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 exchange
1.41 	traded funds investment authority; modifying the
1.42 	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 	43A.17, subdivision 9; 69.011, subdivision 2b, by
2.13 	adding a subdivision; 69.021, subdivisions 5, 11;
2.14 	69.051, subdivisions 1, 1a; 69.33; 69.77, subdivision
2.15 	4; 69.771; 69.772, subdivisions 3, 4; 69.773,
2.16 	subdivisions 4, 5; 69.775; 352.01, subdivisions 2a, 4,
2.17 	5, 12, 21, 23, by adding a subdivision; 352.021,
2.18 	subdivisions 1, 2, 3, 4; 352.04, subdivisions 1, 12;
2.19 	352.041, subdivisions 1, 2, 3, 5; 352.115,
2.20 	subdivisions 2, 3; 352.15, subdivisions 1, 3, 4;
2.21 	352.22, subdivision 10; 352.87, subdivision 3; 352.91,
2.22 	by adding a subdivision; 352.93, subdivision 1;
2.23 	352B.01, subdivisions 1, 2, 3; 352B.02, subdivision
2.24 	1e; 352B.071; 352C.021, by adding a subdivision;
2.25 	352C.091, subdivision 1; 352C.10; 352D.01; 352D.015,
2.26 	subdivisions 3, 4; 352D.02, subdivision 1; 352D.03;
2.27 	352D.05, subdivision 4; 352D.085, subdivision 1;
2.28 	352D.09, subdivision 5; 352D.12; 353.01, subdivisions
2.29 	6, 10, 14, 32, 33, by adding a subdivision; 353.025;
2.30 	353.026; 353.027; 353.028; 353.14; 353.15,
2.31 	subdivisions 1, 3; 353.27, subdivision 11; 353.271;
2.32 	353.28, subdivisions 5, 6; 353.29, subdivision 3;
2.33 	353.31, subdivision 1c; 353.32, subdivision 9; 353.33,
2.34 	subdivisions 3, 12; 353.64, by adding a subdivision;
2.35 	353.651, subdivision 3; 353.656, subdivision 1;
2.36 	353F.02, subdivision 4; 354.05, subdivision 7, by
2.37 	adding a subdivision; 354.091; 354.094, subdivision 1;
2.38 	354.10, subdivisions 1, 3, 4; 354.33, subdivision 5;
2.39 	354.39; 354.41, subdivision 2; 354.42, by adding a
2.40 	subdivision; 354.44, subdivisions 2, 6; 354A.011,
2.41 	subdivision 3a, by adding a subdivision; 354A.021,
2.42 	subdivision 5, by adding a subdivision; 354A.097,
2.43 	subdivision 1; 354A.31, subdivisions 4, 4a, 5;
2.44 	354B.21, subdivisions 2, 3; 354B.25, subdivision 2;
2.45 	355.01, subdivision 3e; 356.20, subdivision 4;
2.46 	356.215, subdivision 8; 356.216; 356.24, subdivision
2.47 	1; 356.47, subdivision 3; 356.551; 356.65, subdivision
2.48 	2; 356A.06, subdivision 7; 383B.46, subdivision 2;
2.49 	383B.47; 383B.48; 383B.49; 422A.01, subdivisions 6,
2.50 	11, by adding a subdivision; 422A.05, subdivision 2c;
2.51 	422A.06, subdivisions 3, 5, 7, 8; 422A.10,
2.52 	subdivisions 1, 2; 422A.101, subdivision 3; 422A.15,
2.53 	subdivision 1; 422A.16, subdivision 9; 422A.22,
2.54 	subdivisions 1, 3, 4, 6; 422A.231; 422A.24; 423B.05,
2.55 	subdivision 3; 423B.09, subdivision 1, by adding a
2.56 	subdivision; 423B.10, subdivision 1; 423B.17; 423C.05,
2.57 	subdivision 2; 423C.09; 424A.02, subdivisions 3, 4, 7;
2.58 	424A.04, subdivision 1; 424B.10, subdivision 1;
2.59 	471A.10; 490.121, subdivisions 1, 4, 6, 7, 13, 14, 15,
2.60 	20, 21, 22, by adding subdivisions; 490.122; 490.123,
2.61 	subdivisions 1, 1a, 1b, 1c, 2, 3; 490.124,
2.62 	subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13;
2.63 	490.125, subdivisions 1, 2; 490.126; 490.133; 525.05;
2.64 	Laws 1999, chapter 222, article 16, section 16, as
2.65 	amended; Laws 2000, chapter 461, article 4, section 4,
2.66 	as amended; Laws 2004, chapter 267, article 12,
2.67 	section 4; proposing coding for new law in Minnesota
2.68 	Statutes, chapters 352C; 356; 383B; 423C; 424A;
2.69 	proposing coding for new law as Minnesota Statutes,
2.70 	chapter 490A; repealing Minnesota Statutes 2004,
2.71 	sections 3A.01, subdivisions 3, 4, 6a, 7; 3A.02,
3.1 	subdivision 2; 3A.04, subdivision 1a; 3A.09; 352.119,
3.2 	subdivision 1; 352.15, subdivision 1a; 352C.01;
3.3 	352C.011; 352C.021; 352C.031; 352C.033; 352C.04;
3.4 	352C.051; 352C.09; 352C.091, subdivisions 2, 3;
3.5 	353.15, subdivision 2; 353.29, subdivision 2; 353.34,
3.6 	subdivision 3b; 353.36, subdivisions 2, 2a, 2b, 2c;
3.7 	353.46, subdivision 4; 353.651, subdivision 2;
3.8 	353.663; 353.74; 353.75; 354.10, subdivision 2;
3.9 	354.59; 422A.101, subdivision 4; 422A.22, subdivisions
3.10 	2, 5; 422A.221; 490.021; 490.025; 490.101; 490.102;
3.11 	490.103; 490.105; 490.106; 490.107; 490.108; 490.109;
3.12 	490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9,
3.13 	10, 11, 12, 16, 17, 18, 19, 20; 490.124, subdivision
3.14 	6; 490.132; 490.15; 490.16; 490.18.
3.15 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
3.16 	2005 OMNIBUS RETIREMENT BILL

3.17 	ARTICLE 1
3.18 	CLARIFICATION AND RECODIFICATION OF
3.19 	STATEWIDE SPECIALTY RETIREMENT PLANS

3.20 	Section 1. Minnesota Statutes 2004, section 3A.01,
3.21 	subdivision 1, is amended to read:
3.22 		Subdivision 1.Purposes. Each of the terms defined in
3.23 	this section,for the purposes of this chapter shall be
3.24 	given has the meanings meaning ascribed to them.

3.25 	Sec. 2. Minnesota Statutes 2004, section 3A.01, is amended
3.26 	by adding a subdivision to read:
3.27 		Subd. 1a.Actuarial equivalent. "Actuarial equivalent"
3.28 	means the condition of one allowance or benefit having an equal
3.29 	actuarial present value to another allowance or benefit,
3.30 	determined by the actuary retained under section 356.214 as of a
3.31 	given date at a specified age with each actuarial present value
3.32 	based on the mortality table applicable for the plan and
3.33 	approved under section 356.215, subdivision 18, and using the
3.34 	applicable preretirement or postretirement interest rate
3.35 	assumption specified in section 356.215, subdivision 8.

3.36 	Sec. 3. Minnesota Statutes 2004, section 3A.01, is amended
3.37 	by adding a subdivision to read:
3.38 		Subd. 1b.Average monthly salary. "Average monthly
3.39 	salary" means the average of the member's highest five
3.40 	successive years of salary that was received as a member of the
3.41 	legislature and upon which the member has made contributions
3.42 	under section 3A.03, subdivision 1, or for which the member of
4.1 	the legislature has made payments for past service under
4.2 	Minnesota Statutes 2004, section 3A.02, subdivision 2, or has
4.3 	made, before July 1, 1994, payments in lieu of contributions
4.4 	under Minnesota Statutes 1992, section 3A.031.

4.5 	Sec. 4. Minnesota Statutes 2004, section 3A.01, is amended
4.6 	by adding a subdivision to read:
4.7 		Subd. 1c.Constitutional officer. "Constitutional
4.8 	officer" means a person who was duly elected, qualifies for, and
4.9 	serves as the governor, the lieutenant governor, the attorney
4.10 	general, the secretary of state, or the state auditor of the
4.11 	state of Minnesota.

4.12 	Sec. 5. Minnesota Statutes 2004, section 3A.01,
4.13 	subdivision 2, is amended to read:
4.14 		Subd. 2.Dependent child. (a) "Dependent child" means
4.15 	any natural or adopted child of a deceased member of the
4.16 	legislature or a former legislator who is under the age of 18,
4.17 	or who is under the age of 22 and is a full-time student, and
4.18 	who,in either case,is unmarried and was actually dependent for
4.19 	more than one-half of support upon such the legislator for a
4.20 	period of at least 90 days immediately prior to before the
4.21 	legislator's death. It 
4.22 	(b) The term also includes any child of the member of the
4.23 	legislature or former legislator who was conceived during the
4.24 	lifetime of, and who was born after the death of, the member or
4.25 	former legislator. This subdivision shall be retroactive as to
4.26 	any dependent child under the age of 22 years as of April 1,
4.27 	1975.

4.28 	Sec. 6. Minnesota Statutes 2004, section 3A.01,
4.29 	subdivision 6, is amended to read:
4.30 		Subd. 6.Director.  "Director" means the executive
4.31 	director of the Minnesota State Retirement System who was
4.32 	appointed under section 352.03, subdivision 5.

4.33 	Sec. 7. Minnesota Statutes 2004, section 3A.01, is amended
4.34 	by adding a subdivision to read:
4.35 		Subd. 6b.Former legislator. "Former legislator" means a
4.36 	legislator who has ceased to be a member of the legislature for
5.1 	any reason, including, but not limited to, the expiration of the
5.2 	term for which a member of the legislature was elected or the
5.3 	death of the member.

5.4 	Sec. 8. Minnesota Statutes 2004, section 3A.01, is amended
5.5 	by adding a subdivision to read:
5.6 		Subd. 6c.Member of the legislature. "Member of the
5.7 	legislature" means a person who was a member of the House of
5.8 	Representatives or of the Senate of the state of Minnesota who
5.9 	has subscribed to the oath of office after July 1, 1965, and who
5.10 	was first elected to a legislative office before July 1, 1997,
5.11 	and retained coverage by the plan under Laws 1997, chapter 233,
5.12 	article 2, section 15.

5.13 	Sec. 9. Minnesota Statutes 2004, section 3A.01,
5.14 	subdivision 8, is amended to read:
5.15 		Subd. 8.Normal retirement age.  "Normal retirement age"
5.16 	means the age of 60 years with regard to any member of the
5.17 	legislature whose service terminates prior to the beginning of
5.18 	the 1981 legislative session, and the age of 62 years with
5.19 	regard to any member of the legislature whose service terminates
5.20 	after the beginning of the 1981 session.

5.21 	Sec. 10. Minnesota Statutes 2004, section 3A.01, is
5.22 	amended by adding a subdivision to read:
5.23 		Subd. 9.Retirement. "Retirement" means the period of
5.24 	time after which a former legislator is entitled to a retirement
5.25 	allowance.

5.26 	Sec. 11. Minnesota Statutes 2004, section 3A.01, is
5.27 	amended by adding a subdivision to read:
5.28 		Subd. 10.Salary. (a) "Salary" means the regular
5.29 	compensation payable under law to a member of the legislature
5.30 	and paid to the person for service as a legislator.
5.31 	(b) The term includes the monthly compensation paid to the
5.32 	member of the legislature and the per diem payments paid during
5.33 	a regular or special session to the member of the legislature.
5.34 	(c) The term does not include per diem payments paid to a
5.35 	member of the legislature other than during the regular or
5.36 	special session; additional compensation attributable to a
6.1 	leadership position under section 3.099, subdivision 3; living
6.2 	expense payments under section 3.101; and special session living
6.3 	expense payments under section 3.103.

6.4 	Sec. 12. Minnesota Statutes 2004, section 3A.011, is
6.5 	amended to read:
6.6 	3A.011 ADMINISTRATION OF PLAN.
6.7 	The executive director and the board of directors of the 
6.8 	Minnesota State Retirement System shall administer the
6.9 	legislators retirement plan in accordance with this chapter and 
6.10 	chapter 356A.

6.11 	Sec. 13. Minnesota Statutes 2004, section 3A.02,
6.12 	subdivision 1, is amended to read:
6.13 		Subdivision 1.Qualifications.  (a) A former legislator
6.14 	is entitled, upon written application to the director, to
6.15 	receive a retirement allowance monthly, if the person:
6.16 	(1) has either served at least six full years, without
6.17 	regard to the application of section 3A.10, subdivision 2, or
6.18 	has served during all or part of four regular sessions as a
6.19 	member of the legislature, which service need not be continuous;
6.20 	(2) has attained the normal retirement age;
6.21 	(3) has retired as a member of the legislature; and
6.22 	(4) has made all contributions provided for in section
6.23 	3A.03, has made payments for past service under subdivision 2,
6.24 	or has made payments in lieu of contributions under Minnesota
6.25 	Statutes 1992, section 3A.031, prior to before July 1, 1994.
6.26 	(b) This paragraph applies to members of the legislature
6.27 	who terminate service as a legislator before July 1, 1997.  For
6.28 	service rendered before the beginning of the 1979 legislative
6.29 	session, but not to exceed eight years of service, the
6.30 	retirement allowance is an amount equal to five percent per year
6.31 	of service of that member's average monthly salary.  For service
6.32 	in excess of eight years rendered before the beginning of the
6.33 	1979 legislative session, and for service rendered after the
6.34 	beginning of the 1979 legislative session,Unless the former
6.35 	legislator has legislative service before January 1, 1979,the
6.36 	retirement allowance is an amount equal to 2-1/2 percent per
7.1 	year of service of that member's average monthly salary.
7.2 	(c) This paragraph applies to members of the legislature
7.3 	who terminate service as a legislator after June 30, 1997.  The
7.4 	retirement allowance is an amount equal to the applicable rate
7.5 	or rates under paragraph (b) per year of service of the member's
7.6 	average monthly salary and adjusted for that person on an
7.7 	actuarial equivalent basis to reflect the change in the
7.8 	postretirement interest rate actuarial assumption under section
7.9 	356.215, subdivision 8, from five percent to six percent.  The
7.10 	adjustment must be calculated by or, alternatively, the
7.11 	adjustment procedure must be specified by, the actuary retained
7.12 	by the Legislative Commission on Pensions and Retirement under
7.13 	section 356.214.  The purpose of this adjustment is to ensure
7.14 	that the total amount of benefits that the actuary predicts an
7.15 	individual member will receive over the member's lifetime under
7.16 	this paragraph will be the same as the total amount of benefits
7.17 	the actuary predicts the individual member would receive over
7.18 	the member's lifetime under the law in effect before enactment
7.19 	of this paragraph. If the former legislator has legislative
7.20 	service before January 1, 1979, the person's benefit must
7.21 	include the additional benefit amount in effect on January 1,
7.22 	1979, and adjusted as otherwise provided in this paragraph.
7.23 	(d) (c) The retirement allowance accrues beginning with the
7.24 	first day of the month of receipt of the application, but not
7.25 	before age 60, and for the remainder of the former legislator's
7.26 	life, if the former legislator is not serving as a member of the
7.27 	legislature or as a constitutional officer or commissioner as
7.28 	defined in section 352C.021, subdivisions 2 and 3 section 3A.01,
7.29 	subdivision 1c.  The annuity does not begin to accrue prior to 
7.30 	before the person's retirement as a legislator.  No annuity
7.31 	payment may be made retroactive for more than 180 days before
7.32 	the date that the annuity application is filed with the director.
7.33 	(e) (d) Any member who has served during all or part of
7.34 	four regular sessions is considered to have served eight years
7.35 	as a member of the legislature.
7.36 	(f) (e) The retirement allowance ceases with the last
8.1 	payment that accrued to the retired legislator during the
8.2 	retired legislator's lifetime, except that the surviving spouse,
8.3 	if any, is entitled to receive the retirement allowance of the
8.4 	retired legislator for the calendar month in which the retired
8.5 	legislator died.

8.6 	Sec. 14. Minnesota Statutes 2004, section 3A.02,
8.7 	subdivision 1b, is amended to read:
8.8 		Subd. 1b.Reduced retirement allowance.  (a) Upon
8.9 	separation from service after the beginning of the 1981
8.10 	legislative session, a former member of the legislature who has
8.11 	attained the age set by the board of directors of the Minnesota
8.12 	State Retirement System and who is otherwise qualified in
8.13 	accordance with under subdivision 1 is entitled,upon making
8.14 	written application on forms supplied a form prescribed by the
8.15 	director,to a reduced retirement allowance in .  The reduced
8.16 	retirement allowance is an amount equal to the retirement
8.17 	allowance specified in subdivision 1, paragraph (b), that is 
8.18 	reduced so that the reduced annuity allowance is the actuarial
8.19 	equivalent of the annuity allowance that would be payable if the
8.20 	former member of the legislature deferred receipt of the annuity 
8.21 	allowance and the annuity allowance amount were was augmented
8.22 	at an annual rate of three percent compounded annually from the
8.23 	date the annuity allowance begins to accrue until age 62.
8.24 	(b) The age set by the board of directors under paragraph
8.25 	(a) cannot be less an earlier age than the early retirement age
8.26 	under section 352.116, subdivision 1a.
8.27 	(c) If there is an actuarial cost to the plan of resetting
8.28 	the early retirement age under paragraph (a), the retired
8.29 	legislator is required to pay an additional amount to cover the
8.30 	full actuarial value.  The additional amount must be paid in a
8.31 	lump sum within 30 days of the certification of the amount by
8.32 	the executive director.
8.33 	(d) The executive director of the Minnesota State
8.34 	Retirement System shall report to the Legislative Commission on
8.35 	Pensions and Retirement on the utilization of this
8.36 	provision annually on or before September 1, 2000.

9.1 	Sec. 15. Minnesota Statutes 2004, section 3A.02,
9.2 	subdivision 3, is amended to read:
9.3 		Subd. 3.Appropriation.  The amounts required for payment
9.4 	of retirement allowances provided by this section are
9.5 	appropriated annually to the director from the participation of
9.6 	the legislators retirement plan in the Minnesota postretirement
9.7 	investment fund and shall .  The retirement allowance must be
9.8 	paid monthly to the recipients entitled thereto to those
9.9 	retirement allowances.

9.10 	Sec. 16. Minnesota Statutes 2004, section 3A.02,
9.11 	subdivision 4, is amended to read:
9.12 		Subd. 4.Deferred annuities augmentation.  (a) The
9.13 	deferred annuity retirement allowance of any former legislator
9.14 	must be augmented as provided herein.
9.15 	(b) The required reserves applicable to the
9.16 	deferred annuity retirement allowance, determined as of the date
9.17 	the benefit begins to accrue using an appropriate mortality
9.18 	table and an interest assumption of six percent, must be
9.19 	augmented from the first of the month following the termination
9.20 	of active service, or July 1, 1973, whichever is later, to the
9.21 	first day of the month in which the annuity allowance begins to
9.22 	accrue, at the following annually compounded rate of five
9.23 	percent per annum compounded annually until January 1, 1981, and
9.24 	thereafter at the rate of three percent per annum compounded
9.25 	annually until January 1 of the year in which the former
9.26 	legislator attains age 55.  From that date to the effective date
9.27 	of retirement, the rate is five percent compounded annually.or
9.28 	rates:
9.29 	rate period
9.30 	     (1) five percent until January 1, 1981 
9.31 	(2) three percent from January 1, 1981, or from the
9.32 	                          first day of the month following
9.33 	                          the termination of active service,
9.34 	                          whichever is later, until January 1
9.35 	                          of the year in which the former
9.36 	                          legislator attains age 55
10.2 	     (3) five percent from the period end date under
10.3 	                          clause (2) to the effective date
10.4 	                          of retirement.
10.5 	(b) The retirement allowance of, or the survivor benefit
10.6 	payable on behalf of, a former member of the legislature who
10.7 	terminated service before July 1, 1997, which is not first
10.8 	payable until after June 30, 1997, must be increased on an
10.9 	actuarial equivalent basis to reflect the change in the
10.10 	postretirement interest rate actuarial assumption under section
10.11 	356.215, subdivision 8, from five percent to six percent under a
10.12 	calculation procedure and tables adopted by the board of
10.13 	directors of the Minnesota State Retirement System and approved
10.14 	by the actuary retained by the Legislative Commission on
10.15 	Pensions and Retirement.

10.16 	Sec. 17. Minnesota Statutes 2004, section 3A.02,
10.17 	subdivision 5, is amended to read:
10.18 		Subd. 5.Optional annuities.  (a) The board of directors
10.19 	shall establish an optional retirement annuity in the form of a
10.20 	joint and survivor annuity and an optional retirement annuity in
10.21 	the form of a period certain and life thereafter.  Except as
10.22 	provided in paragraph (b), these optional annuity forms must be
10.23 	actuarially equivalent to the normal annuity allowance computed
10.24 	under this section, plus the actuarial value of any surviving
10.25 	spouse benefit otherwise potentially payable at the time of
10.26 	retirement under section 3A.04, subdivision 1.  An individual
10.27 	selecting an optional annuity under this subdivision waives and
10.28 	the person's spouse waive any rights to surviving spouse
10.29 	benefits under section 3A.04, subdivision 1.
10.30 	(b) If a retired legislator selects the joint and survivor
10.31 	annuity option, the retired legislator must receive a normal
10.32 	single-life annuity allowance if the designated optional annuity
10.33 	beneficiary dies before the retired legislator and no reduction
10.34 	may be made in the annuity to provide for restoration of the
10.35 	normal single-life annuity allowance in the event of the death
10.36 	of the designated optional annuity beneficiary.
11.1 	(c) The surviving spouse of a legislator who has attained
11.2 	at least age 60 and who dies while a member of the legislature
11.3 	may elect an optional joint and survivor annuity under paragraph
11.4 	(a), in lieu of surviving spouse benefits under section 3A.04,
11.5 	subdivision 1.

11.6 	Sec. 18. Minnesota Statutes 2004, section 3A.03,
11.7 	subdivision 1, is amended to read:
11.8 		Subdivision 1.Percentage. (a) Every member of the
11.9 	legislature shall contribute nine percent of total salary,.
11.10 	(b) The contribution must be made by payroll deduction,
11.11 	to and must be paid into the state treasury and deposited in the
11.12 	general fund. It shall be the duty of 
11.13 	(c) The director to must record the periodic contributions
11.14 	of each member of the legislature and must credit such each 
11.15 	contribution to the member's account.

11.16 	Sec. 19. Minnesota Statutes 2004, section 3A.03,
11.17 	subdivision 2, is amended to read:
11.18 		Subd. 2.Refund.  (a) A former member who has made
11.19 	contributions under subdivision 1 and who is no longer a member
11.20 	of the legislature is entitled to receive, upon written
11.21 	application to the executive director on a form prescribed by
11.22 	the executive director, a refund from the general fund of all
11.23 	contributions credited to the member's account with interest
11.24 	computed as provided in section 352.22, subdivision 2.
11.25 	(b) The refund of contributions as provided in paragraph (a)
11.26 	terminates all rights of a former member of the legislature and
11.27 	the survivors of the former member under this chapter.
11.28 	(c) If the former member of the legislature again becomes a
11.29 	member of the legislature after having taken a refund as
11.30 	provided in paragraph (a), the member must be considered is a
11.31 	new member of this plan the unclassified employees retirement
11.32 	program of the Minnesota State Retirement System.
11.33 	(d) However, the member may reinstate the rights and credit
11.34 	for service previously forfeited under this chapter if the
11.35 	member repays all refunds taken,plus interest at an annual rate
11.36 	of 8.5 percent compounded annually from the date on which the
12.1 	refund was taken to the date on which the refund is repaid.
12.2 	(d) (e) No person may be required to apply for or to accept
12.3 	a refund.

12.4 	Sec. 20. Minnesota Statutes 2004, section 3A.04,
12.5 	subdivision 1, is amended to read:
12.6 		Subdivision 1.Surviving spouse. (a) Upon the death of a
12.7 	member of the legislature while serving as such a member after
12.8 	June 30, 1973, or upon the death of a former member of the
12.9 	legislature with at least the number of six full years of
12.10 	service as required by section 3A.02, subdivision 1, clause
12.11 	(1) or service in all or part of four regular legislative
12.12 	sessions, the surviving spouse shall be paid is entitled to a
12.13 	survivor benefit in the amount of .
12.14 	(b) The surviving spouse benefit is one-half of the
12.15 	retirement allowance of the member of the legislature computed
12.16 	as though the member were at least normal retirement age on the
12.17 	date of death and based upon the member's allowable service
12.18 	or upon eight years,whichever is greater.  The augmentation
12.19 	provided in section 3A.02, subdivision 4, if applicable, shall 
12.20 	must be applied for the period up to, and including,the month
12.21 	of death.
12.22 	(c) Upon the death of a former legislator receiving a
12.23 	retirement allowance, the surviving spouse shall be is entitled
12.24 	to one-half of the amount of the retirement allowance being paid
12.25 	to the legislator. Such 
12.26 	(d) The surviving spouse benefit shall be paid during is
12.27 	payable for the lifetime of the surviving spouse.

12.28 	Sec. 21. Minnesota Statutes 2004, section 3A.04,
12.29 	subdivision 2, is amended to read:
12.30 		Subd. 2.Dependent children. (a) Upon the death of a
12.31 	member of the legislature while serving as a member, or upon the
12.32 	death of a former member of the legislature who has rendered at
12.33 	least the number of six full years of service as required by
12.34 	section 3A.02, subdivision 1, clause (1) or service in all or
12.35 	part of four regular legislative sessions and who was not
12.36 	receiving a retirement allowance, each dependent child of the
13.1 	member or former legislator shall be is entitled to receive a
13.2 	survivor benefit in the following amount:
13.3 	(1) for the first dependent child, a monthly allowance
13.4 	which equals benefit equal to 25 percent of the monthly
13.5 	retirement allowance of the member of the legislature or the 
13.6 	former legislator computed as though the member or the former
13.7 	legislator had attained at least the normal retirement age on
13.8 	the date of death and based upon the average monthly salary as
13.9 	of the date of death or as of the date of termination, whichever
13.10 	is applicable applies, and the member's allowable service or
13.11 	eight years,whichever is greater;
13.12 	(2) for each additional dependent child, a monthly
13.13 	allowance which equals benefit equal to 12-1/2 percent of the
13.14 	monthly retirement allowance of the member or the former
13.15 	legislator computed as provided in the case of the first child 
13.16 	clause (1); but and 
13.17 	(3) the total amount paid to the surviving spouse and to
13.18 	the dependent child or children shall may not exceed,in any
13.19 	one month,100 percent of the monthly retirement allowance of
13.20 	the member or of the former legislator computed as provided in
13.21 	the case of the first child clause (1).
13.22 	(b) The augmentation provided in section 3A.02, subdivision
13.23 	4, if applicable, shall be applied applies from the first day of
13.24 	the month next following the date of the termination of the
13.25 	person from service as a member of the legislature to the month
13.26 	of the death of the person.
13.27 	(c) Upon the death of a former legislator who was receiving
13.28 	a retirement allowance, the a surviving dependent child shall be 
13.29 	is entitled to the applicable percentage specified above in
13.30 	paragraph (a), clause (1) or (2), whichever applies,of the
13.31 	amount of the allowance which was paid to the former legislator
13.32 	for the month immediately prior to before the date of death of
13.33 	the former legislator.
13.34 	(d) The payments for dependent children shall must be made
13.35 	to the surviving spouse or to the guardian of the estate of the
13.36 	dependent children, if there is one.

14.1 	Sec. 22. Minnesota Statutes 2004, section 3A.04,
14.2 	subdivision 3, is amended to read:
14.3 		Subd. 3.Payment.  The surviving spouse's spouse and
14.4 	dependent children's child or children survivor benefits payable
14.5 	under this section shall be paid are payable by the director
14.6 	monthly in the same manner as retirement allowances are
14.7 	authorized to be paid by this chapter.

14.8 	Sec. 23. Minnesota Statutes 2004, section 3A.04,
14.9 	subdivision 4, is amended to read:
14.10 		Subd. 4.Death refunds. (a) Upon the death of a member
14.11 	of the legislature or of a former legislator who was not
14.12 	receiving a retirement allowance,without leaving either a
14.13 	surviving spouse or a dependent child or dependent children, the
14.14 	last designated beneficiary named on a form that was filed with
14.15 	the director before the death of the legislator, or if no
14.16 	designation is filed, the estate of the member or the former
14.17 	legislator, upon application, shall be is entitled to a refund.
14.18 	(b) The refund is the amount of contributions credited to
14.19 	the person's account plus interest as provided in section 3A.03,
14.20 	subdivision 2, clause (2) paragraph (a).

14.21 	Sec. 24. Minnesota Statutes 2004, section 3A.04, is
14.22 	amended by adding a subdivision to read:
14.23 		Subd. 5.Appropriation. The survivor benefits and the
14.24 	death refunds authorized by this section are appropriated to the
14.25 	director from the general fund when they are due and payable.

14.26 	Sec. 25. Minnesota Statutes 2004, section 3A.05, is
14.27 	amended to read:
14.28 	3A.05 APPLICATION FOR SURVIVOR BENEFIT.
14.29 	(a) Applications for survivor benefits pursuant to under 
14.30 	section 3A.04shall must be filed with the director by the
14.31 	surviving spouse and dependent child or children entitled to
14.32 	benefits pursuant to under section 3A.04, or by the guardian of
14.33 	the estate, if there is one, of the dependent child or children.
14.34 	(b) Survivor benefits shall accrue as of the first day of
14.35 	the month following the death of the member of the legislature
14.36 	or former legislator and payments shall commence as of the first
15.1 	of the month next following the filing of the application,
15.2 	and shall be are retroactive to the date the benefit accrues;
15.3 	provided, however, that no payment shall be retroactive for more
15.4 	than or the first of the month occurring 12 months prior
15.5 	to before the month in which the application is filed with the
15.6 	director, whichever is earlier.

15.7 	Sec. 26. Minnesota Statutes 2004, section 3A.07, is
15.8 	amended to read:
15.9 	3A.07 APPLICATION.
15.10 	(a) Except as provided in paragraph (b), this chapter
15.11 	applies to members of the legislature in service after July 1,
15.12 	1965, who otherwise meet the requirements of this chapter.
15.13 	(b) Members of the legislature who were elected for the
15.14 	first time after June 30, 1997, or members of the legislature
15.15 	who were elected before July 1, 1997, and who, after July 1,
15.16 	1998, elect not to be members of the plan established by this
15.17 	chapter are covered by the unclassified employees retirement
15.18 	program governed by chapter 352D.
15.19 	(c) The post-July 1, 1998, coverage election under
15.20 	paragraph (b) is irrevocable and must be made on a form
15.21 	prescribed by the director. The second chance referendum
15.22 	election under Laws 2002, chapter 392, article 15, also is
15.23 	irrevocable.

15.24 	Sec. 27. Minnesota Statutes 2004, section 3A.10,
15.25 	subdivision 1, is amended to read:
15.26 		Subdivision 1.Service credit for legislative term. (a) 
15.27 	In the case of a member of the house of representatives,one
15.28 	full term of office shall must be considered two full years of 
15.29 	service,notwithstanding the fact that the oath of office may be 
15.30 	was taken on different days each biennium.
15.31 	(b) In the case of a member of the senate, one full term of
15.32 	office shall must be considered four full years of service,
15.33 	notwithstanding the fact that the oath of office may be was 
15.34 	taken on different days at the start of each term.
15.35 	(c) For purposes of this chapter, a legislative term shall 
15.36 	must be deemed to commence on January 1st 1 and to end on
16.1 	December 31st 31.

16.2 	Sec. 28. Minnesota Statutes 2004, section 3A.12, is
16.3 	amended to read:
16.4 	3A.12 COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR
16.5 	ASSOCIATION.
16.6 		Subdivision 1.Entitlement to annuity. (a) Any
16.7 	legislator who has been an employee covered by a member of a
16.8 	retirement plan listed in paragraph (b) is entitled, when
16.9 	otherwise qualified, to a retirement allowance or annuity from
16.10 	each plan if the total allowable service in all plans or in any
16.11 	two of these plans totals ten or more years.
16.12 	(b) This section applies to any retirement plan or program
16.13 	administered by the Minnesota State Retirement System, or a
16.14 	member of any retirement plan administered by the Public
16.15 	Employees Retirement Association,including the Public Employees
16.16 	Retirement Association police and fire fund, or the Teachers
16.17 	Retirement Association, or the Minneapolis employees
16.18 	retirement Fund plan, or the State Patrol retirement fund plan,
16.19 	or any other public employee retirement system in the state of
16.20 	Minnesota having a like provision but excluding all .
16.21 	(c) This section does not apply to other funds retirement
16.22 	plans providing benefits for police or firefighters, shall be
16.23 	entitled when qualified to an annuity from each fund if the
16.24 	total allowable service for which the legislator has credit in
16.25 	all funds or in any two of these funds totals ten or more years,
16.26 	provided .
16.27 	(d) No portion of the allowable service upon which the
16.28 	retirement annuity from one fund plan is based is again used in
16.29 	the computation for benefits from another fund plan.  The
16.30 	annuity from each fund shall plan must be determined by the
16.31 	appropriate provisions of the law,except that the requirement
16.32 	that a person must have at least ten a minimum number of years
16.33 	of allowable service in the respective system or
16.34 	association shall does not apply for the purposes of this
16.35 	section provided if the combined service in two or more of these
16.36 	funds plans equals ten or more years.  The augmentation of
17.1 	deferred annuities provided in section 3A.02, subdivision
17.2 	4, shall apply applies to the annuities accruing hereunder under
17.3 	this section.
17.4 		Subd. 2.Refund repayment. Any A former legislator who
17.5 	has received a refund as provided in section 3A.03, subdivision
17.6 	2, who is a currently contributing member of a retirement fund 
17.7 	plan specified in subdivision 1, paragraph (b), may repay the
17.8 	refund as provided in section 3A.03, subdivision 2. Any A 
17.9 	member of the legislature who has received a refund from any of
17.10 	the funds retirement plans specified in subdivision 1,may repay
17.11 	the refund to the respective fund plan under such terms and
17.12 	conditions consistent with the law governing such fund the
17.13 	retirement plan if the law governing such fund the plan permits
17.14 	the repayment of refunds.  If the total amount to be repaid,
17.15 	including principal and interest exceeds $2,000, repayment may
17.16 	be made in three equal installments over a period of 18 months,
17.17 	with the interest accrued during the period of the repayment
17.18 	added to the final installment.

17.19 	Sec. 29. Minnesota Statutes 2004, section 3A.13, is
17.20 	amended to read:
17.21 	3A.13 EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM
17.22 	DEDUCTION.
17.23 	(a) The provisions of section 352.15shall apply to the
17.24 	legislators retirement plan, chapter 3A.
17.25 	(b) The executive director of the Minnesota State
17.26 	Retirement System must, at the request of a retired legislator
17.27 	who is enrolled in a health insurance plan covering state
17.28 	employees, deduct the person's health insurance premiums from
17.29 	the person's annuity and transfer the amount of the premium to a
17.30 	health insurance carrier covering state employees.

17.31 	Sec. 30. [352C.001] RETIREMENT PLAN; APPLICATION.
17.32 	(a) The retirement plan applicable to a former
17.33 	constitutional officer who was first elected to a constitutional
17.34 	office after July 1, 1967, and before July 1, 1997, is the
17.35 	applicable portions of this chapter and chapter 356 in effect on
17.36 	the date on which the person terminated active service as a
18.1 	constitutional officer.
18.2 	(b) Nothing in this section or section 352C.091,
18.3 	subdivision 1, or 490.125, subdivision 2, is intended to reduce
18.4 	the benefits of former constitutional officers or to adversely
18.5 	modify their eligibility for benefits in effect as of the day
18.6 	before the effective date of this section.

18.7 	Sec. 31. Minnesota Statutes 2004, section 352C.091,
18.8 	subdivision 1, is amended to read:
18.9 		Subdivision 1.Administrative agency and standards. This
18.10 	chapter (a) The elected officers retirement plan must be
18.11 	administered by the board of directors and the executive
18.12 	director of the Minnesota State Retirement System.
18.13 	(b) The elected state officers retirement plan must be
18.14 	administered consistent with this chapter the applicable
18.15 	statutory provisions governing the plan and chapters 356 and
18.16 	356A.

18.17 	Sec. 32. Minnesota Statutes 2004, section 352C.10, is
18.18 	amended to read:
18.19 	352C.10 BENEFIT ADJUSTMENTS.
18.20 	Retirement allowances payable to retired constitutional
18.21 	officers pursuant to section 352C.031and surviving spouse
18.22 	benefits payable pursuant to section 352C.04, shall must be
18.23 	adjusted in the same manner, at the same times and in the same
18.24 	amounts as are benefits payable from the Minnesota
18.25 	postretirement investment fund to retirees of a participating
18.26 	public pension fund.

18.27 	Sec. 33. Minnesota Statutes 2004, section 352D.02,
18.28 	subdivision 1, is amended to read:
18.29 		Subdivision 1.Coverage.  (a) Employees enumerated in
18.30 	paragraph (c), clauses (2), (3), (4), and (6) to (14), if they
18.31 	are in the unclassified service of the state or Metropolitan
18.32 	Council and are eligible for coverage under the general state
18.33 	employees retirement plan under chapter 352, are participants in
18.34 	the unclassified plan under this chapter unless the employee
18.35 	gives notice to the executive director of the Minnesota State
18.36 	Retirement System within one year following the commencement of
19.1 	employment in the unclassified service that the employee desires
19.2 	coverage under the general state employees retirement plan.  For
19.3 	the purposes of this chapter, an employee who does not file
19.4 	notice with the executive director is deemed to have exercised
19.5 	the option to participate in the unclassified plan.
19.6 	(b) Persons referenced in paragraph (c), clauses (1) and 
19.7 	clause (5), are participants in the unclassified program under
19.8 	this chapter unless the person is eligible to elect different
19.9 	coverage under section 3A.07or 352C.011and, after July 1,
19.10 	1998, elects elected retirement coverage by the applicable
19.11 	alternative retirement plan.  Persons referenced in paragraph
19.12 	(c), clause (15), are participants in the unclassified program
19.13 	under this chapter for judicial employment in excess of the
19.14 	service credit limit in section 490.121, subdivision 22.
19.15 	(c) Enumerated employees and referenced persons are:
19.16 	(1) the governor, the lieutenant governor, the secretary of
19.17 	state, the state auditor, and the attorney general;
19.18 	(2) an employee in the Office of the Governor, Lieutenant
19.19 	Governor, Secretary of State, State Auditor, Attorney General;
19.20 	(3) an employee of the State Board of Investment;
19.21 	(4) the head of a department, division, or agency created
19.22 	by statute in the unclassified service, an acting department
19.23 	head subsequently appointed to the position, or an employee
19.24 	enumerated in section 15A.0815 or 15A.083, subdivision 4;
19.25 	(5) a member of the legislature;
19.26 	(6) a full-time unclassified employee of the legislature or
19.27 	a commission or agency of the legislature who is appointed
19.28 	without a limit on the duration of the employment or a temporary
19.29 	legislative employee having shares in the supplemental
19.30 	retirement fund as a result of former employment covered by this
19.31 	chapter, whether or not eligible for coverage under the
19.32 	Minnesota State Retirement System;
19.33 	(7) a person who is employed in a position established
19.34 	under section 43A.08, subdivision 1, clause (3), or in a
19.35 	position authorized under a statute creating or establishing a
19.36 	department or agency of the state, which is at the deputy or
20.1 	assistant head of department or agency or director level;
20.2 	(8) the regional administrator, or executive director of
20.3 	the Metropolitan Council, general counsel, division directors,
20.4 	operations managers, and other positions as designated by the
20.5 	council, all of which may not exceed 27 positions at the council
20.6 	and the chair;
20.7 	(9) the executive director, associate executive director,
20.8 	and not to exceed nine positions of the Higher Education
20.9 	Services Office in the unclassified service, as designated by
20.10 	the Higher Education Services Office before January 1, 1992, or
20.11 	subsequently redesignated with the approval of the board of
20.12 	directors of the Minnesota State Retirement System, unless the
20.13 	person has elected coverage by the individual retirement account
20.14 	plan under chapter 354B;
20.15 	(10) the clerk of the appellate courts appointed under
20.16 	article VI, section 2, of the Constitution of the state of
20.17 	Minnesota;
20.18 	(11) the chief executive officers of correctional
20.19 	facilities operated by the Department of Corrections and of
20.20 	hospitals and nursing homes operated by the Department of Human
20.21 	Services;
20.22 	(12) an employee whose principal employment is at the state
20.23 	ceremonial house;
20.24 	(13) an employee of the Minnesota Educational Computing
20.25 	Corporation;
20.26 	(14) an employee of the State Lottery who is covered by the
20.27 	managerial plan established under section 43A.18, subdivision 3;
20.28 	and
20.29 	(15) a judge who has exceeded the service credit limit in
20.30 	section 490.121, subdivision 22.

20.31 	Sec. 34. Minnesota Statutes 2004, section 355.01,
20.32 	subdivision 3e, is amended to read:
20.33 		Subd. 3e.Judge.  "Judge" means a judge as defined in
20.34 	section 490.121, subdivision 3 21a.

20.35 	Sec. 35. Minnesota Statutes 2004, section 356.65,
20.36 	subdivision 2, is amended to read:
21.1 		Subd. 2.Disposition of abandoned amounts.  Any unclaimed
21.2 	public pension fund amounts existing in any public pension fund
21.3 	are presumed to be abandoned, but are not subject to the
21.4 	provisions of sections 345.31 to 345.60.  Unless the benefit
21.5 	plan of the public pension fund specifically provides for a
21.6 	different disposition of unclaimed or abandoned funds or
21.7 	amounts, any unclaimed public pension fund amounts cancel and
21.8 	must be credited to the public pension fund.  If the unclaimed
21.9 	public pension fund amount exceeds $25 and the inactive or
21.10 	former member again becomes a member of the applicable public
21.11 	pension plan or applies for a retirement annuity under section
21.12 	3A.12, 352.72, 352B.30, 352C.051,353.71, 354.60, 356.30, or
21.13 	422A.16, subdivision 8, whichever applies, the canceled amount
21.14 	must be restored to the credit of the person.

21.15 	Sec. 36. Minnesota Statutes 2004, section 490.121,
21.16 	subdivision 1, is amended to read:
21.17 		Subdivision 1.Scope.  For purposes of sections 490.121
21.18 	to 490.132, unless the context clearly indicates otherwise, each
21.19 	of the terms defined in this section have has the meanings 
21.20 	meaning given them unless the context clearly indicates
21.21 	otherwise it.

21.22 	Sec. 37. Minnesota Statutes 2004, section 490.121, is
21.23 	amended by adding a subdivision to read:
21.24 		Subd. 2a.Actuarial equivalent. "Actuarial equivalent"
21.25 	means the condition of one annuity or benefit having an equal
21.26 	actuarial present value as another annuity or benefit,
21.27 	determined as of a given date with each actuarial present value
21.28 	based on the appropriate mortality table adopted by the board of
21.29 	directors of the Minnesota State Retirement System based on the
21.30 	experience of the fund as recommended by the actuary retained
21.31 	under section 356.214 and approved under section 356.215,
21.32 	subdivision 18, and using the applicable preretirement or
21.33 	postretirement interest rate assumption specified in section
21.34 	356.215, subdivision 8.

21.35 	Sec. 38. Minnesota Statutes 2004, section 490.121,
21.36 	subdivision 4, is amended to read:
22.1 		Subd. 4.Allowable service. (a) "Allowable service"
22.2 	means any calendar month, subject to the service credit limit in
22.3 	subdivision 22, served as a judge at any time, or during which
22.4 	the judge received compensation for that service from the state,
22.5 	municipality, or county, whichever applies, and for which the
22.6 	judge made any required member contribution.  It also includes
22.7 	any month served as a referee in probate for all referees in
22.8 	probate who were in office prior to before January 1, 1974.
22.9 	(b) "Allowable service" does not mean service as a retired
22.10 	judge.

22.11 	Sec. 39. Minnesota Statutes 2004, section 490.121,
22.12 	subdivision 6, is amended to read:
22.13 		Subd. 6.Annuity.  "Annuity" means the payments that are 
22.14 	made each year to an annuitant from the judges' retirement fund,
22.15 	pursuant to the provisions of under sections 490.121 to 490.132.

22.16 	Sec. 40. Minnesota Statutes 2004, section 490.121,
22.17 	subdivision 7, is amended to read:
22.18 		Subd. 7.Annuitant.  "Annuitant" means a former judge, a 
22.19 	surviving spouse,or a dependent child who is entitled to and is
22.20 	receiving an annuity under the provisions of sections 490.121 to
22.21 	490.132.

22.22 	Sec. 41. Minnesota Statutes 2004, section 490.121, is
22.23 	amended by adding a subdivision to read:
22.24 		Subd. 7a.Approved actuary. "Approved actuary" means an
22.25 	actuary as defined in section 356.215, subdivision 1, paragraph
22.26 	(c).

22.27 	Sec. 42. Minnesota Statutes 2004, section 490.121, is
22.28 	amended by adding a subdivision to read:
22.29 		Subd. 7b.Court. "Court" means any court of this state
22.30 	that is established by the Minnesota Constitution.

22.31 	Sec. 43. Minnesota Statutes 2004, section 490.121, is
22.32 	amended by adding a subdivision to read:
22.33 		Subd. 7c.Dependent surviving child. "Dependent
22.34 	surviving child" means any natural or adopted child of a
22.35 	deceased judge who has not reached the age of 18 years, or
22.36 	having reached the age of 18, is under age 22 and who is a
23.1 	full-time student throughout the normal school year, is
23.2 	unmarried, and is actually dependent for more than one-half of
23.3 	the child's support upon the judge for a period of at least 90
23.4 	days before the judge's death.  It also includes any natural
23.5 	child of the judge who was born after the death of the judge.

23.6 	Sec. 44. Minnesota Statutes 2004, section 490.121,
23.7 	subdivision 13, is amended to read:
23.8 		Subd. 13.Disability.  "Disability" means the permanent
23.9 	inability of a judge to continue to perform the functions of
23.10 	judge by reason of a physical or mental impairment resulting
23.11 	from a sickness or an injury.

23.12 	Sec. 45. Minnesota Statutes 2004, section 490.121,
23.13 	subdivision 14, is amended to read:
23.14 		Subd. 14.Disability retirement date.  "Disability
23.15 	retirement date" means the last day of the first month after the
23.16 	date on which the governor determines, upon receipt of the 
23.17 	voluntary application by the judge or otherwise, that a judge
23.18 	suffers from a disability.

23.19 	Sec. 46. Minnesota Statutes 2004, section 490.121,
23.20 	subdivision 15, is amended to read:
23.21 		Subd. 15.Disability retirement annuity.  "Disability
23.22 	retirement annuity" means an annuity to which a judge is
23.23 	entitled under section 490.124, subdivisions 1 and 4,after the 
23.24 	retirement for reason of the judge because of a disability.

23.25 	Sec. 47. Minnesota Statutes 2004, section 490.121, is
23.26 	amended by adding a subdivision to read:
23.27 		Subd. 15a.Early retirement date. "Early retirement date"
23.28 	means the last day of the month after a judge attains the age of
23.29 	60 but before the judge reaches the normal retirement date.

23.30 	Sec. 48. Minnesota Statutes 2004, section 490.121, is
23.31 	amended by adding a subdivision to read:
23.32 		Subd. 15b.Early retirement annuity. "Early retirement
23.33 	annuity" means an annuity to which a judge is entitled under
23.34 	section 490.124, subdivisions 1 and 3, upon retirement by the
23.35 	judge at an early retirement date.

23.36 	Sec. 49. Minnesota Statutes 2004, section 490.121,
24.1 	subdivision 21, is amended to read:
24.2 		Subd. 21.Final average compensation.  "Final average
24.3 	compensation" means the total amount of the salary payable to a
24.4 	judge in the highest five years out of the last ten years prior
24.5 	to before the event of maturity of benefits termination of
24.6 	judicial service, divided by five; provided, however, that if
24.7 	the number of years of service by the judge equals or exceeds
24.8 	ten.  If the number of years of service by the judge is less
24.9 	than ten, but more than five, the highest five shall years of
24.10 	salary must be counted, and .If the number of years of service
24.11 	by the judge is less than five, the aggregate salary in such for
24.12 	the period shall of service must be divided by the number of
24.13 	months in such the period and multiplied by 12.

24.14 	Sec. 50. Minnesota Statutes 2004, section 490.121, is
24.15 	amended by adding a subdivision to read:
24.16 		Subd. 21a.Judge. "Judge" means a judge or a justice of
24.17 	any court as defined under subdivision 7b.

24.18 	Sec. 51. Minnesota Statutes 2004, section 490.121, is
24.19 	amended by adding a subdivision to read:
24.20 		Subd. 21b.Judges' retirement fund; retirement fund;
24.21 	fund. "Judges' retirement fund," "retirement fund," or "fund"
24.22 	means the fund created by section 490.123.

24.23 	Sec. 52. Minnesota Statutes 2004, section 490.121, is
24.24 	amended by adding a subdivision to read:
24.25 		Subd. 21c.Mandatory retirement date. "Mandatory
24.26 	retirement date" means the last day of the month in which a
24.27 	judge has attained 70 years of age.

24.28 	Sec. 53. Minnesota Statutes 2004, section 490.121, is
24.29 	amended by adding a subdivision to read:
24.30 		Subd. 21d.Normal retirement annuity. Except as
24.31 	otherwise provided in sections 490.121 to 490.132, "normal
24.32 	retirement annuity" means an annuity to which a judge is
24.33 	entitled under section 490.124, subdivision 1, upon retirement
24.34 	on or after the normal retirement date of the judge.

24.35 	Sec. 54. Minnesota Statutes 2004, section 490.121, is
24.36 	amended by adding a subdivision to read:
25.1 		Subd. 21e.Normal retirement date. "Normal retirement
25.2 	date" means the last day of the month in which a judge attains
25.3 	the age of 65.

25.4 	Sec. 55. Minnesota Statutes 2004, section 490.121,
25.5 	subdivision 22, is amended to read:
25.6 		Subd. 22.Service credit limit.  "Service credit limit"
25.7 	means the greater of:  (1) 24 years of allowable service
25.8 	under this chapter 490; or (2) for judges with allowable service
25.9 	rendered prior to before July 1, 1980, the number of years of
25.10 	allowable service under chapter 490, which, when multiplied by
25.11 	the percentage listed in section 356.315, subdivision 7 or 8,
25.12 	whichever is applicable to each year of service, equals 76.8.

25.13 	Sec. 56. Minnesota Statutes 2004, section 490.121, is
25.14 	amended by adding a subdivision to read:
25.15 		Subd. 23.Surviving spouse. "Surviving spouse" means the
25.16 	surviving legally married spouse of a deceased judge.

25.17 	Sec. 57. Minnesota Statutes 2004, section 490.121, is
25.18 	amended by adding a subdivision to read:
25.19 		Subd. 24.Survivor's annuity. "Survivor's annuity" means
25.20 	an annuity to which a surviving spouse or dependent child is
25.21 	entitled under section 490.124, subdivision 9.

25.22 	Sec. 58. Minnesota Statutes 2004, section 490.122, is
25.23 	amended to read:
25.24 	490.122 ADMINISTRATION OF JUDGES' RETIREMENT.
25.25 		Subdivision 1.Administration. The policy-making,
25.26 	management, and administrative functions governing the operation
25.27 	of the judges' retirement fund and the administration
25.28 	of sections 490.121 to 490.132this chapter are vested in the
25.29 	board of directors and executive director of the Minnesota State
25.30 	Retirement System with such .  In administering the plan and
25.31 	fund, the board and the director have the same duties,
25.32 	authority, and responsibility as are provided in chapter 352.
25.33 		Subd. 2.Inapplicability of certain laws. Except as
25.34 	otherwise specified, no provision of chapter 352 applies to the
25.35 	judges' retirement fund or any judge.
25.36 		Subd. 3.Fiduciary responsibility. Fiduciary
26.1 	activities of relating to the uniform judges' retirement and
26.2 	Survivors' Annuities for Judges plan must be undertaken in a
26.3 	manner consistent with chapter 356A.

26.4 	Sec. 59. Minnesota Statutes 2004, section 490.123,
26.5 	subdivision 1, is amended to read:
26.6 		Subdivision 1.Fund creation; revenue and authorized
26.7 	disbursements. (a) There is created a special fund to be known
26.8 	as the "judges' retirement fund."
26.9 	(b) The judges' retirement fund must be credited with all
26.10 	contributions,;all interest, dividends, and other investment
26.11 	proceeds;and all other income authorized by this chapter or
26.12 	other applicable law.
26.13 	(c) From this fund there are appropriated the payments
26.14 	authorized by sections 490.121 to 490.132, in the amounts and at
26.15 	the times provided, including the necessary and reasonable
26.16 	expenses of the Minnesota State Retirement System in
26.17 	administering the fund and the transfers to the Minnesota
26.18 	postretirement investment fund.

26.19 	Sec. 60. Minnesota Statutes 2004, section 490.123,
26.20 	subdivision 1a, is amended to read:
26.21 		Subd. 1a.Member contribution rates.  (a) A judge who is
26.22 	covered by the federal Old Age, Survivors, Disability, and
26.23 	Health Insurance Program and whose service does not exceed the
26.24 	service credit limit in section 490.121, subdivision 22, shall
26.25 	contribute to the fund from each salary payment a sum equal to
26.26 	8.00 percent of salary.
26.27 	(b) A judge not so covered whose service does not exceed
26.28 	the service credit limit in section 490.121, subdivision 22,
26.29 	shall contribute to the fund from each salary payment a sum
26.30 	equal to 8.15 percent of salary.
26.31 	(c) The contribution under this subdivision is payable by
26.32 	salary deduction. The deduction must be made by the state court
26.33 	administrator under section 352.04, subdivisions 4, 5, and 8.

26.34 	Sec. 61. Minnesota Statutes 2004, section 490.123,
26.35 	subdivision 1b, is amended to read:
26.36 		Subd. 1b.Employer contribution rate. (a) The employer
27.1 	contribution rate to the fund on behalf of a judge is 20.5
27.2 	percent of salary and .  The employer obligation continues after
27.3 	a judge exceeds the service credit limit in section 490.121,
27.4 	subdivision 22.
27.5 	(b) The employer contribution must be paid by the state
27.6 	court administrator and .  The employer contribution is payable
27.7 	at the same time as member contributions are made under
27.8 	subdivision 1a or as employee contributions are made to the
27.9 	unclassified plan in program governed by chapter 352D for judges
27.10 	whose service exceeds the limit in section 490.121, subdivision
27.11 	22, are remitted.

27.12 	Sec. 62. Minnesota Statutes 2004, section 490.123,
27.13 	subdivision 1c, is amended to read:
27.14 		Subd. 1c.Additional employer contribution. In the event
27.15 	that If the employer contribution under subdivision 1b and the
27.16 	assets of the judges retirement fund are insufficient to meet
27.17 	reserve transfers to the Minnesota postretirement investment
27.18 	fund or payments of survivor benefits before July 1, 1993 in a
27.19 	month, the necessary amount is appropriated from the general
27.20 	fund to the executive director of the Minnesota State Retirement
27.21 	System, upon the certification of the required amount by the
27.22 	executive director to the commissioner of finance.

27.23 	Sec. 63. Minnesota Statutes 2004, section 490.123,
27.24 	subdivision 2, is amended to read:
27.25 		Subd. 2.Commissioner of finance.  The commissioner of
27.26 	finance shall be is the ex officio treasurer of the judges'
27.27 	retirement fund and the .  The commissioner's general bond to the
27.28 	state shall must be so conditioned as to cover all liability for
27.29 	acting as the treasurer of this the fund.  All moneys money 
27.30 	received by the commissioner pursuant to under this section
27.31 	shall must be set aside in the state treasury to the credit of
27.32 	the judges' retirement fund. The commissioner shall transmit
27.33 	monthly to the executive director described in section 352.03,
27.34 	subdivision 5, a detailed statement of all amounts so received
27.35 	and credited to the fund.  The commissioner shall pay out the
27.36 	fund only upon vouchers signed by said executive director;
28.1 	provided that vouchers for investment may be signed by the
28.2 	secretary of the State Board of Investment.

28.3 	Sec. 64. Minnesota Statutes 2004, section 490.123,
28.4 	subdivision 3, is amended to read:
28.5 		Subd. 3.Investment. (a) The executive director referred
28.6 	to in subdivision 2 of the Minnesota State Retirement System 
28.7 	shall, from time to time, certify to the State Board of
28.8 	Investment such portions of the judges' retirement fund as in
28.9 	the director's judgment may not be required for immediate use.
28.10 	(b) Assets from the judges' retirement fund shall must be
28.11 	transferred to the Minnesota postretirement investment fund for
28.12 	retirement and disability benefits as provided in sections
28.13 	11A.18 and 352.119.
28.14 	(c) The State Board of Investment shall thereupon invest
28.15 	and reinvest sums so transferred, or certified, in such
28.16 	securities as are duly authorized legal investments for such
28.17 	purposes under section 11A.24in compliance with sections
28.18 	356A.04 and 356A.06.

28.19 	Sec. 65. Minnesota Statutes 2004, section 490.124,
28.20 	subdivision 1, is amended to read:
28.21 		Subdivision 1.Basic retirement annuity. (a) Except as
28.22 	qualified hereinafter from and after the mandatory retirement
28.23 	date, the normal retirement date, the early retirement date, or
28.24 	one year from the disability retirement date, as the case may
28.25 	be, a retiring judge is eligible to receive a retirement annuity
28.26 	shall be payable to a retiring judge from the judges' retirement
28.27 	fund in .
28.28 	(b) The retirement annuity is an amount equal to:  (1) the
28.29 	percent specified in section 356.315, subdivision 7, multiplied
28.30 	by the judge's final average compensation with that result then 
28.31 	multiplied by the number of years and fractions of years of
28.32 	allowable service rendered prior to before July 1, 1980; plus
28.33 	(2) the percent specified in section 356.315, subdivision 8,
28.34 	multiplied by the judge's final average compensation with that
28.35 	result then multiplied by the number of years and fractions of
28.36 	years of allowable service rendered after June 30, 1980.
29.1 	(c) Service that exceeds the service credit limit in
29.2 	section 490.121, subdivision 22, must be excluded in calculating
29.3 	the retirement annuity, but the compensation earned by the judge 
29.4 	during this period of judicial service must be used in
29.5 	determining a judge's final average compensation and calculating
29.6 	the retirement annuity.

29.7 	Sec. 66. Minnesota Statutes 2004, section 490.124,
29.8 	subdivision 2, is amended to read:
29.9 		Subd. 2.Minimum service requirement; extension of term.
 29.10 	No (a) Unless section 356.30 applies, a judge shall be is not 
29.11 	eligible for an annuity at the normal retirement date or the 
29.12 	early retirement date if the judge has less than five years of
29.13 	allowable service.
29.14 	(b) A judge who shall retire retires on or, as permitted
29.15 	under sections 490.121 to 490.132, after the judge's mandatory
29.16 	retirement date, shall be is entitled to a proportionate annuity
29.17 	based upon the allowable service of the judge at the date of
29.18 	retirement.
29.19 	A judge who was in office on December 31, 1973, and
29.20 	thereafter and who, by the date on which the current term
29.21 	expires, would not be eligible to retire with full benefits
29.22 	under statutes in effect on December 31, 1973, may apply to the
29.23 	governor for an extension to serve up to three additional years,
29.24 	stating the intention of the judge to retire upon attaining
29.25 	eligibility to receive a retirement allowance.  Notwithstanding
29.26 	section 490.125, the governor shall forthwith make a written
29.27 	order accepting the retirement application, and extending the
29.28 	term of office of the judge for the period of time, not to
29.29 	exceed three years, as may be necessary to make the judge
29.30 	eligible for retirement, solely for purposes of computing
29.31 	benefits hereunder.

29.32 	Sec. 67. Minnesota Statutes 2004, section 490.124,
29.33 	subdivision 3, is amended to read:
29.34 		Subd. 3.Early reduced retirement.  The retirement
29.35 	annuity provided by under subdivision 1 of any judge electing 
29.36 	who elects to retire at an early retirement date shall must be
30.1 	reduced by one-half of one percent per month from the retirement
30.2 	date to the normal retirement date.

30.3 	Sec. 68. Minnesota Statutes 2004, section 490.124,
30.4 	subdivision 4, is amended to read:
30.5 		Subd. 4.Disability retirement. (a) When the governor
30.6 	determines that a judge is disabled under section 490.121,
30.7 	subdivision 13, notice of the governor's determination must be
30.8 	sent to the judge, the chief justice of the Supreme Court, the
30.9 	state court administrator, and the executive director of the
30.10 	Minnesota State Retirement System.
30.11 	(b) From and after disability retirement date, a disabled
30.12 	judge shall be is entitled to continuation of the judge's full
30.13 	salary payable by the judge's employer, as if the judge's office
30.14 	were not vacated by retirement, for a period of up to one full
30.15 	year, but in no event beyond the judge's mandatory retirement
30.16 	date.  During this year the judge will is entitled to earn
30.17 	additional service credit in the judges' retirement plan.  The
30.18 	salary earned will be payable to a disabled judge is subject to
30.19 	retirement deductions and will must be included in computing
30.20 	final average compensation of the judge. Thereafter 
30.21 	(c) At the conclusion of the year of continued salary
30.22 	following a disability or upon the judge's mandatory retirement
30.23 	date, whichever is earlier, the disabled judge is entitled to a
30.24 	disability retirement annuity computed as provided in
30.25 	subdivision 1 shall be paid, provided that .  If the computed
30.26 	retirement annuity is a smaller amount,the judge shall is
30.27 	entitled to receive a minimum annuity of 25 percent of the
30.28 	judge's final average compensation.

30.29 	Sec. 69. Minnesota Statutes 2004, section 490.124,
30.30 	subdivision 5, is amended to read:
30.31 		Subd. 5.Deferred benefits.  (a) Any A benefit to which a
30.32 	judge is entitled under this section may be deferred until the 
30.33 	early or normal retirement date or later, notwithstanding the 
30.34 	termination of such the judge's service prior thereto.
30.35 	(b) The retirement annuity of, or the survivor benefit
30.36 	payable on behalf of, a former judge, who terminated service
31.1 	before July 1, 1997, which is not first payable until after June
31.2 	30, 1997, must be increased on an actuarial equivalent basis to
31.3 	reflect the change in the postretirement interest rate actuarial
31.4 	assumption under section 356.215, subdivision 8, from five
31.5 	percent to six percent under a calculation procedure and tables
31.6 	adopted by the board of directors of the Minnesota State
31.7 	Retirement System and approved by the actuary retained by the
31.8 	Legislative Commission on Pensions and Retirement under section
31.9 	356.214.

31.10 	Sec. 70. Minnesota Statutes 2004, section 490.124,
31.11 	subdivision 8, is amended to read:
31.12 		Subd. 8.Exclusive normal retirement benefits. Any (a)
31.13 	Except as provided in paragraph (b), a judge who retires after
31.14 	December 31, 1973, shall be is entitled to a retirement pension,
31.15 	retirement compensation or other retirement payment under
31.16 	statutes applicable solely to judges pursuant to under this
31.17 	section only, except that any such .
31.18 	(b) A judge who was in office prior to before January 1,
31.19 	1974, who retires at or after normal retirement age may then
31.20 	elect to receive during the judge's lifetime a normal retirement
31.21 	annuity computed on the basis of retirement compensation
31.22 	provided for such judge under statutes in effect on December 31,
31.23 	1973, in lieu of the amount of normal retirement annuity
31.24 	otherwise computed under sections 490.121 to 490.132.
31.25 	For purposes of this subdivision, the Conciliation Court of
31.26 	the city of Duluth shall be deemed to have been a court of
31.27 	record by the statutes in effect on December 31, 1973.

31.28 	Sec. 71. Minnesota Statutes 2004, section 490.124,
31.29 	subdivision 9, is amended to read:
31.30 		Subd. 9.Survivors' annuity. (a) Upon the death of a
31.31 	judge prior to before retirement, or upon the death of a person
31.32 	who has qualified for an annuity under this section but who
31.33 	ceases to be a judge prior to before retirement and has who not
31.34 	received a refund of contributions pursuant to under subdivision
31.35 	12, a surviving spouse is entitled to,or, if there be no
31.36 	surviving spouse, dependent children, shall are entitled to 
32.1 	receive an annuity, payable monthly, equal in total to 60
32.2 	percent of the normal retirement annuity which would have been
32.3 	payable to the judge or former judge had the date of death been
32.4 	the normal retirement date, provided that the .
32.5 	(b) The annuity payable to a surviving spouse or to 
32.6 	dependent children shall receive an annuity is an amount of not
32.7 	less than 25 percent of the judge's or the former judge's final
32.8 	average compensation.
32.9 	If a judge, whose surviving spouse was not entitled to
32.10 	survivors benefits provided solely for judges under statutes in
32.11 	effect prior to January 1, 1974, shall have died prior to
32.12 	retirement on or after May 23, 1973 and before January 1, 1974,
32.13 	a surviving spouse and dependent children, if any, shall be
32.14 	entitled to survivors benefits as provided hereunder as if such
32.15 	judge had died on January 1, 1974.

32.16 	Sec. 72. Minnesota Statutes 2004, section 490.124,
32.17 	subdivision 10, is amended to read:
32.18 		Subd. 10.Prior survivors' benefits; limitation. (a) 
32.19 	Benefits provided pursuant to under Minnesota Statutes 2004,
32.20 	section 490.102, subdivision 6, or 490.1091, for a surviving
32.21 	spouse of a retired judge, payable after the death of the judge,
32.22 	shall be are limited to:
32.23 	(a) spouses of judges who have retired prior to before 
32.24 	January 1, 1974; and .
32.25 	(b) spouses of judges in office on December 31, 1973 and
32.26 	thereafter who elect to continue contributions pursuant to
32.27 	section 490.102, subdivision 6 or 490.109.  The contributions
32.28 	shall be in addition to contributions pursuant to section
32.29 	490.123, and upon retirement the judge may not elect to receive
32.30 	any optional annuity pursuant to subdivision 11 unless the judge
32.31 	and the spouse shall waive any benefits pursuant to section
32.32 	490.102, subdivision 6 or 490.1091.
32.33 	No other judge in office on or after January 1, 1974, shall
32.34 	be is required to contribute pursuant to under Minnesota
32.35 	Statutes 2004,section 490.102, subdivision 6,or 490.109.

32.36 	Sec. 73. Minnesota Statutes 2004, section 490.124,
33.1 	subdivision 11, is amended to read:
33.2 		Subd. 11.limitation on survivor benefits;optional
33.3 	annuities. (a) No survivor or death benefits may be paid in
33.4 	connection with the death of a judge who retires after December
33.5 	31, 1973, except as otherwise provided in sections 490.121 to
33.6 	490.132.
33.7 	(b) Except as provided in subdivision 10, a judge may elect
33.8 	to receive, instead of the normal retirement annuity, an
33.9 	optional retirement annuity in the form of either (1) an annuity
33.10 	payable for a period certain and for life after that period, (2) 
33.11 	a joint and survivor annuity without reinstatement in the event
33.12 	of if the designated beneficiary predeceasing predeceases the
33.13 	retired judge, or (3) a joint and survivor annuity with
33.14 	reinstatement in the event of if the designated beneficiary
33.15 	predeceasing predeceases the retired judge.
33.16 	(c) An optional retirement annuity must be actuarially
33.17 	equivalent to a single-life annuity with no term certain and
33.18 	must be established by the board of directors of the Minnesota
33.19 	State Retirement System.  In establishing these optional
33.20 	retirement annuity forms, the board shall obtain the written
33.21 	recommendation of the actuary retained by the Legislative
33.22 	Commission on Pensions and Retirement under section 356.214.
33.23 	The recommendations must be retained as a part of the permanent
33.24 	records of the board.

33.25 	Sec. 74. Minnesota Statutes 2004, section 490.124,
33.26 	subdivision 12, is amended to read:
33.27 		Subd. 12.Refund.  (a) A person who ceases to be a
33.28 	judge but who does not qualify for a retirement annuity or other
33.29 	benefit under section 490.121is entitled to a refund in an
33.30 	amount that is equal to all of the member's employee
33.31 	contributions to the judges' retirement fund plus interest
33.32 	computed under section 352.22, subdivision 2.
33.33 	(b) A refund of contributions under paragraph (a)
33.34 	terminates all service credits and all rights and benefits of
33.35 	the judge and the judge's survivors under this chapter.
33.36 	(c) A person who becomes a judge again after taking a
34.1 	refund under paragraph (a) may reinstate the previously
34.2 	terminated allowable service credits credit, rights, and
34.3 	benefits by repaying the total amount of the previously received
34.4 	refund.  The refund repayment must include interest on the total
34.5 	amount previously received at an annual rate of 8.5 percent,
34.6 	compounded annually,from the date on which the refund was
34.7 	received until the date on which the refund is repaid.

34.8 	Sec. 75. Minnesota Statutes 2004, section 490.124,
34.9 	subdivision 13, is amended to read:
34.10 		Subd. 13.Death refund.  If a judge who has not received
34.11 	other benefits under this chapter dies and there are no survivor
34.12 	benefits payable under this chapter, a refund plus interest as
34.13 	provided in subdivision 12 is payable to the last designated
34.14 	beneficiary named on a form filed with the director before the
34.15 	death of the judge, or,if no designation is on file, the refund
34.16 	is payable to the estate of the deceased judge.

34.17 	Sec. 76. Minnesota Statutes 2004, section 490.125,
34.18 	subdivision 1, is amended to read:
34.19 		Subdivision 1.Mandatory retirement age.  Except as
34.20 	otherwise provided in sections 490.121 to 490.132, each a judge
34.21 	shall retire terminate active service as a judge on the judge's
34.22 	mandatory retirement date.

34.23 	Sec. 77. Minnesota Statutes 2004, section 490.125,
34.24 	subdivision 2, is amended to read:
34.25 		Subd. 2.Exception. Except as provided by sections
34.26 	490.025, subdivision 3, 490.102, subdivisions 3 and 3a and
34.27 	490.12, subdivision 2,Any judge in office on December 31, 1973
34.28 	who shall have attained 70 years of age on or prior to such date
34.29 	shall retire upon the expiration of the term of office of such
34.30 	judge.

34.31 	Sec. 78. Minnesota Statutes 2004, section 490.126, is
34.32 	amended to read:
34.33 	490.126 PROCEDURES.
34.34 		Subdivision 1.Compulsory retirement. Proceedings for
34.35 	compulsory retirement of a judge, if necessary, shall must be
34.36 	conducted in accordance with rules issued by the Supreme Court
35.1 	pursuant to under section 490.16 490A.02.
35.2 		Subd. 2.Vacancies. Any judge may make written
35.3 	application to the governor for retirement.  The governor
35.4 	thereupon shall direct the judge's retirement by written order
35.5 	which, when filed in the Office of the Secretary of State, shall
35.6 	effect effects a vacancy in the office to be filled as provided
35.7 	by law.
35.8 		Subd. 3.Application for annuity or refund. An 
35.9 	application for an annuity or a refund under sections 490.121 to
35.10 	490.132 may be made by the potential annuitant or by someone
35.11 	authorized to act for the potential annuitant.  Every
35.12 	application for an annuity or refund, with accompanied by a 
35.13 	proof of age and by a record of years of service when
35.14 	required, shall must be submitted to the governing
35.15 	body executive director of the Minnesota State Retirement System
35.16 	in a form prescribed by it the director.
35.17 		Subd. 4.Manner of payment. Unless otherwise
35.18 	specifically provided by statute or agreed upon by the annuitant
35.19 	and the governing body board of directors of the Minnesota State
35.20 	Retirement System, annuities payable under sections 490.121 to
35.21 	490.132 shall must be paid in the manner and at the intervals as
35.22 	prescribed by the executive director of the Minnesota State
35.23 	Retirement System.  The annuity shall cease ceases with the last
35.24 	payment received by the annuitant while living.
35.25 		Subd. 5.Exemption from process; no assignment. None of
35.26 	the money, annuities, or other benefits provided in this chapter
35.27 	is assignable either in law or equity or is subject to state
35.28 	estate tax, or to execution, levy, attachment, garnishment, or
35.29 	other legal process, except as provided in section 518.58,
35.30 	518.581, or 518.6111.

35.31 	Sec. 79. Minnesota Statutes 2004, section 490.133, is
35.32 	amended to read:
35.33 	490.133 RETIREMENT; TRANSITION PROVISIONS; TRANSFER TO
35.34 	COURT OF APPEALS.
35.35 	(a) If a judge to whom or to whose survivors benefits would
35.36 	be payable under Minnesota Statutes 2004,sections 490.101 to
36.1 	490.12,is elected or appointed to the Court of Appeals, that
36.2 	judge and the judge's survivors, shall continue to be eligible
36.3 	for benefits under those sections and not under sections 490.121
36.4 	to 490.132.
36.5 	(b) In that the case of a judge to whom paragraph (a)
36.6 	applies, the service of the judge in the Court of Appeals shall 
36.7 	must be added to the prior service as district judge, probate
36.8 	judge, or judge of any other court of record in determining
36.9 	eligibility and the compensation of a judge of the Court of
36.10 	Appeals at the time of the judge's death, disability, or
36.11 	retirement shall be is the "compensation allotted to the office"
36.12 	for the purposes of calculating benefit amounts.
36.13 	(c) All other judges of the Court of Appeals and their
36.14 	survivors shall be are subject to the retirement and survivor's
36.15 	annuity provisions of sections 490.121 to 490.132.

36.16 	Sec. 80. [490A.01] BOARD OF JUDICIAL STANDARDS;
36.17 	ESTABLISHMENT.
36.18 		Subdivision 1.Establishment; composition. The Board on
36.19 	Judicial Standards is established.  The Board on Judicial
36.20 	Standards is a continuation of the board established by Laws
36.21 	1971, chapter 909, sections 1 and 2, as amended.  For the
36.22 	purposes of this chapter, "board" means the Board on Judicial
36.23 	Standards.
36.24 		Subd. 2.Composition; appointment. (a) The board
36.25 	consists of one judge of the Court of Appeals, three trial court
36.26 	judges, two lawyers who have practiced law in the state for at
36.27 	least ten years, and four citizens who are not judges, retired
36.28 	judges, or lawyers.
36.29 	(b) All members must be appointed by the governor with the
36.30 	advice and consent of the senate.  Senate confirmation is not
36.31 	required for judicial members.
36.32 		Subd. 3.Term maximum; membership termination. No member
36.33 	may serve more than two full four-year terms or their equivalent.
36.34 	Membership terminates if a member ceases to hold the position
36.35 	that qualified the member for appointment.
36.36 		Subd. 4.Member terms; compensation; removal. The
37.1 	membership terms, compensation, removal of members, and filling
37.2 	of vacancies on the board are as provided in section 15.0575.
37.3 		Subd. 5.Executive secretary appointment; salary. (a)
37.4 	The board shall appoint the executive secretary.
37.5 	(b) The salary of the executive secretary of the board is
37.6 	85 percent of the maximum salary provided for an administrative
37.7 	law judge under section 15A.083, subdivision 6a.

37.8 	Sec. 81. [490A.02] JUDICIAL STANDARDS BOARD; POWERS.
37.9 		Subdivision 1.Judicial disqualification. A judge is
37.10 	disqualified from acting as a judge, without a loss of salary,
37.11 	while there is pending an indictment or any information charging
37.12 	the judge with a crime that is punishable as a felony under
37.13 	either Minnesota law or federal law, or while there is pending a
37.14 	recommendation to the Supreme Court by the Board on Judicial
37.15 	Standards for the judge's removal or retirement.
37.16 		Subd. 2.Judicial suspension. On receipt of a
37.17 	recommendation of the Board on Judicial Standards or on its own
37.18 	motion, the Supreme Court may suspend a judge from office
37.19 	without salary when the judge pleads guilty to or no contest to
37.20 	or is found guilty of a crime that is punishable as a felony
37.21 	under either Minnesota law or federal law or any other crime
37.22 	that involves moral turpitude.  If the conviction is reversed,
37.23 	the suspension terminates and the judge must be paid a salary
37.24 	for the period of suspension.  If the judge is suspended and the
37.25 	conviction becomes final, the Supreme Court shall remove the
37.26 	judge from office.
37.27 		Subd. 3.Judicial disability. On receipt of a
37.28 	recommendation of the Board on Judicial Standards, the Supreme
37.29 	Court may retire a judge for a disability that the court
37.30 	determines seriously interferes with the performance of the
37.31 	judge's duties and is or is likely to become permanent, and
37.32 	censure or remove a judge for an action or inaction that may
37.33 	constitute persistent failure to perform the judge's duties,
37.34 	incompetence in performing the judge's duties, habitual
37.35 	intemperance, or conduct prejudicial to the administration of
37.36 	justice that brings the judicial office into disrepute.
38.1 		Subd. 4.Authority to reopen matters. The board is
38.2 	specifically empowered to reopen any matter wherein any
38.3 	information or evidence was previously precluded by a statute of
38.4 	limitations or by a previously existing provision of time
38.5 	limitation.
38.6 		Subd. 5.Retirement status. (a) A judge who is retired
38.7 	by the Supreme Court must be considered to have retired
38.8 	voluntarily.
38.9 	(b) This section and section 490A.01 must not affect the
38.10 	right of a judge who is suspended, retired, or removed under
38.11 	this section from qualifying for any pension or other retirement
38.12 	benefits to which the judge would otherwise be entitled by law
38.13 	to receive.
38.14 		Subd. 6.Eligibility for judicial office; practice
38.15 	law. A judge removed by the Supreme Court is ineligible for any
38.16 	future service in a judicial office.  The question of the right
38.17 	of a removed judge to practice law in this state must be
38.18 	referred to the proper authority for review.
38.19 		Subd. 7.Supreme court rules. The Supreme Court shall
38.20 	make rules to implement this section.

38.21 	Sec. 82. [490A.03] PERSONS AFFECTED.
38.22 	The provisions of sections 490A.01 and 490A.02 apply to all
38.23 	judges, judicial officers, and referees.

38.24 	Sec. 83. Minnesota Statutes 2004, section 525.05, is
38.25 	amended to read:
38.26 	525.05 JUDGE OR REFEREE; GROUNDS FOR DISQUALIFICATION.
38.27 	The following shall be grounds for disqualification of any
38.28 	judge or referee from acting in any matter:  (1) That the judge
38.29 	or the judge's spouse or any of either of their kin nearer than
38.30 	first cousin is interested as representative, heir, devisee,
38.31 	legatee, ward, or creditor in the estate involved therein; (2)
38.32 	that it involves the validity or interpretation of a will drawn
38.33 	or witnessed by the judge; (3) that the judge may be a necessary
38.34 	witness in the matter; (4) that it involves a property right in
38.35 	respect to which the judge has been engaged or is engaged as an
38.36 	attorney; or (5) that the judge was engaged in a joint
39.1 	enterprise for profit with the decedent at the time of death or
39.2 	that the judge is then engaged in a joint enterprise for profit
39.3 	with any person interested in the matter as representative,
39.4 	heir, devisee, legatee, ward, or creditor.  When grounds for
39.5 	disqualification exist, the judge may, and upon proper petition
39.6 	of any person interested in the estate must, request another
39.7 	judge or a judge who has retired as provided in section 490.12,
39.8 	subdivision 2,to act in the judge's stead in the matter.

39.9 	Sec. 84. REPEALER; EFFECT ON BENEFIT COVERAGE.
 39.10 		Subdivision 1.Legislators retirement plan; repealed as
39.11 	obsolete. Minnesota Statutes 2004, sections 3A.01, subdivisions
39.12 	3, 4, 6a, and 7; 3A.02, subdivision 2; 3A.04, subdivision 1a;
39.13 	and 3A.09, are repealed.
39.14 		Subd. 2.Elective state officers retirement plan;
39.15 	repealed as obsolete. Minnesota Statutes 2004, sections
39.16 	352C.01; 352C.011; 352C.021; 352C.031; 352C.033; 352C.04;
39.17 	352C.051; 352C.09; and 352C.091, subdivisions 2 and 3, are
39.18 	repealed.
39.19 		Subd. 3.Judicial retirement plans; repealed as
39.20 	obsolete. Minnesota Statutes 2004, sections 490.021; 490.025;
39.21 	490.101; 490.102; 490.103; 490.105; 490.106; 490.107; 490.108;
39.22 	490.109; 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9,
39.23 	10, 11, 12, 16, 17, 18, 19, and 20; 490.124, subdivision 6; and
39.24 	490.132, are repealed.
39.25 		Subd. 4.Judicial standards board; repealed for
39.26 	relocation as minnesota statutes, chapter 490a. Minnesota
39.27 	Statutes 2004, sections 490.15, 490.16, and 490.18, are repealed.
39.28 		Subd. 5.Uniform judicial retirement plan; no benefit
39.29 	diminishment intended; procedure. Sections 32 to 76 are not
39.30 	intended to reduce or increase the entitlement of active,
39.31 	deferred, or retired judges to retirement annuities or benefits
39.32 	as of July 1, 2005, as reflected in the records of the Minnesota
39.33 	State Retirement System.  If the executive director of the
39.34 	Minnesota State Retirement System determines that any provisions
39.35 	of sections 32 to 76 functions to modify, impair, or diminish
39.36 	the retirement annuity or benefit entitlement of any judge that
40.1 	had accrued or earned before July 1, 2005, the executive
40.2 	director shall certify that determination and a recommendation
40.3 	as to the required legislative correction to the chair of the
40.4 	Legislative Commission on Pensions and Retirement, the chair of
40.5 	the senate State and Local Governmental Operations Committee,
40.6 	the chair of the house Governmental Operations and Veterans
40.7 	Affairs Policy Committee, and the executive director of the
40.8 	Legislative Commission on Pensions and Retirement on or before
40.9 	the October 1 next following that determination.

40.10 	Sec. 85. REVISOR INSTRUCTIONS.
 40.11 	(a) In Minnesota Statutes, chapters 352, 352D, 355, 356,
40.12 	and 487, the revisor of statutes shall change references to
40.13 	"sections 490.121 to 490.132" to "chapter 490." 
40.14 	(b) In Minnesota Statutes, chapter 490, the revisor of
40.15 	statutes shall change references to "sections 490.121 to
40.16 	490.132" to "this chapter." 
40.17 	(c) In Minnesota Statutes, sections 175A.01, subdivision 4,
40.18 	and 271.01, subdivision 1, the revisor of statutes shall change
40.19 	references to "sections 490.15 and 490.16" to "sections 490A.01
40.20 	and 490A.02." 

40.21 	Sec. 86. EFFECTIVE DATE.
 40.22 	This article is effective July 1, 2005.

40.23 	ARTICLE 2
40.24 	COVERED SALARY; AVERAGE SALARY

40.25 	Section 1. Minnesota Statutes 2004, section 352.01, is
40.26 	amended by adding a subdivision to read:
40.27 		Subd. 14a.Average salary. (a) "Average salary" means
40.28 	the average of the highest five successive years of salary upon
40.29 	which the employee has made contributions to the retirement fund
40.30 	by payroll deductions.  Average salary must be based upon all
40.31 	allowable service if this service is less than five years.
40.32 	(b) "Average salary" does not include the payment of
40.33 	accrued unused annual leave or overtime paid at time of final
40.34 	separation from state service if paid in a lump sum nor does it
40.35 	include the reduced salary, if any, paid during the period the
40.36 	employee is entitled to workers' compensation benefit payments
41.1 	for temporary disability.
41.2 	(c) For an employee covered by the correctional state
41.3 	employees retirement plan, "average salary" means the average of
41.4 	the monthly salary during the employee's highest five successive
41.5 	years of salary as an employee covered by the general state
41.6 	employees retirement plan, or the correctional state employees
41.7 	retirement plan, or by a combination of the two.  If the total
41.8 	of the covered service is less than five years, the
41.9 	determination of average salary must be based on all allowable
41.10 	service.

41.11 	Sec. 2. Minnesota Statutes 2004, section 352.115,
41.12 	subdivision 2, is amended to read:
41.13 		Subd. 2.average salary normal retirement annuity.  The
41.14 	retirement annuity hereunder payable at normal retirement age or
41.15 	thereafter must be computed in accordance with the applicable
41.16 	provisions of the formula stated in subdivision 3, on the basis
41.17 	of the employee's average salary for the period of allowable
41.18 	service.  This retirement annuity is known as the "normal"
41.19 	retirement annuity.
41.20 	For each year of allowable service, "average salary" of an
41.21 	employee in determining a retirement annuity means the average
41.22 	of the highest five successive years of salary upon which the
41.23 	employee has made contributions to the retirement fund by
41.24 	payroll deductions.  Average salary must be based upon all
41.25 	allowable service if this service is less than five years.
41.26 	"Average salary" does not include the payment of accrued
41.27 	unused annual leave or overtime paid at time of final separation
41.28 	from state service if paid in a lump sum nor does it include the
41.29 	reduced salary, if any, paid during the period the employee is
41.30 	entitled to workers' compensation benefit payments for temporary
41.31 	disability.

41.32 	Sec. 3. Minnesota Statutes 2004, section 352.115,
41.33 	subdivision 3, is amended to read:
41.34 		Subd. 3.Retirement annuity formula.  (a) This paragraph,
41.35 	in conjunction with section 352.116, subdivision 1, applies to a
41.36 	person who became a covered employee or a member of a pension
42.1 	fund listed in section 356.30, subdivision 3, before July 1,
42.2 	1989, unless paragraph (b), in conjunction with section 352.116,
42.3 	subdivision 1a, produces a higher annuity amount, in which case
42.4 	paragraph (b) will apply.  The employee's average salary, as
42.5 	defined in section 352.01,subdivision 2 14a, multiplied by the
42.6 	percent specified in section 356.315, subdivision 1, per year of
42.7 	allowable service for the first ten years and the percent
42.8 	specified in section 356.315, subdivision 2, for each later year
42.9 	of allowable service and pro rata for completed months less than
42.10 	a full year shall determine the amount of the retirement annuity
42.11 	to which the employee is entitled.
42.12 	(b) This paragraph applies to a person who has become at
42.13 	least 55 years old and first became a covered employee after
42.14 	June 30, 1989, and to any other covered employee who has become
42.15 	at least 55 years old and whose annuity amount, when calculated
42.16 	under this paragraph and in conjunction with section 352.116,
42.17 	subdivision 1a, is higher than it is when calculated under
42.18 	paragraph (a), in conjunction with section 352.116, subdivision
42.19 	1.  The employee's average salary, as defined in section 352.01,
42.20 	subdivision 2 14a, multiplied by the percent specified in
42.21 	section 356.315, subdivision 2, for each year of allowable
42.22 	service and pro rata for months less than a full year shall
42.23 	determine the amount of the retirement annuity to which the
42.24 	employee is entitled.

42.25 	Sec. 4. Minnesota Statutes 2004, section 352.87,
42.26 	subdivision 3, is amended to read:
42.27 		Subd. 3.Retirement annuity formula.  A person specified
42.28 	in subdivision 1 will have is entitled to receive a retirement
42.29 	annuity applicable for allowable service credit under this
42.30 	section calculated by multiplying the employee's average salary,
42.31 	as defined in section 352.115 352.01, subdivision 2 14a, by the
42.32 	percent specified in section 356.315, subdivision 2a, for each
42.33 	year or portions of a year of allowable service credit.  No
42.34 	reduction for retirement prior to before the normal retirement
42.35 	age, as specified in section 352.01, subdivision 25, applies to
42.36 	service to which this section applies.

43.1 	Sec. 5. Minnesota Statutes 2004, section 352.93,
43.2 	subdivision 1, is amended to read:
43.3 		Subdivision 1.Basis of annuity; when to apply.  After
43.4 	separation from state service, an employee covered under section
43.5 	352.91 who has reached age 55 years and has credit for at least
43.6 	three years of covered correctional service or a combination of
43.7 	covered correctional service and regular Minnesota general
43.8 	employees state retirement System plan service is entitled upon
43.9 	application to a retirement annuity under this section,based
43.10 	only on covered correctional employees' service.  Application
43.11 	may be made no earlier than 60 days before the date the employee
43.12 	is eligible to retire by reason of both age and service
43.13 	requirements.
43.14 	In this section, "average salary" means the average of the
43.15 	monthly salary during the employee's highest five successive
43.16 	years of salary as an employee covered by the Minnesota State
43.17 	Retirement System.  Average salary must be based upon all
43.18 	allowable service if this service is less than five years.

43.19 	Sec. 6. Minnesota Statutes 2004, section 352C.021, is
43.20 	amended by adding a subdivision to read:
43.21 		Subd. 1a.Average salary. "Average salary," for purposes
43.22 	of calculating the normal retirement annuity under section
43.23 	352C.031, subdivision 4, means the average of the highest five
43.24 	successive years of salary upon which contributions have been
43.25 	made under section 352C.09.

43.26 	Sec. 7. Minnesota Statutes 2004, section 353.01,
43.27 	subdivision 10, is amended to read:
43.28 		Subd. 10.Salary.  (a) Subject to the limitations of
43.29 	section 356.611,"salary" means:
43.30 	(1) the periodic compensation of a public employee, before
43.31 	deductions for deferred compensation, supplemental retirement
43.32 	plans, or other voluntary salary reduction programs, and also
43.33 	means "wages" and includes net income from fees;
43.34 	(2) for a public employee who is covered by a supplemental
43.35 	retirement plan under section 356.24, subdivision 1, clause (8),
43.36 	(9), or (10), which require all plan contributions be made by
44.1 	the employer, the contribution to the applicable supplemental
44.2 	retirement plan when the contribution is from mandatory
44.3 	withholdings from employees' wages;and
44.4 	(2) (3) for a public employee who has prior service covered
44.5 	by a local police or firefighters relief association that has
44.6 	consolidated with the Public Employees Retirement Association or
44.7 	to which section 353.665 applies and who has elected coverage
44.8 	either under the public employees police and fire fund benefit
44.9 	plan under section 353A.08 following the consolidation or under
44.10 	section 353.665, subdivision 4, the rate of salary upon which
44.11 	member contributions to the special fund of the relief
44.12 	association were made prior to the effective date of the
44.13 	consolidation as specified by law and by bylaw provisions
44.14 	governing the relief association on the date of the initiation
44.15 	of the consolidation procedure and the actual periodic
44.16 	compensation of the public employee after the effective date of
44.17 	consolidation.
44.18 	(b) Salary does not mean:
44.19 	(1) the fees paid to district court reporters, unused
44.20 	annual vacation or sick leave payments, in lump-sum or periodic
44.21 	payments, severance payments, reimbursement of expenses,
44.22 	lump-sum settlements not attached to a specific earnings period,
44.23 	or workers' compensation payments;
44.24 	(2) employer-paid amounts used by an employee toward the
44.25 	cost of insurance coverage, employer-paid fringe benefits,
44.26 	flexible spending accounts, cafeteria plans, health care expense
44.27 	accounts, day care expenses, or any payments in lieu of any
44.28 	employer-paid group insurance coverage, including the difference
44.29 	between single and family rates that may be paid to a member
44.30 	with single coverage and certain amounts determined by the
44.31 	executive director to be ineligible;
44.32 	(3) the amount equal to that which the employing
44.33 	governmental subdivision would otherwise pay toward single or
44.34 	family insurance coverage for a covered employee when, through a
44.35 	contract or agreement with some but not all employees, the
44.36 	employer:
45.1 	(i) discontinues, or for new hires does not provide,
45.2 	payment toward the cost of the employee's selected insurance
45.3 	coverages under a group plan offered by the employer;
45.4 	(ii) makes the employee solely responsible for all
45.5 	contributions toward the cost of the employee's selected
45.6 	insurance coverages under a group plan offered by the employer,
45.7 	including any amount the employer makes toward other employees'
45.8 	selected insurance coverages under a group plan offered by the
45.9 	employer; and
45.10 	(iii) provides increased salary rates for employees who do
45.11 	not have any employer-paid group insurance coverages;
45.12 	(4) except as provided in section 353.86 or 353.87,
45.13 	compensation of any kind paid to volunteer ambulance service
45.14 	personnel or volunteer firefighters, as defined in subdivision
45.15 	35 or 36; and
45.16 	(5) the amount of compensation that exceeds the limitation
45.17 	provided in section 356.611.
45.18 	(c) Amounts provided to an employee by the employer through
45.19 	a grievance proceeding or a legal settlement are salary only if
45.20 	the settlement is reviewed by the executive director and the
45.21 	amounts are determined by the executive director to be
45.22 	consistent with paragraph (a) and prior determinations.

45.23 	Sec. 8. Minnesota Statutes 2004, section 353.01, is
45.24 	amended by adding a subdivision to read:
45.25 		Subd. 17a.Average salary. (a) "Average salary," for
45.26 	purposes of calculating a retirement annuity under section
45.27 	353.29, subdivision 3, means an amount equivalent to the average
45.28 	of the highest salary of the member, police officer, or
45.29 	firefighter, whichever applies, upon which employee
45.30 	contributions were paid for any five successive years of
45.31 	allowable service, based on dates of salary periods as listed on
45.32 	salary deduction reports.  Average salary must be based upon all
45.33 	allowable service if this service is less than five years.
45.34 	(b) "Average salary" may not include any reduced salary
45.35 	paid during a period in which the employee is entitled to
45.36 	benefit payments from workers' compensation for temporary
46.1 	disability, unless the average salary is higher, including this
46.2 	period.

46.3 	Sec. 9. Minnesota Statutes 2004, section 353.29,
46.4 	subdivision 3, is amended to read:
46.5 		Subd. 3.Retirement annuity formula.  (a) This paragraph,
46.6 	in conjunction with section 353.30, subdivisions 1, 1a, 1b, and
46.7 	1c, applies to any member who first became a public employee or
46.8 	a member of a pension fund listed in section 356.30, subdivision
46.9 	3, before July 1, 1989, unless paragraph (b), in conjunction
46.10 	with section 353.30, subdivision 5, produces a higher annuity
46.11 	amount, in which case paragraph (b) will apply.  The average
46.12 	salary as defined in section 353.01,subdivision 2 17a,
46.13 	multiplied by the percent specified in section 356.315,
46.14 	subdivision 3, for each year of allowable service for the first
46.15 	ten years and thereafter by the percent specified in section
46.16 	356.315, subdivision 4, per year of allowable service and
46.17 	completed months less than a full year for the "basic member,"
46.18 	and the percent specified in section 356.315, subdivision 1, for
46.19 	each year of allowable service for the first ten years and
46.20 	thereafter by the percent specified in section 356.315,
46.21 	subdivision 2, per year of allowable service and completed
46.22 	months less than a full year for the "coordinated member," shall
46.23 	determine the amount of the "normal" retirement annuity.
46.24 	(b) This paragraph applies to a member who has become at
46.25 	least 55 years old and first became a public employee after June
46.26 	30, 1989, and to any other member whose annuity amount, when
46.27 	calculated under this paragraph and in conjunction with section
46.28 	353.30, subdivision 5, is higher than it is when calculated
46.29 	under paragraph (a), in conjunction with section 353.30,
46.30 	subdivisions 1, 1a, 1b, and 1c.  The average salary, as defined
46.31 	in section 353.01,subdivision 2 17a, multiplied by the percent
46.32 	specified in section 356.315, subdivision 4, for each year of
46.33 	allowable service and completed months less than a full year for
46.34 	a basic member and the percent specified in section 356.315,
46.35 	subdivision 2, per year of allowable service and completed
46.36 	months less than a full year for a coordinated member, shall
47.1 	determine the amount of the normal retirement annuity.

47.2 	Sec. 10. Minnesota Statutes 2004, section 353.33,
47.3 	subdivision 3, is amended to read:
47.4 		Subd. 3.Computation of benefits.  This disability
47.5 	benefit is an amount equal to the normal annuity payable to a
47.6 	member who has reached normal retirement age with the same
47.7 	number of years of allowable service and the same average
47.8 	salary, as provided in section 353.01, subdivision 17a, and 
47.9 	section 353.29, subdivisions 2 and subdivision 3.
47.10 	A basic member shall receive a supplementary monthly
47.11 	benefit of $25 to age 65 or the five-year anniversary of the
47.12 	effective date of the disability benefit, whichever is later.
47.13 	If the disability benefits under this subdivision exceed
47.14 	the average salary as defined in section 353.29 353.01,
47.15 	subdivision 2 17a, the disability benefits must be reduced to an
47.16 	amount equal to said the average salary.

47.17 	Sec. 11. Minnesota Statutes 2004, section 353.651,
47.18 	subdivision 3, is amended to read:
47.19 		Subd. 3.Retirement annuity formula.  The average salary
47.20 	as defined in section 353.01,subdivision 2 17a, multiplied by
47.21 	the percent specified in section 356.315, subdivision 6, per
47.22 	year of allowable service determines the amount of the normal
47.23 	retirement annuity.  If the member has earned allowable service
47.24 	for performing services other than those of a police officer or
47.25 	firefighter, the annuity representing such that service is must
47.26 	be computed under sections 353.29 and 353.30.

47.27 	Sec. 12. Minnesota Statutes 2004, section 353.656,
47.28 	subdivision 1, is amended to read:
47.29 		Subdivision 1.In line of duty; computation of benefits.
 47.30 	A member of the police and fire plan who becomes disabled and
47.31 	physically unfit to perform duties as a police officer,
47.32 	firefighter, or paramedic as defined under section 353.64,
47.33 	subdivision 10, as a direct result of an injury, sickness, or
47.34 	other disability incurred in or arising out of any act of duty,
47.35 	which has or is expected to render the member physically or
47.36 	mentally unable to perform the duties as a police officer,
48.1 	firefighter, or paramedic as defined under section 353.64,
48.2 	subdivision 10, for a period of at least one year, shall receive
48.3 	disability benefits during the period of such disability.  The
48.4 	benefits must be in an amount equal to 60 percent of the
48.5 	"average salary" as defined in section 353.651 353.01,
48.6 	subdivision 2 17a, plus an additional percent specified in
48.7 	section 356.315, subdivision 6, of that average salary for each
48.8 	year of service in excess of 20 years.  If the disability under
48.9 	this subdivision occurs before the member has at least five
48.10 	years of allowable service credit in the police and fire plan,
48.11 	the disability benefit must be computed on the "average salary"
48.12 	from which deductions were made for contribution to the police
48.13 	and fire fund.

48.14 	Sec. 13. Minnesota Statutes 2004, section 354.05, is
48.15 	amended by adding a subdivision to read:
48.16 		Subd. 13a.Average salary. (a) "Average salary," for the
48.17 	purpose of determining the member's retirement annuity, means
48.18 	the average salary upon which contributions were made for the
48.19 	highest five successive years of formula service credit.
48.20 	(b) "Average salary" may not include any more than the
48.21 	equivalent of 60 monthly salary payments.
48.22 	(c) "Average salary" must be based upon all years of
48.23 	formula service credit if this service credit is less than five
48.24 	years.

48.25 	Sec. 14. Minnesota Statutes 2004, section 354.44,
48.26 	subdivision 6, is amended to read:
48.27 		Subd. 6.Computation of formula program retirement
48.28 	annuity.  (a) The formula retirement annuity must be computed in
48.29 	accordance with the applicable provisions of the formulas stated
48.30 	in paragraph (b) or (d) on the basis of each member's average
48.31 	salary under section 354.05, subdivision 13a,for the period of
48.32 	the member's formula service credit.
48.33 	For all years of formula service credit, "average salary,"
48.34 	for the purpose of determining the member's retirement annuity,
48.35 	means the average salary upon which contributions were made and
48.36 	upon which payments were made to increase the salary limitation
49.1 	provided in Minnesota Statutes 1971, section 354.511, for the
49.2 	highest five successive years of formula service credit
49.3 	provided, however, that such "average salary" shall not include
49.4 	any more than the equivalent of 60 monthly salary payments.
49.5 	Average salary must be based upon all years of formula service
49.6 	credit if this service credit is less than five years.
49.7 	(b) This paragraph, in conjunction with paragraph (c),
49.8 	applies to a person who first became a member of the association
49.9 	or a member of a pension fund listed in section 356.30,
49.10 	subdivision 3, before July 1, 1989, unless paragraph (d), in
49.11 	conjunction with paragraph (e), produces a higher annuity
49.12 	amount, in which case paragraph (d) applies.  The average salary
49.13 	as defined in paragraph (a) section 354.05, subdivision 13a,
49.14 	multiplied by the following percentages per year of formula
49.15 	service credit shall determine the amount of the annuity to
49.16 	which the member qualifying therefor is entitled:
49.17 	Coordinated Member   Basic Member
49.18 	Each year of service     the percent        the percent
49.19 	during first ten         specified in       specified in
49.20 	section 356.315,   section 356.315,
49.21 	subdivision 1,     subdivision 3,
49.22 	per year           per year
49.23 	Each year of service     the percent        the percent
49.24 	thereafter               specified in       specified in
49.25 	section 356.315,   section 356.315,
49.26 	subdivision 2,     subdivision 4,
49.27 	per year           per year
49.28 	(c)(i) This paragraph applies only to a person who first
49.29 	became a member of the association or a member of a pension fund
49.30 	listed in section 356.30, subdivision 3, before July 1, 1989,
49.31 	and whose annuity is higher when calculated under paragraph (b),
49.32 	in conjunction with this paragraph than when calculated under
49.33 	paragraph (d), in conjunction with paragraph (e).
49.34 	(ii) Where any member retires prior to normal retirement
49.35 	age under a formula annuity, the member shall be paid a
49.36 	retirement annuity in an amount equal to the normal annuity
50.1 	provided in paragraph (b) reduced by one-quarter of one percent
50.2 	for each month that the member is under normal retirement age at
50.3 	the time of retirement except that for any member who has 30 or
50.4 	more years of allowable service credit, the reduction shall be
50.5 	applied only for each month that the member is under age 62.
50.6 	(iii) Any member whose attained age plus credited allowable
50.7 	service totals 90 years is entitled, upon application, to a
50.8 	retirement annuity in an amount equal to the normal annuity
50.9 	provided in paragraph (b), without any reduction by reason of
50.10 	early retirement.
50.11 	(d) This paragraph applies to a member who has become at
50.12 	least 55 years old and first became a member of the association
50.13 	after June 30, 1989, and to any other member who has become at
50.14 	least 55 years old and whose annuity amount when calculated
50.15 	under this paragraph and in conjunction with paragraph (e), is
50.16 	higher than it is when calculated under paragraph (b), in
50.17 	conjunction with paragraph (c).  The average salary, as defined
50.18 	in paragraph (a) section 354.05, subdivision 13a,multiplied by
50.19 	the percent specified by section 356.315, subdivision 4, for
50.20 	each year of service for a basic member and by the percent
50.21 	specified in section 356.315, subdivision 2, for each year of
50.22 	service for a coordinated member shall determine the amount of
50.23 	the retirement annuity to which the member is entitled.
50.24 	(e) This paragraph applies to a person who has become at
50.25 	least 55 years old and first becomes a member of the association
50.26 	after June 30, 1989, and to any other member who has become at
50.27 	least 55 years old and whose annuity is higher when calculated
50.28 	under paragraph (d) in conjunction with this paragraph than when
50.29 	calculated under paragraph (b), in conjunction with paragraph
50.30 	(c).  An employee who retires under the formula annuity before
50.31 	the normal retirement age shall be paid the normal annuity
50.32 	provided in paragraph (d) reduced so that the reduced annuity is
50.33 	the actuarial equivalent of the annuity that would be payable to
50.34 	the employee if the employee deferred receipt of the annuity and
50.35 	the annuity amount were augmented at an annual rate of three
50.36 	percent compounded annually from the day the annuity begins to
51.1 	accrue until the normal retirement age.
51.2 	(f) No retirement annuity is payable to a former employee
51.3 	with a salary that exceeds 95 percent of the governor's salary
51.4 	unless and until the salary figures used in computing the
51.5 	highest five successive years average salary under paragraph (a)
51.6 	have been audited by the Teachers Retirement Association and
51.7 	determined by the executive director to comply with the
51.8 	requirements and limitations of section 354.05, subdivisions 35
51.9 	and 35a.

51.10 	Sec. 15. Minnesota Statutes 2004, section 354A.011, is
51.11 	amended by adding a subdivision to read:
51.12 		Subd. 7a.Average salary. "Average salary," for purposes
51.13 	of computing a normal coordinated program retirement annuity
51.14 	under section 354A.31, subdivision 4 or 4a, means an amount
51.15 	equal to the average salary upon which contributions were made
51.16 	for the highest five successive years of service credit but may
51.17 	not, in any event, include any more than the equivalent of 60
51.18 	monthly salary payments.  Average salary must be based upon all
51.19 	years of service credit if this service credit is less than five
51.20 	years.

51.21 	Sec. 16. Minnesota Statutes 2004, section 354A.31,
51.22 	subdivision 4, is amended to read:
51.23 		Subd. 4.Computation of the normal coordinated retirement
51.24 	annuity; minneapolis and st. paul funds.  (a) This subdivision
51.25 	applies to the coordinated programs of the Minneapolis Teachers
51.26 	Retirement Fund Association and the St. Paul Teachers Retirement
51.27 	Fund Association.
51.28 	(b) The normal coordinated retirement annuity shall be is 
51.29 	an amount equal to a retiring coordinated member's average
51.30 	salary under section 354A.011, subdivision 7a,multiplied by the
51.31 	retirement annuity formula percentage. Average salary for
51.32 	purposes of this section shall mean an amount equal to the
51.33 	average salary upon which contributions were made for the
51.34 	highest five successive years of service credit, but which shall
51.35 	not in any event include any more than the equivalent of 60
51.36 	monthly salary payments.  Average salary must be based upon all
52.1 	years of service credit if this service credit is less than five
52.2 	years.
52.3 	(c) This paragraph, in conjunction with subdivision 6,
52.4 	applies to a person who first became a member or a member in a
52.5 	pension fund listed in section 356.30, subdivision 3, before
52.6 	July 1, 1989, unless paragraph (d), in conjunction with
52.7 	subdivision 7, produces a higher annuity amount, in which case
52.8 	paragraph (d) will apply.  The retirement annuity formula
52.9 	percentage for purposes of this paragraph is the percent
52.10 	specified in section 356.315, subdivision 1, per year for each
52.11 	year of coordinated service for the first ten years and the
52.12 	percent specified in section 356.315, subdivision 2, for each
52.13 	year of coordinated service thereafter.
52.14 	(d) This paragraph applies to a person who has become at
52.15 	least 55 years old and who first becomes a member after June 30,
52.16 	1989, and to any other member who has become at least 55 years
52.17 	old and whose annuity amount, when calculated under this
52.18 	paragraph and in conjunction with subdivision 7 is higher than
52.19 	it is when calculated under paragraph (c), in conjunction with
52.20 	the provisions of subdivision 6.  The retirement annuity formula
52.21 	percentage for purposes of this paragraph is the percent
52.22 	specified in section 356.315, subdivision 2, for each year of
52.23 	coordinated service.

52.24 	Sec. 17. Minnesota Statutes 2004, section 354A.31,
52.25 	subdivision 4a, is amended to read:
52.26 		Subd. 4a.Computation of the normal coordinated
52.27 	retirement annuity; duluth fund.  (a) This subdivision applies
52.28 	to the new law coordinated program of the Duluth Teachers
52.29 	Retirement Fund Association.
52.30 	(b) The normal coordinated retirement annuity is an amount
52.31 	equal to a retiring coordinated member's average salary under
52.32 	section 354A.011, subdivision 7a,multiplied by the retirement
52.33 	annuity formula percentage. Average salary for purposes of this
52.34 	section means an amount equal to the average salary upon which
52.35 	contributions were made for the highest five successive years of
52.36 	service credit, but may not in any event include any more than
53.1 	the equivalent of 60 monthly salary payments.  Average salary
53.2 	must be based upon all years of service credit if this service
53.3 	credit is less than five years.
53.4 	(c) This paragraph, in conjunction with subdivision 6,
53.5 	applies to a person who first became a member or a member in a
53.6 	pension fund listed in section 356.30, subdivision 3, before
53.7 	July 1, 1989, unless paragraph (d), in conjunction with
53.8 	subdivision 7, produces a higher annuity amount, in which case
53.9 	paragraph (d) applies.  The retirement annuity formula
53.10 	percentage for purposes of this paragraph is the percent
53.11 	specified in section 356.315, subdivision 1, per year for each
53.12 	year of coordinated service for the first ten years and the
53.13 	percent specified in section 356.315, subdivision 2, for each
53.14 	subsequent year of coordinated service.
53.15 	(d) This paragraph applies to a person who is at least 55
53.16 	years old and who first becomes a member after June 30, 1989,
53.17 	and to any other member who is at least 55 years old and whose
53.18 	annuity amount, when calculated under this paragraph and in
53.19 	conjunction with subdivision 7, is higher than it is when
53.20 	calculated under paragraph (c) in conjunction with subdivision
53.21 	6.  The retirement annuity formula percentage for purposes of
53.22 	this paragraph is the percent specified in section 356.315,
53.23 	subdivision 2, for each year of coordinated service.

53.24 	Sec. 18. Minnesota Statutes 2004, section 422A.01, is
53.25 	amended by adding a subdivision to read:
53.26 		Subd. 4a.Average salary. (a) "Average salary" means the
53.27 	arithmetic average annual salary, wages, or compensation of the
53.28 	member from the city for any five calendar years out of the last
53.29 	ten calendar years of service, except as provided for in section
53.30 	422A.16, which may include the year in which the employee
53.31 	retires, as selected by the employee.
53.32 	(b) A member with more than five calendar years of service,
53.33 	but less than ten calendar years, may select any five calendar
53.34 	years of service to determine the average salary.  A member with
53.35 	less than five years of service with the city shall use all
53.36 	earnings to determine the average salary.

54.1 	Sec. 19. Minnesota Statutes 2004, section 422A.15,
54.2 	subdivision 1, is amended to read:
54.3 		Subdivision 1.Formula pension and annuity.  Except as
54.4 	otherwise provided in subdivision 3, each contributing member
54.5 	who, at the time of retirement, fulfills the conditions
54.6 	necessary to enable the member to retire, shall is entitled to 
54.7 	receive what shall be known as a "formula pension and annuity"
54.8 	equal to two percent for each year of allowable service for the
54.9 	first ten years and thereafter 2.5 percent per year of allowable
54.10 	service of the arithmetic average annual salary, wages or
54.11 	compensation of the member from the city for any five calendar
54.12 	years out of the last ten calendar years of service except as
54.13 	provided for in section 422A.16, which may include the year in
54.14 	which the employee retires, as selected by the employee,
54.15 	multiplied by the years of service credited by the retirement
54.16 	fund.  The formula pension and annuity shall must be computed on
54.17 	the single life plan but subject to the option selections
54.18 	provided for in section 422A.17.
54.19 	In order to be entitled to the formula pension and annuity
54.20 	herein provided for, the retiring employee at the time of
54.21 	cessation of employment and of actual retirement shall must have
54.22 	attained the age of 60 years or have been employed by the city
54.23 	not less than 30 years, or meet the qualifications provided for
54.24 	in section 422A.16, and in addition thereto have contributed to
54.25 	the retirement fund at the percentage rate prescribed by the
54.26 	retirement law applicable when the salary, wages or compensation
54.27 	was paid on all salaries, wages, or compensation received from
54.28 	the city or from an applicable employing unit.  The years of
54.29 	service to be applied in the formula pension and annuity shall 
54.30 	must be found and determined by the retirement board, except
54.31 	that no credit shall may be allowed for any year in which a back
54.32 	charge is owing at time of retirement and the earnings from any
54.33 	year in which a back charge is owing shall may not be used in
54.34 	determining the average annual salary.

54.35 	Sec. 20. Minnesota Statutes 2004, section 422A.16,
54.36 	subdivision 9, is amended to read:
55.1 		Subd. 9.Incompetency or death of member.  Any member of
55.2 	the contributing class who becomes permanently separated from
55.3 	the service of the city under subdivision 8, may, by an
55.4 	instrument in writing, filed with the municipal employees
55.5 	retirement board within 30 days after such the separation
55.6 	becomes permanent, elect to allow the member contributions
55.7 	to such the fund to the date of separation to remain on deposit
55.8 	in such the fund, and in such the event the member shall be 
55.9 	is entitled to receive a retirement allowance at age 65,
55.10 	provided the member, or someone acting in the member's behalf if
55.11 	the member be incompetent, shall must make a written application
55.12 	for such the retirement allowance in the same manner provided
55.13 	for in section 422A.17 and in accordance with the provisions of
55.14 	section 422A.15, subdivision 1,except for determining
55.15 	average annual salary. A member with more than five calendar
55.16 	years of service but less than ten calendar years may select any
55.17 	five calendar years of service to determine the average annual
55.18 	salary.  A member with less than five years of service with the
55.19 	city shall use all earnings to determine the average annual
55.20 	salary.
55.21 	If the contributing member dies before reaching the age of
55.22 	65 years, or having attained the age of 65 years without having
55.23 	made the election provided for herein, the net accumulated
55.24 	amount of deductions from the member's salary, pay or
55.25 	compensation, plus interest, to the member's credit on date of
55.26 	death shall be paid is payable to such the person or persons as
55.27 	have been nominated by written designation filed with the
55.28 	retirement board, in such the form as that the retirement board
55.29 	shall require requires.
55.30 	If the employee fails to make a designation, or if the
55.31 	person or persons designated by such the employee predeceases
55.32 	such the employee, the net accumulated credit to such the 
55.33 	employee's account on date of death shall be paid is payable to
55.34 	such the employee's estate.
55.35 	The provisions of subdivisions 4, 5,and 6 shall also apply
55.36 	to any member qualifying for benefits under this subdivision,
56.1 	except for purposes of this subdivision the age referred to in
56.2 	subdivision 4 shall be is 65 years.

56.3 	Sec. 21. Minnesota Statutes 2004, section 490.121,
56.4 	subdivision 21, is amended to read:
56.5 		Subd. 21.Final average compensation.  "Final average
56.6 	compensation" means the total amount of salary payable to a
56.7 	judge in the highest five years out of the last ten years prior
56.8 	to before the event of maturity of benefits termination of
56.9 	judicial service, divided by five; provided, however, that if
56.10 	the number of years of service by the judge equals or exceeds
56.11 	ten.  If the number of years of service by the judge is less
56.12 	than ten, but more than five,the highest five shall years of
56.13 	salary must be counted, and .If the number of years of service
56.14 	by the judge is less than five, the aggregate salary in such for
56.15 	the period shall of service must be divided by the number of
56.16 	months in such the period and multiplied by 12.

56.17 	Sec. 22. REPEALER.
 56.18 	Minnesota Statutes 2004, sections 352C.031, subdivision 3;
56.19 	353.29, subdivision 2; and 353.651, subdivision 2, are repealed.

56.20 	Sec. 23. EFFECTIVE DATE.
 56.21 	This article is effective the day following final enactment.

56.22 	ARTICLE 3
56.23 	ALLOWABLE SERVICE CREDIT

56.24 	Section 1. [356.195] SERVICE CREDIT PURCHASE PROCEDURES
56.25 	FOR STRIKE PERIODS.
56.26 		Subdivision 1.Covered plans. This section applies to
56.27 	all defined benefit plans specified in section 356.30,
56.28 	subdivision 3.
56.29 		Subd. 2.Purchase procedure for strike periods. (a) An
56.30 	employee covered by a plan specified in subdivision 1 may
56.31 	purchase allowable service credit in the applicable plan for any
56.32 	period of time during which the employee was on a public
56.33 	employee strike without pay, not to exceed a period of one year,
56.34 	if the employee makes a payment in lieu of salary deductions as
56.35 	specified in paragraph (b) or (c), whichever applies.  The
56.36 	employing unit, at its option, may pay the employer portion of
57.1 	the amount specified in paragraph (b) on behalf of its employees.
57.2 	(b) If payment is received by the applicable pension plan
57.3 	executive director within one year from the end of the strike,
57.4 	the payment amount is equal to the applicable employee and
57.5 	employer contribution rates specified in law for the applicable
57.6 	plan during the strike period, applied to the employee's rate of
57.7 	salary in effect at the conclusion of the strike for the period
57.8 	of the strike without pay, plus compound interest at a monthly
57.9 	rate of 0.71 percent from the last day of the strike period
57.10 	until the date payment is received.
57.11 	(c) If payment is received by the applicable pension fund
57.12 	director after one year and before five years from the end of
57.13 	the strike, the payment amount is the amount determined under
57.14 	section 356.551.
57.15 	(d) Payments may not be made more than five years after the
57.16 	end of the strike.

57.17 	Sec. 2. Minnesota Statutes 2004, section 490.121,
57.18 	subdivision 4, is amended to read:
57.19 		Subd. 4.Allowable service. (a) "Allowable service"
57.20 	means any calendar month, subject to the service credit limit in
57.21 	subdivision 22, served as a judge at any time, or served as a
57.22 	referee in probate for all referees in probate who were in
57.23 	office prior to January 1, 1974.
57.24 	(b) "Allowable service" also means a period of authorized
57.25 	leave of absence for which the judge has made a payment in lieu
57.26 	of contributions, not in an amount in excess of the service
57.27 	credit limit under subdivision 22.  To obtain the service
57.28 	credit, the judge shall pay an amount equal to the normal cost
57.29 	of the judges retirement plan on the date of return from the
57.30 	leave of absence, as determined in the most recent actuarial
57.31 	report for the plan filed with the Legislative Commission on
57.32 	Pensions and Retirement, multiplied by the judge's average
57.33 	monthly salary rate during the authorized leave of absence and
57.34 	multiplied by the number of months of the authorized leave of
57.35 	absence, plus annual compound interest at the rate of 8.5
57.36 	percent from the date of the termination of the leave to the
58.1 	date on which payment is made.  The payment must be made within
58.2 	one year of the date on which the authorized leave of absence
58.3 	terminated.  Service credit for an authorized leave of absence
58.4 	is in addition to a uniformed service leave under section
58.5 	490.1211.

58.6 	Sec. 3. Laws 1999, chapter 222, article 16, section 16, as
58.7 	amended by Laws 2002, chapter 392, article 7, section 1, and
58.8 	Laws 2003, First Special Session chapter 12, article 6, section
58.9 	2, and Laws 2004, chapter 267, article 17, section 6, is amended
58.10 	to read:
58.11 	Sec. 16REPEALER.
 58.12 	(a) Sections 2 to 6 and 8 to 13 are repealed on May 16,
58.13 	2004.
58.14 	(b) Sections 1 and 7 are repealed on May 16, 2006 2007.

58.15 	Sec. 4. Laws 2000, chapter 461, article 4, section 4, as
58.16 	amended by Laws 2003, First Special Session chapter 12, article
58.17 	6, section 3, and Laws 2004, chapter 267, article 17, section 7,
58.18 	is amended to read:
58.19 	Sec. 4EFFECTIVE DATE; SUNSET REPEALER.
 58.20 	(a) Sections 1, 2, and 3 are effective on the day following
58.21 	final enactment.
58.22 	(b) Sections 1, 2, and 3, are repealed on May 16, 2006 2007.

58.23 	Sec. 5. METRO TRANSIT STRIKE PROVISION.
 58.24 	Notwithstanding the payment deadline specified in Minnesota
58.25 	Statutes, section 356.195, subdivision 2, paragraph (b), a Metro
58.26 	Transit employee covered by the general state employees
58.27 	retirement plan of the Minnesota State Retirement System who was
58.28 	on strike on or after January 1, 2004, and before the effective
58.29 	date of this section, is authorized to make a payment under that
58.30 	paragraph on or before one year after the effective date of this
58.31 	section.

58.32 	Sec. 6. CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.
 58.33 	Notwithstanding the payment deadline specified in Minnesota
58.34 	Statutes, section 356.195, subdivision 2, paragraph (b), a
58.35 	Crosby-Ironton public school teacher covered by the Teachers
58.36 	Retirement Association who was on strike during a period that
59.1 	included April 1, 2005, and before the effective date of this
59.2 	section, is authorized to make a payment under that paragraph on
59.3 	or before one year after the effective date of this section.

59.4 	Sec. 7. UNIVERSITY OF MINNESOTA STRIKE PROVISION.
 59.5 	Notwithstanding the payment deadline specified in Minnesota
59.6 	Statutes, section 356.195, subdivision 2, paragraph (b), a
59.7 	University of Minnesota employee covered by the Minnesota State
59.8 	Retirement System who was on strike on or after October 21,
59.9 	2003, and before the effective date of this section, is
59.10 	authorized to make a payment under that paragraph on or before
59.11 	one year after the effective date of this section.

59.12 	Sec. 8. EFFECTIVE DATE.
 59.13 	(a) Sections 1 and 3 to 7 are effective the day following
59.14 	final enactment.
59.15 	(b) Section 2 is effective retroactively from January 1,
59.16 	2005, and applies to any person who was in active service as a
59.17 	judge on or after that date and applies to an authorized leave
59.18 	of absence that occurred before or after that date.  For a
59.19 	person for whom section 2 is retroactive, the equivalent
59.20 	contribution payment must be made on or before July 1, 2006.

59.21 	ARTICLE 4
59.22 	ACTUARIAL FINANCIAL REPORTING AND OTHER
59.23 	GENERALLY APPLICABLE ADMINISTRATIVE CHANGES

59.24 	Section 1. Minnesota Statutes 2004, section 352.01,
59.25 	subdivision 12, is amended to read:
59.26 		Subd. 12.Actuarial equivalent.  "Actuarial equivalent"
59.27 	means the condition of one annuity or benefit having an equal
59.28 	actuarial present value as another annuity or benefit,
59.29 	determined as of a given date at a specified age with each
59.30 	actuarial present value based on the appropriate mortality table
59.31 	adopted by the board of directors based on the experience of the
59.32 	fund as recommended by the actuary retained by the Legislative
59.33 	Commission on Pensions and Retirement under section 356.214, and
59.34 	approved under section 356.215, subdivision 18,and using the
59.35 	applicable preretirement or postretirement interest rate
59.36 	assumption specified in section 356.215, subdivision 8.

60.1 	Sec. 2. Minnesota Statutes 2004, section 353.01,
60.2 	subdivision 14, is amended to read:
60.3 		Subd. 14.Actuarial equivalent.  "Actuarial equivalent"
60.4 	means the condition of one annuity or benefit having an equal
60.5 	actuarial present value as another annuity or benefit,
60.6 	determined as of a given date with each actuarial present value
60.7 	based on the appropriate mortality table adopted by the board of
60.8 	trustees based on the experience of the fund as recommended by
60.9 	the actuary retained by the Legislative Commission on Pensions
60.10 	and Retirement under section 356.214, and approved under section
60.11 	356.215, subdivision 18,and using the applicable preretirement
60.12 	or postretirement interest rate assumption specified in section
60.13 	356.215, subdivision 8.

60.14 	Sec. 3. Minnesota Statutes 2004, section 354.05,
60.15 	subdivision 7, is amended to read:
60.16 		Subd. 7.Actuarial equivalent.  "Actuarial equivalent"
60.17 	means the condition of one annuity or benefit having an equal
60.18 	actuarial present value as another annuity or benefit,
60.19 	determined as of a given date with each actuarial present value
60.20 	based on the appropriate mortality table adopted by the board of
60.21 	trustees based on the experience of the association as
60.22 	recommended by the actuary retained by the Legislative
60.23 	Commission on Pensions and Retirement under section 356.214, and
60.24 	approved under section 356.215, subdivision 18,and using the
60.25 	applicable preretirement or postretirement interest rate
60.26 	assumption specified in section 356.215, subdivision 8.

60.27 	Sec. 4. Minnesota Statutes 2004, section 354.094,
60.28 	subdivision 1, is amended to read:
60.29 		Subdivision 1.Service credit contributions. (a) Upon
60.30 	granting any extended leave of absence under section 122A.46 or
60.31 	136F.43, the employing unit granting the leave must certify the
60.32 	leave to the association on a form specified by the executive
60.33 	director.  A member granted an extended leave of absence under
60.34 	section 122A.46 or 136F.43 may pay employee contributions and
60.35 	receive allowable service credit toward annuities and other
60.36 	benefits under this chapter, for each year of the leave,
61.1 	provided that the member and the employing board make the
61.2 	required employer contribution in any proportion they may agree
61.3 	upon, during the period of the leave.  The employer may enter
61.4 	into an agreement with the exclusive bargaining representative
61.5 	of the teachers in the district under which, for an individual
61.6 	teacher, all or a portion of the employee's contribution is paid
61.7 	by the employer.  Any such agreement must include a sunset of
61.8 	eligibility to qualify for the payment and must not be a part of
61.9 	the collective bargaining agreement.  The leave period must not
61.10 	exceed five years.  A member may not receive more than five
61.11 	years of allowable service credit under this section.  The
61.12 	employee and employer contributions must be based upon the rates
61.13 	of contribution prescribed by section 354.42 for the salary
61.14 	received during the year immediately preceding the extended
61.15 	leave.
61.16 	(b) Employee contribution payments for the years for which
61.17 	a member is receiving service credit while on extended leave
61.18 	must be made on or before the later of June 30 of each fiscal
61.19 	year for which service credit is to be received or within 30
61.20 	days after first notification of the amount due, if requested by
61.21 	the member, is given by the association. If payment is to be
61.22 	made by a transfer of pretax assets authorized under section
61.23 	356.441, payment is authorized after June 30 of the fiscal year
61.24 	providing that authorization for the asset transfer has been
61.25 	received by the applicable third party administrator by June 30,
61.26 	and the payment must include interest at a rate of .708 percent
61.27 	per month from June 30 through the end of the month in which
61.28 	payment is received.No payment is permitted after the
61.29 	following September 30. Payments received after June 30 must
61.30 	include interest at an annual rate of 8.5 percent from June 30
61.31 	through the end of the month in which payment is received.
61.32 	(c) Notwithstanding the provisions of any agreements to the
61.33 	contrary, employee and employer contributions may not be made to
61.34 	receive allowable service credit if the member does not have
61.35 	full reinstatement rights as provided in section 122A.46 or
61.36 	136F.43, both during and at the end of the extended leave.
62.1 	(d) Any school district paying the employee's retirement
62.2 	contributions under this section shall forward to the applicable
62.3 	retirement association or retirement fund a copy of the
62.4 	agreement executed by the school district and the employee.

62.5 	Sec. 5. Minnesota Statutes 2004, section 354A.011,
62.6 	subdivision 3a, is amended to read:
62.7 		Subd. 3a.Actuarial equivalent.  "Actuarial equivalent"
62.8 	means the condition of one annuity or benefit having an equal
62.9 	actuarial present value as another annuity or benefit,
62.10 	determined as of a given date with each actuarial present value
62.11 	based on the appropriate mortality table adopted by the
62.12 	appropriate board of trustees based on the experience of that
62.13 	retirement fund association as recommended by the actuary
62.14 	retained by the Legislative Commission on Pensions and
62.15 	Retirement under section 356.214, and approved under section
62.16 	356.215, subdivision 18,and using the applicable preretirement
62.17 	or postretirement interest rate assumption specified in section
62.18 	356.215, subdivision 8.

62.19 	Sec. 6. Minnesota Statutes 2004, section 356.20,
62.20 	subdivision 4, is amended to read:
62.21 		Subd. 4.Contents of financial report.  (a) The financial
62.22 	report required by this section must contain financial
62.23 	statements and disclosures that indicate the financial
62.24 	operations and position of the retirement plan and fund.  The
62.25 	report must conform with generally accepted governmental
62.26 	accounting principles, applied on a consistent basis.  The
62.27 	report must be audited.  The report must include, as part of its
62.28 	exhibits or its footnotes, an actuarial disclosure item based on
62.29 	the actuarial valuation calculations prepared by the
62.30 	commission-retained actuary retained under section 356.214or by
62.31 	the actuary retained by the retirement fund or plan, if
62.32 	applicable whichever applies, according to applicable actuarial
62.33 	requirements enumerated in section 356.215, and specified in the
62.34 	most recent standards for actuarial work adopted by the
62.35 	Legislative Commission on Pensions and Retirement.  The accrued
62.36 	assets, the accrued liabilities, including accrued reserves, and
63.1 	the unfunded actuarial accrued liability of the fund or plan
63.2 	must be disclosed.  The disclosure item must contain a
63.3 	declaration by the actuary retained by the Legislative
63.4 	Commission on Pensions and Retirement under section 356.214or
63.5 	the actuary retained by the fund or plan, whichever applies,
63.6 	specifying that the required reserves for any retirement,
63.7 	disability, or survivor benefits provided under a benefit
63.8 	formula are computed in accordance with the entry age actuarial
63.9 	cost method and in accordance with the most recent applicable
63.10 	standards for actuarial work adopted by the Legislative
63.11 	Commission on Pensions and Retirement.
63.12 	(b) Assets of the fund or plan contained in the disclosure
63.13 	item must include the following statement of the actuarial value
63.14 	of current assets as defined in section 356.215, subdivision 1:
63.15 	Value         Value
63.16 	at cost       at market
63.17 	Cash, cash equivalents, and
63.18 	short-term securities           .........     .........
63.19 	Accounts receivable               .........     .........
63.20 	Accrued investment income         .........     .........
63.21 	Fixed income investments          .........     .........
63.22 	Equity investments other
63.23 	than real estate                .........     .........
63.24 	Real estate investments           .........     .........
63.25 	Equipment                         .........     .........
63.26 	Equity Participation in the Minnesota
63.27 	postretirement investment
63.28 	fund or the retirement 
63.29 	benefit fund.........     .........
63.30 	Other                             .........     .........
63.31 	
63.32 	Total assets
63.33 	Value at cost                                 .........
63.34 	Value at market                               .........
63.35 	Actuarial value of current assets             .........
63.36 	(c) The unfunded actuarial accrued liability of the fund or
64.1 	plan contained in the disclosure item must include the following
64.2 	measures of unfunded actuarial accrued liability, using
64.3 	the actuarial value of current assets:
64.4 	(1) the unfunded actuarial accrued liability, determined by
64.5 	subtracting the current assets and the present value of future
64.6 	normal costs from the total current and expected future benefit
64.7 	obligations; and
64.8 	(2) the unfunded pension benefit obligation, determined by
64.9 	subtracting the current assets from the actuarial present value
64.10 	of credited projected benefits.
64.11 	If the current assets of the fund or plan exceed the
64.12 	actuarial accrued liabilities, the excess must be disclosed and
64.13 	indicated as a surplus.
64.14 	(d) The pension benefit obligations schedule included in
64.15 	the disclosure must contain the following information on the
64.16 	benefit obligations:
64.17 	(1) the pension benefit obligation, determined as the
64.18 	actuarial present value of credited projected benefits on
64.19 	account of service rendered to date, separately identified as
64.20 	follows:
64.21 	(i) for annuitants;
64.22 	               retirement annuities;
64.23 	               disability benefits;
64.24 	               surviving spouse and child benefits;
64.25 	         (ii)  for former members without vested rights;
64.26 	         (iii) for deferred annuitants' benefits, including
64.27 	               any augmentation;
64.28 	         (iv)  for active employees;
64.29 	               accumulated employee contributions,
64.30 	               including allocated investment income;
64.31 	               employer-financed benefits vested;
64.32 	               employer-financed benefits nonvested;
64.33 	               total pension benefit obligation; and
64.34 	(2) if there are additional benefits not appropriately
64.35 	covered by the foregoing items of benefit obligations, a
64.36 	separate identification of the obligation.
65.1 	(e) The report must contain an itemized exhibit describing
65.2 	the administrative expenses of the plan, including, but not
65.3 	limited to, the following items, classified on a consistent
65.4 	basis from year to year, and with any further meaningful detail:
65.5 	(1) personnel expenses;
65.6 	(2) communication-related expenses;
65.7 	(3) office building and maintenance expenses;
65.8 	(4) professional services fees; and 
65.9 	(5) other expenses.
65.10 	(f) The report must contain an itemized exhibit describing
65.11 	the investment expenses of the plan, including, but not limited
65.12 	to, the following items, classified on a consistent basis from
65.13 	year to year, and with any further meaningful detail:
65.14 	(1) internal investment-related expenses; and 
65.15 	(2) external investment-related expenses.
65.16 	(g) Any additional statements or exhibits or more detailed
65.17 	or subdivided itemization of a disclosure item that will enable
65.18 	the management of the fund to portray a true interpretation of
65.19 	the fund's financial condition must be included in the
65.20 	additional statements or exhibits.

65.21 	Sec. 7. Minnesota Statutes 2004, section 356.47,
65.22 	subdivision 3, is amended to read:
65.23 		Subd. 3.Payment.  (a) Upon the retired member attaining
65.24 	the age of 65 years or upon the first day of the month next
65.25 	following the month occurring one year after the termination of
65.26 	the reemployment that gave rise to the limitation, whichever is
65.27 	later, and the filing of a written application, the retired
65.28 	member is entitled to the payment, in a lump sum, of the value
65.29 	of the person's amount under subdivision 2, plus interest at the
65.30 	compound annual rate of six percent from the date that the
65.31 	amount was deducted from the retirement annuity to the date of
65.32 	payment.
65.33 	(b) The written application must be on a form prescribed by
65.34 	the chief administrative officer of the applicable retirement
65.35 	plan.
65.36 	(c) If the retired member dies before the payment provided
66.1 	for in paragraph (a) is made, the amount is payable, upon
66.2 	written application, to the deceased person's surviving spouse,
66.3 	or if none, to the deceased person's designated beneficiary, or
66.4 	if none, to the deceased person's estate.
66.5 	(d) In lieu of the direct payment of the person's amount
66.6 	under subdivision 2, on or after the payment date under
66.7 	paragraph (a), if the federal Internal Revenue Code so permits,
66.8 	the retired member may elect to have all or any portion of the
66.9 	payment amount under this section paid in the form of a direct
66.10 	rollover to an eligible retirement plan as defined in section
66.11 	402(c) of the federal Internal Revenue Code that is specified by
66.12 	the retired member.  If the retired member dies with a balance
66.13 	remaining payable under this section, the surviving spouse of
66.14 	the retired member, or if none, the deceased person's designated
66.15 	beneficiary, or if none, the administrator of the deceased
66.16 	person's estate may elect a direct rollover under this paragraph.

66.17 	Sec. 8. Minnesota Statutes 2004, section 422A.01,
66.18 	subdivision 6, is amended to read:
66.19 		Subd. 6.Present worth or present value.  "Present worth"
66.20 	or "present value" means that the present amount of money if
66.21 	increased at the applicable postretirement or preretirement
66.22 	interest rate assumption specified in section 356.215,
66.23 	subdivision 8, and based on the mortality table adopted by the
66.24 	board of trustees based on the experience of the fund as
66.25 	recommended by the actuary retained by the Legislative
66.26 	Commission on Pensions and Retirement under section 356.214, and
66.27 	approved under section 356.215, subdivision 18,will at
66.28 	retirement equal the actuarial accrued liability of the annuity
66.29 	already earned.

66.30 	Sec. 9. Minnesota Statutes 2004, section 490.121,
66.31 	subdivision 20, is amended to read:
66.32 		Subd. 20.Actuarial equivalent.  "Actuarial equivalent"
66.33 	means the condition of one annuity or benefit having an equal
66.34 	actuarial present value as another annuity or benefit,
66.35 	determined as of a given date with each actuarial present value
66.36 	based on the appropriate mortality table adopted by the board of
67.1 	trustees directors of the Minnesota State Retirement System 
67.2 	based on the experience of the fund as recommended by
67.3 	the commission-retained actuary retained under section 356.214,
67.4 	and approved under section 356.215, subdivision 18,and using
67.5 	the applicable preretirement or postretirement interest rate
67.6 	assumption specified in section 356.215, subdivision 8.

67.7 	Sec. 10. EFFECTIVE DATE.
 67.8 	(a) Sections 1 to 5, 8, and 9 are effective July 1, 2005.
67.9 	(b) Section 6 is effective the day following final
67.10 	enactment and applies to annual financial reporting occurring on
67.11 	or after June 30, 2005.
67.12 	(c) Section 4 is effective the day following final
67.13 	enactment.
67.14 	(d) Section 7 is effective July 1, 2005, and applies to
67.15 	retired members with an amount in a reemployed annuitant's
67.16 	account on or after that date.

67.17 	ARTICLE 5
67.18 	MEMBERSHIP INCLUSIONS
67.19 	AND EXCLUSIONS

67.20 	Section 1. Minnesota Statutes 2004, section 69.011, is
67.21 	amended by adding a subdivision to read:
67.22 		Subd. 2c.Ineligibility of certain police officers. A
67.23 	police officer employed by the University of Minnesota who is
67.24 	required by the Board of Regents to be a member of the
67.25 	University of Minnesota faculty retirement plan is not eligible
67.26 	to be included in any police state-aid certification under this
67.27 	section.

67.28 	Sec. 2. Minnesota Statutes 2004, section 352.01,
67.29 	subdivision 2a, is amended to read:
67.30 		Subd. 2a.Included employees.  (a) "State employee"
67.31 	includes:
67.32 	(1) employees of the Minnesota Historical Society;
67.33 	(2) employees of the State Horticultural Society;
67.34 	(3) employees of the Disabled American Veterans, Department
67.35 	of Minnesota, Veterans of Foreign Wars, Department of Minnesota,
67.36 	if employed before July 1, 1963;
68.1 	(4) employees of the Minnesota Crop Improvement
68.2 	Association;
68.3 	(5) employees of the adjutant general who are paid from
68.4 	federal funds and who are not covered by any federal civilian
68.5 	employees retirement system;
68.6 	(6) employees of the Minnesota State Colleges and
68.7 	Universities employed under the university or college activities
68.8 	program;
68.9 	(7) currently contributing employees covered by the system
68.10 	who are temporarily employed by the legislature during a
68.11 	legislative session or any currently contributing employee
68.12 	employed for any special service as defined in subdivision 2b,
68.13 	clause (8);
68.14 	(8) employees of the Armory Building Commission;
68.15 	(9) employees of the legislature appointed without a limit
68.16 	on the duration of their employment and persons employed or
68.17 	designated by the legislature or by a legislative committee or
68.18 	commission or other competent authority to conduct a special
68.19 	inquiry, investigation, examination, or installation;
68.20 	(10) trainees who are employed on a full-time established
68.21 	training program performing the duties of the classified
68.22 	position for which they will be eligible to receive immediate
68.23 	appointment at the completion of the training period;
68.24 	(11) employees of the Minnesota Safety Council;
68.25 	(12) any employees on authorized leave of absence from the
68.26 	Transit Operating Division of the former Metropolitan Transit
68.27 	Commission who are employed by the labor organization which is
68.28 	the exclusive bargaining agent representing employees of the
68.29 	Transit Operating Division;
68.30 	(13) employees of the Metropolitan Council, Metropolitan
68.31 	Parks and Open Space Commission, Metropolitan Sports Facilities
68.32 	Commission, Metropolitan Mosquito Control Commission, or
68.33 	Metropolitan Radio Board unless excluded or covered by another
68.34 	public pension fund or plan under section 473.415, subdivision
68.35 	3;
68.36 	(14) judges of the Tax Court;
69.1 	(15) personnel employed on June 30, 1992, by the University
69.2 	of Minnesota in the management, operation, or maintenance of its
69.3 	heating plant facilities, whose employment transfers to an
69.4 	employer assuming operation of the heating plant facilities, so
69.5 	long as the person is employed at the University of Minnesota
69.6 	heating plant by that employer or by its successor organization;
69.7 	and 
69.8 	(16) seasonal help in the classified service employed by
69.9 	the Department of Revenue; and 
69.10 	(17) persons employed by the Department of Commerce as a
69.11 	peace officer in the Insurance Fraud Prevention Division under
69.12 	section 45.0135 who have attained the mandatory retirement age
69.13 	specified in section 43A.34, subdivision 4.
69.14 	(b) Employees specified in paragraph (a), clause (15), are
69.15 	included employees under paragraph (a) if employer and employee
69.16 	contributions are made in a timely manner in the amounts
69.17 	required by section 352.04.  Employee contributions must be
69.18 	deducted from salary.  Employer contributions are the sole
69.19 	obligation of the employer assuming operation of the University
69.20 	of Minnesota heating plant facilities or any successor
69.21 	organizations to that employer.

69.22 	Sec. 3. Minnesota Statutes 2004, section 352.91, is
69.23 	amended by adding a subdivision to read:
69.24 		Subd. 4a.Process for evaluating and recommending
69.25 	potential employment positions for membership inclusion. (a)
69.26 	The Department of Corrections and the Department of Human
69.27 	Services must establish a procedure for evaluating periodic
69.28 	requests by department employees for qualification for
69.29 	recommendation by the commissioner for inclusion of the
69.30 	employment position in the correctional facility or human
69.31 	services facility in the correctional retirement plan and for
69.32 	periodically determining employment positions that no longer
69.33 	qualify for continued correctional retirement plan coverage.
69.34 	(b) The procedure must provide for an evaluation of the
69.35 	extent of the employee's working time spent in direct contact
69.36 	with patients or inmates, the extent of the physical hazard that
70.1 	the employee is routinely subjected to in the course of
70.2 	employment, and the extent of intervention routinely expected of
70.3 	the employee in the event of a facility incident.  The
70.4 	percentage of routine direct contact with inmates or patients
70.5 	may not be less than 75 percent.
70.6 	(c) The applicable commissioner shall notify the employee
70.7 	of the determination of the appropriateness of recommending the
70.8 	employment position for inclusion in the correctional retirement
70.9 	plan, if the evaluation procedure results in a finding that the
70.10 	employee:
70.11 	(1) routinely spends 75 percent of the employee's time in
70.12 	direct contact with inmates or patients; and 
70.13 	(2) is regularly engaged in the rehabilitation, treatment,
70.14 	custody, or supervision of inmates or patients.
70.15 	(d) After providing the affected employee an opportunity to
70.16 	dispute or clarify any evaluation determinations, if the
70.17 	commissioner determines that the employment position is
70.18 	appropriate for inclusion in the correctional retirement plan,
70.19 	the commissioner shall forward that recommendation and
70.20 	supporting documentation to the chair of the Legislative
70.21 	Commission on Pensions and Retirement, the chair of the State
70.22 	and Local Governmental Operations Committee of the senate, the
70.23 	chair of the Governmental Operations and Veterans Affairs Policy
70.24 	Committee of the house of representatives, and the executive
70.25 	director of the Legislative Commission on Pensions and
70.26 	Retirement in the form of the appropriate proposed legislation.
70.27 	The recommendation must be forwarded to the legislature before
70.28 	January 15 for the recommendation to be considered in that
70.29 	year's legislative session.

70.30 	Sec. 4. Minnesota Statutes 2004, section 352B.01,
70.31 	subdivision 2, is amended to read:
70.32 		Subd. 2.Member.  "Member" means:
70.33 	(1) a State Patrol member currently employed after June 30,
70.34 	1943, under section 299D.03 by the state, who is a peace officer
70.35 	under section 626.84, and whose salary or compensation is paid
70.36 	out of state funds;
71.1 	(2) a conservation officer employed under section 97A.201,
71.2 	currently employed by the state, whose salary or compensation is
71.3 	paid out of state funds;
71.4 	(3) a crime bureau officer who was employed by the crime
71.5 	bureau and was a member of the Highway Patrolmen's retirement
71.6 	fund on July 1, 1978, whether or not that person has the power
71.7 	of arrest by warrant after that date, or who is employed as
71.8 	police personnel, with powers of arrest by warrant under section
71.9 	299C.04, and who is currently employed by the state, and whose
71.10 	salary or compensation is paid out of state funds;
71.11 	(4) a person who is employed by the state in the Department
71.12 	of Public Safety in a data processing management position with
71.13 	salary or compensation paid from state funds, who was a crime
71.14 	bureau officer covered by the State Patrol retirement plan on
71.15 	August 15, 1987, and who was initially hired in the data
71.16 	processing management position within the department during
71.17 	September 1987, or January 1988, with membership continuing for
71.18 	the duration of the person's employment in that position,
71.19 	whether or not the person has the power of arrest by warrant
71.20 	after August 15, 1987;
71.21 	(5) a public safety employee defined as a peace officer in
71.22 	section 626.84, subdivision 1, paragraph (c), and employed with
71.23 	the Division of Alcohol and Gambling Enforcement under section
71.24 	299L.01; and 
71.25 	(6) a Fugitive Apprehension Unit officer after October 31,
71.26 	2000, employed by the Office of Special Investigations of the
71.27 	Department of Corrections who is a peace officer under section
71.28 	626.84; and 
71.29 	(7) an employee of the Department of Commerce defined as a
71.30 	peace officer in section 626.84, subdivision 1, paragraph (c),
71.31 	who is employed by the Division of Insurance Fraud Prevention
71.32 	under section 45.0135 after January 1, 2005, and who has not
71.33 	attained the mandatory retirement age specified in section
71.34 	43A.34, subdivision 4.

71.35 	Sec. 5. Minnesota Statutes 2004, section 353.01,
71.36 	subdivision 6, is amended to read:
72.1 		Subd. 6.Governmental subdivision.  (a) "Governmental
72.2 	subdivision" means a county, city, town, school district within
72.3 	this state, or a department or unit of state government, or any
72.4 	public body whose revenues are derived from taxation, fees,
72.5 	assessments or from other sources.
72.6 	(b) Governmental subdivision also means the Public
72.7 	Employees Retirement Association, the League of Minnesota
72.8 	Cities, the Association of Metropolitan Municipalities, public
72.9 	hospitals owned or operated by, or an integral part of, a
72.10 	governmental subdivision or governmental subdivisions, the
72.11 	Association of Minnesota Counties, the Metropolitan Intercounty
72.12 	Association, the Minnesota Municipal Utilities Association, the
72.13 	Metropolitan Airports Commission, the University of Minnesota
72.14 	with respect to police officers covered by the public employees
72.15 	police and fire retirement plan,the Minneapolis Employees
72.16 	Retirement Fund for employment initially commenced after June
72.17 	30, 1979, the Range Association of Municipalities and Schools,
72.18 	soil and water conservation districts, economic development
72.19 	authorities created or operating under sections 469.090 to
72.20 	469.108, the Port Authority of the city of St. Paul, the Spring
72.21 	Lake Park Fire Department, incorporated, the Lake Johanna
72.22 	Volunteer Fire Department, incorporated, the Red Wing
72.23 	Environmental Learning Center, and the Dakota County
72.24 	Agricultural Society.
72.25 	(c) Governmental subdivision does not mean any municipal
72.26 	housing and redevelopment authority organized under the
72.27 	provisions of sections 469.001 to 469.047; or any port authority
72.28 	organized under sections 469.048 to 469.089 other than the Port
72.29 	Authority of the city of St. Paul; or any hospital district
72.30 	organized or reorganized prior to July 1, 1975, under sections
72.31 	447.31 to 447.37 or the successor of the district, nor the
72.32 	Minneapolis Community Development Agency.

72.33 	Sec. 6. Minnesota Statutes 2004, section 353.64, is
72.34 	amended by adding a subdivision to read:
72.35 		Subd. 6a.University of minnesota police officers;
72.36 	inclusions and exclusions. (a) Unless paragraph (b) applies, a
73.1 	person who is employed as a peace officer by the University of
73.2 	Minnesota at any campus or facility of the university, who is
73.3 	required by the university to be and is licensed as a peace
73.4 	officer by the Minnesota Peace Officer Standards and Training
73.5 	Board under sections 626.84 to 626.863, and who has the full
73.6 	power of arrest is a member of the public employees police and
73.7 	fire retirement plan.
73.8 	(b) A police officer employed by the University of
73.9 	Minnesota who is required by the Board of Regents to contribute
73.10 	to the University of Minnesota faculty retirement plan is not
73.11 	eligible to be a member of the public employees police and fire
73.12 	retirement plan.

73.13 	Sec. 7. Minnesota Statutes 2004, section 354B.21,
73.14 	subdivision 2, is amended to read:
73.15 		Subd. 2.Coverage; election.  (a) An eligible person is
73.16 	entitled to elect coverage by the plan.  If the eligible person
73.17 	does not make a timely election of coverage by the plan, the
73.18 	person has the coverage specified in subdivision 3.
73.19 	(b) For eligible persons who were employed by the former
73.20 	state university system or the former community college system
73.21 	before May 1, 1995, the person has the retirement coverage that
73.22 	the person had for employment immediately before May 1, 1995.
73.23 	(c) (b) For all other eligible persons, the election of
73.24 	coverage must be made within 90 days of May 10, 1995, or 90 days
73.25 	of receiving notice from the employer of the options available
73.26 	under this section, whichever occurs later unless otherwise
73.27 	specified in this section, the eligible person is authorized to
73.28 	elect prospective Teachers Retirement Association plan coverage
73.29 	rather than coverage by the plan established by this chapter.
73.30 	The election of prospective Teachers Retirement Association plan
73.31 	coverage shall be made within one year of commencing eligible
73.32 	Minnesota State Colleges and Universities system employment.  If
73.33 	an election is not made within the specified election period due
73.34 	to a termination of Minnesota State Colleges and Universities
73.35 	system employment, an election may be made within 90 days of
73.36 	returning to eligible Minnesota State Colleges and Universities
74.1 	system employment.  All elections are irrevocable.  Prior to
74.2 	making an election the eligible person shall be covered by the
74.3 	plan indicated as default coverage under subdivision 3.
74.4 	(c) A purchase of service credit in the Teachers Retirement
74.5 	Association plan for any period or periods of Minnesota State
74.6 	Colleges and Universities system employment occurring prior to
74.7 	the election under paragraph (b) is prohibited.

74.8 	Sec. 8. Minnesota Statutes 2004, section 354B.21,
74.9 	subdivision 3, is amended to read:
74.10 		Subd. 3.Default coverage.  (a) Prior to making an
74.11 	election under subdivision 2, or if an eligible person fails to
74.12 	elect coverage by the plan under subdivision 2 or if the person
74.13 	fails to make a timely election, the following retirement
74.14 	coverage applies:
74.15 	(1) for employees of the board who are employed in faculty
74.16 	positions in the technical colleges, in the state universities
74.17 	or in the community colleges, the retirement coverage is by the
74.18 	plan established by this chapter;
74.19 	(2) for employees of the board who are employed in faculty
74.20 	positions in the technical colleges, the retirement coverage is
74.21 	by the plan established by this chapter unless on June 30, 1997,
74.22 	the employee was a member of the Teachers Retirement Association
74.23 	established under chapter 354 and then the retirement coverage
74.24 	is by the Teachers Retirement Association, or, unless the
74.25 	employee was a member of a first class city teacher retirement
74.26 	fund established under chapter 354A on June 30, 1995, and then
74.27 	the retirement coverage is by the Duluth Teachers Retirement
74.28 	Fund Association if the person was a member of that plan on June
74.29 	30, 1995, or the Minneapolis Teachers Retirement Fund
74.30 	Association if the person was a member of that plan on June 30,
74.31 	1995, or the St. Paul Teachers Retirement Fund Association if
74.32 	the person was a member of that plan on June 30, 1995; and
74.33 	(3) for employees of the board who are employed in eligible
74.34 	unclassified administrative positions, the retirement coverage
74.35 	is by the plan established by this chapter.
74.36 	(b) If an employee fails to correctly certify prior
75.1 	membership in the Teachers Retirement Association to the
75.2 	Minnesota State colleges and Universities system, the system
75.3 	shall not pay interest on employee contributions, employer
75.4 	contributions, and additional employer contributions to the
75.5 	Teachers Retirement Association under section 354.52,
75.6 	subdivision 4.

75.7 	Sec. 9. EFFECTIVE DATE.
 75.8 	(a) Sections 1, 3, 5, and 6 are effective July 1, 2005.
75.9 	(b) Sections 2 and 4 are effective retroactively from
75.10 	January 1, 2005.
75.11 	(c) Sections 7 and 8 are effective the day following final
75.12 	enactment.

75.13 	ARTICLE 6
75.14 	RETIREMENT CONTRIBUTIONS

75.15 	Section 1. Minnesota Statutes 2004, section 353.28,
75.16 	subdivision 5, is amended to read:
75.17 		Subd. 5.Interest charges chargeable on amounts due.  Any
75.18 	amount due under this section or section 353.27, subdivision 4,
75.19 	is payable with interest at an annual compound rate of 8.5
75.20 	percent compounded annually from the date due until the date
75.21 	payment is received by the association, with a minimum interest
75.22 	charge of $10. Interest for past due payments of excess police
75.23 	state aid under section 69.031, subdivision 5, must be charged
75.24 	at an annual rate of 8.5 percent compounded annually.

75.25 	Sec. 2. Minnesota Statutes 2004, section 353.28,
75.26 	subdivision 6, is amended to read:
75.27 		Subd. 6.failure to pay collection of unpaid amounts. (a) 
75.28 	If the a governmental subdivision which receives the direct
75.29 	proceeds of property taxation fails to pay amounts an amount due
75.30 	under chapters chapter 353, 353A, 353B, 353C, and or 353D or
75.31 	fails to make payments of excess police state aid to the public
75.32 	employees police and fire fund under section 69.031, subdivision
75.33 	5, the executive director shall certify those amounts the amount 
75.34 	to the governmental subdivision for payment.  If the
75.35 	governmental subdivision fails to remit the sum so due in a
75.36 	timely fashion, the executive director shall certify amounts the
76.1 	amount to the applicable county auditor for collection.  The
76.2 	county auditor shall collect such amounts the amount out of the
76.3 	revenue of the governmental subdivision, or shall add them the
76.4 	amount to the levy of the governmental subdivision and make
76.5 	payment directly to the association.  This tax shall must be
76.6 	levied, collected, and apportioned in the manner that other
76.7 	taxes are levied, collected, and apportioned.
76.8 	(b) If a governmental subdivision which is not funded
76.9 	directly from the proceeds of property taxation fails to pay an
76.10 	amount due under this chapter, the executive director shall
76.11 	certify the amount to the governmental subdivision for payment.
76.12 	If the governmental subdivision fails to pay the amount for a
76.13 	period of 60 days after certification, the executive director
76.14 	shall certify the amount to the commissioner of finance, who
76.15 	shall deduct the amount from any subsequent state-aid payment or
76.16 	state appropriation amount applicable to the governmental
76.17 	subdivision.

76.18 	Sec. 3. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; INTEREST
76.19 	ON SERVICE CREDIT PURCHASE PAYMENT RETURN.
 76.20 	If a former employee of the Minneapolis Community
76.21 	Development Agency made a prior service credit purchase payment
76.22 	under Minnesota Statutes 2002, section 356.55, in an amount that
76.23 	is greater than the actually required payment amount because of
76.24 	the use of an inaccurate salary figure or other similar
76.25 	reporting or clerical error, the general employees retirement
76.26 	plan of the Public Employees Retirement Association may pay
76.27 	interest on the overage amount at an annual compound rate of six
76.28 	percent per year.

76.29 	Sec. 4. RETURN OF PRIOR SERVICE CREDIT PURCHASE PAYMENT
76.30 	FOR CERTAIN MINNEAPOLIS CITY EMPLOYEES.
 76.31 	(a) An eligible person, upon written application, may
76.32 	receive a return of a prior service credit purchase payment
76.33 	under Minnesota Statutes 2002, section 356.55, plus interest on
76.34 	the amount at an annual compound rate of six percent per year.
76.35 	The return amount and interest must be made in an
76.36 	institution-to-institution transfer to a federal tax qualified
77.1 	retirement plan or account and may not be paid directly to an
77.2 	individual.
77.3 	(b) An eligible person is a person who was an employee of
77.4 	the Minneapolis Community Development Agency and made a payment
77.5 	for the purchase of prior service credit under Laws 2003,
77.6 	chapter 127, article 12, section 31, subdivision 4, and
77.7 	Minnesota Statutes 2002, section 356.55, in an erroneous amount
77.8 	because of an inaccurate salary figure supplied by the employing
77.9 	agency.

77.10 	Sec. 5. EFFECTIVE DATE.
 77.11 	(a) Sections 1 and 2 are effective July 1, 2005.
77.12 	(b) Sections 3 and 4 are effective the day following final
77.13 	enactment.
77.14 	(c) Section 4 expires June 30, 2005.

77.15 	ARTICLE 7
77.16 	PENSION BENEFITS UPON PRIVATIZATION

77.17 	Section 1. Minnesota Statutes 2004, section 353F.02,
77.18 	subdivision 4, is amended to read:
77.19 		Subd. 4.Medical facility.  "Medical facility" means:
77.20 	(1) Bridges Medical Services;
77.21 	(2) the Fair Oaks Lodge, Wadena;
77.22 	(2) (3) the Glencoe Area Health Center;
77.23 	(3) (4) the Hutchinson Area Health Care;
77.24 	(5) the Kanabec Hospital;
77.25 	(4) (6) the Luverne Public Hospital;
77.26 	(7) the Northfield Hospital;
77.27 	(5) (8) the RenVilla Nursing Home;
77.28 	(6) (9) the Renville County Hospital in Olivia;
77.29 	(7) (10) the St. Peter Community Healthcare Center; and
77.30 	(8) (11) the Waconia-Ridgeview Medical Center.

77.31 	Sec. 2. Minnesota Statutes 2004, section 471A.10, is
77.32 	amended to read:
77.33 	471A.10 PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF EXISTING
77.34 	FACILITY.
77.35 	(a) Unless expressly provided therein, and except as
77.36 	provided in this section, no state law, charter provision, or
78.1 	ordinance of a municipality relating to public employees shall
78.2 	apply to a person solely by reason of that person's employment
78.3 	by a private vendor in connection with services rendered under a
78.4 	service contract.
78.5 	(b) A private vendor purchasing or leasing existing related
78.6 	facilities from a municipality or operating or maintaining the
78.7 	facility shall recognize all exclusive bargaining
78.8 	representatives and existing labor agreements and those
78.9 	agreements shall remain in force until they expire by their
78.10 	terms.  Persons who are not who were employed by a municipality
78.11 	in a related facility at the time of and who were members of the
78.12 	Public Employees Retirement Association general plan due to that
78.13 	employment are not permitted to remain as active members of the
78.14 	plan following a lease or purchase of the facility by the a 
78.15 	private vendor are not "public employees" within the meaning of
78.16 	the Public Employees Retirement Act, chapter 353.  Persons
78.17 	employed by a municipality in a related facility at the time of
78.18 	a lease or purchase of the facility by a private vendor shall
78.19 	continue to be considered to be "public employees" within the
78.20 	meaning of the Public Employees Retirement Act, chapter 353, but
78.21 	may elect to terminate their participation in the Public
78.22 	Employees Retirement Association as provided in this section.
78.23 	Each such employee may exercise the election annually on the
78.24 	anniversary of the person's initial employment by the
78.25 	municipality.  An employee electing to terminate participation
78.26 	in the association is entitled to benefits that the employee
78.27 	would be entitled to if terminating public employment and may
78.28 	participate in a retirement program established by the private
78.29 	vendor.

78.30 	Sec. 3. Laws 2004, chapter 267, article 12, section 4, is
78.31 	amended to read:
78.32 	Sec. 4EFFECTIVE DATE.
 78.33 	(a) Section 1, relating to the Fair Oaks Lodge, Wadena, is
78.34 	effective upon the latter of:
78.35 	(1) the day after the governing body of Todd County and its
78.36 	chief clerical officer timely complete their compliance with
79.1 	Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
79.2 	(2) the day after the governing body of Wadena County and
79.3 	its chief clerical officer timely complete their compliance with
79.4 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.
79.5 	(b) Section 1, relating to the RenVilla Nursing Home, is
79.6 	effective upon the latter of:
79.7 	(1) the day after the governing body of the city of
79.8 	Renville and its chief clerical officer timely complete their
79.9 	compliance with Minnesota Statutes, section 645.021,
79.10 	subdivisions 2 and 3, except that the certificate of approval
79.11 	must be filed before January 1, 2006; and
79.12 	(2) the first day of the month next following certification
79.13 	to the governing body of the city of Renville by the executive
79.14 	director of the Public Employees Retirement Association that the
79.15 	actuarial accrued liability of the special benefit coverage
79.16 	proposed for extension to the privatized RenVilla Nursing Home
79.17 	employees under section 1 does not exceed the actuarial gain
79.18 	otherwise to be accrued by the Public Employees Retirement
79.19 	Association, as calculated by the consulting actuary retained by
79.20 	the Legislative Commission on Pensions and Retirement, or the
79.21 	actuary retained under Minnesota Statutes, section 356.214,
79.22 	whichever is applicable.
79.23 	(c) The cost of the actuarial calculations must be borne by
79.24 	the city of Renville or the purchaser of the RenVilla Nursing
79.25 	Home.
79.26 	(d) Section 1, relating to the St. Peter Community
79.27 	Healthcare Center, is effective upon the latter of:
79.28 	(1) the day after the governing body of the city of St.
79.29 	Peter and its chief clerical officer timely complete their
79.30 	compliance with Minnesota Statutes, section 645.021,
79.31 	subdivisions 2 and 3; and
79.32 	(2) the first day of the month next following certification
79.33 	to the governing body of the city of St. Peter by the executive
79.34 	director of the Public Employees Retirement Association that the
79.35 	actuarial accrued liability of the special benefit coverage
79.36 	proposed for extension to the privatized St. Peter Community
80.1 	Healthcare Center employees under section 1 does not exceed the
80.2 	actuarial gain otherwise to be accrued by the Public Employees
80.3 	Retirement Association, as calculated by the consulting actuary
80.4 	retained by the Legislative Commission on Pensions and
80.5 	Retirement, or the actuary retained under Minnesota Statutes,
80.6 	section 356.214, whichever is applicable.
80.7 	(e) The cost of the actuarial calculations must be borne by
80.8 	the city of St. Peter or the purchaser of the St. Peter
80.9 	Community Healthcare Center.
80.10 	(f) If the required actions under paragraphs (b) and (c)
80.11 	occur, section 1 applies retroactively to the RenVilla Nursing
80.12 	Home as of the date of privatization.
80.13 	(g) If the required actions under paragraph (a) occur,
80.14 	section 1 applies retroactively to Fair Oaks Lodge, Wadena, as
80.15 	of January 1, 2004.
80.16 	(h) Sections 2 and 3 are effective on the day following
80.17 	final enactment.

80.18 	Sec. 4. EFFECTIVE DATE.
 80.19 	(a) Section 1, relating to Bridges Medical Services, is
80.20 	effective upon the later of:
80.21 	(1) the day after the governing body of the city of Ada and
80.22 	its chief clerical officer timely complete their compliance with
80.23 	Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 
80.24 	(2) the first day of the month next following certification
80.25 	to the governing body of the city of Ada by the executive
80.26 	director of the Public Employees Retirement Association that the
80.27 	actuarial accrued liability of the special benefit coverage
80.28 	proposed for extension to the privatized Bridges Medical
80.29 	Services employees under section 1 does not exceed the actuarial
80.30 	gain otherwise to be accrued by the Public Employees Retirement
80.31 	Association, as calculated by the consulting actuary retained
80.32 	under Minnesota Statutes, section 356.214.
80.33 	(b) Section 1, relating to the Hutchinson Area Health Care,
80.34 	is effective upon the later of:
80.35 	(1) the day after the governing body of the city of
80.36 	Hutchinson and its chief clerical officer timely complete their
81.1 	compliance with Minnesota Statutes, section 645.021,
81.2 	subdivisions 2 and 3; and 
81.3 	(2) the first day of the month next following certification
81.4 	to the governing body of the city of Hutchinson by the executive
81.5 	director of the Public Employees Retirement Association that the
81.6 	actuarial accrued liability of the special benefit coverage
81.7 	proposed for extension to the privatized Hutchinson Area Health
81.8 	Care employees under section 1 does not exceed the actuarial
81.9 	gain otherwise to be accrued by the Public Employees Retirement
81.10 	Association, as calculated by the consulting actuary retained by
81.11 	the Legislative Commission on Pensions and Retirement.
81.12 	(c) Section 1, relating to the Northfield Hospital, is
81.13 	effective upon the later of:
81.14 	(1) the day after the governing body of the city of
81.15 	Northfield and its chief clerical officer timely complete their
81.16 	compliance with Minnesota Statutes, section 645.021,
81.17 	subdivisions 2 and 3; and 
81.18 	(2) the first day of the month next following certification
81.19 	to the governing body of the city of Northfield by the executive
81.20 	director of the Public Employees Retirement Association that the
81.21 	actuarial accrued liability of the special benefit coverage
81.22 	proposed for extension to the privatized Northfield Hospital
81.23 	employees under section 1 does not exceed the actuarial gain
81.24 	otherwise to be accrued by the Public Employees Retirement
81.25 	Association, as calculated by the consulting actuary retained by
81.26 	the Legislative Commission on Pensions and Retirement.
81.27 	(d) The cost of the actuarial calculations must be borne by
81.28 	the facility, the city in which the facility is located, or the
81.29 	purchaser of the facility.
81.30 	(e) If the required actions in paragraphs (a), (b), or (c)
81.31 	and (d) occur, section 1 applies retroactively to the date of
81.32 	privatization.
81.33 	(f) Section 3 is effective the day following final
81.34 	enactment.
81.35 	(g) Section 2 is effective the day following final
81.36 	enactment and applies to privatizations occurring on or after
82.1 	the effective date.

82.2 	ARTICLE 8
82.3 	FIRST CLASS CITY TEACHER
82.4 	RETIREMENT FUND ASSOCIATIONS

82.5 	Section 1. Minnesota Statutes 2004, section 354A.021, is
82.6 	amended by adding a subdivision to read:
82.7 		Subd. 9.Updated articles of incorporation and bylaws;
82.8 	filing. (a) On or before July 1, 2006, and within six months of
82.9 	the date of the approval of any amendment to the articles of
82.10 	incorporation or bylaws, the chief administrative officer of
82.11 	each first class city teacher retirement fund association shall
82.12 	prepare and publish an updated compilation of the articles of
82.13 	incorporation and the bylaws of the association.
82.14 	(b) The chief administrative officer of the first class
82.15 	city teacher retirement fund association must certify the
82.16 	accuracy and the completeness of the compilation.
82.17 	(c) The compilation of the articles of incorporation and
82.18 	bylaws of a first class city teacher retirement fund association
82.19 	must contain an index.
82.20 	(d) The compilation must be made available to association
82.21 	members and other interested parties.  The association may
82.22 	charge a fee for a copy that reflects the price of printing or
82.23 	otherwise producing the copy.  Two copies of the compilation
82.24 	must be filed, without charge, by each retirement fund
82.25 	association with the Legislation Commission on Pensions and
82.26 	Retirement, the Legislative Reference Library, the state
82.27 	auditor, the commissioner of education, the chancellor of the
82.28 	Minnesota State Colleges and Universities system, and the
82.29 	superintendent of the applicable school district.
82.30 	(e) A first class city teacher retirement fund association
82.31 	may contract with the revisor of statutes for the preparation of
82.32 	the compilation.
82.33 	(f) If a first class city teacher retirement fund
82.34 	association makes an updated copy of its articles of
82.35 	incorporation and bylaws available on its Web site, the
82.36 	retirement fund association is not obligated to file a hard copy
83.1 	of the documents under paragraph (d) for the applicable filing
83.2 	period.

83.3 	Sec. 2. EFFECTIVE DATE.
 83.4 	Section 1 is effective July 1, 2005.

83.5 	ARTICLE 9
83.6 	MINNESOTA STATE COLLEGES AND UNIVERSITIES
83.7 	INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES

83.8 	Section 1. Minnesota Statutes 2004, section 354B.25,
83.9 	subdivision 2, is amended to read:
83.10 		Subd. 2.Investment options. (a) The plan administrator
83.11 	shall arrange for the purchase of investment products.
83.12 	(b) The investment products must be purchased with
83.13 	contributions under section 354B.23 or with money or assets
83.14 	otherwise provided by law by authority of the board.
83.15 	(c) Various investment accounts offered through the
83.16 	Minnesota supplemental investment fund established under section
83.17 	11A.17 and administered by the State Board of Investment is one
83.18 	of the may be included as investment products for the individual
83.19 	retirement account plan.  Direct access must also be provided to
83.20 	lower expense and no-load mutual funds, as those terms are
83.21 	defined by the federal Securities and Exchange Commission,
83.22 	including stock funds, bond funds, and balanced funds.  Other
83.23 	investment products or combination of investment products which
83.24 	may be included are:
83.25 	(1) savings accounts at federally insured financial
83.26 	institutions;
83.27 	(2) life insurance contracts, fixed and variable annuity
83.28 	contracts from companies that are subject to regulation by the
83.29 	commerce commissioner;
83.30 	(3) investment options from open-ended investment companies
83.31 	registered under the federal Investment Company Act of 1940,
83.32 	United States Code, title 15, sections 80a-1 to 80a-64;
83.33 	(4) investment options from a firm that is a registered
83.34 	investment advisor under the federal Investment Advisers Act of
83.35 	1940, United States Code, title 15, sections 80b-1 to 80b-21;
83.36 	and
84.1 	(5) investment options of a bank as defined in United
84.2 	States Code, title 15, section 80b-2, subsection (a), paragraph
84.3 	2, or a bank holding company as defined in the Bank Holding
84.4 	Company Act of 1956, United States Code, title 12, section 1841,
84.5 	subsection (a), paragraph (1).

84.6 	Sec. 2. EFFECTIVE DATE.
 84.7 	Section 1 is effective the day following final enactment.

84.8 	ARTICLE 10
84.9 	SUPPLEMENTAL RETIREMENT PLANS

84.10 	Section 1. Minnesota Statutes 2004, section 356.24,
84.11 	subdivision 1, is amended to read:
84.12 		Subdivision 1.Restriction; exceptions.  It is unlawful
84.13 	for a school district or other governmental subdivision or state
84.14 	agency to levy taxes for, or to contribute public funds to a
84.15 	supplemental pension or deferred compensation plan that is
84.16 	established, maintained, and operated in addition to a primary
84.17 	pension program for the benefit of the governmental subdivision
84.18 	employees other than:
84.19 	(1) to a supplemental pension plan that was established,
84.20 	maintained, and operated before May 6, 1971;
84.21 	(2) to a plan that provides solely for group health,
84.22 	hospital, disability, or death benefits;
84.23 	(3) to the individual retirement account plan established
84.24 	by chapter 354B;
84.25 	(4) to a plan that provides solely for severance pay under
84.26 	section 465.72 to a retiring or terminating employee;
84.27 	(5) for employees other than personnel employed by the
84.28 	Board of Trustees of the Minnesota State Colleges and
84.29 	Universities and covered under the Higher Education Supplemental
84.30 	Retirement Plan under chapter 354C, if the supplemental plan
84.31 	coverage is provided for in a personnel policy of the public
84.32 	employer or in the collective bargaining agreement between the
84.33 	public employer and the exclusive representative of public
84.34 	employees in an appropriate unit, in an amount matching employee
84.35 	contributions on a dollar for dollar basis, but not to exceed an
84.36 	employer contribution of $2,000 a year per employee;
85.1 	(i) to the state of Minnesota deferred compensation plan
85.2 	under section 352.96; or
85.3 	(ii) in payment of the applicable portion of the
85.4 	contribution made to any investment eligible under section
85.5 	403(b) of the Internal Revenue Code, if the employing unit has
85.6 	complied with any applicable pension plan provisions of the
85.7 	Internal Revenue Code with respect to the tax-sheltered annuity
85.8 	program during the preceding calendar year;
85.9 	(6) for personnel employed by the Board of Trustees of the
85.10 	Minnesota State Colleges and Universities and not covered by
85.11 	clause (5), to the supplemental retirement plan under chapter
85.12 	354C, if the supplemental plan coverage is provided for in a
85.13 	personnel policy or in the collective bargaining agreement of
85.14 	the public employer with the exclusive representative of the
85.15 	covered employees in an appropriate unit, in an amount matching
85.16 	employee contributions on a dollar for dollar basis, but not to
85.17 	exceed an employer contribution of $2,700 a year for each
85.18 	employee;
85.19 	(7) to a supplemental plan or to a governmental trust to
85.20 	save for postretirement health care expenses qualified for
85.21 	tax-preferred treatment under the Internal Revenue Code, if the
85.22 	supplemental plan coverage is provided for in a personnel policy
85.23 	or in the collective bargaining agreement of a public employer
85.24 	with the exclusive representative of the covered employees in an
85.25 	appropriate unit;
85.26 	(8) to the laborer's national industrial pension fund or to
85.27 	a laborer's local pension fund for the employees of a
85.28 	governmental subdivision who are covered by a collective
85.29 	bargaining agreement that provides for coverage by that fund and
85.30 	that sets forth a fund contribution rate, but not to exceed an
85.31 	employer contribution of $2,000 $5,000 per year per employee;
85.32 	(9) to the plumbers' and pipefitters' national pension fund
85.33 	or to a plumbers' and pipefitters' local pension fund for the
85.34 	employees of a governmental subdivision who are covered by a
85.35 	collective bargaining agreement that provides for coverage by
85.36 	that fund and that sets forth a fund contribution rate, but not
86.1 	to exceed an employer contribution of $2,000 $5,000 per year per
86.2 	employee;
86.3 	(10) to the international union of operating engineers
86.4 	pension fund for the employees of a governmental subdivision who
86.5 	are covered by a collective bargaining agreement that provides
86.6 	for coverage by that fund and that sets forth a fund
86.7 	contribution rate, but not to exceed an employer contribution of
86.8 	$2,000 $5,000 per year per employee; or
86.9 	(11) to a supplemental plan organized and operated under
86.10 	the federal Internal Revenue Code, as amended, that is wholly
86.11 	and solely funded by the employee's accumulated sick leave,
86.12 	accumulated vacation leave, and accumulated severance pay at the
86.13 	date of retirement or the termination of active employment.

86.14 	Sec. 2. EFFECTIVE DATE.
 86.15 	Section 1 is effective the day following final enactment.

86.16 	ARTICLE 11
86.17 	VOLUNTEER FIREFIGHTER RELIEF
86.18 	ASSOCIATION CHANGES

86.19 	Section 1. Minnesota Statutes 2004, section 69.051,
86.20 	subdivision 1, is amended to read:
86.21 		Subdivision 1.Financial report and audit.  The board of
86.22 	each salaried firefighters relief association, police relief
86.23 	association, and volunteer firefighters relief association as
86.24 	defined in section 424A.001, subdivision 4, with assets of at
86.25 	least $200,000 or liabilities of at least $200,000 in the prior
86.26 	year or in any previous year, according to the most recent 
86.27 	applicable actuarial valuation or financial report if no
86.28 	valuation is required, shall:
86.29 	(1) prepare a financial report covering the special and
86.30 	general funds of the relief association for the preceding fiscal
86.31 	year on a form prescribed by the state auditor.  The financial
86.32 	report shall must contain financial statements and disclosures
86.33 	which present the true financial condition of the relief
86.34 	association and the results of relief association operations in
86.35 	conformity with generally accepted accounting principles and in
86.36 	compliance with the regulatory, financing and funding provisions
87.1 	of this chapter and any other applicable laws.  The financial
87.2 	report shall must be countersigned by the municipal clerk or
87.3 	clerk-treasurer of the municipality in which the relief
87.4 	association is located if the relief association is a
87.5 	firefighters relief association which is directly associated
87.6 	with a municipal fire department or is a police relief
87.7 	association, or countersigned by the secretary of the
87.8 	independent nonprofit firefighting corporation and by the
87.9 	municipal clerk or clerk-treasurer of the largest municipality
87.10 	in population which contracts with the independent nonprofit
87.11 	firefighting corporation if the volunteer firefighter relief
87.12 	association is a subsidiary of an independent nonprofit
87.13 	firefighting corporation;
87.14 	(2) file the financial report in its office for public
87.15 	inspection and present it to the city council after the close of
87.16 	the fiscal year.  One copy of the financial report shall must be
87.17 	furnished to the state auditor after the close of the fiscal
87.18 	year; and
87.19 	(3) submit to the state auditor audited financial
87.20 	statements which have been attested to by a certified public
87.21 	accountant, public accountant, or the state auditor within 180
87.22 	days after the close of the fiscal year.  The state auditor may
87.23 	accept this report in lieu of the report required in clause (2).

87.24 	Sec. 2. Minnesota Statutes 2004, section 69.051,
87.25 	subdivision 1a, is amended to read:
87.26 		Subd. 1a.Financial statement.  (a) The board of each
87.27 	volunteer firefighters relief association, as defined in section
87.28 	424A.001, subdivision 4, with assets of less than $200,000 and
87.29 	liabilities less than $200,000, according to the most recent
87.30 	financial report, shall that is not required to file a financial
87.31 	report and audit under subdivision 1 must prepare a detailed
87.32 	statement of the financial affairs for the preceding fiscal year
87.33 	of the relief association's special and general funds in the
87.34 	style and form prescribed by the state auditor.  The detailed
87.35 	statement must show the sources and amounts of all money
87.36 	received; all disbursements, accounts payable and accounts
88.1 	receivable; the amount of money remaining in the treasury; total
88.2 	assets including a listing of all investments; the accrued
88.3 	liabilities; and all items necessary to show accurately the
88.4 	revenues and expenditures and financial position of the relief
88.5 	association.
88.6 	(b) The detailed financial statement required under
88.7 	paragraph (a) must be certified by an independent public
88.8 	accountant or auditor or by the auditor or accountant who
88.9 	regularly examines or audits the financial transactions of the
88.10 	municipality.  In addition to certifying the financial condition
88.11 	of the special and general funds of the relief association, the
88.12 	accountant or auditor conducting the examination shall give an
88.13 	opinion as to the condition of the special and general funds of
88.14 	the relief association, and shall comment upon any exceptions to
88.15 	the report.  The independent accountant or auditor shall must 
88.16 	have at least five years of public accounting, auditing, or
88.17 	similar experience, and shall must not be an active, inactive,
88.18 	or retired member of the relief association or the fire or
88.19 	police department.
88.20 	(c) The detailed statement required under paragraph (a)
88.21 	must be countersigned by the municipal clerk or clerk-treasurer
88.22 	of the municipality, or, where applicable, by the secretary of
88.23 	the independent nonprofit firefighting corporation and by the
88.24 	municipal clerk or clerk-treasurer of the largest municipality
88.25 	in population which contracts with the independent nonprofit
88.26 	firefighting corporation if the relief association is a
88.27 	subsidiary of an independent nonprofit firefighting corporation.
88.28 	(d) The volunteer firefighters' relief association board
88.29 	must file the detailed statement required under paragraph (a) in
88.30 	the relief association office for public inspection and present
88.31 	it to the city council within 45 days after the close of the
88.32 	fiscal year, and must submit a copy of the detailed statement to
88.33 	the state auditor within 90 days of the close of the fiscal year.

88.34 	Sec. 3. Minnesota Statutes 2004, section 69.771, is
88.35 	amended to read:
88.36 	69.771 VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION
89.1 	FINANCING GUIDELINES ACT; APPLICATION.
89.2 		Subdivision 1.Covered relief associations. The
89.3 	applicable provisions of sections 69.771 to 69.776shall apply
89.4 	to any firefighters' relief association other than a relief
89.5 	association enumerated in section 69.77, subdivision 1a, which
89.6 	is organized under any laws of this state, which is composed of
89.7 	volunteer firefighters or is composed partially of volunteer
89.8 	firefighters and partially of salaried firefighters with
89.9 	retirement coverage provided by the public employees police and
89.10 	fire fund and which, in either case,operates subject to the
89.11 	service pension minimum requirements for entitlement and
89.12 	maximums contained in section 424A.02, or subject to a special
89.13 	law modifying those requirements or maximums.
89.14 		Subd. 2.Authorized employer support for a relief
89.15 	association. Notwithstanding any law to the contrary, a
89.16 	municipality may lawfully contribute public funds, including the
89.17 	transfer of any applicable fire state aid, or may levy property
89.18 	taxes for the support of a firefighters' relief association
89.19 	specified in subdivision 1, however organized, which provides
89.20 	retirement coverage or pays a service pension to retired
89.21 	firefighter or a retirement benefit to a disabled firefighter or
89.22 	a surviving dependent of either an active or retired firefighter
89.23 	for the operation and maintenance of the relief association only
89.24 	if the municipality and the relief association both comply with
89.25 	the applicable provisions of sections 69.771 to 69.776.
89.26 		Subd. 3.Remedy for noncompliance; determination.
 89.27 	Any (a) A municipality in which there exists a firefighters'
89.28 	relief association as specified in subdivision 1 which does not
89.29 	comply with the applicable provisions of sections 69.771 to
89.30 	69.776 or the provisions of any applicable special law relating
89.31 	to the funding or financing of the association shall does not
89.32 	qualify initially to receive, or be and is not entitled
89.33 	subsequently to retain, fire state aid pursuant to under 
89.34 	sections 69.011 to 69.051 until the reason for the 
89.35 	disqualification specified by the state auditor is remedied,
89.36 	whereupon the municipality or relief association, if otherwise
90.1 	qualified, shall be is entitled to again receive fire state aid
90.2 	for the year occurring immediately subsequent to the year in
90.3 	which the disqualification is remedied.
90.4 	(b) The state auditor shall determine if a municipality to
90.5 	which a firefighters' relief association is directly associated
90.6 	or a firefighters' relief association fails to comply with the
90.7 	provisions of sections 69.771 to 69.776 or the funding or
90.8 	financing provisions of any applicable special law based upon
90.9 	the information contained in the annual financial report of the
90.10 	firefighters' relief association required pursuant to under 
90.11 	section 69.051., the actuarial valuation of the relief
90.12 	association, if applicable, the relief association officers'
90.13 	financial requirements of the relief association and minimum
90.14 	municipal obligation determination documentation under section
90.15 	69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or
90.16 	69.774, subdivision 2, if requested to be filed by the state
90.17 	auditor, the applicable municipal or nonprofit firefighting
90.18 	corporation budget, if requested to be filed by the state
90.19 	auditor, and any other relevant documents or reports obtained by
90.20 	the state auditor.
90.21 	(c) The municipality or nonprofit firefighting corporation
90.22 	and the associated relief association are not eligible to
90.23 	receive or to retain fire state aid if:
90.24 	(1) the relief association fails to prepare or to file the
90.25 	financial report or financial statement under section 69.051;
90.26 	(2) the relief association treasurer is not bonded in the
90.27 	manner and in the amount required by section 69.051, subdivision
90.28 	2;
90.29 	(3) the relief association officers fail to determine or
90.30 	improperly determine the accrued liability and the annual
90.31 	accruing liability of the relief association under section
90.32 	69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if
90.33 	applicable;
90.34 	(4) if applicable, the relief association officers fail to
90.35 	obtain and file a required actuarial valuation or the officers
90.36 	file an actuarial valuation that does not contain the special
91.1 	fund actuarial liability calculated under the entry age normal
91.2 	actuarial cost method, the special fund current assets, the
91.3 	special fund unfunded actuarial accrued liability, the special
91.4 	fund normal cost under the entry age normal actuarial cost
91.5 	method, the amortization requirement for the special fund
91.6 	unfunded actuarial accrued liability by the applicable target
91.7 	date, a summary of the applicable benefit plan, a summary of the
91.8 	membership of the relief association, a summary of the actuarial
91.9 	assumptions used in preparing the valuation, and a signed
91.10 	statement by the actuary attesting to its results and certifying
91.11 	to the qualifications of the actuary as an approved actuary
91.12 	under section 356.215, subdivision 1, paragraph (c);
91.13 	(5) the municipality failed to provide a municipal
91.14 	contribution, or the nonprofit firefighting corporation failed
91.15 	to provide a corporate contribution, in the amount equal to the
91.16 	minimum municipal obligation if the relief association is
91.17 	governed under section 69.772, or the amount necessary, when
91.18 	added to the fire state aid actually received in the plan year
91.19 	in question, to at least equal in total the calculated annual
91.20 	financial requirements of the special fund of the relief
91.21 	association if the relief association is governed under section
91.22 	69.773, and, if the municipal or corporate contribution is
91.23 	deficient, the municipality failed to include the minimum
91.24 	municipal obligation certified under section 69.772, subdivision
91.25 	3, or 69.773, subdivision 5, in its budget and tax levy or the
91.26 	nonprofit firefighting corporation failed to include the minimum
91.27 	corporate obligation certified under section 69.774, subdivision
91.28 	2, in the corporate budget;
91.29 	(6) the relief association did not receive municipal
91.30 	ratification for the most recent plan amendment when municipal
91.31 	ratification was required under section 69.772, subdivision 6;
91.32 	69.773, subdivision 6; or 424A.02, subdivision 10;
91.33 	(7) the relief association invested special fund assets in
91.34 	an investment security that is not authorized under section
91.35 	69.775;
91.36 	(8) the relief association had an administrative expense
92.1 	that is not authorized under section 69.80 or 424A.05,
92.2 	subdivision 3, or the municipality had an expenditure that is
92.3 	not authorized under section 424A.08;
92.4 	(9) the relief association officers fail to provide a
92.5 	complete and accurate public pension plan investment portfolio
92.6 	and performance disclosure under section 356.219;
92.7 	(10) the relief association fails to obtain the
92.8 	acknowledgment from a broker of the statement of investment
92.9 	restrictions under section 356A.06, subdivision 8b;
92.10 	(11) the relief association officers permitted to occur a
92.11 	prohibited transaction under section 356A.06, subdivision 9, or
92.12 	424A.001, subdivision 7, or failed to undertake correction of a
92.13 	prohibited transaction that did occur; or 
92.14 	(12) the relief association pays a defined benefit service
92.15 	pension in an amount that is in excess of the applicable service
92.16 	pension maximum under section 424A.02, subdivision 3.

92.17 	Sec. 4. Minnesota Statutes 2004, section 69.772,
92.18 	subdivision 3, is amended to read:
92.19 		Subd. 3.Financial requirements of relief association;
92.20 	minimum obligation of municipality. (a) During the month of
92.21 	July, the officers of the relief association shall determine the
92.22 	overall funding balance of the special fund for the current
92.23 	calendar year, the financial requirements of the special fund
92.24 	for the following calendar year and the minimum obligation of
92.25 	the municipality with respect to the special fund for the
92.26 	following calendar year in accordance with the requirements of
92.27 	this subdivision.
92.28 	(1) (b) The overall funding balance of the special fund for
92.29 	the current calendar year shall must be determined in the
92.30 	following manner:
92.31 	(a) (1) The total accrued liability of the special fund for
92.32 	all active and deferred members of the relief association as of
92.33 	December 31 of the current year shall must be calculated
92.34 	pursuant to under subdivisions 2 and 2a, if applicable.
92.35 	(b) (2) The total present assets of the special fund
92.36 	projected to December 31 of the current year, including receipts
93.1 	by and disbursements from the special fund anticipated to occur
93.2 	on or before December 31 shall , must be calculated.  To the
93.3 	extent possible, for those assets for which a market value is
93.4 	readily ascertainable, the current market value as of the date
93.5 	of the calculation for those assets shall must be utilized in
93.6 	making this calculation.  For any asset for which no market
93.7 	value is readily ascertainable, the cost value or the book
93.8 	value, whichever is applicable, shall must be utilized in making
93.9 	this calculation.
93.10 	(c) (3) The amount of the total present assets of the
93.11 	special fund calculated pursuant to under clause (b) shall (2)
93.12 	must be subtracted from the amount of the total accrued
93.13 	liability of the special fund calculated pursuant to under 
93.14 	clause (a) (1).  If the amount of total present assets exceeds
93.15 	the amount of the total accrued liability, then the special fund
93.16 	shall be is considered to have a surplus over full funding.  If
93.17 	the amount of the total present assets is less than the amount
93.18 	of the total accrued liability, then the special fund shall be 
93.19 	is considered to have a deficit from full funding.  If the
93.20 	amount of total present assets is equal to the amount of the
93.21 	total accrued liability, then the special fund shall be is 
93.22 	considered to be fully funded.
93.23 	(2) (c) The financial requirements of the special fund for
93.24 	the following calendar year shall must be determined in the
93.25 	following manner:
93.26 	(a) (1) The total accrued liability of the special fund for
93.27 	all active and deferred members of the relief association as of
93.28 	December 31 of the calendar year next following the current
93.29 	calendar year shall must be calculated pursuant to under 
93.30 	subdivisions 2 and 2a, if applicable.
93.31 	(b) (2) The increase in the total accrued liability of the
93.32 	special fund for the following calendar year over the total
93.33 	accrued liability of the special fund for the current year shall 
93.34 	must be calculated.
93.35 	(c) (3) The amount of anticipated future administrative
93.36 	expenses of the special fund shall must be calculated by
94.1 	multiplying the dollar amount of the administrative expenses of
94.2 	the special fund for the most recent prior calendar year by the
94.3 	factor of 1.035.
94.4 	(d) (4) If the special fund is fully funded, the financial
94.5 	requirement requirements of the special fund for the following
94.6 	calendar year shall be are the figure which represents the
94.7 	increase in the total accrued liability of the special fund as 
94.8 	amounts calculated pursuant to subclause (b) under clauses (2)
94.9 	and (3).
94.10 	(e) (5) If the special fund has a deficit from full
94.11 	funding, the financial requirements of the special fund for the
94.12 	following calendar year shall be are the financial requirements
94.13 	of the special fund calculated as though the special fund were
94.14 	fully funded pursuant to subclause (d) under clause (4) plus an
94.15 	amount equal to one-tenth of the original amount of the deficit
94.16 	from full funding of the special fund as determined pursuant to
94.17 	this section for the calendar year 1971 until that deficit from
94.18 	full funding is fully retired, and plus an amount equal to
94.19 	one-tenth of the increase in the deficit from full funding of
94.20 	the special fund under clause (2) resulting either from an
94.21 	increase in the amount of the service pension accruing after
94.22 	December 31, 1971 occurring in the last ten years or from a net
94.23 	annual investment loss occurring during the last ten years until
94.24 	each increase in the deficit from full funding is fully
94.25 	retired. The annual amortization contribution under this clause
94.26 	may not exceed the amount of the deficit from full funding.
94.27 	(f) (6) If the special fund has a surplus over full
94.28 	funding, the financial requirements of the special fund for the
94.29 	following calendar year shall be are the financial requirements
94.30 	of the special fund calculated as though the special fund were
94.31 	fully funded pursuant to subclause (d) under clause (4) reduced
94.32 	by an amount equal to one-tenth of the amount of the surplus
94.33 	over full funding of the special fund.
94.34 	(3) (d) The minimum obligation of the municipality with
94.35 	respect to the special fund shall be is the financial
94.36 	requirements of the special fund reduced by the amount of any
95.1 	fire state aid payable pursuant to under sections 69.011 to
95.2 	69.051 reasonably anticipated to be received by the municipality
95.3 	for transmittal to the special fund during the following
95.4 	calendar year, an amount of interest on the assets of the
95.5 	special fund projected to the beginning of the following
95.6 	calendar year calculated at the rate of five percent per annum,
95.7 	and the amount of any anticipated contributions to the special
95.8 	fund required by the relief association bylaws from the active 
95.9 	members of the relief association reasonably anticipated to be
95.10 	received during the following calendar year. A reasonable
95.11 	amount of anticipated fire state aid is an amount that does not
95.12 	exceed the fire state aid actually received in the prior year
95.13 	multiplied by the factor 1.035.

95.14 	Sec. 5. Minnesota Statutes 2004, section 69.772,
95.15 	subdivision 4, is amended to read:
95.16 		Subd. 4.Certification of financial requirements and
95.17 	minimum municipal obligation; levy. (a) The officers of the
95.18 	relief association shall certify the financial requirements of
95.19 	the special fund of the relief association and the minimum
95.20 	obligation of the municipality with respect to the special fund
95.21 	of the relief association as determined pursuant to under 
95.22 	subdivision 3 to the governing body of the municipality on or
95.23 	before August 1 of each year. The financial requirements of the
95.24 	relief association and the minimum municipal obligation must be
95.25 	included in the financial report or financial statement under
95.26 	section 69.051.
95.27 	(b) The municipality shall provide for at least the minimum
95.28 	obligation of the municipality with respect to the special fund
95.29 	of the relief association by tax levy or from any other source
95.30 	of public revenue.
95.31 	(c) The municipality may levy taxes for the payment of the
95.32 	minimum municipal obligation without any limitation as to rate
95.33 	or amount and irrespective of any limitations imposed by other
95.34 	provisions of law upon the rate or amount of taxation until the
95.35 	balance of the special fund or any fund of the relief
95.36 	association has attained a specified level.  In addition, any
96.1 	taxes levied pursuant to under this section shall must not cause
96.2 	the amount or rate of any other taxes levied in that year or to
96.3 	be levied in a subsequent year by the municipality which are
96.4 	subject to a limitation as to rate or amount to be reduced.
96.5 	(d) If the municipality does not include the full amount of
96.6 	the minimum municipal obligations in its levy for any year, the
96.7 	officers of the relief association shall certify that amount to
96.8 	the county auditor, who shall spread a levy in the amount of the
96.9 	certified minimum municipal obligation on the taxable property
96.10 	of the municipality.
96.11 	(e) If the state auditor determines that a municipal
96.12 	contribution actually made in a plan year was insufficient under
96.13 	section 69.771, subdivision 3, paragraph (c), clause (5), the
96.14 	state auditor may request a copy of the certifications under
96.15 	this subdivision from the relief association or from the city.
96.16 	The relief association or the city, whichever applies, must
96.17 	provide the certifications within 14 days of the date of the
96.18 	request from the state auditor.

96.19 	Sec. 6. Minnesota Statutes 2004, section 69.773,
96.20 	subdivision 4, is amended to read:
96.21 		Subd. 4.Financial requirements of special fund. Prior
96.22 	to (a) On or before August 1 of each year, the officers of the
96.23 	relief association shall determine the financial requirements of
96.24 	the special fund of the relief association in accordance with
96.25 	the requirements of this subdivision.
96.26 	(b) The financial requirements of the relief
96.27 	association shall must be based on the most recent actuarial
96.28 	valuation of the special fund prepared in accordance with
96.29 	subdivision 2.  If the relief association has an unfunded
96.30 	actuarial accrued liability as reported in the most recent
96.31 	actuarial valuation, the financial requirements shall must be
96.32 	determined by adding the figures calculated pursuant to under
96.33 	paragraph (d),clauses (a) (1), (b) (2), and (c) (3).  If
96.34 	the relief association does not have an unfunded actuarial
96.35 	accrued liability as reported in the most recent actuarial
96.36 	valuation, the financial requirements shall must be an amount
97.1 	equal to the figure calculated pursuant to under paragraph (d),
97.2 	clauses (a) (1) and (b) (2), reduced by an amount equal to
97.3 	one-tenth of the amount of any assets in excess of the actuarial
97.4 	accrued liability of the relief association.
97.5 	(c) The determination of whether or not the relief
97.6 	association has an unfunded actuarial accrued liability
97.7 	shall must be based on the current market value of assets for
97.8 	which a market value is readily ascertainable and the cost or
97.9 	book value, whichever is applicable, for assets for which no
97.10 	market value is readily ascertainable.
97.11 	(a) (d) The components of the financial requirements of the
97.12 	relief association are the following:
97.13 	(1) The normal level cost requirement for the following
97.14 	year, expressed as a dollar amount, shall be is the figure for
97.15 	the normal level cost of the relief association as reported in
97.16 	the actuarial valuation.
97.17 	(b) (2) The amount of anticipated future administrative
97.18 	expenses of the special fund shall must be calculated by
97.19 	multiplying the dollar amount of the administrative expenses of
97.20 	the special fund for the most recent prior calendar year by the
97.21 	factor of 1.035.
97.22 	(c) (3) The amortization contribution requirement to retire
97.23 	the current unfunded actuarial accrued liability by the
97.24 	established date for full funding shall be is the figure for the
97.25 	amortization contribution as reported in the actuarial
97.26 	valuation.  If there has not been a change in the actuarial
97.27 	assumptions used for calculating the actuarial accrued liability
97.28 	of the special fund, a change in the bylaws of the relief
97.29 	association governing the service pensions, retirement benefits,
97.30 	or both,payable from the special fund,or a change in the
97.31 	actuarial cost method used to value all or a portion of the
97.32 	special fund which change or changes, which by themselves,
97.33 	without inclusion of any other items of increase or decrease,
97.34 	produce a net increase in the unfunded actuarial accrued
97.35 	liability of the special fund since December 31, 1970, the
97.36 	established date for full funding shall be is the December 31,
98.1 	1990 occurring ten years later.  If there has been a change in
98.2 	the actuarial assumptions used for calculating the actuarial
98.3 	accrued liability of the special fund, a change in the bylaws of
98.4 	the relief association governing the service pensions,
98.5 	retirement benefits, or both payable from the special fund or a
98.6 	change in the actuarial cost method used to value all or a
98.7 	portion of the special fund and the change or changes, by
98.8 	themselves and without inclusion of any other items of increase
98.9 	or decrease, produce a net increase in the unfunded actuarial
98.10 	accrued liability of the special fund since December 31, 1970,
98.11 	but prior to January 1, 1979 within the past 20 years, the
98.12 	established date for full funding shall be December 31, 1998,
98.13 	and if there has been a change since December 31, 1978, the
98.14 	established date for full funding shall must be determined using
98.15 	the following procedure:
98.16 	(i) the unfunded actuarial accrued liability of the special
98.17 	fund attributable to experience losses that have occurred since
98.18 	the most recent prior actuarial valuation must be determined and
98.19 	the level annual dollar contribution needed to amortize the
98.20 	experience loss over a period of ten years ending on the
98.21 	December 31 occurring ten years later must be calculated;
98.22 	(ii) the unfunded actuarial accrued liability of the
98.23 	special fund shall must be determined in accordance with the
98.24 	provisions governing service pensions, retirement benefits, and
98.25 	actuarial assumptions in effect before an applicable change;
98.26 	(ii) (iii) the level annual dollar contribution needed to
98.27 	amortize this unfunded actuarial accrued liability amount by the
98.28 	date for full funding in effect prior to before the change shall 
98.29 	must be calculated using the interest assumption specified in
98.30 	section 356.215, subdivision 8, in effect before any applicable
98.31 	change;
98.32 	(iii) (iv) the unfunded actuarial accrued liability of the
98.33 	special fund shall must be determined in accordance with any new
98.34 	provisions governing service pensions, retirement benefits, and
98.35 	actuarial assumptions and the remaining provisions governing
98.36 	service pensions, retirement benefits, and actuarial assumptions
99.1 	in effect before an applicable change;
99.2 	(iv) (v) the level annual dollar contribution needed to
99.3 	amortize the difference between the unfunded actuarial accrued
99.4 	liability amount calculated pursuant to subclause (i) under item
99.5 	(ii) and the unfunded actuarial accrued liability amount
99.6 	calculated pursuant to subclause (iii) under item (iv) over a
99.7 	period of 20 years starting December 31 of the year in which the
99.8 	change is effective shall must be calculated using the interest
99.9 	assumption specified in section 356.215, subdivision 8, in
99.10 	effect after any applicable change;
99.11 	(v) (vi) the annual amortization contribution calculated
99.12 	pursuant to subclause (iv) shall under item (v) must be added to
99.13 	the annual amortization contribution calculated pursuant to
99.14 	subclause (ii) under items (i) and (iii);
99.15 	(vi) (vii) the period in which the unfunded actuarial
99.16 	accrued liability amount determined in subclause (iii) item (iv) 
99.17 	will be amortized by the total annual amortization contribution
99.18 	computed pursuant to subclause (v) shall under item (vi) must be
99.19 	calculated using the interest assumption specified in section
99.20 	356.215, subdivision 8, in effect after any applicable change,
99.21 	rounded to the nearest integral number of years, but which shall 
99.22 	must not exceed a period of 20 years from the end of the year in
99.23 	which the determination of the date for full funding using this
99.24 	procedure is made and which shall must not be less than the
99.25 	period of years beginning in the year in which the determination
99.26 	of the date for full funding using this procedure is made and
99.27 	ending by the date for full funding in effect before the change;
99.28 	(vii) (viii) the period determined pursuant to subclause
99.29 	(vi) shall under item (vii) must be added to the date as of
99.30 	which the actuarial valuation was prepared and the resulting
99.31 	date shall be is the new date for full funding.

99.32 	Sec. 7. Minnesota Statutes 2004, section 69.773,
99.33 	subdivision 5, is amended to read:
99.34 		Subd. 5.Minimum municipal obligation. (a) The officers
99.35 	of the relief association shall determine the minimum obligation
99.36 	of the municipality with respect to the special fund of the
100.1 	relief association for the following calendar year prior to on
100.2 	or before August 1 of each year in accordance with the
100.3 	requirements of this subdivision.
100.4 	(b) The minimum obligation of the municipality with respect
100.5 	to the special fund shall be is an amount equal to the financial
100.6 	requirements of the special fund of the relief association
100.7 	determined pursuant to under subdivision 4, reduced by the
100.8 	estimated amount of any fire state aid payable pursuant to under 
100.9 	sections 69.011 to 69.051reasonably anticipated to be received
100.10 	by the municipality for transmittal to the special fund of the
100.11 	relief association during the following year and the amount of
100.12 	any anticipated contributions to the special fund required by
100.13 	the relief association bylaws from the active members of the
100.14 	relief association reasonably anticipated to be received during
100.15 	the following calendar year. A reasonable amount of anticipated
100.16 	fire state aid is an amount that does not exceed the fire state
100.17 	aid actually received in the prior year multiplied by the factor
100.18 	1.035.
100.19 	(c) The officers of the relief association shall certify
100.20 	the financial requirements of the special fund of the relief
100.21 	association and the minimum obligation of the municipality with
100.22 	respect to the special fund of the relief association as
100.23 	determined pursuant to under subdivision 4 and this subdivision
100.24 	to the governing body of the municipality by August 1 of each
100.25 	year. The financial requirements of the relief association and
100.26 	the minimum municipal obligation must be included in the
100.27 	financial report or financial statement under section 69.051.
100.28 	(d) The municipality shall provide for at least the minimum
100.29 	obligation of the municipality with respect to the special fund
100.30 	of the relief association by tax levy or from any other source
100.31 	of public revenue.  The municipality may levy taxes for the
100.32 	payment of the minimum municipal obligation without any
100.33 	limitation as to rate or amount and irrespective of any
100.34 	limitations imposed by other provisions of law or charter upon
100.35 	the rate or amount of taxation until the balance of the special
100.36 	fund or any fund of the relief association has attained a
101.1 	specified level.  In addition, any taxes levied pursuant to 
101.2 	under this section shall must not cause the amount or rate of
101.3 	any other taxes levied in that year or to be levied in a
101.4 	subsequent year by the municipality which are subject to a
101.5 	limitation as to rate or amount to be reduced.
101.6 	(e) If the municipality does not include the full amount of
101.7 	the minimum municipal obligation in its levy for any year, the
101.8 	officers of the relief association shall certify that amount to
101.9 	the county auditor, who shall spread a levy in the amount of the
101.10 	minimum municipal obligation on the taxable property of the
101.11 	municipality.
101.12 	(f) If the state auditor determines that a municipal
101.13 	contribution actually made in a plan year was insufficient under
101.14 	section 69.771, subdivision 3, paragraph (c), clause (5), the
101.15 	state auditor may request from the relief association or from
101.16 	the city a copy of the certifications under this subdivision.
101.17 	The relief association or the city, whichever applies, must
101.18 	provide the certifications within 14 days of the date of the
101.19 	request from the state auditor.

101.20 	Sec. 8. Minnesota Statutes 2004, section 69.775, is
101.21 	amended to read:
101.22 	69.775 INVESTMENTS.
101.23 	(a) The special fund assets of the a relief associations 
101.24 	association governed by sections 69.771 to 69.776 must be
101.25 	invested in securities that are authorized investments under
101.26 	section 356A.06, subdivision 6 or 7.
101.27 	(b) Notwithstanding the foregoing, up to 75 percent of the
101.28 	market value of the assets of the special fund, not including
101.29 	any money market mutual funds,may be invested in open-end
101.30 	investment companies registered under the federal Investment
101.31 	Company Act of 1940, if the portfolio investments of the
101.32 	investment companies comply with the type of securities
101.33 	authorized for investment under section 356A.06, subdivision 7.
101.34 	(c) Securities held by the associations before June 2,
101.35 	1989, that do not meet the requirements of this section may be
101.36 	retained after that date if they were proper investments for the
102.1 	association on that date.
102.2 	(d) The governing board of the association may select and
102.3 	appoint investment agencies to act for and in its behalf or may
102.4 	certify special fund assets for investment by the State Board of
102.5 	Investment under section 11A.17.
102.6 	(e) The governing board of the association may certify
102.7 	general fund assets of the relief association for investment by
102.8 	the State Board of Investment in fixed income pools or in a
102.9 	separately managed account at the discretion of the State Board
102.10 	of Investment as provided in section 11A.14.
102.11 	(f) The governing board of the association may select and
102.12 	appoint a qualified private firm to measure management
102.13 	performance and return on investment, and the firm shall use the
102.14 	formula or formulas developed by the state board under section
102.15 	11A.04, clause (11).

102.16 	Sec. 9. Minnesota Statutes 2004, section 356A.06,
102.17 	subdivision 7, is amended to read:
102.18 		Subd. 7.Expanded list of authorized investment
102.19 	securities.  (a)  [AUTHORITY.] Except to the extent otherwise
102.20 	authorized by law or bylaws, a covered pension plan not
102.21 	described by subdivision 6, paragraph (a), may invest its assets
102.22 	only in accordance with this subdivision.
102.23 	(b)  [SECURITIES GENERALLY.] The covered pension plan has
102.24 	the authority to purchase, sell, lend, or exchange the
102.25 	securities specified in paragraphs (c) to (g) (h), including
102.26 	puts and call options and future contracts traded on a contract
102.27 	market regulated by a governmental agency or by a financial
102.28 	institution regulated by a governmental agency.  These
102.29 	securities may be owned as units in commingled trusts that own
102.30 	the securities described in paragraphs (c) to (g) (h).
102.31 	(c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may
102.32 	invest funds in governmental bonds, notes, bills, mortgages, and
102.33 	other evidences of indebtedness provided the issue is backed by
102.34 	the full faith and credit of the issuer or the issue is rated
102.35 	among the top four quality rating categories by a nationally
102.36 	recognized rating agency.  The obligations in which funds may be
103.1 	invested under this paragraph include guaranteed or insured
103.2 	issues of (1) the United States, its agencies, its
103.3 	instrumentalities, or organizations created and regulated by an
103.4 	act of Congress; (2) Canada and its provinces, provided the
103.5 	principal and interest is payable in United States dollars; (3)
103.6 	the states and their municipalities, political subdivisions,
103.7 	agencies, or instrumentalities; (4) the International Bank for
103.8 	Reconstruction and Development, the Inter-American Development
103.9 	Bank, the Asian Development Bank, the African Development Bank,
103.10 	or any other United States government sponsored organization of
103.11 	which the United States is a member, provided the principal and
103.12 	interest is payable in United States dollars.
103.13 	(d)  [CORPORATE OBLIGATIONS.] The covered pension plan may
103.14 	invest funds in bonds, notes, debentures, transportation
103.15 	equipment obligations, or any other longer term evidences of
103.16 	indebtedness issued or guaranteed by a corporation organized
103.17 	under the laws of the United States or any state thereof, or the
103.18 	Dominion of Canada or any province thereof if they conform to
103.19 	the following provisions:
103.20 	(1) the principal and interest of obligations of
103.21 	corporations incorporated or organized under the laws of the
103.22 	Dominion of Canada or any province thereof must be payable in
103.23 	United States dollars; and
103.24 	(2) obligations must be rated among the top four quality
103.25 	categories by a nationally recognized rating agency.
103.26 	(e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may
103.27 	invest funds in bankers acceptances, certificates of deposit,
103.28 	deposit notes, commercial paper, mortgage participation
103.29 	certificates and pools, asset backed securities, repurchase
103.30 	agreements and reverse repurchase agreements, guaranteed
103.31 	investment contracts, savings accounts, and guaranty fund
103.32 	certificates, surplus notes, or debentures of domestic mutual
103.33 	insurance companies if they conform to the following provisions:
103.34 	(i) bankers acceptances and deposit notes of United States
103.35 	banks are limited to those issued by banks rated in the highest
103.36 	four quality categories by a nationally recognized rating
104.1 	agency;
104.2 	(ii) certificates of deposit are limited to those issued by
104.3 	(A) United States banks and savings institutions that are rated
104.4 	in the highest four quality categories by a nationally
104.5 	recognized rating agency or whose certificates of deposit are
104.6 	fully insured by federal agencies; or (B) credit unions in
104.7 	amounts up to the limit of insurance coverage provided by the
104.8 	National Credit Union Administration;
104.9 	(iii) commercial paper is limited to those issued by United
104.10 	States corporations or their Canadian subsidiaries and rated in
104.11 	the highest two quality categories by a nationally recognized
104.12 	rating agency;
104.13 	(iv) mortgage participation or pass through certificates
104.14 	evidencing interests in pools of first mortgages or trust deeds
104.15 	on improved real estate located in the United States where the
104.16 	loan to value ratio for each loan as calculated in accordance
104.17 	with section 61A.28, subdivision 3, does not exceed 80 percent
104.18 	for fully amortizable residential properties and in all other
104.19 	respects meets the requirements of section 61A.28, subdivision
104.20 	3;
104.21 	(v) collateral for repurchase agreements and reverse
104.22 	repurchase agreements is limited to letters of credit and
104.23 	securities authorized in this section;
104.24 	(vi) guaranteed investment contracts are limited to those
104.25 	issued by insurance companies or banks rated in the top four
104.26 	quality categories by a nationally recognized rating agency or
104.27 	to alternative guaranteed investment contracts where the
104.28 	underlying assets comply with the requirements of this
104.29 	subdivision;
104.30 	(vii) savings accounts are limited to those fully insured
104.31 	by federal agencies; and
104.32 	(viii) asset backed securities must be rated in the top
104.33 	four quality categories by a nationally recognized rating agency.
104.34 	(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
104.35 	not apply to certificates of deposit and collateralization
104.36 	agreements executed by the covered pension plan under clause
105.1 	(1), item (ii).
105.2 	(3) In addition to investments authorized by clause (1),
105.3 	item (iv), the covered pension plan may purchase from the
105.4 	Minnesota Housing Finance Agency all or any part of a pool of
105.5 	residential mortgages, not in default, that has previously been
105.6 	financed by the issuance of bonds or notes of the agency.  The
105.7 	covered pension plan may also enter into a commitment with the
105.8 	agency, at the time of any issue of bonds or notes, to purchase
105.9 	at a specified future date, not exceeding 12 years from the date
105.10 	of the issue, the amount of mortgage loans then outstanding and
105.11 	not in default that have been made or purchased from the
105.12 	proceeds of the bonds or notes.  The covered pension plan may
105.13 	charge reasonable fees for any such commitment and may agree to
105.14 	purchase the mortgage loans at a price sufficient to produce a
105.15 	yield to the covered pension plan comparable, in its judgment,
105.16 	to the yield available on similar mortgage loans at the date of
105.17 	the bonds or notes.  The covered pension plan may also enter
105.18 	into agreements with the agency for the investment of any
105.19 	portion of the funds of the agency.  The agreement must cover
105.20 	the period of the investment, withdrawal privileges, and any
105.21 	guaranteed rate of return.
105.22 	(f)  [CORPORATE STOCKS.] The covered pension plan may
105.23 	invest funds in stocks or convertible issues of any corporation
105.24 	organized under the laws of the United States or the states
105.25 	thereof, any corporation organized under the laws of the
105.26 	Dominion of Canada or its provinces, or any corporation listed
105.27 	on the New York Stock Exchange or the American Stock Exchange an
105.28 	exchange regulated by an agency of the United States or of the
105.29 	Canadian national government, if they conform to the following
105.30 	provisions:
105.31 	(1) the aggregate value of corporate stock investments, as
105.32 	adjusted for realized profits and losses, must not exceed 85
105.33 	percent of the market or book value, whichever is less, of a
105.34 	fund, less the aggregate value of investments according to
105.35 	subdivision 6 paragraph (h);
105.36 	(2) investments must not exceed five percent of the total
106.1 	outstanding shares of any one corporation.
106.2 	(g)  [EXCHANGE TRADED FUNDS.] The covered pension plan may
106.3 	invest funds in exchange traded funds, subject to the maximums,
106.4 	the requirements, and the limitations set forth in paragraph
106.5 	(d), (e), (f), or (h), whichever applies.
106.6 	(h) [OTHER INVESTMENTS.] (1) In addition to the
106.7 	investments authorized in paragraphs (b) to (f) (g), and subject
106.8 	to the provisions in clause (2), the covered pension plan may
106.9 	invest funds in:
106.10 	(i) venture capital investment businesses through
106.11 	participation in limited partnerships and corporations;
106.12 	(ii) real estate ownership interests or loans secured by
106.13 	mortgages or deeds of trust through investment in limited
106.14 	partnerships, bank sponsored collective funds, trusts, and
106.15 	insurance company commingled accounts, including separate
106.16 	accounts;
106.17 	(iii) regional and mutual funds through bank sponsored
106.18 	collective funds and open-end investment companies registered
106.19 	under the Federal Investment Company Act of 1940;
106.20 	(iv) resource investments through limited partnerships,
106.21 	private placements, and corporations; and
106.22 	(v) international securities.
106.23 	(2) The investments authorized in clause (1) must conform
106.24 	to the following provisions:
106.25 	(i) the aggregate value of all investments made according
106.26 	to clause (1) may not exceed 35 percent of the market value of
106.27 	the fund for which the covered pension plan is investing;
106.28 	(ii) there must be at least four unrelated owners of the
106.29 	investment other than the state board covered pension plan for
106.30 	investments made under clause (1), item (i), (ii), (iii), or
106.31 	(iv);
106.32 	(iii) covered pension plan participation in an investment
106.33 	vehicle is limited to 20 percent thereof for investments made
106.34 	under clause (1), item (i), (ii), (iii), or (iv); and
106.35 	(iv) covered pension plan participation in a limited
106.36 	partnership does not include a general partnership interest or
107.1 	other interest involving general liability.  The covered pension
107.2 	plan may not engage in any activity as a limited partner which
107.3 	creates general liability.

107.4 	Sec. 10. Minnesota Statutes 2004, section 424A.02,
107.5 	subdivision 3, is amended to read:
107.6 		Subd. 3.Flexible service pension maximums.  (a) Annually
107.7 	on or before August 1 as part of the certification of the
107.8 	financial requirements and minimum municipal obligation
107.9 	determined under section 69.772, subdivision 4, or 69.773,
107.10 	subdivision 5, as applicable, the secretary or some other
107.11 	official of the relief association designated in the bylaws of
107.12 	each relief association shall calculate and certify to the
107.13 	governing body of the applicable qualified municipality the
107.14 	average amount of available financing per active covered
107.15 	firefighter for the most recent three-year period.  The amount
107.16 	of available financing shall include any amounts of fire state
107.17 	aid received or receivable by the relief association, any
107.18 	amounts of municipal contributions to the relief association
107.19 	raised from levies on real estate or from other available
107.20 	revenue sources exclusive of fire state aid, and one-tenth of
107.21 	the amount of assets in excess of the accrued liabilities of the
107.22 	relief association calculated under section 69.772, subdivision
107.23 	2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if
107.24 	any.
107.25 	(b) The maximum service pension which the relief
107.26 	association has authority to provide for in its bylaws for
107.27 	payment to a member retiring after the calculation date when the
107.28 	minimum age and service requirements specified in subdivision 1
107.29 	are met must be determined using the table in paragraph (c) or
107.30 	(d), whichever applies.
107.31 	(c) For a relief association where the governing bylaws
107.32 	provide for a monthly service pension to a retiring member, the
107.33 	maximum monthly service pension amount per month for each year
107.34 	of service credited that may be provided for in the bylaws is
107.35 	the greater of the service pension amount provided for in the
107.36 	bylaws on the date of the calculation of the average amount of
108.1 	the available financing per active covered firefighter or the 
108.2 	maximum service pension figure corresponding to the average
108.3 	amount of available financing per active covered firefighter:
108.4 	Minimum Average Amount of      Maximum Service Pension
108.5 	  Available Financing per        Amount Payable per Month
108.6 	       Firefighter               for Each Year of Service
108.7 	$...                            $  .25
108.8 	42 41.50
108.9 	84 81 1.00
108.10 	126 122 1.50
108.11 	168 162 2.00
108.12 	209 203 2.50
108.13 	252 243 3.00
108.14 	294 284 3.50
108.15 	335 324 4.00
108.16 	378 365 4.50
108.17 	420 405 5.00
108.18 	503 486 6.00
108.19 	587 567 7.00
108.20 	672 648 8.00
108.21 	755 729 9.00
108.22 	839 810 10.00
108.23 	923 891 11.00
108.24 	1007 972 12.00
108.25 	1090 1053 13.00
108.26 	1175 1134 14.00
108.27 	1259 1215 15.00
108.28 	1342 1296 16.00
108.29 	1427 1377 17.00
108.30 	1510 1458 18.00
108.31 	1594 1539 19.00
108.32 	1677 1620 20.00
108.33 	1762 1701 21.00
108.34 	1845 1782 22.00
108.35 	1888 1823 22.50
108.36 	1929 1863 23.00
109.1 	2014 1944 24.00
109.2 	2098 2025 25.00
109.3 	2183 2106 26.00
109.4 	2267 2187 27.00
109.5 	2351 2268 28.00
109.6 	2436 2349 29.00
109.7 	2520 2430 30.00
109.8 	2604 2511 31.00
109.9 	2689 2592 32.00
109.10 	2773 2673 33.00
109.11 	2857 2754 34.00
109.12 	2942 2834 35.00
109.13 	3026 2916 36.00
109.14 	3110 2997 37.00
109.15 	3194 3078 38.00
109.16 	3278 3159 39.00
109.17 	3362 3240 40.00
109.18 	3446 3321 41.00
109.19 	3530 3402 42.00
109.20 	3614 3483 43.00
109.21 	3698 3564 44.00
109.22 	3782 3645 45.00
109.23 	3866 3726 46.00
109.24 	3950 3807 47.00
109.25 	4034 3888 48.00
109.26 	4118 3969 49.00
109.27 	4202 4050 50.00
109.28 	4286 4131 51.00
109.29 	4370 4212 52.00
109.30 	Effective beginning December 31, 2003:
109.31 	4454 4293 53.00
109.32 	4538 4374 54.00
109.33 	4622 4455 55.00
109.34 	4706 4536 56.00
109.35 	(d) For a relief association in which the governing bylaws
109.36 	provide for a lump sum service pension to a retiring member, the
110.1 	maximum lump sum service pension amount for each year of service
110.2 	credited that may be provided for in the bylaws is the greater
110.3 	of the service pension amount provided for in the bylaws on the
110.4 	date of the calculation of the average amount of the available
110.5 	financing per active covered firefighter or the maximum service
110.6 	pension figure corresponding to the average amount of available
110.7 	financing per active covered firefighter for the applicable
110.8 	specified period:
110.9 	Minimum Average Amount         Maximum Lump Sum Service
110.10 	 of Available Financing         Pension Amount Payable
110.11 	    per Firefighter             for Each Year of Service
110.12 	$..                              $10
110.13 	         11                               20
110.14 	         16                               30
110.15 	         23                               40
110.16 	         27                               50
110.17 	         32                               60
110.18 	         43                               80
110.19 	         54                              100
110.20 	         65                              120
110.21 	         77                              140
110.22 	         86                              160
110.23 	         97                              180
110.24 	        108                              200
110.25 	        131                              240
110.26 	        151                              280
110.27 	        173                              320
110.28 	        194                              360
110.29 	        216                              400
110.30 	        239                              440
110.31 	        259                              480
110.32 	        281                              520
110.33 	        302                              560
110.34 	        324                              600
110.35 	        347                              640
110.36 	        367                              680
111.1 	        389                              720
111.2 	        410                              760
111.3 	        432                              800
111.4 	        486                              900
111.5 	        540                             1000
111.6 	        594                             1100
111.7 	        648                             1200
111.8 	        702                             1300
111.9 	        756                             1400
111.10 	        810                             1500
111.11 	        864                             1600
111.12 	        918                             1700
111.13 	        972                             1800
111.14 	       1026                             1900
111.15 	       1080                             2000
111.16 	       1134                             2100
111.17 	       1188                             2200
111.18 	       1242                             2300
111.19 	       1296                             2400
111.20 	       1350                             2500
111.21 	       1404                             2600
111.22 	       1458                             2700
111.23 	       1512                             2800
111.24 	       1566                             2900
111.25 	       1620                             3000
111.26 	       1672                             3100
111.27 	       1726                             3200
111.28 	       1753                             3250
111.29 	       1780                             3300
111.30 	       1820                             3375
111.31 	1834                             3400
111.32 	       1888                             3500
111.33 	1942                             3600
111.34 	       1996                             3700
111.35 	       2023                             3750
111.36 	2050                             3800
112.1 	       2104                             3900
112.2 	       2158                             4000
112.3 	2212                             4100
112.4 	       2265                             4200
112.5 	       2319                             4300
112.6 	       2373                             4400
112.7 	       2427                             4500
112.8 	       2481                             4600
112.9 	       2535                             4700
112.10 	       2589                             4800
112.11 	       2643                             4900
112.12 	       2697                             5000
112.13 	       2751                             5100
112.14 	       2805                             5200
112.15 	       2859                             5300
112.16 	       2913                             5400
112.17 	       2967                             5500
112.18 	3021                             5600
112.19 	3075                             5700
112.20 	3129                             5800
112.21 	3183                             5900
112.22 	3237                             6000
112.23 	3291                             6100
112.24 	3345                             6200
112.25 	3399                             6300
112.26 	3453                             6400
112.27 	3507                             6500
112.28 	3561                             6600
112.29 	3615                             6700
112.30 	3669                             6800
112.31 	3723                             6900
112.32 	3777                             7000
112.33 	Effective beginning December 31, 2003:
112.34 	3831                             7100
112.35 	3885                             7200
112.36 	3939                             7300
113.1 	3993                             7400
113.2 	4047                             7500
113.3 	(e) For a relief association in which the governing bylaws
113.4 	provide for a monthly benefit service pension as an alternative
113.5 	form of service pension payment to a lump sum service pension,
113.6 	the maximum service pension amount for each pension payment type
113.7 	must be determined using the applicable table contained in this
113.8 	subdivision.
113.9 	(f) If a relief association establishes a service pension
113.10 	in compliance with the applicable maximum contained in paragraph
113.11 	(c) or (d) and the minimum average amount of available financing
113.12 	per active covered firefighter is subsequently reduced because
113.13 	of a reduction in fire state aid or because of an increase in
113.14 	the number of active firefighters, the relief association may
113.15 	continue to provide the prior service pension amount specified
113.16 	in its bylaws, but may not increase the service pension amount
113.17 	until the minimum average amount of available financing per
113.18 	firefighter under the table in paragraph (c) or (d), whichever
113.19 	applies, permits.
113.20 	(g) No relief association is authorized to provide a
113.21 	service pension in an amount greater than the largest applicable
113.22 	flexible service pension maximum amount even if the amount of
113.23 	available financing per firefighter is greater than the
113.24 	financing amount associated with the largest applicable flexible
113.25 	service pension maximum.

113.26 	Sec. 11. Minnesota Statutes 2004, section 424A.02,
113.27 	subdivision 4, is amended to read:
113.28 		Subd. 4.Defined contribution lump sum service
113.29 	pensions. (a) If the bylaws governing the relief association so
113.30 	provide exclusively, the relief association may pay a defined
113.31 	contribution lump sum service pension in lieu of any defined
113.32 	benefit service pension governed by subdivision 2.
113.33 	(b) An individual account for each firefighter who is a
113.34 	member of the relief association shall must be established.  To
113.35 	each individual active member account shall must be credited a
113.36 	right to an equal share of: (a) (1) any amounts of fire state
114.1 	aid received by the relief association; (b) (2) any amounts of
114.2 	municipal contributions to the relief association raised from
114.3 	levies on real estate or from other available revenue sources
114.4 	exclusive of fire state aid; and (c) (3) any amounts equal to
114.5 	the share of the assets of the special fund to the credit
114.6 	of: (1) (i) any former member who terminated active service
114.7 	with the fire department to which the relief association is
114.8 	associated prior to before meeting the minimum service
114.9 	requirement provided for in subdivision 1 and has not returned
114.10 	to active service with the fire department for a period no
114.11 	shorter than five years; or (2) (ii) any retired member who
114.12 	retired prior to before obtaining a full nonforfeitable interest
114.13 	in the amounts credited to the individual member
114.14 	account pursuant to under subdivision 2 and any applicable
114.15 	provision of the bylaws of the relief association.  In addition,
114.16 	any interest or investment income earned return on the assets of
114.17 	the special fund shall must be credited in proportion to the
114.18 	share of the assets of the special fund to the credit of each
114.19 	individual active member account through the date on which the
114.20 	investment return is recognized by and credited to the special
114.21 	fund.
114.22 	(c) At the time of retirement pursuant to under subdivision
114.23 	1 and any applicable provision of the bylaws of the relief
114.24 	association, a retiring member shall be is entitled to that
114.25 	portion of the assets of the special fund to the credit of the
114.26 	member in the individual member account which is
114.27 	nonforfeitable pursuant to under subdivision 2 and any
114.28 	applicable provision of the bylaws of the relief association
114.29 	based on the number of years of service to the credit of the
114.30 	retiring member.

114.31 	Sec. 12. Minnesota Statutes 2004, section 424A.02,
114.32 	subdivision 7, is amended to read:
114.33 		Subd. 7.Deferred service pensions.  (a) A member of a
114.34 	relief association to which this section applies is entitled to
114.35 	a deferred service pension if the member:
114.36 	(1) has completed the lesser of the minimum period of
115.1 	active service with the fire department specified in the bylaws
115.2 	or 20 years of active service with the fire department;
115.3 	(2) has completed at least five years of active membership
115.4 	in the relief association; and
115.5 	(3) separates from active service and membership before
115.6 	reaching age 50 or the minimum age for retirement and
115.7 	commencement of a service pension specified in the bylaws
115.8 	governing the relief association if that age is greater than age
115.9 	50.
115.10 	(b) The deferred service pension starts is payable when the
115.11 	former member reaches age 50,or the minimum age specified in
115.12 	the bylaws governing the relief association if that age is
115.13 	greater than age 50,and when the former member makes a valid
115.14 	written application.
115.15 	(c) A relief association that provides a lump sum service
115.16 	pension governed by subdivision 3 may, when its governing bylaws
115.17 	so provide, pay interest on the deferred lump sum service
115.18 	pension during the period of deferral.  If provided for in the
115.19 	bylaws, interest must be paid in one of the following manners:
115.20 	(1) at the investment performance rate actually earned on
115.21 	that portion of the assets if the deferred benefit amount is
115.22 	invested by the relief association in a separate account
115.23 	established and maintained by the relief association or if the
115.24 	deferred benefit amount is invested in a separate investment
115.25 	vehicle held by the relief association;
115.26 	(2) at the an interest rate of up to five percent,
115.27 	compounded annually, as set by the board of directors and
115.28 	approved as provided in subdivision 10; or
115.29 	(3) at a rate equal to the actual time weighted total rate
115.30 	of return investment performance of the special fund as reported
115.31 	by the Office of the State Auditor under section 356.219, up to
115.32 	five percent, compounded annually, and applied consistently for
115.33 	all deferred service pensioners.
115.34 	(d) A relief association may not use the method provided
115.35 	for in paragraph (c),clause (3), until it has modified its
115.36 	bylaws to be consistent with that clause.
116.1 	(d) Interest under paragraph (c), clause (2) or (3), is
116.2 	payable from the first day of the month next following the date
116.3 	on which the municipality has approved the deferred service
116.4 	pension interest rate established by the board of trustees or
116.5 	from the first day of the month next following the date on which
116.6 	the member separated from active fire department service and
116.7 	relief association membership, whichever is later, to the last
116.8 	day of the month immediately before the month in which the
116.9 	deferred member becomes eligible to begin receipt of the service
116.10 	pension and applies for the deferred service pension.
116.11 	(e) A relief association that provides a defined
116.12 	contribution service pension may, if its governing bylaws so
116.13 	provide, credit interest or additional investment performance on
116.14 	the deferred lump sum service pension during the period of
116.15 	deferral.  If provided for in the bylaws, the interest must be
116.16 	paid in one of the manners specified in paragraph (c) or
116.17 	alternatively the relief association may credit any investment
116.18 	return on the assets of the special fund of the defined
116.19 	contribution volunteer firefighter relief association in
116.20 	proportion to the share of the assets of the special fund to the
116.21 	credit of each individual deferred member account through the
116.22 	date on which the investment return is recognized by and
116.23 	credited to the special fund.
116.24 	(f) For a deferred service pension that is transferred to a
116.25 	separate account established and maintained by the relief
116.26 	association or separate investment vehicle held by the relief
116.27 	association, the deferred member bears the full investment risk
116.28 	subsequent to transfer and in calculating the accrued liability
116.29 	of the volunteer firefighters relief association that pays a
116.30 	lump sum service pension, the accrued liability for deferred
116.31 	service pensions is equal to the separate relief association
116.32 	account balance or the fair market value of the separate
116.33 	investment vehicle held by the relief association.
116.34 	(f) (g) The deferred service pension is governed by and
116.35 	must be calculated under the general statute, special law,
116.36 	relief association articles of incorporation, and relief
117.1 	association bylaw provisions applicable on the date on which the
117.2 	member separated from active service with the fire department
117.3 	and active membership in the relief association.

117.4 	Sec. 13. [424A.021] CREDIT FOR BREAK IN SERVICE TO
117.5 	PROVIDE UNIFORMED SERVICE.
117.6 		Subdivision 1.Authorization. Subject to restrictions
117.7 	stated in this section, a volunteer firefighter who is absent
117.8 	from firefighting service due to service in the uniformed
117.9 	services, as defined in United States Code, title 38, section
117.10 	4303(13), may obtain service credit if the relief association is
117.11 	a defined benefit plan or an allocation of any fire state aid,
117.12 	any municipal contributions, and any investment return received
117.13 	by the relief association if the relief association is a defined
117.14 	contribution plan for the period of the uniformed service, not
117.15 	to exceed five years, unless a longer period is required under
117.16 	United States Code, title 38, section 4312.
117.17 		Subd. 2.Limitations. (a) To be eligible for service
117.18 	credit or an investment return allocation under this section,
117.19 	the volunteer firefighter must return to firefighting service
117.20 	with coverage by the same relief association or by the successor
117.21 	to that relief association upon discharge from service in the
117.22 	uniformed service within the time frame required in United
117.23 	States Code, title 38, section 4312(e).
117.24 	(b) Service credit or an investment return allocation is
117.25 	not authorized if the firefighter separates from uniformed
117.26 	service with a dishonorable or bad conduct discharge or under
117.27 	other than honorable conditions.
117.28 	(c) Service credit or an investment return allocation is
117.29 	not authorized if the firefighter fails to provide notice to the
117.30 	fire department that the individual is leaving to provide
117.31 	service in the uniformed service, unless it is not feasible to
117.32 	provide that notice due to the emergency nature of the situation.

117.33 	Sec. 14. Minnesota Statutes 2004, section 424A.04,
117.34 	subdivision 1, is amended to read:
117.35 		Subdivision 1.Membership.  (a) Every A relief
117.36 	association that is directly associated with a municipal fire
118.1 	department shall must be managed by a board of trustees
118.2 	consisting of nine members.  Six trustees shall must be elected
118.3 	from the membership of the relief association and three trustees
118.4 	shall must be drawn from the officials of the municipalities
118.5 	served by the fire department to which the relief association is
118.6 	directly associated.  The bylaws of a relief association which
118.7 	provides a monthly benefit service pension may provide that one
118.8 	of the six trustees elected from the relief
118.9 	association membership may be a retired member receiving a
118.10 	monthly pension who is elected by the membership of the relief
118.11 	association.  The three ex officio municipal trustees shall be
118.12 	the mayor, the clerk, clerk-treasurer or finance director,must
118.13 	be one elected municipal official and one elected or appointed
118.14 	municipal official who are designated as municipal
118.15 	representatives by the municipal governing board annually and
118.16 	the chief of the municipal fire department.
118.17 	(b) Every A relief association that is a subsidiary of an
118.18 	independent nonprofit firefighting corporation shall must be
118.19 	managed by a board of trustees consisting of ten nine members.
118.20 	Six trustees shall must be elected from the membership of the
118.21 	relief association, three two trustees shall must be drawn from
118.22 	the officials of the municipalities served by the fire
118.23 	department to which the relief association is directly
118.24 	associated, and one trustee shall be the fire chief serving with
118.25 	the independent nonprofit firefighting corporation.  The bylaws
118.26 	of a relief association may provide that one of the six trustees
118.27 	elected from the relief association membership may be a retired
118.28 	member receiving a monthly pension who is elected by the
118.29 	membership of the relief association.  The three ex officio two
118.30 	municipal trustees who are the elected officials shall must 
118.31 	be elected or appointed municipal officials,selected as follows:
118.32 	(1) if only one municipality contracts with the independent
118.33 	nonprofit firefighting corporation, the ex officio municipal 
118.34 	trustees shall must be three elected two officials of the
118.35 	contracting municipality who are designated annually by the
118.36 	governing body of the municipality;
119.1 	(2) if two municipalities contract with the independent
119.2 	nonprofit firefighting corporation, the ex officio trustees
119.3 	shall be two elected officials of the largest municipality in
119.4 	population and one elected official of the next largest
119.5 	municipality in population who are designated by the governing
119.6 	bodies of the applicable municipalities;or
119.7 	(3) (2) if three two or more municipalities contract with
119.8 	the independent nonprofit corporation, the ex officio municipal 
119.9 	trustees shall must be one elected official of from each of
119.10 	the three two largest municipalities in population who are
119.11 	designated annually by the governing bodies of the applicable
119.12 	municipalities.
119.13 	(c) The municipal trustees for a relief association that is
119.14 	directly associated with a fire department operated as or by a
119.15 	joint powers entity must be designated annually by the joint
119.16 	powers board.  The municipal trustees for a relief association
119.17 	that is directly associated with a fire department service area
119.18 	township must be designated by the township board.
119.19 	(d) If a relief association lacks the ex officio municipal 
119.20 	board members provided for in paragraph (a), (b),or (b) (c) 
119.21 	because the fire department is not located in or associated with
119.22 	an organized municipality, joint powers entity, or township,the
119.23 	ex officio municipal board members must be appointed from the
119.24 	fire department service area by the board of commissioners of
119.25 	the applicable county.
119.26 	(e) The term of these appointed ex officio municipal board
119.27 	members is three years one year or until the person's successor
119.28 	is qualified, whichever is later.
119.29 	(d) An ex officio (f) A municipal trustee under paragraph
119.30 	(a), (b), or (c) shall have , or (d) has all the rights and
119.31 	duties accorded to any other trustee,except the right to be an
119.32 	officer of the relief association board of trustees.
119.33 	(e) (g) A board shall must have at least three officers,
119.34 	which shall be who are a president, a secretary and a treasurer.
119.35 	These officers shall must be elected from among the elected
119.36 	trustees by either the full board of trustees or by the
120.1 	membership, as specified in the bylaws, and .In no event shall 
120.2 	may any trustee hold more than one officer position at any one
120.3 	time.  The terms of the elected trustees and of the officers of
120.4 	the board shall must be specified in the bylaws of the relief
120.5 	association, but shall may not exceed three years.  If the term
120.6 	of the elected trustees exceeds one year, the election of the
120.7 	various trustees elected from the membership shall initially and
120.8 	shall thereafter continue to must be staggered on as equal a
120.9 	basis as is practicable.

120.10 	Sec. 15. Minnesota Statutes 2004, section 424B.10,
120.11 	subdivision 1, is amended to read:
120.12 		Subdivision 1.Benefits.  (a) Notwithstanding any
120.13 	provision of section 424A.02, subdivision 3, to the contrary,
120.14 	the service pension of the subsequent relief association as of
120.15 	the effective date of consolidation is either the service
120.16 	pension amount specified in clause (1) or the service pension
120.17 	amounts specified in clause (2), as provided for in the
120.18 	consolidated relief association's articles of incorporation or
120.19 	bylaws:
120.20 	(1) the highest dollar amount service pension amount of any
120.21 	prior volunteer firefighters relief association in effect
120.22 	immediately before the consolidation initiation if the pension
120.23 	amount was implemented consistent with section 424A.02; or 
120.24 	(2) for service rendered by each individual volunteer
120.25 	firefighter before consolidation, the service pension amount
120.26 	under the consolidating volunteer firefighters relief
120.27 	association that the firefighter belonged to immediately before
120.28 	the consolidation if the pension amount was implemented
120.29 	consistent with section 424A.02 and for service rendered after
120.30 	the effective date of the consolidation, the highest dollar
120.31 	amount service pension of any of the consolidating volunteer
120.32 	firefighters relief associations in effect immediately before
120.33 	the consolidation if the pension amount was implemented
120.34 	consistent with section 424A.02.
120.35 	(b) Any increase in the service pension amount beyond the
120.36 	amount implemented under paragraph (a) must conform with the
121.1 	requirements and limitations of sections 69.771 to 69.775 and
121.2 	424A.02.

121.3 	Sec. 16. STUDY OF STATEWIDE LUMP-SUM VOLUNTEER
121.4 	FIREFIGHTER RETIREMENT PLAN; CREATION OF TASK FORCE.
 121.5 		Subdivision 1.Task force membership. (a) A statewide
121.6 	Volunteer Firefighter Retirement Plan Study Task Force is
121.7 	created.
121.8 	(b) The task force members are:
121.9 	(1) four members who are appointed by the president of the
121.10 	Minnesota Area Relief Association coalition;
121.11 	(2) four members who are appointed by the president of the
121.12 	Minnesota State Fire Department Association;
121.13 	(3) four members who are appointed by the president of the
121.14 	Minnesota State Fire Chiefs Association;
121.15 	(4) four members who are appointed by the board of
121.16 	directors of the League of Minnesota Cities;
121.17 	(5) two members who are appointed by the board of directors
121.18 	of the Insurance Federation of Minnesota;
121.19 	(6) two members who are appointed by the board of directors
121.20 	of the Minnesota Association of Farm Mutual Insurance Companies;
121.21 	and 
121.22 	(7) the Minnesota state auditor or the auditor's designee.
121.23 	(c) Appointments must be made on or before July 1, 2005.
121.24 	If the appointment is not made in a timely manner, or if there
121.25 	is a vacancy, the state auditor shall appoint the task force
121.26 	member or the replacement member.
121.27 	(d) The chair of the task force shall be selected by the
121.28 	task force.
121.29 	(e) Administrative services for the task force must be
121.30 	provided by the Department of Public Safety.
121.31 		Subd. 2.Task force duties. (a) The task force shall
121.32 	conduct fact finding regarding the creation of a statewide
121.33 	volunteer firefighter retirement plan.
121.34 	(b) The task force shall recommend whether or not a
121.35 	statewide volunteer firefighter retirement plan should be
121.36 	created.  If the task force concludes a statewide volunteer
122.1 	firefighter retirement plan has merit, the task force shall
122.2 	recommend the investment vehicle or vehicles to be utilized by
122.3 	the plan, the administration and corporate governance structure
122.4 	of the plan, the incentives needed to formulate the plan, the
122.5 	limitations applicable to the plan, and the state resources
122.6 	needed to be dedicated to the plan.  The task force may also
122.7 	consider creation of regional volunteer firefighter retirement
122.8 	plans.
122.9 		Subd. 3.Report. The task force shall prepare a report
122.10 	detailing its findings about a potential statewide or regional
122.11 	volunteer firefighter retirement plan or plans.  The report is
122.12 	due January 15, 2006, and must be filed with the Legislative
122.13 	Reference Library; the chair of the Legislative Commission on
122.14 	Pensions and Retirement; the chair of the State and Local
122.15 	Governmental Operations Committee of the senate; the chair of
122.16 	the State Government Budget Division of the senate Finance
122.17 	Committee; the chair of the Governmental Operations and Veterans
122.18 	Affairs Committee of the house of representatives; and the chair
122.19 	of the State Government Finance Committee of the house of
122.20 	representatives.

122.21 	Sec. 17. EFFECTIVE DATE.
 122.22 	(a) Sections 1 to 12, 14, and 15 are effective July 1, 2005.
122.23 	(b) Section 13 is effective July 1, 2005, and applies to
122.24 	breaks in service that end on or after that date.
122.25 	(c) Section 16 is effective the day following final
122.26 	enactment.

122.27 	ARTICLE 12
122.28 	VARIOUS CORRECTIONS
122.29 	AND CLARIFICATIONS

122.30 	Section 1. Minnesota Statutes 2004, section 3A.13, is
122.31 	amended to read:
122.32 	3A.13 EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM
122.33 	DEDUCTION.
122.34 	(a) The provisions of section 352.15 shall 356.401 apply to
122.35 	the legislators retirement plan, chapter 3A.
122.36 	(b) The executive director of the Minnesota State
123.1 	Retirement System must, at the request of a retired legislator
123.2 	who is enrolled in a health insurance plan covering state
123.3 	employees, deduct the person's health insurance premiums from
123.4 	the person's annuity and transfer the amount of the premium to a
123.5 	health insurance carrier covering state employees.

123.6 	Sec. 2. Minnesota Statutes 2004, section 69.011,
123.7 	subdivision 2b, is amended to read:
123.8 		Subd. 2b.Departments of natural resources and public
123.9 	safety.  (a) On or before July 1, 1997, the commissioner of
123.10 	natural resources shall certify one-half of the number of peace
123.11 	officers as defined in subdivision 1, clause (g), employed by
123.12 	the Enforcement Division during calendar year 1996 and the
123.13 	commissioner of public safety shall certify one-half of the
123.14 	number of peace officers as defined in subdivision 1, clause
123.15 	(g), employed by the Bureau of Criminal Apprehension, the
123.16 	Gambling Enforcement Division, and the State Patrol Division
123.17 	during calendar year 1996.
123.18 	(b) On or before March 15, 1998, the commissioner of
123.19 	natural resources shall certify seven-tenths of the number of
123.20 	peace officers as defined in subdivision 1, clause (g), employed
123.21 	by the Enforcement Division and the commissioner of public
123.22 	safety shall certify seven-tenths of the number of peace
123.23 	officers as defined in subdivision 1, clause (g), employed by
123.24 	the Bureau of Criminal Apprehension, the Gambling Enforcement
123.25 	Division, and the State Patrol Division.
123.26 	(c) On or before March 15, 1999, and annually on or before 
123.27 	each March 15 thereafter, the commissioner of natural resources
123.28 	shall certify the number of peace officers as defined in
123.29 	subdivision 1, clause (g), employed by the Enforcement Division
123.30 	and the commissioner of public safety shall certify the number
123.31 	of peace officers as defined in subdivision 1, clause (g),
123.32 	employed by the Bureau of Criminal Apprehension, the Gambling
123.33 	Enforcement Division, and the State Patrol Division.
123.34 	(d) (b) The certification must be on a form prescribed by
123.35 	the commissioner.  Peace officers certified under this paragraph
123.36 	must be included in the total certifications under subdivision 2.

124.1 	Sec. 3. Minnesota Statutes 2004, section 69.021,
124.2 	subdivision 5, is amended to read:
124.3 		Subd. 5.Calculation of state aid.  (a) The amount of
124.4 	fire state aid available for apportionment, before the addition
124.5 	of the minimum fire state aid allocation amount under
124.6 	subdivision 7, is equal to 107 percent of the amount of premium
124.7 	taxes paid to the state upon the fire, lightning, sprinkler
124.8 	leakage, and extended coverage premiums reported to the
124.9 	commissioner by insurers on the Minnesota Firetown Premium
124.10 	Report.  This amount shall must be reduced by the amount
124.11 	required to pay the state auditor's costs and expenses of the
124.12 	audits or exams of the firefighters relief associations.
124.13 	The total amount for apportionment in respect to fire state
124.14 	aid must not be less than two percent of the premiums reported
124.15 	to the commissioner by insurers on the Minnesota Firetown
124.16 	Premium Report after subtracting the following amounts:
124.17 	(1) the amount required to pay the state auditor's costs
124.18 	and expenses of the audits or exams of the firefighters relief
124.19 	associations; and
124.20 	(2) one percent of the premiums reported by town and
124.21 	farmers' mutual insurance companies and mutual property and
124.22 	casualty companies with total assets of $5,000,000 or less.
124.23 	(b) The total amount for apportionment as police state aid
124.24 	is equal to 104 percent of the amount of premium taxes paid to
124.25 	the state on the premiums reported to the commissioner by
124.26 	insurers on the Minnesota Aid to Police Premium Report, reduced
124.27 	by the amount required to pay the costs and expenses of the
124.28 	state auditor for audits or exams of police relief
124.29 	associations.  The total amount for apportionment in respect to
124.30 	the police state aid program must not be less than two percent
124.31 	of the amount of premiums reported to the commissioner by
124.32 	insurers on the Minnesota Aid to Police Premium Report after
124.33 	subtracting the amount required to pay the state auditor's cost
124.34 	and expenses of the audits or exams of the police relief
124.35 	associations.
124.36 	(c) The commissioner shall calculate the percentage of
125.1 	increase or decrease reflected in the apportionment over or
125.2 	under the previous year's available state aid using the same
125.3 	premiums as a basis for comparison.
125.4 	(d) The amount for apportionment in respect to peace
125.5 	officer state aid under paragraph (b) must be further reduced by
125.6 	$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,
125.7 	and $2,404,000 in fiscal year 2001.  These reductions in this
125.8 	paragraph cancel to the general fund.
125.9 	(e) In addition to the amount for apportionment of police
125.10 	state aid under paragraph (b), each year $100,000 shall must be
125.11 	apportioned for police state aid.  An amount sufficient to pay
125.12 	this increase is annually appropriated from the general fund.

125.13 	Sec. 4. Minnesota Statutes 2004, section 69.021,
125.14 	subdivision 11, is amended to read:
125.15 		Subd. 11.Excess police state-aid holding account.  (a)
125.16 	The excess police state-aid holding account is established in
125.17 	the general fund.  The excess police state-aid holding account
125.18 	must be administered by the commissioner.
125.19 	(b) Excess police state aid determined according to
125.20 	subdivision 10, must be deposited in the excess police state-aid
125.21 	holding account.
125.22 	(c) From the balance in the excess police state-aid holding
125.23 	account, $900,000 is appropriated to and must be transferred
125.24 	annually to the ambulance service personnel longevity award and
125.25 	incentive suspense account established by section 144E.42,
125.26 	subdivision 2.
125.27 	(d) If a police officer stress reduction program is created
125.28 	by law and money is appropriated for that program, an amount
125.29 	equal to that appropriation must be transferred to the
125.30 	administrator of that program from the balance in the excess
125.31 	police state-aid holding account.
125.32 	(e) On October 1, 1997, and annually on each subsequent
125.33 	October 1 of each year, one-half of the balance of the excess
125.34 	police state-aid holding account remaining after the deductions
125.35 	under paragraphs (c) and (d) is appropriated for additional
125.36 	amortization aid under section 423A.02, subdivision 1b.
126.1 	(f) Annually, the remaining balance in the excess police
126.2 	state-aid holding account, after the deductions under paragraphs
126.3 	(c), (d), and (e), cancels to the general fund.

126.4 	Sec. 5. Minnesota Statutes 2004, section 69.33, is amended
126.5 	to read:
126.6 	69.33 NAMES OF ASSOCIATIONS REPORTED TO INSURANCE
126.7 	COMPANIES.
126.8 	The commissioner shall enclose in the annual statement
126.9 	blank that is sent to all fire insurance companies doing
126.10 	business in this state a blank form containing the names of all
126.11 	firefighters' relief associations in all cities of the first
126.12 	class and the names of the cities and require these companies,
126.13 	at the time of making their annual statements to the
126.14 	commissioner, to state on these blanks the amount of premiums
126.15 	received by them upon properties insured within the corporate
126.16 	limits of the cities named thereon during the year ending
126.17 	December 31st last past.  Thereafter, before July first each
126.18 	year, the commissioner shall certify to the commissioner of
126.19 	finance the information thus obtained, together with the amount
126.20 	of the tax for the benefit of the relief association pension
126.21 	plans covering firefighters in cities of the first class paid in
126.22 	such year by these companies upon these insurance premiums.

126.23 	Sec. 6. Minnesota Statutes 2004, section 69.773,
126.24 	subdivision 4, is amended to read:
126.25 		Subd. 4.Financial requirements of special fund. Prior
126.26 	to Before August 1 of each year, the officers of the relief
126.27 	association shall determine the financial requirements of the
126.28 	special fund of the relief association in accordance with the
126.29 	requirements of this subdivision.  The financial requirements of
126.30 	the relief association shall must be based on the most recent
126.31 	actuarial valuation of the special fund prepared in accordance
126.32 	with subdivision 2.  If the relief association has an unfunded
126.33 	actuarial accrued liability as reported in the most recent
126.34 	actuarial valuation, the financial requirements shall must be
126.35 	determined by adding the figures calculated pursuant to under 
126.36 	clauses (a), (b), and (c).  If the relief association does not
127.1 	have an unfunded actuarial accrued liability as reported in the
127.2 	most recent actuarial valuation, the financial requirements
127.3 	shall must be an amount equal to the figure calculated pursuant
127.4 	to under clauses (a) and (b), reduced by an amount equal to
127.5 	one-tenth of the amount of any assets in excess of the actuarial
127.6 	accrued liability of the relief association.  The determination
127.7 	of whether or not the relief association has an unfunded
127.8 	actuarial accrued liability shall must be based on the current
127.9 	market value of assets for which a market value is readily
127.10 	ascertainable and the cost or book value, whichever is
127.11 	applicable, for assets for which no market value is readily
127.12 	ascertainable.
127.13 	(a) The normal level cost requirement for the following
127.14 	year, expressed as a dollar amount, shall be is the figure for
127.15 	the normal level cost of the relief association as reported in
127.16 	the actuarial valuation.
127.17 	(b) The amount of anticipated future administrative
127.18 	expenses of the special fund shall must be calculated by
127.19 	multiplying the dollar amount of the administrative expenses of
127.20 	the special fund for the most recent year by the factor of 1.035.
127.21 	(c) The amortization contribution requirement to retire the
127.22 	current unfunded actuarial accrued liability by the established
127.23 	date for full funding shall be is the figure for the
127.24 	amortization contribution as reported in the actuarial
127.25 	valuation. If there has not been a change in the actuarial
127.26 	assumptions used for calculating the actuarial accrued liability
127.27 	of the special fund, a change in the bylaws of the relief
127.28 	association governing the service pensions, retirement benefits,
127.29 	or both payable from the special fund or a change in the
127.30 	actuarial cost method used to value all or a portion of the
127.31 	special fund which change or changes, which by themselves
127.32 	without inclusion of any other items of increase or decrease,
127.33 	produce a net increase in the unfunded actuarial accrued
127.34 	liability of the special fund since December 31, 1970, the
127.35 	established date for full funding shall be December 31, 1990.
127.36 	If there has been a change in the actuarial assumptions used for
128.1 	calculating the actuarial accrued liability of the special fund,
128.2 	a change in the bylaws of the relief association governing the
128.3 	service pensions, retirement benefits, or both payable from the
128.4 	special fund or a change in the actuarial cost method used to
128.5 	value all or a portion of the special fund and the change or
128.6 	changes, by themselves and without inclusion of any other items
128.7 	of increase or decrease, produce a net increase in the unfunded
128.8 	actuarial accrued liability of the special fund since December
128.9 	31, 1970, but prior to January 1, 1979, the established date for
128.10 	full funding shall be December 31, 1998, and if there has been a
128.11 	change since December 31, 1978, the established date for full
128.12 	funding shall must be determined using the following procedure:
128.13 	(i) the unfunded actuarial accrued liability of the special
128.14 	fund shall must be determined in accordance with the provisions
128.15 	governing service pensions, retirement benefits, and actuarial
128.16 	assumptions in effect before an applicable change;
128.17 	(ii) the level annual dollar contribution needed to
128.18 	amortize this unfunded actuarial accrued liability amount by the
128.19 	date for full funding in effect prior to before the change shall 
128.20 	must be calculated using the interest assumption specified in
128.21 	section 356.215, subdivision 8, in effect before any applicable
128.22 	change;
128.23 	(iii) the unfunded actuarial accrued liability of the
128.24 	special fund shall must be determined in accordance with any new
128.25 	provisions governing service pensions, retirement benefits, and
128.26 	actuarial assumptions and the remaining provisions governing
128.27 	service pensions, retirement benefits, and actuarial assumptions
128.28 	in effect before an applicable change;
128.29 	(iv) the level annual dollar contribution needed to
128.30 	amortize the difference between the unfunded actuarial accrued
128.31 	liability amount calculated pursuant to under subclause (i) and
128.32 	the unfunded actuarial accrued liability amount
128.33 	calculated pursuant to under subclause (iii) over a period of 20
128.34 	years starting December 31 of the year in which the change is
128.35 	effective shall must be calculated using the interest assumption
128.36 	specified in section 356.215, subdivision 8, in effect after any
129.1 	applicable change;
129.2 	(v) the annual amortization contribution calculated
129.3 	pursuant to under subclause (iv) shall must be added to the
129.4 	annual amortization contribution calculated pursuant to under 
129.5 	subclause (ii);
129.6 	(vi) the period in which the unfunded actuarial accrued
129.7 	liability amount determined in subclause (iii) will be amortized
129.8 	by the total annual amortization contribution computed pursuant
129.9 	to under subclause (v) shall must be calculated using the
129.10 	interest assumption specified in section 356.215, subdivision 8,
129.11 	in effect after any applicable change, rounded to the nearest
129.12 	integral number of years, but which shall does not exceed a
129.13 	period of 20 years from the end of the year in which the
129.14 	determination of the date for full funding using this procedure
129.15 	is made and which shall is not be less than the period of years
129.16 	beginning in the year in which the determination of the date for
129.17 	full funding using this procedure is made and ending by the date
129.18 	for full funding in effect before the change;
129.19 	(vii) the period determined pursuant to under subclause (vi)
129.20 	shall must be added to the date as of which the actuarial
129.21 	valuation was prepared and the resulting date shall be is the
129.22 	new date for full funding.

129.23 	Sec. 7. Minnesota Statutes 2004, section 352.01,
129.24 	subdivision 4, is amended to read:
129.25 		Subd. 4.Accumulated contributions.  "Accumulated
129.26 	contributions" means the total, exclusive of interest, of (1)
129.27 	the sums deducted from the salary of an employee, (2) the amount
129.28 	of payments, including assessments, paid by the employee in lieu
129.29 	of salary deductions and all other payments made under Laws
129.30 	1929, chapter 191, as amended,this chapter and credited to the
129.31 	employee's individual account in the retirement fund.

129.32 	Sec. 8. Minnesota Statutes 2004, section 352.01,
129.33 	subdivision 5, is amended to read:
129.34 		Subd. 5.Retirement fund. (a) "Retirement fund" means
129.35 	the general state employees retirement fund created by section
129.36 	352.04, subdivision 1, with respect to the general state
130.1 	employees retirement plan or the correctional state employees
130.2 	retirement fund created by section 352.911, subdivision 1, with
130.3 	respect to the correctional state employees retirement plan.
130.4 	(b) " The retirement fund " includes the aggregate of
130.5 	accumulated contributions of employees covered by the applicable
130.6 	plan, and all other funds paid into the state treasury or
130.7 	received by the director under Laws 1929, chapter 191, as
130.8 	amended this chapter, together with all income and profits from
130.9 	the money and interest on it, including contributions on the
130.10 	part of the federal government, the state, and state departments.

130.11 	Sec. 9. Minnesota Statutes 2004, section 352.01,
130.12 	subdivision 21, is amended to read:
130.13 		Subd. 21.Accrued annuities. (a) In this chapter and
130.14 	chapters 3A, 352B, 352C, and 490, "accrued annuity"  means an
130.15 	annuity that had become payable to a retired employee in the
130.16 	lifetime of the employee.
130.17 	(b) An annuity or benefit authorized as provided in this
130.18 	chapter and chapters 3A, 352B, 352C, and 490 becomes payable on
130.19 	the first day of each calendar month for that calendar month and
130.20 	is to must be paid on the first day of each calendar month
130.21 	beginning with benefits payable on and after December 1, 1977.
130.22 	(c) Notwithstanding any provision to the contrary in this
130.23 	chapter and chapters 3A, 352B, 352C, and 490, benefit payment
130.24 	authorized as "payable for life" is payable for the entire month
130.25 	in which death occurs, and the benefit payment for the month of
130.26 	death is payable to the surviving spouse or other beneficiary
130.27 	only if the annuitant dies before negotiating the benefit check.

130.28 	Sec. 10. Minnesota Statutes 2004, section 352.01,
130.29 	subdivision 23, is amended to read:
130.30 		Subd. 23.Coverage or covered by the system.  "Coverage"
130.31 	or "covered by the system" means that a state employees employee 
130.32 	who serve serves the state of Minnesota and make makes the
130.33 	required employee contributions to the retirement fund will is,
130.34 	by reason of these contributions become ,entitled to either (1)
130.35 	a retirement annuity, or (2) a disability benefit, or (3) a
130.36 	refund of accumulated contributions, as provided in this chapter.

131.1 	Sec. 11. Minnesota Statutes 2004, section 352.021,
131.2 	subdivision 1, is amended to read:
131.3 		Subdivision 1.Establishment. (a) There is established
131.4 	the general state employees retirement plan of the Minnesota
131.5 	State Retirement System for state employees.
131.6 	(b) The system general state employees retirement plan is a
131.7 	continuation of the State Employees Retirement Association.
131.8 	(c) Any person who was a member of the State Employees
131.9 	Retirement Association on June 30, 1967, is covered by
131.10 	the system general state employees retirement plan and is
131.11 	entitled to all benefits provided by the system plan upon
131.12 	fulfilling the age, service, contribution, and other
131.13 	requirements of this chapter.

131.14 	Sec. 12. Minnesota Statutes 2004, section 352.021,
131.15 	subdivision 2, is amended to read:
131.16 		Subd. 2.State employees covered.  Every person who is a
131.17 	state employee, as defined in section 352.01, on July 1, 1967,
131.18 	or becomes a state employee after that date as defined in
131.19 	section 352.01is covered by the system general state employees
131.20 	retirement plan.  Acceptance of state employment or continuance
131.21 	in state service is deemed to be consent to have deductions made
131.22 	from salary for deposit to the credit of the account of the
131.23 	state employee in the retirement fund.

131.24 	Sec. 13. Minnesota Statutes 2004, section 352.021,
131.25 	subdivision 3, is amended to read:
131.26 		Subd. 3.Optional exemptions.  Any person who is
131.27 	appointed by the governor or lieutenant governor may request
131.28 	exemption from coverage by the general state employees
131.29 	retirement plan under this chapter if the appointee is not so 
131.30 	covered at by the plan on the date of appointment.  To qualify
131.31 	for this exemption, a written request must be made within 90
131.32 	days from the date of entering upon the duties of the position
131.33 	to which the person is appointed.  After making the request, a
131.34 	person requesting the exemption is not entitled to coverage by
131.35 	the general state employees retirement plan while employed in
131.36 	the position that entitled that person to an exemption from
132.1 	coverage.

132.2 	Sec. 14. Minnesota Statutes 2004, section 352.021,
132.3 	subdivision 4, is amended to read:
132.4 		Subd. 4.Reentering service after refund.  When a former
132.5 	employee who has withdrawn accumulated contributions reenters
132.6 	employment in a position entitled to coverage under the
132.7 	system general state employees retirement plan, the employee
132.8 	shall must be covered by the system plan on the same basis as a
132.9 	new employee and is not entitled to credit for any former
132.10 	service.  The annuity rights forfeited when taking a refund can
132.11 	only be restored as provided in this chapter.

132.12 	Sec. 15. Minnesota Statutes 2004, section 352.04,
132.13 	subdivision 1, is amended to read:
132.14 		Subdivision 1.Fund created.  (a) There is created a
132.15 	special fund to be known as the general state employees
132.16 	retirement fund.  In that fund there shall be deposited
132.17 	employees , employee contributions, employers employer 
132.18 	contributions, and other amounts authorized by law must be
132.19 	deposited.
132.20 	(b) Effective July 1, 1969,The general state employees
132.21 	retirement plan of the Minnesota State Retirement System shall 
132.22 	must participate in the Minnesota postretirement investment fund.
132.23 	In that fund there shall be deposited The amounts provided in
132.24 	section 352.119must be deposited in the Minnesota
132.25 	postretirement investment fund.

132.26 	Sec. 16. Minnesota Statutes 2004, section 352.04,
132.27 	subdivision 12, is amended to read:
132.28 		Subd. 12.Fund disbursement restricted.  The general 
132.29 	state employees retirement fund and the participation in the
132.30 	Minnesota postretirement investment fund must be disbursed only
132.31 	for the purposes provided by law.  The expenses of the system
132.32 	and any benefits provided by law, other than benefits payable
132.33 	from the Minnesota postretirement investment fund, must be paid
132.34 	from the general state employees retirement fund.  The
132.35 	retirement allowances, retirement annuities, and disability
132.36 	benefits, as well as refunds of any sum remaining to the credit
133.1 	of a deceased retired employee or a disabled employee must be
133.2 	paid only from the general state employees retirement fund after
133.3 	the needs have been certified and the amounts withdrawn from the
133.4 	participation in the Minnesota postretirement investment fund
133.5 	under section 11A.18.  The amounts necessary to make the
133.6 	payments from the general state employees retirement fund and
133.7 	the participation in the Minnesota postretirement investment
133.8 	fund are annually appropriated from these funds for those
133.9 	purposes.

133.10 	Sec. 17. Minnesota Statutes 2004, section 352.041,
133.11 	subdivision 1, is amended to read:
133.12 		Subdivision 1.Allowable service credit. Any (a) An 
133.13 	employee covered by the system general state employees
133.14 	retirement plan who is given a leave of absence for employment
133.15 	by a political subdivision of the state shall remains a member
133.16 	of the plan and must continue to pay member contributions into
133.17 	the general state employees retirement fund for the period of
133.18 	leave.
133.19 	(b) Upon payment of member contributions,the employee must
133.20 	be given allowable service credit as a state employee on the
133.21 	records of the system retirement plan as though the employee had
133.22 	received salary from the state during the leave.  Payments into
133.23 	the retirement fund shall must be at the rate required in
133.24 	section 352.04, subdivision 2, and must be based upon the salary
133.25 	received from the political subdivision subject to the maximum
133.26 	amount, if any.

133.27 	Sec. 18. Minnesota Statutes 2004, section 352.041,
133.28 	subdivision 2, is amended to read:
133.29 		Subd. 2.Employee contributions, procedure.  The officer
133.30 	or employee who is authorized by law to pay salaries to
133.31 	employees of the political subdivision which is employing a
133.32 	state employee shall have must deduct employee contributions
133.33 	deducted for the general state employees retirement plan under
133.34 	section 352.04, subdivision 2,from the salary of each employee
133.35 	who is on leave of absence from state service on each payroll
133.36 	abstract and shall must pay the sum to the director following
134.1 	the conclusion of each pay period.

134.2 	Sec. 19. Minnesota Statutes 2004, section 352.041,
134.3 	subdivision 3, is amended to read:
134.4 		Subd. 3.Employer contributions, procedure.  The officer
134.5 	or employee who is authorized by law to pay salaries to
134.6 	employees of the political subdivision which is employing a
134.7 	state employee covered by the system shall general state
134.8 	employees retirement plan also must have employer contributions
134.9 	made to the general state employees retirement fund on following
134.10 	the conclusion of each payroll abstract in the amount required
134.11 	by section 352.04, subdivision 3.  These contributions are to 
134.12 	must be charged to the political subdivision as an
134.13 	administrative cost.

134.14 	Sec. 20. Minnesota Statutes 2004, section 352.041,
134.15 	subdivision 5, is amended to read:
134.16 		Subd. 5.Employer contributions, leaves of absence; tax
134.17 	levies. (a) Every political subdivision which is employing a
134.18 	state employee covered by the system on leave of absence from
134.19 	state service for employment by a political subdivision of the
134.20 	state shall must pay into the general state employees retirement
134.21 	fund the amount of the employer contribution required by law for
134.22 	state employees covered by the system under section 352.04,
134.23 	subdivision 3.
134.24 	(b) Employing political subdivisions, except other than 
134.25 	school districts,may levy taxes necessary for the payment of
134.26 	employer contributions without limitation as to rate or amount.
134.27 	The levy of the taxes does not reduce the amount of other
134.28 	taxes to that may be levied by political subdivisions,
134.29 	except other than school districts,which are subject to any
134.30 	limitation.

134.31 	Sec. 21. Minnesota Statutes 2004, section 352.15,
134.32 	subdivision 1, is amended to read:
134.33 		Subdivision 1.Exemption; exceptions. None of the money,
134.34 	annuities, or other benefits mentioned in this chapter is
134.35 	assignable either in law or in equity or subject to execution,
134.36 	levy, attachment, garnishment, or other legal process, except as
135.1 	provided in subdivision 1a or section 518.58, 518.581, or
135.2 	518.6111.The provisions of section 356.401 apply to the general
135.3 	state employees retirement plan and to the correctional state
135.4 	employees retirement plan.

135.5 	Sec. 22. Minnesota Statutes 2004, section 352.15,
135.6 	subdivision 3, is amended to read:
135.7 		Subd. 3.Deducting health or dental insurance premiums.
 135.8 	The board may direct authorize, at its discretion, the deduction
135.9 	of a retiree's health or dental insurance premiums and transfer
135.10 	of the amounts to a health or dental insurance carrier covering
135.11 	state employees.  The insurance carrier must certify that the
135.12 	retired employee has signed an authorization for the deduction
135.13 	and provide a computer readable roster of covered retirees and
135.14 	amounts.  The health or dental insurance carrier must refund
135.15 	deductions withheld from a retiree's check in error directly to
135.16 	the retiree.  The board shall require that the insurance carrier
135.17 	to reimburse the fund for the administrative expense of
135.18 	withholding the premium amounts.  The insurance carrier shall
135.19 	assume liability for any failure of the system to properly
135.20 	withhold the premium amounts.

135.21 	Sec. 23. Minnesota Statutes 2004, section 352.15,
135.22 	subdivision 4, is amended to read:
135.23 		Subd. 4.Direct transfer of refunds. A direct transfer
135.24 	of account refunds under this chapter may be made to an 
135.25 	individual retirement savings accounts account or a qualified
135.26 	retirement plans plan of the person upon the receipt of an 
135.27 	application for transfer by a former employee, on forms
135.28 	acceptable to the executive director.

135.29 	Sec. 24. Minnesota Statutes 2004, section 352.22,
135.30 	subdivision 10, is amended to read:
135.31 		Subd. 10.Other refunds.  Former employees covered by the
135.32 	system are entitled to apply for refunds if they are or become
135.33 	members of the State Patrol retirement fund, the state Teachers
135.34 	Retirement Association, or employees of the University of
135.35 	Minnesota excluded from coverage under the system by action of
135.36 	the Board of Regents; or labor service employees, excluded from
136.1 	coverage under section 352.01, subdivision 2b, clause (25);or
136.2 	employees of the adjutant general who under federal law
136.3 	effectually elect membership in a federal retirement system; or
136.4 	officers or employees of the senate or house of representatives,
136.5 	excluded from coverage under section 352.01, subdivision 2b,
136.6 	clause (8) (7).  The refunds must include accumulated
136.7 	contributions plus interest as provided in subdivision 2.  These
136.8 	employees may apply for a refund once 30 days or more have
136.9 	elapsed after their coverage ceases, even if they continue in
136.10 	state service but in positions not covered by this chapter.

136.11 	Sec. 25. Minnesota Statutes 2004, section 352B.01,
136.12 	subdivision 1, is amended to read:
136.13 		Subdivision 1.Scope.  In this chapter, each of the terms
136.14 	defined in this section have has the meanings meaning given
136.15 	them to it.

136.16 	Sec. 26. Minnesota Statutes 2004, section 352B.01,
136.17 	subdivision 2, is amended to read:
136.18 		Subd. 2.Member.  "Member" means:
136.19 	(1) a State Patrol member currently employed after June 30,
136.20 	1943,under section 299D.03 by the state, who is a peace officer
136.21 	under section 626.84, and whose salary or compensation is paid
136.22 	out of state funds;
136.23 	(2) a conservation officer employed under section 97A.201,
136.24 	currently employed by the state, whose salary or compensation is
136.25 	paid out of state funds;
136.26 	(3) a crime bureau officer who was employed by the crime
136.27 	bureau and was a member of the Highway Patrolmen's retirement
136.28 	fund on July 1, 1978, whether or not that person has the power
136.29 	of arrest by warrant after that date, or who is employed as
136.30 	police personnel, with powers of arrest by warrant under section
136.31 	299C.04, and who is currently employed by the state, and whose
136.32 	salary or compensation is paid out of state funds;
136.33 	(4) a person who is employed by the state in the Department
136.34 	of Public Safety in a data processing management position with
136.35 	salary or compensation paid from state funds, who was a crime
136.36 	bureau officer covered by the State Patrol retirement plan on
137.1 	August 15, 1987, and who was initially hired in the data
137.2 	processing management position within the department during
137.3 	September 1987, or January 1988, with membership continuing for
137.4 	the duration of the person's employment in that position,
137.5 	whether or not the person has the power of arrest by warrant
137.6 	after August 15, 1987;
137.7 	(5) a public safety employee defined as who is a peace
137.8 	officer in under section 626.84, subdivision 1, paragraph (c),
137.9 	and who is employed with by the Division of Alcohol and Gambling
137.10 	Enforcement under section 299L.01; and
137.11 	(6) a Fugitive Apprehension Unit officer after October 31,
137.12 	2000, who is employed by the Office of Special Investigations of
137.13 	the Department of Corrections and who is a peace officer under
137.14 	section 626.84.

137.15 	Sec. 27. Minnesota Statutes 2004, section 352B.01,
137.16 	subdivision 3, is amended to read:
137.17 		Subd. 3.Allowable service.  (a) "Allowable service"
137.18 	means:
137.19 	(1) for members defined in subdivision 2, clause (a) (1),
137.20 	monthly service is granted for in any month for which payments
137.21 	have been made to the State Patrol retirement fund, and
137.22 	(2) for members defined in subdivision 2, clauses (b) (2) 
137.23 	and (c) (3), service for which payments have been made to the
137.24 	State Patrol retirement fund, service for which payments were
137.25 	made to the State Police officers retirement fund after June 30,
137.26 	1961, and all prior service which was credited to a member for
137.27 	service on or before June 30, 1961.
137.28 	(b) Allowable service also includes any period of absence
137.29 	from duty by a member who, by reason of injury incurred in the
137.30 	performance of duty, is temporarily disabled and for which
137.31 	disability the state is liable under the workers' compensation
137.32 	law, until the date authorized by the executive director for
137.33 	commencement of payment of a disability benefit or return to
137.34 	employment.
137.35 	(c) MS 2002 (Expired)
137.36 	(d) Allowable service means service in a month during which
138.1 	a member is paid a salary from which a member contribution is
138.2 	deducted, deposited, and credited in the State Patrol retirement
138.3 	plan.

138.4 	Sec. 28. Minnesota Statutes 2004, section 352B.02,
138.5 	subdivision 1e, is amended to read:
138.6 		Subd. 1e.Audit; actuarial valuation.  The legislative
138.7 	auditor shall audit the fund.  Any actuarial valuation of the
138.8 	fund required under section 356.215 must be prepared by the
138.9 	actuary retained under section 356.214.  Any approved actuary
138.10 	retained by the executive director under section 352.03,
138.11 	subdivision 6, may perform actuarial valuations and experience
138.12 	studies to supplement those performed by the commission-retained 
138.13 	actuary retained under section 356.214.  Any supplemental
138.14 	actuarial valuation or experience studies shall must be filed
138.15 	with the executive director of the Legislative Commission on
138.16 	Pensions and Retirement.

138.17 	Sec. 29. Minnesota Statutes 2004, section 352B.071, is
138.18 	amended to read:
138.19 	352B.071 EXEMPTION FROM PROCESS.
138.20 	None of the money, annuities, or other benefits provided
138.21 	for in this chapter is assignable either in law or in equity or
138.22 	be subject to execution, levy, attachment, garnishment, or other
138.23 	legal process, except as provided in section 518.58, 518.581, or
138.24 	518.6111.The provisions of section 356.401 apply to the State
138.25 	Patrol retirement plan.

138.26 	Sec. 30. Minnesota Statutes 2004, section 352D.01, is
138.27 	amended to read:
138.28 	352D.01 ESTABLISHMENT.
138.29 	There is hereby established within the Minnesota State
138.30 	Retirement System a retirement program for certain public
138.31 	employees to be known as the Minnesota unclassified employees
138.32 	retirement program, which shall be .  The program must be 
138.33 	administered by the Minnesota State Retirement System.

138.34 	Sec. 31. Minnesota Statutes 2004, section 352D.015,
138.35 	subdivision 3, is amended to read:
138.36 		Subd. 3.Supplemental investment fund.  "Supplemental
139.1 	investment fund" means the fund established and governed by
139.2 	section 11A.17.

139.3 	Sec. 32. Minnesota Statutes 2004, section 352D.015,
139.4 	subdivision 4, is amended to read:
139.5 		Subd. 4.General fund.  "General fund" means the general 
139.6 	state employees retirement fund except the moneys for the
139.7 	unclassified program.

139.8 	Sec. 33. Minnesota Statutes 2004, section 352D.03, is
139.9 	amended to read:
139.10 	352D.03 TRANSFER OF ASSETS.
139.11 	Unless an eligible employee enumerated in section 352D.02,
139.12 	subdivision 1 or 1a, has elected coverage under the individual
139.13 	retirement account plan under chapter 354B, a sum of money
139.14 	representing the assets credited to each employee exercising the
139.15 	option contained in section 352D.02, plus an equal employer
139.16 	contribution together with interest for the employment period at
139.17 	the actuarially assumed rates applicable preretirement interest
139.18 	actuarial assumption rate during this period, compounded
139.19 	annually, shall must be used for the purchase of shares on
139.20 	behalf of each employee in the accounts of the supplemental
139.21 	retirement fund established by section 11A.17. Any employer's
139.22 	contribution to amortize the deficit in the state employee's
139.23 	retirement fund shall not, however, be used for the purchase of
139.24 	shares.

139.25 	Sec. 34. Minnesota Statutes 2004, section 352D.05,
139.26 	subdivision 4, is amended to read:
139.27 		Subd. 4.Repayment of refund. (a) A participant in the
139.28 	unclassified program may repay regular refunds taken pursuant to 
139.29 	under section 352.22, as provided in section 352.23.
139.30 	(b) A participant in the unclassified program or an
139.31 	employee covered by the general plan who has withdrawn the value
139.32 	of the total shares may repay the refund taken and thereupon
139.33 	restore the service credit, rights and benefits forfeited by
139.34 	paying into the fund the amount refunded plus interest at an
139.35 	annual rate of 8.5 percent compounded annually from the date
139.36 	that the refund was taken until the date that the refund is
140.1 	repaid.  If the participant had withdrawn only the employee
140.2 	shares as permitted under prior laws, repayment shall must be
140.3 	pro rata. Payment shall 
140.4 	(c) Except as provided in section 356.441, the repayment of
140.5 	a refund under this section must be made in a lump sum.

140.6 	Sec. 35. Minnesota Statutes 2004, section 352D.085,
140.7 	subdivision 1, is amended to read:
140.8 		Subdivision 1.Combined service. Except as provided in
140.9 	section 356.30, 356.302, or 356.303,service under the
140.10 	unclassified program for which the employee has been credited
140.11 	with employee shares may be used for the limited purpose of
140.12 	qualifying for benefits under sections 352.115, 352.72,
140.13 	subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60;
140.14 	provided such .  The service also may not be used to qualify for
140.15 	a disability benefit under section 352.113 or 354.48 if a
140.16 	participant was under the unclassified program at the time of
140.17 	the disability, and provided further that .  Also,the years of
140.18 	service and salary paid while the participant was in the
140.19 	unclassified program shall may not be used in determining the
140.20 	amount of benefits.

140.21 	Sec. 36. Minnesota Statutes 2004, section 352D.09,
140.22 	subdivision 5, is amended to read:
140.23 		Subd. 5.Unclaimed benefits.  If the beneficiary,
140.24 	surviving spouse or estate has not made application for benefits
140.25 	within ten years after the date of the death of a participant,
140.26 	the value of the shares shall be is appropriated to the regular 
140.27 	general state employees retirement fund and the provisions of
140.28 	section 352.12, subdivision 12shall ,govern.  If a former
140.29 	participant fails to make a claim for benefits within five years
140.30 	after the termination of covered service or by age 70, whichever
140.31 	is later, the value of the shares shall be is appropriated to
140.32 	the general state employees retirement fund and the provisions
140.33 	of section 352.22, subdivision 8, shall apply.

140.34 	Sec. 37. Minnesota Statutes 2004, section 352D.12, is
140.35 	amended to read:
140.36 	352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.
141.1 	(a) An employee who is a participant in the unclassified
141.2 	program and who has prior service credit in a covered plan under
141.3 	chapters 3A,chapter 352, 352C,353, 354, 354A, and or 422A
141.4 	may, within the time limits specified in this section, elect to
141.5 	transfer to the unclassified program prior service contributions
141.6 	to one or more of those plans. Participants with six or more
141.7 	years of prior service credit in a plan governed by chapter 3A
141.8 	or 352C on July 1, 1998, may not transfer prior service
141.9 	contributions.  Participants with less than six years of prior
141.10 	service credit in a plan governed by chapter 3A or 352C on July
141.11 	1, 1998, must be contributing to the unclassified plan on or
141.12 	after January 5, 1999, in order to transfer prior contributions.
141.13 	(b) For participants with prior service credit in a plan
141.14 	governed by chapter 352, 353, 354, 354A, or 422A, "prior service
141.15 	contributions" means the accumulated employee and equal employer
141.16 	contributions with interest at an annual rate of 8.5 percent
141.17 	compounded annually, based on fiscal year balances. For
141.18 	participants with less than six years of service credit as of
141.19 	July 1, 1998, and with prior service credit in a plan governed
141.20 	by chapter 3A or 352C, "prior service contributions" means an
141.21 	amount equal to twice the amount of the accumulated member
141.22 	contributions plus annual compound interest at the rate of 8.5
141.23 	percent, computed on fiscal year balances.
141.24 	(c) If a participant has taken a refund from a retirement
141.25 	plan listed in this section, the participant may repay the
141.26 	refund to that plan, notwithstanding any restrictions on
141.27 	repayment to that plan, plus 8.5 percent interest compounded
141.28 	annually and have the accumulated employee and equal employer
141.29 	contributions transferred to the unclassified program with
141.30 	interest at an annual rate of 8.5 percent compounded annually
141.31 	based on fiscal year balances.  If a person repays a refund and
141.32 	subsequently elects to have the money transferred to the
141.33 	unclassified program, the repayment amount, including interest,
141.34 	is added to the fiscal year balance in the year which the
141.35 	repayment was made.
141.36 	(d) A participant electing to transfer prior service
142.1 	contributions credited to a retirement plan governed by chapter
142.2 	352, 353, 354, 354A, or 422A as provided under this section must
142.3 	complete the a written application for the transfer and repay
142.4 	any refund within one year of the commencement of the employee's
142.5 	participation in the unclassified program. A participant
142.6 	electing to transfer prior service contributions credited to a
142.7 	retirement plan governed by chapter 3A or 352C as provided under
142.8 	this section must complete the application for the transfer and
142.9 	repay any refund between January 5, 1999, and June 1, 1999, if
142.10 	the employee commenced participation in the unclassified program
142.11 	before January 5, 1999, or within one year of the commencement
142.12 	of the employee's participation in the unclassified program if
142.13 	the employee commenced participation in the unclassified program
142.14 	after January 4, 1999.

142.15 	Sec. 38. Minnesota Statutes 2004, section 353.01,
142.16 	subdivision 32, is amended to read:
142.17 		Subd. 32.Coordinated member.  "Coordinated member" means
142.18 	any a public employee, including any a public hospital employee,
142.19 	who is covered by any an agreement or modification made between
142.20 	the state and the Secretary of Health, Education and Welfare 
142.21 	Human Services, making the provisions of the federal Old Age,
142.22 	Survivors and Disability Insurance Act applicable to the member
142.23 	if the membership eligibility criteria are met under this
142.24 	chapter.  A coordinated member also is a former basic member who
142.25 	has a complete and continuous separation for at least 30 days
142.26 	from employment as a public employee meeting the requirements
142.27 	specified in subdivision 28, paragraphs (a) and (b), and who
142.28 	reenters public service as a public employee and meets the
142.29 	membership eligibility criteria under this chapter.

142.30 	Sec. 39. Minnesota Statutes 2004, section 353.01,
142.31 	subdivision 33, is amended to read:
142.32 		Subd. 33.Basic member.  "Basic member" means any a 
142.33 	public employee, including any a public hospital employee, who
142.34 	is not covered by any agreement or modification made between the
142.35 	state and the Secretary of Health, Education and Welfare Human
142.36 	Services.

143.1 	Sec. 40. Minnesota Statutes 2004, section 353.025, is
143.2 	amended to read:
143.3 	353.025 RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.
143.4 	From and after January 1, 1982,Employees of the Range
143.5 	Association of Municipalities and Schools hereinafter referred
143.6 	to as the association, shall become are coordinated members of
143.7 	the general employees retirement plan of the Public Employees
143.8 	Retirement Association unless specifically exempt under section
143.9 	353.01, subdivision 2b, and .The Range Association shall be
143.10 	deemed to be of Municipalities and Schools is a governmental
143.11 	subdivision for the purposes of this chapter.

143.12 	Sec. 41. Minnesota Statutes 2004, section 353.026, is
143.13 	amended to read:
143.14 	353.026 COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT
143.15 	EMPLOYEES.
143.16 	Any person who was employed by the city of Minneapolis,
143.17 	Special School District No. 1, or public corporation as defined
143.18 	in section 422A.01, subdivision 9, on or after July 1, 1978,and
143.19 	prior to before July 1, 1979, and who was excluded from
143.20 	retirement coverage by the coordinated program of the
143.21 	Minneapolis municipal employees retirement fund pursuant to 
143.22 	under section 422A.09, subdivision 3, shall be is entitled to
143.23 	retirement coverage by the general employees retirement plan of
143.24 	the Public Employees Retirement Association unless specifically
143.25 	excluded pursuant to under section 353.01, subdivision 2b, from
143.26 	and after May 19, 1981.

143.27 	Sec. 42. Minnesota Statutes 2004, section 353.027, is
143.28 	amended to read:
143.29 	353.027 RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT
143.30 	EMPLOYEES.
143.31 	Any person employed on January 1, 1975, by a municipal
143.32 	court established pursuant to under Minnesota Statutes 1957,
143.33 	section 488.03,and located in the cities of New Brighton,
143.34 	Roseville, Maplewood, North Saint Paul, White Bear Lake,or St.
143.35 	Paul shall be is eligible for membership in the general
143.36 	employees retirement plan of the Public Employees Retirement
144.1 	Association and shall retain retains any rights or benefits the
144.2 	person had attained as a member of the general employees
144.3 	retirement plan of the association on January 1, 1975, so long
144.4 	as the person remains an employee of the municipal court of
144.5 	Ramsey County.

144.6 	Sec. 43. Minnesota Statutes 2004, section 353.028, is
144.7 	amended to read:
144.8 	353.028 CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.
144.9 		Subdivision 1.Definitions. (a) For purposes of this
144.10 	section, each of the terms in this subdivision has the meaning
144.11 	indicated.
144.12 	(b) "City manager" means (1) a person who is duly appointed
144.13 	to and is holding the position of city manager in a Plan B
144.14 	statutory city or in a home rule city operating under the
144.15 	"council-manager" form of government, or (2) a person who is 
144.16 	appointed to and is holding the position of chief administrative
144.17 	officer of a home rule charter city or a statutory city pursuant
144.18 	to under a charter provision, ordinance, or resolution
144.19 	establishing such a position and prescribing its duties and
144.20 	responsibilities.
144.21 	(c) "Governing body" means the city council of the city
144.22 	employing the city manager.
144.23 	(d) "Election" means the election described in subdivision
144.24 	2.
144.25 		Subd. 2.Election. (a) A city manager may elect to be
144.26 	excluded from membership in the general employees retirement
144.27 	plan of the Public Employees Retirement Association.  The
144.28 	election of exclusion must be made within six months following
144.29 	the commencement of employment, must be made in writing on a
144.30 	form prescribed by the executive director, and must be approved
144.31 	by a resolution of adopted by the governing body of the city.
144.32 	The election of exclusion is not effective until it is filed
144.33 	with the executive director.  Membership of a city manager in
144.34 	the association general employees retirement plan ceases on the
144.35 	date the written election is received by the executive director
144.36 	or upon a later date specified.  Employee and employer
145.1 	contributions made on behalf of a person exercising the option
145.2 	to be excluded from membership under this section must be
145.3 	refunded in accordance with section 353.27, subdivision 7.
145.4 	(b) A city manager who has elected exclusion under this
145.5 	subdivision may elect to revoke that action by filing a written
145.6 	notice with the executive director.  The notice must be on a
145.7 	form prescribed by the executive director and must be approved
145.8 	by a resolution of the governing body of the city.  Membership
145.9 	of the city manager in the association resumes prospectively
145.10 	from the date of the first day of the pay period for which
145.11 	contributions were deducted or, if pay period coverage dates are
145.12 	not provided, the date on which the notice of revocation or
145.13 	contributions are received in the office of the association,
145.14 	provided that the notice of revocation is received by the
145.15 	association within 60 days of the receipt of contributions.
145.16 	(c) An election under paragraph (b) is irrevocable.  Any
145.17 	election under paragraph (a) or (b) must include a statement
145.18 	that the individual will not seek authorization to purchase
145.19 	service credit for any period of excluded service.
145.20 		Subd. 3.Deferred compensation; city contribution. If an
145.21 	election of exclusion is made, and if the city manager and the
145.22 	governing body of the city additionally agree in writing that
145.23 	the additional compensation is to be deferred and shall is to be
145.24 	contributed on behalf of the city manager to a deferred
145.25 	compensation program which meets the requirements of section 457
145.26 	of the Internal Revenue Code of 1954 1986, as amended through
145.27 	December 31, 1980, the governing body may compensate the city
145.28 	manager, in addition to the salary allowed under any limitation
145.29 	imposed on salaries by law or charter, in an amount equal to the
145.30 	employer contribution which would be required by section 353.27,
145.31 	subdivision 3, if the city manager were a member of the
145.32 	association general employees retirement plan.
145.33 		Subd. 4.Refunds; deferred annuity. A city manager who
145.34 	makes an election to be excluded from membership is entitled to
145.35 	a refund of accumulated deductions or, if otherwise qualified, a
145.36 	deferred annuity in the manner provided by under section 353.34,
146.1 	at the option of the manager.
146.2 		Subd. 5.Election; other employment. If a city manager
146.3 	who has made an election to be excluded subsequently accepts
146.4 	employment in another governmental subdivision or subsequently 
146.5 	accepts employment other than as a city manager in the same
146.6 	city, the election shall be deemed to have been is rescinded on
146.7 	the effective date of employment.

146.8 	Sec. 44. Minnesota Statutes 2004, section 353.14, is
146.9 	amended to read:
146.10 	353.14 BENEFITS FROM OTHER FUNDS.
146.11 	No annuity or benefit provided by this chapter shall may be
146.12 	affected, diminished, or impaired by any pension, benefit, or
146.13 	annuity which any member or survivor is entitled to receive from
146.14 	a tax supported public retirement plan or system authorized by
146.15 	any other law, for based on service that is different service
146.16 	than the service for which the member or survivor is entitled to
146.17 	receive benefit or annuity from a retirement plan administered
146.18 	by the Public Employees Retirement Association.

146.19 	Sec. 45. Minnesota Statutes 2004, section 353.15,
146.20 	subdivision 1, is amended to read:
146.21 		Subdivision 1.Exemption; exceptions. No money, annuity,
146.22 	or benefit provided for in this chapter is assignable or subject
146.23 	to execution, levy, attachment, garnishment, or legal process,
146.24 	except as provided in subdivision 2 or section 518.58, 518.581,
146.25 	or 518.6111.The provisions of section 356.401 apply to the
146.26 	general employees retirement plan, to the public employees
146.27 	police and fire retirement plan, and to the local government
146.28 	correctional service retirement plan.

146.29 	Sec. 46. Minnesota Statutes 2004, section 353.15,
146.30 	subdivision 3, is amended to read:
146.31 		Subd. 3.Payment to public bodies.  If,in the judgment
146.32 	of the executive director,conditions so warrant, payment of an
146.33 	annuity, a retirement benefit, or a refund may be made to a
146.34 	public body in behalf of an annuitant, disabilitant, or survivor
146.35 	upon such terms as the executive director may prescribe.

146.36 	Sec. 47. Minnesota Statutes 2004, section 353.27,
147.1 	subdivision 11, is amended to read:
147.2 		Subd. 11.Employers; required to furnish requested
147.3 	information. (a) All governmental subdivisions shall furnish
147.4 	promptly such other information relative to the employment
147.5 	status of all employees or former employees, including,but not
147.6 	limited to,payroll abstracts pertaining to all past and present
147.7 	employees, as may be requested by the association or its 
147.8 	executive director, including schedules of salaries applicable
147.9 	to various categories of employment.
147.10 	(b) In the event payroll abstract records have been lost or
147.11 	destroyed, for whatever reason or in whatever manner, so that
147.12 	such schedules of salaries cannot be furnished therefrom, the
147.13 	employing governmental subdivision, in lieu thereof, shall
147.14 	furnish to the association an estimate of the earnings of any
147.15 	employee or former employee for any period as may be requested
147.16 	by the association or its executive director. Should If the
147.17 	association receive such schedules is provided a schedule of
147.18 	estimated earnings, the executive director is hereby authorized
147.19 	to use the same as a basis for making whatever computations
147.20 	might be necessary for determining obligations of the employee
147.21 	and employer to the retirement fund.  If estimates are not
147.22 	furnished by the employer pursuant to at the request of the
147.23 	association or its executive director, the association executive
147.24 	director may estimate the obligations of the employee and
147.25 	employer to the retirement fund based upon such those records as 
147.26 	that are in its possession. Where payroll abstracts have been
147.27 	lost or destroyed, the governmental agency need not furnish any
147.28 	information pertaining to employment prior to July 1, 1963.  The
147.29 	association shall make no estimate of any obligation of any
147.30 	employee, former employee, or employer covering employment prior
147.31 	to July 1, 1963.

147.32 	Sec. 48. Minnesota Statutes 2004, section 353.271, is
147.33 	amended to read:
147.34 	353.271 PARTICIPATION IN MINNESOTA POSTRETIREMENT
147.35 	INVESTMENT FUND.
147.36 		Subdivision 1.Authorization. The general employees
148.1 	retirement plan of the Public Employees Retirement Association,
148.2 	including the public employees police and fire fund but
148.3 	excluding the various local relief association consolidation
148.4 	accounts, is retirement plan, and the local government
148.5 	correctional service retirement plan are authorized to
148.6 	participate in the Minnesota postretirement investment fund.
148.7 	There shall be is one general participation in the Minnesota
148.8 	postretirement investment fund for all purposes by each plan of 
148.9 	the Public Employees Retirement fund and one general
148.10 	participation in the Minnesota postretirement investment fund
148.11 	for all purposes by the public employees police and fire
148.12 	fund Association.
148.13 		Subd. 2.Valuation of assets; adjustment of benefits.
 148.14 	(1) (a) The required reserves for retirement annuities payable
148.15 	as provided in this chapter other than those payable from the
148.16 	various local relief association consolidation accounts, as
148.17 	determined in accordance with the appropriate mortality table
148.18 	adopted by the board of trustees based on the experience of the
148.19 	fund as recommended by the actuary retained by the Legislative
148.20 	Commission on Pensions and Retirement under section 356.214, and
148.21 	approved under section 356.215, subdivision 18, and using the
148.22 	postretirement interest assumption specified in section 356.215,
148.23 	subdivision 8, shall must be transferred to the Minnesota
148.24 	postretirement investment fund as of the last business day of
148.25 	the month in which the retirement annuity begins.
148.26 	(2) (b) Annuity payments other than those payable from the
148.27 	various local relief association consolidation accounts
148.28 	shall must be adjusted in accordance with the provisions of
148.29 	section 11A.18.
148.30 	(3) (c) Increases in payments pursuant to under this
148.31 	section or from the various local relief association
148.32 	consolidation accounts, if applicable, will must be made
148.33 	automatically unless the intended recipient files written notice
148.34 	with the executive director of the Public Employees Retirement
148.35 	Association requesting that the increase shall not be made.

148.36 	Sec. 49. Minnesota Statutes 2004, section 353.31,
149.1 	subdivision 1c, is amended to read:
149.2 		Subd. 1c.Coordinated members.  Except for benefits
149.3 	provided under section 353.32, subdivisions 1 and 1a,no
149.4 	survivor benefits are payable to the surviving spouse or
149.5 	dependent children of a deceased coordinated member.

149.6 	Sec. 50. Minnesota Statutes 2004, section 353.32,
149.7 	subdivision 9, is amended to read:
149.8 		Subd. 9.Payment to a minor.  If a member or former
149.9 	member dies having named as beneficiary a person who is a minor
149.10 	at the time of the application for refund, the board may make
149.11 	the payment (a) (1) directly to the minor, (b) (2) to any 
149.12 	a person who has legally qualified and is acting as guardian of
149.13 	the minor's person or property in any jurisdiction, or (c) (3) 
149.14 	to either parent of the minor or to any an adult person with
149.15 	whom the minor may at the time be living, provided only that .
149.16 	The parent or other person to whom any amount is to be
149.17 	paid shall have advised must advise the board in writing that
149.18 	the amount will be held or used in trust for the benefit of such
149.19 	minor.  Any annuity or disability benefit payable at the time of
149.20 	death of an annuitant or recipient of a disability benefit,
149.21 	which is payable to a beneficiary who is a minor, may be paid in
149.22 	the same manner. Such The payment shall be is a bar to recovery
149.23 	by any other person or persons.

149.24 	Sec. 51. Minnesota Statutes 2004, section 353.33,
149.25 	subdivision 12, is amended to read:
149.26 		Subd. 12.Basic disability survivor benefits.  If a basic
149.27 	member who is receiving a disability benefit under subdivision 3:
149.28 	(a) (1) dies before attaining age 65 or within five years
149.29 	of the effective date of the disability, whichever is later, the
149.30 	surviving spouse shall is entitled to receive a survivor benefit
149.31 	under section 353.31, unless the surviving spouse elected to
149.32 	receive a refund under section 353.32, subdivision 1.;
149.33 	(b) (2) is living at age 65 or five years after the
149.34 	effective date of the disability, whichever is later, the basic
149.35 	member may continue to receive a normal disability benefit, or
149.36 	elect a joint and survivor optional annuity under section
150.1 	353.31, subdivision 1b.  The election of the joint and survivor
150.2 	optional annuity must occur within 90 days of attaining age 65
150.3 	or of reaching the five-year anniversary of the effective date
150.4 	of the disability benefit, whichever is later.  The optional
150.5 	annuity takes effect on the first day of the month following the
150.6 	month in which the person attains age 65 or reaches the
150.7 	five-year anniversary of the effective date of the disability
150.8 	benefit, whichever is later.; or 
150.9 	(c) (3) if there is a dependent child or children under
150.10 	paragraph (a) or (b) clause (1) or (2), the association shall
150.11 	grant dependent child is entitled to a dependent child benefit
150.12 	under section 353.31, subdivision 1b, paragraph (b).

150.13 	Sec. 52. Minnesota Statutes 2004, section 354.091, is
150.14 	amended to read:
150.15 	354.091 SERVICE CREDIT.
150.16 	(a) In computing service credit, no teacher shall may 
150.17 	receive credit for more than one year of teaching service for
150.18 	any fiscal year. Commencing July 1, 1961 Additionally, in
150.19 	crediting allowable service:
150.20 	(1) if a teacher teaches less than five hours in a day,
150.21 	service credit must be given for the fractional part of the day
150.22 	as the term of service performed bears to five hours;
150.23 	(2) if a teacher teaches five or more hours in a day,
150.24 	service credit must be given for only one day;
150.25 	(3) if a teacher teaches at least 170 full days in any
150.26 	fiscal year, service credit must be given for a full year of
150.27 	teaching service; and
150.28 	(4) if a teacher teaches for only a fractional part of the
150.29 	year, service credit must be given for such fractional part of
150.30 	the year in the same relationship as the period of service
150.31 	performed bears to 170 days.
150.32 	(b) A teacher shall must receive a full year of service
150.33 	credit based on the number of days in the employer's full school
150.34 	year if it that school year is less than 170 days.  Teaching
150.35 	service performed before July 1, 1961, must be computed under
150.36 	the law in effect at the time it was performed.
151.1 	(c) A teacher must not lose or gain retirement service
151.2 	credit as a result of the employer converting to a flexible or
151.3 	alternate work schedule.  If the employer converts to a flexible
151.4 	or alternate work schedule, the forms for reporting teaching
151.5 	service and the procedures for determining service credit must
151.6 	be determined by the executive director with the approval of the
151.7 	board of trustees.
151.8 	(d) For all services rendered on or after July 1, 2003,
151.9 	service credit for all members employed by the Minnesota State
151.10 	Colleges and Universities system must be determined:
151.11 	(1) for full-time employees, by the definition of full-time
151.12 	employment contained in the collective bargaining agreement for
151.13 	those units listed in section 179A.10, subdivision 2, or
151.14 	contained in the applicable personnel or salary plan for those
151.15 	positions designated in section 179A.10, subdivision 1;
151.16 	(2) for part-time employees, by the appropriate proration
151.17 	of full-time equivalency based on the provisions contained in
151.18 	the collective bargaining agreement for those units listed in
151.19 	section 179A.10, subdivision 2, or contained in the applicable
151.20 	personnel or salary plan for those positions designated in
151.21 	section 179A.10, subdivision 1, and the applicable procedures of
151.22 	the Minnesota State Colleges and Universities system; and
151.23 	(3) in no case may a member receive more than one year of
151.24 	service credit for any fiscal year.

151.25 	Sec. 53. Minnesota Statutes 2004, section 354.10,
151.26 	subdivision 1, is amended to read:
151.27 		Subdivision 1.Exemption; exceptions. (a) The provisions
151.28 	of section 356.401 apply to the teachers retirement plan.
151.29 	(b) The right of a teacher to take advantage of the
151.30 	benefits provided by this chapter, is a personal right only and
151.31 	is not assignable.  All money to the credit of a teacher's
151.32 	account in the fund or any money payable to the teacher from the
151.33 	fund belongs to the state of Minnesota until actually paid to
151.34 	the teacher or a beneficiary under this chapter.
151.35 	(c) The association may acknowledge a properly completed
151.36 	power of attorney form. An assignment or attempted assignment
152.1 	of a teacher's interest in the fund, or of the beneficiary's
152.2 	interest in the fund, by a teacher or a beneficiary is void and
152.3 	exempt from garnishment or levy under attachment or execution,
152.4 	except as provided in subdivision 2 or 3, or section 518.58,
152.5 	518.581, or 518.6111.

152.6 	Sec. 54. Minnesota Statutes 2004, section 354.10,
152.7 	subdivision 3, is amended to read:
152.8 		Subd. 3.Payment to public bodies.  If,in the judgment
152.9 	of the executive director,conditions so warrant, payment of an
152.10 	annuity, a retirement benefit, or a refund may be made to a
152.11 	public body in behalf of an annuitant, disabilitant, or survivor
152.12 	upon such terms as the executive director may prescribe.

152.13 	Sec. 55. Minnesota Statutes 2004, section 354.10,
152.14 	subdivision 4, is amended to read:
152.15 		Subd. 4.Changes in designated beneficiaries. Any (a) A 
152.16 	beneficiary designated by a retiree or member under section
152.17 	354.05, subdivision 22, may be changed or revoked by the retiree
152.18 	or member on a form provided by the executive director.
152.19 	(b) A change or revocation made under this subdivision is
152.20 	valid only if the properly completed form is received by the
152.21 	association on or before the date of death of the retiree or the
152.22 	member.
152.23 	(c) If a designated beneficiary dies before the retiree or
152.24 	member designating the beneficiary,and a new beneficiary is not
152.25 	designated, the retiree's or member's estate is the beneficiary.

152.26 	Sec. 56. Minnesota Statutes 2004, section 354.33,
152.27 	subdivision 5, is amended to read:
152.28 		Subd. 5.Retirees not eligible for federal benefits.
 152.29 	Notwithstanding the provisions of section 354.55, subdivision 3,
152.30 	when any person retires after July 1, 1973,who (a) (1) has ten
152.31 	or more years of allowable service, and (b) (2) does not have
152.32 	any retroactive Social Security coverage by reason of the
152.33 	person's position in the retirement system, and (c) (3) does not
152.34 	qualify for federal old age and survivor primary benefits at the
152.35 	time of retirement, the annuity shall must be computed under
152.36 	section 354.44, subdivision 2,of the law in effect on June 30,
153.1 	1969, except that accumulations after June 30, 1957, shall must 
153.2 	be calculated using the same mortality table and interest
153.3 	assumption as are used to transfer the required reserves to the
153.4 	Minnesota postretirement investment fund.

153.5 	Sec. 57. Minnesota Statutes 2004, section 354.39, is
153.6 	amended to read:
153.7 	354.39 EFFECTIVE DATE; APPLICATION.
153.8 	After July 1, 1971, any A member of the Teachers Retirement
153.9 	Association who is employed in a new state university and or any 
153.10 	other new institutions institution of higher learning not
153.11 	included in any agreement or modification made between the state
153.12 	and the federal Secretary of Health, Education and Welfare Human
153.13 	Services, making the provisions of the federal Old Age and ,
153.14 	Survivors and Disability Insurance Act applicable to such
153.15 	members, shall must be covered under the provisions of this
153.16 	chapter applicable to coordinated members.

153.17 	Sec. 58. Minnesota Statutes 2004, section 354.41,
153.18 	subdivision 2, is amended to read:
153.19 		Subd. 2.Teachers.  Every teacher after June 30, 1957,in
153.20 	the service or entering the service of the state or one of its
153.21 	governmental subdivision subdivisions as a teacher, except
153.22 	persons specially specifically excluded, shall must become a
153.23 	member of the association by the acceptance of such employment.

153.24 	Sec. 59. Minnesota Statutes 2004, section 354.42, is
153.25 	amended by adding a subdivision to read:
153.26 		Subd. 1a.Teachers retirement fund. (a) Within the
153.27 	Teachers Retirement Association and the state treasury is
153.28 	created a special retirement fund, which must include all the
153.29 	assets of the Teachers Retirement Association and all revenue of
153.30 	the association.  The fund is the continuation of the fund
153.31 	established under Laws 1931, chapter 406, section 2,
153.32 	notwithstanding the repeal of Minnesota Statutes 1973, section
153.33 	354.42, subdivision 1, by Laws 1974, chapter 289, section 59.
153.34 	(b) The teachers retirement fund must be credited with all
153.35 	employee and employer contributions, all investment revenue and
153.36 	gains, and all other income authorized by law.
154.1 	(c) From the teachers retirement fund is appropriated the
154.2 	payments of annuities and benefits authorized by this chapter,
154.3 	the transfers to the Minnesota postretirement investment fund,
154.4 	and the reasonable and necessary expenses of administering the
154.5 	fund and the association.

154.6 	Sec. 60. Minnesota Statutes 2004, section 354.44,
154.7 	subdivision 2, is amended to read:
154.8 		Subd. 2.Computation of money purchase annuity. (a) The
154.9 	amount of retirement annuity is an amount equal to double the
154.10 	annuity which could be purchased by the member's accumulated
154.11 	deductions plus interest thereon.  The annuity shall must be
154.12 	determined by the member's age, sex, double the amount of
154.13 	accumulated deductions, double the amount of interest earned on
154.14 	the accumulated deductions, and the appropriate mortality tables
154.15 	and interest rates.  To determine the amount of the annuity for
154.16 	a basic member, the accumulated deductions prior to before July
154.17 	1, 1957, and the accumulated deductions subsequent to after July
154.18 	1, 1957, shall must be considered separately.
154.19 	(1) (b) For service rendered prior to before July 1, 1957,
154.20 	the accumulated deductions for any a member shall must be
154.21 	carried forward at a fixed amount which is shown credited to the
154.22 	member's account as of that date.  That fixed amount shall must 
154.23 	also include any payments in lieu of salary deductions which are
154.24 	to be made in the future and are were actually so made pursuant
154.25 	to under an agreement executed between the member and the board
154.26 	as authorized by section 354.50 or any other authorized payments
154.27 	made by the member to the fund.  The annuity granted with
154.28 	respect to the period shall must be determined as follows:
154.29 	(a) (1) the fixed amount of the accumulated deductions for
154.30 	the period including the interest credited on the amount as
154.31 	earned up to July 1, 1957.; and 
154.32 	(b) (2) annuity purchase rates based on the applicable
154.33 	mortality table established by the board and the interest rate
154.34 	assumption in effect prior to before July 1, 1957, in the case
154.35 	of basic members and an annuity purchase rate based on an
154.36 	appropriate annuity table of mortality established by the board
155.1 	as provided in section 354.07, subdivision 1, and using the
155.2 	applicable postretirement interest rate assumption specified in
155.3 	section 356.215, subdivision 8, in the case of coordinated
155.4 	members.
155.5 	(2) (c) For service rendered subsequent to after July 1,
155.6 	1957, the accumulated deductions for any a member shall must 
155.7 	consist of the amounts actually credited to the member's account
155.8 	by reason of salary deductions.  The annuity granted with
155.9 	respect to the period shall must be determined by the following:
155.10 	(a) (1) accumulated deductions for the period;
155.11 	(b) (2) interest credited on these accumulated deductions
155.12 	from July 1, 1957, to the date of retirement;
155.13 	(c) (3) interest credited on accumulated deductions
155.14 	including prior credited interest provided in paragraph (1) (b) 
155.15 	from July 1, 1957, to the date of retirement;
155.16 	(d) (4) after the amount available for an annuity granted
155.17 	with respect to the person is determined in accordance with the
155.18 	provisions of this subdivision, an additional amount equal to 20
155.19 	percent of the sum of clause (2)(a) (1) plus interest credited
155.20 	to members a member's account from July 1, 1957, to date of
155.21 	retirement is to be added.  This added amount is not to be
155.22 	doubled as provided for other amounts determined in this
155.23 	subdivision; and 
155.24 	(e) (5) the annuity purchase rate based on an appropriate
155.25 	annuity table of mortality established by the board as provided
155.26 	in section 354.07, subdivision 1, and using the applicable
155.27 	postretirement interest rate assumption specified in section
155.28 	356.215, subdivision 8.

155.29 	Sec. 61. Minnesota Statutes 2004, section 354A.021,
155.30 	subdivision 5, is amended to read:
155.31 		Subd. 5.Tax sheltered annuity program and fund. Any A 
155.32 	teachers retirement fund association may establish a tax
155.33 	sheltered annuity program and fund meeting the requirements of
155.34 	section 403(b) of the Internal Revenue Code of 1986, as amended
155.35 	through December 31, 1992, which shall must include all assets
155.36 	which were acquired for the specific purpose of being credited
156.1 	to the program and fund and to which shall must be credited all
156.2 	employee contributions,and employer contributions,if
156.3 	negotiated under a collective bargaining agreement, designated
156.4 	for this purpose and all interest income attributable to the
156.5 	assets of the program and fund.

156.6 	Sec. 62. Minnesota Statutes 2004, section 354A.097,
156.7 	subdivision 1, is amended to read:
156.8 		Subdivision 1.Service credit purchase authorized.  A
156.9 	teacher who has at least three years of allowable service credit
156.10 	with the teachers retirement fund association and who performed
156.11 	service in the United States armed forces before becoming a
156.12 	teacher as defined in section 354A.011, subdivision 27, or who
156.13 	failed to obtain service credit for a military leave of absence
156.14 	period under section 354A.093, is entitled to purchase allowable
156.15 	service credit for the initial period of enlistment, induction,
156.16 	or call to active duty without any voluntary extension by making
156.17 	payment under section 356.55 provided 356.551 if the teacher has
156.18 	not purchased service credit from another Minnesota defined
156.19 	benefit public employee pension plan for the same period of
156.20 	service.

156.21 	Sec. 63. Minnesota Statutes 2004, section 354A.31,
156.22 	subdivision 5, is amended to read:
156.23 		Subd. 5.Unreduced normal retirement annuity.  Upon
156.24 	retirement at normal retirement age with at least three years of
156.25 	service credit, a coordinated member shall be is entitled to a
156.26 	normal retirement annuity calculated pursuant to under 
156.27 	subdivision 4 or 4a, whichever applies.

156.28 	Sec. 64. [356.401] EXEMPTION FROM PROCESS.
156.29 		Subdivision 1.Exemption; exceptions. None of the money,
156.30 	annuities, or other benefits provided for in the governing law
156.31 	of a covered retirement plan is assignable either in law or in
156.32 	equity or subject to state estate tax, or to execution, levy,
156.33 	attachment, garnishment, or other legal process, except as
156.34 	provided in subdivision 2 or section 518.58, 518.581, or
156.35 	518.6111.
156.36 		Subd. 2.Automatic deposits. (a) The chief
157.1 	administrative officer of a covered retirement plan may remit,
157.2 	through an automatic deposit system, annuity, benefit, or refund
157.3 	payments only to a financial institution associated with the
157.4 	National Automated Clearinghouse Association or a comparable
157.5 	successor organization that is trustee for a person who is
157.6 	eligible to receive the annuity, benefit, or refund.
157.7 	(b) Upon the request of a retiree, disabilitant, survivor,
157.8 	or former member, the chief administrative officer of a covered
157.9 	retirement plan may remit the annuity, benefit, or refund check
157.10 	to the applicable financial institution for deposit in the
157.11 	person's individual account or the person's joint account.  An
157.12 	overpayment to a joint account after the death of the annuitant
157.13 	or benefit recipient must be repaid to the fund of the
157.14 	applicable covered retirement plan by the joint tenant if the
157.15 	overpayment is not repaid to that fund by the financial
157.16 	institution associated with the National Automated Clearinghouse
157.17 	Association or its successor.  The governing board of the
157.18 	covered retirement plan may prescribe the conditions under which
157.19 	these payments may be made.
157.20 		Subd. 3.Covered retirement plans. The provisions of
157.21 	this section apply to the following retirement plans:
157.22 	(1) the legislators retirement plan, established by chapter
157.23 	3A;
157.24 	(2) the general state employees retirement plan of the
157.25 	Minnesota State Retirement System, established by chapter 352;
157.26 	(3) the correctional state employees retirement plan of the
157.27 	Minnesota State Retirement System, established by chapter 352;
157.28 	(4) the State Patrol retirement plan, established by
157.29 	chapter 352B;
157.30 	(5) the elective state officers retirement plan,
157.31 	established by chapter 352C;
157.32 	(6) the unclassified state employees retirement program,
157.33 	established by chapter 352D;
157.34 	(7) the general employees retirement plan of the Public
157.35 	Employees Retirement Association, established by chapter 353;
157.36 	(8) the public employees police and fire plan of the Public
158.1 	Employees Retirement Association, established by chapter 353;
158.2 	(9) the public employees defined contribution plan,
158.3 	established by chapter 353D;
158.4 	(10) the local government correctional service retirement
158.5 	plan of the Public Employees Retirement Association, established
158.6 	by chapter 353E;
158.7 	(11) the Teachers Retirement Association, established by
158.8 	chapter 354;
158.9 	(12) the Duluth Teachers Retirement Fund Association,
158.10 	established by chapter 354A;
158.11 	(13) the Minneapolis Teachers Retirement Fund Association,
158.12 	established by chapter 354A;
158.13 	(14) the St. Paul Teachers Retirement Fund Association,
158.14 	established by chapter 354A;
158.15 	(15) the individual retirement account plan, established by
158.16 	chapter 354B;
158.17 	(16) the higher education supplemental retirement plan,
158.18 	established by chapter 354C;
158.19 	(17) the Minneapolis employees retirement fund, established
158.20 	by chapter 422A;
158.21 	(18) the Minneapolis Police Relief Association, established
158.22 	by chapter 423B;
158.23 	(19) the Minneapolis Firefighters Relief Association,
158.24 	established by chapter 423C; and 
158.25 	(20) the judges retirement fund, established by sections
158.26 	490.121 to 490.132.

158.27 	Sec. 65. Minnesota Statutes 2004, section 356.551, is
158.28 	amended to read:
158.29 	356.551 POST JULY 1, 2003 2004, PRIOR SERVICE CREDIT
158.30 	PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.
158.31 		Subdivision 1.Application. (a) Unless the prior service
158.32 	credit purchase authorization special law or general statute
158.33 	provision explicitly specifies a different purchase payment
158.34 	amount determination procedure, and if section 356.55 has
158.35 	expired,this section governs the determination of the prior
158.36 	service credit purchase payment amount of any prior service
159.1 	credit purchase.
159.2 	(b) The purchase payment amount determination procedure
159.3 	must recognize any service credit accrued to the purchaser in a
159.4 	pension plan enumerated in section 356.30, subdivision 3.
159.5 	(c) Any service credit in a Minnesota defined benefit
159.6 	public employee pension plan available to be reinstated by the
159.7 	purchaser through the repayment of a refund of member or
159.8 	employee contributions previously received must be repaid in
159.9 	full before any purchase of prior service credit payment is made
159.10 	under this section.
159.11 		Subd. 2.Determination. (a) Unless the minimum purchase
159.12 	amount set forth in paragraph (c) applies,the prior service
159.13 	credit purchase amount is an amount equal to the actuarial
159.14 	present value, on the date of payment, as calculated by the
159.15 	chief administrative officer of the pension plan and reviewed by
159.16 	the actuary retained by the Legislative Commission on Pensions
159.17 	and Retirement under section 356.214, of the amount of the
159.18 	additional retirement annuity obtained by the acquisition of the
159.19 	additional service credit in this section.
159.20 	(b) Calculation of this amount must be made using the
159.21 	preretirement interest rate applicable to the public pension
159.22 	plan specified in section 356.215, subdivision 4d 8, and the
159.23 	mortality table adopted for the public pension plan.  The
159.24 	calculation must assume continuous future service in the public
159.25 	pension plan until, and retirement at, the age at which the
159.26 	minimum requirements of the fund for normal retirement or
159.27 	retirement with an annuity unreduced for retirement at an early
159.28 	age, including section 356.30, are met with the additional
159.29 	service credit purchased.  The calculation must also assume a
159.30 	full-time equivalent salary, or actual salary, whichever is
159.31 	greater, and a future salary history that includes annual salary
159.32 	increases at the applicable salary increase rate for the plan
159.33 	specified in section 356.215, subdivision 4d.
159.34 	(c) The prior service credit purchase amount may not be
159.35 	less than the amount determined by applying the current employee
159.36 	or member contribution rate, the employer contribution rate, and
160.1 	the additional employer contribution rate, if any, to the
160.2 	person's current annual salary and multiplying that result by
160.3 	the number of whole and fraction years of service to be
160.4 	purchased.
160.5 	(d) Payment must be made in one lump sum within one year of
160.6 	the prior service credit authorization.  Payment of the amount
160.7 	calculated under this section must be made by the applicable
160.8 	eligible person.
160.9 	(e) However, the current employer or the prior employer
160.10 	may, at its discretion, pay all or any portion of the payment
160.11 	amount that exceeds an amount equal to the employee contribution
160.12 	rates in effect during the period or periods of prior service
160.13 	applied to the actual salary rates in effect during the period
160.14 	or periods of prior service, plus interest at the rate of 8.5
160.15 	percent a year compounded annually from the date on which the
160.16 	contributions would otherwise have been made to the date on
160.17 	which the payment is made.  If the employer agrees to payments
160.18 	under this subdivision, the purchaser must make the employee
160.19 	payments required under this subdivision within 290 90 days of
160.20 	the prior service credit authorization.  If that employee
160.21 	payment is made, the employer payment under this subdivision
160.22 	must be remitted to the chief administrative officer of the
160.23 	public pension plan within 60 days of receipt by the chief
160.24 	administrative officer of the employee payments specified under
160.25 	this subdivision.
160.26 		Subd. 3.Documentation. The prospective prior service
160.27 	credit purchaser must provide any relevant documentation
160.28 	required by the chief administrative officer of the applicable 
160.29 	public pension plan to determine eligibility for the prior
160.30 	service credit under this section.
160.31 		Subd. 4.Payment precondition for credit grant. Service
160.32 	credit for the purchase period must be granted by the public
160.33 	pension plan to the purchaser upon receipt of the full purchase
160.34 	payment amount specified in subdivision 2.

160.35 	Sec. 66. Minnesota Statutes 2004, section 356A.06,
160.36 	subdivision 7, is amended to read:
161.1 		Subd. 7.Expanded list of authorized investment
161.2 	securities.  (a)  [AUTHORITY.] Except to the extent otherwise
161.3 	authorized by law or bylaws, a covered pension plan not
161.4 	described by subdivision 6, paragraph (a), may invest its assets
161.5 	only in accordance with this subdivision.
161.6 	(b)  [SECURITIES GENERALLY.] The covered pension plan has
161.7 	the authority to purchase, sell, lend, or exchange the
161.8 	securities specified in paragraphs (c) to (g), including puts
161.9 	and call options and future contracts traded on a contract
161.10 	market regulated by a governmental agency or by a financial
161.11 	institution regulated by a governmental agency.  These
161.12 	securities may be owned as units in commingled trusts that own
161.13 	the securities described in paragraphs (c) to (g).
161.14 	(c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may
161.15 	invest funds in governmental bonds, notes, bills, mortgages, and
161.16 	other evidences of indebtedness provided the issue is backed by
161.17 	the full faith and credit of the issuer or the issue is rated
161.18 	among the top four quality rating categories by a nationally
161.19 	recognized rating agency.  The obligations in which funds may be
161.20 	invested under this paragraph include guaranteed or insured
161.21 	issues of (1) the United States, its agencies, its
161.22 	instrumentalities, or organizations created and regulated by an
161.23 	act of Congress; (2) Canada and its provinces, provided the
161.24 	principal and interest is payable in United States dollars; (3)
161.25 	the states and their municipalities, political subdivisions,
161.26 	agencies, or instrumentalities; (4) the International Bank for
161.27 	Reconstruction and Development, the Inter-American Development
161.28 	Bank, the Asian Development Bank, the African Development Bank,
161.29 	or any other United States government sponsored organization of
161.30 	which the United States is a member, provided the principal and
161.31 	interest is payable in United States dollars.
161.32 	(d)  [CORPORATE OBLIGATIONS.] The covered pension plan may
161.33 	invest funds in bonds, notes, debentures, transportation
161.34 	equipment obligations, or any other longer term evidences of
161.35 	indebtedness issued or guaranteed by a corporation organized
161.36 	under the laws of the United States or any state thereof, or the
162.1 	Dominion of Canada or any province thereof if they conform to
162.2 	the following provisions:
162.3 	(1) the principal and interest of obligations of
162.4 	corporations incorporated or organized under the laws of the
162.5 	Dominion of Canada or any province thereof must be payable in
162.6 	United States dollars; and
162.7 	(2) obligations must be rated among the top four quality
162.8 	categories by a nationally recognized rating agency.
162.9 	(e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may
162.10 	invest funds in bankers acceptances, certificates of deposit,
162.11 	deposit notes, commercial paper, mortgage participation
162.12 	certificates and pools, asset backed securities, repurchase
162.13 	agreements and reverse repurchase agreements, guaranteed
162.14 	investment contracts, savings accounts, and guaranty fund
162.15 	certificates, surplus notes, or debentures of domestic mutual
162.16 	insurance companies if they conform to the following provisions:
162.17 	(i) bankers acceptances and deposit notes of United States
162.18 	banks are limited to those issued by banks rated in the highest
162.19 	four quality categories by a nationally recognized rating
162.20 	agency;
162.21 	(ii) certificates of deposit are limited to those issued by
162.22 	(A) United States banks and savings institutions that are rated
162.23 	in the highest four quality categories by a nationally
162.24 	recognized rating agency or whose certificates of deposit are
162.25 	fully insured by federal agencies; or (B) credit unions in
162.26 	amounts up to the limit of insurance coverage provided by the
162.27 	National Credit Union Administration;
162.28 	(iii) commercial paper is limited to those issued by United
162.29 	States corporations or their Canadian subsidiaries and rated in
162.30 	the highest two quality categories by a nationally recognized
162.31 	rating agency;
162.32 	(iv) mortgage participation or pass through certificates
162.33 	evidencing interests in pools of first mortgages or trust deeds
162.34 	on improved real estate located in the United States where the
162.35 	loan to value ratio for each loan as calculated in accordance
162.36 	with section 61A.28, subdivision 3, does not exceed 80 percent
163.1 	for fully amortizable residential properties and in all other
163.2 	respects meets the requirements of section 61A.28, subdivision
163.3 	3;
163.4 	(v) collateral for repurchase agreements and reverse
163.5 	repurchase agreements is limited to letters of credit and
163.6 	securities authorized in this section;
163.7 	(vi) guaranteed investment contracts are limited to those
163.8 	issued by insurance companies or banks rated in the top four
163.9 	quality categories by a nationally recognized rating agency or
163.10 	to alternative guaranteed investment contracts where the
163.11 	underlying assets comply with the requirements of this
163.12 	subdivision;
163.13 	(vii) savings accounts are limited to those fully insured
163.14 	by federal agencies; and
163.15 	(viii) asset backed securities must be rated in the top
163.16 	four quality categories by a nationally recognized rating agency.
163.17 	(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
163.18 	not apply to certificates of deposit and collateralization
163.19 	agreements executed by the covered pension plan under clause
163.20 	(1), item (ii).
163.21 	(3) In addition to investments authorized by clause (1),
163.22 	item (iv), the covered pension plan may purchase from the
163.23 	Minnesota Housing Finance Agency all or any part of a pool of
163.24 	residential mortgages, not in default, that has previously been
163.25 	financed by the issuance of bonds or notes of the agency.  The
163.26 	covered pension plan may also enter into a commitment with the
163.27 	agency, at the time of any issue of bonds or notes, to purchase
163.28 	at a specified future date, not exceeding 12 years from the date
163.29 	of the issue, the amount of mortgage loans then outstanding and
163.30 	not in default that have been made or purchased from the
163.31 	proceeds of the bonds or notes.  The covered pension plan may
163.32 	charge reasonable fees for any such commitment and may agree to
163.33 	purchase the mortgage loans at a price sufficient to produce a
163.34 	yield to the covered pension plan comparable, in its judgment,
163.35 	to the yield available on similar mortgage loans at the date of
163.36 	the bonds or notes.  The covered pension plan may also enter
164.1 	into agreements with the agency for the investment of any
164.2 	portion of the funds of the agency.  The agreement must cover
164.3 	the period of the investment, withdrawal privileges, and any
164.4 	guaranteed rate of return.
164.5 	(f)  [CORPORATE STOCKS.] The covered pension plan may
164.6 	invest funds in stocks or convertible issues of any corporation
164.7 	organized under the laws of the United States or the states
164.8 	thereof, the Dominion of Canada or its provinces, or any
164.9 	corporation listed on the New York Stock Exchange or the
164.10 	American Stock Exchange, if they conform to the following
164.11 	provisions:
164.12 	(1) the aggregate value of corporate stock investments, as
164.13 	adjusted for realized profits and losses, must not exceed 85
164.14 	percent of the market or book value, whichever is less, of a
164.15 	fund, less the aggregate value of investments according to
164.16 	subdivision 6 paragraph (g);
164.17 	(2) investments must not exceed five percent of the total
164.18 	outstanding shares of any one corporation.
164.19 	(g)  [OTHER INVESTMENTS.] (1) In addition to the
164.20 	investments authorized in paragraphs (b) to (f), and subject to
164.21 	the provisions in clause (2), the covered pension plan may
164.22 	invest funds in:
164.23 	(i) venture capital investment businesses through
164.24 	participation in limited partnerships and corporations;
164.25 	(ii) real estate ownership interests or loans secured by
164.26 	mortgages or deeds of trust through investment in limited
164.27 	partnerships, bank sponsored collective funds, trusts, and
164.28 	insurance company commingled accounts, including separate
164.29 	accounts;
164.30 	(iii) regional and mutual funds through bank sponsored
164.31 	collective funds and open-end investment companies registered
164.32 	under the Federal Investment Company Act of 1940;
164.33 	(iv) resource investments through limited partnerships,
164.34 	private placements, and corporations; and
164.35 	(v) international securities.
164.36 	(2) The investments authorized in clause (1) must conform
165.1 	to the following provisions:
165.2 	(i) the aggregate value of all investments made according
165.3 	to clause (1) may not exceed 35 percent of the market value of
165.4 	the fund for which the covered pension plan is investing;
165.5 	(ii) there must be at least four unrelated owners of the
165.6 	investment other than the state board covered pension plan for
165.7 	investments made under clause (1), item (i), (ii), (iii), or
165.8 	(iv);
165.9 	(iii) covered pension plan participation in an investment
165.10 	vehicle is limited to 20 percent thereof for investments made
165.11 	under clause (1), item (i), (ii), (iii), or (iv); and
165.12 	(iv) covered pension plan participation in a limited
165.13 	partnership does not include a general partnership interest or
165.14 	other interest involving general liability.  The covered pension
165.15 	plan may not engage in any activity as a limited partner which
165.16 	creates general liability.

165.17 	Sec. 67. Minnesota Statutes 2004, section 422A.01,
165.18 	subdivision 11, is amended to read:
165.19 		Subd. 11.Employee.  "Employee" means any a person who is 
165.20 	not exempted from the contributing class pursuant to under 
165.21 	section 422A.09, subdivision 3, who is was employed before July
165.22 	1, 1979,by and paid, in whole or in part, by the city or any of
165.23 	its boards, departments, or commissions, operated as a
165.24 	department of city government or independently if financed in
165.25 	whole or in part by city funds, including any a person who was 
165.26 	employed by a public corporation as herein defined, and
165.27 	including any a person who was employed before July 1, 1979,by
165.28 	Special School District No. 1, and who is not a member of any
165.29 	other retirement system, and also including any a person who is 
165.30 	was employed before July 1, 1973,by the county of Hennepin, who
165.31 	was entitled by law to elect and has elected to retain
165.32 	membership in the municipal Minneapolis Employees Retirement
165.33 	Fund and who makes any required member contributions to the fund
165.34 	and who remains so employed.

165.35 	Sec. 68. Minnesota Statutes 2004, section 422A.06,
165.36 	subdivision 7, is amended to read:
166.1 		Subd. 7.Disability benefit fund.  (a) The required
166.2 	reserves for disability allowances which become effective after
166.3 	December 31, 1973, shall be transferred from the deposit
166.4 	accumulation fund to the A disability benefit fund is
166.5 	established, containing the required reserves for disability
166.6 	allowances under this chapter.  A proportionate share of income
166.7 	from investments shall must be allocated to this fund.
166.8 	There shall must be paid from this fund the disability
166.9 	allowances which become effective after December 31, 1973 
166.10 	payable under this chapter.
166.11 	(b) In the event of the termination of any disability
166.12 	allowance for any reason other than the death of the recipient,
166.13 	the balance of the required reserves for the disability
166.14 	allowance as of the date of the termination shall must be
166.15 	transferred from the disability benefit fund to the deposit
166.16 	accumulation fund.
166.17 	(c) At the end of each fiscal year, as part of the annual
166.18 	actuarial valuation, a determination shall must be made of the
166.19 	required reserves for all disability allowances being paid from
166.20 	the disability benefit fund.  Any excess of assets over
166.21 	actuarial required reserves in the disability benefit fund shall 
166.22 	must be transferred to the deposit accumulation fund.  Any
166.23 	excess of actuarial reserves over assets in the disability
166.24 	benefit fund shall must be funded by a transfer of the
166.25 	appropriate amount of assets from the deposit accumulation fund.

166.26 	Sec. 69. Minnesota Statutes 2004, section 422A.10,
166.27 	subdivision 1, is amended to read:
166.28 		Subdivision 1.member contribution rate ; deductions. (a) 
166.29 	There shall must be deducted and withheld from the basic salary,
166.30 	pay or compensation of each employee in the contributing class,
166.31 	prior to January 1, 1980 an amount equal to 7-1/4 percent, after
166.32 	December 31, 1979 but prior to January 1, 1981 an amount equal
166.33 	to 8-1/4 percent and after December 31, 1980 an amount equal to
166.34 	9-1/4 percent of such salary, pay or compensation, except as
166.35 	hereinafter provided.
166.36 	(b) The retirement board may increase the percentage rate
167.1 	of contribution to the retirement fund of any employee or
167.2 	employees for the purpose of establishing and maintaining on an
167.3 	actuarial basis a plan of insurance, survivors' benefits, or
167.4 	other type of benefit or benefits, the cost of which shall must 
167.5 	be paid out of such extra percentage so authorized and deducted
167.6 	from the employee's compensation, except as hereinafter
167.7 	provided.  Any plan or plans so established and placed in
167.8 	operation may be amended from time to time, or may be abandoned,
167.9 	but if abandoned, any surplus remaining from the operation of a
167.10 	plan shall must be the property of the fund, and shall must be
167.11 	credited to the reserve for loss in investment account.

167.12 	Sec. 70. Minnesota Statutes 2004, section 422A.10,
167.13 	subdivision 2, is amended to read:
167.14 		Subd. 2.consent to deductions mandatory member
167.15 	contributions.  Every employee to whom sections 422A.01 to
167.16 	422A.25 this chapter applies who shall continue in the service
167.17 	after the passage of Laws 1919, chapter 522, as well as every
167.18 	person to whom sections 422A.01 to 422A.25 applies who may
167.19 	hereafter be appointed to a position or place, shall be is 
167.20 	deemed to consent and agree to the deductions made and provided
167.21 	for herein, and payment with such reductions, for service, shall
167.22 	be are a full and complete discharge and acquittance of all
167.23 	claims and demands for all services rendered by such person
167.24 	during the period covered by such payment; except the person's
167.25 	claim to the benefits to which the person may be entitled under
167.26 	the provisions of sections 422A.01 to 422A.25this chapter.

167.27 	Sec. 71. Minnesota Statutes 2004, section 422A.22,
167.28 	subdivision 1, is amended to read:
167.29 		Subdivision 1.Retention; transfer. (a) If an employee
167.30 	to whom sections 422A.01 to 422A.25this chapter applies becomes
167.31 	absolutely separated from the active service prior to before 
167.32 	attaining the minimum retirement age established in section
167.33 	422A.13, the employee is entitled to a refund of the net
167.34 	accumulated amount of deduction from salary, pay, or
167.35 	compensation, made for the purpose of accumulating a fund from
167.36 	which to pay retirement allowances, shall be returned to such
168.1 	employee,with interest at the annual compound rate of six
168.2 	percent.
168.3 	(b) Any contributing employee who separates from a
168.4 	department, board or commission of the city whose employees are
168.5 	covered by a fund organized under sections 422A.01 to 422A.25
168.6 	this chapter, and becomes an employee of a department or board
168.7 	of the same city, whose employees are covered by a retirement
168.8 	fund or relief association by whatever name known, organized
168.9 	under any other law and supported in whole or in part by taxes
168.10 	on the same city, shall have has the option of:
168.11 	(1) retaining their membership in the fund organized under
168.12 	sections 422A.01 to 422A.25this chapter, regardless of the
168.13 	provisions of any law, rule, bylaw or other action requiring
168.14 	membership in any other retirement fund or relief association
168.15 	however organized.; or 
168.16 	(2) transferring to the fund or association covering the
168.17 	employees of the department or board to which they are
168.18 	transferring, providing they are eligible for membership therein.
168.19 	(c) Any contributing employee who elects to transfer to
168.20 	another fund or association as herein provided in paragraph (b),
168.21 	clause (2), shall must make such election within one year from
168.22 	the date of separation from the city service covered by this
168.23 	fund.  If the contributing employee elects to transfer to
168.24 	another fund as herein provided, the employee is entitled to a
168.25 	refund of the net accumulated contributions made by such
168.26 	employee to the fund organized under sections 422A.01 to
168.27 	422A.25, shall be returned to the employee this chapter with
168.28 	interest at the annual compound rate of six percent.

168.29 	Sec. 72. Minnesota Statutes 2004, section 422A.22,
168.30 	subdivision 3, is amended to read:
168.31 		Subd. 3.Limitation on eligibility.  No employee of the
168.32 	city shall be is eligible to be a member of,or receive benefits
168.33 	from,more than one retirement plan or fund of the city for the
168.34 	same period of service.

168.35 	Sec. 73. Minnesota Statutes 2004, section 422A.22,
168.36 	subdivision 4, is amended to read:
169.1 		Subd. 4.Death-while-active refund.  (a) Upon the death
169.2 	of an active member prior to before the employee's termination
169.3 	of active service, there shall be paid to the beneficiary or
169.4 	beneficiaries designated by the member on a form specified by
169.5 	the executive director and filed with the retirement board,are
169.6 	entitled to receive the net accumulated employee deductions from
169.7 	salary, pay, or compensation, including interest under
169.8 	subdivision 1, paragraph (a),compounded annually to the date of
169.9 	the member's death.  The amount must not include any
169.10 	contributions made by the employee or on the employee's behalf,
169.11 	or any interest or investment earnings on those contributions,
169.12 	which were allocated to the survivor benefit fund under section
169.13 	422A.06, subdivision 6.
169.14 	(b) If the employee fails to make a designation, or if the
169.15 	beneficiary or beneficiaries designated by the employee
169.16 	predeceases the employee, the benefit specified in paragraph (a)
169.17 	must be paid to the deceased employee's estate is entitled to
169.18 	the benefit specified in paragraph (a).
169.19 	(c) A benefit payable under this subdivision is in addition
169.20 	to any applicable survivor benefit under section 422A.23.

169.21 	Sec. 74. Minnesota Statutes 2004, section 422A.22,
169.22 	subdivision 6, is amended to read:
169.23 		Subd. 6.Refund; municipal employees retirement fund.
 169.24 	Any A person who has received a refund from the municipal 
169.25 	Minneapolis Employees Retirement Fund, and who is a member of a
169.26 	public retirement system included in section 422A.16,
169.27 	subdivision 8, may repay such refund with interest at a compound
169.28 	annual rate of 8.5 percent to the municipal Minneapolis 
169.29 	Employees Retirement Fund.  If a refund is repaid to the fund
169.30 	and if more than one refund has been received from the fund, all
169.31 	refunds must be repaid.  Repayment shall must be made as
169.32 	provided in sections 422A.01 to 422A.25this chapter.

169.33 	Sec. 75. Minnesota Statutes 2004, section 422A.231, is
169.34 	amended to read:
169.35 	422A.231 COST ALLOCATION.
169.36 	(a) Notwithstanding any law to the contrary, all current
170.1 	and future contribution requirements due to this article are
170.2 	payable by the participating contributing employing units other
170.3 	than the state of Minnesota.
170.4 	(b) In each actuarial valuation of the retirement fund, the
170.5 	actuary retained by the Legislative Commission on Pensions and
170.6 	Retirement under section 356.214shall include an exhibit on the
170.7 	impact of the benefit increases contained in this article on the
170.8 	survivor benefit fund.  The actuary shall calculate the expected
170.9 	change in the present value of the future benefits payable from
170.10 	the survivor benefit fund attributable to this article, using
170.11 	the actuarial method and assumptions applicable to the
170.12 	Minneapolis Employees Retirement Fund, from the prior actuarial
170.13 	valuation and shall compare that result with the actual change
170.14 	in the present value of future benefits payable from the
170.15 	survivor benefit fund attributable to this article from the
170.16 	prior actuarial valuation.
170.17 	(c) The executive director shall assess each participating
170.18 	employer, other than the state of Minnesota, its proportional
170.19 	share of the net increase amount calculated under paragraph
170.20 	(b).  The assessment must be made on the first business day of
170.21 	the following February, plus compound interest at an annual rate
170.22 	of six percent on the amount from the actuarial valuation date
170.23 	to the date of payment.

170.24 	Sec. 76. Minnesota Statutes 2004, section 422A.24, is
170.25 	amended to read:
170.26 	422A.24 ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.
170.27 	No money payable pursuant to this chapter shall be
170.28 	assignable either in law or equity or be subject to execution,
170.29 	levy, attachment, garnishment, or other legal process, except as
170.30 	provided in section 518.58, 518.581, or 518.6111, nor shall any
170.31 	of the proceeds of payments due pursuant to this chapter be
170.32 	subject to the inheritance tax provisions of this state upon
170.33 	transfer to a surviving spouse or minor or dependent child of
170.34 	the decedent or a trust for their benefit.The provisions of
170.35 	section 356.401 apply to the Minneapolis employees retirement
170.36 	plan.

171.1 	Sec. 77. Minnesota Statutes 2004, section 423B.17, is
171.2 	amended to read:
171.3 	423B.17 PAYMENTS EXEMPT FROM PROCESS.
171.4 	A payment made by the association under a provision of
171.5 	sections 423B.01 to 423B.18, as amended, is exempt from legal
171.6 	process except as provided in section 518.58, 518.581, or
171.7 	518.6111.  No person entitled to a payment may assign the same.
171.8 	The association may not recognize an assignment or pay a sum on
171.9 	account of an assignment.The provisions of section 356.401
171.10 	apply to the Minneapolis Police Relief Association.

171.11 	Sec. 78. Minnesota Statutes 2004, section 423C.09, is
171.12 	amended to read:
171.13 	423C.09 PAYMENTS EXEMPT FROM PROCESS.
171.14 	All payments made, or to be made, by the association under
171.15 	this chapter shall be totally exempt from garnishment,
171.16 	execution, or other legal process, except as provided in section
171.17 	518.58, 518.581, or 518.6111.  No person entitled to a payment
171.18 	shall have the right to assign the name, nor shall the
171.19 	association have authority to recognize any assignment or to pay
171.20 	any sum on account thereof.  Any attempt to transfer any right
171.21 	or claim, or any part thereof, shall be void.The provisions of
171.22 	section 356.401 apply to the Minneapolis Firefighters Relief
171.23 	Association.

171.24 	Sec. 79. Minnesota Statutes 2004, section 490.126,
171.25 	subdivision 5, is amended to read:
171.26 		Subd. 5.Exemption from process; no assignment. None of
171.27 	the money, annuities, or other benefits provided in this chapter
171.28 	is assignable either in law or equity or is subject to
171.29 	execution, levy, attachment, garnishment, or other legal
171.30 	process, except as provided in section 518.58, 518.581, or
171.31 	518.6111.The provisions of section 356.401 apply to the judges
171.32 	retirement plan.

171.33 	Sec. 80. REVISOR'S INSTRUCTION.
 171.34 	In the next edition and subsequent editions of Minnesota
171.35 	Statutes, the revisor of statutes shall replace the reference to
171.36 	"sections 422A.01 to 422A.25" with the reference to "this
172.1 	chapter" wherever the reference appears in Minnesota Statutes,
172.2 	chapter 422A.

172.3 	Sec. 81. REPEALER.
 172.4 	(a) Minnesota Statutes 2004, section 352.119, subdivision
172.5 	1, is repealed.
172.6 	(b) Minnesota Statutes 2004, sections 353.34, subdivision
172.7 	3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision
172.8 	4; 353.663; 353.74; and 353.75, are repealed.
172.9 	(c) Minnesota Statutes 2004, section 354.59, is repealed.
172.10 	(d) Minnesota Statutes 2004, sections 422A.22, subdivisions
172.11 	2 and 5; and 422A.221, are repealed.
172.12 	(e) Minnesota Statutes 2004, sections 352.15, subdivision
172.13 	1a; 353.15, subdivision 2; and 354.10, subdivision 2, are
172.14 	repealed.

172.15 	Sec. 82. EFFECTIVE DATE.
 172.16 	(a) Sections 1 to 73 and 75 to 81 are effective July 1,
172.17 	2005.
172.18 	(b) Section 74 is effective January 1, 2006.
172.19 	(c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78,
172.20 	79, and 81, paragraph (e), do not apply to any cause of action
172.21 	that is proceeding on the date of enactment or to any cause of
172.22 	action for which the applicable statute of limitations has not
172.23 	expired as of the date of enactment.

172.24 	ARTICLE 13
172.25 	LOCAL RETIREMENT PLANS

172.26 	Section 1. Minnesota Statutes 2004, section 69.77,
172.27 	subdivision 4, is amended to read:
172.28 		Subd. 4.Relief association financial requirements;
172.29 	minimum municipal obligation.  (a) The officers of the relief
172.30 	association shall determine the financial requirements of the
172.31 	relief association and minimum obligation of the municipality
172.32 	for the following calendar year in accordance with the
172.33 	requirements of this subdivision.  The financial requirements of
172.34 	the relief association and the minimum obligation of the
172.35 	municipality must be determined on or before the submission date
172.36 	established by the municipality under subdivision 5.
173.1 	(b) The financial requirements of the relief association
173.2 	for the following calendar year must be based on the most recent
173.3 	actuarial valuation or survey of the special fund of the
173.4 	association if more than one fund is maintained by the
173.5 	association, or of the association, if only one fund is
173.6 	maintained, prepared in accordance with sections 356.215,
173.7 	subdivisions 4 to 15, and 356.216, as required under subdivision
173.8 	10.  If an actuarial estimate is prepared by the actuary of the
173.9 	relief association as part of obtaining a modification of the
173.10 	benefit plan of the relief association and the modification is
173.11 	implemented, the actuarial estimate must be used in calculating
173.12 	the subsequent financial requirements of the relief association.
173.13 	(c) If the relief association has an unfunded actuarial
173.14 	accrued liability as reported in the most recent actuarial
173.15 	valuation or survey, the total of the amounts calculated under
173.16 	clauses (1), (2), and (3), constitute the financial requirements
173.17 	of the relief association for the following year.  If the relief
173.18 	association does not have an unfunded actuarial accrued
173.19 	liability as reported in the most recent actuarial valuation or
173.20 	survey, the amount calculated under clauses (1) and (2)
173.21 	constitute the financial requirements of the relief association
173.22 	for the following year.  The financial requirement elements are:
173.23 	(1) the normal level cost requirement for the following
173.24 	year, expressed as a dollar amount, which must be determined by
173.25 	applying the normal level cost of the relief association as
173.26 	reported in the actuarial valuation or survey and expressed as a
173.27 	percentage of covered payroll to the estimated covered payroll
173.28 	of the active membership of the relief association, including
173.29 	any projected change in the active membership, for the following
173.30 	year;
173.31 	(2) for the Bloomington Fire Department Relief Association,
173.32 	the Fairmont Police Relief Association, and the Virginia Fire
173.33 	Department Relief Association, to the dollar amount of normal
173.34 	cost determined under clause (1) must be added an amount equal
173.35 	to the dollar amount of the administrative expenses of the
173.36 	special fund of the association if more than one fund is
174.1 	maintained by the association, or of the association if only one
174.2 	fund is maintained, for the most recent year, multiplied by the
174.3 	factor of 1.035.  The administrative expenses are those
174.4 	authorized under section 69.80.  No amount of administrative
174.5 	expenses under this clause are to be included in the financial
174.6 	requirements of the Minneapolis Firefighters Relief Association
174.7 	or the Minneapolis Police Relief Association; and
174.8 	(3) to the dollar amount of normal cost and expenses
174.9 	determined under clauses (1) and (2) must be added an amount
174.10 	equal to the level annual dollar amount which is sufficient to
174.11 	amortize the unfunded actuarial accrued liability by December
174.12 	31, 2010, the Fairmont Police Relief Association, the
174.13 	Minneapolis Firefighters Relief Association, and the Virginia
174.14 	Fire Department Relief Association, by the date determined under
174.15 	section 356.216, paragraph (a), clause (2), for the Bloomington
174.16 	Fire Department Relief Association, and by December 31, 2020,
174.17 	for the Minneapolis Police Relief Association,as determined
174.18 	from the actuarial valuation or survey of the fund, using an
174.19 	interest assumption set at the applicable rate specified in
174.20 	section 356.215, subdivision 8.  The amortization date specified
174.21 	in this clause applies to all local police or salaried
174.22 	firefighters' relief associations and that date supersedes any
174.23 	amortization date specified in any applicable special law.
174.24 	(d) The minimum obligation of the municipality is an amount
174.25 	equal to the financial requirements of the relief association
174.26 	reduced by the estimated amount of member contributions from
174.27 	covered salary anticipated for the following calendar year and
174.28 	the estimated amounts anticipated for the following calendar
174.29 	year from the applicable state aid program established under
174.30 	sections 69.011 to 69.051 receivable by the relief association
174.31 	after any allocation made under section 69.031, subdivision 5,
174.32 	paragraph (b), clause (2), or 423A.01, subdivision 2, clause
174.33 	(6), from the local police and salaried firefighters' relief
174.34 	association amortization aid program established under section
174.35 	423A.02, subdivision 1, from the supplementary amortization
174.36 	state-aid program established under section 423A.02, subdivision
175.1 	1a, and from the additional amortization state aid under section
175.2 	423A.02, subdivision 1b.

175.3 	Sec. 2. Minnesota Statutes 2004, section 356.215,
175.4 	subdivision 8, is amended to read:
175.5 		Subd. 8.Interest and salary assumptions.  (a) The
175.6 	actuarial valuation must use the applicable following
175.7 	preretirement interest assumption and the applicable following
175.8 	postretirement interest assumption:
175.9 	preretirement  postretirement
175.10 	                                   interest rate  interest rate
175.11 	            plan                      assumption     assumption
175.12 	     general state employees
175.13 	         retirement plan                  8.5%          6.0%
175.14 	     correctional state employees
175.15 	         retirement plan                  8.5           6.0
175.16 	     State Patrol retirement plan         8.5           6.0
175.17 	     legislators retirement plan          8.5           6.0
175.18 	     elective state officers
175.19 	         retirement plan                  8.5           6.0
175.20 	     judges retirement plan               8.5           6.0
175.21 	     general public employees
175.22 	         retirement plan                  8.5           6.0
175.23 	     public employees police and fire
175.24 	         retirement plan                  8.5           6.0
175.25 	     local government correctional
175.26 	         service retirement plan          8.5           6.0
175.27 	     teachers retirement plan             8.5           6.0
175.28 	     Minneapolis employees
175.29 	         retirement plan                  6.0           5.0
175.30 	     Duluth teachers retirement plan      8.5           8.5
175.31 	     Minneapolis teachers retirement
175.32 	         plan                             8.5           8.5
175.33 	     St. Paul teachers retirement
175.34 	         plan                             8.5           8.5
175.35 	     Minneapolis Police Relief
175.36 	         Association                      6.0           6.0
175.37 	     Fairmont Police Relief
175.38 	         Association                      5.0           5.0
175.39 	     Minneapolis Fire Department
175.40 	         Relief Association               6.0           6.0
175.41 	     Virginia Fire Department
175.42 	         Relief Association               5.0           5.0
175.43 	Bloomington Fire Department
175.44 	         Relief Association 6.0 6.0 
175.45 	     local monthly benefit volunteer
175.46 	         firefighters relief associations 5.0           5.0
175.47 	(b) The actuarial valuation must use the applicable
175.48 	following single rate future salary increase assumption, the
175.49 	applicable following modified single rate future salary increase
175.50 	assumption, or the applicable following graded rate future
175.51 	salary increase assumption:
175.52 	(1) single rate future salary increase assumption
175.53 	future salary
175.54 	            plan                          increase assumption
175.55 	     legislators retirement plan                  5.0%
175.56 	     elective state officers retirement
176.1 	         plan                                     5.0
176.2 	     judges retirement plan                       5.0
176.3 	     Minneapolis Police Relief Association        4.0
176.4 	     Fairmont Police Relief
176.5 	         Association                              3.5
176.6 	     Minneapolis Fire Department Relief
176.7 	         Association                              4.0
176.8 	     Virginia Fire Department
176.9 	         Relief Association                       3.5
176.10 	Bloomington Fire Department Relief 
176.11 	Association 4.0 
176.12 	(2) modified single rate future salary increase assumption
176.13 	future salary
176.14 	               plan                       increase assumption
176.15 	         Minneapolis employees        the prior calendar year
176.16 	           retirement plan            amount increased first by
176.17 	1.0198 percent to prior
176.18 	                                      fiscal year date and
176.19 	                                      then increased by 4.0
176.20 	                                      percent annually for
176.21 	                                      each future year
176.22 	(3) select and ultimate future salary increase assumption
176.23 	or graded rate future salary increase assumption
176.24 	future salary
176.25 	               plan                       increase assumption
176.26 	     general state employees             select calculation and
176.27 	         retirement plan                      assumption A
176.28 	     correctional state employees
176.29 	         retirement plan                      assumption H
176.30 	     State Patrol retirement plan             assumption H
176.31 	     general public employees            select calculation and
176.32 	         retirement plan                      assumption B
176.33 	     public employees police and fire
176.34 	         fund retirement plan                 assumption C
176.35 	     local government correctional service
176.36 	         retirement plan                      assumption H
176.37 	     teachers retirement plan                 assumption D
176.38 	     Duluth teachers retirement plan          assumption E
176.39 	     Minneapolis teachers retirement plan     assumption F
176.40 	     St. Paul teachers retirement plan        assumption G
176.41 	
176.42 	     The select calculation is:
176.43 	     during the ten-year select period, a designated percent
176.44 	     is multiplied by the result of ten minus T, where T is
176.45 	     the number of completed years of service, and is added
176.46 	     to the applicable future salary increase assumption.  The
176.47 	     designated percent is 0.2 percent for the correctional state
176.48 	     employees retirement plan, the State Patrol retirement
176.49 	     plan, the public employees police and fire plan, and the
176.50 	     local government correctional service plan; 0.3 percent
176.51 	     for the general state employees retirement plan, the
176.52 	     general public employees retirement plan, the teachers
176.53 	     retirement plan, the Duluth Teachers Retirement Fund
176.54 	     Association, and the St. Paul Teachers Retirement Fund
176.55 	     Association; and 0.4 percent for the Minneapolis Teachers
176.56 	     Retirement Fund Association.
176.57 	
176.58 	          The ultimate future salary increase assumption is:
176.59 	
176.60 	     age  A     B      C     D     E     F     G      H
176.61 	     16  6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
176.62 	     17  6.906.9011.508.158.006.506.90  7.7500
176.63 	     18  6.856.8511.508.108.006.506.90  7.7500
176.64 	     19  6.806.8011.508.058.006.506.90  7.7500
177.1 	     20  6.756.4011.506.006.906.506.90  7.7500
177.2 	     21  6.756.4011.506.006.906.506.90  7.1454
177.3 	     22  6.756.4011.006.006.906.506.90  7.0725
177.4 	     23  6.756.4010.506.006.856.506.85  7.0544
177.5 	     24  6.756.4010.006.006.806.506.80  7.0363
177.6 	     25  6.756.409.506.006.756.506.75  7.0000
177.7 	     26  6.756.369.206.006.706.506.70  7.0000
177.8 	     27  6.756.328.906.006.656.506.65  7.0000
177.9 	     28  6.756.288.606.006.606.506.60  7.0000
177.10 	     29  6.756.248.306.006.556.506.55  7.0000
177.11 	     30  6.756.208.006.006.506.506.50  7.0000
177.12 	     31  6.756.167.806.006.456.506.45  7.0000
177.13 	     32  6.756.127.606.006.406.506.40  7.0000
177.14 	     33  6.756.087.406.006.356.506.35  7.0000
177.15 	     34  6.756.047.206.006.306.506.30  7.0000
177.16 	     35  6.756.007.006.006.256.506.25  7.0000
177.17 	     36  6.755.966.806.006.206.506.20  6.9019
177.18 	     37  6.755.926.606.006.156.506.15  6.8074
177.19 	     38  6.755.886.405.906.106.506.10  6.7125
177.20 	     39  6.755.846.205.806.056.506.05  6.6054
177.21 	     40  6.755.806.005.706.006.506.00  6.5000
177.22 	     41  6.755.765.905.605.906.505.95  6.3540
177.23 	     42  6.755.725.805.505.806.505.90  6.2087
177.24 	     43  6.655.685.705.405.706.505.85  6.0622
177.25 	     44  6.555.645.605.305.606.505.80  5.9048
177.26 	     45  6.455.605.505.205.506.505.75  5.7500
177.27 	     46  6.355.565.455.105.406.405.70  5.6940
177.28 	     47  6.255.525.405.005.306.305.65  5.6375
177.29 	     48  6.155.485.355.005.206.205.60  5.5822
177.30 	     49  6.055.445.305.005.106.105.55  5.5404
177.31 	     50  5.955.405.255.005.006.005.50  5.5000
177.32 	     51  5.855.365.255.005.005.905.45  5.4384
177.33 	     52  5.755.325.255.005.005.805.40  5.3776
177.34 	     53  5.655.285.255.005.005.705.35  5.3167
177.35 	     54  5.555.245.255.005.005.605.30  5.2826
177.36 	     55  5.455.205.255.005.005.505.25  5.2500
177.37 	     56  5.355.165.255.005.005.405.20  5.2500
177.38 	     57  5.255.125.255.005.005.305.15  5.2500
177.39 	     58  5.255.085.255.105.005.205.10  5.2500
177.40 	     59  5.255.045.255.205.005.105.05  5.2500
177.41 	     60  5.255.005.255.305.005.005.00  5.2500
177.42 	     61  5.255.005.255.405.005.005.00  5.2500
177.43 	     62  5.255.005.255.505.005.005.00  5.2500
177.44 	     63  5.255.005.255.605.005.005.00  5.2500
177.45 	     64  5.255.005.255.705.005.005.00  5.2500
177.46 	     65  5.255.005.255.705.005.005.00  5.2500
177.47 	     66  5.255.005.255.705.005.005.00  5.2500
177.48 	     67  5.255.005.255.705.005.005.00  5.2500
177.49 	     68  5.255.005.255.705.005.005.00  5.2500
177.50 	     69  5.255.005.255.705.005.005.00  5.2500
177.51 	     70  5.255.005.255.705.005.005.00  5.2500
177.52 	     71  5.255.00         5.70
177.53 	(c) The actuarial valuation must use the applicable
177.54 	following payroll growth assumption for calculating the
177.55 	amortization requirement for the unfunded actuarial accrued
177.56 	liability where the amortization retirement is calculated as a
177.57 	level percentage of an increasing payroll:
177.58 	payroll growth
177.59 	                  plan                             assumption
177.60 	     general state employees retirement plan          5.00%
177.61 	     correctional state employees retirement plan     5.00
177.62 	     State Patrol retirement plan                     5.00
177.63 	     legislators retirement plan                      5.00
177.64 	     elective state officers retirement plan          5.00
177.65 	     judges retirement plan                           5.00
178.1 	     general public employees retirement plan         6.00
178.2 	     public employees police and fire
178.3 	         retirement plan                              6.00
178.4 	     local government correctional service
178.5 	         retirement plan                              6.00
178.6 	     teachers retirement plan                         5.00
178.7 	     Duluth teachers retirement plan                  5.00
178.8 	     Minneapolis teachers retirement plan             5.00
178.9 	     St. Paul teachers retirement plan                5.00

178.10 	Sec. 3. Minnesota Statutes 2004, section 356.216, is
178.11 	amended to read:
178.12 	356.216 CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE
178.13 	AND FIRE FUNDS.
178.14 	(a) The provisions of section 356.215 that govern the
178.15 	contents of actuarial valuations must apply to any local police
178.16 	or fire pension fund or relief association required to make an
178.17 	actuarial report under this section, except as follows:
178.18 	(1) in calculating normal cost and other requirements, if
178.19 	required to be expressed as a level percentage of covered
178.20 	payroll, the salaries used in computing covered payroll must be
178.21 	the maximum rate of salary on which retirement and survivorship
178.22 	credits and amounts of benefits are determined and from which
178.23 	any member contributions are calculated and deducted;
178.24 	(2) in lieu of the amortization date specified in section
178.25 	356.215, subdivision 11, the appropriate amortization target
178.26 	date specified in section 69.77, subdivision 4, or 69.773,
178.27 	subdivision 4, clause (c), must be used in calculating any
178.28 	required amortization contribution, except that if the actuarial
178.29 	report for the Bloomington Fire Department Relief Association
178.30 	indicates an unfunded actuarial accrued liability, the unfunded
178.31 	obligation is to be amortized on a level dollar basis by
178.32 	December 31 of the year occurring 20 years later, and if
178.33 	subsequent actuarial valuations for the Bloomington Fire
178.34 	Department Relief Association determine a net actuarial
178.35 	experience loss incurred during the year which ended as of the
178.36 	day before the most recent actuarial valuation date, any
178.37 	unfunded liability due to that loss is to be amortized on a
178.38 	level dollar basis by December 31 of the year occurring 20 years
178.39 	later and except that the amortization date for the Minneapolis
178.40 	Police Relief Association is December 31, 2020;
179.1 	(3) in addition to the tabulation of active members and
179.2 	annuitants provided for in section 356.215, subdivision 13, the
179.3 	member contributions for active members for the calendar year
179.4 	and the prospective annual retirement annuities under the
179.5 	benefit plan for active members must be reported;
179.6 	(4) actuarial valuations required under section 69.773,
179.7 	subdivision 2, must be made at least every four years and
179.8 	actuarial valuations required under section 69.77 shall be made
179.9 	annually;
179.10 	(5) the actuarial balance sheet showing accrued assets
179.11 	valued at market value if the actuarial valuation is required to
179.12 	be prepared at least every four years or valued as current
179.13 	assets under section 356.215, subdivision 1, clause (6), or
179.14 	paragraph (b), whichever applies, if the actuarial valuation is
179.15 	required to be prepared annually, actuarial accrued liabilities,
179.16 	and the unfunded actuarial accrued liability must include the
179.17 	following required reserves:
179.18 	(i) For active members
179.19 	      1.  Retirement benefits
179.20 	      2.  Disability benefits
179.21 	      3.  Refund liability due to death or withdrawal
179.22 	      4.  Survivors' benefits
179.23 	         (ii) For deferred annuitants' benefits
179.24 	         (iii) For former members without vested rights
179.25 	         (iv) For annuitants
179.26 	      1.  Retirement annuities
179.27 	      2.  Disability annuities
179.28 	      3.  Surviving spouses' annuities
179.29 	      4.  Surviving children's annuities
179.30 	In addition to those required reserves, separate items must
179.31 	be shown for additional benefits, if any, which may not be
179.32 	appropriately included in the reserves listed above; and
179.33 	(6) actuarial valuations are due by the first day of the
179.34 	seventh month after the end of the fiscal year which the
179.35 	actuarial valuation covers.
179.36 	(b) For the Minneapolis Firefighters Relief Association or
180.1 	the Minneapolis Police Relief Association, the following
180.2 	provisions additionally apply:
180.3 	(1) in calculating the actuarial balance sheet, unfunded
180.4 	actuarial accrued liability, and amortization contribution of
180.5 	the relief association, "current assets" means the value of all
180.6 	assets at cost, including realized capital gains and losses,
180.7 	plus or minus, whichever applies, the average value of total
180.8 	unrealized capital gains or losses for the most recent
180.9 	three-year period ending with the end of the plan year
180.10 	immediately preceding the actuarial valuation report
180.11 	transmission date; and
180.12 	(2) in calculating the applicable portions of the actuarial
180.13 	valuation, an annual preretirement interest assumption of six
180.14 	percent, an annual postretirement interest assumption of six
180.15 	percent, and an annual salary increase assumption of four
180.16 	percent must be used.

180.17 	Sec. 4. Minnesota Statutes 2004, section 383B.46,
180.18 	subdivision 2, is amended to read:
180.19 		Subd. 2.Establishment of account; contributions.  The
180.20 	county of Hennepin shall deduct from the salary of every person
180.21 	who is eligible for coverage and who elected to retain or obtain
180.22 	coverage by the Hennepin County supplemental retirement program
180.23 	a sum equal to one percent of the total salary of the person.
180.24 	Any classified or unclassified employee who is employed in
180.25 	subsidized on-the-job training, work experience or public
180.26 	service employment as an enrollee under the federal
180.27 	Comprehensive Employment and Training Act shall not be included
180.28 	in the supplemental retirement account from and after March 30,
180.29 	1978 unless the employee has as of the later of March 30, 1978
180.30 	or the date of employment sufficient service credit in the
180.31 	public employees retirement fund or the Minneapolis municipal
180.32 	employees retirement fund, whichever is applicable, to meet the
180.33 	minimum vesting requirements for a deferred retirement annuity,
180.34 	or the county agrees in writing to make the required employer
180.35 	contributions on account of the individual from revenue sources
180.36 	other than funds provided under the federal Comprehensive
181.1 	Employment and Training Act, or the employee agrees in writing
181.2 	to make the required employer contribution in addition to the
181.3 	employee contribution.  The deduction shall be made in the same
181.4 	manner as other retirement deductions are made from the salary
181.5 	of the person.  An amount equal to the amounts deducted during
181.6 	each payroll period shall be contributed by the county of
181.7 	Hennepin.  The total amount deducted and contributed shall be
181.8 	deposited to the credit of the supplemental retirement account
181.9 	in the treasury of the county of Hennepin a separate account
181.10 	administered by the Minnesota State Retirement System on behalf
181.11 	of Hennepin County.  The Hennepin County supplemental retirement
181.12 	account is hereby established as an account separate and
181.13 	distinct from other funds, accounts, or assets of the county of
181.14 	Hennepin.

181.15 	Sec. 5. Minnesota Statutes 2004, section 383B.47, is
181.16 	amended to read:
181.17 	383B.47 PARTICIPATION IN MINNESOTA SUPPLEMENTAL INVESTMENT
181.18 	FUND.
181.19 	With the moneys deposited to the credit of the supplemental
181.20 	retirement account in the treasury of the county of Hennepin,
181.21 	the county of Hennepin , the Minnesota State Retirement System 
181.22 	shall purchase shares on behalf of Hennepin County in the
181.23 	accounts of the Minnesota supplemental investment fund as
181.24 	provided in section 383B.48.

181.25 	Sec. 6. Minnesota Statutes 2004, section 383B.48, is
181.26 	amended to read:
181.27 	383B.48 BUYING STATE SUPPLEMENTAL INVESTMENT FUND SHARES.
181.28 	At the time a person becomes eligible for coverage and
181.29 	elects to obtain coverage by the Hennepin County supplemental
181.30 	retirement program and before November 1 of each subsequent
181.31 	year,A participant in the Hennepin County supplemental
181.32 	retirement program shall indicate in writing on a form provided
181.33 	by the county of Hennepin the account of the Minnesota
181.34 	supplemental investment fund in which the participant wishes
181.35 	salary deductions and county matching contributions attributable
181.36 	to salary deductions to be invested for the subsequent 12-month
182.1 	period such time as allowed by the Minnesota State Retirement
182.2 	System. For that 12-month period,The county of Hennepin 
182.3 	Minnesota State Retirement System shall purchase with the salary
182.4 	deductions and county matching funds attributable to the salary
182.5 	deductions shares in the appropriate account of the Minnesota
182.6 	supplemental investment fund in accordance with the indicated
182.7 	preferences of the participant.  However, the county of Hennepin
182.8 	has the authority to determine which accounts of the Minnesota
182.9 	supplemental investment fund will be available for participant
182.10 	investment.  The shares purchased must stand in the name of the
182.11 	county of Hennepin.  A record must be kept by the county of
182.12 	Hennepin Minnesota State Retirement System indicating the number
182.13 	of shares in each account of the Minnesota supplemental
182.14 	investment fund purchased with the salary deductions and county
182.15 	matching funds attributable to the salary deductions of each
182.16 	participant.  The record must be known as the "participant's
182.17 	share account record."  The participant's share account record
182.18 	must show, in addition to the number of shares in the account,
182.19 	any cash balance of salary deductions or county matching funds
182.20 	attributable to those deductions which stand uninvested in
182.21 	shares.  At the option of the county of Hennepin, and subject to
182.22 	any terms and conditions established and communicated in writing
182.23 	by the county to a participant, the participant may designate no
182.24 	more often than once each calendar quarter month that prior
182.25 	salary deductions and county matching contributions attributable
182.26 	to the salary deductions, together with any interest earned, be
182.27 	reinvested in another account of the Minnesota supplemental
182.28 	investment fund made available by the county of Hennepin.

182.29 	Sec. 7. Minnesota Statutes 2004, section 383B.49, is
182.30 	amended to read:
182.31 	383B.49 SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF
182.32 	SHARES.
182.33 	When requested to do so, in writing, on forms provided by
182.34 	the county Minnesota State Retirement System, by a participant,
182.35 	surviving spouse, a guardian of a surviving child or a personal
182.36 	representative, whichever is applicable, the county of Hennepin 
183.1 	Minnesota State Retirement System shall on behalf of Hennepin
183.2 	County redeem shares in the accounts of the Minnesota
183.3 	supplemental investment fund standing in a participant's share
183.4 	account record under the following circumstances and in
183.5 	accordance with the laws and regulations governing the Minnesota
183.6 	supplemental investment fund:
183.7 	(1) A participant who is no longer employed by the county
183.8 	of Hennepin is entitled to receive the cash realized on the
183.9 	redemption of the shares to the credit of the participant's
183.10 	share account record of the person.  The participant may request
183.11 	the redemption of all or a portion of the shares in the
183.12 	participant's share account record of the person, but may not
183.13 	request more than one redemption in any one calendar year.  If
183.14 	only a portion of the shares in the participant's share account
183.15 	record is requested to be redeemed the person may request to
183.16 	redeem not less than 20 percent of the shares in any one
183.17 	calendar year and the redemption must be completed in no more
183.18 	than five years. The person may select annual redemption in a
183.19 	single lump sum or in monthly payments.An election is
183.20 	irrevocable except that a participant may request an amendment
183.21 	of the election to redeem all of the person's remaining shares.
183.22 	All requests under this paragraph are subject to application to
183.23 	and approval of the Hennepin County administrator, in the sole
183.24 	discretion of the administrator Minnesota State Retirement
183.25 	System upon verification by Hennepin County through the county
183.26 	administrator of the recipient's eligibility to redeem funds.
183.27 	(2) In the event of the death of a participant leaving a
183.28 	surviving spouse, the surviving spouse is entitled to receive
183.29 	the cash realized on the redemption of all or a portion of the
183.30 	shares in the participant's share account record of the deceased
183.31 	spouse, but in no event may the spouse request more than one
183.32 	redemption in each calendar year.  If only a portion of the
183.33 	shares in the participant's share account record is requested to
183.34 	be redeemed, the surviving spouse may request the redemption of
183.35 	not less than 20 percent of the shares in any one calendar year.
183.36 	The surviving spouse may elect annual redemption in a single
184.1 	lump sum payment or in monthly payments.Redemption must be
184.2 	completed in no more than five years.  An election is
184.3 	irrevocable except that the surviving spouse may request an
184.4 	amendment of the election to redeem all of the participant's
184.5 	remaining shares.  All requests under this paragraph are subject
184.6 	to application to and approval of the Hennepin County
184.7 	administrator, in the sole discretion of the
184.8 	administrator Minnesota State Retirement System upon
184.9 	verification by Hennepin County through the county administrator
184.10 	of the recipient's eligibility to redeem funds.  Upon the death
184.11 	of the surviving spouse, any shares remaining in the
184.12 	participant's share account record must be redeemed on behalf of
184.13 	Hennepin County by the county of Hennepin Minnesota State
184.14 	Retirement System and the cash realized from the redemption
184.15 	distributed to the estate of the surviving spouse.
184.16 	(3) In the event of the death of a participant leaving no
184.17 	surviving spouse, but leaving a minor surviving child or minor
184.18 	surviving children, the guardianship estate of the minor child
184.19 	is, or the guardianship estates of the minor children are,
184.20 	entitled to receive the cash realized on the redemption of all
184.21 	shares to the credit of the participant's share account record
184.22 	of the deceased participant.  In the event of minor surviving
184.23 	children, the cash realized must be paid in equal shares to the
184.24 	guardianship estates of the minor surviving children.
184.25 	(4) In the event of the death of a participant leaving no
184.26 	surviving spouse and no minor surviving children, the estate of
184.27 	the deceased participant is entitled to receive the cash
184.28 	realized on the redemption of all shares to the credit of the
184.29 	participant's share account record of the deceased participant.

184.30 	Sec. 8. [383B.491] MINNESOTA STATE RETIREMENT SYSTEM
184.31 	BILLING AUTHORITY.
184.32 	The Minnesota State Retirement System executive director is
184.33 	authorized to enter into an interagency agreement with Hennepin
184.34 	County under which the Minnesota State Retirement System would
184.35 	directly bill the county for the cost of the Minnesota State
184.36 	Retirement System's administration of the Hennepin County
185.1 	Supplemental Retirement Plan.

185.2 	Sec. 9. Minnesota Statutes 2004, section 423B.05,
185.3 	subdivision 3, is amended to read:
185.4 		Subd. 3.Continuation of board.  Notwithstanding the
185.5 	provisions of section 423A.01, subdivision 2, or any other law,
185.6 	the board of trustees and its successors established under
185.7 	subdivision 1 shall continue to govern the association until
185.8 	there are no more than 100 225 members of the police pension
185.9 	fund.  The fund thereafter must become a trust fund in
185.10 	accordance with section 423A.01, subdivision 2.

185.11 	Sec. 10. Minnesota Statutes 2004, section 423B.09,
185.12 	subdivision 1, is amended to read:
185.13 		Subdivision 1.Minneapolis police; persons entitled to
185.14 	receive pensions.  The association shall grant pensions payable
185.15 	from the police pension fund in monthly installments to persons
185.16 	entitled to pensions in the manner and for the following
185.17 	purposes.
185.18 	(a) When the actuarial value of assets of the fund
185.19 	according to the most recent annual actuarial valuation
185.20 	performed in accordance with sections 356.215 and 356.216 is
185.21 	less than 90 percent of the actuarial accrued liabilities,An
185.22 	active member or a deferred pensioner who has performed duty as
185.23 	a member of the police department of the city for five years or
185.24 	more, upon written application after retiring from duty and
185.25 	reaching at least age 50, is entitled to be paid monthly for
185.26 	life a service pension equal to eight units.  For full years of
185.27 	service beyond five years, the service pension increases by 1.6
185.28 	units for each full year, to a maximum of 40 units.  When the
185.29 	actuarial value of assets of the fund according to the most
185.30 	recent annual actuarial valuation prepared in accordance with
185.31 	sections 356.215 and 356.216 is greater than 90 percent of
185.32 	actuarial accrued liabilities,.Active members, deferred
185.33 	members, and service pensioners are entitled to a service
185.34 	pension according to the following schedule:
185.35 	5 years           8.0 units
185.36 	               6 years           9.6 units
186.1 	               7 years          11.2 units
186.2 	               8 years          12.8 units
186.3 	               9 years          14.4 units
186.4 	              10 years          16.0 units
186.5 	              11 years          17.6 units
186.6 	              12 years          19.2 units
186.7 	              13 years          20.8 units
186.8 	              14 years          22.4 units
186.9 	              15 years          24.0 units
186.10 	              16 years          25.6 units
186.11 	              17 years          27.2 units
186.12 	              18 years          28.8 units
186.13 	              19 years          30.4 units
186.14 	A B 
186.15 	              20 years 34.0 34.5 units 35.0 units 
186.16 	              21 years 35.6 36.1 units 36.6 units 
186.17 	              22 years 37.2 37.7 units 38.2 units 
186.18 	              23 years 38.8 39.3 units 39.8 units 
186.19 	              24 years 40.4 40.9 units 41.4 units 
186.20 	              25 years 42.0 42.5 units 43.0 units 
186.21 	Column A is applicable until December 31, 2005, and applies
186.22 	retroactively to January 1, 2005, for a service pensioner who
186.23 	retired before January 1, 2005.  Column B applies on and after
186.24 	January 1, 2006.
186.25 	Fractional years of service may not be used in computing
186.26 	pensions.
186.27 	(b) An active member who after five years' service but less
186.28 	than 20 years' service with the police department of the city,
186.29 	becomes superannuated so as to be permanently unable to perform
186.30 	the person's assigned duties, is entitled to be paid monthly for
186.31 	life a superannuation pension equal to four units for five years
186.32 	of service and an additional two units for each full year of
186.33 	service over five years and less than 20 years.
186.34 	(c) An active member who is not eligible for a service
186.35 	pension and who, while a member of the police department of the
186.36 	city, becomes diseased or sustains an injury while in the
187.1 	service that permanently unfits the member for the performance
187.2 	of police duties is entitled to be paid monthly for life a
187.3 	pension equal to 34 units while so disabled.

187.4 	Sec. 11. Minnesota Statutes 2004, section 423B.09, is
187.5 	amended by adding a subdivision to read:
187.6 		Subd. 7.Additional unit. The additional half units
187.7 	provided to members by subdivision 1 must also be provided under
187.8 	the same terms and at the same time as applicable under
187.9 	subdivision 1 to members who selected a joint annuity option
187.10 	under subdivision 6 and must be in an amount that is actuarially
187.11 	equivalent to the service pension and the automatic survivor
187.12 	coverage for that additional unit.

187.13 	Sec. 12. Minnesota Statutes 2004, section 423B.10,
187.14 	subdivision 1, is amended to read:
187.15 		Subdivision 1.Entitlement; benefit amount.  (a) The
187.16 	surviving spouse of a deceased service pensioner, disability
187.17 	pensioner, deferred pensioner, superannuation pensioner, or
187.18 	active member, who was the legally married spouse of the
187.19 	decedent, residing with the decedent, and who was married while
187.20 	or before the time the decedent was on the payroll of the police
187.21 	department, and who, if the deceased member was a service or
187.22 	deferred pensioner, was legally married to the member for a
187.23 	period of at least one year before retirement from the police
187.24 	department, is entitled to a surviving spouse benefit.  The
187.25 	surviving spouse benefit is equal to 22 22.5 units per month
187.26 	until December 31, 2005, and 23 units per month beginning on
187.27 	January 1, 2006,if the person is the surviving spouse of a
187.28 	deceased active member or disabilitant.  The surviving spouse
187.29 	benefit is equal to six units per month, plus an additional one
187.30 	unit for each year of service to the credit of the decedent in
187.31 	excess of five years, to a maximum of 22 22.5 units per month
187.32 	until December 31, 2005, and 23 units per month beginning on
187.33 	January 1, 2006, if the person is the surviving spouse of a
187.34 	deceased service pensioner, deferred pensioner, or
187.35 	superannuation pensioner.  The surviving spouse benefit is
187.36 	payable for the life of the surviving spouse.
188.1 	(b) A surviving child of a deceased service pensioner,
188.2 	disability pensioner, deferred pensioner, superannuation
188.3 	pensioner, or active member, who was living while the decedent
188.4 	was an active member of the police department or was born within
188.5 	nine months after the decedent terminated active service in the
188.6 	police department, is entitled to a surviving child benefit.
188.7 	The surviving child benefit is equal to eight units per month if
188.8 	the person is the surviving child of a deceased active member or
188.9 	disabilitant.  The surviving child benefit is equal to two units
188.10 	per month, plus an additional four-tenths of one unit per month
188.11 	for each year of service to the credit of the decedent in excess
188.12 	of five years, to a maximum of eight units, if the person is the
188.13 	surviving child of a deceased service pensioner, deferred
188.14 	pensioner, or superannuation pensioner.  The surviving child
188.15 	benefit is payable until the person attains age 18, or, if in
188.16 	full-time attendance during the normal school year, in a school
188.17 	approved by the board of directors, until the person receives a
188.18 	bachelor's degree or attains the age of 22 years, whichever
188.19 	occurs first.  In the event of the death of both parents leaving
188.20 	a surviving child or children entitled to a surviving child
188.21 	benefit as determined in this paragraph, the surviving child is,
188.22 	or the surviving children are, entitled to a surviving child
188.23 	benefit in such sums as determined by the board of directors to
188.24 	be necessary for the care and education of such surviving child
188.25 	or children, but not to exceed the family maximum benefit per
188.26 	month, to the children of any one family.
188.27 	(c) The surviving spouse and surviving child benefits are
188.28 	subject to a family maximum benefit.  The family maximum benefit
188.29 	is 41 units per month.
188.30 	(d) A surviving spouse who is otherwise not qualified may
188.31 	receive a benefit if the surviving spouse was married to the
188.32 	decedent for a period of five years and was residing with the
188.33 	decedent at the time of death.  The surviving spouse benefit is
188.34 	the same as that provided in paragraph (a), except that if the
188.35 	surviving spouse is younger than the decedent, the surviving
188.36 	spouse benefit must be actuarially equivalent to a surviving
189.1 	spouse benefit that would have been paid to the member's spouse
189.2 	had the member been married to a person of the same age or a
189.3 	greater age than the member's age before retirement.
189.4 	(e) For any surviving spouse who began receiving survivor
189.5 	benefits before January 1, 2005, the half-unit increase under
189.6 	paragraph (a) is effective retroactive to January 1, 2005.

189.7 	Sec. 13. Minnesota Statutes 2004, section 423C.05,
189.8 	subdivision 2, is amended to read:
189.9 		Subd. 2.Service pension.  (a) An active A member who has
189.10 	performed duty for the fire department for five years or more,
189.11 	upon written application after retiring from duty and reaching
189.12 	at least age 50, is entitled to be paid monthly for life a
189.13 	service pension under paragraph (b).
189.14 	(b) Based on the percentage that the actuarial value of
189.15 	assets of the special fund equal to the actuarial accrued
189.16 	liabilities of the special fund according to the most recent
189.17 	annual actuarial valuation of the relief association prepared in
189.18 	accordance with sections 356.215 and 356.216,The amount of the
189.19 	service pension is as follows:
189.20 	Length of Service Service Service 
189.21 	allowable pension pension pension 
189.22 	service payable if payable payable if 
189.23 	credit under 90 if greater greater
189.24 	             percent than 89.99than 92.49
189.25 	                            percent and percent
189.26 	                            less than Number of 
189.27 	92.5 percent units 
189.28 	5 years-8.0 units 8.0 units
189.29 	 6 years-9.6 units 9.6 units
189.30 	 7 years-11.2 units 11.2 units
189.31 	 8 years-12.8 units 12.8 units
189.32 	 9 years-14.4 units 14.4 units
189.33 	10 years 16.0 units 16.0 units 16.0 units
189.34 	11 years 17.6 units 17.6 units 17.6 units
189.35 	12 years 19.2 units 19.2 units 19.2 units
189.36 	13 years 20.8 units 20.8 units 20.8 units
190.1 	14 years 22.4 units 22.4 units 22.4 units
190.2 	15 years 24.0 units 24.0 units 24.0 units
190.3 	16 years 25.6 units 25.6 units 25.6 units
190.4 	17 years 27.2 units 27.2 units 27.2 units
190.5 	18 years 28.8 units 28.8 units 28.8 units
190.6 	19 years 30.4 units 30.4 units 30.4 units
190.7 	20 years 33.0 units 33.5 units 34.0 units
190.8 	21 years 34.6 units 35.1 units 35.6 units
190.9 	22 years 36.2 units 37.7 units 37.2 units
190.10 	23 years 37.8 units 38.3 units 38.8 units
190.11 	24 years 39.4 units 39.9 units 40.4 units
190.12 	25 years
190.13 	 or more 41.0 units 41.5 units 42.0 units
190.14 	(c) A member entitled to a benefit under this subdivision
190.15 	may elect to have it paid as an optional retirement annuity
190.16 	pursuant to the conditions set forth in subdivision 8.  A member
190.17 	receiving a benefit pursuant to subdivision 5 or 6 shall not
190.18 	simultaneously be entitled to a benefit under this subdivision.

190.19 	Sec. 14. [423C.16] RECOMPUTATION OF DISABLED BENEFIT
190.20 	PROHIBITED.
190.21 	Notwithstanding section 423A.11, the Board of Trustees of
190.22 	the Minneapolis Firefighters Relief Association shall not
190.23 	recompute the disability benefit of a member who became
190.24 	permanently disabled as the result of a service-related disease
190.25 	or injury.  Any prior recomputation of a disabled member's
190.26 	service-related disability pension shall be revoked upon the
190.27 	member's request and upon the member's signed and sworn
190.28 	agreement to waive any right to a recomputation of the benefit
190.29 	in the future.  Non-service-related disability pension benefits
190.30 	that were recomputed at full 25-year service pensions shall
190.31 	remain in effect.

190.32 	Sec. 15. NO REDUCTION OF BENEFITS.
 190.33 	When a pension benefit is properly paid in accordance with
190.34 	the laws governing the Minneapolis Police Relief Association or
190.35 	the Minneapolis Firefighters Relief Association, whichever
190.36 	apply, to any member, the dollar amount of the pension a member
191.1 	received may not be reduced if the city of Minneapolis and the
191.2 	collective bargaining agent representing active police officers
191.3 	or firefighters enter into or are required to abide by an
191.4 	agreement that would otherwise require the association to reduce
191.5 	the dollar amount of a pension that had properly been paid to
191.6 	any member.

191.7 	Sec. 16. AURORA, BIWABIK CITY, HOYT LAKES, AND PALO
191.8 	VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.
 191.9 	(a) This section applies to consolidation of any
191.10 	combination of two or more of the following volunteer
191.11 	firefighter relief associations:  Aurora, Biwabik City, Hoyt
191.12 	Lakes, and Palo.
191.13 	(b) Notwithstanding Minnesota Statutes, section 424B.10,
191.14 	subdivision 1, paragraph (a), the service pension to be paid by
191.15 	the relief association existing after the consolidation is as
191.16 	follows:
191.17 	(1) for the service rendered by each individual volunteer
191.18 	firefighter before the effective date of the consolidation, the
191.19 	service pension amount is the amount payable to that volunteer
191.20 	firefighter under the articles of incorporation or bylaws of the
191.21 	consolidating volunteer firefighters relief association that the
191.22 	firefighter was a member of immediately before the
191.23 	consolidation;
191.24 	(2) for the service rendered after the effective date of
191.25 	the consolidation, the service pension amount is the highest
191.26 	dollar amount service pension of any of the consolidating
191.27 	volunteer firefighters relief associations under the articles of
191.28 	incorporation or bylaws in effect immediately before the
191.29 	consolidation; and 
191.30 	(3) after consolidation, increases in the amounts
191.31 	established in clauses (1) and (2) may be implemented if
191.32 	consistent with applicable requirements of Minnesota Statutes,
191.33 	chapters 69 and 424A.

191.34 	Sec. 17. EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD
191.35 	HOC POSTRETIREMENT ADJUSTMENT.
 191.36 	(a) In addition to the current pensions and other
192.1 	retirement benefits payable, the pensions and retirement
192.2 	benefits payable to retired police officers and firefighters and
192.3 	their surviving spouses by the Eveleth police and fire trust
192.4 	fund are increased by $100 per month.  Increases are retroactive
192.5 	from January 1, 2005.
192.6 	(b) Following the January 1, 2005, effective date of the
192.7 	benefit increase provided under paragraph (a), every two years
192.8 	thereafter, to be effective no earlier than the applicable
192.9 	January 1, the city council of the city of Eveleth is authorized
192.10 	to provide permanent, uniform benefit increases, not less than
192.11 	$10 per month nor to exceed $100 per month, to any remaining
192.12 	retirees and survivors receiving benefits from the Eveleth
192.13 	police and fire trust fund.  Any given benefit improvement under
192.14 	this paragraph is not effective unless the city council passes a
192.15 	resolution approving the increase.
192.16 	(c) Within 30 days following the approval of a resolution
192.17 	under paragraph (b), the chief administrative officer of the
192.18 	city of Eveleth shall file a copy of the resolution with the
192.19 	executive director of the Legislative Commission on Pensions and
192.20 	Retirement, with the chair of the house Governmental Operations
192.21 	and Veterans Affairs Committee, and with the chair of the senate
192.22 	State and Local Government Operations Committee.  Along with a
192.23 	copy of the resolution, the city's chief administrative officer
192.24 	must send a statement indicating the age of each benefit
192.25 	recipient and the retirement benefit or survivor benefit being
192.26 	received before and after the benefit increase.

192.27 	Sec. 18. MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER
192.28 	RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.
 192.29 	Notwithstanding any limitations in Minnesota Statutes,
192.30 	section 424A.02, subdivision 13, or any other provision of law
192.31 	to the contrary, if an agreement between the affected relief
192.32 	associations and cities is reached as provided in this section,
192.33 	the Maplewood Firefighters Relief Association may transfer
192.34 	assets from its special fund to the Oakdale Fire Department
192.35 	Relief Association representing the value of the accumulated
192.36 	service credit for the current members of the Oakdale Fire
193.1 	Department Relief Association who are currently eligible to
193.2 	receive a combined service pension for firefighter service in
193.3 	both associations.  The transfer of the assets from the
193.4 	Maplewood Firefighters Relief Association to the Oakdale Fire
193.5 	Department Relief Association must be in an amount representing
193.6 	the cumulative value of the service credit earned by the members
193.7 	of the Oakdale Fire Department Relief Association who are
193.8 	currently eligible to receive a combined service pension for
193.9 	firefighting service in both associations for the service credit
193.10 	that they accrued while working for the Maplewood Fire
193.11 	Department.  The amount of the assets, liabilities, and service
193.12 	credit to be transferred must be specified in a joint agreement
193.13 	negotiated by the secretaries of the two relief associations and
193.14 	ratified by the boards of trustees of both relief associations
193.15 	and of the cities of Maplewood and Oakdale.  The agreement must
193.16 	specify by name or other appropriate means the firefighters
193.17 	affected by the liability, asset, and service credit transfer.
193.18 	The ratification must be expressed in the form of resolutions
193.19 	adopted by each entity.  The agreements must specify the amount
193.20 	of assets to be transferred, the amount of liabilities to be
193.21 	transferred, and the amount of service credit each of the
193.22 	applicable individuals will receive in the Oakdale Fire
193.23 	Department Relief Association.  Upon the ratification of the
193.24 	agreement by both relief associations and both cities, the
193.25 	assets, liabilities, and service credit of the applicable
193.26 	individuals must be transferred to the Oakdale Fire Department
193.27 	Relief Association, and the Maplewood Firefighters Relief
193.28 	Association is relieved of any obligation to the individuals.  A
193.29 	certified copy of the ratified agreement must be filed with the
193.30 	state auditor and with the secretary of state.

193.31 	Sec. 19. EFFECTIVE DATE; LOCAL APPROVAL.
 193.32 	(a) Sections 2 and 3 with respect to the Bloomington Fire
193.33 	Department Relief Association are effective the day after the
193.34 	date on which the city council of the city of Bloomington and
193.35 	its chief clerical officer timely complete their compliance with
193.36 	Minnesota Statutes, section 645.021, subdivisions 2 and 4.
194.1 	(b) Sections 1, 3, with respect to the Minneapolis Police
194.2 	Relief Association, 9, 10, 11, 12, 13, and 15 are not severable
194.3 	and are effective the day after the date of the approval by the
194.4 	city council of the city of Minneapolis and the timely
194.5 	completion by the chief clerical officer of the city of
194.6 	Minneapolis of compliance with Minnesota Statutes, section
194.7 	645.021, subdivisions 2 and 3.
194.8 	(c) Sections 4, 5, 6, 7, and 8 are effective the day after
194.9 	the board of Hennepin County and its chief clerical officer
194.10 	complete in a timely manner their compliance with Minnesota
194.11 	Statutes, section 645.021, subdivisions 2 and 3.
194.12 	(d) Sections 14 and 15 are effective the day after the
194.13 	governing body of the city of Minneapolis and its chief clerical
194.14 	officer timely complete their compliance with Minnesota
194.15 	Statutes, section 645.021, subdivisions 2 and 3.
194.16 	(e) Section 17 is effective the day after the date on which
194.17 	the city council of the city of Eveleth and its chief clerical
194.18 	officer timely complete their compliance with Minnesota
194.19 	Statutes, section 645.021, subdivisions 2 and 3.
194.20 	(f) Section 16 is effective with respect to a volunteer
194.21 	firefighters relief association listed in column A the day after
194.22 	the governing body of the municipality listed in column B and
194.23 	its chief clerical officer timely complete compliance with
194.24 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.
194.25 	A B
194.26 	              Aurora city of Aurora
194.27 	              Biwabik city of Biwabik
194.28 	              Hoyt Lakes city of Hoyt Lakes
194.29 	              Palo town of White 
194.30 	(g) Section 18 is effective the day after the governing
194.31 	body of the city of Maplewood, the governing body of the city of
194.32 	Oakdale, the Maplewood chief clerical officer, and the Oakdale
194.33 	chief clerical officer complete their compliance with Minnesota
194.34 	Statutes, section 645.021, subdivisions 2 and 3.

194.35 	ARTICLE 14
194.36 	MINNEAPOLIS EMPLOYEES RETIREMENT
195.1 	FUND CHANGES

195.2 	Section 1. Minnesota Statutes 2004, section 43A.17,
195.3 	subdivision 9, is amended to read:
195.4 		Subd. 9.Political subdivision compensation limit.  (a)
195.5 	The salary and the value of all other forms of compensation of a
195.6 	person employed by a political subdivision of this state,
195.7 	excluding a school district, or employed under section 422A.03
195.8 	may not exceed 95 percent of the salary of the governor as set
195.9 	under section 15A.082, except as provided in this subdivision.
195.10 	For purposes of this subdivision, "political subdivision of this
195.11 	state" includes a statutory or home rule charter city, county,
195.12 	town, metropolitan or regional agency, or other political
195.13 	subdivision, but does not include a hospital, clinic, or health
195.14 	maintenance organization owned by such a governmental unit or a
195.15 	retirement plan governed by chapter 422A.
195.16 	(b) Deferred compensation and payroll allocations to
195.17 	purchase an individual annuity contract for an employee are
195.18 	included in determining the employee's salary.  Other forms of
195.19 	compensation which shall be included to determine an employee's
195.20 	total compensation are all other direct and indirect items of
195.21 	compensation which are not specifically excluded by this
195.22 	subdivision.  Other forms of compensation which shall not be
195.23 	included in a determination of an employee's total compensation
195.24 	for the purposes of this subdivision are:
195.25 	(1) employee benefits that are also provided for the
195.26 	majority of all other full-time employees of the political
195.27 	subdivision, vacation and sick leave allowances, health and
195.28 	dental insurance, disability insurance, term life insurance, and
195.29 	pension benefits or like benefits the cost of which is borne by
195.30 	the employee or which is not subject to tax as income under the
195.31 	Internal Revenue Code of 1986;
195.32 	(2) dues paid to organizations that are of a civic,
195.33 	professional, educational, or governmental nature; and
195.34 	(3) reimbursement for actual expenses incurred by the
195.35 	employee which the governing body determines to be directly
195.36 	related to the performance of job responsibilities, including
196.1 	any relocation expenses paid during the initial year of
196.2 	employment.
196.3 	The value of other forms of compensation shall be the
196.4 	annual cost to the political subdivision for the provision of
196.5 	the compensation.
196.6 	(c) The salary of a medical doctor or doctor of osteopathy
196.7 	occupying a position that the governing body of the political
196.8 	subdivision has determined requires an M.D. or D.O. degree is
196.9 	excluded from the limitation in this subdivision.
196.10 	(d) The commissioner may increase the limitation in this
196.11 	subdivision for a position that the commissioner has determined
196.12 	requires special expertise necessitating a higher salary to
196.13 	attract or retain a qualified person.  The commissioner shall
196.14 	review each proposed increase giving due consideration to salary
196.15 	rates paid to other persons with similar responsibilities in the
196.16 	state and nation.  The commissioner may not increase the
196.17 	limitation until the commissioner has presented the proposed
196.18 	increase to the Legislative Coordinating Commission and received
196.19 	the commission's recommendation on it.  The recommendation is
196.20 	advisory only.  If the commission does not give its
196.21 	recommendation on a proposed increase within 30 days from its
196.22 	receipt of the proposal, the commission is deemed to have made
196.23 	no recommendation.

196.24 	Sec. 2. Minnesota Statutes 2004, section 422A.05,
196.25 	subdivision 2c, is amended to read:
196.26 		Subd. 2c.Minneapolis employees retirement fund
196.27 	investment authority.  (a) For investments made on or after July
196.28 	1, 1991, the board shall invest funds only in investments
196.29 	authorized by section 356A.06, subdivision 7.
196.30 	(b) However, in addition to real estate investments
196.31 	authorized under paragraph (a), the board may also make loans to
196.32 	purchasers of Minnesota situs nonfarm residential real estate
196.33 	that is owned by the Minneapolis Employees Retirement Fund.  The
196.34 	loans must be secured by mortgages or deeds of trust.
196.35 	(c) For investments made before July 1, 1991, the board
196.36 	may, but is not required to, comply with paragraph (a).
197.1 	However, with respect to these investments, the board shall act
197.2 	in accordance with subdivision 2a and chapter 356A.
197.3 	(d) The board may certify assets for investment by the
197.4 	State Board of Investment under sections 11A.14 and 11A.17.

197.5 	Sec. 3. Minnesota Statutes 2004, section 422A.06,
197.6 	subdivision 3, is amended to read:
197.7 		Subd. 3.Deposit accumulation fund. (a) The deposit
197.8 	accumulation fund consists of the assets held in the fund,
197.9 	including amounts contributed by or for employees, amounts
197.10 	contributed by the city, amounts contributed by municipal
197.11 	activities supported in whole or in part by revenues other than
197.12 	taxes and amounts contributed by any public corporation, amounts
197.13 	paid by the state, and by income from investments.
197.14 	(b) There must be paid from the fund the amounts required
197.15 	to be transferred to the retirement benefit fund, or the
197.16 	disability benefit fund, refunds of contributions, including the
197.17 	death-while-active refund specified in section 422A.22,
197.18 	subdivision 4, postretirement increases in retirement allowances
197.19 	granted under Laws 1965, chapter 688, or Laws 1969, chapter 859,
197.20 	and expenses of the administration of the retirement fund which
197.21 	were not charged by the retirement board against the income of
197.22 	the retirement benefit fund from investments as the cost of
197.23 	handling the investments of the retirement benefit fund.
197.24 	(c) To the extent that the deposit accumulation fund has
197.25 	insufficient assets to transfer the total value of the required
197.26 	reserves for retirement annuities to either the disability
197.27 	benefit fund under subdivisions 5 and 7 or the retirement
197.28 	benefit fund under subdivisions 5 and 8 as required, the deposit
197.29 	accumulation fund has a transfer amount payable on which an
197.30 	interest charge accrues.  The executive director must determine
197.31 	the interest charge for the period that transfer amount payable
197.32 	remains unpaid at an annual rate equal to five percent plus the
197.33 	percentage increase in the amount of the annual Consumer Price
197.34 	Index for urban wage earners and clerical workers as calculated
197.35 	by the Bureau of Labor Statistics of the United States
197.36 	Department of Labor from the previous June 30.  The interest
198.1 	charge must be reflected in the books of the Minneapolis
198.2 	Employees Retirement Fund and assessed against the deposit
198.3 	accumulation fund based on the average quarterly transfer amount
198.4 	payable balance outstanding.  Any revenue received by the
198.5 	deposit accumulation fund subsequent to unpaid transfers must be
198.6 	transferred from the deposit accumulation fund to the disability
198.7 	benefit fund or to the retirement fund, whichever applies, must
198.8 	first be applied to any remaining interest charge and then must
198.9 	be applied to the principal amount of transfer amount payable
198.10 	outstanding.

198.11 	Sec. 4. Minnesota Statutes 2004, section 422A.06,
198.12 	subdivision 5, is amended to read:
198.13 		Subd. 5.Transfer of reserves to retirement benefit fund;
198.14 	adjustments of annuities and benefits.  (a) Assets equal to the
198.15 	required reserves for retirement annuities as determined in
198.16 	accordance with the appropriate mortality table adopted by the
198.17 	board of trustees based on the experience of the fund as
198.18 	recommended by the commission-retained actuary retained under
198.19 	section 356.214and using the postretirement interest assumption
198.20 	specified in section 356.215, subdivision 8, shall must be
198.21 	transferred to the disability benefit fund as provided in
198.22 	subdivision 7, or the retirement benefit fund, except for any
198.23 	amounts payable from the survivor benefit fund, as of date of
198.24 	retirement.
198.25 	(b) If a full transfer amount is not payable from the
198.26 	deposit accumulation fund, the applicable fund must be credited
198.27 	with an interest-bearing transfer amount receivable.
198.28 	(b) (c) Annuity payments shall must be adjusted in
198.29 	accordance with this chapter, except that no minimum retirement
198.30 	payments described in this chapter shall must include any
198.31 	amounts payable from the survivors' benefit fund or disability
198.32 	benefit fund and supplemented benefits specifically financed by
198.33 	statute.
198.34 	(c) (d) Increases in annuity payments pursuant to under 
198.35 	this section shall be made automatically unless written notice
198.36 	on a form prescribed by the board is filed with the retirement
199.1 	board requesting that the increase not be made.
199.2 	(d) (e) Any additional annuity which began to accrue on
199.3 	July 1, 1973, or which began to accrue on January 1, 1974,
199.4 	pursuant to Laws 1973, chapter 770, section 1, shall must be
199.5 	considered as part of the base amount to be used in determining
199.6 	any postretirement adjustments payable pursuant to under the
199.7 	provisions of subdivision 8.

199.8 	Sec. 5. Minnesota Statutes 2004, section 422A.06,
199.9 	subdivision 7, is amended to read:
199.10 		Subd. 7.Disability benefit fund.  (a) Unless subdivision
199.11 	3, paragraph (c), applies,the required reserves for disability
199.12 	allowances which become effective after December 31, 1973, shall 
199.13 	must be transferred from the deposit accumulation fund to the
199.14 	disability benefit fund.  A proportionate share of income from
199.15 	investments shall must be allocated to this fund and any
199.16 	interest charge under subdivision 3, paragraph (c), must be
199.17 	credited to the fund. There shall be paid From this fund,the
199.18 	disability allowances which become effective after December 31,
199.19 	1973, must be paid.
199.20 	(b) In the event of termination of any disability allowance
199.21 	for any reason other than the death of the recipient, the
199.22 	balance of the required reserves for the disability allowance as
199.23 	of the date of termination shall must be transferred from the
199.24 	disability benefit fund to the deposit accumulation fund.
199.25 	(c) At the end of each fiscal year, as part of the annual
199.26 	actuarial valuation, a determination shall must be made of the
199.27 	required reserves for all disability allowances being paid from
199.28 	the disability benefit fund.  Any excess of assets over
199.29 	actuarial required reserves in the disability benefit fund shall 
199.30 	must be transferred to the deposit accumulation fund. Unless
199.31 	subdivision 3, paragraph (c), applies,any excess of actuarial
199.32 	reserves over assets in the disability benefit fund shall must 
199.33 	be funded by a transfer of the appropriate amount of assets from
199.34 	the deposit accumulation fund.

199.35 	Sec. 6. Minnesota Statutes 2004, section 422A.06,
199.36 	subdivision 8, is amended to read:
200.1 		Subd. 8.Retirement benefit fund.  (a) The retirement
200.2 	benefit fund shall consist consists of amounts held for payment
200.3 	of retirement allowances for members retired pursuant to under 
200.4 	this chapter, including any transfer amount payable under
200.5 	subdivision 3, paragraph (c).
200.6 	(b) Unless subdivision 3, paragraph (c), applies,assets
200.7 	equal to the required reserves for retirement
200.8 	allowances pursuant to under this chapter determined in
200.9 	accordance with the appropriate mortality table adopted by the
200.10 	board of trustees based on the experience of the fund as
200.11 	recommended by the commission-retained actuary shall retained
200.12 	under section 356.214, must be transferred from the deposit
200.13 	accumulation fund to the retirement benefit fund as of the last
200.14 	business day of the month in which the retirement allowance
200.15 	begins.  The income from investments of these assets shall must 
200.16 	be allocated to this fund and any interest charge under
200.17 	subdivision 3, paragraph (c), must be credited to the fund.
200.18 	There shall must be paid from this fund the retirement annuities
200.19 	authorized by law.  A required reserve calculation for the
200.20 	retirement benefit fund must be made by the actuary retained by
200.21 	the Legislative Commission on Pensions and Retirement under
200.22 	section 356.214and must be certified to the retirement board by
200.23 	the commission-retained actuary.
200.24 	(c) The retirement benefit fund shall must be governed by
200.25 	the applicable laws governing the accounting and audit
200.26 	procedures, investment, actuarial requirements, calculation and
200.27 	payment of postretirement benefit adjustments, discharge of any
200.28 	deficiency in the assets of the fund when compared to the
200.29 	actuarially determined required reserves, and other applicable
200.30 	operations and procedures regarding the Minnesota postretirement
200.31 	investment fund in effect on June 30, 1997, established under
200.32 	Minnesota Statutes 1996, section 11A.18, and any legal or
200.33 	administrative interpretations of those laws of the State Board
200.34 	of Investment, the legal advisor to the Board of Investment and
200.35 	the executive director of the State Board of Investment in
200.36 	effect on June 30, 1997.  If a deferred yield adjustment account
201.1 	is established for the Minnesota postretirement investment fund
201.2 	before June 30, 1997, under Minnesota Statutes 1996, section
201.3 	11A.18, subdivision 5, the retirement board shall also establish
201.4 	and maintain a deferred yield adjustment account within this
201.5 	fund.
201.6 	(d) Annually, following the calculation of any
201.7 	postretirement adjustment payable from the retirement benefit
201.8 	fund, the board of trustees shall submit a report to the
201.9 	executive director of the Legislative Commission on Pensions and
201.10 	Retirement and to the commissioner of finance indicating the
201.11 	amount of any postretirement adjustment and the underlying
201.12 	calculations on which that postretirement adjustment amount is
201.13 	based, including the amount of dividends, the amount of
201.14 	interest, and the amount of net realized capital gains or losses
201.15 	utilized in the calculations.
201.16 	(e) With respect to a former contributing member who began
201.17 	receiving a retirement annuity or disability benefit under
201.18 	section 422A.151, paragraph (a), clause (2), after June 30,
201.19 	1997, or with respect to a survivor of a former contributing
201.20 	member who began receiving a survivor benefit under section
201.21 	422A.151, paragraph (a), clause (2), after June 30, 1997, the
201.22 	reserves attributable to the one percent lower amount of the
201.23 	cost-of-living adjustment payable to those annuity or benefit
201.24 	recipients annually must be transferred back to the deposit
201.25 	accumulation fund to the credit of the Metropolitan Airports
201.26 	Commission.  The calculation of this annual reduced
201.27 	cost-of-living adjustment reserve transfer must be reviewed by
201.28 	the actuary retained by the Legislative Commission on Pensions
201.29 	and Retirement under section 356.214.

201.30 	Sec. 7. Minnesota Statutes 2004, section 422A.101,
201.31 	subdivision 3, is amended to read:
201.32 		Subd. 3.State contributions.  (a) Subject to the
201.33 	limitation set forth in paragraph (c), the state shall pay to
201.34 	the Minneapolis Employees Retirement Fund annually an amount
201.35 	equal to the amount calculated under paragraph (b).
201.36 	(b) The payment amount is an amount equal to the financial
202.1 	requirements of the Minneapolis Employees Retirement Fund
202.2 	reported in the actuarial valuation of the fund prepared by the
202.3 	commission-retained actuary pursuant to section 356.215 for the
202.4 	most recent year but based on a target date for full
202.5 	amortization of the unfunded actuarial accrued liabilities by
202.6 	June 30, 2020, less the amount of employee contributions
202.7 	required pursuant to section 422A.10, and the amount of employer
202.8 	contributions required pursuant to subdivisions 1a, 2, and 2a.
202.9 	Payments shall be made September 15 annually.
202.10 	(c) The annual state contribution under this subdivision
202.11 	may not exceed $9,000,000, plus the cost of the annual
202.12 	supplemental benefit determined under section 356.43.
202.13 	(d) If the amount determined under paragraph (b) exceeds
202.14 	$11,910,000 $9,000,000, the excess must be allocated to and paid
202.15 	to the fund by the employers identified in subdivisions 1a and
202.16 	2, other than units of metropolitan government.  Each employer's
202.17 	share of the excess is proportionate to the employer's share of
202.18 	the fund's unfunded actuarial accrued liability as disclosed in
202.19 	the annual actuarial valuation prepared by the actuary
202.20 	retained by the Legislative Commission on Pensions and
202.21 	Retirement under section 356.214compared to the total unfunded
202.22 	actuarial accrued liability attributed to all employers
202.23 	identified in subdivisions 1a and 2, other than units of
202.24 	metropolitan government.  Payments must be made in equal
202.25 	installments as set forth in paragraph (b).

202.26 	Sec. 8. REPEALER.
 202.27 	Minnesota Statutes 2004, section 422A.101, subdivision 4,
202.28 	is repealed.

202.29 	Sec. 9. EFFECTIVE DATE; LOCAL APPROVAL.
 202.30 	Sections 1 to 8 are effective the day after the city
202.31 	council of the city of Minneapolis and its chief clerical
202.32 	officer timely complete their compliance with Minnesota
202.33 	Statutes, section 645.021, subdivisions 2 and 3.

202.34 	ARTICLE 15
202.35 	ONE PERSON AND SMALL GROUP
202.36 	RETIREMENT CHANGES

203.1 	Section 1. PURCHASE OF PRIOR SERVICE CREDIT.
 203.2 	(a) An eligible person described in paragraph (b) is
203.3 	entitled to purchase up to one year of allowable service credit
203.4 	from the Teachers Retirement Association for the 2003-2004
203.5 	school year.  The service credit purchase under this section
203.6 	must be made in accordance with Minnesota Statutes, section
203.7 	356.551, except as otherwise stated in this section.
203.8 	(b) An eligible person is a person who:
203.9 	(1) is currently a member of the Teachers Retirement
203.10 	Association;
203.11 	(2) was born on April 2, 1949;
203.12 	(3) has been employed by Independent School District No.
203.13 	11, Anoka-Hennepin, since the 1971-1972 school year;
203.14 	(4) applied for and was granted an extended leave of
203.15 	absence from Independent School District No. 11, Anoka-Hennepin,
203.16 	for the 2002-2003, 2003-2004, and 2004-2005 school years under
203.17 	Minnesota Statutes, section 122A.46;
203.18 	(5) was unable to make timely payment for the 2003-2004
203.19 	school year under Minnesota Statutes, section 354.094, because
203.20 	of a problem in transferring funds from the individual's
203.21 	tax-sheltered annuity account; and 
203.22 	(6) was not permitted by the Teachers Retirement
203.23 	Association to make payment after June 30, 2004, with interest.
203.24 	(c) Notwithstanding Minnesota Statutes, section 356.551,
203.25 	payment must be made by September 1, 2005, or prior to
203.26 	termination of service, whichever is earlier, and the employee
203.27 	payment amount is an amount equal to the employee contribution
203.28 	rate in effect during the 2003-2004 school year applied to the
203.29 	eligible individual's salary in the year prior to the leave,
203.30 	plus .708 percent monthly interest from June 30, 2004, until the
203.31 	end of the month in which payment is made.  If the full payment
203.32 	required under this paragraph is made, then notwithstanding
203.33 	Minnesota Statutes, section 354.094, the individual is
203.34 	authorized under Minnesota Statutes, section 354.094, to make
203.35 	the required contribution for the 2004-2005 school year, and any
203.36 	subsequent years of the leave.  Notwithstanding payment
204.1 	deadlines in Minnesota Statutes, section 354.094, the employee
204.2 	contribution for the 2004-2005 school year must be made on or
204.3 	before September 30, 2005, with .708 percent monthly interest
204.4 	from June 30, 2005, until paid.
204.5 	(d) If payment is received under paragraph (c), the
204.6 	executive director of the Teachers Retirement Association shall
204.7 	bill Independent School District No. 11, Anoka-Hennepin, for the
204.8 	employer contribution that would have been made on behalf of the
204.9 	eligible person for the 2003-2004 fiscal year under Minnesota
204.10 	Statutes, section 354.094.  The remainder of the full actuarial
204.11 	value payment under Minnesota Statutes, section 356.551, is
204.12 	waived.  If the school district fails to make payment under this
204.13 	paragraph within 30 days of notification of the amount due, the
204.14 	executive director shall notify the commissioner of the
204.15 	Department of Finance of that fact and the employer payment
204.16 	amount shall be deducted from any subsequent state aid to the
204.17 	school district.

204.18 	Sec. 2. EFFECTIVE DATE.
 204.19 	Section 1 is effective the day following final enactment.