1.1                          A bill for an act 
  1.2             relating to retirement; various public pension plans; 
  1.3             clarifying and revising various plan provisions; 
  1.4             eliminating obsolete provisions; defining final 
  1.5             average salary; modifying the definition of allowable 
  1.6             service to include time on strike; permitting judges 
  1.7             to purchase service credit for an authorized leave; 
  1.8             requiring specified payments; clarifying references to 
  1.9             actuarial services in determining actuarial 
  1.10            equivalence; defining covered salary to include 
  1.11            certain employer contributions to supplemental 
  1.12            retirement plans; specifying itemized detail of plan 
  1.13            administrative expenses in annual financial reporting; 
  1.14            excluding police officers of the University of 
  1.15            Minnesota from the public employees police and fire 
  1.16            fund; clarifying collection procedures relating to 
  1.17            charter schools; adding a uniform nonassignment and 
  1.18            legal process exemption provision; adding employees of 
  1.19            Bridges Medical Services, Hutchinson Area Health Care, 
  1.20            and Northfield Hospital to privatization coverage; 
  1.21            extending date for filing special law approval with 
  1.22            the secretary of state for the RenVilla Nursing Home; 
  1.23            requiring the privatization periodic filing of updated 
  1.24            copies of articles of incorporation and bylaws; 
  1.25            modifying a higher education individual retirement 
  1.26            account plan investment option provision; implementing 
  1.27            the recommendations of the Volunteer Firefighter 
  1.28            Relief Association working group of the state auditor; 
  1.29            modifying the trigger date for filing financial 
  1.30            reports; revising the per firefighter financing 
  1.31            requirements for monthly benefit service pensions; 
  1.32            modifying the options for crediting interest on 
  1.33            deferred service pensions; clarifying the deferred 
  1.34            service pension options available to defined 
  1.35            contribution plans; providing for the crediting of 
  1.36            service during military service leaves; requiring the 
  1.37            amortization of experience losses; clarifying the 
  1.38            compliance requirements for the qualification for fire 
  1.39            state aid; modifying a limit on mutual fund 
  1.40            investments; clarifying corporate stock and 
  1.41            exchange-traded funds investment authority; modifying 
  1.42            the municipal representation requirements on relief 
  1.43            association governing boards; clarifying exemptions 
  1.44            from process and taxation; providing that certain laws 
  1.45            do not apply to the consolidation of specified 
  1.46            volunteer firefighter relief associations; providing 
  2.1             an ad hoc postretirement adjustment to Eveleth police 
  2.2             and fire trust fund benefit recipients; authorizing 
  2.3             the Maplewood Firefighters Relief Association to 
  2.4             transfer assets to the Oakdale Firefighters Relief 
  2.5             Association to cover service credits earned by certain 
  2.6             individuals; appropriating money; amending Minnesota 
  2.7             Statutes 2004, sections 3A.01, subdivisions 1, 2, 6, 
  2.8             8, by adding subdivisions; 3A.011; 3A.02, subdivisions 
  2.9             1, 1b, 3, 4, 5; 3A.03, subdivisions 1, 2; 3A.04, 
  2.10            subdivisions 1, 2, 3, 4, by adding a subdivision; 
  2.11            3A.05; 3A.07; 3A.10, subdivision 1; 3A.12; 3A.13; 
  2.12            69.011, subdivision 2b, by adding a subdivision; 
  2.13            69.021, subdivisions 5, 11; 69.051, subdivisions 1, 
  2.14            1a; 69.33; 69.771; 69.772, subdivisions 3, 4; 69.773, 
  2.15            subdivisions 4, 5; 69.775; 352.01, subdivisions 2a, 4, 
  2.16            5, 12, 21, 23, by adding a subdivision; 352.021, 
  2.17            subdivisions 1, 2, 3, 4; 352.04, subdivisions 1, 12; 
  2.18            352.041, subdivisions 1, 2, 3, 5; 352.115, 
  2.19            subdivisions 2, 3; 352.15, subdivisions 1, 3, 4; 
  2.20            352.22, subdivision 10; 352.87, subdivision 3; 352.91, 
  2.21            by adding a subdivision; 352.93, subdivision 1; 
  2.22            352B.01, subdivisions 1, 2, 3; 352B.02, subdivision 
  2.23            1e; 352B.071; 352C.021, by adding a subdivision; 
  2.24            352C.091, subdivision 1; 352D.01; 352D.015, 
  2.25            subdivisions 3, 4; 352D.03; 352D.05, subdivision 4; 
  2.26            352D.085, subdivision 1; 352D.09, subdivision 5; 
  2.27            352D.12; 353.01, subdivisions 6, 10, 14, 32, 33, by 
  2.28            adding a subdivision; 353.025; 353.026; 353.027; 
  2.29            353.028; 353.14; 353.15, subdivisions 1, 3; 353.27, 
  2.30            subdivision 11; 353.271; 353.28, subdivisions 5, 6; 
  2.31            353.29, subdivision 3; 353.31, subdivision 1c; 353.32, 
  2.32            subdivision 9; 353.33, subdivisions 3, 12; 353.64, by 
  2.33            adding a subdivision; 353.651, subdivision 3; 353.656, 
  2.34            subdivision 1; 353F.02, subdivision 4; 354.05, 
  2.35            subdivision 7, by adding a subdivision; 354.091; 
  2.36            354.10, subdivisions 1, 3, 4; 354.33, subdivision 5; 
  2.37            354.39; 354.41, subdivision 2; 354.42, by adding a 
  2.38            subdivision; 354.44, subdivisions 2, 6; 354A.011, 
  2.39            subdivision 3a, by adding a subdivision; 354A.021, 
  2.40            subdivision 5, by adding a subdivision; 354A.097, 
  2.41            subdivision 1; 354A.31, subdivisions 4, 4a, 5; 
  2.42            354B.25, subdivision 2; 356.20, subdivision 4; 
  2.43            356.215, subdivision 8; 356.216; 356.24, subdivision 
  2.44            1; 356.551; 356A.06, subdivision 7; 422A.01, 
  2.45            subdivisions 6, 11, by adding a subdivision; 422A.06, 
  2.46            subdivision 7; 422A.10, subdivisions 1, 2; 422A.15, 
  2.47            subdivision 1; 422A.16, subdivision 9; 422A.22, 
  2.48            subdivisions 1, 3, 4, 6; 422A.231; 422A.24; 423B.17; 
  2.49            423C.09; 424A.02, subdivisions 3, 4, 7; 424A.04, 
  2.50            subdivision 1; 424B.10, subdivision 1; 490.121, 
  2.51            subdivisions 1, 4, 6, 7, 13, 14, 15, 20, 21, 22, by 
  2.52            adding subdivisions; 490.122; 490.123, subdivisions 1, 
  2.53            1a, 1b, 1c, 2, 3; 490.124, subdivisions 1, 2, 3, 4, 5, 
  2.54            8, 9, 10, 11, 12, 13; 490.125, subdivision 1; 490.126; 
  2.55            490.133; Laws 1999, chapter 222, article 16, section 
  2.56            16, as amended; Laws 2000, chapter 461, article 4, 
  2.57            section 4, as amended; Laws 2004, chapter 267, article 
  2.58            12, section 4; proposing coding for new law in 
  2.59            Minnesota Statutes, chapters 352C; 356; 424A; 
  2.60            proposing coding for new law as Minnesota Statutes, 
  2.61            chapter 490A; repealing Minnesota Statutes 2004, 
  2.62            sections 3A.01, subdivisions 3, 4, 6a, 7; 3A.02, 
  2.63            subdivision 2; 3A.04, subdivision 1; 3A.09; 352.119, 
  2.64            subdivision 1; 352.15, subdivision 1a; 352C.01; 
  2.65            352C.011; 352C.021; 352C.031, subdivision 3; 352C.033; 
  2.66            352C.04; 352C.051; 352C.09; 352C.091, subdivisions 2, 
  2.67            3; 353.15, subdivision 2; 353.29, subdivision 2; 
  2.68            353.34, subdivision 3b; 353.36, subdivisions 2, 2a, 
  2.69            2b, 2c; 353.46, subdivision 4; 353.651, subdivision 2; 
  2.70            353.663; 353.74; 353.75; 354.10, subdivision 2; 
  2.71            354.59; 422A.22, subdivisions 2, 5; 422A.221; 490.021; 
  3.1             490.025, subdivisions 1, 2, 3, 4, 6; 490.101; 490.102; 
  3.2             490.103; 490.105; 490.106; 490.107; 490.108; 490.109; 
  3.3             490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 
  3.4             10, 11, 12, 16, 17, 18, 19, 20. 
  3.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  3.6                     2005 OMNIBUS RETIREMENT BILL
  3.7                              ARTICLE 1
  3.8                   CLARIFICATION/RECODIFICATION OF
  3.9                 STATEWIDE SPECIALTY RETIREMENT PLANS
  3.10     Section 1.  Minnesota Statutes 2004, section 3A.01, 
  3.11  subdivision 1, is amended to read: 
  3.12     Subdivision 1.  [PURPOSES.] Each of the terms defined in 
  3.13  this section, for the purposes of this chapter shall be 
  3.14  given has the meanings meaning ascribed to them. 
  3.15     Sec. 2.  Minnesota Statutes 2004, section 3A.01, is amended 
  3.16  by adding a subdivision to read: 
  3.17     Subd. 1a.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
  3.18  means the condition of one allowance or benefit having an equal 
  3.19  actuarial present value to another allowance or benefit, 
  3.20  determined by the actuary retained under section 356.214 as of a 
  3.21  given date at a specified age with each actuarial present value 
  3.22  based on the mortality table applicable for the plan and 
  3.23  approved under section 356.215, subdivision 18, and using the 
  3.24  applicable preretirement or postretirement interest rate 
  3.25  assumption specified in section 356.215, subdivision 8. 
  3.26     Sec. 3.  Minnesota Statutes 2004, section 3A.01, is amended 
  3.27  by adding a subdivision to read: 
  3.28     Subd. 1b.  [AVERAGE MONTHLY SALARY.] "Average monthly 
  3.29  salary" means the average of the member's highest five 
  3.30  successive years of salary that was received as a member of the 
  3.31  legislature and upon which the member has made contributions 
  3.32  under section 3A.03, subdivision 1, or for which the member of 
  3.33  the legislature has made payments for past service under section 
  3.34  3A.02, subdivision 2, or has made, before July 1, 1994, payments 
  3.35  in lieu of contributions under Minnesota Statutes 1992, section 
  3.36  3A.031. 
  3.37     Sec. 4.  Minnesota Statutes 2004, section 3A.01, is amended 
  4.1   by adding a subdivision to read: 
  4.2      Subd. 1c.  [CONSTITUTIONAL OFFICER.] "Constitutional 
  4.3   officer" means a person who was duly elected, qualifies for, and 
  4.4   serves as the governor, the lieutenant governor, the attorney 
  4.5   general, the secretary of state, or the state auditor of the 
  4.6   state of Minnesota. 
  4.7      Sec. 5.  Minnesota Statutes 2004, section 3A.01, 
  4.8   subdivision 2, is amended to read: 
  4.9      Subd. 2.  [DEPENDENT CHILD.] (a) "Dependent child" means 
  4.10  any natural or adopted child of a deceased member of the 
  4.11  legislature or a former legislator who is under the age of 18, 
  4.12  or who is under the age of 22 and is a full-time student, and 
  4.13  who, in either case, is unmarried and was actually dependent for 
  4.14  more than one-half of support upon such the legislator for a 
  4.15  period of at least 90 days immediately prior to before the 
  4.16  legislator's death.  It 
  4.17     (b) The term also includes any child of the member of the 
  4.18  legislature or former legislator who was conceived during the 
  4.19  lifetime of, and who was born after the death of, the member or 
  4.20  former legislator.  This subdivision shall be retroactive as to 
  4.21  any dependent child under the age of 22 years as of April 1, 
  4.22  1975. 
  4.23     Sec. 6.  Minnesota Statutes 2004, section 3A.01, 
  4.24  subdivision 6, is amended to read: 
  4.25     Subd. 6.  [DIRECTOR.] "Director" means the executive 
  4.26  director of the Minnesota State Retirement System who was 
  4.27  appointed under section 352.03, subdivision 5. 
  4.28     Sec. 7.  Minnesota Statutes 2004, section 3A.01, is amended 
  4.29  by adding a subdivision to read: 
  4.30     Subd. 6b.  [FORMER LEGISLATOR.] "Former legislator" means a 
  4.31  legislator who has ceased to be a member of the legislature for 
  4.32  any reason, including, but not limited to, the expiration of the 
  4.33  term for which a member of the legislature was elected or the 
  4.34  death of the member. 
  4.35     Sec. 8.  Minnesota Statutes 2004, section 3A.01, is amended 
  4.36  by adding a subdivision to read: 
  5.1      Subd. 6c.  [MEMBER OF THE LEGISLATURE.] "Member of the 
  5.2   legislature" means a person who was a member of the house of 
  5.3   representatives or of the senate of the state of Minnesota who 
  5.4   has subscribed to the oath of office after July 1, 1965, and who 
  5.5   was first elected to a legislative office before July 1, 1997, 
  5.6   and retained coverage by the plan under Laws 1997, chapter 233, 
  5.7   article 2, section 15. 
  5.8      Sec. 9.  Minnesota Statutes 2004, section 3A.01, 
  5.9   subdivision 8, is amended to read: 
  5.10     Subd. 8.  [NORMAL RETIREMENT AGE.] "Normal retirement age" 
  5.11  means the age of 60 years with regard to any member of the 
  5.12  legislature whose service terminates prior to the beginning of 
  5.13  the 1981 legislative session, and the age of 62 years with 
  5.14  regard to any member of the legislature whose service terminates 
  5.15  after the beginning of the 1981 session. 
  5.16     Sec. 10.  Minnesota Statutes 2004, section 3A.01, is 
  5.17  amended by adding a subdivision to read: 
  5.18     Subd. 9.  [RETIREMENT.] "Retirement" means the period of 
  5.19  time after which a former legislator is entitled to a retirement 
  5.20  allowance. 
  5.21     Sec. 11.  Minnesota Statutes 2004, section 3A.01, is 
  5.22  amended by adding a subdivision to read: 
  5.23     Subd. 10.  [SALARY.] (a) "Salary" means the regular 
  5.24  compensation payable under law to a member of the legislature 
  5.25  and paid to the person for service as a legislator. 
  5.26     (b) The term includes the monthly compensation paid to the 
  5.27  member of the legislature and the per diem payments paid during 
  5.28  a regular or special session to the member of the legislature. 
  5.29     (c) The term does not include per diem payments paid to a 
  5.30  member of the legislature other than during the regular or 
  5.31  special session; additional compensation attributable to a 
  5.32  leadership position under section 3.099, subdivision 3; living 
  5.33  expense payments under section 3.101; and special session living 
  5.34  expense payments under section 3.103. 
  5.35     Sec. 12.  Minnesota Statutes 2004, section 3A.011, is 
  5.36  amended to read: 
  6.1      3A.011 [ADMINISTRATION OF PLAN.] 
  6.2      The executive director and the board of directors of the 
  6.3   Minnesota State Retirement System shall administer the 
  6.4   legislators retirement plan in accordance with this chapter and 
  6.5   chapter 356A. 
  6.6      Sec. 13.  Minnesota Statutes 2004, section 3A.02, 
  6.7   subdivision 1, is amended to read: 
  6.8      Subdivision 1.  [QUALIFICATIONS.] (a) A former legislator 
  6.9   is entitled, upon written application to the director, to 
  6.10  receive a retirement allowance monthly, if the person: 
  6.11     (1) has either served at least six full years, without 
  6.12  regard to the application of section 3A.10, subdivision 2, or 
  6.13  has served during all or part of four regular sessions as a 
  6.14  member of the legislature, which service need not be continuous; 
  6.15     (2) has attained the normal retirement age; 
  6.16     (3) has retired as a member of the legislature; and 
  6.17     (4) has made all contributions provided for in section 
  6.18  3A.03, has made payments for past service under subdivision 2, 
  6.19  or has made payments in lieu of contributions under Minnesota 
  6.20  Statutes 1992, section 3A.031, prior to before July 1, 1994. 
  6.21     (b) This paragraph applies to members of the legislature 
  6.22  who terminate service as a legislator before July 1, 1997.  For 
  6.23  service rendered before the beginning of the 1979 legislative 
  6.24  session, but not to exceed eight years of service, the 
  6.25  retirement allowance is an amount equal to five percent per year 
  6.26  of service of that member's average monthly salary.  For service 
  6.27  in excess of eight years rendered before the beginning of the 
  6.28  1979 legislative session, and for service rendered after the 
  6.29  beginning of the 1979 legislative session, Unless the former 
  6.30  legislator has legislative service before January 1, 1979, the 
  6.31  retirement allowance is an amount equal to 2-1/2 percent per 
  6.32  year of service of that member's average monthly salary. 
  6.33     (c) This paragraph applies to members of the legislature 
  6.34  who terminate service as a legislator after June 30, 1997.  The 
  6.35  retirement allowance is an amount equal to the applicable rate 
  6.36  or rates under paragraph (b) per year of service of the member's 
  7.1   average monthly salary and adjusted for that person on an 
  7.2   actuarial equivalent basis to reflect the change in the 
  7.3   postretirement interest rate actuarial assumption under section 
  7.4   356.215, subdivision 8, from five percent to six percent.  The 
  7.5   adjustment must be calculated by or, alternatively, the 
  7.6   adjustment procedure must be specified by, the actuary retained 
  7.7   by the Legislative Commission on Pensions and Retirement under 
  7.8   section 356.214.  The purpose of this adjustment is to ensure 
  7.9   that the total amount of benefits that the actuary predicts an 
  7.10  individual member will receive over the member's lifetime under 
  7.11  this paragraph will be the same as the total amount of benefits 
  7.12  the actuary predicts the individual member would receive over 
  7.13  the member's lifetime under the law in effect before enactment 
  7.14  of this paragraph.  If the former legislator has legislative 
  7.15  service before January 1, 1979, the person's benefit must 
  7.16  include the additional benefit amount in effect on January 1, 
  7.17  1979, and adjusted as otherwise provided in this paragraph. 
  7.18     (d) (c) The retirement allowance accrues beginning with the 
  7.19  first day of the month of receipt of the application, but not 
  7.20  before age 60, and for the remainder of the former legislator's 
  7.21  life, if the former legislator is not serving as a member of the 
  7.22  legislature or as a constitutional officer or commissioner as 
  7.23  defined in section 352C.021, subdivisions 2 and 3 3A.01, 
  7.24  subdivision 1c. The annuity does not begin to accrue prior to 
  7.25  before the person's retirement as a legislator.  No annuity 
  7.26  payment may be made retroactive for more than 180 days before 
  7.27  the date that the annuity application is filed with the director.
  7.28     (e) (d) Any member who has served during all or part of 
  7.29  four regular sessions is considered to have served eight years 
  7.30  as a member of the legislature. 
  7.31     (f) (e) The retirement allowance ceases with the last 
  7.32  payment that accrued to the retired legislator during the 
  7.33  retired legislator's lifetime, except that the surviving spouse, 
  7.34  if any, is entitled to receive the retirement allowance of the 
  7.35  retired legislator for the calendar month in which the retired 
  7.36  legislator died. 
  8.1      Sec. 14.  Minnesota Statutes 2004, section 3A.02, 
  8.2   subdivision 1b, is amended to read: 
  8.3      Subd. 1b.  [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 
  8.4   separation from service after the beginning of the 1981 
  8.5   legislative session, a former member of the legislature who has 
  8.6   attained the age set by the board of directors of the Minnesota 
  8.7   State Retirement System and who is otherwise qualified in 
  8.8   accordance with under subdivision 1 is entitled, upon making 
  8.9   written application on forms supplied a form prescribed by the 
  8.10  director, to a reduced retirement allowance in.  The reduced 
  8.11  retirement allowance is an amount equal to the retirement 
  8.12  allowance specified in subdivision 1, paragraph (b), that is 
  8.13  reduced so that the reduced annuity allowance is the actuarial 
  8.14  equivalent of the annuity allowance that would be payable if the 
  8.15  former member of the legislature deferred receipt of the annuity 
  8.16  allowance and the annuity allowance amount were was augmented 
  8.17  at an annual rate of three percent compounded annually from the 
  8.18  date the annuity allowance begins to accrue until age 62. 
  8.19     (b) The age set by the board of directors under paragraph 
  8.20  (a) cannot be less an earlier age than the early retirement age 
  8.21  under section 352.116, subdivision 1a. 
  8.22     (c) If there is an actuarial cost to the plan of resetting 
  8.23  the early retirement age under paragraph (a), the retired 
  8.24  legislator is required to pay an additional amount to cover the 
  8.25  full actuarial value.  The additional amount must be paid in a 
  8.26  lump sum within 30 days of the certification of the amount by 
  8.27  the executive director.  
  8.28     (d) The executive director of the Minnesota State 
  8.29  Retirement System shall report to the Legislative Commission on 
  8.30  Pensions and Retirement on the utilization of this 
  8.31  provision annually on or before September 1, 2000. 
  8.32     Sec. 15.  Minnesota Statutes 2004, section 3A.02, 
  8.33  subdivision 3, is amended to read: 
  8.34     Subd. 3.  [APPROPRIATION.] The amounts required for payment 
  8.35  of retirement allowances provided by this section are 
  8.36  appropriated annually to the director from the participation of 
  9.1   the legislators retirement plan in the Minnesota postretirement 
  9.2   investment fund and shall.  The retirement allowance must be 
  9.3   paid monthly to the recipients entitled thereto to those 
  9.4   retirement allowances. 
  9.5      Sec. 16.  Minnesota Statutes 2004, section 3A.02, 
  9.6   subdivision 4, is amended to read: 
  9.7      Subd. 4.  [DEFERRED ANNUITIES AUGMENTATION.] (a) The 
  9.8   deferred annuity retirement allowance of any former legislator 
  9.9   must be augmented as provided herein.  
  9.10     (b) The required reserves applicable to the 
  9.11  deferred annuity retirement allowance, determined as of the date 
  9.12  the benefit begins to accrue using an appropriate mortality 
  9.13  table and an interest assumption of six percent, must be 
  9.14  augmented from the first of the month following the termination 
  9.15  of active service, or July 1, 1973, whichever is later, to the 
  9.16  first day of the month in which the annuity allowance begins to 
  9.17  accrue, at the following annually compounded rate of five 
  9.18  percent per annum compounded annually until January 1, 1981, and 
  9.19  thereafter at the rate of three percent per annum compounded 
  9.20  annually until January 1 of the year in which the former 
  9.21  legislator attains age 55.  From that date to the effective date 
  9.22  of retirement, the rate is five percent compounded annually. or 
  9.23  rates: 
  9.24          rate                   period
  9.25       (1) five percent     until January 1, 1981
  9.26       (2) three percent    from January 1, 1981, or from the
  9.27                            first day of the month following
  9.28                            the termination of active service,
  9.29                            whichever is later, until January 1
  9.30                            of the year in which the former
  9.31                            legislator attains age 55
  9.33       (3) five percent     from the period end date under
  9.34                            clause (2) to the effective date 
  9.35                            of retirement. 
  9.36     (b) The retirement allowance of, or the survivor benefit 
 10.1   payable on behalf of, a former member of the legislature who 
 10.2   terminated service before July 1, 1997, which is not first 
 10.3   payable until after June 30, 1997, must be increased on an 
 10.4   actuarial equivalent basis to reflect the change in the 
 10.5   postretirement interest rate actuarial assumption under section 
 10.6   356.215, subdivision 8, from five percent to six percent under a 
 10.7   calculation procedure and tables adopted by the board of 
 10.8   directors of the Minnesota State Retirement System and approved 
 10.9   by the actuary retained by the Legislative Commission on 
 10.10  Pensions and Retirement. 
 10.11     Sec. 17.  Minnesota Statutes 2004, section 3A.02, 
 10.12  subdivision 5, is amended to read: 
 10.13     Subd. 5.  [OPTIONAL ANNUITIES.] (a) The board of directors 
 10.14  shall establish an optional retirement annuity in the form of a 
 10.15  joint and survivor annuity and an optional retirement annuity in 
 10.16  the form of a period certain and life thereafter.  Except as 
 10.17  provided in paragraph (b), these optional annuity forms must be 
 10.18  actuarially equivalent to the normal annuity allowance computed 
 10.19  under this section, plus the actuarial value of any surviving 
 10.20  spouse benefit otherwise potentially payable at the time of 
 10.21  retirement under section 3A.04, subdivision 1.  An individual 
 10.22  selecting an optional annuity under this subdivision waives and 
 10.23  the person's spouse waive any rights to surviving spouse 
 10.24  benefits under section 3A.04, subdivision 1. 
 10.25     (b) If a retired legislator selects the joint and survivor 
 10.26  annuity option, the retired legislator must receive a normal 
 10.27  single-life annuity allowance if the designated optional annuity 
 10.28  beneficiary dies before the retired legislator and no reduction 
 10.29  may be made in the annuity to provide for restoration of the 
 10.30  normal single-life annuity allowance in the event of the death 
 10.31  of the designated optional annuity beneficiary. 
 10.32     (c) The surviving spouse of a legislator who has attained 
 10.33  at least age 60 and who dies while a member of the legislature 
 10.34  may elect an optional joint and survivor annuity under paragraph 
 10.35  (a), in lieu of surviving spouse benefits under section 3A.04, 
 10.36  subdivision 1. 
 11.1      Sec. 18.  Minnesota Statutes 2004, section 3A.03, 
 11.2   subdivision 1, is amended to read: 
 11.3      Subdivision 1.  [PERCENTAGE.] (a) Every member of the 
 11.4   legislature shall contribute nine percent of total salary,. 
 11.5      (b) The contribution must be made by payroll deduction, 
 11.6   to and must be paid into the state treasury and deposited in the 
 11.7   general fund.  It shall be the duty of 
 11.8      (c) The director to must record the periodic contributions 
 11.9   of each member of the legislature and must credit such each 
 11.10  contribution to the member's account. 
 11.11     Sec. 19.  Minnesota Statutes 2004, section 3A.03, 
 11.12  subdivision 2, is amended to read: 
 11.13     Subd. 2.  [REFUND.] (a) A former member who has made 
 11.14  contributions under subdivision 1 and who is no longer a member 
 11.15  of the legislature is entitled to receive, upon written 
 11.16  application to the executive director on a form prescribed by 
 11.17  the executive director, a refund from the general fund of all 
 11.18  contributions credited to the member's account with interest 
 11.19  computed as provided in section 352.22, subdivision 2. 
 11.20     (b) The refund of contributions as provided in paragraph (a)
 11.21  terminates all rights of a former member of the legislature and 
 11.22  the survivors of the former member under this chapter. 
 11.23     (c) If the former member of the legislature again becomes a 
 11.24  member of the legislature after having taken a refund as 
 11.25  provided in paragraph (a), the member must be considered is a 
 11.26  new member of this plan the unclassified employees retirement 
 11.27  program of the Minnesota State Retirement System.  
 11.28     (d) However, the member may reinstate the rights and credit 
 11.29  for service previously forfeited under this chapter if the 
 11.30  member repays all refunds taken, plus interest at an annual rate 
 11.31  of 8.5 percent compounded annually from the date on which the 
 11.32  refund was taken to the date on which the refund is repaid.  
 11.33     (d) (e) No person may be required to apply for or to accept 
 11.34  a refund. 
 11.35     Sec. 20.  Minnesota Statutes 2004, section 3A.04, 
 11.36  subdivision 1, is amended to read: 
 12.1      Subdivision 1.  [SURVIVING SPOUSE.] (a) Upon the death of a 
 12.2   member of the legislature while serving as such a member after 
 12.3   June 30, 1973, or upon the death of a former member of the 
 12.4   legislature with at least the number of six full years of 
 12.5   service as required by section 3A.02, subdivision 1, clause 
 12.6   (1) or service in all or part of four regular legislative 
 12.7   sessions, the surviving spouse shall be paid is entitled to a 
 12.8   survivor benefit in the amount of. 
 12.9      (b) The surviving spouse benefit is one-half of the 
 12.10  retirement allowance of the member of the legislature computed 
 12.11  as though the member were at least normal retirement age on the 
 12.12  date of death and based upon the member's allowable service 
 12.13  or upon eight years, whichever is greater.  The augmentation 
 12.14  provided in section 3A.02, subdivision 4, if applicable, shall 
 12.15  must be applied for the period up to, and including, the month 
 12.16  of death.  
 12.17     (c) Upon the death of a former legislator receiving a 
 12.18  retirement allowance, the surviving spouse shall be is entitled 
 12.19  to one-half of the amount of the retirement allowance being paid 
 12.20  to the legislator.  Such 
 12.21     (d) The surviving spouse benefit shall be paid during is 
 12.22  payable for the lifetime of the surviving spouse. 
 12.23     Sec. 21.  Minnesota Statutes 2004, section 3A.04, 
 12.24  subdivision 2, is amended to read: 
 12.25     Subd. 2.  [DEPENDENT CHILDREN.] (a) Upon the death of a 
 12.26  member of the legislature while serving as a member, or upon the 
 12.27  death of a former member of the legislature who has rendered at 
 12.28  least the number of six full years of service as required by 
 12.29  section 3A.02, subdivision 1, clause (1) or service in all or 
 12.30  part of four regular legislative sessions and who was not 
 12.31  receiving a retirement allowance, each dependent child of the 
 12.32  member or former legislator shall be is entitled to receive a 
 12.33  survivor benefit in the following amount:  
 12.34     (1) for the first dependent child, a monthly allowance 
 12.35  which equals benefit equal to 25 percent of the monthly 
 12.36  retirement allowance of the member of the legislature or the 
 13.1   former legislator computed as though the member or the former 
 13.2   legislator had attained at least the normal retirement age on 
 13.3   the date of death and based upon the average monthly salary as 
 13.4   of the date of death or as of the date of termination, whichever 
 13.5   is applicable applies, and the member's allowable service or 
 13.6   eight years, whichever is greater; 
 13.7      (2) for each additional dependent child, a monthly 
 13.8   allowance which equals benefit equal to 12-1/2 percent of the 
 13.9   monthly retirement allowance of the member or the former 
 13.10  legislator computed as provided in the case of the first child 
 13.11  clause (1); but and 
 13.12     (3) the total amount paid to the surviving spouse and to 
 13.13  the dependent child or children shall may not exceed, in any 
 13.14  one month, 100 percent of the monthly retirement allowance of 
 13.15  the member or of the former legislator computed as provided in 
 13.16  the case of the first child clause (1).  
 13.17     (b) The augmentation provided in section 3A.02, subdivision 
 13.18  4, if applicable, shall be applied applies from the first day of 
 13.19  the month next following the date of the termination of the 
 13.20  person from service as a member of the legislature to the month 
 13.21  of the death of the person.  
 13.22     (c) Upon the death of a former legislator who was receiving 
 13.23  a retirement allowance, the a surviving dependent child shall be 
 13.24  is entitled to the applicable percentage specified above in 
 13.25  paragraph (a), clause (1) or (2), whichever applies, of the 
 13.26  amount of the allowance which was paid to the former legislator 
 13.27  for the month immediately prior to before the date of death of 
 13.28  the former legislator.  
 13.29     (d) The payments for dependent children shall must be made 
 13.30  to the surviving spouse or to the guardian of the estate of the 
 13.31  dependent children, if there is one.  
 13.32     Sec. 22.  Minnesota Statutes 2004, section 3A.04, 
 13.33  subdivision 3, is amended to read: 
 13.34     Subd. 3.  [PAYMENT.] The surviving spouse's spouse and 
 13.35  dependent children's child or children survivor benefits payable 
 13.36  under this section shall be paid are payable by the director 
 14.1   monthly in the same manner as retirement allowances are 
 14.2   authorized to be paid by this chapter.  
 14.3      Sec. 23.  Minnesota Statutes 2004, section 3A.04, 
 14.4   subdivision 4, is amended to read: 
 14.5      Subd. 4.  [DEATH REFUNDS.] (a) Upon the death of a member 
 14.6   of the legislature or of a former legislator who was not 
 14.7   receiving a retirement allowance, without leaving either a 
 14.8   surviving spouse or a dependent child or dependent children, the 
 14.9   last designated beneficiary named on a form that was filed with 
 14.10  the director before the death of the legislator, or if no 
 14.11  designation is filed, the estate of the member or the former 
 14.12  legislator, upon application, shall be is entitled to a refund. 
 14.13     (b) The refund is the amount of contributions credited to 
 14.14  the person's account plus interest as provided in section 3A.03, 
 14.15  subdivision 2, clause (2) paragraph (a). 
 14.16     Sec. 24.  Minnesota Statutes 2004, section 3A.04, is 
 14.17  amended by adding a subdivision to read: 
 14.18     Subd. 5.  [APPROPRIATION.] The survivor benefits and the 
 14.19  death refunds authorized by this section are appropriated to the 
 14.20  director from the general fund when they are due and payable. 
 14.21     Sec. 25.  Minnesota Statutes 2004, section 3A.05, is 
 14.22  amended to read: 
 14.23     3A.05 [APPLICATION FOR SURVIVOR BENEFIT.] 
 14.24     (a) Applications for survivor benefits pursuant to under 
 14.25  section 3A.04 shall must be filed with the director by the 
 14.26  surviving spouse and dependent child or children entitled to 
 14.27  benefits pursuant to under section 3A.04, or by the guardian of 
 14.28  the estate, if there is one, of the dependent child or children. 
 14.29     (b) Survivor benefits shall accrue as of the first day of 
 14.30  the month following the death of the member of the legislature 
 14.31  or former legislator and payments shall commence as of the first 
 14.32  of the month next following the filing of the application, 
 14.33  and shall be are retroactive to the date the benefit accrues; 
 14.34  provided, however, that no payment shall be retroactive for more 
 14.35  than or the first of the month occurring 12 months prior 
 14.36  to before the month in which the application is filed with the 
 15.1   director, whichever is earlier. 
 15.2      Sec. 26.  Minnesota Statutes 2004, section 3A.07, is 
 15.3   amended to read: 
 15.4      3A.07 [APPLICATION.] 
 15.5      (a) Except as provided in paragraph (b), this chapter 
 15.6   applies to members of the legislature in service after July 1, 
 15.7   1965, who otherwise meet the requirements of this chapter. 
 15.8      (b) Members of the legislature who were elected for the 
 15.9   first time after June 30, 1997, or members of the legislature 
 15.10  who were elected before July 1, 1997, and who, after July 1, 
 15.11  1998, elect not to be members of the plan established by this 
 15.12  chapter are covered by the unclassified employees retirement 
 15.13  program governed by chapter 352D. 
 15.14     (c) The post-July 1, 1998, coverage election under 
 15.15  paragraph (b) is irrevocable and must be made on a form 
 15.16  prescribed by the director.  The second chance referendum 
 15.17  election under Laws 2002, chapter 392, article 15, also is 
 15.18  irrevocable. 
 15.19     Sec. 27.  Minnesota Statutes 2004, section 3A.10, 
 15.20  subdivision 1, is amended to read: 
 15.21     Subdivision 1.  [SERVICE CREDIT FOR LEGISLATIVE TERM.] (a) 
 15.22  In the case of a member of the house of representatives, one 
 15.23  full term of office shall must be considered two full years of 
 15.24  service, notwithstanding the fact that the oath of office may be 
 15.25  was taken on different days each biennium.  
 15.26     (b) In the case of a member of the senate, one full term of 
 15.27  office shall must be considered four full years of service, 
 15.28  notwithstanding the fact that the oath of office may be was 
 15.29  taken on different days at the start of each term.  
 15.30     (c) For purposes of this chapter, a legislative term shall 
 15.31  must be deemed to commence on January 1st 1 and to end on 
 15.32  December 31st 31.  
 15.33     Sec. 28.  Minnesota Statutes 2004, section 3A.12, is 
 15.34  amended to read: 
 15.35     3A.12 [COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR 
 15.36  ASSOCIATION.] 
 16.1      Subdivision 1.  [ENTITLEMENT TO ANNUITY.] (a) Any 
 16.2   legislator who has been an employee covered by a member of a 
 16.3   retirement plan listed in paragraph (b) is entitled, when 
 16.4   otherwise qualified, to a retirement allowance or annuity from 
 16.5   each plan if the total allowable service in all plans or in any 
 16.6   two of these plans totals ten or more years. 
 16.7      (b) This section applies to any retirement plan or program 
 16.8   administered by the Minnesota State Retirement System, or a 
 16.9   member of any retirement plan administered by the Public 
 16.10  Employees Retirement Association, including the Public Employees 
 16.11  Retirement Association police and fire fund, or the Teachers 
 16.12  Retirement Association, or the Minneapolis employees 
 16.13  retirement Fund plan, or the State Patrol retirement fund plan, 
 16.14  or any other public employee retirement system in the state of 
 16.15  Minnesota having a like provision but excluding all. 
 16.16     (c) This section does not apply to other funds retirement 
 16.17  plans providing benefits for police or firefighters, shall be 
 16.18  entitled when qualified to an annuity from each fund if the 
 16.19  total allowable service for which the legislator has credit in 
 16.20  all funds or in any two of these funds totals ten or more years, 
 16.21  provided. 
 16.22     (d) No portion of the allowable service upon which the 
 16.23  retirement annuity from one fund plan is based is again used in 
 16.24  the computation for benefits from another fund plan.  The 
 16.25  annuity from each fund shall plan must be determined by the 
 16.26  appropriate provisions of the law, except that the requirement 
 16.27  that a person must have at least ten a minimum number of years 
 16.28  of allowable service in the respective system or 
 16.29  association shall does not apply for the purposes of this 
 16.30  section provided if the combined service in two or more of these 
 16.31  funds plans equals ten or more years.  The augmentation of 
 16.32  deferred annuities provided in section 3A.02, subdivision 
 16.33  4, shall apply applies to the annuities accruing hereunder under 
 16.34  this section. 
 16.35     Subd. 2.  [REFUND REPAYMENT.] Any A former legislator who 
 16.36  has received a refund as provided in section 3A.03, subdivision 
 17.1   2, who is a currently contributing member of a retirement fund 
 17.2   plan specified in subdivision 1, paragraph (b), may repay the 
 17.3   refund as provided in section 3A.03, subdivision 2.  Any A 
 17.4   member of the legislature who has received a refund from any of 
 17.5   the funds retirement plans specified in subdivision 1, may repay 
 17.6   the refund to the respective fund plan under such terms and 
 17.7   conditions consistent with the law governing such fund the 
 17.8   retirement plan if the law governing such fund the plan permits 
 17.9   the repayment of refunds.  If the total amount to be repaid, 
 17.10  including principal and interest exceeds $2,000, repayment may 
 17.11  be made in three equal installments over a period of 18 months, 
 17.12  with the interest accrued during the period of the repayment 
 17.13  added to the final installment. 
 17.14     Sec. 29.  Minnesota Statutes 2004, section 3A.13, is 
 17.15  amended to read: 
 17.16     3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 
 17.17  DEDUCTION.] 
 17.18     (a) The provisions of section 352.15 shall apply to the 
 17.19  legislators retirement plan, chapter 3A.  
 17.20     (b) The executive director of the Minnesota State 
 17.21  Retirement System must, at the request of a retired legislator 
 17.22  who is enrolled in a health insurance plan covering state 
 17.23  employees, deduct the person's health insurance premiums from 
 17.24  the person's annuity and transfer the amount of the premium to a 
 17.25  health insurance carrier covering state employees. 
 17.26     Sec. 30.  [352C.001] [RETIREMENT PLAN; APPLICATION.] 
 17.27     (a) The retirement plan applicable to a former 
 17.28  constitutional officer who was first elected to a constitutional 
 17.29  office after July 1, 1967, and before July 1, 1997, is the 
 17.30  applicable portions of this chapter and chapter 356 in effect on 
 17.31  the date on which the person terminated active service as a 
 17.32  constitutional officer. 
 17.33     (b) Nothing in this section or section 31 or 77, 
 17.34  subdivision 2, is intended to reduce the benefits of former 
 17.35  constitutional officers or to adversely modify their eligibility 
 17.36  for benefits in effect as of the day before the effective date 
 18.1   of this section. 
 18.2      Sec. 31.  Minnesota Statutes 2004, section 352C.091, 
 18.3   subdivision 1, is amended to read: 
 18.4      Subdivision 1.  [ADMINISTRATIVE AGENCY AND STANDARDS.] This 
 18.5   chapter (a) The elected officers retirement plan must be 
 18.6   administered by the board of directors and the executive 
 18.7   director of the Minnesota State Retirement System.  
 18.8      (b) The elected state officers retirement plan must be 
 18.9   administered consistent with this chapter the applicable 
 18.10  statutory provisions governing the plan and chapters 356 and 
 18.11  356A. 
 18.12     Sec. 32.  Minnesota Statutes 2004, section 490.121, 
 18.13  subdivision 1, is amended to read: 
 18.14     Subdivision 1.  [SCOPE.] For purposes of sections 490.121 
 18.15  to 490.132, unless the context clearly indicates otherwise, each 
 18.16  of the terms defined in this section have has the meanings 
 18.17  meaning given them unless the context clearly indicates 
 18.18  otherwise it. 
 18.19     Sec. 33.  Minnesota Statutes 2004, section 490.121, is 
 18.20  amended by adding a subdivision to read: 
 18.21     Subd. 2a.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 18.22  means the condition of one annuity or benefit having an equal 
 18.23  actuarial present value as another annuity or benefit, 
 18.24  determined as of a given date with each actuarial present value 
 18.25  based on the appropriate mortality table adopted by the board of 
 18.26  directors of the Minnesota State Retirement System based on the 
 18.27  experience of the fund as recommended by the actuary retained 
 18.28  under section 356.214 and approved under section 356.215, 
 18.29  subdivision 18, and using the applicable preretirement or 
 18.30  postretirement interest rate assumption specified in section 
 18.31  356.215, subdivision 8. 
 18.32     Sec. 34.  Minnesota Statutes 2004, section 490.121, 
 18.33  subdivision 4, is amended to read: 
 18.34     Subd. 4.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
 18.35  means any calendar month, subject to the service credit limit in 
 18.36  subdivision 22, served as a judge at any time, or during which 
 19.1   the judge received compensation for that service from the state, 
 19.2   municipality, or county, whichever applies, and for which the 
 19.3   judge made any required member contribution.  It also includes 
 19.4   any month served as a referee in probate for all referees in 
 19.5   probate who were in office prior to before January 1, 1974. 
 19.6      (b) "Allowable service" does not mean service as a retired 
 19.7   judge. 
 19.8      Sec. 35.  Minnesota Statutes 2004, section 490.121, 
 19.9   subdivision 6, is amended to read: 
 19.10     Subd. 6.  [ANNUITY.] "Annuity" means the payments that are 
 19.11  made each year to an annuitant from the judges' retirement fund, 
 19.12  pursuant to the provisions of under sections 490.121 to 490.132. 
 19.13     Sec. 36.  Minnesota Statutes 2004, section 490.121, 
 19.14  subdivision 7, is amended to read: 
 19.15     Subd. 7.  [ANNUITANT.] "Annuitant" means a former judge, a 
 19.16  surviving spouse, or a dependent child who is entitled to and is 
 19.17  receiving an annuity under the provisions of sections 490.121 to 
 19.18  490.132. 
 19.19     Sec. 37.  Minnesota Statutes 2004, section 490.121, is 
 19.20  amended by adding a subdivision to read: 
 19.21     Subd. 7a.  [APPROVED ACTUARY.] "Approved actuary" means an 
 19.22  actuary as defined in section 356.215, subdivision 1, paragraph 
 19.23  (c).  
 19.24     Sec. 38.  Minnesota Statutes 2004, section 490.121, is 
 19.25  amended by adding a subdivision to read: 
 19.26     Subd. 7b.  [COURT.] "Court" means any court of this state 
 19.27  that is established by the Minnesota Constitution. 
 19.28     Sec. 39.  Minnesota Statutes 2004, section 490.121, is 
 19.29  amended by adding a subdivision to read: 
 19.30     Subd. 7c.  [DEPENDENT SURVIVING CHILD.] "Dependent 
 19.31  surviving child" means any natural or adopted child of a 
 19.32  deceased judge who has not reached the age of 18 years, or 
 19.33  having reached the age of 18, is under age 22 and who is a 
 19.34  full-time student throughout the normal school year, is 
 19.35  unmarried, and is actually dependent for more than one-half of 
 19.36  the child's support upon the judge for a period of at least 90 
 20.1   days before the judge's death. It also includes any natural 
 20.2   child of the judge who was born after the death of the judge. 
 20.3      Sec. 40.  Minnesota Statutes 2004, section 490.121, 
 20.4   subdivision 13, is amended to read: 
 20.5      Subd. 13.  [DISABILITY.] "Disability" means the permanent 
 20.6   inability of a judge to continue to perform the functions of 
 20.7   judge by reason of a physical or mental impairment resulting 
 20.8   from a sickness or an injury. 
 20.9      Sec. 41.  Minnesota Statutes 2004, section 490.121, 
 20.10  subdivision 14, is amended to read: 
 20.11     Subd. 14.  [DISABILITY RETIREMENT DATE.] "Disability 
 20.12  retirement date" means the last day of the first month after the 
 20.13  date on which the governor determines, upon receipt of the 
 20.14  voluntary application by the judge or otherwise, that a judge 
 20.15  suffers from a disability. 
 20.16     Sec. 42.  Minnesota Statutes 2004, section 490.121, 
 20.17  subdivision 15, is amended to read: 
 20.18     Subd. 15.  [DISABILITY RETIREMENT ANNUITY.] "Disability 
 20.19  retirement annuity" means an annuity to which a judge is 
 20.20  entitled under section 490.124, subdivisions 1 and 4, after the 
 20.21  retirement for reason of the judge because of a disability. 
 20.22     Sec. 43.  Minnesota Statutes 2004, section 490.121, is 
 20.23  amended by adding a subdivision to read: 
 20.24     Subd. 15a.  [EARLY RETIREMENT DATE.] "Early retirement date"
 20.25  means the last day of the month after a judge attains the age of 
 20.26  60 but before the judge reaches the normal retirement date. 
 20.27     Sec. 44.  Minnesota Statutes 2004, section 490.121, is 
 20.28  amended by adding a subdivision to read: 
 20.29     Subd. 15b.  [EARLY RETIREMENT ANNUITY.] "Early retirement 
 20.30  annuity" means an annuity to which a judge is entitled under 
 20.31  section 490.124, subdivisions 1 and 3, upon retirement by the 
 20.32  judge at an early retirement date. 
 20.33     Sec. 45.  Minnesota Statutes 2004, section 490.121, 
 20.34  subdivision 21, is amended to read: 
 20.35     Subd. 21.  [FINAL AVERAGE COMPENSATION.] "Final average 
 20.36  compensation" means the total amount of the salary payable paid 
 21.1   to a judge in the highest five years out of the last ten years 
 21.2   prior to before the event of maturity of benefits termination of 
 21.3   judicial service, divided by five; provided, however, that if 
 21.4   the number of years of service by the judge equals or exceeds 
 21.5   ten.  If the number of years of service by the judge is less 
 21.6   than ten, but more than five, the highest five shall years of 
 21.7   salary must be counted , and.  If the number of years of service 
 21.8   by the judge is less than five, the aggregate salary in such for 
 21.9   the period shall of service must be divided by the number of 
 21.10  months in such the period and multiplied by 12. 
 21.11     Sec. 46.  Minnesota Statutes 2004, section 490.121, is 
 21.12  amended by adding a subdivision to read: 
 21.13     Subd. 21a.  [JUDGE.] "Judge" means a judge or a justice of 
 21.14  any court as defined under subdivision 7b. 
 21.15     Sec. 47.  Minnesota Statutes 2004, section 490.121, is 
 21.16  amended by adding a subdivision to read: 
 21.17     Subd. 21b.  [JUDGES' RETIREMENT FUND; RETIREMENT FUND; 
 21.18  FUND.] "Judges' retirement fund," "retirement fund," or "fund" 
 21.19  means the fund created by section 490.123. 
 21.20     Sec. 48.  Minnesota Statutes 2004, section 490.121, is 
 21.21  amended by adding a subdivision to read: 
 21.22     Subd. 21c.  [MANDATORY RETIREMENT DATE.] "Mandatory 
 21.23  retirement date" means the last day of the month in which a 
 21.24  judge has attained 70 years of age. 
 21.25     Sec. 49.  Minnesota Statutes 2004, section 490.121, is 
 21.26  amended by adding a subdivision to read: 
 21.27     Subd. 21d.  [NORMAL RETIREMENT ANNUITY.] Except as 
 21.28  otherwise provided in sections 490.121 to 490.132, "normal 
 21.29  retirement annuity" means an annuity to which a judge is 
 21.30  entitled under section 490.124, subdivision 1, upon retirement 
 21.31  on or after the normal retirement date of the judge. 
 21.32     Sec. 50.  Minnesota Statutes 2004, section 490.121, is 
 21.33  amended by adding a subdivision to read: 
 21.34     Subd. 21e.  [NORMAL RETIREMENT DATE.] "Normal retirement 
 21.35  date" means the last day of the month in which a judge attains 
 21.36  the age of 65. 
 22.1      Sec. 51.  Minnesota Statutes 2004, section 490.121, 
 22.2   subdivision 22, is amended to read: 
 22.3      Subd. 22.  [SERVICE CREDIT LIMIT.] "Service credit limit" 
 22.4   means the greater of:  (1) 24 years of allowable service 
 22.5   under this chapter 490; or (2) for judges with allowable service 
 22.6   rendered prior to before July 1, 1980, the number of years of 
 22.7   allowable service under chapter 490, which, when multiplied by 
 22.8   the percentage listed in section 356.315, subdivision 7 or 8, 
 22.9   whichever is applicable to each year of service, equals 76.8. 
 22.10     Sec. 52.  Minnesota Statutes 2004, section 490.121, is 
 22.11  amended by adding a subdivision to read: 
 22.12     Subd. 23.  [SURVIVING SPOUSE.] "Surviving spouse" means the 
 22.13  surviving legally married spouse of a deceased judge. 
 22.14     Sec. 53.  Minnesota Statutes 2004, section 490.121, is 
 22.15  amended by adding a subdivision to read: 
 22.16     Subd. 24.  [SURVIVOR'S ANNUITY.] "Survivor's annuity" means 
 22.17  an annuity to which a surviving spouse or dependent child is 
 22.18  entitled under section 490.124, subdivision 9. 
 22.19     Sec. 54.  Minnesota Statutes 2004, section 490.122, is 
 22.20  amended to read: 
 22.21     490.122 [ADMINISTRATION OF JUDGES' RETIREMENT.] 
 22.22     Subdivision 1.  [ADMINISTRATION.] The policy-making, 
 22.23  management, and administrative functions governing the operation 
 22.24  of the judges' retirement fund and the administration 
 22.25  of sections 490.121 to 490.132 this chapter are vested in the 
 22.26  board of directors and executive director of the Minnesota State 
 22.27  Retirement System with such.  In administering the plan and 
 22.28  fund, the board and the director have the same duties, 
 22.29  authority, and responsibility as are provided in chapter 352.  
 22.30     Subd. 2.  [INAPPLICABILITY OF CERTAIN LAWS.] Except as 
 22.31  otherwise specified, no provision of chapter 352 applies to the 
 22.32  judges' retirement fund or any judge.  
 22.33     Subd. 3.  [FIDUCIARY RESPONSIBILITY.] Fiduciary 
 22.34  activities of relating to the uniform judges' retirement and 
 22.35  Survivors' Annuities for Judges plan must be undertaken in a 
 22.36  manner consistent with chapter 356A. 
 23.1      Sec. 55.  Minnesota Statutes 2004, section 490.123, 
 23.2   subdivision 1, is amended to read: 
 23.3      Subdivision 1.  [FUND CREATION; REVENUE AND AUTHORIZED 
 23.4   DISBURSEMENTS.] (a) There is created a special fund to be known 
 23.5   as the "judges' retirement fund." 
 23.6      (b) The judges' retirement fund must be credited with all 
 23.7   contributions,; all interest, dividends, and other investment 
 23.8   proceeds; and all other income authorized by this chapter or 
 23.9   other applicable law.  
 23.10     (c) From this fund there are appropriated the payments 
 23.11  authorized by sections 490.121 to 490.132, in the amounts and at 
 23.12  the times provided, including the necessary and reasonable 
 23.13  expenses of the Minnesota State Retirement System in 
 23.14  administering the fund and the transfers to the Minnesota 
 23.15  postretirement investment fund.  
 23.16     Sec. 56.  Minnesota Statutes 2004, section 490.123, 
 23.17  subdivision 1a, is amended to read: 
 23.18     Subd. 1a.  [MEMBER CONTRIBUTION RATES.] (a) A judge who is 
 23.19  covered by the federal Old Age, Survivors, Disability, and 
 23.20  Health Insurance Program and whose service does not exceed the 
 23.21  service credit limit in section 490.121, subdivision 22, shall 
 23.22  contribute to the fund from each salary payment a sum equal to 
 23.23  8.00 percent of salary.  
 23.24     (b) A judge not so covered whose service does not exceed 
 23.25  the service credit limit in section 490.121, subdivision 22, 
 23.26  shall contribute to the fund from each salary payment a sum 
 23.27  equal to 8.15 percent of salary. 
 23.28     (c) The contribution under this subdivision is payable by 
 23.29  salary deduction.  The deduction must be made by the state court 
 23.30  administrator under section 352.04, subdivisions 4, 5, and 8. 
 23.31     Sec. 57.  Minnesota Statutes 2004, section 490.123, 
 23.32  subdivision 1b, is amended to read: 
 23.33     Subd. 1b.  [EMPLOYER CONTRIBUTION RATE.] (a) The employer 
 23.34  contribution rate to the fund on behalf of a judge is 20.5 
 23.35  percent of salary and.  The employer obligation continues after 
 23.36  a judge exceeds the service credit limit in section 490.121, 
 24.1   subdivision 22. 
 24.2      (b) The employer contribution must be paid by the state 
 24.3   court administrator and.  The employer contribution is payable 
 24.4   at the same time as member contributions are made under 
 24.5   subdivision 1a or as employee contributions are made to the 
 24.6   unclassified plan in program governed by chapter 352D for judges 
 24.7   whose service exceeds the limit in section 490.121, subdivision 
 24.8   22, are remitted. 
 24.9      Sec. 58.  Minnesota Statutes 2004, section 490.123, 
 24.10  subdivision 1c, is amended to read: 
 24.11     Subd. 1c.  [ADDITIONAL EMPLOYER CONTRIBUTION.] In the event 
 24.12  that If the employer contribution under subdivision 1b and the 
 24.13  assets of the judges retirement fund are insufficient to meet 
 24.14  reserve transfers to the Minnesota postretirement investment 
 24.15  fund or payments of survivor benefits before July 1, 1993 in a 
 24.16  month, the necessary amount is appropriated from the general 
 24.17  fund to the executive director of the Minnesota State Retirement 
 24.18  System, upon the certification of the required amount by the 
 24.19  executive director to the commissioner of finance. 
 24.20     Sec. 59.  Minnesota Statutes 2004, section 490.123, 
 24.21  subdivision 2, is amended to read: 
 24.22     Subd. 2.  [COMMISSIONER OF FINANCE.] The commissioner of 
 24.23  finance shall be is the ex officio treasurer of the judges' 
 24.24  retirement fund and the.  The commissioner's general bond to the 
 24.25  state shall must be so conditioned as to cover all liability for 
 24.26  acting as the treasurer of this the fund.  All moneys money 
 24.27  received by the commissioner pursuant to under this section 
 24.28  shall must be set aside in the state treasury to the credit of 
 24.29  the judges' retirement fund.  The commissioner shall transmit 
 24.30  monthly to the executive director described in section 352.03, 
 24.31  subdivision 5, a detailed statement of all amounts so received 
 24.32  and credited to the fund.  The commissioner shall pay out the 
 24.33  fund only upon vouchers signed by said executive director; 
 24.34  provided that vouchers for investment may be signed by the 
 24.35  secretary of the State Board of Investment. 
 24.36     Sec. 60.  Minnesota Statutes 2004, section 490.123, 
 25.1   subdivision 3, is amended to read: 
 25.2      Subd. 3.  [INVESTMENT.] (a) The executive director referred 
 25.3   to in subdivision 2 of the Minnesota State Retirement System 
 25.4   shall, from time to time, certify to the State Board of 
 25.5   Investment such portions of the judges' retirement fund as in 
 25.6   the director's judgment may not be required for immediate use.  
 25.7      (b) Assets from the judges' retirement fund shall must be 
 25.8   transferred to the Minnesota postretirement investment fund for 
 25.9   retirement and disability benefits as provided in sections 
 25.10  11A.18 and 352.119.  
 25.11     (c) The State Board of Investment shall thereupon invest 
 25.12  and reinvest sums so transferred, or certified, in such 
 25.13  securities as are duly authorized legal investments for such 
 25.14  purposes under section 11A.24 in compliance with sections 
 25.15  356A.04 and 356A.06.  
 25.16     Sec. 61.  Minnesota Statutes 2004, section 490.124, 
 25.17  subdivision 1, is amended to read: 
 25.18     Subdivision 1.  [BASIC RETIREMENT ANNUITY.] (a) Except as 
 25.19  qualified hereinafter from and after the mandatory retirement 
 25.20  date, the normal retirement date, the early retirement date, or 
 25.21  one year from the disability retirement date, as the case may 
 25.22  be, a retiring judge is eligible to receive a retirement annuity 
 25.23  shall be payable to a retiring judge from the judges' retirement 
 25.24  fund in. 
 25.25     (b) The retirement annuity is an amount equal to:  (1) the 
 25.26  percent specified in section 356.315, subdivision 7, multiplied 
 25.27  by the judge's final average compensation with that result then 
 25.28  multiplied by the number of years and fractions of years of 
 25.29  allowable service rendered prior to before July 1, 1980; plus 
 25.30  (2) the percent specified in section 356.315, subdivision 8, 
 25.31  multiplied by the judge's final average compensation with that 
 25.32  result then multiplied by the number of years and fractions of 
 25.33  years of allowable service rendered after June 30, 1980. 
 25.34     (c) Service that exceeds the service credit limit in 
 25.35  section 490.121, subdivision 22, must be excluded in calculating 
 25.36  the retirement annuity, but the compensation earned by the judge 
 26.1   during this period of judicial service must be used in 
 26.2   determining a judge's final average compensation and calculating 
 26.3   the retirement annuity.  
 26.4      Sec. 62.  Minnesota Statutes 2004, section 490.124, 
 26.5   subdivision 2, is amended to read: 
 26.6      Subd. 2.  [MINIMUM SERVICE REQUIREMENT; EXTENSION OF TERM.] 
 26.7   No (a) Unless section 356.30 applies, a judge shall be is not 
 26.8   eligible for an annuity at the normal retirement date or the 
 26.9   early retirement date if the judge has less than five years of 
 26.10  allowable service.  
 26.11     (b) A judge who shall retire retires on or, as permitted 
 26.12  under sections 490.121 to 490.132, after the judge's mandatory 
 26.13  retirement date, shall be is entitled to a proportionate annuity 
 26.14  based upon the allowable service of the judge at the date of 
 26.15  retirement. 
 26.16     A judge who was in office on December 31, 1973, and 
 26.17  thereafter and who, by the date on which the current term 
 26.18  expires, would not be eligible to retire with full benefits 
 26.19  under statutes in effect on December 31, 1973, may apply to the 
 26.20  governor for an extension to serve up to three additional years, 
 26.21  stating the intention of the judge to retire upon attaining 
 26.22  eligibility to receive a retirement allowance.  Notwithstanding 
 26.23  section 490.125, the governor shall forthwith make a written 
 26.24  order accepting the retirement application, and extending the 
 26.25  term of office of the judge for the period of time, not to 
 26.26  exceed three years, as may be necessary to make the judge 
 26.27  eligible for retirement, solely for purposes of computing 
 26.28  benefits hereunder. 
 26.29     Sec. 63.  Minnesota Statutes 2004, section 490.124, 
 26.30  subdivision 3, is amended to read: 
 26.31     Subd. 3.  [EARLY REDUCED RETIREMENT.] The retirement 
 26.32  annuity provided by under subdivision 1 of any judge electing 
 26.33  who elects to retire at an early retirement date shall must be 
 26.34  reduced by one-half of one percent per month from the retirement 
 26.35  date to the normal retirement date. 
 26.36     Sec. 64.  Minnesota Statutes 2004, section 490.124, 
 27.1   subdivision 4, is amended to read: 
 27.2      Subd. 4.  [DISABILITY RETIREMENT.] (a) When the governor 
 27.3   determines that a judge is disabled under section 490.121, 
 27.4   subdivision 13, notice of the governor's determination must be 
 27.5   sent to the judge, to the chief justice of the Supreme Court, to 
 27.6   the state court administrator, and to the executive director of 
 27.7   the Minnesota State Retirement System. 
 27.8      (b) From and after disability retirement date, a disabled 
 27.9   judge shall be is entitled to continuation of the judge's full 
 27.10  salary payable by the judge's employer, as if the judge's office 
 27.11  were not vacated by retirement, for a period of up to one full 
 27.12  year, but in no event beyond the judge's mandatory retirement 
 27.13  date.  During this year the judge will is entitled to earn 
 27.14  additional service credit in the judges' retirement plan.  The 
 27.15  salary earned will be payable to a disabled judge is subject to 
 27.16  retirement deductions and will must be included in computing 
 27.17  final average compensation of the judge.  Thereafter 
 27.18     (c) At the conclusion of the year of continued salary 
 27.19  following a disability or upon the judge's mandatory retirement 
 27.20  date, whichever is earlier, the disabled judge is entitled to a 
 27.21  disability retirement annuity computed as provided in 
 27.22  subdivision 1 shall be paid, provided that.  If the computed 
 27.23  retirement annuity is a smaller amount, the judge shall is 
 27.24  entitled to receive a minimum annuity of 25 percent of the 
 27.25  judge's final average compensation. 
 27.26     Sec. 65.  Minnesota Statutes 2004, section 490.124, 
 27.27  subdivision 5, is amended to read: 
 27.28     Subd. 5.  [DEFERRED BENEFITS.] (a) Any A benefit to which a 
 27.29  judge is entitled under this section may be deferred until the 
 27.30  early or normal retirement date or later, notwithstanding the 
 27.31  termination of such the judge's service prior thereto. 
 27.32     (b) The retirement annuity of, or the survivor benefit 
 27.33  payable on behalf of, a former judge, who terminated service 
 27.34  before July 1, 1997, which is not first payable until after June 
 27.35  30, 1997, must be increased on an actuarial equivalent basis to 
 27.36  reflect the change in the postretirement interest rate actuarial 
 28.1   assumption under section 356.215, subdivision 8, from five 
 28.2   percent to six percent under a calculation procedure and tables 
 28.3   adopted by the board of directors of the Minnesota State 
 28.4   Retirement System and approved by the actuary retained by the 
 28.5   Legislative Commission on Pensions and Retirement under section 
 28.6   356.214. 
 28.7      Sec. 66.  Minnesota Statutes 2004, section 490.124, 
 28.8   subdivision 8, is amended to read: 
 28.9      Subd. 8.  [EXCLUSIVE NORMAL RETIREMENT BENEFITS.] Any (a) 
 28.10  Except as provided in paragraph (b), a judge who retires after 
 28.11  December 31, 1973, shall be is entitled to a retirement pension, 
 28.12  retirement compensation or other retirement payment under 
 28.13  statutes applicable solely to judges pursuant to under this 
 28.14  section only, except that any such. 
 28.15     (b) A judge who was in office prior to before January 1, 
 28.16  1974, who retires at or after normal retirement age may then 
 28.17  elect to receive during the judge's lifetime a normal retirement 
 28.18  annuity computed on the basis of retirement compensation 
 28.19  provided for such judge under statutes in effect on December 31, 
 28.20  1973, in lieu of the amount of normal retirement annuity 
 28.21  otherwise computed under sections 490.121 to 490.132.  
 28.22     For purposes of this subdivision, the Conciliation Court of 
 28.23  the city of Duluth shall be deemed to have been a court of 
 28.24  record by the statutes in effect on December 31, 1973.  
 28.25     Sec. 67.  Minnesota Statutes 2004, section 490.124, 
 28.26  subdivision 9, is amended to read: 
 28.27     Subd. 9.  [SURVIVORS' ANNUITY.] (a) Upon the death of a 
 28.28  judge prior to before retirement, or upon the death of a person 
 28.29  who has qualified for an annuity under this section but who 
 28.30  ceases to be a judge prior to before retirement and has who not 
 28.31  received a refund of contributions pursuant to under subdivision 
 28.32  12, a surviving spouse is entitled to, or, if there be no 
 28.33  surviving spouse, dependent children, shall are entitled to 
 28.34  receive an annuity, payable monthly, equal in total to 60 
 28.35  percent of the normal retirement annuity which would have been 
 28.36  payable to the judge or former judge had the date of death been 
 29.1   the normal retirement date, provided that the. 
 29.2      (b)  The annuity payable to a surviving spouse or to 
 29.3   dependent children shall receive an annuity is an amount of not 
 29.4   less than 25 percent of the judge's or the former judge's final 
 29.5   average compensation. 
 29.6      If a judge, whose surviving spouse was not entitled to 
 29.7   survivors benefits provided solely for judges under statutes in 
 29.8   effect prior to January 1, 1974, shall have died prior to 
 29.9   retirement on or after May 23, 1973 and before January 1, 1974, 
 29.10  a surviving spouse and dependent children, if any, shall be 
 29.11  entitled to survivors benefits as provided hereunder as if such 
 29.12  judge had died on January 1, 1974. 
 29.13     Sec. 68.  Minnesota Statutes 2004, section 490.124, 
 29.14  subdivision 10, is amended to read: 
 29.15     Subd. 10.  [PRIOR SURVIVORS' BENEFITS; LIMITATION.] (a) 
 29.16  Benefits provided pursuant to under Minnesota Statutes 2004, 
 29.17  section 490.102, subdivision 6, or 490.1091, for a surviving 
 29.18  spouse of a retired judge, payable after the death of the judge, 
 29.19  shall be are limited to: 
 29.20     (a) spouses of judges who have retired prior to before 
 29.21  January 1, 1974; and. 
 29.22     (b) spouses of judges in office on December 31, 1973 and 
 29.23  thereafter who elect to continue contributions pursuant to 
 29.24  section 490.102, subdivision 6 or 490.109.  The contributions 
 29.25  shall be in addition to contributions pursuant to section 
 29.26  490.123, and upon retirement the judge may not elect to receive 
 29.27  any optional annuity pursuant to subdivision 11 unless the judge 
 29.28  and the spouse shall waive any benefits pursuant to section 
 29.29  490.102, subdivision 6 or 490.1091. 
 29.30     No other judge in office on or after January 1, 1974, shall 
 29.31  be is required to contribute pursuant to under Minnesota 
 29.32  Statutes 2004, section 490.102, subdivision 6, or 490.109. 
 29.33     Sec. 69.  Minnesota Statutes 2004, section 490.124, 
 29.34  subdivision 11, is amended to read: 
 29.35     Subd. 11.  [LIMITATION ON SURVIVOR BENEFITS; OPTIONAL 
 29.36  ANNUITIES.] (a) No survivor or death benefits may be paid in 
 30.1   connection with the death of a judge who retires after December 
 30.2   31, 1973, except as otherwise provided in sections 490.121 to 
 30.3   490.132.  
 30.4      (b) Except as provided in subdivision 10, a judge may elect 
 30.5   to receive, instead of the normal retirement annuity, an 
 30.6   optional retirement annuity in the form of either (1) an annuity 
 30.7   payable for a period certain and for life after that period, (2) 
 30.8   a joint and survivor annuity without reinstatement in the event 
 30.9   of if the designated beneficiary predeceasing predeceases the 
 30.10  retired judge, or (3) a joint and survivor annuity with 
 30.11  reinstatement in the event of if the designated beneficiary 
 30.12  predeceasing predeceases the retired judge.  
 30.13     (c) An optional retirement annuity must be actuarially 
 30.14  equivalent to a single-life annuity with no term certain and 
 30.15  must be established by the board of directors of the Minnesota 
 30.16  State Retirement System.  In establishing these optional 
 30.17  retirement annuity forms, the board shall obtain the written 
 30.18  recommendation of the actuary retained by the Legislative 
 30.19  Commission on Pensions and Retirement under section 356.214.  
 30.20  The recommendations must be retained as a part of the permanent 
 30.21  records of the board. 
 30.22     Sec. 70.  Minnesota Statutes 2004, section 490.124, 
 30.23  subdivision 12, is amended to read: 
 30.24     Subd. 12.  [REFUND.] (a) A person who ceases to be a 
 30.25  judge but who does not qualify for a retirement annuity or other 
 30.26  benefit under section 490.121 is entitled to a refund in an 
 30.27  amount that is equal to all of the member's employee 
 30.28  contributions to the judges' retirement fund plus interest 
 30.29  computed under section 352.22, subdivision 2. 
 30.30     (b) A refund of contributions under paragraph (a) 
 30.31  terminates all service credits and all rights and benefits of 
 30.32  the judge and the judge's survivors under this chapter.  
 30.33     (c) A person who becomes a judge again after taking a 
 30.34  refund under paragraph (a) may reinstate the previously 
 30.35  terminated allowable service credits credit, rights, and 
 30.36  benefits by repaying the total amount of the previously received 
 31.1   refund.  The refund repayment must include interest on the total 
 31.2   amount previously received at an annual rate of 8.5 percent, 
 31.3   compounded annually, from the date on which the refund was 
 31.4   received until the date on which the refund is repaid. 
 31.5      Sec. 71.  Minnesota Statutes 2004, section 490.124, 
 31.6   subdivision 13, is amended to read: 
 31.7      Subd. 13.  [DEATH REFUND.] If a judge who has not received 
 31.8   other benefits under this chapter dies and there are no survivor 
 31.9   benefits payable under this chapter, a refund plus interest as 
 31.10  provided in subdivision 12 is payable to the last designated 
 31.11  beneficiary named on a form filed with the director before the 
 31.12  death of the judge, or, if no designation is on file, the refund 
 31.13  is payable to the estate of the deceased judge. 
 31.14     Sec. 72.  Minnesota Statutes 2004, section 490.125, 
 31.15  subdivision 1, is amended to read: 
 31.16     Subdivision 1.  [MANDATORY RETIREMENT AGE.] Except as 
 31.17  otherwise provided in sections 490.121 to 490.132, each a judge 
 31.18  shall retire terminate active service as a judge on the judge's 
 31.19  mandatory retirement date.  
 31.20     Sec. 73.  Minnesota Statutes 2004, section 490.126, is 
 31.21  amended to read: 
 31.22     490.126 [PROCEDURES.] 
 31.23     Subdivision 1.  [COMPULSORY RETIREMENT.] Proceedings for 
 31.24  compulsory retirement of a judge, if necessary, shall must be 
 31.25  conducted in accordance with rules issued by the Supreme Court 
 31.26  pursuant to under section 490.16. 
 31.27     Subd. 2.  [VACANCIES.] Any judge may make written 
 31.28  application to the governor for retirement.  The governor 
 31.29  thereupon shall direct the judge's retirement by written order 
 31.30  which, when filed in the Office of the Secretary of State, shall 
 31.31  effect effects a vacancy in the office to be filled as provided 
 31.32  by law.  
 31.33     Subd. 3.  [APPLICATION FOR ANNUITY OR REFUND.] An 
 31.34  application for an annuity or a refund under sections 490.121 to 
 31.35  490.132 may be made by the potential annuitant or by someone 
 31.36  authorized to act for the potential annuitant.  Every 
 32.1   application for an annuity or refund, with accompanied by a 
 32.2   proof of age and by a record of years of service when 
 32.3   required, shall must be submitted to the governing 
 32.4   body executive director of the Minnesota State Retirement System 
 32.5   in a form prescribed by it the director.  
 32.6      Subd. 4.  [MANNER OF PAYMENT.] Unless otherwise 
 32.7   specifically provided by statute or agreed upon by the annuitant 
 32.8   and the governing body board of directors of the Minnesota State 
 32.9   Retirement System, annuities payable under sections 490.121 to 
 32.10  490.132 shall must be paid in the manner and at the intervals as 
 32.11  prescribed by the executive director of the Minnesota State 
 32.12  Retirement System.  The annuity shall cease ceases with the last 
 32.13  payment received by the annuitant while living.  
 32.14     Subd. 5.  [EXEMPTION FROM PROCESS; NO ASSIGNMENT.] None of 
 32.15  the money, annuities, or other benefits provided in this chapter 
 32.16  is assignable either in law or equity or is subject to state 
 32.17  estate tax, or to execution, levy, attachment, garnishment, or 
 32.18  other legal process, except as provided in section 518.58, 
 32.19  518.581, or 518.6111. 
 32.20     Sec. 74.  Minnesota Statutes 2004, section 490.133, is 
 32.21  amended to read: 
 32.22     490.133 [RETIREMENT; TRANSITION PROVISIONS; TRANSFER TO 
 32.23  COURT OF APPEALS.] 
 32.24     (a) If a judge to whom or to whose survivors benefits would 
 32.25  be payable under Minnesota Statutes 2004, sections 490.101 to 
 32.26  490.12, is elected or appointed to the Court of Appeals, that 
 32.27  judge and the judge's survivors, shall continue to be eligible 
 32.28  for benefits under those sections and not under sections 490.121 
 32.29  to 490.132.  
 32.30     (b) In that the case of a judge to whom paragraph (a) 
 32.31  applies, the service of the judge in the Court of Appeals shall 
 32.32  must be added to the prior service as district judge, probate 
 32.33  judge, or judge of any other court of record in determining 
 32.34  eligibility and the compensation of a judge of the Court of 
 32.35  Appeals at the time of the judge's death, disability, or 
 32.36  retirement shall be is the "compensation allotted to the office" 
 33.1   for the purposes of calculating benefit amounts.  
 33.2      (c) All other judges of the Court of Appeals and their 
 33.3   survivors shall be are subject to the retirement and survivor's 
 33.4   annuity provisions of sections 490.121 to 490.132. 
 33.5      Sec. 75.  [490A.01] [BOARD OF JUDICIAL STANDARDS; 
 33.6   ESTABLISHMENT.] 
 33.7      Subdivision 1.  [ESTABLISHMENT; COMPOSITION.] The Board on 
 33.8   Judicial Standards is established.  The board is a continuation 
 33.9   of the board established by Laws 1971, chapter 909, sections 1 
 33.10  and 2, as amended. 
 33.11     Subd. 2.  [COMPOSITION; APPOINTMENT.] (a) The board 
 33.12  consists of one judge of the Court of Appeals, three trial court 
 33.13  judges, two lawyers who have practiced law in the state for at 
 33.14  least ten years, and four citizens who are not judges, retired 
 33.15  judges, or lawyers. 
 33.16     (b) All members must be appointed by the governor with the 
 33.17  advice and consent of the senate.  Senate confirmation is not 
 33.18  required for judicial members. 
 33.19     Subd. 3.  [TERM MAXIMUM; MEMBERSHIP TERMINATION.] No member 
 33.20  may serve more than two full four-year terms or their equivalent.
 33.21  Membership terminates if a member ceases to hold the position 
 33.22  that qualified the member for appointment. 
 33.23     Subd. 4.  [MEMBER TERMS; COMPENSATION; REMOVAL.] The 
 33.24  membership terms, compensation, removal of members, and filling 
 33.25  of vacancies on the board are as provided in section 15.0575. 
 33.26     Subd. 5.  [EXECUTIVE SECRETARY APPOINTMENT; SALARY.] (a) 
 33.27  The board shall appoint the executive secretary. 
 33.28     (b) The salary of the executive secretary of the board is 
 33.29  85 percent of the maximum salary provided for an administrative 
 33.30  law judge under section 15A.083, subdivision 6a. 
 33.31     Sec. 76.  [490A.02] [JUDICIAL STANDARDS BOARD; POWERS.] 
 33.32     Subdivision 1.  [JUDICIAL DISQUALIFICATION.] A judge is 
 33.33  disqualified from acting as a judge, without a loss of salary, 
 33.34  while there is pending an indictment or any information charging 
 33.35  the judge with a crime that is punishable as a felony under 
 33.36  either Minnesota law or federal law, or while there is pending a 
 34.1   recommendation to the Supreme Court by the Board on Judicial 
 34.2   Standards for the judge's removal or retirement. 
 34.3      Subd. 2.  [JUDICIAL SUSPENSION.] On receipt of a 
 34.4   recommendation of the Board on Judicial Standards or on its own 
 34.5   motion, the Supreme Court may suspend a judge from office 
 34.6   without salary when the judge pleads guilty to or no contest to 
 34.7   or is found guilty of a crime that is punishable as a felony 
 34.8   under either Minnesota law or federal law or any other crime 
 34.9   that involves moral turpitude.  If the conviction is reversed, 
 34.10  the suspension terminates and the judge must be paid a salary 
 34.11  for the period of suspension.  If the judge is suspended and the 
 34.12  conviction becomes final, the Supreme Court shall remove the 
 34.13  judge from office. 
 34.14     Subd. 3.  [JUDICIAL DISABILITY.] On receipt of a 
 34.15  recommendation of the Board on Judicial Standards, the Supreme 
 34.16  Court may retire a judge for a disability that the court 
 34.17  determines seriously interferes with the performance of the 
 34.18  judge's duties and is or is likely to become permanent, and 
 34.19  censure or remove a judge for an action or inaction that may 
 34.20  constitute persistent failure to perform the judge's duties, 
 34.21  incompetence in performing the judge's duties, habitual 
 34.22  intemperance, or conduct prejudicial to the administration of 
 34.23  justice that brings the judicial office into disrepute. 
 34.24     Subd. 4.  [AUTHORITY TO REOPEN MATTERS.] The board is 
 34.25  specifically empowered to reopen any matter wherein any 
 34.26  information or evidence was previously precluded by a statute of 
 34.27  limitations or by a previously existing provision of time 
 34.28  limitation. 
 34.29     Subd. 5.  [RETIREMENT STATUS.] (a) A judge who is retired 
 34.30  by the Supreme Court must be considered to have retired 
 34.31  voluntarily. 
 34.32     (b) This section and section 490A.01 must not affect the 
 34.33  right of a judge who is suspended, retired, or removed hereunder 
 34.34  from qualifying for any pension or other retirement benefits to 
 34.35  which the judge would otherwise be entitled by law to receive. 
 34.36     Subd. 6.  [ELIGIBILITY FOR JUDICIAL OFFICE; PRACTICE 
 35.1   LAW.] A judge removed by the Supreme Court is ineligible for any 
 35.2   future service in a judicial office.  The question of the right 
 35.3   of a removed judge to practice law in this state must be 
 35.4   referred to the proper authority for review. 
 35.5      Subd. 7.  [SUPREME COURT RULES.] The Supreme Court shall 
 35.6   make rules to implement this section. 
 35.7      Sec. 77.  [REPEALER; EFFECT ON BENEFIT COVERAGE.] 
 35.8      Subdivision 1.  [LEGISLATORS RETIREMENT PLAN; REPEALED AS 
 35.9   OBSOLETE.] Minnesota Statutes 2004, sections 3A.01, subdivisions 
 35.10  3, 4, 6a, and 7; 3A.02, subdivision 2; 3A.04, subdivision 1; and 
 35.11  3A.09, are repealed. 
 35.12     Subd. 2.  [ELECTIVE STATE OFFICERS RETIREMENT PLAN; 
 35.13  REPEALED AS OBSOLETE.] Minnesota Statutes 2004, sections 
 35.14  352C.01; 352C.011; 352C.021; 352C.031; 352C.033; 352C.04; 
 35.15  352C.051; 352C.09; and 352C.091, subdivisions 2 and 3, are 
 35.16  repealed. 
 35.17     Subd. 3.  [JUDICIAL RETIREMENT PLANS; REPEALED AS 
 35.18  OBSOLETE.] Minnesota Statutes 2004, sections 490.021; 490.025, 
 35.19  subdivisions 1, 2, 3, 4, and 6; 490.101; 490.102; 490.103; 
 35.20  490.105; 490.106; 490.107; 490.108; 490.109; 490.1091; 490.12; 
 35.21  and 490.121, subdivisions 2, 3, 5, 8, 9, 10, 11, 12, 16, 17, 18, 
 35.22  19, and 20, are repealed. 
 35.23     Subd. 4.  [JUDICIAL STANDARDS BOARD; REPEALED FOR 
 35.24  RELOCATION AS MINNESOTA STATUTES, CHAPTER 490A.] Minnesota 
 35.25  Statutes 2004, sections 490.021; 490.025, subdivisions 1, 2, 3, 
 35.26  4, and 6; 490.101; 490.102; 490.103; 490.105; 490.106; 490.107; 
 35.27  490.108; 490.109; 490.1091; 490.12; and 490.121, subdivisions 2, 
 35.28  3, 5, 8, 9, 10, 11, 12, 16, 17, 18, 19, and 20, are repealed. 
 35.29     Subd. 5.  [UNIFORM JUDICIAL RETIREMENT PLAN; NO BENEFIT 
 35.30  DIMINISHMENT INTENDED; PROCEDURE.] Sections 32 to 76 are not 
 35.31  intended to reduce or increase the entitlement of active, 
 35.32  deferred, or retired judges to retirement annuities or benefits 
 35.33  as of July 1, 2005, as reflected in the records of the Minnesota 
 35.34  State Retirement System.  If the executive director of the 
 35.35  Minnesota State Retirement System determines that any provisions 
 35.36  of sections 32 to 76 functions to modify, impair, or diminish 
 36.1   the retirement annuity or benefit entitlement of any judge that 
 36.2   had accrued or earned before July 1, 2005, the executive 
 36.3   director shall certify that determination and a recommendation 
 36.4   as to the required legislative correction to the chair of the 
 36.5   Legislative Commission on Pensions and Retirement, the chair of 
 36.6   the senate State and Local Government Operations Committee, the 
 36.7   chair of the house Governmental Operations and Veterans Affairs 
 36.8   Policy Committee, and the executive director of the Legislative 
 36.9   Commission on Pensions and Retirement on or before the October 1 
 36.10  next following that determination. 
 36.11     Sec. 78.  [EFFECTIVE DATE.] 
 36.12     Sections 1 to 77 are effective on July 1, 2005. 
 36.13                             ARTICLE 2
 36.14                   COVERED SALARY; AVERAGE SALARY
 36.15     Section 1.  Minnesota Statutes 2004, section 352.01, is 
 36.16  amended by adding a subdivision to read: 
 36.17     Subd. 14a.  [AVERAGE SALARY.] (a) "Average salary" means 
 36.18  the average of the highest five successive years of salary upon 
 36.19  which the employee has made contributions to the retirement fund 
 36.20  by payroll deductions.  Average salary must be based upon all 
 36.21  allowable service if this service is less than five years. 
 36.22     (b) "Average salary" does not include the payment of 
 36.23  accrued unused annual leave or overtime paid at time of final 
 36.24  separation from state service if paid in a lump sum nor does it 
 36.25  include the reduced salary, if any, paid during the period the 
 36.26  employee is entitled to workers' compensation benefit payments 
 36.27  for temporary disability. 
 36.28     (c) For an employee covered by the correctional state 
 36.29  employees retirement plan, "average salary" means the average of 
 36.30  the monthly salary during the employee's highest five successive 
 36.31  years of salary as an employee covered by the general state 
 36.32  employees retirement plan, or the correctional state employees 
 36.33  retirement plan, or by a combination of the two.  If the total 
 36.34  of the covered service is less than five years, the 
 36.35  determination of average salary must be based on all allowable 
 36.36  service.  
 37.1      Sec. 2.  Minnesota Statutes 2004, section 352.115, 
 37.2   subdivision 2, is amended to read: 
 37.3      Subd. 2.  [AVERAGE SALARY NORMAL RETIREMENT ANNUITY.] The 
 37.4   retirement annuity hereunder payable at normal retirement age or 
 37.5   thereafter must be computed in accordance with the applicable 
 37.6   provisions of the formula stated in subdivision 3, on the basis 
 37.7   of the employee's average salary for the period of allowable 
 37.8   service.  This retirement annuity is known as the "normal" 
 37.9   retirement annuity.  
 37.10     For each year of allowable service, "average salary" of an 
 37.11  employee in determining a retirement annuity means the average 
 37.12  of the highest five successive years of salary upon which the 
 37.13  employee has made contributions to the retirement fund by 
 37.14  payroll deductions.  Average salary must be based upon all 
 37.15  allowable service if this service is less than five years. 
 37.16     "Average salary" does not include the payment of accrued 
 37.17  unused annual leave or overtime paid at time of final separation 
 37.18  from state service if paid in a lump sum nor does it include the 
 37.19  reduced salary, if any, paid during the period the employee is 
 37.20  entitled to workers' compensation benefit payments for temporary 
 37.21  disability. 
 37.22     Sec. 3.  Minnesota Statutes 2004, section 352.115, 
 37.23  subdivision 3, is amended to read: 
 37.24     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 
 37.25  in conjunction with section 352.116, subdivision 1, applies to a 
 37.26  person who became a covered employee or a member of a pension 
 37.27  fund listed in section 356.30, subdivision 3, before July 1, 
 37.28  1989, unless paragraph (b), in conjunction with section 352.116, 
 37.29  subdivision 1a, produces a higher annuity amount, in which case 
 37.30  paragraph (b) will apply.  The employee's average salary, as 
 37.31  defined in section 352.01, subdivision 2 14a, multiplied by the 
 37.32  percent specified in section 356.315, subdivision 1, per year of 
 37.33  allowable service for the first ten years and the percent 
 37.34  specified in section 356.315, subdivision 2, for each later year 
 37.35  of allowable service and pro rata for completed months less than 
 37.36  a full year shall determine the amount of the retirement annuity 
 38.1   to which the employee is entitled. 
 38.2      (b) This paragraph applies to a person who has become at 
 38.3   least 55 years old and first became a covered employee after 
 38.4   June 30, 1989, and to any other covered employee who has become 
 38.5   at least 55 years old and whose annuity amount, when calculated 
 38.6   under this paragraph and in conjunction with section 352.116, 
 38.7   subdivision 1a, is higher than it is when calculated under 
 38.8   paragraph (a), in conjunction with section 352.116, subdivision 
 38.9   1.  The employee's average salary, as defined in section 352.01, 
 38.10  subdivision 2 14a, multiplied by the percent specified in 
 38.11  section 356.315, subdivision 2, for each year of allowable 
 38.12  service and pro rata for months less than a full year shall 
 38.13  determine the amount of the retirement annuity to which the 
 38.14  employee is entitled. 
 38.15     Sec. 4.  Minnesota Statutes 2004, section 352.87, 
 38.16  subdivision 3, is amended to read: 
 38.17     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] A person specified 
 38.18  in subdivision 1 will have is entitled to receive a retirement 
 38.19  annuity applicable for allowable service credit under this 
 38.20  section calculated by multiplying the employee's average salary, 
 38.21  as defined in section 352.115 352.01, subdivision 2 14a, by the 
 38.22  percent specified in section 356.315, subdivision 2a, for each 
 38.23  year or portions of a year of allowable service credit.  No 
 38.24  reduction for retirement prior to before the normal retirement 
 38.25  age, as specified in section 352.01, subdivision 25, applies to 
 38.26  service to which this section applies. 
 38.27     Sec. 5.  Minnesota Statutes 2004, section 352.93, 
 38.28  subdivision 1, is amended to read: 
 38.29     Subdivision 1.  [BASIS OF ANNUITY; WHEN TO APPLY.] After 
 38.30  separation from state service, an employee covered under section 
 38.31  352.91 who has reached age 55 years and has credit for at least 
 38.32  three years of covered correctional service or a combination of 
 38.33  covered correctional service and regular Minnesota general 
 38.34  employees state retirement System plan service is entitled upon 
 38.35  application to a retirement annuity under this section, based 
 38.36  only on covered correctional employees' service.  Application 
 39.1   may be made no earlier than 60 days before the date the employee 
 39.2   is eligible to retire by reason of both age and service 
 39.3   requirements.  
 39.4      In this section, "average salary" means the average of the 
 39.5   monthly salary during the employee's highest five successive 
 39.6   years of salary as an employee covered by the Minnesota State 
 39.7   Retirement System.  Average salary must be based upon all 
 39.8   allowable service if this service is less than five years. 
 39.9      Sec. 6.  Minnesota Statutes 2004, section 352C.021, is 
 39.10  amended by adding a subdivision to read: 
 39.11     Subd. 1a.  [AVERAGE SALARY.] "Average salary," for purposes 
 39.12  of calculating the normal retirement annuity under section 
 39.13  352C.031, subdivision 4, means the average of the highest five 
 39.14  successive years of salary upon which contributions have been 
 39.15  made under section 352C.09.  
 39.16     Sec. 7.  Minnesota Statutes 2004, section 353.01, 
 39.17  subdivision 10, is amended to read: 
 39.18     Subd. 10.  [SALARY.] (a) "Salary" means: 
 39.19     (1) the periodic compensation of a public employee, before 
 39.20  deductions for deferred compensation, supplemental retirement 
 39.21  plans, or other voluntary salary reduction programs, and also 
 39.22  means "wages" and includes net income from fees; 
 39.23     (2) for a public employee who is covered by a supplemental 
 39.24  retirement plan under section 356.24, subdivision 1, clause (8), 
 39.25  (9), or (10), which require all plan contributions be made by 
 39.26  the employer, the contribution to the applicable supplemental 
 39.27  retirement plan when the contribution is from mandatory 
 39.28  withholdings from employees' wages; and 
 39.29     (2) (3) for a public employee who has prior service covered 
 39.30  by a local police or firefighters relief association that has 
 39.31  consolidated with the Public Employees Retirement Association or 
 39.32  to which section 353.665 applies and who has elected coverage 
 39.33  either under the public employees police and fire fund benefit 
 39.34  plan under section 353A.08 following the consolidation or under 
 39.35  section 353.665, subdivision 4, the rate of salary upon which 
 39.36  member contributions to the special fund of the relief 
 40.1   association were made prior to the effective date of the 
 40.2   consolidation as specified by law and by bylaw provisions 
 40.3   governing the relief association on the date of the initiation 
 40.4   of the consolidation procedure and the actual periodic 
 40.5   compensation of the public employee after the effective date of 
 40.6   consolidation. 
 40.7      (b) Salary does not mean: 
 40.8      (1) the fees paid to district court reporters, unused 
 40.9   annual vacation or sick leave payments, in lump-sum or periodic 
 40.10  payments, severance payments, reimbursement of expenses, 
 40.11  lump-sum settlements not attached to a specific earnings period, 
 40.12  or workers' compensation payments; 
 40.13     (2) employer-paid amounts used by an employee toward the 
 40.14  cost of insurance coverage, employer-paid fringe benefits, 
 40.15  flexible spending accounts, cafeteria plans, health care expense 
 40.16  accounts, day care expenses, or any payments in lieu of any 
 40.17  employer-paid group insurance coverage, including the difference 
 40.18  between single and family rates that may be paid to a member 
 40.19  with single coverage and certain amounts determined by the 
 40.20  executive director to be ineligible; 
 40.21     (3) the amount equal to that which the employing 
 40.22  governmental subdivision would otherwise pay toward single or 
 40.23  family insurance coverage for a covered employee when, through a 
 40.24  contract or agreement with some but not all employees, the 
 40.25  employer: 
 40.26     (i) discontinues, or for new hires does not provide, 
 40.27  payment toward the cost of the employee's selected insurance 
 40.28  coverages under a group plan offered by the employer; 
 40.29     (ii) makes the employee solely responsible for all 
 40.30  contributions toward the cost of the employee's selected 
 40.31  insurance coverages under a group plan offered by the employer, 
 40.32  including any amount the employer makes toward other employees' 
 40.33  selected insurance coverages under a group plan offered by the 
 40.34  employer; and 
 40.35     (iii) provides increased salary rates for employees who do 
 40.36  not have any employer-paid group insurance coverages; 
 41.1      (4) except as provided in section 353.86 or 353.87, 
 41.2   compensation of any kind paid to volunteer ambulance service 
 41.3   personnel or volunteer firefighters, as defined in subdivision 
 41.4   35 or 36; and 
 41.5      (5) the amount of compensation that exceeds the limitation 
 41.6   provided in section 356.611.  
 41.7      (c) Amounts provided to an employee by the employer through 
 41.8   a grievance proceeding or a legal settlement are salary only if 
 41.9   the settlement is reviewed by the executive director and the 
 41.10  amounts are determined by the executive director to be 
 41.11  consistent with paragraph (a) and prior determinations. 
 41.12     Sec. 8.  Minnesota Statutes 2004, section 353.01, is 
 41.13  amended by adding a subdivision to read: 
 41.14     Subd. 17a.  [AVERAGE SALARY.] (a) "Average salary," for 
 41.15  purposes of calculating a retirement annuity under section 
 41.16  353.29, subdivision 3, means an amount equivalent to the average 
 41.17  of the highest salary of the member, police officer, or 
 41.18  firefighter, whichever applies, upon which employee 
 41.19  contributions were paid for any five successive years of 
 41.20  allowable service, based on dates of salary periods as listed on 
 41.21  salary deduction reports.  Average salary must be based upon all 
 41.22  allowable service if this service is less than five years.  
 41.23     (b) "Average salary" may not include any reduced salary 
 41.24  paid during a period in which the employee is entitled to 
 41.25  benefit payments from workers' compensation for temporary 
 41.26  disability, unless the average salary is higher, including this 
 41.27  period. 
 41.28     Sec. 9.  Minnesota Statutes 2004, section 353.29, 
 41.29  subdivision 3, is amended to read: 
 41.30     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 
 41.31  in conjunction with section 353.30, subdivisions 1, 1a, 1b, and 
 41.32  1c, applies to any member who first became a public employee or 
 41.33  a member of a pension fund listed in section 356.30, subdivision 
 41.34  3, before July 1, 1989, unless paragraph (b), in conjunction 
 41.35  with section 353.30, subdivision 5, produces a higher annuity 
 41.36  amount, in which case paragraph (b) will apply.  The average 
 42.1   salary as defined in section 353.01, subdivision 2 17a, 
 42.2   multiplied by the percent specified in section 356.315, 
 42.3   subdivision 3, for each year of allowable service for the first 
 42.4   ten years and thereafter by the percent specified in section 
 42.5   356.315, subdivision 4, per year of allowable service and 
 42.6   completed months less than a full year for the "basic member," 
 42.7   and the percent specified in section 356.315, subdivision 1, for 
 42.8   each year of allowable service for the first ten years and 
 42.9   thereafter by the percent specified in section 356.315, 
 42.10  subdivision 2, per year of allowable service and completed 
 42.11  months less than a full year for the "coordinated member," shall 
 42.12  determine the amount of the "normal" retirement annuity. 
 42.13     (b) This paragraph applies to a member who has become at 
 42.14  least 55 years old and first became a public employee after June 
 42.15  30, 1989, and to any other member whose annuity amount, when 
 42.16  calculated under this paragraph and in conjunction with section 
 42.17  353.30, subdivision 5, is higher than it is when calculated 
 42.18  under paragraph (a), in conjunction with section 353.30, 
 42.19  subdivisions 1, 1a, 1b, and 1c.  The average salary, as defined 
 42.20  in section 353.01, subdivision 2 17a, multiplied by the percent 
 42.21  specified in section 356.315, subdivision 4, for each year of 
 42.22  allowable service and completed months less than a full year for 
 42.23  a basic member and the percent specified in section 356.315, 
 42.24  subdivision 2, per year of allowable service and completed 
 42.25  months less than a full year for a coordinated member, shall 
 42.26  determine the amount of the normal retirement annuity. 
 42.27     Sec. 10.  Minnesota Statutes 2004, section 353.33, 
 42.28  subdivision 3, is amended to read: 
 42.29     Subd. 3.  [COMPUTATION OF BENEFITS.] This disability 
 42.30  benefit is an amount equal to the normal annuity payable to a 
 42.31  member who has reached normal retirement age with the same 
 42.32  number of years of allowable service and the same average 
 42.33  salary, as provided in section 353.01, subdivision 17a, and 
 42.34  section 353.29, subdivisions 2 and subdivision 3. 
 42.35     A basic member shall receive a supplementary monthly 
 42.36  benefit of $25 to age 65 or the five-year anniversary of the 
 43.1   effective date of the disability benefit, whichever is later. 
 43.2      If the disability benefits under this subdivision exceed 
 43.3   the average salary as defined in section 353.29 353.01, 
 43.4   subdivision 2 17a, the disability benefits must be reduced to an 
 43.5   amount equal to said the average salary. 
 43.6      Sec. 11.  Minnesota Statutes 2004, section 353.651, 
 43.7   subdivision 3, is amended to read: 
 43.8      Subd. 3.  [RETIREMENT ANNUITY FORMULA.] The average salary 
 43.9   as defined in section 353.01, subdivision 2 17a, multiplied by 
 43.10  the percent specified in section 356.315, subdivision 6, per 
 43.11  year of allowable service determines the amount of the normal 
 43.12  retirement annuity.  If the member has earned allowable service 
 43.13  for performing services other than those of a police officer or 
 43.14  firefighter, the annuity representing such that service is must 
 43.15  be computed under sections 353.29 and 353.30. 
 43.16     Sec. 12.  Minnesota Statutes 2004, section 353.656, 
 43.17  subdivision 1, is amended to read: 
 43.18     Subdivision 1.  [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 
 43.19  A member of the police and fire plan who becomes disabled and 
 43.20  physically unfit to perform duties as a police officer, 
 43.21  firefighter, or paramedic as defined under section 353.64, 
 43.22  subdivision 10, as a direct result of an injury, sickness, or 
 43.23  other disability incurred in or arising out of any act of duty, 
 43.24  which has or is expected to render the member physically or 
 43.25  mentally unable to perform the duties as a police officer, 
 43.26  firefighter, or paramedic as defined under section 353.64, 
 43.27  subdivision 10, for a period of at least one year, shall receive 
 43.28  disability benefits during the period of such disability.  The 
 43.29  benefits must be in an amount equal to 60 percent of the 
 43.30  "average salary" as defined in section 353.651 353.01, 
 43.31  subdivision 2 17a, plus an additional percent specified in 
 43.32  section 356.315, subdivision 6, of that average salary for each 
 43.33  year of service in excess of 20 years.  If the disability under 
 43.34  this subdivision occurs before the member has at least five 
 43.35  years of allowable service credit in the police and fire plan, 
 43.36  the disability benefit must be computed on the "average salary" 
 44.1   from which deductions were made for contribution to the police 
 44.2   and fire fund. 
 44.3      Sec. 13.  Minnesota Statutes 2004, section 354.05, is 
 44.4   amended by adding a subdivision to read: 
 44.5      Subd. 13a.  [AVERAGE SALARY.] (a) "Average salary," for the 
 44.6   purpose of determining the member's retirement annuity, means 
 44.7   the average salary upon which contributions were made for the 
 44.8   highest five successive years of formula service credit.  
 44.9      (b) "Average salary" may not include any more than the 
 44.10  equivalent of 60 monthly salary payments.  
 44.11     (c) "Average salary" must be based upon all years of 
 44.12  formula service credit if this service credit is less than five 
 44.13  years.  
 44.14     Sec. 14.  Minnesota Statutes 2004, section 354.44, 
 44.15  subdivision 6, is amended to read: 
 44.16     Subd. 6.  [COMPUTATION OF FORMULA PROGRAM RETIREMENT 
 44.17  ANNUITY.] (a) The formula retirement annuity must be computed in 
 44.18  accordance with the applicable provisions of the formulas stated 
 44.19  in paragraph (b) or (d) on the basis of each member's average 
 44.20  salary under section 354.05, subdivision 13a, for the period of 
 44.21  the member's formula service credit.  
 44.22     For all years of formula service credit, "average salary," 
 44.23  for the purpose of determining the member's retirement annuity, 
 44.24  means the average salary upon which contributions were made and 
 44.25  upon which payments were made to increase the salary limitation 
 44.26  provided in Minnesota Statutes 1971, section 354.511, for the 
 44.27  highest five successive years of formula service credit 
 44.28  provided, however, that such "average salary" shall not include 
 44.29  any more than the equivalent of 60 monthly salary payments.  
 44.30  Average salary must be based upon all years of formula service 
 44.31  credit if this service credit is less than five years. 
 44.32     (b) This paragraph, in conjunction with paragraph (c), 
 44.33  applies to a person who first became a member of the association 
 44.34  or a member of a pension fund listed in section 356.30, 
 44.35  subdivision 3, before July 1, 1989, unless paragraph (d), in 
 44.36  conjunction with paragraph (e), produces a higher annuity 
 45.1   amount, in which case paragraph (d) applies.  The average salary 
 45.2   as defined in paragraph (a) section 354.05, subdivision 13a, 
 45.3   multiplied by the following percentages per year of formula 
 45.4   service credit shall determine the amount of the annuity to 
 45.5   which the member qualifying therefor is entitled: 
 45.6                          Coordinated Member   Basic Member
 45.7   Each year of service     the percent        the percent
 45.8   during first ten         specified in       specified in
 45.9                            section 356.315,   section 356.315,
 45.10                           subdivision 1,     subdivision 3,
 45.11                           per year           per year
 45.12  Each year of service     the percent        the percent
 45.13  thereafter               specified in       specified in
 45.14                           section 356.315,   section 356.315,
 45.15                           subdivision 2,     subdivision 4,
 45.16                           per year           per year
 45.17     (c)(i) This paragraph applies only to a person who first 
 45.18  became a member of the association or a member of a pension fund 
 45.19  listed in section 356.30, subdivision 3, before July 1, 1989, 
 45.20  and whose annuity is higher when calculated under paragraph (b), 
 45.21  in conjunction with this paragraph than when calculated under 
 45.22  paragraph (d), in conjunction with paragraph (e). 
 45.23     (ii) Where any member retires prior to normal retirement 
 45.24  age under a formula annuity, the member shall be paid a 
 45.25  retirement annuity in an amount equal to the normal annuity 
 45.26  provided in paragraph (b) reduced by one-quarter of one percent 
 45.27  for each month that the member is under normal retirement age at 
 45.28  the time of retirement except that for any member who has 30 or 
 45.29  more years of allowable service credit, the reduction shall be 
 45.30  applied only for each month that the member is under age 62. 
 45.31     (iii) Any member whose attained age plus credited allowable 
 45.32  service totals 90 years is entitled, upon application, to a 
 45.33  retirement annuity in an amount equal to the normal annuity 
 45.34  provided in paragraph (b), without any reduction by reason of 
 45.35  early retirement. 
 45.36     (d) This paragraph applies to a member who has become at 
 46.1   least 55 years old and first became a member of the association 
 46.2   after June 30, 1989, and to any other member who has become at 
 46.3   least 55 years old and whose annuity amount when calculated 
 46.4   under this paragraph and in conjunction with paragraph (e), is 
 46.5   higher than it is when calculated under paragraph (b), in 
 46.6   conjunction with paragraph (c).  The average salary, as defined 
 46.7   in paragraph (a) section 354.05, subdivision 13a, multiplied by 
 46.8   the percent specified by section 356.315, subdivision 4, for 
 46.9   each year of service for a basic member and by the percent 
 46.10  specified in section 356.315, subdivision 2, for each year of 
 46.11  service for a coordinated member shall determine the amount of 
 46.12  the retirement annuity to which the member is entitled. 
 46.13     (e) This paragraph applies to a person who has become at 
 46.14  least 55 years old and first becomes a member of the association 
 46.15  after June 30, 1989, and to any other member who has become at 
 46.16  least 55 years old and whose annuity is higher when calculated 
 46.17  under paragraph (d) in conjunction with this paragraph than when 
 46.18  calculated under paragraph (b), in conjunction with paragraph 
 46.19  (c).  An employee who retires under the formula annuity before 
 46.20  the normal retirement age shall be paid the normal annuity 
 46.21  provided in paragraph (d) reduced so that the reduced annuity is 
 46.22  the actuarial equivalent of the annuity that would be payable to 
 46.23  the employee if the employee deferred receipt of the annuity and 
 46.24  the annuity amount were augmented at an annual rate of three 
 46.25  percent compounded annually from the day the annuity begins to 
 46.26  accrue until the normal retirement age. 
 46.27     (f) No retirement annuity is payable to a former employee 
 46.28  with a salary that exceeds 95 percent of the governor's salary 
 46.29  unless and until the salary figures used in computing the 
 46.30  highest five successive years average salary under paragraph (a) 
 46.31  have been audited by the Teachers Retirement Association and 
 46.32  determined by the executive director to comply with the 
 46.33  requirements and limitations of section 354.05, subdivisions 35 
 46.34  and 35a. 
 46.35     Sec. 15.  Minnesota Statutes 2004, section 354A.011, is 
 46.36  amended by adding a subdivision to read: 
 47.1      Subd. 7a.  [AVERAGE SALARY.] "Average salary," for purposes 
 47.2   of computing a normal coordinated program retirement annuity 
 47.3   under section 354A.31, subdivision 4 or 4a, means an amount 
 47.4   equal to the average salary upon which contributions were made 
 47.5   for the highest five successive years of service credit but may 
 47.6   not in any event include any more than the equivalent of 60 
 47.7   monthly salary payments.  Average salary must be based upon all 
 47.8   years of service credit if this service credit is less than five 
 47.9   years.  
 47.10     Sec. 16.  Minnesota Statutes 2004, section 354A.31, 
 47.11  subdivision 4, is amended to read: 
 47.12     Subd. 4.  [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 
 47.13  ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 
 47.14  applies to the coordinated programs of the Minneapolis Teachers 
 47.15  Retirement Fund Association and the St. Paul Teachers Retirement 
 47.16  Fund Association.  
 47.17     (b) The normal coordinated retirement annuity shall be is 
 47.18  an amount equal to a retiring coordinated member's average 
 47.19  salary under section 354A.011, subdivision 7a, multiplied by the 
 47.20  retirement annuity formula percentage.  Average salary for 
 47.21  purposes of this section shall mean an amount equal to the 
 47.22  average salary upon which contributions were made for the 
 47.23  highest five successive years of service credit, but which shall 
 47.24  not in any event include any more than the equivalent of 60 
 47.25  monthly salary payments.  Average salary must be based upon all 
 47.26  years of service credit if this service credit is less than five 
 47.27  years. 
 47.28     (c) This paragraph, in conjunction with subdivision 6, 
 47.29  applies to a person who first became a member or a member in a 
 47.30  pension fund listed in section 356.30, subdivision 3, before 
 47.31  July 1, 1989, unless paragraph (d), in conjunction with 
 47.32  subdivision 7, produces a higher annuity amount, in which case 
 47.33  paragraph (d) will apply.  The retirement annuity formula 
 47.34  percentage for purposes of this paragraph is the percent 
 47.35  specified in section 356.315, subdivision 1, per year for each 
 47.36  year of coordinated service for the first ten years and the 
 48.1   percent specified in section 356.315, subdivision 2, for each 
 48.2   year of coordinated service thereafter.  
 48.3      (d) This paragraph applies to a person who has become at 
 48.4   least 55 years old and who first becomes a member after June 30, 
 48.5   1989, and to any other member who has become at least 55 years 
 48.6   old and whose annuity amount, when calculated under this 
 48.7   paragraph and in conjunction with subdivision 7 is higher than 
 48.8   it is when calculated under paragraph (c), in conjunction with 
 48.9   the provisions of subdivision 6.  The retirement annuity formula 
 48.10  percentage for purposes of this paragraph is the percent 
 48.11  specified in section 356.315, subdivision 2, for each year of 
 48.12  coordinated service.  
 48.13     Sec. 17.  Minnesota Statutes 2004, section 354A.31, 
 48.14  subdivision 4a, is amended to read: 
 48.15     Subd. 4a.  [COMPUTATION OF THE NORMAL COORDINATED 
 48.16  RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 
 48.17  to the new law coordinated program of the Duluth Teachers 
 48.18  Retirement Fund Association. 
 48.19     (b) The normal coordinated retirement annuity is an amount 
 48.20  equal to a retiring coordinated member's average salary under 
 48.21  section 354A.011, subdivision 7a, multiplied by the retirement 
 48.22  annuity formula percentage.  Average salary for purposes of this 
 48.23  section means an amount equal to the average salary upon which 
 48.24  contributions were made for the highest five successive years of 
 48.25  service credit, but may not in any event include any more than 
 48.26  the equivalent of 60 monthly salary payments.  Average salary 
 48.27  must be based upon all years of service credit if this service 
 48.28  credit is less than five years. 
 48.29     (c) This paragraph, in conjunction with subdivision 6, 
 48.30  applies to a person who first became a member or a member in a 
 48.31  pension fund listed in section 356.30, subdivision 3, before 
 48.32  July 1, 1989, unless paragraph (d), in conjunction with 
 48.33  subdivision 7, produces a higher annuity amount, in which case 
 48.34  paragraph (d) applies.  The retirement annuity formula 
 48.35  percentage for purposes of this paragraph is the percent 
 48.36  specified in section 356.315, subdivision 1, per year for each 
 49.1   year of coordinated service for the first ten years and the 
 49.2   percent specified in section 356.315, subdivision 2, for each 
 49.3   subsequent year of coordinated service. 
 49.4      (d) This paragraph applies to a person who is at least 55 
 49.5   years old and who first becomes a member after June 30, 1989, 
 49.6   and to any other member who is at least 55 years old and whose 
 49.7   annuity amount, when calculated under this paragraph and in 
 49.8   conjunction with subdivision 7, is higher than it is when 
 49.9   calculated under paragraph (c) in conjunction with subdivision 
 49.10  6.  The retirement annuity formula percentage for purposes of 
 49.11  this paragraph is the percent specified in section 356.315, 
 49.12  subdivision 2, for each year of coordinated service. 
 49.13     Sec. 18.  Minnesota Statutes 2004, section 422A.01, is 
 49.14  amended by adding a subdivision to read: 
 49.15     Subd. 4a.  [AVERAGE SALARY.] (a) "Average salary" means the 
 49.16  arithmetic average annual salary, wages, or compensation of the 
 49.17  member from the city for any five calendar years out of the last 
 49.18  ten calendar years of service, except as provided for in section 
 49.19  422A.16, which may include the year in which the employee 
 49.20  retires, as selected by the employee.  
 49.21     (b) A member with more than five calendar years of service 
 49.22  but less than ten calendar years may select any five calendar 
 49.23  years of service to determine the average salary.  A member with 
 49.24  less than five years of service with the city shall use all 
 49.25  earnings to determine the average salary.  
 49.26     Sec. 19.  Minnesota Statutes 2004, section 422A.15, 
 49.27  subdivision 1, is amended to read: 
 49.28     Subdivision 1.  [FORMULA PENSION AND ANNUITY.] Except as 
 49.29  otherwise provided in subdivision 3, each contributing member 
 49.30  who, at the time of retirement, fulfills the conditions 
 49.31  necessary to enable the member to retire, shall is entitled to 
 49.32  receive what shall be known as a "formula pension and annuity" 
 49.33  equal to two percent for each year of allowable service for the 
 49.34  first ten years and thereafter 2.5 percent per year of allowable 
 49.35  service of the arithmetic average annual salary, wages or 
 49.36  compensation of the member from the city for any five calendar 
 50.1   years out of the last ten calendar years of service except as 
 50.2   provided for in section 422A.16, which may include the year in 
 50.3   which the employee retires, as selected by the employee, 
 50.4   multiplied by the years of service credited by the retirement 
 50.5   fund.  The formula pension and annuity shall must be computed on 
 50.6   the single life plan but subject to the option selections 
 50.7   provided for in section 422A.17. 
 50.8      In order to be entitled to the formula pension and annuity 
 50.9   herein provided for, the retiring employee at the time of 
 50.10  cessation of employment and of actual retirement shall must have 
 50.11  attained the age of 60 years or have been employed by the city 
 50.12  not less than 30 years, or meet the qualifications provided for 
 50.13  in section 422A.16, and in addition thereto have contributed to 
 50.14  the retirement fund at the percentage rate prescribed by the 
 50.15  retirement law applicable when the salary, wages or compensation 
 50.16  was paid on all salaries, wages, or compensation received from 
 50.17  the city or from an applicable employing unit.  The years of 
 50.18  service to be applied in the formula pension and annuity shall 
 50.19  must be found and determined by the retirement board, except 
 50.20  that no credit shall may be allowed for any year in which a back 
 50.21  charge is owing at time of retirement and the earnings from any 
 50.22  year in which a back charge is owing shall may not be used in 
 50.23  determining the average annual salary. 
 50.24     Sec. 20.  Minnesota Statutes 2004, section 422A.16, 
 50.25  subdivision 9, is amended to read: 
 50.26     Subd. 9.  [INCOMPETENCY OR DEATH OF MEMBER.] Any member of 
 50.27  the contributing class who becomes permanently separated from 
 50.28  the service of the city under subdivision 8, may, by an 
 50.29  instrument in writing, filed with the municipal employees 
 50.30  retirement board within 30 days after such the separation 
 50.31  becomes permanent, elect to allow the member contributions 
 50.32  to such the fund to the date of separation to remain on deposit 
 50.33  in such the fund, and in such the event the member shall be 
 50.34  is entitled to receive a retirement allowance at age 65, 
 50.35  provided the member, or someone acting in the member's behalf if 
 50.36  the member be incompetent, shall must make a written application 
 51.1   for such the retirement allowance in the same manner provided 
 51.2   for in section 422A.17 and in accordance with the provisions of 
 51.3   section 422A.15, subdivision 1, except for determining 
 51.4   average annual salary.  A member with more than five calendar 
 51.5   years of service but less than ten calendar years may select any 
 51.6   five calendar years of service to determine the average annual 
 51.7   salary.  A member with less than five years of service with the 
 51.8   city shall use all earnings to determine the average annual 
 51.9   salary. 
 51.10     If the contributing member dies before reaching the age of 
 51.11  65 years, or having attained the age of 65 years without having 
 51.12  made the election provided for herein, the net accumulated 
 51.13  amount of deductions from the member's salary, pay or 
 51.14  compensation, plus interest, to the member's credit on date of 
 51.15  death shall be paid is payable to such the person or persons as 
 51.16  have been nominated by written designation filed with the 
 51.17  retirement board, in such the form as that the retirement board 
 51.18  shall require requires. 
 51.19     If the employee fails to make a designation, or if the 
 51.20  person or persons designated by such the employee predeceases 
 51.21  such the employee, the net accumulated credit to such the 
 51.22  employee's account on date of death shall be paid is payable to 
 51.23  such the employee's estate. 
 51.24     The provisions of subdivisions 4, 5, and 6 shall also apply 
 51.25  to any member qualifying for benefits under this subdivision, 
 51.26  except for purposes of this subdivision the age referred to in 
 51.27  subdivision 4 shall be is 65 years. 
 51.28     Sec. 21.  Minnesota Statutes 2004, section 490.121, 
 51.29  subdivision 21, is amended to read: 
 51.30     Subd. 21.  [FINAL AVERAGE COMPENSATION.] "Final average 
 51.31  compensation" means the total amount of salary payable paid to a 
 51.32  judge in the highest five years out of the last ten years prior 
 51.33  to before the event of maturity of benefits termination of 
 51.34  judicial service, divided by five; provided, however, that if 
 51.35  the number of years of service by the judge equals or exceeds 
 51.36  ten.  If the number of years of service by the judge is less 
 52.1   than ten, but more than five, the highest five shall years of 
 52.2   salary must be counted, and.  If the number of years of service 
 52.3   by the judge is less than five, the aggregate salary in such for 
 52.4   the period shall of service must be divided by the number of 
 52.5   months in such the period and multiplied by 12. 
 52.6      Sec. 22.  [REPEALER.] 
 52.7      Minnesota Statutes 2004, sections 352C.031, subdivision 3; 
 52.8   353.29, subdivision 2; and 353.651, subdivision 2, are repealed. 
 52.9      Sec. 23.  [EFFECTIVE DATE.] 
 52.10     Sections 1 to 22 are effective July 1, 2005. 
 52.11                             ARTICLE 3
 52.12                      ALLOWABLE SERVICE CREDIT
 52.13     Section 1.  [356.195] [SERVICE CREDIT PURCHASE PROCEDURES 
 52.14  FOR STRIKE PERIODS.] 
 52.15     Subdivision 1.  [COVERED PLANS.] This section applies to 
 52.16  all defined benefit plans specified in section 356.30, 
 52.17  subdivision 3. 
 52.18     Subd. 2.  [PURCHASE PROCEDURE FOR STRIKE PERIODS.] (a) An 
 52.19  employee covered by a plan specified in subdivision 1 may 
 52.20  purchase allowable service credit in the applicable plan for any 
 52.21  period of time during which the employee was on a public 
 52.22  employee strike without pay, not to exceed a period of one year, 
 52.23  if the employee makes a payment in lieu of salary deductions as 
 52.24  specified in paragraphs (b) and (c), whichever is applicable.  
 52.25  The employing unit, at its option, may pay the employer portion 
 52.26  of the amount specified in paragraph (b) on behalf of its 
 52.27  employees. 
 52.28     (b) If payment is received by the applicable pension plan 
 52.29  executive director within one year from the end of the strike, 
 52.30  the payment amount is equal to the applicable employee and 
 52.31  employer contribution rates specified in law for the applicable 
 52.32  plan during the strike period, applied to the employee's rate of 
 52.33  salary in effect at the conclusion of the strike for the period 
 52.34  of the strike without pay, plus compound interest at a monthly 
 52.35  rate of 0.71 percent from the last day of the strike period 
 52.36  until the date payment is received. 
 53.1      (c) If payment is received by the applicable pension fund 
 53.2   director after one year and before five years from the end of 
 53.3   the strike, the payment amount is the amount determined under 
 53.4   section 356.551. 
 53.5      (d) Payments may not be made more than five years after the 
 53.6   end of the strike. 
 53.7      Sec. 2.  Minnesota Statutes 2004, section 490.121, 
 53.8   subdivision 4, is amended to read: 
 53.9      Subd. 4.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
 53.10  means any calendar month, subject to the service credit limit in 
 53.11  subdivision 22, served as a judge at any time, or served as a 
 53.12  referee in probate for all referees in probate who were in 
 53.13  office prior to January 1, 1974. 
 53.14     (b) "Allowable service" also means a period of authorized 
 53.15  leave of absence for which the judge has made a payment in lieu 
 53.16  of contributions, not in an amount in excess of the service 
 53.17  credit limit under subdivision 22.  To obtain the service 
 53.18  credit, the judge shall pay an amount equal to the member and 
 53.19  employer contribution rates under section 490.123, subdivisions 
 53.20  1a and 1b, applied to the judge's average monthly salary rate 
 53.21  during the authorized leave of absence and multiplied by the 
 53.22  number of months of the authorized leave of absence, plus annual 
 53.23  compound interest at the rate of 8.5 percent from the date of 
 53.24  the termination of the leave to the date on which payment is 
 53.25  made.  The payment must be made within one year of the date on 
 53.26  which the authorized leave of absence terminated.  Service 
 53.27  credit for an authorized leave of absence is in addition to a 
 53.28  uniformed service leave under section 490.1211. 
 53.29     Sec. 3.  Laws 1999, chapter 222, article 16, section 16, as 
 53.30  amended by Laws 2002, chapter 392, article 7, section 1, and 
 53.31  Laws 2003, First Special Session chapter 12, article 6, section 
 53.32  2, and Laws 2004, chapter 267, article 17, section 6, is amended 
 53.33  to read:  
 53.34     Sec. 16.  [REPEALER.] 
 53.35     (a) Sections 2 to 6 and 8 to 13 are repealed on May 16, 
 53.36  2004.  
 54.1      (b) Sections 1 and 7 are repealed on May 16, 2006 2007.  
 54.2      Sec. 4.  Laws 2000, chapter 461, article 4, section 4, as 
 54.3   amended by Laws 2003, First Special Session chapter 12, article 
 54.4   6, section 3, and Laws 2004, chapter 267, article 17, section 7, 
 54.5   is amended to read:  
 54.6      Sec. 4.  [EFFECTIVE DATE; SUNSET REPEALER.] 
 54.7      (a) Sections 1, 2, and 3 are effective on the day following 
 54.8   final enactment.  
 54.9      (b) Sections 1, 2, and 3, are repealed on May 16, 2006 2007.
 54.10     Sec. 5.  [METRO TRANSIT STRIKE PROVISION.] 
 54.11     Notwithstanding the payment deadline specified in Minnesota 
 54.12  Statutes, section 356.195, subdivision 2, paragraph (b), a Metro 
 54.13  Transit employee covered by the general state employees 
 54.14  retirement plan of the Minnesota State Retirement System who was 
 54.15  on strike on or after January 1, 2004, and before the effective 
 54.16  date of this section, is authorized to make a payment under that 
 54.17  paragraph on or before one year after the effective date of this 
 54.18  section. 
 54.19     Sec. 6.  [CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.] 
 54.20     Notwithstanding the payment deadline specified in Minnesota 
 54.21  Statutes, section 356.195, subdivision 2, paragraph (b), a 
 54.22  Crosby-Ironton public school teacher covered by the Teachers 
 54.23  Retirement Association who was on strike during a period that 
 54.24  included April 1, 2005, and before the effective date of this 
 54.25  section, is authorized to make a payment under that paragraph on 
 54.26  or before one year after the effective date of this section.  
 54.27     Sec. 7.  [EFFECTIVE DATE.] 
 54.28     (a) Sections 1, 3, 4, 5, and 6 are effective the day 
 54.29  following final enactment. 
 54.30     (b) Section 2 is effective retroactively from January 1, 
 54.31  2005, and applies to any person who was in active service as a 
 54.32  judge on or after that date and applies to an authorized leave 
 54.33  of absence that occurred before or after that date.  For a 
 54.34  person for whom section 2 is retroactive, the equivalent 
 54.35  contribution payment must be made on or before July 1, 2006. 
 54.36                             ARTICLE 4
 55.1                       ACTUARIAL AND FINANCIAL
 55.2                          REPORTING CHANGES
 55.3      Section 1.  Minnesota Statutes 2004, section 352.01, 
 55.4   subdivision 12, is amended to read: 
 55.5      Subd. 12.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 55.6   means the condition of one annuity or benefit having an equal 
 55.7   actuarial present value as another annuity or benefit, 
 55.8   determined as of a given date at a specified age with each 
 55.9   actuarial present value based on the appropriate mortality table 
 55.10  adopted by the board of directors based on the experience of the 
 55.11  fund as recommended by the actuary retained by the Legislative 
 55.12  Commission on Pensions and Retirement under section 356.214, and 
 55.13  approved under section 356.215, subdivision 18, and using the 
 55.14  applicable preretirement or postretirement interest rate 
 55.15  assumption specified in section 356.215, subdivision 8. 
 55.16     Sec. 2.  Minnesota Statutes 2004, section 353.01, 
 55.17  subdivision 14, is amended to read: 
 55.18     Subd. 14.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 55.19  means the condition of one annuity or benefit having an equal 
 55.20  actuarial present value as another annuity or benefit, 
 55.21  determined as of a given date with each actuarial present value 
 55.22  based on the appropriate mortality table adopted by the board of 
 55.23  trustees based on the experience of the fund as recommended by 
 55.24  the actuary retained by the Legislative Commission on Pensions 
 55.25  and Retirement under section 356.214, and approved under section 
 55.26  356.215, subdivision 18, and using the applicable preretirement 
 55.27  or postretirement interest rate assumption specified in section 
 55.28  356.215, subdivision 8.  
 55.29     Sec. 3.  Minnesota Statutes 2004, section 354.05, 
 55.30  subdivision 7, is amended to read: 
 55.31     Subd. 7.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 55.32  means the condition of one annuity or benefit having an equal 
 55.33  actuarial present value as another annuity or benefit, 
 55.34  determined as of a given date with each actuarial present value 
 55.35  based on the appropriate mortality table adopted by the board of 
 55.36  trustees based on the experience of the association as 
 56.1   recommended by the actuary retained by the Legislative 
 56.2   Commission on Pensions and Retirement under section 356.214, and 
 56.3   approved under section 356.215, subdivision 18, and using the 
 56.4   applicable preretirement or postretirement interest rate 
 56.5   assumption specified in section 356.215, subdivision 8. 
 56.6      Sec. 4.  Minnesota Statutes 2004, section 354A.011, 
 56.7   subdivision 3a, is amended to read: 
 56.8      Subd. 3a.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 56.9   means the condition of one annuity or benefit having an equal 
 56.10  actuarial present value as another annuity or benefit, 
 56.11  determined as of a given date with each actuarial present value 
 56.12  based on the appropriate mortality table adopted by the 
 56.13  appropriate board of trustees based on the experience of that 
 56.14  retirement fund association as recommended by the actuary 
 56.15  retained by the Legislative Commission on Pensions and 
 56.16  Retirement under section 356.214, and approved under section 
 56.17  356.215, subdivision 18, and using the applicable preretirement 
 56.18  or postretirement interest rate assumption specified in section 
 56.19  356.215, subdivision 8. 
 56.20     Sec. 5.  Minnesota Statutes 2004, section 356.20, 
 56.21  subdivision 4, is amended to read: 
 56.22     Subd. 4.  [CONTENTS OF FINANCIAL REPORT.] (a) The financial 
 56.23  report required by this section must contain financial 
 56.24  statements and disclosures that indicate the financial 
 56.25  operations and position of the retirement plan and fund.  The 
 56.26  report must conform with generally accepted governmental 
 56.27  accounting principles, applied on a consistent basis.  The 
 56.28  report must be audited.  The report must include, as part of its 
 56.29  exhibits or its footnotes, an actuarial disclosure item based on 
 56.30  the actuarial valuation calculations prepared by the 
 56.31  commission-retained actuary retained under section 356.214 or by 
 56.32  the actuary retained by the retirement fund or plan, if 
 56.33  applicable whichever applies, according to applicable actuarial 
 56.34  requirements enumerated in section 356.215, and specified in the 
 56.35  most recent standards for actuarial work adopted by the 
 56.36  Legislative Commission on Pensions and Retirement.  The accrued 
 57.1   assets, the accrued liabilities, including accrued reserves, and 
 57.2   the unfunded actuarial accrued liability of the fund or plan 
 57.3   must be disclosed.  The disclosure item must contain a 
 57.4   declaration by the actuary retained by the Legislative 
 57.5   Commission on Pensions and Retirement under section 356.214 or 
 57.6   the actuary retained by the fund or plan, whichever applies, 
 57.7   specifying that the required reserves for any retirement, 
 57.8   disability, or survivor benefits provided under a benefit 
 57.9   formula are computed in accordance with the entry age actuarial 
 57.10  cost method and in accordance with the most recent applicable 
 57.11  standards for actuarial work adopted by the Legislative 
 57.12  Commission on Pensions and Retirement. 
 57.13     (b) Assets of the fund or plan contained in the disclosure 
 57.14  item must include the following statement of the actuarial value 
 57.15  of current assets as defined in section 356.215, subdivision 1: 
 57.16                                      Value         Value 
 57.17                                     at cost       at market
 57.18   Cash, cash equivalents, and  
 57.19     short-term securities           .........     ......... 
 57.20   Accounts receivable               .........     .........
 57.21   Accrued investment income         .........     .........  
 57.22   Fixed income investments          .........     ......... 
 57.23   Equity investments other 
 57.24     than real estate                .........     ......... 
 57.25   Real estate investments           .........     ......... 
 57.26   Equipment                         .........     ......... 
 57.27   Equity Participation in the Minnesota 
 57.28     postretirement investment
 57.29     fund or the retirement
 57.30     benefit fund                    .........     ......... 
 57.31   Other                             .........     .........  
 57.32    
 57.33   Total assets 
 57.34     Value at cost                                 .........
 57.35     Value at market                               ......... 
 57.36     Actuarial value of current assets             ......... 
 58.1      (c) The unfunded actuarial accrued liability of the fund or 
 58.2   plan contained in the disclosure item must include the following 
 58.3   measures of unfunded actuarial accrued liability, using 
 58.4   the actuarial value of current assets:  
 58.5      (1) the unfunded actuarial accrued liability, determined by 
 58.6   subtracting the current assets and the present value of future 
 58.7   normal costs from the total current and expected future benefit 
 58.8   obligations; and 
 58.9      (2) the unfunded pension benefit obligation, determined by 
 58.10  subtracting the current assets from the actuarial present value 
 58.11  of credited projected benefits. 
 58.12     If the current assets of the fund or plan exceed the 
 58.13  actuarial accrued liabilities, the excess must be disclosed and 
 58.14  indicated as a surplus. 
 58.15     (d) The pension benefit obligations schedule included in 
 58.16  the disclosure must contain the following information on the 
 58.17  benefit obligations: 
 58.18     (1) the pension benefit obligation, determined as the 
 58.19  actuarial present value of credited projected benefits on 
 58.20  account of service rendered to date, separately identified as 
 58.21  follows: 
 58.22           (i) for annuitants;
 58.23                 retirement annuities;
 58.24                 disability benefits;
 58.25                 surviving spouse and child benefits;
 58.26           (ii)  for former members without vested rights;
 58.27           (iii) for deferred annuitants' benefits, including 
 58.28                 any augmentation;
 58.29           (iv)  for active employees;
 58.30                 accumulated employee contributions,
 58.31                 including allocated investment income;
 58.32                 employer-financed benefits vested;
 58.33                 employer-financed benefits nonvested;
 58.34                 total pension benefit obligation; and
 58.35     (2) if there are additional benefits not appropriately 
 58.36  covered by the foregoing items of benefit obligations, a 
 59.1   separate identification of the obligation. 
 59.2      (e) The report must contain an itemized exhibit describing 
 59.3   the administrative expenses of the plan, including, but not 
 59.4   limited to, the following items, classified on a consistent 
 59.5   basis from year to year, and with any further meaningful detail: 
 59.6      (1) personnel expenses; 
 59.7      (2) communication-related expenses; 
 59.8      (3) office building and maintenance expenses; 
 59.9      (4) professional services fees; and 
 59.10     (5) other expenses. 
 59.11     (f) The report must contain an itemized exhibit describing 
 59.12  the investment expenses of the plan, including, but not limited 
 59.13  to, the following items, classified on a consistent basis from 
 59.14  year to year, and with any further meaningful detail: 
 59.15     (1) internal investment-related expenses; and 
 59.16     (2) external investment-related expenses. 
 59.17     (g) Any additional statements or exhibits or more detailed 
 59.18  or subdivided itemization of a disclosure item that will enable 
 59.19  the management of the fund to portray a true interpretation of 
 59.20  the fund's financial condition must be included in the 
 59.21  additional statements or exhibits. 
 59.22     Sec. 6.  Minnesota Statutes 2004, section 422A.01, 
 59.23  subdivision 6, is amended to read: 
 59.24     Subd. 6.  [PRESENT WORTH OR PRESENT VALUE.] "Present worth" 
 59.25  or "present value" means that the present amount of money if 
 59.26  increased at the applicable postretirement or preretirement 
 59.27  interest rate assumption specified in section 356.215, 
 59.28  subdivision 8, and based on the mortality table adopted by the 
 59.29  board of trustees based on the experience of the fund as 
 59.30  recommended by the actuary retained by the Legislative 
 59.31  Commission on Pensions and Retirement under section 356.214, and 
 59.32  approved under section 356.215, subdivision 18, will at 
 59.33  retirement equal the actuarial accrued liability of the annuity 
 59.34  already earned. 
 59.35     Sec. 7.  Minnesota Statutes 2004, section 490.121, 
 59.36  subdivision 20, is amended to read: 
 60.1      Subd. 20.  [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 
 60.2   means the condition of one annuity or benefit having an equal 
 60.3   actuarial present value as another annuity or benefit, 
 60.4   determined as of a given date with each actuarial present value 
 60.5   based on the appropriate mortality table adopted by the board of 
 60.6   trustees directors of the Minnesota State Retirement System 
 60.7   based on the experience of the fund as recommended by 
 60.8   the commission-retained actuary retained under section 356.214, 
 60.9   and approved under section 356.215, subdivision 18, and using 
 60.10  the applicable preretirement or postretirement interest rate 
 60.11  assumption specified in section 356.215, subdivision 8. 
 60.12     Sec. 8.  [EFFECTIVE DATE.] 
 60.13     (a) Sections 1 to 4, 6, and 7 are effective on July 1, 2005.
 60.14     (b) Section 5 is effective the day following final 
 60.15  enactment and applies to annual financial reporting occurring on 
 60.16  or after June 30, 2005. 
 60.17                             ARTICLE 5
 60.18                       MEMBERSHIP INCLUSIONS
 60.19                           AND EXCLUSIONS
 60.20     Section 1.  Minnesota Statutes 2004, section 69.011, is 
 60.21  amended by adding a subdivision to read: 
 60.22     Subd. 2c.  [INELIGIBILITY OF CERTAIN POLICE OFFICERS.] A 
 60.23  police officer employed by the University of Minnesota who is 
 60.24  required by the Board of Regents to be a member of the 
 60.25  University of Minnesota faculty retirement plan is not eligible 
 60.26  to be included in any police state aid certification under this 
 60.27  section. 
 60.28     Sec. 2.  Minnesota Statutes 2004, section 352.01, 
 60.29  subdivision 2a, is amended to read: 
 60.30     Subd. 2a.  [INCLUDED EMPLOYEES.] (a) "State employee" 
 60.31  includes: 
 60.32     (1) employees of the Minnesota Historical Society; 
 60.33     (2) employees of the State Horticultural Society; 
 60.34     (3) employees of the Disabled American Veterans, Department 
 60.35  of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 
 60.36  if employed before July 1, 1963; 
 61.1      (4) employees of the Minnesota Crop Improvement 
 61.2   Association; 
 61.3      (5) employees of the adjutant general who are paid from 
 61.4   federal funds and who are not covered by any federal civilian 
 61.5   employees retirement system; 
 61.6      (6) employees of the Minnesota State Colleges and 
 61.7   Universities employed under the university or college activities 
 61.8   program; 
 61.9      (7) currently contributing employees covered by the system 
 61.10  who are temporarily employed by the legislature during a 
 61.11  legislative session or any currently contributing employee 
 61.12  employed for any special service as defined in subdivision 2b, 
 61.13  clause (8); 
 61.14     (8) employees of the Armory Building Commission; 
 61.15     (9) employees of the legislature appointed without a limit 
 61.16  on the duration of their employment and persons employed or 
 61.17  designated by the legislature or by a legislative committee or 
 61.18  commission or other competent authority to conduct a special 
 61.19  inquiry, investigation, examination, or installation; 
 61.20     (10) trainees who are employed on a full-time established 
 61.21  training program performing the duties of the classified 
 61.22  position for which they will be eligible to receive immediate 
 61.23  appointment at the completion of the training period; 
 61.24     (11) employees of the Minnesota Safety Council; 
 61.25     (12) any employees on authorized leave of absence from the 
 61.26  Transit Operating Division of the former Metropolitan Transit 
 61.27  Commission who are employed by the labor organization which is 
 61.28  the exclusive bargaining agent representing employees of the 
 61.29  Transit Operating Division; 
 61.30     (13) employees of the Metropolitan Council, Metropolitan 
 61.31  Parks and Open Space Commission, Metropolitan Sports Facilities 
 61.32  Commission, Metropolitan Mosquito Control Commission, or 
 61.33  Metropolitan Radio Board unless excluded or covered by another 
 61.34  public pension fund or plan under section 473.415, subdivision 
 61.35  3; 
 61.36     (14) judges of the Tax Court; 
 62.1      (15) personnel employed on June 30, 1992, by the University 
 62.2   of Minnesota in the management, operation, or maintenance of its 
 62.3   heating plant facilities, whose employment transfers to an 
 62.4   employer assuming operation of the heating plant facilities, so 
 62.5   long as the person is employed at the University of Minnesota 
 62.6   heating plant by that employer or by its successor organization; 
 62.7   and 
 62.8      (16) seasonal help in the classified service employed by 
 62.9   the Department of Revenue; and 
 62.10     (17) persons employed by the Department of Commerce as a 
 62.11  peace officer in the Insurance Fraud Prevention Division under 
 62.12  section 45.0135 who have attained the mandatory retirement age 
 62.13  specified in section 43A.34, subdivision 4.  
 62.14     (b) Employees specified in paragraph (a), clause (15), are 
 62.15  included employees under paragraph (a) if employer and employee 
 62.16  contributions are made in a timely manner in the amounts 
 62.17  required by section 352.04.  Employee contributions must be 
 62.18  deducted from salary.  Employer contributions are the sole 
 62.19  obligation of the employer assuming operation of the University 
 62.20  of Minnesota heating plant facilities or any successor 
 62.21  organizations to that employer. 
 62.22     Sec. 3.  Minnesota Statutes 2004, section 352.91, is 
 62.23  amended by adding a subdivision to read: 
 62.24     Subd. 4a.  [PROCESS FOR EVALUATING AND RECOMMENDING 
 62.25  POTENTIAL EMPLOYMENT POSITIONS FOR MEMBERSHIP INCLUSION.] (a) 
 62.26  The Department of Corrections and the Department of Human 
 62.27  Services must establish a procedure for evaluating periodic 
 62.28  requests by department employees for qualification for 
 62.29  recommendation by the commissioner for inclusion of the 
 62.30  employment position in the correctional facility or human 
 62.31  services facility in the correctional retirement plan and for 
 62.32  periodically determining employment positions that no longer 
 62.33  qualify for continued correctional retirement plan coverage.  
 62.34     (b) The procedure must provide for an evaluation of the 
 62.35  extent of the employee's working time spent in direct contact 
 62.36  with patients or inmates, the extent of the physical hazard that 
 63.1   the employee is routinely subjected to in the course of 
 63.2   employment, and the extent of intervention routinely expected of 
 63.3   the employee in the event of a facility incident.  The 
 63.4   percentage of routine direct contact with inmates or patients 
 63.5   may not be less than 75 percent.  
 63.6      (c) The applicable commissioner shall notify the employee 
 63.7   of the determination of the appropriateness of recommending the 
 63.8   employment position for inclusion in the correctional retirement 
 63.9   plan, if the evaluation procedure results in a finding that the 
 63.10  employee: 
 63.11     (1) routinely spends 75 percent of the employee's time in 
 63.12  direct contact with inmates or patients; and 
 63.13     (2) is regularly engaged in the rehabilitation, treatment, 
 63.14  custody, or supervision of inmates or patients.  
 63.15     (d) After providing the affected employee an opportunity to 
 63.16  dispute or clarify any evaluation determinations, if the 
 63.17  commissioner determines that the employment position is 
 63.18  appropriate for inclusion in the correctional retirement plan, 
 63.19  the commissioner shall forward that recommendation and 
 63.20  supporting documentation to the chair of the Legislative 
 63.21  Commission on Pensions and Retirement, the chair of the State 
 63.22  and Local Governmental Operations Committee of the senate, the 
 63.23  chair of the Governmental Operations and Veterans Affairs Policy 
 63.24  Committee of the house of representatives, and the executive 
 63.25  director of the Legislative Commission on Pensions and 
 63.26  Retirement in the form of the appropriate proposed legislation.  
 63.27  The recommendation must be forwarded to the legislature before 
 63.28  January 15 for the recommendation to be considered in that 
 63.29  year's legislative session.  
 63.30     Sec. 4.  Minnesota Statutes 2004, section 352B.01, 
 63.31  subdivision 2, is amended to read: 
 63.32     Subd. 2.  [MEMBER.] "Member" means: 
 63.33     (1) a State Patrol member currently employed after June 30, 
 63.34  1943, under section 299D.03 by the state, who is a peace officer 
 63.35  under section 626.84, and whose salary or compensation is paid 
 63.36  out of state funds; 
 64.1      (2) a conservation officer employed under section 97A.201, 
 64.2   currently employed by the state, whose salary or compensation is 
 64.3   paid out of state funds; 
 64.4      (3) a crime bureau officer who was employed by the crime 
 64.5   bureau and was a member of the Highway Patrolmen's retirement 
 64.6   fund on July 1, 1978, whether or not that person has the power 
 64.7   of arrest by warrant after that date, or who is employed as 
 64.8   police personnel, with powers of arrest by warrant under section 
 64.9   299C.04, and who is currently employed by the state, and whose 
 64.10  salary or compensation is paid out of state funds; 
 64.11     (4) a person who is employed by the state in the Department 
 64.12  of Public Safety in a data processing management position with 
 64.13  salary or compensation paid from state funds, who was a crime 
 64.14  bureau officer covered by the State Patrol retirement plan on 
 64.15  August 15, 1987, and who was initially hired in the data 
 64.16  processing management position within the department during 
 64.17  September 1987, or January 1988, with membership continuing for 
 64.18  the duration of the person's employment in that position, 
 64.19  whether or not the person has the power of arrest by warrant 
 64.20  after August 15, 1987; 
 64.21     (5) a public safety employee defined as a peace officer in 
 64.22  section 626.84, subdivision 1, paragraph (c), and employed with 
 64.23  the Division of Alcohol and Gambling Enforcement under section 
 64.24  299L.01; and 
 64.25     (6) a Fugitive Apprehension Unit officer after October 31, 
 64.26  2000, employed by the Office of Special Investigations of the 
 64.27  Department of Corrections who is a peace officer under section 
 64.28  626.84; and 
 64.29     (7) an employee of the Department of Commerce defined as a 
 64.30  peace officer in section 626.84, subdivision 1, paragraph (c), 
 64.31  who is employed by the Division of Insurance Fraud Prevention 
 64.32  under section 45.0135 after January 1, 2005, and who has not 
 64.33  attained the mandatory retirement age specified in section 
 64.34  43A.34, subdivision 4.  
 64.35     Sec. 5.  Minnesota Statutes 2004, section 353.01, 
 64.36  subdivision 6, is amended to read: 
 65.1      Subd. 6.  [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 
 65.2   subdivision" means a county, city, town, school district within 
 65.3   this state, or a department or unit of state government, or any 
 65.4   public body whose revenues are derived from taxation, fees, 
 65.5   assessments or from other sources. 
 65.6      (b) Governmental subdivision also means the Public 
 65.7   Employees Retirement Association, the League of Minnesota 
 65.8   Cities, the Association of Metropolitan Municipalities, public 
 65.9   hospitals owned or operated by, or an integral part of, a 
 65.10  governmental subdivision or governmental subdivisions, the 
 65.11  Association of Minnesota Counties, the Metropolitan Intercounty 
 65.12  Association, the Minnesota Municipal Utilities Association, the 
 65.13  Metropolitan Airports Commission, the University of Minnesota 
 65.14  with respect to police officers covered by the public employees 
 65.15  police and fire retirement plan, the Minneapolis Employees 
 65.16  Retirement Fund for employment initially commenced after June 
 65.17  30, 1979, the Range Association of Municipalities and Schools, 
 65.18  soil and water conservation districts, economic development 
 65.19  authorities created or operating under sections 469.090 to 
 65.20  469.108, the Port Authority of the city of St. Paul, the Spring 
 65.21  Lake Park Fire Department, incorporated, the Lake Johanna 
 65.22  Volunteer Fire Department, incorporated, the Red Wing 
 65.23  Environmental Learning Center, and the Dakota County 
 65.24  Agricultural Society. 
 65.25     (c) Governmental subdivision does not mean any municipal 
 65.26  housing and redevelopment authority organized under the 
 65.27  provisions of sections 469.001 to 469.047; or any port authority 
 65.28  organized under sections 469.048 to 469.089 other than the Port 
 65.29  Authority of the city of St. Paul; or any hospital district 
 65.30  organized or reorganized prior to July 1, 1975, under sections 
 65.31  447.31 to 447.37 or the successor of the district, nor the 
 65.32  Minneapolis Community Development Agency. 
 65.33     Sec. 6.  Minnesota Statutes 2004, section 353.64, is 
 65.34  amended by adding a subdivision to read: 
 65.35     Subd. 6a.  [UNIVERSITY OF MINNESOTA POLICE OFFICERS; 
 65.36  EXCLUSION.] (a) Unless paragraph (b) applies, a person who is 
 66.1   employed as a peace officer by the University of Minnesota at 
 66.2   any campus or facility of the university, who is required by the 
 66.3   university to be and is licensed as a peace officer by the 
 66.4   Minnesota Peace Officer Standards and Training Board under 
 66.5   sections 626.84 to 626.863, and who has the full power of arrest 
 66.6   is a member of the public employees police and fire retirement 
 66.7   plan. 
 66.8      (b) A police officer employed by the University of 
 66.9   Minnesota who is required by the Board of Regents to contribute 
 66.10  to the University of Minnesota faculty retirement plan is not 
 66.11  eligible to be a member of the public employees police and fire 
 66.12  retirement plan. 
 66.13     Sec. 7.  [EFFECTIVE DATE.] 
 66.14     (a) Sections 1, 3, 5, and 6 are effective July 1, 2005.  
 66.15     (b) Sections 2 and 4 are effective retroactively from 
 66.16  January 1, 2005. 
 66.17                             ARTICLE 6
 66.18                      RETIREMENT CONTRIBUTIONS
 66.19     Section 1.  Minnesota Statutes 2004, section 353.28, 
 66.20  subdivision 5, is amended to read: 
 66.21     Subd. 5.  [INTEREST CHARGES CHARGEABLE ON AMOUNTS DUE.] Any 
 66.22  amount due under this section or section 353.27, subdivision 4, 
 66.23  is payable with interest at an annual compound rate of 8.5 
 66.24  percent compounded annually from the date due until the date 
 66.25  payment is received by the association, with a minimum interest 
 66.26  charge of $10.  Interest for past due payments of excess police 
 66.27  state aid under section 69.031, subdivision 5, must be charged 
 66.28  at an annual rate of 8.5 percent compounded annually. 
 66.29     Sec. 2.  Minnesota Statutes 2004, section 353.28, 
 66.30  subdivision 6, is amended to read: 
 66.31     Subd. 6.  [FAILURE TO PAY COLLECTION OF UNPAID AMOUNTS.] (a)
 66.32  If the a governmental subdivision which receives the direct 
 66.33  proceeds of property taxation fails to pay amounts an amount due 
 66.34  under chapters chapter 353, 353A, 353B, 353C, and or 353D or 
 66.35  fails to make payments of excess police state aid to the public 
 66.36  employees police and fire fund under section 69.031, subdivision 
 67.1   5, the executive director shall certify those amounts the amount 
 67.2   to the governmental subdivision for payment.  If the 
 67.3   governmental subdivision fails to remit the sum so due in a 
 67.4   timely fashion, the executive director shall certify amounts the 
 67.5   amount to the applicable county auditor for collection.  The 
 67.6   county auditor shall collect such amounts the amount out of the 
 67.7   revenue of the governmental subdivision, or shall add them the 
 67.8   amount to the levy of the governmental subdivision and make 
 67.9   payment directly to the association.  This tax shall must be 
 67.10  levied, collected, and apportioned in the manner that other 
 67.11  taxes are levied, collected, and apportioned. 
 67.12     (b) If a governmental subdivision which is not funded 
 67.13  directly from the proceeds of property taxation fails to pay an 
 67.14  amount due under this chapter, the executive director shall 
 67.15  certify the amount to the governmental subdivision for payment.  
 67.16  If the governmental subdivision fails to pay the amount for a 
 67.17  period of 60 days after certification, the executive director 
 67.18  shall certify the amount to the commissioner of finance, who 
 67.19  shall deduct the amount from any subsequent state-aid payment or 
 67.20  state appropriation amount applicable to the governmental 
 67.21  subdivision. 
 67.22     Sec. 3.  [EFFECTIVE DATE.] 
 67.23     Sections 1 and 2 are effective July 1, 2005. 
 67.24                             ARTICLE 7
 67.25                PENSION BENEFITS UPON PRIVATIZATION
 67.26     Section 1.  Minnesota Statutes 2004, section 353F.02, 
 67.27  subdivision 4, is amended to read: 
 67.28     Subd. 4.  [MEDICAL FACILITY.] "Medical facility" means: 
 67.29     (1) Bridges Medical Services; 
 67.30     (2) the Fair Oaks Lodge, Wadena; 
 67.31     (2) (3) the Glencoe Area Health Center; 
 67.32     (3) (4) the Hutchinson Area Health Care; 
 67.33     (5) the Kanabec Hospital; 
 67.34     (4) (6) the Luverne Public Hospital; 
 67.35     (7) the Northfield Hospital; 
 67.36     (5) (8) the RenVilla Nursing Home; 
 68.1      (6) (9) the Renville County Hospital in Olivia; 
 68.2      (7) (10) the St. Peter Community Healthcare Center; and 
 68.3      (8) (11) the Waconia-Ridgeview Medical Center. 
 68.4      Sec. 2.  Laws 2004, chapter 267, article 12, section 4, is 
 68.5   amended to read:  
 68.6      Sec. 4.  [EFFECTIVE DATE.] 
 68.7      (a) Section 1, relating to the Fair Oaks Lodge, Wadena, is 
 68.8   effective upon the latter of: 
 68.9      (1) the day after the governing body of Todd County and its 
 68.10  chief clerical officer timely complete their compliance with 
 68.11  Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 
 68.12     (2) the day after the governing body of Wadena County and 
 68.13  its chief clerical officer timely complete their compliance with 
 68.14  Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
 68.15     (b) Section 1, relating to the RenVilla Nursing Home, is 
 68.16  effective upon the latter of: 
 68.17     (1) the day after the governing body of the city of 
 68.18  Renville and its chief clerical officer timely complete their 
 68.19  compliance with Minnesota Statutes, section 645.021, 
 68.20  subdivisions 2 and 3, except that the certificate of approval 
 68.21  must be filed before January 1, 2006; and 
 68.22     (2) the first day of the month next following certification 
 68.23  to the governing body of the city of Renville by the executive 
 68.24  director of the Public Employees Retirement Association that the 
 68.25  actuarial accrued liability of the special benefit coverage 
 68.26  proposed for extension to the privatized RenVilla Nursing Home 
 68.27  employees under section 1 does not exceed the actuarial gain 
 68.28  otherwise to be accrued by the Public Employees Retirement 
 68.29  Association, as calculated by the consulting actuary retained by 
 68.30  the Legislative Commission on Pensions and Retirement, or the 
 68.31  actuary retained under Minnesota Statutes, section 356.214, 
 68.32  whichever is applicable. 
 68.33     (c) The cost of the actuarial calculations must be borne by 
 68.34  the city of Renville or the purchaser of the RenVilla Nursing 
 68.35  Home. 
 68.36     (d) Section 1, relating to the St. Peter Community 
 69.1   Healthcare Center, is effective upon the latter of: 
 69.2      (1) the day after the governing body of the city of St. 
 69.3   Peter and its chief clerical officer timely complete their 
 69.4   compliance with Minnesota Statutes, section 645.021, 
 69.5   subdivisions 2 and 3; and 
 69.6      (2) the first day of the month next following certification 
 69.7   to the governing body of the city of St. Peter by the executive 
 69.8   director of the Public Employees Retirement Association that the 
 69.9   actuarial accrued liability of the special benefit coverage 
 69.10  proposed for extension to the privatized St. Peter Community 
 69.11  Healthcare Center employees under section 1 does not exceed the 
 69.12  actuarial gain otherwise to be accrued by the Public Employees 
 69.13  Retirement Association, as calculated by the consulting actuary 
 69.14  retained by the Legislative Commission on Pensions and 
 69.15  Retirement, or the actuary retained under Minnesota Statutes, 
 69.16  section 356.214, whichever is applicable. 
 69.17     (e) The cost of the actuarial calculations must be borne by 
 69.18  the city of St. Peter or the purchaser of the St. Peter 
 69.19  Community Healthcare Center. 
 69.20     (f) If the required actions under paragraphs (b) and (c) 
 69.21  occur, section 1 applies retroactively to the RenVilla Nursing 
 69.22  Home as of the date of privatization. 
 69.23     (g) If the required actions under paragraph (a) occur, 
 69.24  section 1 applies retroactively to Fair Oaks Lodge, Wadena, as 
 69.25  of January 1, 2004. 
 69.26     (h) Sections 2 and 3 are effective on the day following 
 69.27  final enactment. 
 69.28     Sec. 3.  [EFFECTIVE DATE.] 
 69.29     (a) Section 1, relating to Bridges Medical Services, is 
 69.30  effective upon the later of: 
 69.31     (1) the day after the governing body of the city of Ada and 
 69.32  its chief clerical officer timely complete their compliance with 
 69.33  Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 
 69.34     (2) the first day of the month next following certification 
 69.35  to the governing body of the city of Ada by the executive 
 69.36  director of the Public Employees Retirement Association that the 
 70.1   actuarial accrued liability of the special benefit coverage 
 70.2   proposed for extension to the privatized Bridges Medical 
 70.3   Services employees under section 1 does not exceed the actuarial 
 70.4   gain otherwise to be accrued by the Public Employees Retirement 
 70.5   Association, as calculated by the consulting actuary retained 
 70.6   under Minnesota Statutes, section 356.214. 
 70.7      (b) Section 1, relating to the Hutchinson Area Health Care, 
 70.8   is effective upon the later of: 
 70.9      (1) the day after the governing body of the city of 
 70.10  Hutchinson and its chief clerical officer timely complete their 
 70.11  compliance with Minnesota Statutes, section 645.021, 
 70.12  subdivisions 2 and 3; and 
 70.13     (2) the first day of the month next following certification 
 70.14  to the governing body of the city of Hutchinson by the executive 
 70.15  director of the Public Employees Retirement Association that the 
 70.16  actuarial accrued liability of the special benefit coverage 
 70.17  proposed for extension to the privatized Hutchinson Area Health 
 70.18  Care employees under section 1 does not exceed the actuarial 
 70.19  gain otherwise to be accrued by the Public Employees Retirement 
 70.20  Association, as calculated by the consulting actuary retained by 
 70.21  the Legislative Commission on Pensions and Retirement. 
 70.22     (c) Section 1, relating to the Northfield Hospital, is 
 70.23  effective upon the later of: 
 70.24     (1) the day after the governing body of the city of 
 70.25  Northfield and its chief clerical officer timely complete their 
 70.26  compliance with Minnesota Statutes, section 645.021, 
 70.27  subdivisions 2 and 3; and 
 70.28     (2) the first day of the month next following certification 
 70.29  to the governing body of the city of Northfield by the executive 
 70.30  director of the Public Employees Retirement Association that the 
 70.31  actuarial accrued liability of the special benefit coverage 
 70.32  proposed for extension to the privatized Northfield Hospital 
 70.33  employees under section 1 does not exceed the actuarial gain 
 70.34  otherwise to be accrued by the Public Employees Retirement 
 70.35  Association, as calculated by the consulting actuary retained by 
 70.36  the Legislative Commission on Pensions and Retirement. 
 71.1      (d) The cost of the actuarial calculations must be borne by 
 71.2   the facility, the city in which the facility is located, or the 
 71.3   purchaser of the facility. 
 71.4      (e) If the required actions in paragraphs (a), (b), or (c) 
 71.5   and (d) occur, section 1 applies retroactively to the date of 
 71.6   privatization. 
 71.7      (f) Section 2 is effective the day following final 
 71.8   enactment. 
 71.9                              ARTICLE 8
 71.10                      FIRST CLASS CITY TEACHER
 71.11                    RETIREMENT FUND ASSOCIATIONS
 71.12     Section 1.  Minnesota Statutes 2004, section 354A.021, is 
 71.13  amended by adding a subdivision to read: 
 71.14     Subd. 9.  [UPDATED ARTICLES OF INCORPORATION AND BYLAWS; 
 71.15  FILING.] (a) On or before July 1, 2006, and within six months of 
 71.16  the date of the approval of any amendment to the articles of 
 71.17  incorporation or bylaws, the chief administrative officer of 
 71.18  each first class city teacher retirement fund association shall 
 71.19  prepare and publish an updated compilation of the articles of 
 71.20  incorporation and the bylaws of the association. 
 71.21     (b) The chief administrative officer of the first class 
 71.22  city teacher retirement fund association must certify the 
 71.23  accuracy and the completeness of the compilation. 
 71.24     (c) The compilation of the articles of incorporation and 
 71.25  bylaws of a first class city teacher retirement fund association 
 71.26  must contain an index. 
 71.27     (d) The compilation must be made available to association 
 71.28  members and other interested parties.  The association may 
 71.29  charge a fee for a copy that reflects the price of printing or 
 71.30  otherwise producing the copy.  Two copies of the compilation 
 71.31  must be filed, without charge, by each retirement fund 
 71.32  association with the Legislation Commission on Pensions and 
 71.33  Retirement, the Legislative Reference Library, the state 
 71.34  auditor, the commissioner of education, the chancellor of the 
 71.35  Minnesota State Colleges and Universities system, and the 
 71.36  superintendent of the applicable school district. 
 72.1      (e) A first class city teacher retirement fund association 
 72.2   may contract with the revisor of statutes for the preparation of 
 72.3   the compilation. 
 72.4      (f) If a first class city teacher retirement fund 
 72.5   association makes an updated copy of its articles of 
 72.6   incorporation and bylaws available on its Web site, the 
 72.7   retirement fund association is not obligated to file a hard copy 
 72.8   of the documents under paragraph (d) for the applicable filing 
 72.9   period. 
 72.10     Sec. 2.  [EFFECTIVE DATE.] 
 72.11     Section 1 is effective July 1, 2005. 
 72.12                             ARTICLE 9
 72.13             MINNESOTA STATE COLLEGES AND UNIVERSITIES
 72.14             INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES
 72.15     Section 1.  Minnesota Statutes 2004, section 354B.25, 
 72.16  subdivision 2, is amended to read: 
 72.17     Subd. 2.  [INVESTMENT OPTIONS.] (a) The plan administrator 
 72.18  shall arrange for the purchase of investment products. 
 72.19     (b) The investment products must be purchased with 
 72.20  contributions under section 354B.23 or with money or assets 
 72.21  otherwise provided by law by authority of the board.  
 72.22     (c) Various investment accounts offered through the 
 72.23  Minnesota supplemental investment fund established under section 
 72.24  11A.17 and administered by the State Board of Investment is one 
 72.25  of the may be included as investment products for the individual 
 72.26  retirement account plan.  Direct access must also be provided to 
 72.27  lower expense and no-load mutual funds, as those terms are 
 72.28  defined by the federal Securities and Exchange Commission, 
 72.29  including stock funds, bond funds, and balanced funds.  Other 
 72.30  investment products or combination of investment products which 
 72.31  may be included are: 
 72.32     (1) savings accounts at federally insured financial 
 72.33  institutions; 
 72.34     (2) life insurance contracts, fixed and variable annuity 
 72.35  contracts from companies that are subject to regulation by the 
 72.36  commerce commissioner; 
 73.1      (3) investment options from open-ended investment companies 
 73.2   registered under the federal Investment Company Act of 1940, 
 73.3   United States Code, title 15, sections 80a-1 to 80a-64; 
 73.4      (4) investment options from a firm that is a registered 
 73.5   investment advisor under the federal Investment Advisers Act of 
 73.6   1940, United States Code, title 15, sections 80b-1 to 80b-21; 
 73.7   and 
 73.8      (5) investment options of a bank as defined in United 
 73.9   States Code, title 15, section 80b-2, subsection (a), paragraph 
 73.10  2, or a bank holding company as defined in the Bank Holding 
 73.11  Company Act of 1956, United States Code, title 12, section 1841, 
 73.12  subsection (a), paragraph (1). 
 73.13     Sec. 2.  [EFFECTIVE DATE.] 
 73.14     Section 1 is effective the day following final enactment. 
 73.15                             ARTICLE 10
 73.16                   SUPPLEMENTAL RETIREMENT PLANS
 73.17     Section 1.  Minnesota Statutes 2004, section 356.24, 
 73.18  subdivision 1, is amended to read: 
 73.19     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
 73.20  for a school district or other governmental subdivision or state 
 73.21  agency to levy taxes for, or to contribute public funds to a 
 73.22  supplemental pension or deferred compensation plan that is 
 73.23  established, maintained, and operated in addition to a primary 
 73.24  pension program for the benefit of the governmental subdivision 
 73.25  employees other than: 
 73.26     (1) to a supplemental pension plan that was established, 
 73.27  maintained, and operated before May 6, 1971; 
 73.28     (2) to a plan that provides solely for group health, 
 73.29  hospital, disability, or death benefits; 
 73.30     (3) to the individual retirement account plan established 
 73.31  by chapter 354B; 
 73.32     (4) to a plan that provides solely for severance pay under 
 73.33  section 465.72 to a retiring or terminating employee; 
 73.34     (5) for employees other than personnel employed by the 
 73.35  Board of Trustees of the Minnesota State Colleges and 
 73.36  Universities and covered under the Higher Education Supplemental 
 74.1   Retirement Plan under chapter 354C, if the supplemental plan 
 74.2   coverage is provided for in a personnel policy of the public 
 74.3   employer or in the collective bargaining agreement between the 
 74.4   public employer and the exclusive representative of public 
 74.5   employees in an appropriate unit, in an amount matching employee 
 74.6   contributions on a dollar for dollar basis, but not to exceed an 
 74.7   employer contribution of $2,000 a year per employee; 
 74.8      (i) to the state of Minnesota deferred compensation plan 
 74.9   under section 352.96; or 
 74.10     (ii) in payment of the applicable portion of the 
 74.11  contribution made to any investment eligible under section 
 74.12  403(b) of the Internal Revenue Code, if the employing unit has 
 74.13  complied with any applicable pension plan provisions of the 
 74.14  Internal Revenue Code with respect to the tax-sheltered annuity 
 74.15  program during the preceding calendar year; 
 74.16     (6) for personnel employed by the Board of Trustees of the 
 74.17  Minnesota State Colleges and Universities and not covered by 
 74.18  clause (5), to the supplemental retirement plan under chapter 
 74.19  354C, if the supplemental plan coverage is provided for in a 
 74.20  personnel policy or in the collective bargaining agreement of 
 74.21  the public employer with the exclusive representative of the 
 74.22  covered employees in an appropriate unit, in an amount matching 
 74.23  employee contributions on a dollar for dollar basis, but not to 
 74.24  exceed an employer contribution of $2,700 a year for each 
 74.25  employee; 
 74.26     (7) to a supplemental plan or to a governmental trust to 
 74.27  save for postretirement health care expenses qualified for 
 74.28  tax-preferred treatment under the Internal Revenue Code, if the 
 74.29  supplemental plan coverage is provided for in a personnel policy 
 74.30  or in the collective bargaining agreement of a public employer 
 74.31  with the exclusive representative of the covered employees in an 
 74.32  appropriate unit; 
 74.33     (8) to the laborer's national industrial pension fund or to 
 74.34  a laborer's local pension fund for the employees of a 
 74.35  governmental subdivision who are covered by a collective 
 74.36  bargaining agreement that provides for coverage by that fund and 
 75.1   that sets forth a fund contribution rate, but not to exceed an 
 75.2   employer contribution of $2,000 $5,000 per year per employee; 
 75.3      (9) to the plumbers' and pipefitters' national pension fund 
 75.4   or to a plumbers' and pipefitters' local pension fund for the 
 75.5   employees of a governmental subdivision who are covered by a 
 75.6   collective bargaining agreement that provides for coverage by 
 75.7   that fund and that sets forth a fund contribution rate, but not 
 75.8   to exceed an employer contribution of $2,000 $5,000 per year per 
 75.9   employee; 
 75.10     (10) to the international union of operating engineers 
 75.11  pension fund for the employees of a governmental subdivision who 
 75.12  are covered by a collective bargaining agreement that provides 
 75.13  for coverage by that fund and that sets forth a fund 
 75.14  contribution rate, but not to exceed an employer contribution of 
 75.15  $2,000 $5,000 per year per employee; or 
 75.16     (11) to a supplemental plan organized and operated under 
 75.17  the federal Internal Revenue Code, as amended, that is wholly 
 75.18  and solely funded by the employee's accumulated sick leave, 
 75.19  accumulated vacation leave, and accumulated severance pay at the 
 75.20  date of retirement or the termination of active employment. 
 75.21     Sec. 2.  [EFFECTIVE DATE.] 
 75.22     Section 1 is effective the day following final enactment. 
 75.23                             ARTICLE 11
 75.24                    VOLUNTEER FIREFIGHTER RELIEF
 75.25                        ASSOCIATION CHANGES
 75.26     Section 1.  Minnesota Statutes 2004, section 69.051, 
 75.27  subdivision 1, is amended to read: 
 75.28     Subdivision 1.  [FINANCIAL REPORT AND AUDIT.] The board of 
 75.29  each salaried firefighters' relief association, police relief 
 75.30  association, and volunteer firefighters' relief association as 
 75.31  defined in section 424A.001, subdivision 4, with assets of at 
 75.32  least $200,000 or liabilities of at least $200,000 in the prior 
 75.33  year or in any previous year, according to the most recent 
 75.34  applicable actuarial valuation or financial report if no 
 75.35  valuation is required, shall:  
 75.36     (1) prepare a financial report covering the special and 
 76.1   general funds of the relief association for the preceding fiscal 
 76.2   year on a form prescribed by the state auditor.  The financial 
 76.3   report shall must contain financial statements and disclosures 
 76.4   which present the true financial condition of the relief 
 76.5   association and the results of relief association operations in 
 76.6   conformity with generally accepted accounting principles and in 
 76.7   compliance with the regulatory, financing and funding provisions 
 76.8   of this chapter and any other applicable laws.  The financial 
 76.9   report shall must be countersigned by the municipal clerk or 
 76.10  clerk-treasurer of the municipality in which the relief 
 76.11  association is located if the relief association is a 
 76.12  firefighters' relief association which is directly associated 
 76.13  with a municipal fire department or is a police relief 
 76.14  association, or countersigned by the secretary of the 
 76.15  independent nonprofit firefighting corporation and by the 
 76.16  municipal clerk or clerk-treasurer of the largest municipality 
 76.17  in population which contracts with the independent nonprofit 
 76.18  firefighting corporation if the volunteer firefighter relief 
 76.19  association is a subsidiary of an independent nonprofit 
 76.20  firefighting corporation; 
 76.21     (2) file the financial report in its office for public 
 76.22  inspection and present it to the city council after the close of 
 76.23  the fiscal year.  One copy of the financial report shall must be 
 76.24  furnished to the state auditor after the close of the fiscal 
 76.25  year; and 
 76.26     (3) submit to the state auditor audited financial 
 76.27  statements which have been attested to by a certified public 
 76.28  accountant, public accountant, or the state auditor within 180 
 76.29  days after the close of the fiscal year.  The state auditor may 
 76.30  accept this report in lieu of the report required in clause (2). 
 76.31     Sec. 2.  Minnesota Statutes 2004, section 69.051, 
 76.32  subdivision 1a, is amended to read: 
 76.33     Subd. 1a.  [FINANCIAL STATEMENT.] (a) The board of each 
 76.34  volunteer firefighters' relief association, as defined in 
 76.35  section 424A.001, subdivision 4, with assets of less than 
 76.36  $200,000 and liabilities less than $200,000, according to the 
 77.1   most recent financial report, shall that is not required to file 
 77.2   a financial report and audit under subdivision 1 must prepare a 
 77.3   detailed statement of the financial affairs for the preceding 
 77.4   fiscal year of the relief association's special and general 
 77.5   funds in the style and form prescribed by the state auditor.  
 77.6   The detailed statement must show the sources and amounts of all 
 77.7   money received; all disbursements, accounts payable and accounts 
 77.8   receivable; the amount of money remaining in the treasury; total 
 77.9   assets including a listing of all investments; the accrued 
 77.10  liabilities; and all items necessary to show accurately the 
 77.11  revenues and expenditures and financial position of the relief 
 77.12  association. 
 77.13     (b) The detailed financial statement required under 
 77.14  paragraph (a) must be certified by an independent public 
 77.15  accountant or auditor or by the auditor or accountant who 
 77.16  regularly examines or audits the financial transactions of the 
 77.17  municipality.  In addition to certifying the financial condition 
 77.18  of the special and general funds of the relief association, the 
 77.19  accountant or auditor conducting the examination shall give an 
 77.20  opinion as to the condition of the special and general funds of 
 77.21  the relief association, and shall comment upon any exceptions to 
 77.22  the report.  The independent accountant or auditor shall must 
 77.23  have at least five years of public accounting, auditing, or 
 77.24  similar experience, and shall must not be an active, inactive, 
 77.25  or retired member of the relief association or the fire or 
 77.26  police department. 
 77.27     (c) The detailed statement required under paragraph (a) 
 77.28  must be countersigned by the municipal clerk or clerk-treasurer 
 77.29  of the municipality, or, where applicable, by the secretary of 
 77.30  the independent nonprofit firefighting corporation and by the 
 77.31  municipal clerk or clerk-treasurer of the largest municipality 
 77.32  in population which contracts with the independent nonprofit 
 77.33  firefighting corporation if the relief association is a 
 77.34  subsidiary of an independent nonprofit firefighting corporation. 
 77.35     (d) The volunteer firefighters' relief association board 
 77.36  must file the detailed statement required under paragraph (a) in 
 78.1   the relief association office for public inspection and present 
 78.2   it to the city council within 45 days after the close of the 
 78.3   fiscal year, and must submit a copy of the detailed statement to 
 78.4   the state auditor within 90 days of the close of the fiscal year.
 78.5      Sec. 3.  Minnesota Statutes 2004, section 69.771, is 
 78.6   amended to read: 
 78.7      69.771 [VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION 
 78.8   FINANCING GUIDELINES ACT; APPLICATION.] 
 78.9      Subdivision 1.  [COVERED RELIEF ASSOCIATIONS.] The 
 78.10  applicable provisions of sections 69.771 to 69.776 shall apply 
 78.11  to any firefighters' relief association other than a relief 
 78.12  association enumerated in section 69.77, subdivision 1a, which 
 78.13  is organized under any laws of this state, which is composed of 
 78.14  volunteer firefighters or is composed partially of volunteer 
 78.15  firefighters and partially of salaried firefighters with 
 78.16  retirement coverage provided by the public employees police and 
 78.17  fire fund and which, in either case, operates subject to the 
 78.18  service pension minimum requirements for entitlement and 
 78.19  maximums contained in section 424A.02, or subject to a special 
 78.20  law modifying those requirements or maximums. 
 78.21     Subd. 2.  [AUTHORIZED EMPLOYER SUPPORT FOR A RELIEF 
 78.22  ASSOCIATION.] Notwithstanding any law to the contrary, a 
 78.23  municipality may lawfully contribute public funds, including the 
 78.24  transfer of any applicable fire state aid, or may levy property 
 78.25  taxes for the support of a firefighters' relief association 
 78.26  specified in subdivision 1, however organized, which provides 
 78.27  retirement coverage or pays a service pension to retired 
 78.28  firefighter or a retirement benefit to a disabled firefighter or 
 78.29  a surviving dependent of either an active or retired firefighter 
 78.30  for the operation and maintenance of the relief association only 
 78.31  if the municipality and the relief association both comply with 
 78.32  the applicable provisions of sections 69.771 to 69.776. 
 78.33     Subd. 3.  [REMEDY FOR NONCOMPLIANCE; DETERMINATION.] 
 78.34  Any (a) A municipality in which there exists a firefighters' 
 78.35  relief association as specified in subdivision 1 which does not 
 78.36  comply with the applicable provisions of sections 69.771 to 
 79.1   69.776 or the provisions of any applicable special law relating 
 79.2   to the funding or financing of the association shall does not 
 79.3   qualify initially to receive, or be and is not entitled 
 79.4   subsequently to retain, fire state aid pursuant to under 
 79.5   sections 69.011 to 69.051 until the reason for the 
 79.6   disqualification specified by the state auditor is remedied, 
 79.7   whereupon the municipality or relief association, if otherwise 
 79.8   qualified, shall be is entitled to again receive fire state aid 
 79.9   for the year occurring immediately subsequent to the year in 
 79.10  which the disqualification is remedied.  
 79.11     (b) The state auditor shall determine if a municipality to 
 79.12  which a firefighters' relief association is directly associated 
 79.13  or a firefighters' relief association fails to comply with the 
 79.14  provisions of sections 69.771 to 69.776 or the funding or 
 79.15  financing provisions of any applicable special law based upon 
 79.16  the information contained in the annual financial report of the 
 79.17  firefighters' relief association required pursuant to under 
 79.18  section 69.051., the actuarial valuation of the relief 
 79.19  association, if applicable, the relief association officers' 
 79.20  financial requirements of the relief association and minimum 
 79.21  municipal obligation determination documentation under section 
 79.22  69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or 
 79.23  69.774, subdivision 2, if requested to be filed by the state 
 79.24  auditor, the applicable municipal or nonprofit firefighting 
 79.25  corporation budget, if requested to be filed by the state 
 79.26  auditor, and any other relevant documents or reports obtained by 
 79.27  the state auditor. 
 79.28     (c) The municipality or nonprofit firefighting corporation 
 79.29  and the associated relief association are not eligible to 
 79.30  receive or to retain fire state aid if: 
 79.31     (1) the relief association fails to prepare or to file the 
 79.32  financial report or financial statement under section 69.051; 
 79.33     (2) the relief association treasurer is not bonded in the 
 79.34  manner and in the amount required by section 69.051, subdivision 
 79.35  2; 
 79.36     (3) the relief association officers fail to determine or 
 80.1   improperly determine the accrued liability and the annual 
 80.2   accruing liability of the relief association under section 
 80.3   69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if 
 80.4   applicable; 
 80.5      (4) if applicable, the relief association officers fail to 
 80.6   obtain and file a required actuarial valuation or the officers 
 80.7   file an actuarial valuation that does not contain the special 
 80.8   fund actuarial liability calculated under the entry age normal 
 80.9   actuarial cost method, the special fund current assets, the 
 80.10  special fund unfunded actuarial accrued liability, the special 
 80.11  fund normal cost under the entry age normal actuarial cost 
 80.12  method, the amortization requirement for the special fund 
 80.13  unfunded actuarial accrued liability by the applicable target 
 80.14  date, a summary of the applicable benefit plan, a summary of the 
 80.15  membership of the relief association, a summary of the actuarial 
 80.16  assumptions used in preparing the valuation, and a signed 
 80.17  statement by the actuary attesting to its results and certifying 
 80.18  to the qualifications of the actuary as an approved actuary 
 80.19  under section 356.215, subdivision 1, paragraph (c); 
 80.20     (5) the municipality failed to provide a municipal 
 80.21  contribution, or the nonprofit firefighting corporation failed 
 80.22  to provide a corporate contribution, in the amount equal to the 
 80.23  minimum municipal obligation if the relief association is 
 80.24  governed under section 69.772, or the amount necessary, when 
 80.25  added to the fire state aid actually received in the plan year 
 80.26  in question, to at least equal in total the calculated annual 
 80.27  financial requirements of the special fund of the relief 
 80.28  association if the relief association is governed under section 
 80.29  69.773, and, if the municipal or corporate contribution is 
 80.30  deficient, the municipality failed to include the minimum 
 80.31  municipal obligation certified under section 69.772, subdivision 
 80.32  3, or 69.773, subdivision 5, in its budget and tax levy or the 
 80.33  nonprofit firefighting corporation failed to include the minimum 
 80.34  corporate obligation certified under section 69.774, subdivision 
 80.35  2, in the corporate budget; 
 80.36     (6) the relief association did not receive municipal 
 81.1   ratification for the most recent plan amendment when municipal 
 81.2   ratification was required under section 69.772, subdivision 6; 
 81.3   69.773, subdivision 6; or 424A.02, subdivision 10; 
 81.4      (7) the relief association invested special fund assets in 
 81.5   an investment security that is not authorized under section 
 81.6   69.775; 
 81.7      (8) the relief association had an administrative expense 
 81.8   that is not authorized under section 69.80 or 424A.05, 
 81.9   subdivision 3, or the municipality had an expenditure that is 
 81.10  not authorized under section 424A.08; 
 81.11     (9) the relief association officers fail to provide a 
 81.12  complete and accurate public pension plan investment portfolio 
 81.13  and performance disclosure under section 356.219; 
 81.14     (10) the relief association fails to obtain the 
 81.15  acknowledgment from a broker of the statement of investment 
 81.16  restrictions under section 356A.06, subdivision 8b; 
 81.17     (11) the relief association officers permitted to occur a 
 81.18  prohibited transaction under section 356A.06, subdivision 9, or 
 81.19  424A.001, subdivision 7, or failed to undertake correction of a 
 81.20  prohibited transaction that did occur; or 
 81.21     (12) the relief association pays a defined benefit service 
 81.22  pension in an amount that is in excess of the applicable service 
 81.23  pension maximum under section 424A.02, subdivision 3. 
 81.24     Sec. 4.  Minnesota Statutes 2004, section 69.772, 
 81.25  subdivision 3, is amended to read: 
 81.26     Subd. 3.  [FINANCIAL REQUIREMENTS OF RELIEF ASSOCIATION; 
 81.27  MINIMUM OBLIGATION OF MUNICIPALITY.] (a) During the month of 
 81.28  July, the officers of the relief association shall determine the 
 81.29  overall funding balance of the special fund for the current 
 81.30  calendar year, the financial requirements of the special fund 
 81.31  for the following calendar year and the minimum obligation of 
 81.32  the municipality with respect to the special fund for the 
 81.33  following calendar year in accordance with the requirements of 
 81.34  this subdivision.  
 81.35     (1) (b) The overall funding balance of the special fund for 
 81.36  the current calendar year shall must be determined in the 
 82.1   following manner: 
 82.2      (a) (1) The total accrued liability of the special fund for 
 82.3   all active and deferred members of the relief association as of 
 82.4   December 31 of the current year shall must be calculated 
 82.5   pursuant to under subdivisions 2 and 2a, if applicable. 
 82.6      (b) (2) The total present assets of the special fund 
 82.7   projected to December 31 of the current year, including receipts 
 82.8   by and disbursements from the special fund anticipated to occur 
 82.9   on or before December 31 shall, must be calculated.  To the 
 82.10  extent possible, for those assets for which a market value is 
 82.11  readily ascertainable, the current market value as of the date 
 82.12  of the calculation for those assets shall must be utilized in 
 82.13  making this calculation.  For any asset for which no market 
 82.14  value is readily ascertainable, the cost value or the book 
 82.15  value, whichever is applicable, shall must be utilized in making 
 82.16  this calculation. 
 82.17     (c) (3) The amount of the total present assets of the 
 82.18  special fund calculated pursuant to under clause (b) shall (2) 
 82.19  must be subtracted from the amount of the total accrued 
 82.20  liability of the special fund calculated pursuant to under 
 82.21  clause (a) (1).  If the amount of total present assets exceeds 
 82.22  the amount of the total accrued liability, then the special fund 
 82.23  shall be is considered to have a surplus over full funding.  If 
 82.24  the amount of the total present assets is less than the amount 
 82.25  of the total accrued liability, then the special fund shall be 
 82.26  is considered to have a deficit from full funding.  If the 
 82.27  amount of total present assets is equal to the amount of the 
 82.28  total accrued liability, then the special fund shall be is 
 82.29  considered to be fully funded. 
 82.30     (2) (c) The financial requirements of the special fund for 
 82.31  the following calendar year shall must be determined in the 
 82.32  following manner: 
 82.33     (a) (1) The total accrued liability of the special fund for 
 82.34  all active and deferred members of the relief association as of 
 82.35  December 31 of the calendar year next following the current 
 82.36  calendar year shall must be calculated pursuant to under 
 83.1   subdivisions 2 and 2a, if applicable. 
 83.2      (b) (2) The increase in the total accrued liability of the 
 83.3   special fund for the following calendar year over the total 
 83.4   accrued liability of the special fund for the current year shall 
 83.5   must be calculated. 
 83.6      (c) (3) The amount of anticipated future administrative 
 83.7   expenses of the special fund shall must be calculated by 
 83.8   multiplying the dollar amount of the administrative expenses of 
 83.9   the special fund for the most recent prior calendar year by the 
 83.10  factor of 1.035. 
 83.11     (d) (4) If the special fund is fully funded, the financial 
 83.12  requirement requirements of the special fund for the following 
 83.13  calendar year shall be are the figure which represents the 
 83.14  increase in the total accrued liability of the special fund as 
 83.15  amounts calculated pursuant to subclause (b) under clauses (2) 
 83.16  and (3).  
 83.17     (e) (5) If the special fund has a deficit from full 
 83.18  funding, the financial requirements of the special fund for the 
 83.19  following calendar year shall be are the financial requirements 
 83.20  of the special fund calculated as though the special fund were 
 83.21  fully funded pursuant to subclause (d) under clause (4) plus an 
 83.22  amount equal to one-tenth of the original amount of the deficit 
 83.23  from full funding of the special fund as determined pursuant to 
 83.24  this section for the calendar year 1971 until that deficit from 
 83.25  full funding is fully retired, and plus an amount equal to 
 83.26  one-tenth of the increase in the deficit from full funding of 
 83.27  the special fund under clause (2) resulting either from an 
 83.28  increase in the amount of the service pension accruing after 
 83.29  December 31, 1971 occurring in the last ten years or from a net 
 83.30  annual investment loss occurring during the last ten years until 
 83.31  each increase in the deficit from full funding is fully 
 83.32  retired.  The annual amortization contribution under this clause 
 83.33  may not exceed the amount of the deficit from full funding. 
 83.34     (f) (6) If the special fund has a surplus over full 
 83.35  funding, the financial requirements of the special fund for the 
 83.36  following calendar year shall be are the financial requirements 
 84.1   of the special fund calculated as though the special fund were 
 84.2   fully funded pursuant to subclause (d) under clause (4) reduced 
 84.3   by an amount equal to one-tenth of the amount of the surplus 
 84.4   over full funding of the special fund. 
 84.5      (3) (d) The minimum obligation of the municipality with 
 84.6   respect to the special fund shall be is the financial 
 84.7   requirements of the special fund reduced by the amount of any 
 84.8   fire state aid payable pursuant to under sections 69.011 to 
 84.9   69.051 reasonably anticipated to be received by the municipality 
 84.10  for transmittal to the special fund during the following 
 84.11  calendar year, an amount of interest on the assets of the 
 84.12  special fund projected to the beginning of the following 
 84.13  calendar year calculated at the rate of five percent per annum, 
 84.14  and the amount of any anticipated contributions to the special 
 84.15  fund required by the relief association bylaws from the active 
 84.16  members of the relief association reasonably anticipated to be 
 84.17  received during the following calendar year.  A reasonable 
 84.18  amount of anticipated fire state aid is an amount that does not 
 84.19  exceed the fire state aid actually received in the prior year 
 84.20  multiplied by the factor 1.035.  
 84.21     Sec. 5.  Minnesota Statutes 2004, section 69.772, 
 84.22  subdivision 4, is amended to read: 
 84.23     Subd. 4.  [CERTIFICATION OF FINANCIAL REQUIREMENTS AND 
 84.24  MINIMUM MUNICIPAL OBLIGATION; LEVY.] (a) The officers of the 
 84.25  relief association shall certify the financial requirements of 
 84.26  the special fund of the relief association and the minimum 
 84.27  obligation of the municipality with respect to the special fund 
 84.28  of the relief association as determined pursuant to under 
 84.29  subdivision 3 to the governing body of the municipality on or 
 84.30  before August 1 of each year.  The financial requirements of the 
 84.31  relief association and the minimum municipal obligation must be 
 84.32  included in the financial report or financial statement under 
 84.33  section 69.051.  
 84.34     (b) The municipality shall provide for at least the minimum 
 84.35  obligation of the municipality with respect to the special fund 
 84.36  of the relief association by tax levy or from any other source 
 85.1   of public revenue.  
 85.2      (c) The municipality may levy taxes for the payment of the 
 85.3   minimum municipal obligation without any limitation as to rate 
 85.4   or amount and irrespective of any limitations imposed by other 
 85.5   provisions of law upon the rate or amount of taxation until the 
 85.6   balance of the special fund or any fund of the relief 
 85.7   association has attained a specified level.  In addition, any 
 85.8   taxes levied pursuant to under this section shall must not cause 
 85.9   the amount or rate of any other taxes levied in that year or to 
 85.10  be levied in a subsequent year by the municipality which are 
 85.11  subject to a limitation as to rate or amount to be reduced.  
 85.12     (d) If the municipality does not include the full amount of 
 85.13  the minimum municipal obligations in its levy for any year, the 
 85.14  officers of the relief association shall certify that amount to 
 85.15  the county auditor, who shall spread a levy in the amount of the 
 85.16  certified minimum municipal obligation on the taxable property 
 85.17  of the municipality. 
 85.18     (e) If the state auditor determines that a municipal 
 85.19  contribution actually made in a plan year was insufficient under 
 85.20  section 69.771, subdivision 3, paragraph (c), clause (5), the 
 85.21  state auditor may request a copy of the certifications under 
 85.22  this subdivision from the relief association or from the city.  
 85.23  The relief association or the city, whichever applies, must 
 85.24  provide the certifications within 14 days of the date of the 
 85.25  request from the state auditor. 
 85.26     Sec. 6.  Minnesota Statutes 2004, section 69.773, 
 85.27  subdivision 4, is amended to read: 
 85.28     Subd. 4.  [FINANCIAL REQUIREMENTS OF SPECIAL FUND.] Prior 
 85.29  to (a) On or before August 1 of each year, the officers of the 
 85.30  relief association shall determine the financial requirements of 
 85.31  the special fund of the relief association in accordance with 
 85.32  the requirements of this subdivision.  
 85.33     (b) The financial requirements of the relief 
 85.34  association shall must be based on the most recent actuarial 
 85.35  valuation of the special fund prepared in accordance with 
 85.36  subdivision 2.  If the relief association has an unfunded 
 86.1   actuarial accrued liability as reported in the most recent 
 86.2   actuarial valuation, the financial requirements shall must be 
 86.3   determined by adding the figures calculated pursuant to under 
 86.4   paragraph (d), clauses (a) (1), (b) (2), and (c) (3).  If 
 86.5   the relief association does not have an unfunded actuarial 
 86.6   accrued liability as reported in the most recent actuarial 
 86.7   valuation, the financial requirements shall must be an amount 
 86.8   equal to the figure calculated pursuant to under paragraph (d), 
 86.9   clauses (a) (1) and (b) (2), reduced by an amount equal to 
 86.10  one-tenth of the amount of any assets in excess of the actuarial 
 86.11  accrued liability of the relief association.  
 86.12     (c) The determination of whether or not the relief 
 86.13  association has an unfunded actuarial accrued liability 
 86.14  shall must be based on the current market value of assets for 
 86.15  which a market value is readily ascertainable and the cost or 
 86.16  book value, whichever is applicable, for assets for which no 
 86.17  market value is readily ascertainable. 
 86.18     (a) (d) The components of the financial requirements of the 
 86.19  relief association are the following: 
 86.20     (1) The normal level cost requirement for the following 
 86.21  year, expressed as a dollar amount, shall be is the figure for 
 86.22  the normal level cost of the relief association as reported in 
 86.23  the actuarial valuation. 
 86.24     (b) (2) The amount of anticipated future administrative 
 86.25  expenses of the special fund shall must be calculated by 
 86.26  multiplying the dollar amount of the administrative expenses of 
 86.27  the special fund for the most recent prior calendar year by the 
 86.28  factor of 1.035. 
 86.29     (c) (3) The amortization contribution requirement to retire 
 86.30  the current unfunded actuarial accrued liability by the 
 86.31  established date for full funding shall be is the figure for the 
 86.32  amortization contribution as reported in the actuarial 
 86.33  valuation.  If there has not been a change in the actuarial 
 86.34  assumptions used for calculating the actuarial accrued liability 
 86.35  of the special fund, a change in the bylaws of the relief 
 86.36  association governing the service pensions, retirement benefits, 
 87.1   or both, payable from the special fund, or a change in the 
 87.2   actuarial cost method used to value all or a portion of the 
 87.3   special fund which change or changes, which by themselves, 
 87.4   without inclusion of any other items of increase or decrease, 
 87.5   produce a net increase in the unfunded actuarial accrued 
 87.6   liability of the special fund since December 31, 1970, the 
 87.7   established date for full funding shall be is the December 31, 
 87.8   1990 occurring ten years later.  If there has been a change in 
 87.9   the actuarial assumptions used for calculating the actuarial 
 87.10  accrued liability of the special fund, a change in the bylaws of 
 87.11  the relief association governing the service pensions, 
 87.12  retirement benefits, or both payable from the special fund or a 
 87.13  change in the actuarial cost method used to value all or a 
 87.14  portion of the special fund and the change or changes, by 
 87.15  themselves and without inclusion of any other items of increase 
 87.16  or decrease, produce a net increase in the unfunded actuarial 
 87.17  accrued liability of the special fund since December 31, 1970, 
 87.18  but prior to January 1, 1979 within the past 20 years, the 
 87.19  established date for full funding shall be December 31, 1998, 
 87.20  and if there has been a change since December 31, 1978, the 
 87.21  established date for full funding shall must be determined using 
 87.22  the following procedure:  
 87.23     (i) the unfunded actuarial accrued liability of the special 
 87.24  fund attributable to experience losses that have occurred since 
 87.25  the most recent prior actuarial valuation must be determined and 
 87.26  the level annual dollar contribution needed to amortize the 
 87.27  experience loss over a period of ten years ending on the 
 87.28  December 31 occurring ten years later must be calculated; 
 87.29     (ii) the unfunded actuarial accrued liability of the 
 87.30  special fund shall must be determined in accordance with the 
 87.31  provisions governing service pensions, retirement benefits, and 
 87.32  actuarial assumptions in effect before an applicable change; 
 87.33     (ii) (iii) the level annual dollar contribution needed to 
 87.34  amortize this unfunded actuarial accrued liability amount by the 
 87.35  date for full funding in effect prior to before the change shall 
 87.36  must be calculated using the interest assumption specified in 
 88.1   section 356.215, subdivision 8, in effect before any applicable 
 88.2   change; 
 88.3      (iii) (iv) the unfunded actuarial accrued liability of the 
 88.4   special fund shall must be determined in accordance with any new 
 88.5   provisions governing service pensions, retirement benefits, and 
 88.6   actuarial assumptions and the remaining provisions governing 
 88.7   service pensions, retirement benefits, and actuarial assumptions 
 88.8   in effect before an applicable change; 
 88.9      (iv) (v) the level annual dollar contribution needed to 
 88.10  amortize the difference between the unfunded actuarial accrued 
 88.11  liability amount calculated pursuant to subclause (i) under item 
 88.12  (ii) and the unfunded actuarial accrued liability amount 
 88.13  calculated pursuant to subclause (iii) under item (iv) over a 
 88.14  period of 20 years starting December 31 of the year in which the 
 88.15  change is effective shall must be calculated using the interest 
 88.16  assumption specified in section 356.215, subdivision 8, in 
 88.17  effect after any applicable change; 
 88.18     (v) (vi) the annual amortization contribution calculated 
 88.19  pursuant to subclause (iv) shall under item (v) must be added to 
 88.20  the annual amortization contribution calculated pursuant to 
 88.21  subclause (ii) under items (i) and (iii); 
 88.22     (vi) (vii) the period in which the unfunded actuarial 
 88.23  accrued liability amount determined in subclause (iii) item (iv) 
 88.24  will be amortized by the total annual amortization contribution 
 88.25  computed pursuant to subclause (v) shall under item (vi) must be 
 88.26  calculated using the interest assumption specified in section 
 88.27  356.215, subdivision 8, in effect after any applicable change, 
 88.28  rounded to the nearest integral number of years, but which shall 
 88.29  must not exceed a period of 20 years from the end of the year in 
 88.30  which the determination of the date for full funding using this 
 88.31  procedure is made and which shall must not be less than the 
 88.32  period of years beginning in the year in which the determination 
 88.33  of the date for full funding using this procedure is made and 
 88.34  ending by the date for full funding in effect before the change; 
 88.35     (vii) (viii) the period determined pursuant to subclause 
 88.36  (vi) shall under item (vii) must be added to the date as of 
 89.1   which the actuarial valuation was prepared and the resulting 
 89.2   date shall be is the new date for full funding. 
 89.3      Sec. 7.  Minnesota Statutes 2004, section 69.773, 
 89.4   subdivision 5, is amended to read: 
 89.5      Subd. 5.  [MINIMUM MUNICIPAL OBLIGATION.] (a) The officers 
 89.6   of the relief association shall determine the minimum obligation 
 89.7   of the municipality with respect to the special fund of the 
 89.8   relief association for the following calendar year prior to on 
 89.9   or before August 1 of each year in accordance with the 
 89.10  requirements of this subdivision.  
 89.11     (b) The minimum obligation of the municipality with respect 
 89.12  to the special fund shall be is an amount equal to the financial 
 89.13  requirements of the special fund of the relief association 
 89.14  determined pursuant to under subdivision 4, reduced by the 
 89.15  estimated amount of any fire state aid payable pursuant to under 
 89.16  sections 69.011 to 69.051 reasonably anticipated to be received 
 89.17  by the municipality for transmittal to the special fund of the 
 89.18  relief association during the following year and the amount of 
 89.19  any anticipated contributions to the special fund required by 
 89.20  the relief association bylaws from the active members of the 
 89.21  relief association reasonably anticipated to be received during 
 89.22  the following calendar year.  A reasonable amount of anticipated 
 89.23  fire state aid is an amount that does not exceed the fire state 
 89.24  aid actually received in the prior year multiplied by the factor 
 89.25  1.035. 
 89.26     (c) The officers of the relief association shall certify 
 89.27  the financial requirements of the special fund of the relief 
 89.28  association and the minimum obligation of the municipality with 
 89.29  respect to the special fund of the relief association as 
 89.30  determined pursuant to under subdivision 4 and this subdivision 
 89.31  to the governing body of the municipality by August 1 of each 
 89.32  year.  The financial requirements of the relief association and 
 89.33  the minimum municipal obligation must be included in the 
 89.34  financial report or financial statement under section 69.051.  
 89.35     (d) The municipality shall provide for at least the minimum 
 89.36  obligation of the municipality with respect to the special fund 
 90.1   of the relief association by tax levy or from any other source 
 90.2   of public revenue.  The municipality may levy taxes for the 
 90.3   payment of the minimum municipal obligation without any 
 90.4   limitation as to rate or amount and irrespective of any 
 90.5   limitations imposed by other provisions of law or charter upon 
 90.6   the rate or amount of taxation until the balance of the special 
 90.7   fund or any fund of the relief association has attained a 
 90.8   specified level.  In addition, any taxes levied pursuant to 
 90.9   under this section shall must not cause the amount or rate of 
 90.10  any other taxes levied in that year or to be levied in a 
 90.11  subsequent year by the municipality which are subject to a 
 90.12  limitation as to rate or amount to be reduced.  
 90.13     (e) If the municipality does not include the full amount of 
 90.14  the minimum municipal obligation in its levy for any year, the 
 90.15  officers of the relief association shall certify that amount to 
 90.16  the county auditor, who shall spread a levy in the amount of the 
 90.17  minimum municipal obligation on the taxable property of the 
 90.18  municipality. 
 90.19     (f) If the state auditor determines that a municipal 
 90.20  contribution actually made in a plan year was insufficient under 
 90.21  section 69.771, subdivision 3, paragraph (c), clause (5), the 
 90.22  state auditor may request from the relief association or from 
 90.23  the city a copy of the certifications under this subdivision.  
 90.24  The relief association or the city, whichever applies, must 
 90.25  provide the certifications within 14 days of the date of the 
 90.26  request from the state auditor. 
 90.27     Sec. 8.  Minnesota Statutes 2004, section 69.775, is 
 90.28  amended to read: 
 90.29     69.775 [INVESTMENTS.] 
 90.30     (a) The special fund assets of the a relief associations 
 90.31  association governed by sections 69.771 to 69.776 must be 
 90.32  invested in securities that are authorized investments under 
 90.33  section 356A.06, subdivision 6 or 7.  
 90.34     (b) Notwithstanding the foregoing, up to 75 percent of the 
 90.35  market value of the assets of the special fund, not including 
 90.36  any money market mutual funds, may be invested in open-end 
 91.1   investment companies registered under the federal Investment 
 91.2   Company Act of 1940, if the portfolio investments of the 
 91.3   investment companies comply with the type of securities 
 91.4   authorized for investment under section 356A.06, subdivision 7.  
 91.5      (c) Securities held by the associations before June 2, 
 91.6   1989, that do not meet the requirements of this section may be 
 91.7   retained after that date if they were proper investments for the 
 91.8   association on that date.  
 91.9      (d) The governing board of the association may select and 
 91.10  appoint investment agencies to act for and in its behalf or may 
 91.11  certify special fund assets for investment by the State Board of 
 91.12  Investment under section 11A.17.  
 91.13     (e) The governing board of the association may certify 
 91.14  general fund assets of the relief association for investment by 
 91.15  the State Board of Investment in fixed income pools or in a 
 91.16  separately managed account at the discretion of the State Board 
 91.17  of Investment as provided in section 11A.14.  
 91.18     (f) The governing board of the association may select and 
 91.19  appoint a qualified private firm to measure management 
 91.20  performance and return on investment, and the firm shall use the 
 91.21  formula or formulas developed by the state board under section 
 91.22  11A.04, clause (11). 
 91.23     Sec. 9.  Minnesota Statutes 2004, section 356A.06, 
 91.24  subdivision 7, is amended to read: 
 91.25     Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
 91.26  SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
 91.27  authorized by law or bylaws, a covered pension plan not 
 91.28  described by subdivision 6, paragraph (a), may invest its assets 
 91.29  only in accordance with this subdivision. 
 91.30     (b)  [SECURITIES GENERALLY.] The covered pension plan has 
 91.31  the authority to purchase, sell, lend, or exchange the 
 91.32  securities specified in paragraphs (c) to (g) (h), including 
 91.33  puts and call options and future contracts traded on a contract 
 91.34  market regulated by a governmental agency or by a financial 
 91.35  institution regulated by a governmental agency.  These 
 91.36  securities may be owned as units in commingled trusts that own 
 92.1   the securities described in paragraphs (c) to (g) (h).  
 92.2      (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
 92.3   invest funds in governmental bonds, notes, bills, mortgages, and 
 92.4   other evidences of indebtedness provided the issue is backed by 
 92.5   the full faith and credit of the issuer or the issue is rated 
 92.6   among the top four quality rating categories by a nationally 
 92.7   recognized rating agency.  The obligations in which funds may be 
 92.8   invested under this paragraph include guaranteed or insured 
 92.9   issues of (1) the United States, its agencies, its 
 92.10  instrumentalities, or organizations created and regulated by an 
 92.11  act of Congress; (2) Canada and its provinces, provided the 
 92.12  principal and interest is payable in United States dollars; (3) 
 92.13  the states and their municipalities, political subdivisions, 
 92.14  agencies, or instrumentalities; (4) the International Bank for 
 92.15  Reconstruction and Development, the Inter-American Development 
 92.16  Bank, the Asian Development Bank, the African Development Bank, 
 92.17  or any other United States government sponsored organization of 
 92.18  which the United States is a member, provided the principal and 
 92.19  interest is payable in United States dollars. 
 92.20     (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
 92.21  invest funds in bonds, notes, debentures, transportation 
 92.22  equipment obligations, or any other longer term evidences of 
 92.23  indebtedness issued or guaranteed by a corporation organized 
 92.24  under the laws of the United States or any state thereof, or the 
 92.25  Dominion of Canada or any province thereof if they conform to 
 92.26  the following provisions: 
 92.27     (1) the principal and interest of obligations of 
 92.28  corporations incorporated or organized under the laws of the 
 92.29  Dominion of Canada or any province thereof must be payable in 
 92.30  United States dollars; and 
 92.31     (2) obligations must be rated among the top four quality 
 92.32  categories by a nationally recognized rating agency. 
 92.33     (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
 92.34  invest funds in bankers acceptances, certificates of deposit, 
 92.35  deposit notes, commercial paper, mortgage participation 
 92.36  certificates and pools, asset backed securities, repurchase 
 93.1   agreements and reverse repurchase agreements, guaranteed 
 93.2   investment contracts, savings accounts, and guaranty fund 
 93.3   certificates, surplus notes, or debentures of domestic mutual 
 93.4   insurance companies if they conform to the following provisions: 
 93.5      (i) bankers acceptances and deposit notes of United States 
 93.6   banks are limited to those issued by banks rated in the highest 
 93.7   four quality categories by a nationally recognized rating 
 93.8   agency; 
 93.9      (ii) certificates of deposit are limited to those issued by 
 93.10  (A) United States banks and savings institutions that are rated 
 93.11  in the highest four quality categories by a nationally 
 93.12  recognized rating agency or whose certificates of deposit are 
 93.13  fully insured by federal agencies; or (B) credit unions in 
 93.14  amounts up to the limit of insurance coverage provided by the 
 93.15  National Credit Union Administration; 
 93.16     (iii) commercial paper is limited to those issued by United 
 93.17  States corporations or their Canadian subsidiaries and rated in 
 93.18  the highest two quality categories by a nationally recognized 
 93.19  rating agency; 
 93.20     (iv) mortgage participation or pass through certificates 
 93.21  evidencing interests in pools of first mortgages or trust deeds 
 93.22  on improved real estate located in the United States where the 
 93.23  loan to value ratio for each loan as calculated in accordance 
 93.24  with section 61A.28, subdivision 3, does not exceed 80 percent 
 93.25  for fully amortizable residential properties and in all other 
 93.26  respects meets the requirements of section 61A.28, subdivision 
 93.27  3; 
 93.28     (v) collateral for repurchase agreements and reverse 
 93.29  repurchase agreements is limited to letters of credit and 
 93.30  securities authorized in this section; 
 93.31     (vi) guaranteed investment contracts are limited to those 
 93.32  issued by insurance companies or banks rated in the top four 
 93.33  quality categories by a nationally recognized rating agency or 
 93.34  to alternative guaranteed investment contracts where the 
 93.35  underlying assets comply with the requirements of this 
 93.36  subdivision; 
 94.1      (vii) savings accounts are limited to those fully insured 
 94.2   by federal agencies; and 
 94.3      (viii) asset backed securities must be rated in the top 
 94.4   four quality categories by a nationally recognized rating agency.
 94.5      (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 
 94.6   not apply to certificates of deposit and collateralization 
 94.7   agreements executed by the covered pension plan under clause 
 94.8   (1), item (ii). 
 94.9      (3) In addition to investments authorized by clause (1), 
 94.10  item (iv), the covered pension plan may purchase from the 
 94.11  Minnesota Housing Finance Agency all or any part of a pool of 
 94.12  residential mortgages, not in default, that has previously been 
 94.13  financed by the issuance of bonds or notes of the agency.  The 
 94.14  covered pension plan may also enter into a commitment with the 
 94.15  agency, at the time of any issue of bonds or notes, to purchase 
 94.16  at a specified future date, not exceeding 12 years from the date 
 94.17  of the issue, the amount of mortgage loans then outstanding and 
 94.18  not in default that have been made or purchased from the 
 94.19  proceeds of the bonds or notes.  The covered pension plan may 
 94.20  charge reasonable fees for any such commitment and may agree to 
 94.21  purchase the mortgage loans at a price sufficient to produce a 
 94.22  yield to the covered pension plan comparable, in its judgment, 
 94.23  to the yield available on similar mortgage loans at the date of 
 94.24  the bonds or notes.  The covered pension plan may also enter 
 94.25  into agreements with the agency for the investment of any 
 94.26  portion of the funds of the agency.  The agreement must cover 
 94.27  the period of the investment, withdrawal privileges, and any 
 94.28  guaranteed rate of return. 
 94.29     (f)  [CORPORATE STOCKS.] The covered pension plan may 
 94.30  invest funds in stocks or convertible issues of any corporation 
 94.31  organized under the laws of the United States or the states 
 94.32  thereof, any corporation organized under the laws of the 
 94.33  Dominion of Canada or its provinces, or any corporation listed 
 94.34  on the New York Stock Exchange or the American Stock Exchange an 
 94.35  exchange regulated by an agency of the United States or of the 
 94.36  Canadian national government, if they conform to the following 
 95.1   provisions: 
 95.2      (1) the aggregate value of corporate stock investments, as 
 95.3   adjusted for realized profits and losses, must not exceed 85 
 95.4   percent of the market or book value, whichever is less, of a 
 95.5   fund, less the aggregate value of investments according to 
 95.6   subdivision 6 paragraph (h); 
 95.7      (2) investments must not exceed five percent of the total 
 95.8   outstanding shares of any one corporation. 
 95.9      (g)  [EXCHANGE TRADED FUNDS.] The covered pension plan may 
 95.10  invest funds in exchange traded funds, subject to the maximums, 
 95.11  the requirements, and the limitations set forth in paragraph 
 95.12  (d), (e), (f), or (h), whichever applies. 
 95.13     (h)  [OTHER INVESTMENTS.] (1) In addition to the 
 95.14  investments authorized in paragraphs (b) to (f) (g), and subject 
 95.15  to the provisions in clause (2), the covered pension plan may 
 95.16  invest funds in:  
 95.17     (i) venture capital investment businesses through 
 95.18  participation in limited partnerships and corporations; 
 95.19     (ii) real estate ownership interests or loans secured by 
 95.20  mortgages or deeds of trust through investment in limited 
 95.21  partnerships, bank sponsored collective funds, trusts, and 
 95.22  insurance company commingled accounts, including separate 
 95.23  accounts; 
 95.24     (iii) regional and mutual funds through bank sponsored 
 95.25  collective funds and open-end investment companies registered 
 95.26  under the Federal Investment Company Act of 1940; 
 95.27     (iv) resource investments through limited partnerships, 
 95.28  private placements, and corporations; and 
 95.29     (v) international securities. 
 95.30     (2) The investments authorized in clause (1) must conform 
 95.31  to the following provisions:  
 95.32     (i) the aggregate value of all investments made according 
 95.33  to clause (1) may not exceed 35 percent of the market value of 
 95.34  the fund for which the covered pension plan is investing; 
 95.35     (ii) there must be at least four unrelated owners of the 
 95.36  investment other than the state board for investments made under 
 96.1   clause (1), item (i), (ii), (iii), or (iv); 
 96.2      (iii) covered pension plan participation in an investment 
 96.3   vehicle is limited to 20 percent thereof for investments made 
 96.4   under clause (1), item (i), (ii), (iii), or (iv); and 
 96.5      (iv) covered pension plan participation in a limited 
 96.6   partnership does not include a general partnership interest or 
 96.7   other interest involving general liability.  The covered pension 
 96.8   plan may not engage in any activity as a limited partner which 
 96.9   creates general liability. 
 96.10     Sec. 10.  Minnesota Statutes 2004, section 424A.02, 
 96.11  subdivision 3, is amended to read: 
 96.12     Subd. 3.  [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) Annually 
 96.13  on or before August 1 as part of the certification of the 
 96.14  financial requirements and minimum municipal obligation 
 96.15  determined under section 69.772, subdivision 4, or 69.773, 
 96.16  subdivision 5, as applicable, the secretary or some other 
 96.17  official of the relief association designated in the bylaws of 
 96.18  each relief association shall calculate and certify to the 
 96.19  governing body of the applicable qualified municipality the 
 96.20  average amount of available financing per active covered 
 96.21  firefighter for the most recent three-year period.  The amount 
 96.22  of available financing shall include any amounts of fire state 
 96.23  aid received or receivable by the relief association, any 
 96.24  amounts of municipal contributions to the relief association 
 96.25  raised from levies on real estate or from other available 
 96.26  revenue sources exclusive of fire state aid, and one-tenth of 
 96.27  the amount of assets in excess of the accrued liabilities of the 
 96.28  relief association calculated under section 69.772, subdivision 
 96.29  2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if 
 96.30  any.  
 96.31     (b) The maximum service pension which the relief 
 96.32  association has authority to provide for in its bylaws for 
 96.33  payment to a member retiring after the calculation date when the 
 96.34  minimum age and service requirements specified in subdivision 1 
 96.35  are met must be determined using the table in paragraph (c) or 
 96.36  (d), whichever applies. 
 97.1      (c) For a relief association where the governing bylaws 
 97.2   provide for a monthly service pension to a retiring member, the 
 97.3   maximum monthly service pension amount per month for each year 
 97.4   of service credited that may be provided for in the bylaws is 
 97.5   the greater of the service pension amount provided for in the 
 97.6   bylaws on the date of the calculation of the average amount of 
 97.7   the available financing per active covered firefighter or the 
 97.8   maximum service pension figure corresponding to the average 
 97.9   amount of available financing per active covered firefighter: 
 97.10    Minimum Average Amount of      Maximum Service Pension
 97.11    Available Financing per        Amount Payable per Month
 97.12         Firefighter               for Each Year of Service
 97.13           $...                            $  .25
 97.14             42   41                          .50
 97.15             84   81                         1.00
 97.16            126  122                         1.50
 97.17            168  162                         2.00
 97.18            209  203                         2.50
 97.19            252  243                         3.00
 97.20            294  284                         3.50
 97.21            335  324                         4.00
 97.22            378  365                         4.50
 97.23            420  405                         5.00
 97.24            503  486                         6.00
 97.25            587  567                         7.00
 97.26            672  648                         8.00
 97.27            755  729                         9.00
 97.28            839  810                        10.00
 97.29            923  891                        11.00
 97.30           1007  972                        12.00
 97.31           1090 1053                        13.00
 97.32           1175 1134                        14.00
 97.33           1259 1215                        15.00
 97.34           1342 1296                        16.00
 97.35           1427 1377                        17.00
 97.36           1510 1458                        18.00
 98.1            1594 1539                        19.00
 98.2            1677 1620                        20.00
 98.3            1762 1701                        21.00
 98.4            1845 1782                        22.00
 98.5            1888 1823                        22.50
 98.6            1929 1863                        23.00
 98.7            2014 1944                        24.00
 98.8            2098 2025                        25.00
 98.9            2183 2106                        26.00
 98.10           2267 2187                        27.00
 98.11           2351 2268                        28.00
 98.12           2436 2349                        29.00
 98.13           2520 2430                        30.00
 98.14           2604 2511                        31.00
 98.15           2689 2592                        32.00
 98.16           2773 2673                        33.00
 98.17           2857 2754                        34.00
 98.18           2942 2834                        35.00
 98.19           3026 2916                        36.00
 98.20           3110 2997                        37.00
 98.21           3194 3078                        38.00
 98.22           3278 3159                        39.00
 98.23           3362 3240                        40.00
 98.24           3446 3321                        41.00
 98.25           3530 3402                        42.00
 98.26           3614 3483                        43.00
 98.27           3698 3564                        44.00
 98.28           3782 3645                        45.00
 98.29           3866 3726                        46.00
 98.30           3950 3807                        47.00
 98.31           4034 3888                        48.00
 98.32           4118 3969                        49.00
 98.33           4202 4050                        50.00
 98.34           4286 4131                        51.00
 98.35           4370 4212                        52.00
 98.36     Effective beginning December 31, 2003: 
 99.1            4454 4293                        53.00
 99.2            4538 4374                        54.00
 99.3            4622 4455                        55.00
 99.4            4706 4536                        56.00
 99.5      (d) For a relief association in which the governing bylaws 
 99.6   provide for a lump sum service pension to a retiring member, the 
 99.7   maximum lump sum service pension amount for each year of service 
 99.8   credited that may be provided for in the bylaws is the greater 
 99.9   of the service pension amount provided for in the bylaws on the 
 99.10  date of the calculation of the average amount of the available 
 99.11  financing per active covered firefighter or the maximum service 
 99.12  pension figure corresponding to the average amount of available 
 99.13  financing per active covered firefighter for the applicable 
 99.14  specified period: 
 99.15   Minimum Average Amount         Maximum Lump Sum Service
 99.16   of Available Financing         Pension Amount Payable
 99.17      per Firefighter             for Each Year of Service
 99.18          $..                              $10
 99.19           11                               20
 99.20           16                               30
 99.21           23                               40
 99.22           27                               50
 99.23           32                               60
 99.24           43                               80
 99.25           54                              100
 99.26           65                              120
 99.27           77                              140
 99.28           86                              160
 99.29           97                              180
 99.30          108                              200
 99.31          131                              240
 99.32          151                              280
 99.33          173                              320
 99.34          194                              360
 99.35          216                              400
 99.36          239                              440
100.1           259                              480
100.2           281                              520
100.3           302                              560
100.4           324                              600
100.5           347                              640
100.6           367                              680
100.7           389                              720
100.8           410                              760
100.9           432                              800
100.10          486                              900
100.11          540                             1000
100.12          594                             1100
100.13          648                             1200
100.14          702                             1300
100.15          756                             1400
100.16          810                             1500
100.17          864                             1600
100.18          918                             1700
100.19          972                             1800
100.20         1026                             1900
100.21         1080                             2000
100.22         1134                             2100
100.23         1188                             2200
100.24         1242                             2300
100.25         1296                             2400
100.26         1350                             2500
100.27         1404                             2600
100.28         1458                             2700
100.29         1512                             2800
100.30         1566                             2900
100.31         1620                             3000
100.32         1672                             3100
100.33         1726                             3200
100.34         1753                             3250
100.35         1780                             3300
100.36         1820                             3375
101.1          1834                             3400
101.2          1888                             3500
101.3          1942                             3600
101.4          1996                             3700
101.5          2023                             3750
101.6          2050                             3800
101.7          2104                             3900
101.8          2158                             4000
101.9          2212                             4100
101.10         2265                             4200
101.11         2319                             4300
101.12         2373                             4400
101.13         2427                             4500
101.14         2481                             4600
101.15         2535                             4700
101.16         2589                             4800
101.17         2643                             4900
101.18         2697                             5000
101.19         2751                             5100
101.20         2805                             5200
101.21         2859                             5300
101.22         2913                             5400
101.23         2967                             5500
101.24         3021                             5600
101.25         3075                             5700
101.26         3129                             5800
101.27         3183                             5900
101.28         3237                             6000
101.29         3291                             6100
101.30         3345                             6200
101.31         3399                             6300
101.32         3453                             6400
101.33         3507                             6500
101.34         3561                             6600
101.35         3615                             6700
101.36         3669                             6800
102.1          3723                             6900
102.2          3777                             7000
102.3      Effective beginning December 31, 2003: 
102.4          3831                             7100
102.5          3885                             7200
102.6          3939                             7300
102.7          3993                             7400
102.8          4047                             7500
102.9      (e) For a relief association in which the governing bylaws 
102.10  provide for a monthly benefit service pension as an alternative 
102.11  form of service pension payment to a lump sum service pension, 
102.12  the maximum service pension amount for each pension payment type 
102.13  must be determined using the applicable table contained in this 
102.14  subdivision. 
102.15     (f) If a relief association establishes a service pension 
102.16  in compliance with the applicable maximum contained in paragraph 
102.17  (c) or (d) and the minimum average amount of available financing 
102.18  per active covered firefighter is subsequently reduced because 
102.19  of a reduction in fire state aid or because of an increase in 
102.20  the number of active firefighters, the relief association may 
102.21  continue to provide the prior service pension amount specified 
102.22  in its bylaws, but may not increase the service pension amount 
102.23  until the minimum average amount of available financing per 
102.24  firefighter under the table in paragraph (c) or (d), whichever 
102.25  applies, permits. 
102.26     (g) No relief association is authorized to provide a 
102.27  service pension in an amount greater than the largest applicable 
102.28  flexible service pension maximum amount even if the amount of 
102.29  available financing per firefighter is greater than the 
102.30  financing amount associated with the largest applicable flexible 
102.31  service pension maximum. 
102.32     Sec. 11.  Minnesota Statutes 2004, section 424A.02, 
102.33  subdivision 4, is amended to read: 
102.34     Subd. 4.  [DEFINED CONTRIBUTION LUMP SUM SERVICE 
102.35  PENSIONS.] (a) If the bylaws governing the relief association so 
102.36  provide exclusively, the relief association may pay a defined 
103.1   contribution lump sum service pension in lieu of any defined 
103.2   benefit service pension governed by subdivision 2.  
103.3      (b) An individual account for each firefighter who is a 
103.4   member of the relief association shall must be established.  To 
103.5   each individual active member account shall must be credited a 
103.6   right to an equal share of:  (a) (1) any amounts of fire state 
103.7   aid received by the relief association; (b) (2) any amounts of 
103.8   municipal contributions to the relief association raised from 
103.9   levies on real estate or from other available revenue sources 
103.10  exclusive of fire state aid; and (c) (3) any amounts equal to 
103.11  the share of the assets of the special fund to the credit 
103.12  of:  (1) (i) any former member who terminated active service 
103.13  with the fire department to which the relief association is 
103.14  associated prior to before meeting the minimum service 
103.15  requirement provided for in subdivision 1 and has not returned 
103.16  to active service with the fire department for a period no 
103.17  shorter than five years; or (2) (ii) any retired member who 
103.18  retired prior to before obtaining a full nonforfeitable interest 
103.19  in the amounts credited to the individual member 
103.20  account pursuant to under subdivision 2 and any applicable 
103.21  provision of the bylaws of the relief association.  In addition, 
103.22  any interest or investment income earned return on the assets of 
103.23  the special fund shall must be credited in proportion to the 
103.24  share of the assets of the special fund to the credit of each 
103.25  individual active member account through the date on which the 
103.26  investment return is recognized by and credited to the special 
103.27  fund.  
103.28     (c) At the time of retirement pursuant to under subdivision 
103.29  1 and any applicable provision of the bylaws of the relief 
103.30  association, a retiring member shall be is entitled to that 
103.31  portion of the assets of the special fund to the credit of the 
103.32  member in the individual member account which is 
103.33  nonforfeitable pursuant to under subdivision 2 and any 
103.34  applicable provision of the bylaws of the relief association 
103.35  based on the number of years of service to the credit of the 
103.36  retiring member.  
104.1      Sec. 12.  Minnesota Statutes 2004, section 424A.02, 
104.2   subdivision 7, is amended to read: 
104.3      Subd. 7.  [DEFERRED SERVICE PENSIONS.] (a) A member of a 
104.4   relief association to which this section applies is entitled to 
104.5   a deferred service pension if the member: 
104.6      (1) has completed the lesser of the minimum period of 
104.7   active service with the fire department specified in the bylaws 
104.8   or 20 years of active service with the fire department; 
104.9      (2) has completed at least five years of active membership 
104.10  in the relief association; and 
104.11     (3) separates from active service and membership before 
104.12  reaching age 50 or the minimum age for retirement and 
104.13  commencement of a service pension specified in the bylaws 
104.14  governing the relief association if that age is greater than age 
104.15  50.  
104.16     (b) The deferred service pension starts is payable when the 
104.17  former member reaches age 50, or the minimum age specified in 
104.18  the bylaws governing the relief association if that age is 
104.19  greater than age 50, and when the former member makes a valid 
104.20  written application. 
104.21     (c) A relief association that provides a lump sum service 
104.22  pension governed by subdivision 3 may, when its governing bylaws 
104.23  so provide, pay interest on the deferred lump sum service 
104.24  pension during the period of deferral.  If provided for in the 
104.25  bylaws, interest must be paid in one of the following manners: 
104.26     (1) at the investment performance rate actually earned on 
104.27  that portion of the assets if the deferred benefit amount is 
104.28  invested by the relief association in a separate account 
104.29  established and maintained by the relief association or if the 
104.30  deferred benefit amount is invested in a separate investment 
104.31  vehicle held by the relief association; 
104.32     (2) at the an interest rate of up to five percent, 
104.33  compounded annually as set by the board of directors and 
104.34  approved as provided in subdivision 10; or 
104.35     (3) at a rate equal to the actual time weighted total rate 
104.36  of return investment performance of the special fund as reported 
105.1   by the Office of the State Auditor under section 356.219, up to 
105.2   five percent, compounded annually, and applied consistently for 
105.3   all deferred service pensioners. 
105.4      (d) A relief association may not use the method provided 
105.5   for in paragraph (c), clause (3), until it has modified its 
105.6   bylaws to be consistent with that clause. 
105.7      (d) Interest under paragraph (c), clause (2) or (3), is 
105.8   payable from the first day of the month next following the date 
105.9   on which the municipality has approved the deferred service 
105.10  pension interest rate established by the board of trustees or 
105.11  from the first day of the month next following the date on which 
105.12  the member separated from active fire department service and 
105.13  relief association membership, whichever is later, to the last 
105.14  day of the month immediately before the month in which the 
105.15  deferred member becomes eligible to begin receipt of the service 
105.16  pension and applies for the deferred service pension.  
105.17     (e) A relief association that provides a defined 
105.18  contribution service pension may, if its governing bylaws so 
105.19  provide, credit interest or additional investment performance on 
105.20  the deferred lump sum service pension during the period of 
105.21  deferral.  If provided for in the bylaws, the interest must be 
105.22  paid in one of the manners specified in paragraph (c) or 
105.23  alternatively the relief association may credit any investment 
105.24  return on the assets of the special fund of the defined 
105.25  contribution volunteer firefighter relief association in 
105.26  proportion to the share of the assets of the special fund to the 
105.27  credit of each individual deferred member account through the 
105.28  date on which the investment return is recognized by and 
105.29  credited to the special fund.  
105.30     (f) For a deferred service pension that is transferred to a 
105.31  separate account established and maintained by the relief 
105.32  association or separate investment vehicle held by the relief 
105.33  association, the deferred member bears the full investment risk 
105.34  subsequent to transfer and in calculating the accrued liability 
105.35  of the volunteer firefighters relief association that pays a 
105.36  lump sum service pension, the accrued liability for deferred 
106.1   service pensions is equal to the separate relief association 
106.2   account balance or the fair market value of the separate 
106.3   investment vehicle held by the relief association. 
106.4      (f) (g) The deferred service pension is governed by and 
106.5   must be calculated under the general statute, special law, 
106.6   relief association articles of incorporation, and relief 
106.7   association bylaw provisions applicable on the date on which the 
106.8   member separated from active service with the fire department 
106.9   and active membership in the relief association. 
106.10     Sec. 13.  [424A.021] [CREDIT FOR BREAK IN SERVICE TO 
106.11  PROVIDE UNIFORMED SERVICE.] 
106.12     Subdivision 1.  [AUTHORIZATION.] Subject to restrictions 
106.13  stated in this section, a volunteer firefighter who is absent 
106.14  from firefighting service due to service in the uniformed 
106.15  services, as defined in United States Code, title 38, section 
106.16  4303(13), may obtain service credit if the relief association is 
106.17  a defined benefit plan or an allocation of any fire state aid, 
106.18  any municipal contributions, and any investment return received 
106.19  by the relief association if the relief association is a defined 
106.20  benefit contribution plan for the period of the uniformed 
106.21  service, not to exceed five years, unless a longer period is 
106.22  required under United States Code, title 38, section 4312.  
106.23     Subd. 2.  [LIMITATIONS.] (a) To be eligible for service 
106.24  credit or financial allocation under this section, the volunteer 
106.25  firefighter must return to firefighting service with coverage by 
106.26  the same relief association or by the successor to that relief 
106.27  association upon discharge from service in the uniformed service 
106.28  within the time frame required in United States Code, title 38, 
106.29  section 4312(e). 
106.30     (b) Service credit or financial allocation is not 
106.31  authorized if the firefighter separates from uniformed service 
106.32  with a dishonorable or bad conduct discharge or under other than 
106.33  honorable conditions. 
106.34     (c) Service credit or financial allocation is not 
106.35  authorized if the firefighter fails to provide notice to the 
106.36  fire department that the individual is leaving to provide 
107.1   service in the uniformed service, unless it is not feasible to 
107.2   provide that notice due to the emergency nature of the situation.
107.3      Sec. 14.  Minnesota Statutes 2004, section 424A.04, 
107.4   subdivision 1, is amended to read: 
107.5      Subdivision 1.  [MEMBERSHIP.] (a) Every A relief 
107.6   association that is directly associated with a municipal fire 
107.7   department shall must be managed by a board of trustees 
107.8   consisting of nine members.  Six trustees shall must be elected 
107.9   from the membership of the relief association and three trustees 
107.10  shall must be drawn from the officials of the municipalities 
107.11  served by the fire department to which the relief association is 
107.12  directly associated.  The bylaws of a relief association which 
107.13  provides a monthly benefit service pension may provide that one 
107.14  of the six trustees elected from the relief 
107.15  association membership may be a retired member receiving a 
107.16  monthly pension who is elected by the membership of the relief 
107.17  association.  The three ex officio municipal trustees shall be 
107.18  the mayor, the clerk, clerk-treasurer or finance director, must 
107.19  be one elected municipal official and one elected or appointed 
107.20  municipal official who are designated as municipal 
107.21  representatives by the municipal governing board annually and 
107.22  the chief of the municipal fire department. 
107.23     (b) Every A relief association that is a subsidiary of an 
107.24  independent nonprofit firefighting corporation shall must be 
107.25  managed by a board of trustees consisting of ten nine members.  
107.26  Six trustees shall must be elected from the membership of the 
107.27  relief association, three two trustees shall must be drawn from 
107.28  the officials of the municipalities served by the fire 
107.29  department to which the relief association is directly 
107.30  associated, and one trustee shall be the fire chief serving with 
107.31  the independent nonprofit firefighting corporation.  The bylaws 
107.32  of a relief association may provide that one of the six trustees 
107.33  elected from the relief association membership may be a retired 
107.34  member receiving a monthly pension who is elected by the 
107.35  membership of the relief association.  The three ex officio two 
107.36  municipal trustees who are the elected officials shall must 
108.1   be elected or appointed municipal officials, selected as follows:
108.2      (1) if only one municipality contracts with the independent 
108.3   nonprofit firefighting corporation, the ex officio municipal 
108.4   trustees shall must be three elected two officials of the 
108.5   contracting municipality who are designated annually by the 
108.6   governing body of the municipality; 
108.7      (2) if two municipalities contract with the independent 
108.8   nonprofit firefighting corporation, the ex officio trustees 
108.9   shall be two elected officials of the largest municipality in 
108.10  population and one elected official of the next largest 
108.11  municipality in population who are designated by the governing 
108.12  bodies of the applicable municipalities; or 
108.13     (3) (2) if three two or more municipalities contract with 
108.14  the independent nonprofit corporation, the ex officio municipal 
108.15  trustees shall must be one elected official of from each of 
108.16  the three two largest municipalities in population who are 
108.17  designated annually by the governing bodies of the applicable 
108.18  municipalities. 
108.19     (c) The municipal trustees for a relief association that is 
108.20  directly associated with a fire department operated as or by a 
108.21  joint powers entity must be designated annually by the joint 
108.22  powers board.  The municipal trustees for a relief association 
108.23  that is directly associated with a fire department service area 
108.24  township must be designated by the township board. 
108.25     (d) If a relief association lacks the ex officio municipal 
108.26  board members provided for in paragraph (a), (b), or (b) (c) 
108.27  because the fire department is not located in or associated with 
108.28  an organized municipality, joint powers entity, or township, the 
108.29  ex officio municipal board members must be appointed from the 
108.30  fire department service area by the board of commissioners of 
108.31  the applicable county.  
108.32     (e) The term of these appointed ex officio municipal board 
108.33  members is three years one year or until the person's successor 
108.34  is qualified, whichever is later. 
108.35     (d) An ex officio (f) A municipal trustee under paragraph 
108.36  (a), (b), or (c) shall have, or (d) has all the rights and 
109.1   duties accorded to any other trustee, except the right to be an 
109.2   officer of the relief association board of trustees.  
109.3      (e) (g) A board shall must have at least three officers, 
109.4   which shall be who are a president, a secretary and a treasurer. 
109.5   These officers shall must be elected from among the elected 
109.6   trustees by either the full board of trustees or by the 
109.7   membership, as specified in the bylaws, and.  In no event shall 
109.8   may any trustee hold more than one officer position at any one 
109.9   time.  The terms of the elected trustees and of the officers of 
109.10  the board shall must be specified in the bylaws of the relief 
109.11  association, but shall may not exceed three years.  If the term 
109.12  of the elected trustees exceeds one year, the election of the 
109.13  various trustees elected from the membership shall initially and 
109.14  shall thereafter continue to must be staggered on as equal a 
109.15  basis as is practicable. 
109.16     Sec. 15.  Minnesota Statutes 2004, section 424B.10, 
109.17  subdivision 1, is amended to read: 
109.18     Subdivision 1.  [BENEFITS.] (a) Notwithstanding any 
109.19  provision of section 424A.02, subdivision 3, to the contrary, 
109.20  the service pension of the subsequent relief association as of 
109.21  the effective date of consolidation is either the service 
109.22  pension amount specified in clause (1) or the service pension 
109.23  amounts specified in clause (2), as provided for in the 
109.24  consolidated relief association's articles of incorporation or 
109.25  bylaws: 
109.26     (1) the highest dollar amount service pension amount of any 
109.27  prior volunteer firefighters relief association in effect 
109.28  immediately before the consolidation initiation if the pension 
109.29  amount was implemented consistent with section 424A.02; or 
109.30     (2) for service rendered by each individual volunteer 
109.31  firefighter under the consolidating volunteer firefighters 
109.32  relief association that the firefighter belonged to immediately 
109.33  before the consolidation if the pension amount was implemented 
109.34  consistent with section 424A.02 and for service rendered after 
109.35  the effective date of the consolidation, the highest dollar 
109.36  amount service pension of any of the consolidating volunteer 
110.1   firefighters relief associations in effect immediately before 
110.2   the consolidation if the pension amount was implemented 
110.3   consistent with section 424A.02. 
110.4      (b) Any increase in the service pension amount beyond the 
110.5   amount implemented under paragraph (a) must conform with the 
110.6   requirements and limitations of sections 69.771 to 69.775 and 
110.7   424A.02. 
110.8      Sec. 16.  [APPROPRIATION.] 
110.9      $40,000 is appropriated from the general fund in fiscal 
110.10  year 2006 to the commissioner of public safety to hire a 
110.11  consultant to assist the statewide Volunteer Firefighter 
110.12  Retirement Plan Study Task Force. 
110.13     Sec. 17.  [EFFECTIVE DATE.] 
110.14     (a) Sections 1 to 12, 14, 15, and 16 are effective July 1, 
110.15  2005. 
110.16     (b) Section 13 is effective July 1, 2005, and applies to 
110.17  breaks in service that end on or after that date. 
110.18                             ARTICLE 12
110.19                        VARIOUS CORRECTIONS
110.20                         AND CLARIFICATIONS
110.21     Section 1.  Minnesota Statutes 2004, section 3A.13, is 
110.22  amended to read: 
110.23     3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 
110.24  DEDUCTION.] 
110.25     (a) The provisions of section 352.15 shall 356.401 apply to 
110.26  the legislators retirement plan, chapter 3A. 
110.27     (b) The executive director of the Minnesota State 
110.28  Retirement System must, at the request of a retired legislator 
110.29  who is enrolled in a health insurance plan covering state 
110.30  employees, deduct the person's health insurance premiums from 
110.31  the person's annuity and transfer the amount of the premium to a 
110.32  health insurance carrier covering state employees. 
110.33     Sec. 2.  Minnesota Statutes 2004, section 69.011, 
110.34  subdivision 2b, is amended to read: 
110.35     Subd. 2b.  [DEPARTMENTS OF NATURAL RESOURCES AND PUBLIC 
110.36  SAFETY.] (a) On or before July 1, 1997, the commissioner of 
111.1   natural resources shall certify one-half of the number of peace 
111.2   officers as defined in subdivision 1, clause (g), employed by 
111.3   the Enforcement Division during calendar year 1996 and the 
111.4   commissioner of public safety shall certify one-half of the 
111.5   number of peace officers as defined in subdivision 1, clause 
111.6   (g), employed by the Bureau of Criminal Apprehension, the 
111.7   Gambling Enforcement Division, and the State Patrol Division 
111.8   during calendar year 1996. 
111.9      (b) On or before March 15, 1998, the commissioner of 
111.10  natural resources shall certify seven-tenths of the number of 
111.11  peace officers as defined in subdivision 1, clause (g), employed 
111.12  by the Enforcement Division and the commissioner of public 
111.13  safety shall certify seven-tenths of the number of peace 
111.14  officers as defined in subdivision 1, clause (g), employed by 
111.15  the Bureau of Criminal Apprehension, the Gambling Enforcement 
111.16  Division, and the State Patrol Division. 
111.17     (c) On or before March 15, 1999, and annually on or before 
111.18  each March 15 thereafter, the commissioner of natural resources 
111.19  shall certify the number of peace officers as defined in 
111.20  subdivision 1, clause (g), employed by the Enforcement Division 
111.21  and the commissioner of public safety shall certify the number 
111.22  of peace officers as defined in subdivision 1, clause (g), 
111.23  employed by the Bureau of Criminal Apprehension, the Gambling 
111.24  Enforcement Division, and the State Patrol Division. 
111.25     (d) (b) The certification must be on a form prescribed by 
111.26  the commissioner.  Peace officers certified under this paragraph 
111.27  must be included in the total certifications under subdivision 2.
111.28     Sec. 3.  Minnesota Statutes 2004, section 69.021, 
111.29  subdivision 5, is amended to read: 
111.30     Subd. 5.  [CALCULATION OF STATE AID.] (a) The amount of 
111.31  fire state aid available for apportionment, before the addition 
111.32  of the minimum fire state aid allocation amount under 
111.33  subdivision 7, is equal to 107 percent of the amount of premium 
111.34  taxes paid to the state upon the fire, lightning, sprinkler 
111.35  leakage, and extended coverage premiums reported to the 
111.36  commissioner by insurers on the Minnesota Firetown Premium 
112.1   Report.  This amount shall must be reduced by the amount 
112.2   required to pay the state auditor's costs and expenses of the 
112.3   audits or exams of the firefighters relief associations. 
112.4      The total amount for apportionment in respect to fire state 
112.5   aid must not be less than two percent of the premiums reported 
112.6   to the commissioner by insurers on the Minnesota Firetown 
112.7   Premium Report after subtracting the following amounts: 
112.8      (1) the amount required to pay the state auditor's costs 
112.9   and expenses of the audits or exams of the firefighters relief 
112.10  associations; and 
112.11     (2) one percent of the premiums reported by town and 
112.12  farmers' mutual insurance companies and mutual property and 
112.13  casualty companies with total assets of $5,000,000 or less.  
112.14     (b) The total amount for apportionment as police state aid 
112.15  is equal to 104 percent of the amount of premium taxes paid to 
112.16  the state on the premiums reported to the commissioner by 
112.17  insurers on the Minnesota Aid to Police Premium Report, reduced 
112.18  by the amount required to pay the costs and expenses of the 
112.19  state auditor for audits or exams of police relief 
112.20  associations.  The total amount for apportionment in respect to 
112.21  the police state aid program must not be less than two percent 
112.22  of the amount of premiums reported to the commissioner by 
112.23  insurers on the Minnesota Aid to Police Premium Report after 
112.24  subtracting the amount required to pay the state auditor's cost 
112.25  and expenses of the audits or exams of the police relief 
112.26  associations.  
112.27     (c) The commissioner shall calculate the percentage of 
112.28  increase or decrease reflected in the apportionment over or 
112.29  under the previous year's available state aid using the same 
112.30  premiums as a basis for comparison. 
112.31     (d) The amount for apportionment in respect to peace 
112.32  officer state aid under paragraph (b) must be further reduced by 
112.33  $1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000, 
112.34  and $2,404,000 in fiscal year 2001.  These reductions in this 
112.35  paragraph cancel to the general fund. 
112.36     (e) In addition to the amount for apportionment of police 
113.1   state aid under paragraph (b), each year $100,000 shall must be 
113.2   apportioned for police state aid.  An amount sufficient to pay 
113.3   this increase is annually appropriated from the general fund. 
113.4      Sec. 4.  Minnesota Statutes 2004, section 69.021, 
113.5   subdivision 11, is amended to read: 
113.6      Subd. 11.  [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a) 
113.7   The excess police state-aid holding account is established in 
113.8   the general fund.  The excess police state-aid holding account 
113.9   must be administered by the commissioner. 
113.10     (b) Excess police state aid determined according to 
113.11  subdivision 10, must be deposited in the excess police state-aid 
113.12  holding account. 
113.13     (c) From the balance in the excess police state-aid holding 
113.14  account, $900,000 is appropriated to and must be transferred 
113.15  annually to the ambulance service personnel longevity award and 
113.16  incentive suspense account established by section 144E.42, 
113.17  subdivision 2. 
113.18     (d) If a police officer stress reduction program is created 
113.19  by law and money is appropriated for that program, an amount 
113.20  equal to that appropriation must be transferred to the 
113.21  administrator of that program from the balance in the excess 
113.22  police state-aid holding account. 
113.23     (e) On October 1, 1997, and annually on each subsequent 
113.24  October 1, one-half of the balance of the excess police 
113.25  state-aid holding account remaining after the deductions under 
113.26  paragraphs (c) and (d) is appropriated for additional 
113.27  amortization aid under section 423A.02, subdivision 1b. 
113.28     (f) Annually, the remaining balance in the excess police 
113.29  state-aid holding account, after the deductions under paragraphs 
113.30  (c), (d), and (e), cancels to the general fund. 
113.31     Sec. 5.  Minnesota Statutes 2004, section 69.33, is amended 
113.32  to read: 
113.33     69.33 [NAMES OF ASSOCIATIONS REPORTED TO INSURANCE 
113.34  COMPANIES.] 
113.35     The commissioner shall enclose in the annual statement 
113.36  blank that is sent to all fire insurance companies doing 
114.1   business in this state a blank form containing the names of all 
114.2   firefighters' relief associations in all cities of the first 
114.3   class and the names of the cities and require these companies, 
114.4   at the time of making their annual statements to the 
114.5   commissioner, to state on these blanks the amount of premiums 
114.6   received by them upon properties insured within the corporate 
114.7   limits of the cities named thereon during the year ending 
114.8   December 31st last past.  Thereafter, before July first each 
114.9   year, the commissioner shall certify to the commissioner of 
114.10  finance the information thus obtained, together with the amount 
114.11  of the tax for the benefit of the relief association pension 
114.12  plans covering firefighters in cities of the first class paid in 
114.13  such year by these companies upon these insurance premiums. 
114.14     Sec. 6.  Minnesota Statutes 2004, section 69.773, 
114.15  subdivision 4, is amended to read: 
114.16     Subd. 4.  [FINANCIAL REQUIREMENTS OF SPECIAL FUND.] Prior 
114.17  to Before August 1 of each year, the officers of the relief 
114.18  association shall determine the financial requirements of the 
114.19  special fund of the relief association in accordance with the 
114.20  requirements of this subdivision.  The financial requirements of 
114.21  the relief association shall must be based on the most recent 
114.22  actuarial valuation of the special fund prepared in accordance 
114.23  with subdivision 2.  If the relief association has an unfunded 
114.24  actuarial accrued liability as reported in the most recent 
114.25  actuarial valuation, the financial requirements shall must be 
114.26  determined by adding the figures calculated pursuant to under 
114.27  clauses (a), (b), and (c).  If the relief association does not 
114.28  have an unfunded actuarial accrued liability as reported in the 
114.29  most recent actuarial valuation, the financial requirements 
114.30  shall must be an amount equal to the figure calculated pursuant 
114.31  to under clauses (a) and (b), reduced by an amount equal to 
114.32  one-tenth of the amount of any assets in excess of the actuarial 
114.33  accrued liability of the relief association.  The determination 
114.34  of whether or not the relief association has an unfunded 
114.35  actuarial accrued liability shall must be based on the current 
114.36  market value of assets for which a market value is readily 
115.1   ascertainable and the cost or book value, whichever is 
115.2   applicable, for assets for which no market value is readily 
115.3   ascertainable. 
115.4      (a) The normal level cost requirement for the following 
115.5   year, expressed as a dollar amount, shall be is the figure for 
115.6   the normal level cost of the relief association as reported in 
115.7   the actuarial valuation. 
115.8      (b) The amount of anticipated future administrative 
115.9   expenses of the special fund shall must be calculated by 
115.10  multiplying the dollar amount of the administrative expenses of 
115.11  the special fund for the most recent year by the factor of 1.035.
115.12     (c) The amortization contribution requirement to retire the 
115.13  current unfunded actuarial accrued liability by the established 
115.14  date for full funding shall be is the figure for the 
115.15  amortization contribution as reported in the actuarial 
115.16  valuation.  If there has not been a change in the actuarial 
115.17  assumptions used for calculating the actuarial accrued liability 
115.18  of the special fund, a change in the bylaws of the relief 
115.19  association governing the service pensions, retirement benefits, 
115.20  or both payable from the special fund or a change in the 
115.21  actuarial cost method used to value all or a portion of the 
115.22  special fund which change or changes, which by themselves 
115.23  without inclusion of any other items of increase or decrease, 
115.24  produce a net increase in the unfunded actuarial accrued 
115.25  liability of the special fund since December 31, 1970, the 
115.26  established date for full funding shall be December 31, 1990.  
115.27  If there has been a change in the actuarial assumptions used for 
115.28  calculating the actuarial accrued liability of the special fund, 
115.29  a change in the bylaws of the relief association governing the 
115.30  service pensions, retirement benefits, or both payable from the 
115.31  special fund or a change in the actuarial cost method used to 
115.32  value all or a portion of the special fund and the change or 
115.33  changes, by themselves and without inclusion of any other items 
115.34  of increase or decrease, produce a net increase in the unfunded 
115.35  actuarial accrued liability of the special fund since December 
115.36  31, 1970, but prior to January 1, 1979, the established date for 
116.1   full funding shall be December 31, 1998, and if there has been a 
116.2   change since December 31, 1978, the established date for full 
116.3   funding shall must be determined using the following procedure:  
116.4      (i) the unfunded actuarial accrued liability of the special 
116.5   fund shall must be determined in accordance with the provisions 
116.6   governing service pensions, retirement benefits, and actuarial 
116.7   assumptions in effect before an applicable change; 
116.8      (ii) the level annual dollar contribution needed to 
116.9   amortize this unfunded actuarial accrued liability amount by the 
116.10  date for full funding in effect prior to before the change shall 
116.11  must be calculated using the interest assumption specified in 
116.12  section 356.215, subdivision 8, in effect before any applicable 
116.13  change; 
116.14     (iii) the unfunded actuarial accrued liability of the 
116.15  special fund shall must be determined in accordance with any new 
116.16  provisions governing service pensions, retirement benefits, and 
116.17  actuarial assumptions and the remaining provisions governing 
116.18  service pensions, retirement benefits, and actuarial assumptions 
116.19  in effect before an applicable change; 
116.20     (iv) the level annual dollar contribution needed to 
116.21  amortize the difference between the unfunded actuarial accrued 
116.22  liability amount calculated pursuant to under subclause (i) and 
116.23  the unfunded actuarial accrued liability amount 
116.24  calculated pursuant to under subclause (iii) over a period of 20 
116.25  years starting December 31 of the year in which the change is 
116.26  effective shall must be calculated using the interest assumption 
116.27  specified in section 356.215, subdivision 8, in effect after any 
116.28  applicable change; 
116.29     (v) the annual amortization contribution calculated 
116.30  pursuant to under subclause (iv) shall must be added to the 
116.31  annual amortization contribution calculated pursuant to under 
116.32  subclause (ii); 
116.33     (vi) the period in which the unfunded actuarial accrued 
116.34  liability amount determined in subclause (iii) will be amortized 
116.35  by the total annual amortization contribution computed pursuant 
116.36  to under subclause (v) shall must be calculated using the 
117.1   interest assumption specified in section 356.215, subdivision 8, 
117.2   in effect after any applicable change, rounded to the nearest 
117.3   integral number of years, but which shall does not exceed a 
117.4   period of 20 years from the end of the year in which the 
117.5   determination of the date for full funding using this procedure 
117.6   is made and which shall is not be less than the period of years 
117.7   beginning in the year in which the determination of the date for 
117.8   full funding using this procedure is made and ending by the date 
117.9   for full funding in effect before the change; 
117.10     (vii) the period determined pursuant to under subclause (vi)
117.11  shall must be added to the date as of which the actuarial 
117.12  valuation was prepared and the resulting date shall be is the 
117.13  new date for full funding. 
117.14     Sec. 7.  Minnesota Statutes 2004, section 352.01, 
117.15  subdivision 4, is amended to read: 
117.16     Subd. 4.  [ACCUMULATED CONTRIBUTIONS.] "Accumulated 
117.17  contributions" means the total, exclusive of interest, of (1) 
117.18  the sums deducted from the salary of an employee, (2) the amount 
117.19  of payments, including assessments, paid by the employee in lieu 
117.20  of salary deductions and all other payments made under Laws 
117.21  1929, chapter 191, as amended, this chapter and credited to the 
117.22  employee's individual account in the retirement fund. 
117.23     Sec. 8.  Minnesota Statutes 2004, section 352.01, 
117.24  subdivision 5, is amended to read: 
117.25     Subd. 5.  [RETIREMENT FUND.] (a) "Retirement fund" means 
117.26  the general state employees retirement fund created by section 
117.27  352.04, subdivision 1, with respect to the general state 
117.28  employees retirement plan or the correctional state employees 
117.29  retirement fund created by section 352.911, subdivision 1, with 
117.30  respect to the correctional state employees retirement plan. 
117.31     (b) "The retirement fund" includes the aggregate of 
117.32  accumulated contributions of employees covered by the applicable 
117.33  plan, and all other funds paid into the state treasury or 
117.34  received by the director under Laws 1929, chapter 191, as 
117.35  amended this chapter, together with all income and profits from 
117.36  the money and interest on it, including contributions on the 
118.1   part of the federal government, the state, and state departments.
118.2      Sec. 9.  Minnesota Statutes 2004, section 352.01, 
118.3   subdivision 21, is amended to read: 
118.4      Subd. 21.  [ACCRUED ANNUITIES.] (a) In this chapter and 
118.5   chapters 3A, 352B, 352C, and 490, "accrued annuity"  means an 
118.6   annuity that had become payable to a retired employee in the 
118.7   lifetime of the employee.  
118.8      (b) An annuity or benefit authorized as provided in this 
118.9   chapter and chapters 3A, 352B, 352C, and 490 becomes payable on 
118.10  the first day of each calendar month for that calendar month and 
118.11  is to must be paid on the first day of each calendar month 
118.12  beginning with benefits payable on and after December 1, 1977. 
118.13     (c) Notwithstanding any provision to the contrary in this 
118.14  chapter and chapters 3A, 352B, 352C, and 490, benefit payment 
118.15  authorized as "payable for life" is payable for the entire month 
118.16  in which death occurs, and the benefit payment for the month of 
118.17  death is payable to the surviving spouse or other beneficiary 
118.18  only if the annuitant dies before negotiating the benefit check. 
118.19     Sec. 10.  Minnesota Statutes 2004, section 352.01, 
118.20  subdivision 23, is amended to read: 
118.21     Subd. 23.  [COVERAGE OR COVERED BY THE SYSTEM.] "Coverage"  
118.22  or "covered by the system" means that a state employees employee 
118.23  who serve serves the state of Minnesota and make makes the 
118.24  required employee contributions to the retirement fund will is, 
118.25  by reason of these contributions become, entitled to either (1) 
118.26  a retirement annuity, or (2) a disability benefit, or (3) a 
118.27  refund of accumulated contributions, as provided in this chapter.
118.28     Sec. 11.  Minnesota Statutes 2004, section 352.021, 
118.29  subdivision 1, is amended to read: 
118.30     Subdivision 1.  [ESTABLISHMENT.] (a) There is established 
118.31  the general state employees retirement plan of the Minnesota 
118.32  State Retirement System for state employees.  
118.33     (b) The system general state employees retirement plan is a 
118.34  continuation of the State Employees Retirement Association.  
118.35     (c) Any person who was a member of the State Employees 
118.36  Retirement Association on June 30, 1967, is covered by 
119.1   the system general state employees retirement plan and is 
119.2   entitled to all benefits provided by the system plan upon 
119.3   fulfilling the age, service, contribution, and other 
119.4   requirements of this chapter.  
119.5      Sec. 12.  Minnesota Statutes 2004, section 352.021, 
119.6   subdivision 2, is amended to read: 
119.7      Subd. 2.  [STATE EMPLOYEES COVERED.] Every person who is a 
119.8   state employee, as defined in section 352.01, on July 1, 1967, 
119.9   or becomes a state employee after that date as defined in 
119.10  section 352.01 is covered by the system general state employees 
119.11  retirement plan.  Acceptance of state employment or continuance 
119.12  in state service is deemed to be consent to have deductions made 
119.13  from salary for deposit to the credit of the account of the 
119.14  state employee in the retirement fund.  
119.15     Sec. 13.  Minnesota Statutes 2004, section 352.021, 
119.16  subdivision 3, is amended to read: 
119.17     Subd. 3.  [OPTIONAL EXEMPTIONS.] Any person who is 
119.18  appointed by the governor or lieutenant governor may request 
119.19  exemption from coverage by the general state employees 
119.20  retirement plan under this chapter if the appointee is not so 
119.21  covered at by the plan on the date of appointment.  To qualify 
119.22  for this exemption, a written request must be made within 90 
119.23  days from the date of entering upon the duties of the position 
119.24  to which the person is appointed.  After making the request, a 
119.25  person requesting the exemption is not entitled to coverage by 
119.26  the general state employees retirement plan while employed in 
119.27  the position that entitled that person to an exemption from 
119.28  coverage.  
119.29     Sec. 14.  Minnesota Statutes 2004, section 352.021, 
119.30  subdivision 4, is amended to read: 
119.31     Subd. 4.  [REENTERING SERVICE AFTER REFUND.] When a former 
119.32  employee who has withdrawn accumulated contributions reenters 
119.33  employment in a position entitled to coverage under the 
119.34  system general state employees retirement plan, the employee 
119.35  shall must be covered by the system plan on the same basis as a 
119.36  new employee and is not entitled to credit for any former 
120.1   service.  The annuity rights forfeited when taking a refund can 
120.2   only be restored as provided in this chapter.  
120.3      Sec. 15.  Minnesota Statutes 2004, section 352.04, 
120.4   subdivision 1, is amended to read: 
120.5      Subdivision 1.  [FUND CREATED.] (a) There is created a 
120.6   special fund to be known as the general state employees 
120.7   retirement fund.  In that fund there shall be deposited 
120.8   employees, employee contributions, employers employer 
120.9   contributions, and other amounts authorized by law must be 
120.10  deposited.  
120.11     (b) Effective July 1, 1969, The general state employees 
120.12  retirement plan of the Minnesota State Retirement System shall 
120.13  must participate in the Minnesota postretirement investment fund.
120.14  In that fund there shall be deposited The amounts provided in 
120.15  section 352.119 must be deposited in the Minnesota 
120.16  postretirement investment fund.  
120.17     Sec. 16.  Minnesota Statutes 2004, section 352.04, 
120.18  subdivision 12, is amended to read: 
120.19     Subd. 12.  [FUND DISBURSEMENT RESTRICTED.] The general 
120.20  state employees retirement fund and the participation in the 
120.21  Minnesota postretirement investment fund must be disbursed only 
120.22  for the purposes provided by law.  The expenses of the system 
120.23  and any benefits provided by law, other than benefits payable 
120.24  from the Minnesota postretirement investment fund, must be paid 
120.25  from the general state employees retirement fund.  The 
120.26  retirement allowances, retirement annuities, and disability 
120.27  benefits, as well as refunds of any sum remaining to the credit 
120.28  of a deceased retired employee or a disabled employee must be 
120.29  paid only from the general state employees retirement fund after 
120.30  the needs have been certified and the amounts withdrawn from the 
120.31  participation in the Minnesota postretirement investment fund 
120.32  under section 11A.18.  The amounts necessary to make the 
120.33  payments from the general state employees retirement fund and 
120.34  the participation in the Minnesota postretirement investment 
120.35  fund are annually appropriated from these funds for those 
120.36  purposes.  
121.1      Sec. 17.  Minnesota Statutes 2004, section 352.041, 
121.2   subdivision 1, is amended to read: 
121.3      Subdivision 1.  [ALLOWABLE SERVICE CREDIT.] Any (a) An 
121.4   employee covered by the system general state employees 
121.5   retirement plan who is given a leave of absence for employment 
121.6   by a political subdivision of the state shall remains a member 
121.7   of the plan and must continue to pay member contributions into 
121.8   the general state employees retirement fund for the period of 
121.9   leave.  
121.10     (b) Upon payment of member contributions, the employee must 
121.11  be given allowable service credit as a state employee on the 
121.12  records of the system retirement plan as though the employee had 
121.13  received salary from the state during the leave.  Payments into 
121.14  the retirement fund shall must be at the rate required in 
121.15  section 352.04, subdivision 2, and must be based upon the salary 
121.16  received from the political subdivision subject to the maximum 
121.17  amount, if any. 
121.18     Sec. 18.  Minnesota Statutes 2004, section 352.041, 
121.19  subdivision 2, is amended to read: 
121.20     Subd. 2.  [EMPLOYEE CONTRIBUTIONS, PROCEDURE.] The officer 
121.21  or employee who is authorized by law to pay salaries to 
121.22  employees of the political subdivision which is employing a 
121.23  state employee shall have must deduct employee contributions 
121.24  deducted for the general state employees retirement plan under 
121.25  section 352.04, subdivision 2, from the salary of each employee 
121.26  who is on leave of absence from state service on each payroll 
121.27  abstract and shall must pay the sum to the director following 
121.28  the conclusion of each pay period. 
121.29     Sec. 19.  Minnesota Statutes 2004, section 352.041, 
121.30  subdivision 3, is amended to read: 
121.31     Subd. 3.  [EMPLOYER CONTRIBUTIONS, PROCEDURE.] The officer 
121.32  or employee who is authorized by law to pay salaries to 
121.33  employees of the political subdivision which is employing a 
121.34  state employee covered by the system shall general state 
121.35  employees retirement plan also must have employer contributions 
121.36  made to the general state employees retirement fund on following 
122.1   the conclusion of each payroll abstract in the amount required 
122.2   by section 352.04, subdivision 3.  These contributions are to 
122.3   must be charged to the political subdivision as an 
122.4   administrative cost.  
122.5      Sec. 20.  Minnesota Statutes 2004, section 352.041, 
122.6   subdivision 5, is amended to read: 
122.7      Subd. 5.  [EMPLOYER CONTRIBUTIONS, LEAVES OF ABSENCE; TAX 
122.8   LEVIES.] (a) Every political subdivision which is employing a 
122.9   state employee covered by the system on leave of absence from 
122.10  state service for employment by a political subdivision of the 
122.11  state shall must pay into the general state employees retirement 
122.12  fund the amount of the employer contribution required by law for 
122.13  state employees covered by the system under section 352.04, 
122.14  subdivision 3.  
122.15     (b) Employing political subdivisions, except other than 
122.16  school districts, may levy taxes necessary for the payment of 
122.17  employer contributions without limitation as to rate or amount.  
122.18  The levy of the taxes does not reduce the amount of other 
122.19  taxes to that may be levied by political subdivisions, 
122.20  except other than school districts, which are subject to any 
122.21  limitation.  
122.22     Sec. 21.  Minnesota Statutes 2004, section 352.15, 
122.23  subdivision 1, is amended to read: 
122.24     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] None of the money, 
122.25  annuities, or other benefits mentioned in this chapter is 
122.26  assignable either in law or in equity or subject to execution, 
122.27  levy, attachment, garnishment, or other legal process, except as 
122.28  provided in subdivision 1a or section 518.58, 518.581, or 
122.29  518.6111. The provisions of section 356.401 apply to the general 
122.30  state employees retirement plan and to the correctional state 
122.31  employees retirement plan.  
122.32     Sec. 22.  Minnesota Statutes 2004, section 352.15, 
122.33  subdivision 3, is amended to read: 
122.34     Subd. 3.  [DEDUCTING HEALTH OR DENTAL INSURANCE PREMIUMS.] 
122.35  The board may direct authorize, at its discretion, the deduction 
122.36  of a retiree's health or dental insurance premiums and transfer 
123.1   of the amounts to a health or dental insurance carrier covering 
123.2   state employees.  The insurance carrier must certify that the 
123.3   retired employee has signed an authorization for the deduction 
123.4   and provide a computer readable roster of covered retirees and 
123.5   amounts.  The health or dental insurance carrier must refund 
123.6   deductions withheld from a retiree's check in error directly to 
123.7   the retiree.  The board shall require that the insurance carrier 
123.8   to reimburse the fund for the administrative expense of 
123.9   withholding the premium amounts.  The insurance carrier shall 
123.10  assume liability for any failure of the system to properly 
123.11  withhold the premium amounts. 
123.12     Sec. 23.  Minnesota Statutes 2004, section 352.15, 
123.13  subdivision 4, is amended to read: 
123.14     Subd. 4.  [DIRECT TRANSFER OF REFUNDS.] A direct transfer 
123.15  of account refunds under this chapter may be made to an 
123.16  individual retirement savings accounts account or a qualified 
123.17  retirement plans plan of the person upon the receipt of an 
123.18  application for transfer by a former employee, on forms 
123.19  acceptable to the executive director. 
123.20     Sec. 24.  Minnesota Statutes 2004, section 352.22, 
123.21  subdivision 10, is amended to read: 
123.22     Subd. 10.  [OTHER REFUNDS.] Former employees covered by the 
123.23  system are entitled to apply for refunds if they are or become 
123.24  members of the State Patrol retirement fund, the state Teachers 
123.25  Retirement Association, or employees of the University of 
123.26  Minnesota excluded from coverage under the system by action of 
123.27  the Board of Regents; or labor service employees, excluded from 
123.28  coverage under section 352.01, subdivision 2b, clause (25); or 
123.29  employees of the adjutant general who under federal law 
123.30  effectually elect membership in a federal retirement system; or 
123.31  officers or employees of the senate or house of representatives, 
123.32  excluded from coverage under section 352.01, subdivision 2b, 
123.33  clause (8) (7).  The refunds must include accumulated 
123.34  contributions plus interest as provided in subdivision 2.  These 
123.35  employees may apply for a refund once 30 days or more have 
123.36  elapsed after their coverage ceases, even if they continue in 
124.1   state service but in positions not covered by this chapter. 
124.2      Sec. 25.  Minnesota Statutes 2004, section 352B.01, 
124.3   subdivision 1, is amended to read: 
124.4      Subdivision 1.  [SCOPE.] In this chapter, each of the terms 
124.5   defined in this section have has the meanings meaning given 
124.6   them to it. 
124.7      Sec. 26.  Minnesota Statutes 2004, section 352B.01, 
124.8   subdivision 2, is amended to read: 
124.9      Subd. 2.  [MEMBER.] "Member" means: 
124.10     (1) a State Patrol member currently employed after June 30, 
124.11  1943, under section 299D.03 by the state, who is a peace officer 
124.12  under section 626.84, and whose salary or compensation is paid 
124.13  out of state funds; 
124.14     (2) a conservation officer employed under section 97A.201, 
124.15  currently employed by the state, whose salary or compensation is 
124.16  paid out of state funds; 
124.17     (3) a crime bureau officer who was employed by the crime 
124.18  bureau and was a member of the Highway Patrolmen's retirement 
124.19  fund on July 1, 1978, whether or not that person has the power 
124.20  of arrest by warrant after that date, or who is employed as 
124.21  police personnel, with powers of arrest by warrant under section 
124.22  299C.04, and who is currently employed by the state, and whose 
124.23  salary or compensation is paid out of state funds; 
124.24     (4) a person who is employed by the state in the Department 
124.25  of Public Safety in a data processing management position with 
124.26  salary or compensation paid from state funds, who was a crime 
124.27  bureau officer covered by the State Patrol retirement plan on 
124.28  August 15, 1987, and who was initially hired in the data 
124.29  processing management position within the department during 
124.30  September 1987, or January 1988, with membership continuing for 
124.31  the duration of the person's employment in that position, 
124.32  whether or not the person has the power of arrest by warrant 
124.33  after August 15, 1987; 
124.34     (5) a public safety employee defined as who is a peace 
124.35  officer in under section 626.84, subdivision 1, paragraph (c), 
124.36  and who is employed with by the Division of Alcohol and Gambling 
125.1   Enforcement under section 299L.01; and 
125.2      (6) a Fugitive Apprehension Unit officer after October 31, 
125.3   2000, who is employed by the Office of Special Investigations of 
125.4   the Department of Corrections and who is a peace officer under 
125.5   section 626.84.  
125.6      Sec. 27.  Minnesota Statutes 2004, section 352B.01, 
125.7   subdivision 3, is amended to read: 
125.8      Subd. 3.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
125.9   means:  
125.10     (1) for members defined in subdivision 2, clause (a) (1), 
125.11  monthly service is granted for in any month for which payments 
125.12  have been made to the State Patrol retirement fund, and 
125.13     (2) for members defined in subdivision 2, clauses (b) (2) 
125.14  and (c) (3), service for which payments have been made to the 
125.15  State Patrol retirement fund, service for which payments were 
125.16  made to the State Police officers retirement fund after June 30, 
125.17  1961, and all prior service which was credited to a member for 
125.18  service on or before June 30, 1961.  
125.19     (b) Allowable service also includes any period of absence 
125.20  from duty by a member who, by reason of injury incurred in the 
125.21  performance of duty, is temporarily disabled and for which 
125.22  disability the state is liable under the workers' compensation 
125.23  law, until the date authorized by the executive director for 
125.24  commencement of payment of a disability benefit or return to 
125.25  employment.  
125.26     (c) MS 2002 (Expired) 
125.27     (d) Allowable service means service in a month during which 
125.28  a member is paid a salary from which a member contribution is 
125.29  deducted, deposited, and credited in the State Patrol retirement 
125.30  plan. 
125.31     Sec. 28.  Minnesota Statutes 2004, section 352B.02, 
125.32  subdivision 1e, is amended to read: 
125.33     Subd. 1e.  [AUDIT; ACTUARIAL VALUATION.] The legislative 
125.34  auditor shall audit the fund.  Any actuarial valuation of the 
125.35  fund required under section 356.215 must be prepared by the 
125.36  actuary retained under section 356.214.  Any approved actuary 
126.1   retained by the executive director under section 352.03, 
126.2   subdivision 6, may perform actuarial valuations and experience 
126.3   studies to supplement those performed by the commission-retained 
126.4   actuary retained under section 356.214.  Any supplemental 
126.5   actuarial valuation or experience studies shall must be filed 
126.6   with the executive director of the Legislative Commission on 
126.7   Pensions and Retirement.  
126.8      Sec. 29.  Minnesota Statutes 2004, section 352B.071, is 
126.9   amended to read: 
126.10     352B.071 [EXEMPTION FROM PROCESS.] 
126.11     None of the money, annuities, or other benefits provided 
126.12  for in this chapter is assignable either in law or in equity or 
126.13  be subject to execution, levy, attachment, garnishment, or other 
126.14  legal process, except as provided in section 518.58, 518.581, or 
126.15  518.6111. The provisions of section 356.401 apply to the State 
126.16  Patrol retirement plan. 
126.17     Sec. 30.  Minnesota Statutes 2004, section 352D.01, is 
126.18  amended to read: 
126.19     352D.01 [ESTABLISHMENT.] 
126.20     There is hereby established within the Minnesota State 
126.21  Retirement System a retirement program for certain public 
126.22  employees to be known as the Minnesota unclassified employees 
126.23  retirement program, which shall be.  The program must be 
126.24  administered by the Minnesota State Retirement System.  
126.25     Sec. 31.  Minnesota Statutes 2004, section 352D.015, 
126.26  subdivision 3, is amended to read: 
126.27     Subd. 3.  [SUPPLEMENTAL INVESTMENT FUND.] "Supplemental 
126.28  investment fund" means the fund established and governed by 
126.29  section 11A.17.  
126.30     Sec. 32.  Minnesota Statutes 2004, section 352D.015, 
126.31  subdivision 4, is amended to read: 
126.32     Subd. 4.  [GENERAL FUND.] "General fund" means the general 
126.33  state employees retirement fund except the moneys for the 
126.34  unclassified program.  
126.35     Sec. 33.  Minnesota Statutes 2004, section 352D.03, is 
126.36  amended to read: 
127.1      352D.03 [TRANSFER OF ASSETS.] 
127.2      Unless an eligible employee enumerated in section 352D.02, 
127.3   subdivision 1 or 1a, has elected coverage under the individual 
127.4   retirement account plan under chapter 354B, a sum of money 
127.5   representing the assets credited to each employee exercising the 
127.6   option contained in section 352D.02, plus an equal employer 
127.7   contribution together with interest for the employment period at 
127.8   the actuarially assumed rates applicable preretirement interest 
127.9   actuarial assumption rate during this period, compounded 
127.10  annually, shall must be used for the purchase of shares on 
127.11  behalf of each employee in the accounts of the supplemental 
127.12  retirement fund established by section 11A.17.  Any employer's 
127.13  contribution to amortize the deficit in the state employee's 
127.14  retirement fund shall not, however, be used for the purchase of 
127.15  shares.  
127.16     Sec. 34.  Minnesota Statutes 2004, section 352D.05, 
127.17  subdivision 4, is amended to read: 
127.18     Subd. 4.  [REPAYMENT OF REFUND.] (a) A participant in the 
127.19  unclassified program may repay regular refunds taken pursuant to 
127.20  under section 352.22, as provided in section 352.23.  
127.21     (b) A participant in the unclassified program or an 
127.22  employee covered by the general plan who has withdrawn the value 
127.23  of the total shares may repay the refund taken and thereupon 
127.24  restore the service credit, rights and benefits forfeited by 
127.25  paying into the fund the amount refunded plus interest at an 
127.26  annual rate of 8.5 percent compounded annually from the date 
127.27  that the refund was taken until the date that the refund is 
127.28  repaid.  If the participant had withdrawn only the employee 
127.29  shares as permitted under prior laws, repayment shall must be 
127.30  pro rata.  Payment shall 
127.31     (c) Except as provided in section 356.441, the repayment of 
127.32  a refund under this section must be made in a lump sum.  
127.33     Sec. 35.  Minnesota Statutes 2004, section 352D.085, 
127.34  subdivision 1, is amended to read: 
127.35     Subdivision 1.  [COMBINED SERVICE.] Except as provided in 
127.36  section 356.30, 356.302, or 356.303, service under the 
128.1   unclassified program for which the employee has been credited 
128.2   with employee shares may be used for the limited purpose of 
128.3   qualifying for benefits under sections 352.115, 352.72, 
128.4   subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60; 
128.5   provided such.  The service also may not be used to qualify for 
128.6   a disability benefit under section 352.113 or 354.48 if a 
128.7   participant was under the unclassified program at the time of 
128.8   the disability, and provided further that.  Also, the years of 
128.9   service and salary paid while the participant was in the 
128.10  unclassified program shall may not be used in determining the 
128.11  amount of benefits. 
128.12     Sec. 36.  Minnesota Statutes 2004, section 352D.09, 
128.13  subdivision 5, is amended to read: 
128.14     Subd. 5.  [UNCLAIMED BENEFITS.] If the beneficiary, 
128.15  surviving spouse or estate has not made application for benefits 
128.16  within ten years after the date of the death of a participant, 
128.17  the value of the shares shall be is appropriated to the regular 
128.18  general state employees retirement fund and the provisions of 
128.19  section 352.12, subdivision 12 shall, govern.  If a former 
128.20  participant fails to make a claim for benefits within five years 
128.21  after the termination of covered service or by age 70, whichever 
128.22  is later, the value of the shares shall be is appropriated to 
128.23  the general state employees retirement fund and the provisions 
128.24  of section 352.22, subdivision 8, shall apply.  
128.25     Sec. 37.  Minnesota Statutes 2004, section 352D.12, is 
128.26  amended to read: 
128.27     352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 
128.28     (a) An employee who is a participant in the unclassified 
128.29  program and who has prior service credit in a covered plan under 
128.30  chapters 3A, chapter 352, 352C, 353, 354, 354A, and or 422A 
128.31  may, within the time limits specified in this section, elect to 
128.32  transfer to the unclassified program prior service contributions 
128.33  to one or more of those plans.  Participants with six or more 
128.34  years of prior service credit in a plan governed by chapter 3A 
128.35  or 352C on July 1, 1998, may not transfer prior service 
128.36  contributions.  Participants with less than six years of prior 
129.1   service credit in a plan governed by chapter 3A or 352C on July 
129.2   1, 1998, must be contributing to the unclassified plan on or 
129.3   after January 5, 1999, in order to transfer prior contributions. 
129.4      (b) For participants with prior service credit in a plan 
129.5   governed by chapter 352, 353, 354, 354A, or 422A, "prior service 
129.6   contributions" means the accumulated employee and equal employer 
129.7   contributions with interest at an annual rate of 8.5 percent 
129.8   compounded annually, based on fiscal year balances.  For 
129.9   participants with less than six years of service credit as of 
129.10  July 1, 1998, and with prior service credit in a plan governed 
129.11  by chapter 3A or 352C, "prior service contributions" means an 
129.12  amount equal to twice the amount of the accumulated member 
129.13  contributions plus annual compound interest at the rate of 8.5 
129.14  percent, computed on fiscal year balances.  
129.15     (c) If a participant has taken a refund from a retirement 
129.16  plan listed in this section, the participant may repay the 
129.17  refund to that plan, notwithstanding any restrictions on 
129.18  repayment to that plan, plus 8.5 percent interest compounded 
129.19  annually and have the accumulated employee and equal employer 
129.20  contributions transferred to the unclassified program with 
129.21  interest at an annual rate of 8.5 percent compounded annually 
129.22  based on fiscal year balances.  If a person repays a refund and 
129.23  subsequently elects to have the money transferred to the 
129.24  unclassified program, the repayment amount, including interest, 
129.25  is added to the fiscal year balance in the year which the 
129.26  repayment was made. 
129.27     (d) A participant electing to transfer prior service 
129.28  contributions credited to a retirement plan governed by chapter 
129.29  352, 353, 354, 354A, or 422A as provided under this section must 
129.30  complete the a written application for the transfer and repay 
129.31  any refund within one year of the commencement of the employee's 
129.32  participation in the unclassified program.  A participant 
129.33  electing to transfer prior service contributions credited to a 
129.34  retirement plan governed by chapter 3A or 352C as provided under 
129.35  this section must complete the application for the transfer and 
129.36  repay any refund between January 5, 1999, and June 1, 1999, if 
130.1   the employee commenced participation in the unclassified program 
130.2   before January 5, 1999, or within one year of the commencement 
130.3   of the employee's participation in the unclassified program if 
130.4   the employee commenced participation in the unclassified program 
130.5   after January 4, 1999. 
130.6      Sec. 38.  Minnesota Statutes 2004, section 353.01, 
130.7   subdivision 32, is amended to read: 
130.8      Subd. 32.  [COORDINATED MEMBER.] "Coordinated member" means 
130.9   any a public employee, including any a public hospital employee, 
130.10  who is covered by any an agreement or modification made between 
130.11  the state and the Secretary of Health, Education and Welfare 
130.12  Human Services, making the provisions of the federal Old Age, 
130.13  Survivors and Disability Insurance Act applicable to the member 
130.14  if the membership eligibility criteria are met under this 
130.15  chapter.  A coordinated member also is a former basic member who 
130.16  has a complete and continuous separation for at least 30 days 
130.17  from employment as a public employee meeting the requirements 
130.18  specified in subdivision 28, paragraphs (a) and (b), and who 
130.19  reenters public service as a public employee and meets the 
130.20  membership eligibility criteria under this chapter. 
130.21     Sec. 39.  Minnesota Statutes 2004, section 353.01, 
130.22  subdivision 33, is amended to read: 
130.23     Subd. 33.  [BASIC MEMBER.] "Basic member" means any a 
130.24  public employee, including any a public hospital employee, who 
130.25  is not covered by any agreement or modification made between the 
130.26  state and the Secretary of Health, Education and Welfare Human 
130.27  Services. 
130.28     Sec. 40.  Minnesota Statutes 2004, section 353.025, is 
130.29  amended to read: 
130.30     353.025 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.] 
130.31     From and after January 1, 1982, Employees of the Range 
130.32  Association of Municipalities and Schools hereinafter referred 
130.33  to as the association, shall become are coordinated members of 
130.34  the general employees retirement plan of the Public Employees 
130.35  Retirement Association unless specifically exempt under section 
130.36  353.01, subdivision 2b, and.  The Range Association shall be 
131.1   deemed to be of Municipalities and Schools is a governmental 
131.2   subdivision for the purposes of this chapter.  
131.3      Sec. 41.  Minnesota Statutes 2004, section 353.026, is 
131.4   amended to read: 
131.5      353.026 [COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT 
131.6   EMPLOYEES.] 
131.7      Any person who was employed by the city of Minneapolis, 
131.8   Special School District No. 1, or public corporation as defined 
131.9   in section 422A.01, subdivision 9, on or after July 1, 1978, and 
131.10  prior to before July 1, 1979, and who was excluded from 
131.11  retirement coverage by the coordinated program of the 
131.12  Minneapolis municipal employees retirement fund pursuant to 
131.13  under section 422A.09, subdivision 3, shall be is entitled to 
131.14  retirement coverage by the general employees retirement plan of 
131.15  the Public Employees Retirement Association unless specifically 
131.16  excluded pursuant to under section 353.01, subdivision 2b, from 
131.17  and after May 19, 1981.  
131.18     Sec. 42.  Minnesota Statutes 2004, section 353.027, is 
131.19  amended to read: 
131.20     353.027 [RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT 
131.21  EMPLOYEES.] 
131.22     Any person employed on January 1, 1975, by a municipal 
131.23  court established pursuant to under Minnesota Statutes 1957, 
131.24  section 488.03, and located in the cities of New Brighton, 
131.25  Roseville, Maplewood, North Saint Paul, White Bear Lake, or St. 
131.26  Paul shall be is eligible for membership in the general 
131.27  employees retirement plan of the Public Employees Retirement 
131.28  Association and shall retain retains any rights or benefits the 
131.29  person had attained as a member of the general employees 
131.30  retirement plan of the association on January 1, 1975, so long 
131.31  as the person remains an employee of the municipal court of 
131.32  Ramsey County.  
131.33     Sec. 43.  Minnesota Statutes 2004, section 353.028, is 
131.34  amended to read: 
131.35     353.028 [CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.] 
131.36     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
132.1   section, each of the terms in this subdivision has the meaning 
132.2   indicated. 
132.3      (b) "City manager" means (1) a person who is duly appointed 
132.4   to and is holding the position of city manager in a Plan B 
132.5   statutory city or in a home rule city operating under the 
132.6   "council-manager" form of government, or (2) a person who is 
132.7   appointed to and is holding the position of chief administrative 
132.8   officer of a home rule charter city or a statutory city pursuant 
132.9   to under a charter provision, ordinance, or resolution 
132.10  establishing such a position and prescribing its duties and 
132.11  responsibilities.  
132.12     (c) "Governing body" means the city council of the city 
132.13  employing the city manager.  
132.14     (d) "Election" means the election described in subdivision 
132.15  2.  
132.16     Subd. 2.  [ELECTION.] (a) A city manager may elect to be 
132.17  excluded from membership in the general employees retirement 
132.18  plan of the Public Employees Retirement Association.  The 
132.19  election of exclusion must be made within six months following 
132.20  the commencement of employment, must be made in writing on a 
132.21  form prescribed by the executive director, and must be approved 
132.22  by a resolution of adopted by the governing body of the city.  
132.23  The election of exclusion is not effective until it is filed 
132.24  with the executive director.  Membership of a city manager in 
132.25  the association general employees retirement plan ceases on the 
132.26  date the written election is received by the executive director 
132.27  or upon a later date specified.  Employee and employer 
132.28  contributions made on behalf of a person exercising the option 
132.29  to be excluded from membership under this section must be 
132.30  refunded in accordance with section 353.27, subdivision 7. 
132.31     (b) A city manager who has elected exclusion under this 
132.32  subdivision may elect to revoke that action by filing a written 
132.33  notice with the executive director.  The notice must be on a 
132.34  form prescribed by the executive director and must be approved 
132.35  by a resolution of the governing body of the city.  Membership 
132.36  of the city manager in the association resumes prospectively 
133.1   from the date of the first day of the pay period for which 
133.2   contributions were deducted or, if pay period coverage dates are 
133.3   not provided, the date on which the notice of revocation or 
133.4   contributions are received in the office of the association, 
133.5   provided that the notice of revocation is received by the 
133.6   association within 60 days of the receipt of contributions. 
133.7      (c) An election under paragraph (b) is irrevocable.  Any 
133.8   election under paragraph (a) or (b) must include a statement 
133.9   that the individual will not seek authorization to purchase 
133.10  service credit for any period of excluded service. 
133.11     Subd. 3.  [DEFERRED COMPENSATION; CITY CONTRIBUTION.] If an 
133.12  election of exclusion is made, and if the city manager and the 
133.13  governing body of the city additionally agree in writing that 
133.14  the additional compensation is to be deferred and shall is to be 
133.15  contributed on behalf of the city manager to a deferred 
133.16  compensation program which meets the requirements of section 457 
133.17  of the Internal Revenue Code of 1954 1986, as amended through 
133.18  December 31, 1980, the governing body may compensate the city 
133.19  manager, in addition to the salary allowed under any limitation 
133.20  imposed on salaries by law or charter, in an amount equal to the 
133.21  employer contribution which would be required by section 353.27, 
133.22  subdivision 3, if the city manager were a member of the 
133.23  association general employees retirement plan.  
133.24     Subd. 4.  [REFUNDS; DEFERRED ANNUITY.] A city manager who 
133.25  makes an election to be excluded from membership is entitled to 
133.26  a refund of accumulated deductions or, if otherwise qualified, a 
133.27  deferred annuity in the manner provided by under section 353.34, 
133.28  at the option of the manager.  
133.29     Subd. 5.  [ELECTION; OTHER EMPLOYMENT.] If a city manager 
133.30  who has made an election to be excluded subsequently accepts 
133.31  employment in another governmental subdivision or subsequently 
133.32  accepts employment other than as a city manager in the same 
133.33  city, the election shall be deemed to have been is rescinded on 
133.34  the effective date of employment.  
133.35     Sec. 44.  Minnesota Statutes 2004, section 353.14, is 
133.36  amended to read: 
134.1      353.14 [BENEFITS FROM OTHER FUNDS.] 
134.2      No annuity or benefit provided by this chapter shall may be 
134.3   affected, diminished, or impaired by any pension, benefit, or 
134.4   annuity which any member or survivor is entitled to receive from 
134.5   a tax supported public retirement plan or system authorized by 
134.6   any other law, for based on service that is different service 
134.7   than the service for which the member or survivor is entitled to 
134.8   receive benefit or annuity from a retirement plan administered 
134.9   by the Public Employees Retirement Association. 
134.10     Sec. 45.  Minnesota Statutes 2004, section 353.15, 
134.11  subdivision 1, is amended to read: 
134.12     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] No money, annuity, 
134.13  or benefit provided for in this chapter is assignable or subject 
134.14  to execution, levy, attachment, garnishment, or legal process, 
134.15  except as provided in subdivision 2 or section 518.58, 518.581, 
134.16  or 518.6111. The provisions of section 356.401 apply to the 
134.17  general employees retirement plan, to the public employees 
134.18  police and fire retirement plan, and to the local government 
134.19  correctional service retirement plan.  
134.20     Sec. 46.  Minnesota Statutes 2004, section 353.15, 
134.21  subdivision 3, is amended to read: 
134.22     Subd. 3.  [PAYMENT TO PUBLIC BODIES.] If, in the judgment 
134.23  of the executive director, conditions so warrant, payment of an 
134.24  annuity, a retirement benefit, or a refund may be made to a 
134.25  public body in behalf of an annuitant, disabilitant, or survivor 
134.26  upon such terms as the executive director may prescribe. 
134.27     Sec. 47.  Minnesota Statutes 2004, section 353.27, 
134.28  subdivision 11, is amended to read: 
134.29     Subd. 11.  [EMPLOYERS; REQUIRED TO FURNISH REQUESTED 
134.30  INFORMATION.] (a) All governmental subdivisions shall furnish 
134.31  promptly such other information relative to the employment 
134.32  status of all employees or former employees, including, but not 
134.33  limited to, payroll abstracts pertaining to all past and present 
134.34  employees, as may be requested by the association or its 
134.35  executive director, including schedules of salaries applicable 
134.36  to various categories of employment.  
135.1      (b) In the event payroll abstract records have been lost or 
135.2   destroyed, for whatever reason or in whatever manner, so that 
135.3   such schedules of salaries cannot be furnished therefrom, the 
135.4   employing governmental subdivision, in lieu thereof, shall 
135.5   furnish to the association an estimate of the earnings of any 
135.6   employee or former employee for any period as may be requested 
135.7   by the association or its executive director.  Should If the 
135.8   association receive such schedules is provided a schedule of 
135.9   estimated earnings, the executive director is hereby authorized 
135.10  to use the same as a basis for making whatever computations 
135.11  might be necessary for determining obligations of the employee 
135.12  and employer to the retirement fund.  If estimates are not 
135.13  furnished by the employer pursuant to at the request of the 
135.14  association or its executive director, the association executive 
135.15  director may estimate the obligations of the employee and 
135.16  employer to the retirement fund based upon such those records as 
135.17  that are in its possession.  Where payroll abstracts have been 
135.18  lost or destroyed, the governmental agency need not furnish any 
135.19  information pertaining to employment prior to July 1, 1963.  The 
135.20  association shall make no estimate of any obligation of any 
135.21  employee, former employee, or employer covering employment prior 
135.22  to July 1, 1963. 
135.23     Sec. 48.  Minnesota Statutes 2004, section 353.271, is 
135.24  amended to read: 
135.25     353.271 [PARTICIPATION IN MINNESOTA POSTRETIREMENT 
135.26  INVESTMENT FUND.] 
135.27     Subdivision 1.  [AUTHORIZATION.] The general employees 
135.28  retirement plan of the Public Employees Retirement Association, 
135.29  including the public employees police and fire fund but 
135.30  excluding the various local relief association consolidation 
135.31  accounts, is retirement plan, and the local government 
135.32  correctional service retirement plan are authorized to 
135.33  participate in the Minnesota postretirement investment fund.  
135.34  There shall be is one general participation in the Minnesota 
135.35  postretirement investment fund for all purposes by each plan of 
135.36  the Public Employees Retirement fund and one general 
136.1   participation in the Minnesota postretirement investment fund 
136.2   for all purposes by the public employees police and fire 
136.3   fund Association. 
136.4      Subd. 2.  [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 
136.5   (1) (a) The required reserves for retirement annuities payable 
136.6   as provided in this chapter other than those payable from the 
136.7   various local relief association consolidation accounts, as 
136.8   determined in accordance with the appropriate mortality table 
136.9   adopted by the board of trustees based on the experience of the 
136.10  fund as recommended by the actuary retained by the Legislative 
136.11  Commission on Pensions and Retirement under section 356.214, and 
136.12  approved under section 356.215, subdivision 18, and using the 
136.13  postretirement interest assumption specified in section 356.215, 
136.14  subdivision 8, shall must be transferred to the Minnesota 
136.15  postretirement investment fund as of the last business day of 
136.16  the month in which the retirement annuity begins.  
136.17     (2) (b) Annuity payments other than those payable from the 
136.18  various local relief association consolidation accounts 
136.19  shall must be adjusted in accordance with the provisions of 
136.20  section 11A.18.  
136.21     (3) (c) Increases in payments pursuant to under this 
136.22  section or from the various local relief association 
136.23  consolidation accounts, if applicable, will must be made 
136.24  automatically unless the intended recipient files written notice 
136.25  with the executive director of the Public Employees Retirement 
136.26  Association requesting that the increase shall not be made. 
136.27     Sec. 49.  Minnesota Statutes 2004, section 353.31, 
136.28  subdivision 1c, is amended to read: 
136.29     Subd. 1c.  [COORDINATED MEMBERS.] Except for benefits 
136.30  provided under section 353.32, subdivisions 1 and 1a, no 
136.31  survivor benefits are payable to the surviving spouse or 
136.32  dependent children of a deceased coordinated member. 
136.33     Sec. 50.  Minnesota Statutes 2004, section 353.32, 
136.34  subdivision 9, is amended to read: 
136.35     Subd. 9.  [PAYMENT TO A MINOR.] If a member or former 
136.36  member dies having named as beneficiary a person who is a minor 
137.1   at the time of the application for refund, the board may make 
137.2   the payment (a) (1) directly to the minor, (b) (2) to any 
137.3   a person who has legally qualified and is acting as guardian of 
137.4   the minor's person or property in any jurisdiction, or (c) (3) 
137.5   to either parent of the minor or to any an adult person with 
137.6   whom the minor may at the time be living, provided only that.  
137.7   The parent or other person to whom any amount is to be 
137.8   paid shall have advised must advise the board in writing that 
137.9   the amount will be held or used in trust for the benefit of such 
137.10  minor.  Any annuity or disability benefit payable at the time of 
137.11  death of an annuitant or recipient of a disability benefit, 
137.12  which is payable to a beneficiary who is a minor, may be paid in 
137.13  the same manner.  Such The payment shall be is a bar to recovery 
137.14  by any other person or persons. 
137.15     Sec. 51.  Minnesota Statutes 2004, section 353.33, 
137.16  subdivision 12, is amended to read: 
137.17     Subd. 12.  [BASIC DISABILITY SURVIVOR BENEFITS.] If a basic 
137.18  member who is receiving a disability benefit under subdivision 3:
137.19     (a) (1) dies before attaining age 65 or within five years 
137.20  of the effective date of the disability, whichever is later, the 
137.21  surviving spouse shall is entitled to receive a survivor benefit 
137.22  under section 353.31, unless the surviving spouse elected to 
137.23  receive a refund under section 353.32, subdivision 1.; 
137.24     (b) (2) is living at age 65 or five years after the 
137.25  effective date of the disability, whichever is later, the basic 
137.26  member may continue to receive a normal disability benefit, or 
137.27  elect a joint and survivor optional annuity under section 
137.28  353.31, subdivision 1b.  The election of the joint and survivor 
137.29  optional annuity must occur within 90 days of attaining age 65 
137.30  or of reaching the five-year anniversary of the effective date 
137.31  of the disability benefit, whichever is later.  The optional 
137.32  annuity takes effect on the first day of the month following the 
137.33  month in which the person attains age 65 or reaches the 
137.34  five-year anniversary of the effective date of the disability 
137.35  benefit, whichever is later.; or 
137.36     (c) (3) if there is a dependent child or children under 
138.1   paragraph (a) or (b) clause (1) or (2), the association shall 
138.2   grant dependent child is entitled to a dependent child benefit 
138.3   under section 353.31, subdivision 1b, paragraph (b). 
138.4      Sec. 52.  Minnesota Statutes 2004, section 354.091, is 
138.5   amended to read: 
138.6      354.091 [SERVICE CREDIT.] 
138.7      (a) In computing service credit, no teacher shall may 
138.8   receive credit for more than one year of teaching service for 
138.9   any fiscal year.  Commencing July 1, 1961 Additionally, in 
138.10  crediting allowable service: 
138.11     (1) if a teacher teaches less than five hours in a day, 
138.12  service credit must be given for the fractional part of the day 
138.13  as the term of service performed bears to five hours; 
138.14     (2) if a teacher teaches five or more hours in a day, 
138.15  service credit must be given for only one day; 
138.16     (3) if a teacher teaches at least 170 full days in any 
138.17  fiscal year, service credit must be given for a full year of 
138.18  teaching service; and 
138.19     (4) if a teacher teaches for only a fractional part of the 
138.20  year, service credit must be given for such fractional part of 
138.21  the year in the same relationship as the period of service 
138.22  performed bears to 170 days. 
138.23     (b) A teacher shall must receive a full year of service 
138.24  credit based on the number of days in the employer's full school 
138.25  year if it that school year is less than 170 days.  Teaching 
138.26  service performed before July 1, 1961, must be computed under 
138.27  the law in effect at the time it was performed. 
138.28     (c) A teacher must not lose or gain retirement service 
138.29  credit as a result of the employer converting to a flexible or 
138.30  alternate work schedule.  If the employer converts to a flexible 
138.31  or alternate work schedule, the forms for reporting teaching 
138.32  service and the procedures for determining service credit must 
138.33  be determined by the executive director with the approval of the 
138.34  board of trustees.  
138.35     (d) For all services rendered on or after July 1, 2003, 
138.36  service credit for all members employed by the Minnesota State 
139.1   Colleges and Universities system must be determined: 
139.2      (1) for full-time employees, by the definition of full-time 
139.3   employment contained in the collective bargaining agreement for 
139.4   those units listed in section 179A.10, subdivision 2, or 
139.5   contained in the applicable personnel or salary plan for those 
139.6   positions designated in section 179A.10, subdivision 1; 
139.7      (2) for part-time employees, by the appropriate proration 
139.8   of full-time equivalency based on the provisions contained in 
139.9   the collective bargaining agreement for those units listed in 
139.10  section 179A.10, subdivision 2, or contained in the applicable 
139.11  personnel or salary plan for those positions designated in 
139.12  section 179A.10, subdivision 1, and the applicable procedures of 
139.13  the Minnesota State Colleges and Universities system; and 
139.14     (3) in no case may a member receive more than one year of 
139.15  service credit for any fiscal year. 
139.16     Sec. 53.  Minnesota Statutes 2004, section 354.10, 
139.17  subdivision 1, is amended to read: 
139.18     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] (a) The provisions 
139.19  of section 356.401 apply to the teachers retirement plan.  
139.20     (b) The right of a teacher to take advantage of the 
139.21  benefits provided by this chapter, is a personal right only and 
139.22  is not assignable.  All money to the credit of a teacher's 
139.23  account in the fund or any money payable to the teacher from the 
139.24  fund belongs to the state of Minnesota until actually paid to 
139.25  the teacher or a beneficiary under this chapter.  
139.26     (c) The association may acknowledge a properly completed 
139.27  power of attorney form.  An assignment or attempted assignment 
139.28  of a teacher's interest in the fund, or of the beneficiary's 
139.29  interest in the fund, by a teacher or a beneficiary is void and 
139.30  exempt from garnishment or levy under attachment or execution, 
139.31  except as provided in subdivision 2 or 3, or section 518.58, 
139.32  518.581, or 518.6111.  
139.33     Sec. 54.  Minnesota Statutes 2004, section 354.10, 
139.34  subdivision 3, is amended to read: 
139.35     Subd. 3.  [PAYMENT TO PUBLIC BODIES.] If, in the judgment 
139.36  of the executive director, conditions so warrant, payment of an 
140.1   annuity, a retirement benefit, or a refund may be made to a 
140.2   public body in behalf of an annuitant, disabilitant, or survivor 
140.3   upon such terms as the executive director may prescribe.  
140.4      Sec. 55.  Minnesota Statutes 2004, section 354.10, 
140.5   subdivision 4, is amended to read: 
140.6      Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any (a) A 
140.7   beneficiary designated by a retiree or member under section 
140.8   354.05, subdivision 22, may be changed or revoked by the retiree 
140.9   or member on a form provided by the executive director.  
140.10     (b) A change or revocation made under this subdivision is 
140.11  valid only if the properly completed form is received by the 
140.12  association on or before the date of death of the retiree or the 
140.13  member.  
140.14     (c) If a designated beneficiary dies before the retiree or 
140.15  member designating the beneficiary, and a new beneficiary is not 
140.16  designated, the retiree's or member's estate is the beneficiary. 
140.17     Sec. 56.  Minnesota Statutes 2004, section 354.33, 
140.18  subdivision 5, is amended to read: 
140.19     Subd. 5.  [RETIREES NOT ELIGIBLE FOR FEDERAL BENEFITS.] 
140.20  Notwithstanding the provisions of section 354.55, subdivision 3, 
140.21  when any person retires after July 1, 1973, who (a) (1) has ten 
140.22  or more years of allowable service, and (b) (2) does not have 
140.23  any retroactive Social Security coverage by reason of the 
140.24  person's position in the retirement system, and (c) (3) does not 
140.25  qualify for federal old age and survivor primary benefits at the 
140.26  time of retirement, the annuity shall must be computed under 
140.27  section 354.44, subdivision 2, of the law in effect on June 30, 
140.28  1969, except that accumulations after June 30, 1957, shall must 
140.29  be calculated using the same mortality table and interest 
140.30  assumption as are used to transfer the required reserves to the 
140.31  Minnesota postretirement investment fund. 
140.32     Sec. 57.  Minnesota Statutes 2004, section 354.39, is 
140.33  amended to read: 
140.34     354.39 [EFFECTIVE DATE; APPLICATION.] 
140.35     After July 1, 1971, any A member of the Teachers Retirement 
140.36  Association who is employed in a new state university and or any 
141.1   other new institutions institution of higher learning not 
141.2   included in any agreement or modification made between the state 
141.3   and the federal Secretary of Health, Education and Welfare Human 
141.4   Services, making the provisions of the federal Old Age and, 
141.5   Survivors and Disability Insurance Act applicable to such 
141.6   members, shall must be covered under the provisions of this 
141.7   chapter applicable to coordinated members. 
141.8      Sec. 58.  Minnesota Statutes 2004, section 354.41, 
141.9   subdivision 2, is amended to read: 
141.10     Subd. 2.  [TEACHERS.] Every teacher after June 30, 1957, in 
141.11  the service or entering the service of the state or one of its 
141.12  governmental subdivision subdivisions as a teacher, except 
141.13  persons specially specifically excluded, shall must become a 
141.14  member of the association by the acceptance of such employment. 
141.15     Sec. 59.  Minnesota Statutes 2004, section 354.42, is 
141.16  amended by adding a subdivision to read: 
141.17     Subd. 1a.  [TEACHERS RETIREMENT FUND.] (a) Within the 
141.18  Teachers Retirement Association and the state treasury is 
141.19  created a special retirement fund, which must include all the 
141.20  assets of the Teachers Retirement Association and all revenue of 
141.21  the association.  The fund is the continuation of the fund 
141.22  established under Laws 1931, chapter 406, section 2, 
141.23  notwithstanding the repeal of Minnesota Statutes 1973, section 
141.24  354.42, subdivision 1, by Laws 1974, chapter 289, section 59. 
141.25     (b) The teachers retirement fund must be credited with all 
141.26  employee and employer contributions, all investment revenue and 
141.27  gains, and all other income authorized by law. 
141.28     (c) From the teachers retirement fund is appropriated the 
141.29  payments of annuities and benefits authorized by this chapter, 
141.30  the transfers to the Minnesota postretirement investment fund, 
141.31  and the reasonable and necessary expenses of administering the 
141.32  fund and the association. 
141.33     Sec. 60.  Minnesota Statutes 2004, section 354.44, 
141.34  subdivision 2, is amended to read: 
141.35     Subd. 2.  [COMPUTATION OF MONEY PURCHASE ANNUITY.] (a) The 
141.36  amount of retirement annuity is an amount equal to double the 
142.1   annuity which could be purchased by the member's accumulated 
142.2   deductions plus interest thereon.  The annuity shall must be 
142.3   determined by the member's age, sex, double the amount of 
142.4   accumulated deductions, double the amount of interest earned on 
142.5   the accumulated deductions, and the appropriate mortality tables 
142.6   and interest rates.  To determine the amount of the annuity for 
142.7   a basic member, the accumulated deductions prior to before July 
142.8   1, 1957, and the accumulated deductions subsequent to after July 
142.9   1, 1957, shall must be considered separately. 
142.10     (1) (b) For service rendered prior to before July 1, 1957, 
142.11  the accumulated deductions for any a member shall must be 
142.12  carried forward at a fixed amount which is shown credited to the 
142.13  member's account as of that date.  That fixed amount shall must 
142.14  also include any payments in lieu of salary deductions which are 
142.15  to be made in the future and are were actually so made pursuant 
142.16  to under an agreement executed between the member and the board 
142.17  as authorized by section 354.50 or any other authorized payments 
142.18  made by the member to the fund.  The annuity granted with 
142.19  respect to the period shall must be determined as follows: 
142.20     (a) (1) the fixed amount of the accumulated deductions for 
142.21  the period including the interest credited on the amount as 
142.22  earned up to July 1, 1957.; and 
142.23     (b) (2) annuity purchase rates based on the applicable 
142.24  mortality table established by the board and the interest rate 
142.25  assumption in effect prior to before July 1, 1957, in the case 
142.26  of basic members and an annuity purchase rate based on an 
142.27  appropriate annuity table of mortality established by the board 
142.28  as provided in section 354.07, subdivision 1, and using the 
142.29  applicable postretirement interest rate assumption specified in 
142.30  section 356.215, subdivision 8, in the case of coordinated 
142.31  members. 
142.32     (2) (c) For service rendered subsequent to after July 1, 
142.33  1957, the accumulated deductions for any a member shall must 
142.34  consist of the amounts actually credited to the member's account 
142.35  by reason of salary deductions.  The annuity granted with 
142.36  respect to the period shall must be determined by the following: 
143.1      (a) (1) accumulated deductions for the period; 
143.2      (b) (2) interest credited on these accumulated deductions 
143.3   from July 1, 1957, to the date of retirement; 
143.4      (c) (3) interest credited on accumulated deductions 
143.5   including prior credited interest provided in paragraph (1) (b) 
143.6   from July 1, 1957, to the date of retirement; 
143.7      (d) (4) after the amount available for an annuity granted 
143.8   with respect to the person is determined in accordance with the 
143.9   provisions of this subdivision, an additional amount equal to 20 
143.10  percent of the sum of clause (2)(a) (1) plus interest credited 
143.11  to members a member's account from July 1, 1957, to date of 
143.12  retirement is to be added.  This added amount is not to be 
143.13  doubled as provided for other amounts determined in this 
143.14  subdivision; and 
143.15     (e) (5) the annuity purchase rate based on an appropriate 
143.16  annuity table of mortality established by the board as provided 
143.17  in section 354.07, subdivision 1, and using the applicable 
143.18  postretirement interest rate assumption specified in section 
143.19  356.215, subdivision 8. 
143.20     Sec. 61.  Minnesota Statutes 2004, section 354A.021, 
143.21  subdivision 5, is amended to read: 
143.22     Subd. 5.  [TAX SHELTERED ANNUITY PROGRAM AND FUND.] Any A 
143.23  teachers retirement fund association may establish a tax 
143.24  sheltered annuity program and fund meeting the requirements of 
143.25  section 403(b) of the Internal Revenue Code of 1986, as amended 
143.26  through December 31, 1992, which shall must include all assets 
143.27  which were acquired for the specific purpose of being credited 
143.28  to the program and fund and to which shall must be credited all 
143.29  employee contributions, and employer contributions, if 
143.30  negotiated under a collective bargaining agreement, designated 
143.31  for this purpose and all interest income attributable to the 
143.32  assets of the program and fund.  
143.33     Sec. 62.  Minnesota Statutes 2004, section 354A.097, 
143.34  subdivision 1, is amended to read: 
143.35     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
143.36  teacher who has at least three years of allowable service credit 
144.1   with the teachers retirement fund association and who performed 
144.2   service in the United States armed forces before becoming a 
144.3   teacher as defined in section 354A.011, subdivision 27, or who 
144.4   failed to obtain service credit for a military leave of absence 
144.5   period under section 354A.093, is entitled to purchase allowable 
144.6   service credit for the initial period of enlistment, induction, 
144.7   or call to active duty without any voluntary extension by making 
144.8   payment under section 356.55 provided 356.551 if the teacher has 
144.9   not purchased service credit from another Minnesota defined 
144.10  benefit public employee pension plan for the same period of 
144.11  service. 
144.12     Sec. 63.  Minnesota Statutes 2004, section 354A.31, 
144.13  subdivision 5, is amended to read: 
144.14     Subd. 5.  [UNREDUCED NORMAL RETIREMENT ANNUITY.] Upon 
144.15  retirement at normal retirement age with at least three years of 
144.16  service credit, a coordinated member shall be is entitled to a 
144.17  normal retirement annuity calculated pursuant to under 
144.18  subdivision 4 or 4a, whichever applies.  
144.19     Sec. 64.  [356.401] [EXEMPTION FROM PROCESS.] 
144.20     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] None of the money, 
144.21  annuities, or other benefits provided for in the governing law 
144.22  of a covered retirement plan is assignable either in law or in 
144.23  equity or subject to state estate tax, or to execution, levy, 
144.24  attachment, garnishment, or other legal process, except as 
144.25  provided in subdivision 2 or section 518.58, 518.581, or 
144.26  518.6111.  
144.27     Subd. 2.  [AUTOMATIC DEPOSITS.] (a) The chief 
144.28  administrative officer of a covered retirement plan may remit, 
144.29  through an automatic deposit system, annuity, benefit, or refund 
144.30  payments only to a financial institution associated with the 
144.31  National Automated Clearinghouse Association or a comparable 
144.32  successor organization that is trustee for a person who is 
144.33  eligible to receive the annuity, benefit, or refund.  
144.34     (b) Upon the request of a retiree, disabilitant, survivor, 
144.35  or former member, the chief administrative officer of a covered 
144.36  retirement plan may remit the annuity, benefit, or refund check 
145.1   to the applicable financial institution for deposit in the 
145.2   person's individual account or the person's joint account.  An 
145.3   overpayment to a joint account after the death of the annuitant 
145.4   or benefit recipient must be repaid to the fund of the 
145.5   applicable covered retirement plan by the joint tenant if the 
145.6   overpayment is not repaid to that fund by the financial 
145.7   institution associated with the National Automated Clearinghouse 
145.8   Association or its successor.  The governing board of the 
145.9   covered retirement plan may prescribe the conditions under which 
145.10  these payments may be made.  
145.11     Subd. 3.  [COVERED RETIREMENT PLANS.] The provisions of 
145.12  this section apply to the following retirement plans: 
145.13     (1) the legislators retirement plan, established by chapter 
145.14  3A; 
145.15     (2) the general state employees retirement plan of the 
145.16  Minnesota State Retirement System, established by chapter 352; 
145.17     (3) the correctional state employees retirement plan of the 
145.18  Minnesota State Retirement System, established by chapter 352; 
145.19     (4) the State Patrol retirement plan, established by 
145.20  chapter 352B; 
145.21     (5) the elective state officers retirement plan, 
145.22  established by chapter 352C; 
145.23     (6) the unclassified state employees retirement program, 
145.24  established by chapter 352D; 
145.25     (7) the general employees retirement plan of the Public 
145.26  Employees Retirement Association, established by chapter 353; 
145.27     (8) the public employees police and fire plan of the Public 
145.28  Employees Retirement Association, established by chapter 353; 
145.29     (9) the public employees defined contribution plan, 
145.30  established by chapter 353D; 
145.31     (10) the local government correctional service retirement 
145.32  plan of the Public Employees Retirement Association, established 
145.33  by chapter 353E; 
145.34     (11) the Teachers Retirement Association, established by 
145.35  chapter 354; 
145.36     (12) the Duluth Teachers Retirement Fund Association, 
146.1   established by chapter 354A; 
146.2      (13) the Minneapolis Teachers Retirement Fund Association, 
146.3   established by chapter 354A; 
146.4      (14) the St. Paul Teachers Retirement Fund Association, 
146.5   established by chapter 354A; 
146.6      (15) the individual retirement account plan, established by 
146.7   chapter 354B; 
146.8      (16) the higher education supplemental retirement plan, 
146.9   established by chapter 354C; 
146.10     (17) the Minneapolis employees retirement fund, established 
146.11  by chapter 422A; 
146.12     (18) the Minneapolis Police Relief Association, established 
146.13  by chapter 423B; 
146.14     (19) the Minneapolis Firefighters Relief Association, 
146.15  established by chapter 423C; and 
146.16     (20) the judges' retirement fund, established by sections 
146.17  490.121 to 490.132.  
146.18     Sec. 65.  Minnesota Statutes 2004, section 356.551, is 
146.19  amended to read: 
146.20     356.551 [POST JULY 1, 2003 2004, PRIOR SERVICE CREDIT 
146.21  PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 
146.22     Subdivision 1.  [APPLICATION.] (a) Unless the prior service 
146.23  credit purchase authorization special law or general statute 
146.24  provision explicitly specifies a different purchase payment 
146.25  amount determination procedure, and if section 356.55 has 
146.26  expired, this section governs the determination of the prior 
146.27  service credit purchase payment amount of any prior service 
146.28  credit purchase. 
146.29     (b) The purchase payment amount determination procedure 
146.30  must recognize any service credit accrued to the purchaser in a 
146.31  pension plan enumerated in section 356.30, subdivision 3. 
146.32     (c) Any service credit in a Minnesota defined benefit 
146.33  public employee pension plan available to be reinstated by the 
146.34  purchaser through the repayment of a refund of member or 
146.35  employee contributions previously received must be repaid in 
146.36  full before any purchase of prior service credit payment is made 
147.1   under this section. 
147.2      Subd. 2.  [DETERMINATION.] (a) Unless the minimum purchase 
147.3   amount set forth in paragraph (c) applies, the prior service 
147.4   credit purchase amount is an amount equal to the actuarial 
147.5   present value, on the date of payment, as calculated by the 
147.6   chief administrative officer of the pension plan and reviewed by 
147.7   the actuary retained by the Legislative Commission on Pensions 
147.8   and Retirement under section 356.214, of the amount of the 
147.9   additional retirement annuity obtained by the acquisition of the 
147.10  additional service credit in this section.  
147.11     (b) Calculation of this amount must be made using the 
147.12  preretirement interest rate applicable to the public pension 
147.13  plan specified in section 356.215, subdivision 4d 8, and the 
147.14  mortality table adopted for the public pension plan.  The 
147.15  calculation must assume continuous future service in the public 
147.16  pension plan until, and retirement at, the age at which the 
147.17  minimum requirements of the fund for normal retirement or 
147.18  retirement with an annuity unreduced for retirement at an early 
147.19  age, including section 356.30, are met with the additional 
147.20  service credit purchased.  The calculation must also assume a 
147.21  full-time equivalent salary, or actual salary, whichever is 
147.22  greater, and a future salary history that includes annual salary 
147.23  increases at the applicable salary increase rate for the plan 
147.24  specified in section 356.215, subdivision 4d.  
147.25     (c) The prior service credit purchase amount may not be 
147.26  less than the amount determined by applying the current employee 
147.27  or member contribution rate, the employer contribution rate, and 
147.28  the additional employer contribution rate, if any, to the 
147.29  person's current annual salary and multiplying that result by 
147.30  the number of whole and fraction years of service to be 
147.31  purchased. 
147.32     (d) Payment must be made in one lump sum within one year of 
147.33  the prior service credit authorization.  Payment of the amount 
147.34  calculated under this section must be made by the applicable 
147.35  eligible person.  
147.36     (e) However, the current employer or the prior employer 
148.1   may, at its discretion, pay all or any portion of the payment 
148.2   amount that exceeds an amount equal to the employee contribution 
148.3   rates in effect during the period or periods of prior service 
148.4   applied to the actual salary rates in effect during the period 
148.5   or periods of prior service, plus interest at the rate of 8.5 
148.6   percent a year compounded annually from the date on which the 
148.7   contributions would otherwise have been made to the date on 
148.8   which the payment is made.  If the employer agrees to payments 
148.9   under this subdivision, the purchaser must make the employee 
148.10  payments required under this subdivision within 290 90 days of 
148.11  the prior service credit authorization.  If that employee 
148.12  payment is made, the employer payment under this subdivision 
148.13  must be remitted to the chief administrative officer of the 
148.14  public pension plan within 60 days of receipt by the chief 
148.15  administrative officer of the employee payments specified under 
148.16  this subdivision. 
148.17     Subd. 3.  [DOCUMENTATION.] The prospective prior service 
148.18  credit purchaser must provide any relevant documentation 
148.19  required by the chief administrative officer of the applicable 
148.20  public pension plan to determine eligibility for the prior 
148.21  service credit under this section. 
148.22     Subd. 4.  [PAYMENT PRECONDITION FOR CREDIT GRANT.] Service 
148.23  credit for the purchase period must be granted by the public 
148.24  pension plan to the purchaser upon receipt of the full purchase 
148.25  payment amount specified in subdivision 2. 
148.26     Sec. 66.  Minnesota Statutes 2004, section 356A.06, 
148.27  subdivision 7, is amended to read: 
148.28     Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
148.29  SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
148.30  authorized by law or bylaws, a covered pension plan not 
148.31  described by subdivision 6, paragraph (a), may invest its assets 
148.32  only in accordance with this subdivision. 
148.33     (b)  [SECURITIES GENERALLY.] The covered pension plan has 
148.34  the authority to purchase, sell, lend, or exchange the 
148.35  securities specified in paragraphs (c) to (g), including puts 
148.36  and call options and future contracts traded on a contract 
149.1   market regulated by a governmental agency or by a financial 
149.2   institution regulated by a governmental agency.  These 
149.3   securities may be owned as units in commingled trusts that own 
149.4   the securities described in paragraphs (c) to (g).  
149.5      (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
149.6   invest funds in governmental bonds, notes, bills, mortgages, and 
149.7   other evidences of indebtedness provided the issue is backed by 
149.8   the full faith and credit of the issuer or the issue is rated 
149.9   among the top four quality rating categories by a nationally 
149.10  recognized rating agency.  The obligations in which funds may be 
149.11  invested under this paragraph include guaranteed or insured 
149.12  issues of (1) the United States, its agencies, its 
149.13  instrumentalities, or organizations created and regulated by an 
149.14  act of Congress; (2) Canada and its provinces, provided the 
149.15  principal and interest is payable in United States dollars; (3) 
149.16  the states and their municipalities, political subdivisions, 
149.17  agencies, or instrumentalities; (4) the International Bank for 
149.18  Reconstruction and Development, the Inter-American Development 
149.19  Bank, the Asian Development Bank, the African Development Bank, 
149.20  or any other United States government sponsored organization of 
149.21  which the United States is a member, provided the principal and 
149.22  interest is payable in United States dollars. 
149.23     (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
149.24  invest funds in bonds, notes, debentures, transportation 
149.25  equipment obligations, or any other longer term evidences of 
149.26  indebtedness issued or guaranteed by a corporation organized 
149.27  under the laws of the United States or any state thereof, or the 
149.28  Dominion of Canada or any province thereof if they conform to 
149.29  the following provisions: 
149.30     (1) the principal and interest of obligations of 
149.31  corporations incorporated or organized under the laws of the 
149.32  Dominion of Canada or any province thereof must be payable in 
149.33  United States dollars; and 
149.34     (2) obligations must be rated among the top four quality 
149.35  categories by a nationally recognized rating agency. 
149.36     (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
150.1   invest funds in bankers acceptances, certificates of deposit, 
150.2   deposit notes, commercial paper, mortgage participation 
150.3   certificates and pools, asset backed securities, repurchase 
150.4   agreements and reverse repurchase agreements, guaranteed 
150.5   investment contracts, savings accounts, and guaranty fund 
150.6   certificates, surplus notes, or debentures of domestic mutual 
150.7   insurance companies if they conform to the following provisions: 
150.8      (i) bankers acceptances and deposit notes of United States 
150.9   banks are limited to those issued by banks rated in the highest 
150.10  four quality categories by a nationally recognized rating 
150.11  agency; 
150.12     (ii) certificates of deposit are limited to those issued by 
150.13  (A) United States banks and savings institutions that are rated 
150.14  in the highest four quality categories by a nationally 
150.15  recognized rating agency or whose certificates of deposit are 
150.16  fully insured by federal agencies; or (B) credit unions in 
150.17  amounts up to the limit of insurance coverage provided by the 
150.18  National Credit Union Administration; 
150.19     (iii) commercial paper is limited to those issued by United 
150.20  States corporations or their Canadian subsidiaries and rated in 
150.21  the highest two quality categories by a nationally recognized 
150.22  rating agency; 
150.23     (iv) mortgage participation or pass through certificates 
150.24  evidencing interests in pools of first mortgages or trust deeds 
150.25  on improved real estate located in the United States where the 
150.26  loan to value ratio for each loan as calculated in accordance 
150.27  with section 61A.28, subdivision 3, does not exceed 80 percent 
150.28  for fully amortizable residential properties and in all other 
150.29  respects meets the requirements of section 61A.28, subdivision 
150.30  3; 
150.31     (v) collateral for repurchase agreements and reverse 
150.32  repurchase agreements is limited to letters of credit and 
150.33  securities authorized in this section; 
150.34     (vi) guaranteed investment contracts are limited to those 
150.35  issued by insurance companies or banks rated in the top four 
150.36  quality categories by a nationally recognized rating agency or 
151.1   to alternative guaranteed investment contracts where the 
151.2   underlying assets comply with the requirements of this 
151.3   subdivision; 
151.4      (vii) savings accounts are limited to those fully insured 
151.5   by federal agencies; and 
151.6      (viii) asset backed securities must be rated in the top 
151.7   four quality categories by a nationally recognized rating agency.
151.8      (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 
151.9   not apply to certificates of deposit and collateralization 
151.10  agreements executed by the covered pension plan under clause 
151.11  (1), item (ii). 
151.12     (3) In addition to investments authorized by clause (1), 
151.13  item (iv), the covered pension plan may purchase from the 
151.14  Minnesota Housing Finance Agency all or any part of a pool of 
151.15  residential mortgages, not in default, that has previously been 
151.16  financed by the issuance of bonds or notes of the agency.  The 
151.17  covered pension plan may also enter into a commitment with the 
151.18  agency, at the time of any issue of bonds or notes, to purchase 
151.19  at a specified future date, not exceeding 12 years from the date 
151.20  of the issue, the amount of mortgage loans then outstanding and 
151.21  not in default that have been made or purchased from the 
151.22  proceeds of the bonds or notes.  The covered pension plan may 
151.23  charge reasonable fees for any such commitment and may agree to 
151.24  purchase the mortgage loans at a price sufficient to produce a 
151.25  yield to the covered pension plan comparable, in its judgment, 
151.26  to the yield available on similar mortgage loans at the date of 
151.27  the bonds or notes.  The covered pension plan may also enter 
151.28  into agreements with the agency for the investment of any 
151.29  portion of the funds of the agency.  The agreement must cover 
151.30  the period of the investment, withdrawal privileges, and any 
151.31  guaranteed rate of return. 
151.32     (f)  [CORPORATE STOCKS.] The covered pension plan may 
151.33  invest funds in stocks or convertible issues of any corporation 
151.34  organized under the laws of the United States or the states 
151.35  thereof, the Dominion of Canada or its provinces, or any 
151.36  corporation listed on the New York Stock Exchange or the 
152.1   American Stock Exchange, if they conform to the following 
152.2   provisions: 
152.3      (1) the aggregate value of corporate stock investments, as 
152.4   adjusted for realized profits and losses, must not exceed 85 
152.5   percent of the market or book value, whichever is less, of a 
152.6   fund, less the aggregate value of investments according to 
152.7   subdivision 6 paragraph (g); 
152.8      (2) investments must not exceed five percent of the total 
152.9   outstanding shares of any one corporation. 
152.10     (g)  [OTHER INVESTMENTS.] (1) In addition to the 
152.11  investments authorized in paragraphs (b) to (f), and subject to 
152.12  the provisions in clause (2), the covered pension plan may 
152.13  invest funds in:  
152.14     (i) venture capital investment businesses through 
152.15  participation in limited partnerships and corporations; 
152.16     (ii) real estate ownership interests or loans secured by 
152.17  mortgages or deeds of trust through investment in limited 
152.18  partnerships, bank sponsored collective funds, trusts, and 
152.19  insurance company commingled accounts, including separate 
152.20  accounts; 
152.21     (iii) regional and mutual funds through bank sponsored 
152.22  collective funds and open-end investment companies registered 
152.23  under the Federal Investment Company Act of 1940; 
152.24     (iv) resource investments through limited partnerships, 
152.25  private placements, and corporations; and 
152.26     (v) international securities. 
152.27     (2) The investments authorized in clause (1) must conform 
152.28  to the following provisions:  
152.29     (i) the aggregate value of all investments made according 
152.30  to clause (1) may not exceed 35 percent of the market value of 
152.31  the fund for which the covered pension plan is investing; 
152.32     (ii) there must be at least four unrelated owners of the 
152.33  investment other than the state board for investments made under 
152.34  clause (1), item (i), (ii), (iii), or (iv); 
152.35     (iii) covered pension plan participation in an investment 
152.36  vehicle is limited to 20 percent thereof for investments made 
153.1   under clause (1), item (i), (ii), (iii), or (iv); and 
153.2      (iv) covered pension plan participation in a limited 
153.3   partnership does not include a general partnership interest or 
153.4   other interest involving general liability.  The covered pension 
153.5   plan may not engage in any activity as a limited partner which 
153.6   creates general liability. 
153.7      Sec. 67.  Minnesota Statutes 2004, section 422A.01, 
153.8   subdivision 11, is amended to read: 
153.9      Subd. 11.  [EMPLOYEE.] "Employee" means any a person who is 
153.10  not exempted from the contributing class pursuant to under 
153.11  section 422A.09, subdivision 3, who is was employed before July 
153.12  1, 1979, by and paid, in whole or in part, by the city or any of 
153.13  its boards, departments, or commissions, operated as a 
153.14  department of city government or independently if financed in 
153.15  whole or in part by city funds, including any a person who was 
153.16  employed by a public corporation as herein defined, and 
153.17  including any a person who was employed before July 1, 1979, by 
153.18  Special School District No. 1, and who is not a member of any 
153.19  other retirement system, and also including any a person who 
153.20  is was employed before July 1, 1973, by the county of Hennepin, 
153.21  who was entitled by law to elect and has elected to retain 
153.22  membership in the municipal Minneapolis Employees Retirement 
153.23  Fund and who makes any required member contributions to the fund 
153.24  and who remains so employed. 
153.25     Sec. 68.  Minnesota Statutes 2004, section 422A.06, 
153.26  subdivision 7, is amended to read: 
153.27     Subd. 7.  [DISABILITY BENEFIT FUND.] (a) The required 
153.28  reserves for disability allowances which become effective after 
153.29  December 31, 1973, shall be transferred from the deposit 
153.30  accumulation fund to the A disability benefit fund is 
153.31  established, containing the required reserves for disability 
153.32  allowances under this chapter.  A proportionate share of income 
153.33  from investments shall must be allocated to this fund.  
153.34  There shall must be paid from this fund the disability 
153.35  allowances which become effective after December 31, 1973 
153.36  payable under this chapter. 
154.1      (b) In the event of the termination of any disability 
154.2   allowance for any reason other than the death of the recipient, 
154.3   the balance of the required reserves for the disability 
154.4   allowance as of the date of the termination shall must be 
154.5   transferred from the disability benefit fund to the deposit 
154.6   accumulation fund. 
154.7      (c) At the end of each fiscal year, as part of the annual 
154.8   actuarial valuation, a determination shall must be made of the 
154.9   required reserves for all disability allowances being paid from 
154.10  the disability benefit fund.  Any excess of assets over 
154.11  actuarial required reserves in the disability benefit fund shall 
154.12  must be transferred to the deposit accumulation fund.  Any 
154.13  excess of actuarial reserves over assets in the disability 
154.14  benefit fund shall must be funded by a transfer of the 
154.15  appropriate amount of assets from the deposit accumulation fund. 
154.16     Sec. 69.  Minnesota Statutes 2004, section 422A.10, 
154.17  subdivision 1, is amended to read: 
154.18     Subdivision 1.  [MEMBER CONTRIBUTION RATE; DEDUCTIONS.] (a) 
154.19  There shall must be deducted and withheld from the basic salary, 
154.20  pay or compensation of each employee in the contributing class, 
154.21  prior to January 1, 1980 an amount equal to 7-1/4 percent, after 
154.22  December 31, 1979 but prior to January 1, 1981 an amount equal 
154.23  to 8-1/4 percent and after December 31, 1980 an amount equal to 
154.24  9-1/4 percent of such salary, pay or compensation, except as 
154.25  hereinafter provided.  
154.26     (b) The retirement board may increase the percentage rate 
154.27  of contribution to the retirement fund of any employee or 
154.28  employees for the purpose of establishing and maintaining on an 
154.29  actuarial basis a plan of insurance, survivors' benefits, or 
154.30  other type of benefit or benefits, the cost of which shall must 
154.31  be paid out of such extra percentage so authorized and deducted 
154.32  from the employee's compensation, except as hereinafter 
154.33  provided.  Any plan or plans so established and placed in 
154.34  operation may be amended from time to time, or may be abandoned, 
154.35  but if abandoned, any surplus remaining from the operation of a 
154.36  plan shall must be the property of the fund, and shall must be 
155.1   credited to the reserve for loss in investment account. 
155.2      Sec. 70.  Minnesota Statutes 2004, section 422A.10, 
155.3   subdivision 2, is amended to read: 
155.4      Subd. 2.  [CONSENT TO DEDUCTIONS MANDATORY MEMBER 
155.5   CONTRIBUTIONS.] Every employee to whom sections 422A.01 to 
155.6   422A.25 this chapter applies who shall continue in the service 
155.7   after the passage of Laws 1919, chapter 522, as well as every 
155.8   person to whom sections 422A.01 to 422A.25 applies who may 
155.9   hereafter be appointed to a position or place, shall be is 
155.10  deemed to consent and agree to the deductions made and provided 
155.11  for herein, and payment with such reductions, for service, shall 
155.12  be are a full and complete discharge and acquittance of all 
155.13  claims and demands for all services rendered by such person 
155.14  during the period covered by such payment; except the person's 
155.15  claim to the benefits to which the person may be entitled under 
155.16  the provisions of sections 422A.01 to 422A.25 this chapter.  
155.17     Sec. 71.  Minnesota Statutes 2004, section 422A.22, 
155.18  subdivision 1, is amended to read: 
155.19     Subdivision 1.  [RETENTION; TRANSFER.] (a) If an employee 
155.20  to whom sections 422A.01 to 422A.25 this chapter applies becomes 
155.21  absolutely separated from the active service prior to before 
155.22  attaining the minimum retirement age established in section 
155.23  422A.13, the employee is entitled to a refund of the net 
155.24  accumulated amount of deduction from salary, pay, or 
155.25  compensation, made for the purpose of accumulating a fund from 
155.26  which to pay retirement allowances, shall be returned to such 
155.27  employee, with interest at the annual compound rate of six 
155.28  percent.  
155.29     (b) Any contributing employee who separates from a 
155.30  department, board or commission of the city whose employees are 
155.31  covered by a fund organized under sections 422A.01 to 422A.25 
155.32  this chapter, and becomes an employee of a department or board 
155.33  of the same city, whose employees are covered by a retirement 
155.34  fund or relief association by whatever name known, organized 
155.35  under any other law and supported in whole or in part by taxes 
155.36  on the same city, shall have has the option of: 
156.1      (1) retaining their membership in the fund organized under 
156.2   sections 422A.01 to 422A.25 this chapter, regardless of the 
156.3   provisions of any law, rule, bylaw or other action requiring 
156.4   membership in any other retirement fund or relief association 
156.5   however organized.; or 
156.6      (2) transferring to the fund or association covering the 
156.7   employees of the department or board to which they are 
156.8   transferring, providing they are eligible for membership therein.
156.9      (c) Any contributing employee who elects to transfer to 
156.10  another fund or association as herein provided in paragraph (b), 
156.11  clause (2), shall must make such election within one year from 
156.12  the date of separation from the city service covered by this 
156.13  fund.  If the contributing employee elects to transfer to 
156.14  another fund as herein provided, the employee is entitled to a 
156.15  refund of the net accumulated contributions made by such 
156.16  employee to the fund organized under sections 422A.01 to 
156.17  422A.25, shall be returned to the employee this chapter with 
156.18  interest at the annual compound rate of six percent.  
156.19     Sec. 72.  Minnesota Statutes 2004, section 422A.22, 
156.20  subdivision 3, is amended to read: 
156.21     Subd. 3.  [LIMITATION ON ELIGIBILITY.] No employee of the 
156.22  city shall be is eligible to be a member of, or receive benefits 
156.23  from, more than one retirement plan or fund of the city for the 
156.24  same period of service.  
156.25     Sec. 73.  Minnesota Statutes 2004, section 422A.22, 
156.26  subdivision 4, is amended to read: 
156.27     Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
156.28  of an active member prior to before the employee's termination 
156.29  of active service, there shall be paid to the beneficiary or 
156.30  beneficiaries designated by the member on a form specified by 
156.31  the executive director and filed with the retirement board, are 
156.32  entitled to receive the net accumulated employee deductions from 
156.33  salary, pay, or compensation, including interest under 
156.34  subdivision 1, paragraph (a), compounded annually to the date of 
156.35  the member's death.  The amount must not include any 
156.36  contributions made by the employee or on the employee's behalf, 
157.1   or any interest or investment earnings on those contributions, 
157.2   which were allocated to the survivor benefit fund under section 
157.3   422A.06, subdivision 6. 
157.4      (b) If the employee fails to make a designation, or if the 
157.5   beneficiary or beneficiaries designated by the employee 
157.6   predeceases the employee, the benefit specified in paragraph (a) 
157.7   must be paid to the deceased employee's estate is entitled to 
157.8   the benefit specified in paragraph (a). 
157.9      (c) A benefit payable under this subdivision is in addition 
157.10  to any applicable survivor benefit under section 422A.23. 
157.11     Sec. 74.  Minnesota Statutes 2004, section 422A.22, 
157.12  subdivision 6, is amended to read: 
157.13     Subd. 6.  [REFUND; MUNICIPAL EMPLOYEES RETIREMENT FUND.] 
157.14  Any A person who has received a refund from the municipal 
157.15  Minneapolis Employees Retirement Fund, and who is a member of a 
157.16  public retirement system included in section 422A.16, 
157.17  subdivision 8, may repay such refund with interest at a compound 
157.18  annual rate of 8.5 percent to the municipal Minneapolis 
157.19  Employees Retirement Fund.  If a refund is repaid to the fund 
157.20  and if more than one refund has been received from the fund, all 
157.21  refunds must be repaid.  Repayment shall must be made as 
157.22  provided in sections 422A.01 to 422A.25 this chapter.  
157.23     Sec. 75.  Minnesota Statutes 2004, section 422A.231, is 
157.24  amended to read: 
157.25     422A.231 [COST ALLOCATION.] 
157.26     (a) Notwithstanding any law to the contrary, all current 
157.27  and future contribution requirements due to this article are 
157.28  payable by the participating contributing employing units other 
157.29  than the state of Minnesota. 
157.30     (b) In each actuarial valuation of the retirement fund, the 
157.31  actuary retained by the Legislative Commission on Pensions and 
157.32  Retirement under section 356.214 shall include an exhibit on the 
157.33  impact of the benefit increases contained in this article on the 
157.34  survivor benefit fund.  The actuary shall calculate the expected 
157.35  change in the present value of the future benefits payable from 
157.36  the survivor benefit fund attributable to this article, using 
158.1   the actuarial method and assumptions applicable to the 
158.2   Minneapolis Employees Retirement Fund, from the prior actuarial 
158.3   valuation and shall compare that result with the actual change 
158.4   in the present value of future benefits payable from the 
158.5   survivor benefit fund attributable to this article from the 
158.6   prior actuarial valuation. 
158.7      (c) The executive director shall assess each participating 
158.8   employer, other than the state of Minnesota, its proportional 
158.9   share of the net increase amount calculated under paragraph 
158.10  (b).  The assessment must be made on the first business day of 
158.11  the following February, plus compound interest at an annual rate 
158.12  of six percent on the amount from the actuarial valuation date 
158.13  to the date of payment. 
158.14     Sec. 76.  Minnesota Statutes 2004, section 422A.24, is 
158.15  amended to read: 
158.16     422A.24 [ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.] 
158.17     No money payable pursuant to this chapter shall be 
158.18  assignable either in law or equity or be subject to execution, 
158.19  levy, attachment, garnishment, or other legal process, except as 
158.20  provided in section 518.58, 518.581, or 518.6111, nor shall any 
158.21  of the proceeds of payments due pursuant to this chapter be 
158.22  subject to the inheritance tax provisions of this state upon 
158.23  transfer to a surviving spouse or minor or dependent child of 
158.24  the decedent or a trust for their benefit. The provisions of 
158.25  section 356.401 apply to the Minneapolis employees retirement 
158.26  plan.  
158.27     Sec. 77.  Minnesota Statutes 2004, section 423B.17, is 
158.28  amended to read: 
158.29     423B.17 [PAYMENTS EXEMPT FROM PROCESS.] 
158.30     A payment made by the association under a provision of 
158.31  sections 423B.01 to 423B.18, as amended, is exempt from legal 
158.32  process except as provided in section 518.58, 518.581, or 
158.33  518.6111.  No person entitled to a payment may assign the same.  
158.34  The association may not recognize an assignment or pay a sum on 
158.35  account of an assignment. The provisions of section 356.401 
158.36  apply to the Minneapolis Police Relief Association.  
159.1      Sec. 78.  Minnesota Statutes 2004, section 423C.09, is 
159.2   amended to read: 
159.3      423C.09 [PAYMENTS EXEMPT FROM PROCESS.] 
159.4      All payments made, or to be made, by the association under 
159.5   this chapter shall be totally exempt from garnishment, 
159.6   execution, or other legal process, except as provided in section 
159.7   518.58, 518.581, or 518.6111.  No person entitled to a payment 
159.8   shall have the right to assign the name, nor shall the 
159.9   association have authority to recognize any assignment or to pay 
159.10  any sum on account thereof.  Any attempt to transfer any right 
159.11  or claim, or any part thereof, shall be void. The provisions of 
159.12  section 356.401 apply to the Minneapolis Firefighters Relief 
159.13  Association.  
159.14     Sec. 79.  Minnesota Statutes 2004, section 490.126, 
159.15  subdivision 5, is amended to read: 
159.16     Subd. 5.  [EXEMPTION FROM PROCESS; NO ASSIGNMENT.] None of 
159.17  the money, annuities, or other benefits provided in this chapter 
159.18  is assignable either in law or equity or is subject to 
159.19  execution, levy, attachment, garnishment, or other legal 
159.20  process, except as provided in section 518.58, 518.581, or 
159.21  518.6111. The provisions of section 356.401 apply to the judges 
159.22  retirement plan.  
159.23     Sec. 80.  [REVISOR'S INSTRUCTION.] 
159.24     In the next edition and subsequent editions of Minnesota 
159.25  Statutes, the revisor of statutes shall replace the reference to 
159.26  "sections 422A.01 to 422A.25" with the reference to "this 
159.27  chapter" wherever the reference appears in Minnesota Statutes, 
159.28  chapter 422A. 
159.29     Sec. 81.  [REPEALER.] 
159.30     (a) Minnesota Statutes 2004, section 352.119, subdivision 
159.31  1, is repealed. 
159.32     (b) Minnesota Statutes 2004, sections 353.34, subdivision 
159.33  3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision 
159.34  4; 353.663; 353.74; and 353.75, are repealed. 
159.35     (c) Minnesota Statutes 2004, section 354.59, is repealed. 
159.36     (d) Minnesota Statutes 2004, sections 422A.22, subdivisions 
160.1   2 and 5; and 422A.221, are repealed. 
160.2      (e) Minnesota Statutes 2004, sections 352.15, subdivision 
160.3   1a; 353.15, subdivision 2; and 354.10, subdivision 2, are 
160.4   repealed.  
160.5      Sec. 82.  [EFFECTIVE DATE.] 
160.6      (a) Sections 1 to 73 and 75 to 81 are effective July 1, 
160.7   2005. 
160.8      (b) Section 74 is effective January 1, 2006. 
160.9      (c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78, 
160.10  79, and 81, paragraph (e), do not apply to any cause of action 
160.11  that is proceeding on the date of enactment or to any cause of 
160.12  action for which the applicable statute of limitations has not 
160.13  expired as of the date of enactment. 
160.14                             ARTICLE 13
160.15                       LOCAL RETIREMENT PLANS
160.16     Section 1.  Minnesota Statutes 2004, section 356.215, 
160.17  subdivision 8, is amended to read: 
160.18     Subd. 8.  [INTEREST AND SALARY ASSUMPTIONS.] (a) The 
160.19  actuarial valuation must use the applicable following 
160.20  preretirement interest assumption and the applicable following 
160.21  postretirement interest assumption: 
160.22                                     preretirement  postretirement 
160.23                                     interest rate  interest rate 
160.24              plan                      assumption     assumption 
160.25       general state employees 
160.26           retirement plan                  8.5%          6.0% 
160.27       correctional state employees 
160.28           retirement plan                  8.5           6.0 
160.29       State Patrol retirement plan         8.5           6.0 
160.30       legislators retirement plan          8.5           6.0 
160.31       elective state officers
160.32           retirement plan                  8.5           6.0 
160.33       judges retirement plan               8.5           6.0 
160.34       general public employees 
160.35           retirement plan                  8.5           6.0 
160.36       public employees police and fire 
160.37           retirement plan                  8.5           6.0 
160.38       local government correctional 
160.39           service retirement plan          8.5           6.0 
160.40       teachers retirement plan             8.5           6.0 
160.41       Minneapolis employees 
160.42           retirement plan                  6.0           5.0 
160.43       Duluth teachers retirement plan      8.5           8.5 
160.44       Minneapolis teachers retirement
160.45           plan                             8.5           8.5 
160.46       St. Paul teachers retirement 
160.47           plan                             8.5           8.5 
160.48       Minneapolis Police Relief 
160.49           Association                      6.0           6.0 
160.50       Fairmont Police Relief 
161.1            Association                      5.0           5.0 
161.2        Minneapolis Fire Department 
161.3            Relief Association               6.0           6.0 
161.4        Virginia Fire Department
161.5            Relief Association               5.0           5.0 
161.6        Bloomington Fire Department
161.7            Relief Association               6.0           6.0
161.8        local monthly benefit volunteer 
161.9            firefighters relief associations 5.0           5.0 
161.10     (b) The actuarial valuation must use the applicable 
161.11  following single rate future salary increase assumption, the 
161.12  applicable following modified single rate future salary increase 
161.13  assumption, or the applicable following graded rate future 
161.14  salary increase assumption: 
161.15     (1) single rate future salary increase assumption 
161.16                                              future salary 
161.17              plan                          increase assumption 
161.18       legislators retirement plan                  5.0% 
161.19       elective state officers retirement 
161.20           plan                                     5.0 
161.21       judges retirement plan                       5.0 
161.22       Minneapolis Police Relief Association        4.0 
161.23       Fairmont Police Relief 
161.24           Association                              3.5 
161.25       Minneapolis Fire Department Relief 
161.26           Association                              4.0 
161.27       Virginia Fire Department
161.28           Relief Association                       3.5 
161.29       Bloomington Fire Department 
161.30           Relief Association                       4.0
161.31     (2) modified single rate future salary increase assumption 
161.32                                              future salary 
161.33                 plan                       increase assumption
161.34           Minneapolis employees        the prior calendar year 
161.35             retirement plan            amount increased first by 
161.36                                        1.0198 percent to prior 
161.37                                        fiscal year date and
161.38                                        then increased by 4.0 
161.39                                        percent annually for
161.40                                        each future year
161.41     (3) select and ultimate future salary increase assumption 
161.42  or graded rate future salary increase assumption 
161.43                                               future salary 
161.44                 plan                       increase assumption 
161.45       general state employees             select calculation and
161.46           retirement plan                      assumption A 
161.47       correctional state employees 
161.48           retirement plan                      assumption H 
161.49       State Patrol retirement plan             assumption H 
161.50       general public employees            select calculation and
161.51           retirement plan                      assumption B 
161.52       public employees police and fire 
161.53           fund retirement plan                 assumption C 
161.54       local government correctional service 
161.55           retirement plan                      assumption H 
161.56       teachers retirement plan                 assumption D 
161.57       Duluth teachers retirement plan          assumption E 
161.58       Minneapolis teachers retirement plan     assumption F 
161.59       St. Paul teachers retirement plan        assumption G 
162.1        
162.2        The select calculation is:
162.3        during the ten-year select period, a designated percent
162.4        is multiplied by the result of ten minus T, where T is 
162.5        the number of completed years of service, and is added
162.6        to the applicable future salary increase assumption.  The
162.7        designated percent is 0.2 percent for the correctional state
162.8        employees retirement plan, the State Patrol retirement
162.9        plan, the public employees police and fire plan, and the
162.10       local government correctional service plan; 0.3 percent
162.11       for the general state employees retirement plan, the
162.12       general public employees retirement plan, the teachers
162.13       retirement plan, the Duluth Teachers Retirement Fund
162.14       Association, and the St. Paul Teachers Retirement Fund
162.15       Association; and 0.4 percent for the Minneapolis Teachers
162.16       Retirement Fund Association.
162.17       
162.18            The ultimate future salary increase assumption is:
162.19       
162.20       age  A     B      C     D     E     F     G      H 
162.21       16  6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
162.22       17  6.90  6.90  11.50  8.15  8.00  6.50  6.90  7.7500
162.23       18  6.85  6.85  11.50  8.10  8.00  6.50  6.90  7.7500
162.24       19  6.80  6.80  11.50  8.05  8.00  6.50  6.90  7.7500
162.25       20  6.75  6.40  11.50  6.00  6.90  6.50  6.90  7.7500
162.26       21  6.75  6.40  11.50  6.00  6.90  6.50  6.90  7.1454
162.27       22  6.75  6.40  11.00  6.00  6.90  6.50  6.90  7.0725
162.28       23  6.75  6.40  10.50  6.00  6.85  6.50  6.85  7.0544
162.29       24  6.75  6.40  10.00  6.00  6.80  6.50  6.80  7.0363
162.30       25  6.75  6.40   9.50  6.00  6.75  6.50  6.75  7.0000 
162.31       26  6.75  6.36   9.20  6.00  6.70  6.50  6.70  7.0000
162.32       27  6.75  6.32   8.90  6.00  6.65  6.50  6.65  7.0000 
162.33       28  6.75  6.28   8.60  6.00  6.60  6.50  6.60  7.0000
162.34       29  6.75  6.24   8.30  6.00  6.55  6.50  6.55  7.0000
162.35       30  6.75  6.20   8.00  6.00  6.50  6.50  6.50  7.0000
162.36       31  6.75  6.16   7.80  6.00  6.45  6.50  6.45  7.0000
162.37       32  6.75  6.12   7.60  6.00  6.40  6.50  6.40  7.0000
162.38       33  6.75  6.08   7.40  6.00  6.35  6.50  6.35  7.0000
162.39       34  6.75  6.04   7.20  6.00  6.30  6.50  6.30  7.0000
162.40       35  6.75  6.00   7.00  6.00  6.25  6.50  6.25  7.0000
162.41       36  6.75  5.96   6.80  6.00  6.20  6.50  6.20  6.9019
162.42       37  6.75  5.92   6.60  6.00  6.15  6.50  6.15  6.8074
162.43       38  6.75  5.88   6.40  5.90  6.10  6.50  6.10  6.7125
162.44       39  6.75  5.84   6.20  5.80  6.05  6.50  6.05  6.6054
162.45       40  6.75  5.80   6.00  5.70  6.00  6.50  6.00  6.5000
162.46       41  6.75  5.76   5.90  5.60  5.90  6.50  5.95  6.3540
162.47       42  6.75  5.72   5.80  5.50  5.80  6.50  5.90  6.2087
162.48       43  6.65  5.68   5.70  5.40  5.70  6.50  5.85  6.0622
162.49       44  6.55  5.64   5.60  5.30  5.60  6.50  5.80  5.9048
162.50       45  6.45  5.60   5.50  5.20  5.50  6.50  5.75  5.7500
162.51       46  6.35  5.56   5.45  5.10  5.40  6.40  5.70  5.6940
162.52       47  6.25  5.52   5.40  5.00  5.30  6.30  5.65  5.6375
162.53       48  6.15  5.48   5.35  5.00  5.20  6.20  5.60  5.5822
162.54       49  6.05  5.44   5.30  5.00  5.10  6.10  5.55  5.5404
162.55       50  5.95  5.40   5.25  5.00  5.00  6.00  5.50  5.5000
162.56       51  5.85  5.36   5.25  5.00  5.00  5.90  5.45  5.4384
162.57       52  5.75  5.32   5.25  5.00  5.00  5.80  5.40  5.3776
162.58       53  5.65  5.28   5.25  5.00  5.00  5.70  5.35  5.3167
162.59       54  5.55  5.24   5.25  5.00  5.00  5.60  5.30  5.2826
162.60       55  5.45  5.20   5.25  5.00  5.00  5.50  5.25  5.2500 
162.61       56  5.35  5.16   5.25  5.00  5.00  5.40  5.20  5.2500
162.62       57  5.25  5.12   5.25  5.00  5.00  5.30  5.15  5.2500
162.63       58  5.25  5.08   5.25  5.10  5.00  5.20  5.10  5.2500
162.64       59  5.25  5.04   5.25  5.20  5.00  5.10  5.05  5.2500
162.65       60  5.25  5.00   5.25  5.30  5.00  5.00  5.00  5.2500
162.66       61  5.25  5.00   5.25  5.40  5.00  5.00  5.00  5.2500
162.67       62  5.25  5.00   5.25  5.50  5.00  5.00  5.00  5.2500
162.68       63  5.25  5.00   5.25  5.60  5.00  5.00  5.00  5.2500
162.69       64  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
162.70       65  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
162.71       66  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
163.1        67  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
163.2        68  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
163.3        69  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
163.4        70  5.25  5.00   5.25  5.70  5.00  5.00  5.00  5.2500
163.5        71  5.25  5.00         5.70
163.6      (c) The actuarial valuation must use the applicable 
163.7   following payroll growth assumption for calculating the 
163.8   amortization requirement for the unfunded actuarial accrued 
163.9   liability where the amortization retirement is calculated as a 
163.10  level percentage of an increasing payroll: 
163.11                                                   payroll growth
163.12                    plan                             assumption 
163.13       general state employees retirement plan          5.00% 
163.14       correctional state employees retirement plan     5.00 
163.15       State Patrol retirement plan                     5.00 
163.16       legislators retirement plan                      5.00 
163.17       elective state officers retirement plan          5.00 
163.18       judges retirement plan                           5.00 
163.19       general public employees retirement plan         6.00 
163.20       public employees police and fire 
163.21           retirement plan                              6.00 
163.22       local government correctional service 
163.23           retirement plan                              6.00 
163.24       teachers retirement plan                         5.00 
163.25       Duluth teachers retirement plan                  5.00 
163.26       Minneapolis teachers retirement plan             5.00 
163.27       St. Paul teachers retirement plan                5.00 
163.28     Sec. 2.  Minnesota Statutes 2004, section 356.216, is 
163.29  amended to read: 
163.30     356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE 
163.31  AND FIRE FUNDS.] 
163.32     (a) The provisions of section 356.215 that govern the 
163.33  contents of actuarial valuations must apply to any local police 
163.34  or fire pension fund or relief association required to make an 
163.35  actuarial report under this section, except as follows: 
163.36     (1) in calculating normal cost and other requirements, if 
163.37  required to be expressed as a level percentage of covered 
163.38  payroll, the salaries used in computing covered payroll must be 
163.39  the maximum rate of salary on which retirement and survivorship 
163.40  credits and amounts of benefits are determined and from which 
163.41  any member contributions are calculated and deducted; 
163.42     (2) in lieu of the amortization date specified in section 
163.43  356.215, subdivision 11, the appropriate amortization target 
163.44  date specified in section 69.77, subdivision 4, or 69.773, 
163.45  subdivision 4, clause (c), must be used in calculating any 
163.46  required amortization contribution, except that if the actuarial 
164.1   report for the Bloomington Fire Department Relief Association 
164.2   indicates an unfunded actuarial accrued liability, the unfunded 
164.3   obligation is to be amortized on a level dollar basis by 
164.4   December 31 of the year occurring 20 years later, and if 
164.5   subsequent actuarial valuations for the Bloomington Fire 
164.6   Department Relief Association determine a net actuarial 
164.7   experience loss incurred during the year which ended as of the 
164.8   day before the most recent actuarial valuation date, any 
164.9   unfunded liability due to that loss is to be amortized on a 
164.10  level dollar basis by December 31 of the year occurring 20 years 
164.11  later; 
164.12     (3) in addition to the tabulation of active members and 
164.13  annuitants provided for in section 356.215, subdivision 13, the 
164.14  member contributions for active members for the calendar year 
164.15  and the prospective annual retirement annuities under the 
164.16  benefit plan for active members must be reported; 
164.17     (4) actuarial valuations required under section 69.773, 
164.18  subdivision 2, must be made at least every four years and 
164.19  actuarial valuations required under section 69.77 shall be made 
164.20  annually; 
164.21     (5) the actuarial balance sheet showing accrued assets 
164.22  valued at market value if the actuarial valuation is required to 
164.23  be prepared at least every four years or valued as current 
164.24  assets under section 356.215, subdivision 1, clause (6), or 
164.25  paragraph (b), whichever applies, if the actuarial valuation is 
164.26  required to be prepared annually, actuarial accrued liabilities, 
164.27  and the unfunded actuarial accrued liability must include the 
164.28  following required reserves: 
164.29           (i) For active members 
164.30        1.  Retirement benefits 
164.31        2.  Disability benefits 
164.32        3.  Refund liability due to death or withdrawal 
164.33        4.  Survivors' benefits 
164.34           (ii) For deferred annuitants' benefits 
164.35           (iii) For former members without vested rights 
164.36           (iv) For annuitants 
165.1         1.  Retirement annuities 
165.2         2.  Disability annuities 
165.3         3.  Surviving spouses' annuities 
165.4         4.  Surviving children's annuities 
165.5      In addition to those required reserves, separate items must 
165.6   be shown for additional benefits, if any, which may not be 
165.7   appropriately included in the reserves listed above; and 
165.8      (6) actuarial valuations are due by the first day of the 
165.9   seventh month after the end of the fiscal year which the 
165.10  actuarial valuation covers. 
165.11     (b) For the Minneapolis Firefighters Relief Association or 
165.12  the Minneapolis Police Relief Association, the following 
165.13  provisions additionally apply: 
165.14     (1) in calculating the actuarial balance sheet, unfunded 
165.15  actuarial accrued liability, and amortization contribution of 
165.16  the relief association, "current assets" means the value of all 
165.17  assets at cost, including realized capital gains and losses, 
165.18  plus or minus, whichever applies, the average value of total 
165.19  unrealized capital gains or losses for the most recent 
165.20  three-year period ending with the end of the plan year 
165.21  immediately preceding the actuarial valuation report 
165.22  transmission date; and 
165.23     (2) in calculating the applicable portions of the actuarial 
165.24  valuation, an annual preretirement interest assumption of six 
165.25  percent, an annual postretirement interest assumption of six 
165.26  percent, and an annual salary increase assumption of four 
165.27  percent must be used. 
165.28     Sec. 3.  [AURORA, BIWABIK CITY, HOYT LAKES, AND PALO 
165.29  VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.] 
165.30     (a) This section applies to consolidation of any 
165.31  combination of two or more of the following volunteer 
165.32  firefighter relief associations:  Aurora, Biwabik City, Hoyt 
165.33  Lakes, and Palo. 
165.34     (b) Notwithstanding Minnesota Statutes, section 424B.10, 
165.35  subdivision 1, paragraph (a), the service pension to be paid by 
165.36  the relief association existing after the consolidation is as 
166.1   follows: 
166.2      (1) for the service rendered by each individual volunteer 
166.3   firefighter before the effective date of the consolidation, the 
166.4   service pension amount is the amount payable to that volunteer 
166.5   firefighter under the articles of incorporation or bylaws of the 
166.6   consolidating volunteer firefighters relief association that the 
166.7   firefighter was a member of immediately before the 
166.8   consolidation; 
166.9      (2) for the service rendered after the effective date of 
166.10  the consolidation, the service pension amount is the highest 
166.11  dollar amount service pension of any of the consolidating 
166.12  volunteer firefighters relief associations under the articles of 
166.13  incorporation or bylaws in effect immediately before the 
166.14  consolidation; and 
166.15     (3) after consolidation, increases in the amounts 
166.16  established in clauses (1) and (2) may be implemented if 
166.17  consistent with applicable requirements of Minnesota Statutes, 
166.18  chapters 69 and 424A. 
166.19     Sec. 4.  [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 
166.20  HOC POSTRETIREMENT ADJUSTMENT.] 
166.21     (a) In addition to the current pensions and other 
166.22  retirement benefits payable, the pensions and retirement 
166.23  benefits payable to retired police officers and firefighters and 
166.24  their surviving spouses by the Eveleth police and fire trust 
166.25  fund are increased by $100 per month.  Increases are retroactive 
166.26  from January 1, 2005. 
166.27     (b) Following the January 1, 2005, effective date of the 
166.28  benefit increase provided under paragraph (a), every two years 
166.29  thereafter, to be effective no earlier than the applicable 
166.30  January 1, the city council of the city of Eveleth is authorized 
166.31  to provide permanent, uniform benefit increases, not less than 
166.32  $10 per month nor to exceed $100 per month, to any remaining 
166.33  retirees and survivors receiving benefits from the Eveleth 
166.34  police and fire trust fund.  Any given benefit improvement under 
166.35  this paragraph is not effective unless the city council passes a 
166.36  resolution approving the increase. 
167.1      (c) Within 30 days following the approval of a resolution 
167.2   under paragraph (b), the chief administrative officer of the 
167.3   city of Eveleth shall file a copy of the resolution with the 
167.4   executive director of the Legislative Commission on Pensions and 
167.5   Retirement, with the chair of the house Governmental Operations 
167.6   and Veterans Affairs Committee, and with the chair of the senate 
167.7   State and Local Government Operations Committee.  Along with a 
167.8   copy of the resolution, the city's chief administrative officer 
167.9   must send a statement indicating the age of each benefit 
167.10  recipient and the retirement benefit or survivor benefit being 
167.11  received before and after the benefit increase. 
167.12     Sec. 5.  [MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER 
167.13  RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.] 
167.14     Notwithstanding any limitations in Minnesota Statutes, 
167.15  section 424A.02, subdivision 13, or any other provision of law 
167.16  to the contrary, if an agreement between the affected relief 
167.17  associations and cities is reached as provided in this section, 
167.18  the Maplewood Firefighters Relief Association may transfer 
167.19  assets from its special fund to the Oakdale Fire Department 
167.20  Relief Association representing the value of the accumulated 
167.21  service credit for the current members of the Oakdale Fire 
167.22  Department Relief Association who are currently eligible to 
167.23  receive a combined service pension for firefighter service in 
167.24  both associations.  The transfer of the assets from the 
167.25  Maplewood Firefighters Relief Association to the Oakdale Fire 
167.26  Department Relief Association must be in an amount representing 
167.27  the cumulative value of the service credit earned by the members 
167.28  of the Oakdale Fire Department Relief Association who are 
167.29  currently eligible to receive a combined service pension for 
167.30  firefighting service in both associations for the service credit 
167.31  that they accrued while working for the Maplewood Fire 
167.32  Department.  The amount of the assets, liabilities, and service 
167.33  credit to be transferred must be specified in a joint agreement 
167.34  negotiated by the secretaries of the two relief associations and 
167.35  ratified by the boards of trustees of both relief associations 
167.36  and of the cities of Maplewood and Oakdale.  The agreement must 
168.1   specify by name or other appropriate means the firefighters 
168.2   affected by the liability, asset, and service credit transfer.  
168.3   The ratification must be expressed in the form of resolutions 
168.4   adopted by each entity.  The agreements must specify the amount 
168.5   of assets to be transferred, the amount of liabilities to be 
168.6   transferred, and the amount of service credit each of the 
168.7   applicable individuals will receive in the Oakdale Fire 
168.8   Department Relief Association.  Upon the ratification of the 
168.9   agreement by both relief associations and both cities, the 
168.10  assets, liabilities, and service credit of the applicable 
168.11  individuals must be transferred to the Oakdale Fire Department 
168.12  Relief Association, and the Maplewood Firefighters Relief 
168.13  Association is relieved of any obligation to the individuals.  A 
168.14  certified copy of the ratified agreement must be filed with the 
168.15  state auditor and with the secretary of state. 
168.16     Sec. 6.  [EFFECTIVE DATE; LOCAL APPROVAL.] 
168.17     (a) Sections 1 and 2 are effective the day after the date 
168.18  of the approval by the city council of the city of Bloomington 
168.19  and upon timely completion by the chief clerical officer of the 
168.20  city of Bloomington of compliance with Minnesota Statutes, 
168.21  section 645.021, subdivisions 2 and 3. 
168.22     (b) Section 3 is effective the day after the date on which 
168.23  the city council of the city of Eveleth and its chief clerical 
168.24  officer timely complete their compliance with Minnesota 
168.25  Statutes, section 645.021, subdivisions 2 and 3. 
168.26     (c) Section 4 is effective with respect to a volunteer 
168.27  firefighters relief association listed in column A the day after 
168.28  the governing body of the municipality listed in column B and 
168.29  its chief clerical officer timely complete compliance with 
168.30  Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
168.31                   A                      B       
168.32                Aurora              city of Aurora
168.33                Biwabik             city of Biwabik
168.34                Hoyt Lakes          city of Hoyt Lakes
168.35                Palo                town of White
168.36     (d) Section 5 is effective the day after the governing body 
169.1   of the city of Maplewood, the governing body of the city of 
169.2   Oakdale, the Maplewood chief clerical officer, and the Oakdale 
169.3   chief clerical officer complete their compliance with Minnesota 
169.4   Statutes, section 645.021, subdivisions 2 and 3.