) During the month of
7.29 	July, the officers of the relief association shall determine the
7.30 	overall funding balance of the special fund for the current
7.31 	calendar year, the financial requirements of the special fund
7.32 	for the following calendar year and the minimum obligation of
7.33 	the municipality with respect to the special fund for the
7.34 	following calendar year in accordance with the requirements of
7.35 	this subdivision.
7.36 	(1) (b) The overall funding balance of the special fund for
8.1 	the current calendar year shall must be determined in the
8.2 	following manner:
8.3 	(a) (1) The total accrued liability of the special fund for
8.4 	all active and deferred members of the relief association as of
8.5 	December 31 of the current year shall must be calculated
8.6 	pursuant to under subdivisions 2 and 2a, if applicable.
8.7 	(b) (2) The total present assets of the special fund
8.8 	projected to December 31 of the current year, including receipts
8.9 	by and disbursements from the special fund anticipated to occur
8.10 	on or before December 31 shall , must be calculated.  To the
8.11 	extent possible, for those assets for which a market value is
8.12 	readily ascertainable, the current market value as of the date
8.13 	of the calculation for those assets shall must be utilized in
8.14 	making this calculation.  For any asset for which no market
8.15 	value is readily ascertainable, the cost value or the book
8.16 	value, whichever is applicable, shall must be utilized in making
8.17 	this calculation.
8.18 	(c) (3) The amount of the total present assets of the
8.19 	special fund calculated pursuant to under clause (b) shall (2)
8.20 	must be subtracted from the amount of the total accrued
8.21 	liability of the special fund calculated pursuant to under 
8.22 	clause (a) (1).  If the amount of total present assets exceeds
8.23 	the amount of the total accrued liability, then the special fund
8.24 	shall be is considered to have a surplus over full funding.  If
8.25 	the amount of the total present assets is less than the amount
8.26 	of the total accrued liability, then the special fund shall be 
8.27 	is considered to have a deficit from full funding.  If the
8.28 	amount of total present assets is equal to the amount of the
8.29 	total accrued liability, then the special fund shall be is 
8.30 	considered to be fully funded.
8.31 	(2) (c) The financial requirements of the special fund for
8.32 	the following calendar year shall must be determined in the
8.33 	following manner:
8.34 	(a) (1) The total accrued liability of the special fund for
8.35 	all active and deferred members of the relief association as of
8.36 	December 31 of the calendar year next following the current
9.1 	calendar year shall must be calculated pursuant to under 
9.2 	subdivisions 2 and 2a, if applicable.
9.3 	(b) (2) The increase in the total accrued liability of the
9.4 	special fund for the following calendar year over the total
9.5 	accrued liability of the special fund for the current year shall 
9.6 	must be calculated.
9.7 	(c) (3) The amount of anticipated future administrative
9.8 	expenses of the special fund shall must be calculated by
9.9 	multiplying the dollar amount of the administrative expenses of
9.10 	the special fund for the most recent prior calendar year by the
9.11 	factor of 1.035.
9.12 	(d) (4) If the special fund is fully funded, the financial
9.13 	requirement requirements of the special fund for the following
9.14 	calendar year shall be are the figure which represents the
9.15 	increase in the total accrued liability of the special fund as 
9.16 	amounts calculated pursuant to subclause (b) under clauses (2)
9.17 	and (3).
9.18 	(e) (5) If the special fund has a deficit from full
9.19 	funding, the financial requirements of the special fund for the
9.20 	following calendar year shall be are the financial requirements
9.21 	of the special fund calculated as though the special fund were
9.22 	fully funded pursuant to subclause (d) under clause (4) plus an
9.23 	amount equal to one-tenth of the original amount of the deficit
9.24 	from full funding of the special fund as determined pursuant to
9.25 	this section for the calendar year 1971 until that deficit from
9.26 	full funding is fully retired, and plus an amount equal to
9.27 	one-tenth of the increase in the deficit from full funding of
9.28 	the special fund under clause (2) resulting either from an
9.29 	increase in the amount of the service pension accruing after
9.30 	December 31, 1971 occurring in the last ten years or from a net
9.31 	annual investment loss occurring during the last ten years until
9.32 	each increase in the deficit from full funding is fully
9.33 	retired. The annual amortization contribution under this clause
9.34 	may not exceed the amount of the deficit from full funding.
9.35 	(f) (6) If the special fund has a surplus over full
9.36 	funding, the financial requirements of the special fund for the
10.1 	following calendar year shall be are the financial requirements
10.2 	of the special fund calculated as though the special fund were
10.3 	fully funded pursuant to subclause (d) under clause (4) reduced
10.4 	by an amount equal to one-tenth of the amount of the surplus
10.5 	over full funding of the special fund.
10.6 	(3) (d) The minimum obligation of the municipality with
10.7 	respect to the special fund shall be is the financial
10.8 	requirements of the special fund reduced by the amount of any
10.9 	fire state aid payable pursuant to under sections 69.011 to
10.10 	69.051 reasonably anticipated to be received by the municipality
10.11 	for transmittal to the special fund during the following
10.12 	calendar year, an amount of interest on the assets of the
10.13 	special fund projected to the beginning of the following
10.14 	calendar year calculated at the rate of five percent per annum,
10.15 	and the amount of any anticipated contributions to the special
10.16 	fund required by the relief association bylaws from the active 
10.17 	members of the relief association reasonably anticipated to be
10.18 	received during the following calendar year. A reasonable
10.19 	amount of anticipated fire state aid is an amount that does not
10.20 	exceed the fire state aid actually received in the prior year
10.21 	multiplied by the factor 1.035.

10.22 	Sec. 5. Minnesota Statutes 2004, section 69.772,
10.23 	subdivision 4, is amended to read:
10.24 		Subd. 4.Certification of financial requirements and
10.25 	minimum municipal obligation; levy. (a) The officers of the
10.26 	relief association shall certify the financial requirements of
10.27 	the special fund of the relief association and the minimum
10.28 	obligation of the municipality with respect to the special fund
10.29 	of the relief association as determined pursuant to under 
10.30 	subdivision 3 to the governing body of the municipality on or
10.31 	before August 1 of each year. The financial requirements of the
10.32 	relief association and the minimum municipal obligation must be
10.33 	included in the financial report or financial statement under
10.34 	section 69.051.
10.35 	(b) The municipality shall provide for at least the minimum
10.36 	obligation of the municipality with respect to the special fund
11.1 	of the relief association by tax levy or from any other source
11.2 	of public revenue.
11.3 	(c) The municipality may levy taxes for the payment of the
11.4 	minimum municipal obligation without any limitation as to rate
11.5 	or amount and irrespective of any limitations imposed by other
11.6 	provisions of law upon the rate or amount of taxation until the
11.7 	balance of the special fund or any fund of the relief
11.8 	association has attained a specified level.  In addition, any
11.9 	taxes levied pursuant to under this section shall must not cause
11.10 	the amount or rate of any other taxes levied in that year or to
11.11 	be levied in a subsequent year by the municipality which are
11.12 	subject to a limitation as to rate or amount to be reduced.
11.13 	(d) If the municipality does not include the full amount of
11.14 	the minimum municipal obligations in its levy for any year, the
11.15 	officers of the relief association shall certify that amount to
11.16 	the county auditor, who shall spread a levy in the amount of the
11.17 	certified minimum municipal obligation on the taxable property
11.18 	of the municipality.
11.19 	(e) If the state auditor determines that a municipal
11.20 	contribution actually made in a plan year was insufficient under
11.21 	section 69.771, subdivision 3, paragraph (c), clause (5), the
11.22 	state auditor may request a copy of the certifications under
11.23 	this subdivision from the relief association or from the city.
11.24 	The relief association or the city, whichever applies, must
11.25 	provide the certifications within 14 days of the date of the
11.26 	request from the state auditor.

11.27 	Sec. 6. Minnesota Statutes 2004, section 69.773,
11.28 	subdivision 4, is amended to read:
11.29 		Subd. 4.Financial requirements of special fund. Prior
11.30 	to (a) On or before August 1 of each year, the officers of the
11.31 	relief association shall determine the financial requirements of
11.32 	the special fund of the relief association in accordance with
11.33 	the requirements of this subdivision.
11.34 	(b) The financial requirements of the relief
11.35 	association shall must be based on the most recent actuarial
11.36 	valuation of the special fund prepared in accordance with
12.1 	subdivision 2.  If the relief association has an unfunded
12.2 	actuarial accrued liability as reported in the most recent
12.3 	actuarial valuation, the financial requirements shall must be
12.4 	determined by adding the figures calculated pursuant to under
12.5 	paragraph (d),clauses (a) (1), (b) (2), and (c) (3).  If
12.6 	the relief association does not have an unfunded actuarial
12.7 	accrued liability as reported in the most recent actuarial
12.8 	valuation, the financial requirements shall must be an amount
12.9 	equal to the figure calculated pursuant to under paragraph (d),
12.10 	clauses (a) (1) and (b) (2), reduced by an amount equal to
12.11 	one-tenth of the amount of any assets in excess of the actuarial
12.12 	accrued liability of the relief association.
12.13 	(c) The determination of whether or not the relief
12.14 	association has an unfunded actuarial accrued liability
12.15 	shall must be based on the current market value of assets for
12.16 	which a market value is readily ascertainable and the cost or
12.17 	book value, whichever is applicable, for assets for which no
12.18 	market value is readily ascertainable.
12.19 	(a) (d) The components of the financial requirements of the
12.20 	relief association are the following:
12.21 	(1) The normal level cost requirement for the following
12.22 	year, expressed as a dollar amount, shall be is the figure for
12.23 	the normal level cost of the relief association as reported in
12.24 	the actuarial valuation.
12.25 	(b) (2) The amount of anticipated future administrative
12.26 	expenses of the special fund shall must be calculated by
12.27 	multiplying the dollar amount of the administrative expenses of
12.28 	the special fund for the most recent prior calendar year by the
12.29 	factor of 1.035.
12.30 	(c) (3) The amortization contribution requirement to retire
12.31 	the current unfunded actuarial accrued liability by the
12.32 	established date for full funding shall be is the figure for the
12.33 	amortization contribution as reported in the actuarial
12.34 	valuation.  If there has not been a change in the actuarial
12.35 	assumptions used for calculating the actuarial accrued liability
12.36 	of the special fund, a change in the bylaws of the relief
13.1 	association governing the service pensions, retirement benefits,
13.2 	or both,payable from the special fund,or a change in the
13.3 	actuarial cost method used to value all or a portion of the
13.4 	special fund which change or changes, which by themselves,
13.5 	without inclusion of any other items of increase or decrease,
13.6 	produce a net increase in the unfunded actuarial accrued
13.7 	liability of the special fund since December 31, 1970, the
13.8 	established date for full funding shall be is the December 31,
13.9 	1990 occurring ten years later.  If there has been a change in
13.10 	the actuarial assumptions used for calculating the actuarial
13.11 	accrued liability of the special fund, a change in the bylaws of
13.12 	the relief association governing the service pensions,
13.13 	retirement benefits, or both payable from the special fund or a
13.14 	change in the actuarial cost method used to value all or a
13.15 	portion of the special fund and the change or changes, by
13.16 	themselves and without inclusion of any other items of increase
13.17 	or decrease, produce a net increase in the unfunded actuarial
13.18 	accrued liability of the special fund since December 31, 1970,
13.19 	but prior to January 1, 1979 within the past 20 years, the
13.20 	established date for full funding shall be December 31, 1998,
13.21 	and if there has been a change since December 31, 1978, the
13.22 	established date for full funding shall must be determined using
13.23 	the following procedure:
13.24 	(i) the unfunded actuarial accrued liability of the special
13.25 	fund attributable to experience losses that have occurred since
13.26 	the most recent prior actuarial valuation must be determined and
13.27 	the level annual dollar contribution needed to amortize the
13.28 	experience loss over a period of ten years ending on the
13.29 	December 31 occurring ten years later must be calculated;
13.30 	(ii) the unfunded actuarial accrued liability of the
13.31 	special fund shall must be determined in accordance with the
13.32 	provisions governing service pensions, retirement benefits, and
13.33 	actuarial assumptions in effect before an applicable change;
13.34 	(ii) (iii) the level annual dollar contribution needed to
13.35 	amortize this unfunded actuarial accrued liability amount by the
13.36 	date for full funding in effect prior to before the change shall 
14.1 	must be calculated using the interest assumption specified in
14.2 	section 356.215, subdivision 8, in effect before any applicable
14.3 	change;
14.4 	(iii) (iv) the unfunded actuarial accrued liability of the
14.5 	special fund shall must be determined in accordance with any new
14.6 	provisions governing service pensions, retirement benefits, and
14.7 	actuarial assumptions and the remaining provisions governing
14.8 	service pensions, retirement benefits, and actuarial assumptions
14.9 	in effect before an applicable change;
14.10 	(iv) (v) the level annual dollar contribution needed to
14.11 	amortize the difference between the unfunded actuarial accrued
14.12 	liability amount calculated pursuant to subclause (i) under item
14.13 	(ii) and the unfunded actuarial accrued liability amount
14.14 	calculated pursuant to subclause (iii) under item (iv) over a
14.15 	period of 20 years starting December 31 of the year in which the
14.16 	change is effective shall must be calculated using the interest
14.17 	assumption specified in section 356.215, subdivision 8, in
14.18 	effect after any applicable change;
14.19 	(v) (vi) the annual amortization contribution calculated
14.20 	pursuant to subclause (iv) shall under item (v) must be added to
14.21 	the annual amortization contribution calculated pursuant to
14.22 	subclause (ii) under items (i) and (iii);
14.23 	(vi) (vii) the period in which the unfunded actuarial
14.24 	accrued liability amount determined in subclause (iii) item (iv) 
14.25 	will be amortized by the total annual amortization contribution
14.26 	computed pursuant to subclause (v) shall under item (vi) must be
14.27 	calculated using the interest assumption specified in section
14.28 	356.215, subdivision 8, in effect after any applicable change,
14.29 	rounded to the nearest integral number of years, but which shall 
14.30 	must not exceed a period of 20 years from the end of the year in
14.31 	which the determination of the date for full funding using this
14.32 	procedure is made and which shall must not be less than the
14.33 	period of years beginning in the year in which the determination
14.34 	of the date for full funding using this procedure is made and
14.35 	ending by the date for full funding in effect before the change;
14.36 	(vii) (viii) the period determined pursuant to subclause
15.1 	(vi) shall under item (vii) must be added to the date as of
15.2 	which the actuarial valuation was prepared and the resulting
15.3 	date shall be is the new date for full funding.

15.4 	Sec. 7. Minnesota Statutes 2004, section 69.773,
15.5 	subdivision 5, is amended to read:
15.6 		Subd. 5.Minimum municipal obligation. (a) The officers
15.7 	of the relief association shall determine the minimum obligation
15.8 	of the municipality with respect to the special fund of the
15.9 	relief association for the following calendar year prior to on
15.10 	or before August 1 of each year in accordance with the
15.11 	requirements of this subdivision.
15.12 	(b) The minimum obligation of the municipality with respect
15.13 	to the special fund shall be is an amount equal to the financial
15.14 	requirements of the special fund of the relief association
15.15 	determined pursuant to under subdivision 4, reduced by the
15.16 	estimated amount of any fire state aid payable pursuant to under 
15.17 	sections 69.011 to 69.051reasonably anticipated to be received
15.18 	by the municipality for transmittal to the special fund of the
15.19 	relief association during the following year and the amount of
15.20 	any anticipated contributions to the special fund required by
15.21 	the relief association bylaws from the active members of the
15.22 	relief association reasonably anticipated to be received during
15.23 	the following calendar year. A reasonable amount of anticipated
15.24 	fire state aid is an amount that does not exceed the fire state
15.25 	aid actually received in the prior year multiplied by the factor
15.26 	1.035.
15.27 	(c) The officers of the relief association shall certify
15.28 	the financial requirements of the special fund of the relief
15.29 	association and the minimum obligation of the municipality with
15.30 	respect to the special fund of the relief association as
15.31 	determined pursuant to under subdivision 4 and this subdivision
15.32 	to the governing body of the municipality by August 1 of each
15.33 	year. The financial requirements of the relief association and
15.34 	the minimum municipal obligation must be included in the
15.35 	financial report or financial statement under section 69.051.
15.36 	(d) The municipality shall provide for at least the minimum
16.1 	obligation of the municipality with respect to the special fund
16.2 	of the relief association by tax levy or from any other source
16.3 	of public revenue.  The municipality may levy taxes for the
16.4 	payment of the minimum municipal obligation without any
16.5 	limitation as to rate or amount and irrespective of any
16.6 	limitations imposed by other provisions of law or charter upon
16.7 	the rate or amount of taxation until the balance of the special
16.8 	fund or any fund of the relief association has attained a
16.9 	specified level.  In addition, any taxes levied pursuant to 
16.10 	under this section shall must not cause the amount or rate of
16.11 	any other taxes levied in that year or to be levied in a
16.12 	subsequent year by the municipality which are subject to a
16.13 	limitation as to rate or amount to be reduced.
16.14 	(e) If the municipality does not include the full amount of
16.15 	the minimum municipal obligation in its levy for any year, the
16.16 	officers of the relief association shall certify that amount to
16.17 	the county auditor, who shall spread a levy in the amount of the
16.18 	minimum municipal obligation on the taxable property of the
16.19 	municipality.
16.20 	(f) If the state auditor determines that a municipal
16.21 	contribution actually made in a plan year was insufficient under
16.22 	section 69.771, subdivision 3, paragraph (c), clause (5), the
16.23 	state auditor may request from the relief association or from
16.24 	the city a copy of the certifications under this subdivision.
16.25 	The relief association or the city, whichever applies, must
16.26 	provide the certifications within 14 days of the date of the
16.27 	request from the state auditor.

16.28 	Sec. 8. Minnesota Statutes 2004, section 69.775, is
16.29 	amended to read:
16.30 	69.775 INVESTMENTS.
16.31 	(a) The special fund assets of the a relief associations 
16.32 	association governed by sections 69.771 to 69.776 must be
16.33 	invested in securities that are authorized investments under
16.34 	section 356A.06, subdivision 6 or 7.
16.35 	(b) Notwithstanding the foregoing, up to 75 percent of the
16.36 	market value of the assets of the special fund, not including
17.1 	any money market mutual funds,may be invested in open-end
17.2 	investment companies registered under the federal Investment
17.3 	Company Act of 1940, if the portfolio investments of the
17.4 	investment companies comply with the type of securities
17.5 	authorized for investment under section 356A.06, subdivision 7.
17.6 	(c) Securities held by the associations before June 2,
17.7 	1989, that do not meet the requirements of this section may be
17.8 	retained after that date if they were proper investments for the
17.9 	association on that date.
17.10 	(d) The governing board of the association may select and
17.11 	appoint investment agencies to act for and in its behalf or may
17.12 	certify special fund assets for investment by the State Board of
17.13 	Investment under section 11A.17.
17.14 	(e) The governing board of the association may certify
17.15 	general fund assets of the relief association for investment by
17.16 	the State Board of Investment in fixed income pools or in a
17.17 	separately managed account at the discretion of the State Board
17.18 	of Investment as provided in section 11A.14.
17.19 	(f) The governing board of the association may select and
17.20 	appoint a qualified private firm to measure management
17.21 	performance and return on investment, and the firm shall use the
17.22 	formula or formulas developed by the state board under section
17.23 	11A.04, clause (11).

17.24 	Sec. 9. Minnesota Statutes 2004, section 356A.06,
17.25 	subdivision 7, is amended to read:
17.26 		Subd. 7.Expanded list of authorized investment
17.27 	securities.  (a)  [AUTHORITY.] Except to the extent otherwise
17.28 	authorized by law or bylaws, a covered pension plan not
17.29 	described by subdivision 6, paragraph (a), may invest its assets
17.30 	only in accordance with this subdivision.
17.31 	(b)  [SECURITIES GENERALLY.] The covered pension plan has
17.32 	the authority to purchase, sell, lend, or exchange the
17.33 	securities specified in paragraphs (c) to (g) (h), including
17.34 	puts and call options and future contracts traded on a contract
17.35 	market regulated by a governmental agency or by a financial
17.36 	institution regulated by a governmental agency.  These
18.1 	securities may be owned as units in commingled trusts that own
18.2 	the securities described in paragraphs (c) to (g) (h).
18.3 	(c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may
18.4 	invest funds in governmental bonds, notes, bills, mortgages, and
18.5 	other evidences of indebtedness provided the issue is backed by
18.6 	the full faith and credit of the issuer or the issue is rated
18.7 	among the top four quality rating categories by a nationally
18.8 	recognized rating agency.  The obligations in which funds may be
18.9 	invested under this paragraph include guaranteed or insured
18.10 	issues of (1) the United States, its agencies, its
18.11 	instrumentalities, or organizations created and regulated by an
18.12 	act of Congress; (2) Canada and its provinces, provided the
18.13 	principal and interest is payable in United States dollars; (3)
18.14 	the states and their municipalities, political subdivisions,
18.15 	agencies, or instrumentalities; (4) the International Bank for
18.16 	Reconstruction and Development, the Inter-American Development
18.17 	Bank, the Asian Development Bank, the African Development Bank,
18.18 	or any other United States government sponsored organization of
18.19 	which the United States is a member, provided the principal and
18.20 	interest is payable in United States dollars.
18.21 	(d)  [CORPORATE OBLIGATIONS.] The covered pension plan may
18.22 	invest funds in bonds, notes, debentures, transportation
18.23 	equipment obligations, or any other longer term evidences of
18.24 	indebtedness issued or guaranteed by a corporation organized
18.25 	under the laws of the United States or any state thereof, or the
18.26 	Dominion of Canada or any province thereof if they conform to
18.27 	the following provisions:
18.28 	(1) the principal and interest of obligations of
18.29 	corporations incorporated or organized under the laws of the
18.30 	Dominion of Canada or any province thereof must be payable in
18.31 	United States dollars; and
18.32 	(2) obligations must be rated among the top four quality
18.33 	categories by a nationally recognized rating agency.
18.34 	(e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may
18.35 	invest funds in bankers acceptances, certificates of deposit,
18.36 	deposit notes, commercial paper, mortgage participation
19.1 	certificates and pools, asset backed securities, repurchase
19.2 	agreements and reverse repurchase agreements, guaranteed
19.3 	investment contracts, savings accounts, and guaranty fund
19.4 	certificates, surplus notes, or debentures of domestic mutual
19.5 	insurance companies if they conform to the following provisions:
19.6 	(i) bankers acceptances and deposit notes of United States
19.7 	banks are limited to those issued by banks rated in the highest
19.8 	four quality categories by a nationally recognized rating
19.9 	agency;
19.10 	(ii) certificates of deposit are limited to those issued by
19.11 	(A) United States banks and savings institutions that are rated
19.12 	in the highest four quality categories by a nationally
19.13 	recognized rating agency or whose certificates of deposit are
19.14 	fully insured by federal agencies; or (B) credit unions in
19.15 	amounts up to the limit of insurance coverage provided by the
19.16 	National Credit Union Administration;
19.17 	(iii) commercial paper is limited to those issued by United
19.18 	States corporations or their Canadian subsidiaries and rated in
19.19 	the highest two quality categories by a nationally recognized
19.20 	rating agency;
19.21 	(iv) mortgage participation or pass through certificates
19.22 	evidencing interests in pools of first mortgages or trust deeds
19.23 	on improved real estate located in the United States where the
19.24 	loan to value ratio for each loan as calculated in accordance
19.25 	with section 61A.28, subdivision 3, does not exceed 80 percent
19.26 	for fully amortizable residential properties and in all other
19.27 	respects meets the requirements of section 61A.28, subdivision
19.28 	3;
19.29 	(v) collateral for repurchase agreements and reverse
19.30 	repurchase agreements is limited to letters of credit and
19.31 	securities authorized in this section;
19.32 	(vi) guaranteed investment contracts are limited to those
19.33 	issued by insurance companies or banks rated in the top four
19.34 	quality categories by a nationally recognized rating agency or
19.35 	to alternative guaranteed investment contracts where the
19.36 	underlying assets comply with the requirements of this
20.1 	subdivision;
20.2 	(vii) savings accounts are limited to those fully insured
20.3 	by federal agencies; and
20.4 	(viii) asset backed securities must be rated in the top
20.5 	four quality categories by a nationally recognized rating agency.
20.6 	(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
20.7 	not apply to certificates of deposit and collateralization
20.8 	agreements executed by the covered pension plan under clause
20.9 	(1), item (ii).
20.10 	(3) In addition to investments authorized by clause (1),
20.11 	item (iv), the covered pension plan may purchase from the
20.12 	Minnesota Housing Finance Agency all or any part of a pool of
20.13 	residential mortgages, not in default, that has previously been
20.14 	financed by the issuance of bonds or notes of the agency.  The
20.15 	covered pension plan may also enter into a commitment with the
20.16 	agency, at the time of any issue of bonds or notes, to purchase
20.17 	at a specified future date, not exceeding 12 years from the date
20.18 	of the issue, the amount of mortgage loans then outstanding and
20.19 	not in default that have been made or purchased from the
20.20 	proceeds of the bonds or notes.  The covered pension plan may
20.21 	charge reasonable fees for any such commitment and may agree to
20.22 	purchase the mortgage loans at a price sufficient to produce a
20.23 	yield to the covered pension plan comparable, in its judgment,
20.24 	to the yield available on similar mortgage loans at the date of
20.25 	the bonds or notes.  The covered pension plan may also enter
20.26 	into agreements with the agency for the investment of any
20.27 	portion of the funds of the agency.  The agreement must cover
20.28 	the period of the investment, withdrawal privileges, and any
20.29 	guaranteed rate of return.
20.30 	(f)  [CORPORATE STOCKS.] The covered pension plan may
20.31 	invest funds in stocks or convertible issues of any corporation
20.32 	organized under the laws of the United States or the states
20.33 	thereof, any corporation organized under the laws of the
20.34 	Dominion of Canada or its provinces, or any corporation listed
20.35 	on the New York Stock Exchange or the American Stock Exchange an
20.36 	exchange regulated by an agency of the United States or of the
21.1 	Canadian national government, if they conform to the following
21.2 	provisions:
21.3 	(1) the aggregate value of corporate stock investments, as
21.4 	adjusted for realized profits and losses, must not exceed 85
21.5 	percent of the market or book value, whichever is less, of a
21.6 	fund, less the aggregate value of investments according to
21.7 	subdivision 6 paragraph (h);
21.8 	(2) investments must not exceed five percent of the total
21.9 	outstanding shares of any one corporation.
21.10 	(g)  [EXCHANGE TRADED FUNDS.] The covered pension plan may
21.11 	invest funds in exchange traded funds, subject to the maximums,
21.12 	the requirements, and the limitations set forth in paragraph
21.13 	(d), (e), (f), or (h), whichever applies.
21.14 	(h) [OTHER INVESTMENTS.] (1) In addition to the
21.15 	investments authorized in paragraphs (b) to (f) (g), and subject
21.16 	to the provisions in clause (2), the covered pension plan may
21.17 	invest funds in:
21.18 	(i) venture capital investment businesses through
21.19 	participation in limited partnerships and corporations;
21.20 	(ii) real estate ownership interests or loans secured by
21.21 	mortgages or deeds of trust through investment in limited
21.22 	partnerships, bank sponsored collective funds, trusts, and
21.23 	insurance company commingled accounts, including separate
21.24 	accounts;
21.25 	(iii) regional and mutual funds through bank sponsored
21.26 	collective funds and open-end investment companies registered
21.27 	under the Federal Investment Company Act of 1940;
21.28 	(iv) resource investments through limited partnerships,
21.29 	private placements, and corporations; and
21.30 	(v) international securities.
21.31 	(2) The investments authorized in clause (1) must conform
21.32 	to the following provisions:
21.33 	(i) the aggregate value of all investments made according
21.34 	to clause (1) may not exceed 35 percent of the market value of
21.35 	the fund for which the covered pension plan is investing;
21.36 	(ii) there must be at least four unrelated owners of the
22.1 	investment other than the state board for investments made under
22.2 	clause (1), item (i), (ii), (iii), or (iv);
22.3 	(iii) covered pension plan participation in an investment
22.4 	vehicle is limited to 20 percent thereof for investments made
22.5 	under clause (1), item (i), (ii), (iii), or (iv); and
22.6 	(iv) covered pension plan participation in a limited
22.7 	partnership does not include a general partnership interest or
22.8 	other interest involving general liability.  The covered pension
22.9 	plan may not engage in any activity as a limited partner which
22.10 	creates general liability.

22.11 	Sec. 10. Minnesota Statutes 2004, section 424A.02,
22.12 	subdivision 3, is amended to read:
22.13 		Subd. 3.Flexible service pension maximums.  (a) Annually
22.14 	on or before August 1 as part of the certification of the
22.15 	financial requirements and minimum municipal obligation
22.16 	determined under section 69.772, subdivision 4, or 69.773,
22.17 	subdivision 5, as applicable, the secretary or some other
22.18 	official of the relief association designated in the bylaws of
22.19 	each relief association shall calculate and certify to the
22.20 	governing body of the applicable qualified municipality the
22.21 	average amount of available financing per active covered
22.22 	firefighter for the most recent three-year period.  The amount
22.23 	of available financing shall include any amounts of fire state
22.24 	aid received or receivable by the relief association, any
22.25 	amounts of municipal contributions to the relief association
22.26 	raised from levies on real estate or from other available
22.27 	revenue sources exclusive of fire state aid, and one-tenth of
22.28 	the amount of assets in excess of the accrued liabilities of the
22.29 	relief association calculated under section 69.772, subdivision
22.30 	2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if
22.31 	any.
22.32 	(b) The maximum service pension which the relief
22.33 	association has authority to provide for in its bylaws for
22.34 	payment to a member retiring after the calculation date when the
22.35 	minimum age and service requirements specified in subdivision 1
22.36 	are met must be determined using the table in paragraph (c) or
23.1 	(d), whichever applies.
23.2 	(c) For a relief association where the governing bylaws
23.3 	provide for a monthly service pension to a retiring member, the
23.4 	maximum monthly service pension amount per month for each year
23.5 	of service credited that may be provided for in the bylaws is
23.6 	the maximum service pension figure corresponding to the average
23.7 	amount of available financing per active covered firefighter:
23.8 	Minimum Average Amount of      Maximum Service Pension
23.9 	  Available Financing per        Amount Payable per Month
23.10 	       Firefighter               for Each Year of Service
23.11 	$...                            $  .25
23.12 	42 41.50
23.13 	84 81 1.00
23.14 	126 122 1.50
23.15 	168 162 2.00
23.16 	209 203 2.50
23.17 	252 243 3.00
23.18 	294 284 3.50
23.19 	335 324 4.00
23.20 	378 365 4.50
23.21 	420 405 5.00
23.22 	503 486 6.00
23.23 	587 567 7.00
23.24 	672 648 8.00
23.25 	755 729 9.00
23.26 	839 810 10.00
23.27 	923 891 11.00
23.28 	1007 972 12.00
23.29 	1090 1053 13.00
23.30 	1175 1134 14.00
23.31 	1259 1215 15.00
23.32 	1342 1296 16.00
23.33 	1427 1377 17.00
23.34 	1510 1458 18.00
23.35 	1594 1539 19.00
23.36 	1677 1620 20.00
24.1 	1762 1701 21.00
24.2 	1845 1782 22.00
24.3 	1888 1823 22.50
24.4 	1929 1863 23.00
24.5 	2014 1944 24.00
24.6 	2098 2025 25.00
24.7 	2183 2106 26.00
24.8 	2267 2187 27.00
24.9 	2351 2268 28.00
24.10 	2436 2349 29.00
24.11 	2520 2430 30.00
24.12 	2604 2511 31.00
24.13 	2689 2592 32.00
24.14 	2773 2673 33.00
24.15 	2857 2754 34.00
24.16 	2942 2834 35.00
24.17 	3026 2916 36.00
24.18 	3110 2997 37.00
24.19 	3194 3078 38.00
24.20 	3278 3159 39.00
24.21 	3362 3240 40.00
24.22 	3446 3321 41.00
24.23 	3530 3402 42.00
24.24 	3614 3483 43.00
24.25 	3698 3564 44.00
24.26 	3782 3645 45.00
24.27 	3866 3726 46.00
24.28 	3950 3807 47.00
24.29 	4034 3888 48.00
24.30 	4118 3969 49.00
24.31 	4202 4050 50.00
24.32 	4286 4131 51.00
24.33 	4370 4212 52.00
24.34 	Effective beginning December 31, 2003:
24.35 	4454 4293 53.00
24.36 	4538 4374 54.00
25.1 	4622 4455 55.00
25.2 	4706 4536 56.00
25.3 	(d) For a relief association in which the governing bylaws
25.4 	provide for a lump sum service pension to a retiring member, the
25.5 	maximum lump sum service pension amount for each year of service
25.6 	credited that may be provided for in the bylaws is the maximum
25.7 	service pension figure corresponding to the average amount of
25.8 	available financing per active covered firefighter for the
25.9 	applicable specified period:
25.10 	Minimum Average Amount         Maximum Lump Sum Service
25.11 	 of Available Financing         Pension Amount Payable
25.12 	    per Firefighter             for Each Year of Service
25.13 	$..                              $10
25.14 	         11                               20
25.15 	         16                               30
25.16 	         23                               40
25.17 	         27                               50
25.18 	         32                               60
25.19 	         43                               80
25.20 	         54                              100
25.21 	         65                              120
25.22 	         77                              140
25.23 	         86                              160
25.24 	         97                              180
25.25 	        108                              200
25.26 	        131                              240
25.27 	        151                              280
25.28 	        173                              320
25.29 	        194                              360
25.30 	        216                              400
25.31 	        239                              440
25.32 	        259                              480
25.33 	        281                              520
25.34 	        302                              560
25.35 	        324                              600
25.36 	        347                              640
26.1 	        367                              680
26.2 	        389                              720
26.3 	        410                              760
26.4 	        432                              800
26.5 	        486                              900
26.6 	        540                             1000
26.7 	        594                             1100
26.8 	        648                             1200
26.9 	        702                             1300
26.10 	        756                             1400
26.11 	        810                             1500
26.12 	        864                             1600
26.13 	        918                             1700
26.14 	        972                             1800
26.15 	       1026                             1900
26.16 	       1080                             2000
26.17 	       1134                             2100
26.18 	       1188                             2200
26.19 	       1242                             2300
26.20 	       1296                             2400
26.21 	       1350                             2500
26.22 	       1404                             2600
26.23 	       1458                             2700
26.24 	       1512                             2800
26.25 	       1566                             2900
26.26 	       1620                             3000
26.27 	       1672                             3100
26.28 	       1726                             3200
26.29 	       1753                             3250
26.30 	       1780                             3300
26.31 	       1820                             3375
26.32 	1834                             3400
26.33 	       1888                             3500
26.34 	1942                             3600
26.35 	       1996                             3700
26.36 	       2023                             3750
27.1 	2050                             3800
27.2 	       2104                             3900
27.3 	       2158                             4000
27.4 	2212                             4100
27.5 	       2265                             4200
27.6 	       2319                             4300
27.7 	       2373                             4400
27.8 	       2427                             4500
27.9 	       2481                             4600
27.10 	       2535                             4700
27.11 	       2589                             4800
27.12 	       2643                             4900
27.13 	       2697                             5000
27.14 	       2751                             5100
27.15 	       2805                             5200
27.16 	       2859                             5300
27.17 	       2913                             5400
27.18 	       2967                             5500
27.19 	3021                             5600
27.20 	3075                             5700
27.21 	3129                             5800
27.22 	3183                             5900
27.23 	3237                             6000
27.24 	3291                             6100
27.25 	3345                             6200
27.26 	3399                             6300
27.27 	3453                             6400
27.28 	3507                             6500
27.29 	3561                             6600
27.30 	3615                             6700
27.31 	3669                             6800
27.32 	3723                             6900
27.33 	3777                             7000
27.34 	Effective beginning December 31, 2003:
27.35 	3831                             7100
27.36 	3885                             7200
28.1 	3939                             7300
28.2 	3993                             7400
28.3 	4047                             7500
28.4 	(e) For a relief association in which the governing bylaws
28.5 	provide for a monthly benefit service pension as an alternative
28.6 	form of service pension payment to a lump sum service pension,
28.7 	the maximum service pension amount for each pension payment type
28.8 	must be determined using the applicable table contained in this
28.9 	subdivision.
28.10 	(f) If a relief association establishes a service pension
28.11 	in compliance with the applicable maximum contained in paragraph
28.12 	(c) or (d) and the minimum average amount of available financing
28.13 	per active covered firefighter is subsequently reduced because
28.14 	of a reduction in fire state aid or because of an increase in
28.15 	the number of active firefighters, the relief association may
28.16 	continue to provide the prior service pension amount specified
28.17 	in its bylaws, but may not increase the service pension amount
28.18 	until the minimum average amount of available financing per
28.19 	firefighter under the table in paragraph (c) or (d), whichever
28.20 	applies, permits.
28.21 	(g) No relief association is authorized to provide a
28.22 	service pension in an amount greater than the largest applicable
28.23 	flexible service pension maximum amount even if the amount of
28.24 	available financing per firefighter is greater than the
28.25 	financing amount associated with the largest applicable flexible
28.26 	service pension maximum.

28.27 	Sec. 11. Minnesota Statutes 2004, section 424A.02,
28.28 	subdivision 4, is amended to read:
28.29 		Subd. 4.Defined contribution lump sum service
28.30 	pensions. (a) If the bylaws governing the relief association so
28.31 	provide exclusively, the relief association may pay a defined
28.32 	contribution lump sum service pension in lieu of any defined
28.33 	benefit service pension governed by subdivision 2.
28.34 	(b) An individual account for each firefighter who is a
28.35 	member of the relief association shall must be established.  To
28.36 	each individual active member account shall must be credited a
29.1 	right to an equal share of: (a) (1) any amounts of fire state
29.2 	aid received by the relief association; (b) (2) any amounts of
29.3 	municipal contributions to the relief association raised from
29.4 	levies on real estate or from other available revenue sources
29.5 	exclusive of fire state aid; and (c) (3) any amounts equal to
29.6 	the share of the assets of the special fund to the credit
29.7 	of: (1) (i) any former member who terminated active service
29.8 	with the fire department to which the relief association is
29.9 	associated prior to before meeting the minimum service
29.10 	requirement provided for in subdivision 1 and has not returned
29.11 	to active service with the fire department for a period no
29.12 	shorter than five years; or (2) (ii) any retired member who
29.13 	retired prior to before obtaining a full nonforfeitable interest
29.14 	in the amounts credited to the individual member
29.15 	account pursuant to under subdivision 2 and any applicable
29.16 	provision of the bylaws of the relief association.  In addition,
29.17 	any interest or investment income earned return on the assets of
29.18 	the special fund shall must be credited in proportion to the
29.19 	share of the assets of the special fund to the credit of each
29.20 	individual active member account through the date on which the
29.21 	investment return is recognized by and credited to the special
29.22 	fund.
29.23 	(c) At the time of retirement pursuant to under subdivision
29.24 	1 and any applicable provision of the bylaws of the relief
29.25 	association, a retiring member shall be is entitled to that
29.26 	portion of the assets of the special fund to the credit of the
29.27 	member in the individual member account which is
29.28 	nonforfeitable pursuant to under subdivision 2 and any
29.29 	applicable provision of the bylaws of the relief association
29.30 	based on the number of years of service to the credit of the
29.31 	retiring member.

29.32 	Sec. 12. Minnesota Statutes 2004, section 424A.02,
29.33 	subdivision 7, is amended to read:
29.34 		Subd. 7.Deferred service pensions.  (a) A member of a
29.35 	relief association to which this section applies is entitled to
29.36 	a deferred service pension if the member:
30.1 	(1) has completed the lesser of the minimum period of
30.2 	active service with the fire department specified in the bylaws
30.3 	or 20 years of active service with the fire department;
30.4 	(2) has completed at least five years of active membership
30.5 	in the relief association; and
30.6 	(3) separates from active service and membership before
30.7 	reaching age 50 or the minimum age for retirement and
30.8 	commencement of a service pension specified in the bylaws
30.9 	governing the relief association if that age is greater than age
30.10 	50.
30.11 	(b) The deferred service pension starts is payable when the
30.12 	former member reaches age 50,or the minimum age specified in
30.13 	the bylaws governing the relief association if that age is
30.14 	greater than age 50,and when the former member makes a valid
30.15 	written application.
30.16 	(c) A relief association that provides a lump sum service
30.17 	pension governed by subdivision 3 may, when its governing bylaws
30.18 	so provide, pay interest on the deferred lump sum service
30.19 	pension during the period of deferral.  If provided for in the
30.20 	bylaws, interest must be paid in one of the following manners:
30.21 	(1) at the investment performance rate actually earned on
30.22 	that portion of the assets if the deferred benefit amount is
30.23 	invested by the relief association in a separate account
30.24 	established and maintained by the relief association or if the
30.25 	deferred benefit amount is invested in a separate investment
30.26 	vehicle held by the relief association;
30.27 	(2) at the an interest rate of up to five percent,
30.28 	compounded annually as set by the board of directors and
30.29 	approved as provided in subdivision 10; or
30.30 	(3) at a rate equal to the actual time weighted total rate
30.31 	of return investment performance of the special fund as reported
30.32 	by the Office of the State Auditor under section 356.219, up to
30.33 	five percent, compounded annually, and applied consistently for
30.34 	all deferred service pensioners.
30.35 	(d) A relief association may not use the method provided
30.36 	for in paragraph (c),clause (3), until it has modified its
31.1 	bylaws to be consistent with that clause.
31.2 	(d) Interest under paragraph (c), clause (2) or (3), is
31.3 	payable from the first day of the month next following the date
31.4 	on which the municipality has approved the deferred service
31.5 	pension interest rate established by the board of trustees or
31.6 	from the first day of the month next following the date on which
31.7 	the member separated from active fire department service and
31.8 	relief association membership, whichever is later, to the last
31.9 	day of the month immediately before the month in which the
31.10 	deferred member becomes eligible to begin receipt of the service
31.11 	pension and applies for the deferred service pension.
31.12 	(e) A relief association that provides a defined
31.13 	contribution service pension may, if its governing bylaws so
31.14 	provide, credit interest or additional investment performance on
31.15 	the deferred lump sum service pension during the period of
31.16 	deferral.  If provided for in the bylaws, the interest must be
31.17 	paid in one of the manners specified in paragraph (c) or
31.18 	alternatively the relief association may credit any investment
31.19 	return on the assets of the special fund of the defined
31.20 	contribution volunteer firefighter relief association in
31.21 	proportion to the share of the assets of the special fund to the
31.22 	credit of each individual deferred member account through the
31.23 	date on which the investment return is recognized by and
31.24 	credited to the special fund.
31.25 	(f) For a deferred service pension that is transferred to a
31.26 	separate account established and maintained by the relief
31.27 	association or separate investment vehicle held by the relief
31.28 	association, the deferred member bears the full investment risk
31.29 	subsequent to transfer and in calculating the accrued liability
31.30 	of the volunteer firefighters relief association that pays a
31.31 	lump sum service pension, the accrued liability for deferred
31.32 	service pensions is equal to the separate relief association
31.33 	account balance or the fair market value of the separate
31.34 	investment vehicle held by the relief association.
31.35 	(f) (g) The deferred service pension is governed by and
31.36 	must be calculated under the general statute, special law,
32.1 	relief association articles of incorporation, and relief
32.2 	association bylaw provisions applicable on the date on which the
32.3 	member separated from active service with the fire department
32.4 	and active membership in the relief association.

32.5 	Sec. 13. [424A.021] CREDIT FOR BREAK IN SERVICE TO
32.6 	PROVIDE UNIFORMED SERVICE.
32.7 		Subdivision 1.Authorization. Subject to restrictions
32.8 	stated in this section, a volunteer firefighter who is absent
32.9 	from firefighting service due to service in the uniformed
32.10 	services, as defined in United States Code, title 38, section
32.11 	4303(13), may obtain service credit for the period of the
32.12 	uniformed service, not to exceed five years, unless a longer
32.13 	period is required under United States Code, title 38, section
32.14 	4312.
32.15 		Subd. 2.Limitations. (a) To be eligible for service
32.16 	credit under this section, the volunteer firefighter must return
32.17 	to firefighting service with coverage by the same relief
32.18 	association or by the successor to that relief association upon
32.19 	discharge from service in the uniformed service within the time
32.20 	frame required in United States Code, title 38, section 4312(e).
32.21 	(b) Service credit is not authorized if the firefighter
32.22 	separates from uniformed service with a dishonorable or bad
32.23 	conduct discharge or under other than honorable conditions.
32.24 	(c) Service credit is not authorized if the firefighter
32.25 	fails to provide notice to the fire department that the
32.26 	individual is leaving to provide service in the uniformed
32.27 	service, unless it is not feasible to provide that notice due to
32.28 	the emergency nature of the situation.

32.29 	Sec. 14. Minnesota Statutes 2004, section 424A.04,
32.30 	subdivision 1, is amended to read:
32.31 		Subdivision 1.Membership.  (a) Every A relief
32.32 	association that is directly associated with a municipal fire
32.33 	department shall must be managed by a board of trustees
32.34 	consisting of nine members.  Six trustees shall must be elected
32.35 	from the membership of the relief association and three trustees
32.36 	shall must be drawn from the officials of the municipalities
33.1 	served by the fire department to which the relief association is
33.2 	directly associated.  The bylaws of a relief association which
33.3 	provides a monthly benefit service pension may provide that one
33.4 	of the six trustees elected from the relief
33.5 	association membership may be a retired member receiving a
33.6 	monthly pension who is elected by the membership of the relief
33.7 	association.  The three ex officio municipal trustees shall be
33.8 	the mayor, the clerk, clerk-treasurer or finance director,must
33.9 	be one elected municipal official and one elected or appointed
33.10 	municipal official who are designated as municipal
33.11 	representatives by the municipal governing board annually and
33.12 	the chief of the municipal fire department.
33.13 	(b) Every A relief association that is a subsidiary of an
33.14 	independent nonprofit firefighting corporation shall must be
33.15 	managed by a board of trustees consisting of ten nine members.
33.16 	Six trustees shall must be elected from the membership of the
33.17 	relief association, three two trustees shall must be drawn from
33.18 	the officials of the municipalities served by the fire
33.19 	department to which the relief association is directly
33.20 	associated, and one trustee shall be the fire chief serving with
33.21 	the independent nonprofit firefighting corporation.  The bylaws
33.22 	of a relief association may provide that one of the six trustees
33.23 	elected from the relief association membership may be a retired
33.24 	member receiving a monthly pension who is elected by the
33.25 	membership of the relief association.  The three ex officio two
33.26 	municipal trustees who are the elected officials shall must 
33.27 	be elected or appointed municipal officials,selected as follows:
33.28 	(1) if only one municipality contracts with the independent
33.29 	nonprofit firefighting corporation, the ex officio municipal 
33.30 	trustees shall must be three elected two officials of the
33.31 	contracting municipality who are designated annually by the
33.32 	governing body of the municipality;
33.33 	(2) if two municipalities contract with the independent
33.34 	nonprofit firefighting corporation, the ex officio trustees
33.35 	shall be two elected officials of the largest municipality in
33.36 	population and one elected official of the next largest
34.1 	municipality in population who are designated by the governing
34.2 	bodies of the applicable municipalities;or
34.3 	(3) (2) if three two or more municipalities contract with
34.4 	the independent nonprofit corporation, the ex officio municipal 
34.5 	trustees shall must be one elected official of from each of
34.6 	the three two largest municipalities in population who are
34.7 	designated annually by the governing bodies of the applicable
34.8 	municipalities.
34.9 	(c) The municipal trustees for a relief association that is
34.10 	directly associated with a fire department operated as or by a
34.11 	joint powers entity must be designated annually by the joint
34.12 	powers board.  The municipal trustees for a relief association
34.13 	that is directly associated with a fire department service area
34.14 	township must be designated by the township board.
34.15 	(d) If a relief association lacks the ex officio municipal 
34.16 	board members provided for in paragraph (a), (b),or (b) (c) 
34.17 	because the fire department is not located in or associated with
34.18 	an organized municipality, joint powers entity, or township,the
34.19 	ex officio municipal board members must be appointed from the
34.20 	fire department service area by the board of commissioners of
34.21 	the applicable county.
34.22 	(e) The term of these appointed ex officio municipal board
34.23 	members is three years one year or until the person's successor
34.24 	is qualified, whichever is later.
34.25 	(d) An ex officio (f) A municipal trustee under paragraph
34.26 	(a), (b), or (c) shall have , or (d) has all the rights and
34.27 	duties accorded to any other trustee,except the right to be an
34.28 	officer of the relief association board of trustees.
34.29 	(e) (g) A board shall must have at least three officers,
34.30 	which shall be who are a president, a secretary and a treasurer.
34.31 	These officers shall must be elected from among the elected
34.32 	trustees by either the full board of trustees or by the
34.33 	membership, as specified in the bylaws, and .In no event shall 
34.34 	may any trustee hold more than one officer position at any one
34.35 	time.  The terms of the elected trustees and of the officers of
34.36 	the board shall must be specified in the bylaws of the relief
35.1 	association, but shall may not exceed three years.  If the term
35.2 	of the elected trustees exceeds one year, the election of the
35.3 	various trustees elected from the membership shall initially and
35.4 	shall thereafter continue to must be staggered on as equal a
35.5 	basis as is practicable.

35.6 	Sec. 15. EFFECTIVE DATE.
 35.7 	(a) Sections 1 to 12 and 14 are effective on July 1, 2005.
35.8 	(b) Section 13 is effective on July 1, 2005, and applies to
35.9 	breaks in service that end on or after that date.