1.1 	A bill for an act
1.2 	relating to retirement; amending local police and firefighters relief association 
1.3 	amortization provisions; allocating state aid;amending Minnesota Statutes 2006, 
1.4 	section 423A.02, subdivision 1b.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2006, section 423A.02, subdivision 1b, is amended to 
1.7 	read:
1.8 		Subd. 1b.Additional amortization state aid. (a) Annually, on October 1, the 
1.9 	commissioner of revenue shall allocate the additional amortization state aid transferred 
1.10 	under section 69.021, subdivision 11, to: 
1.11 	(1) all police or salaried firefighters relief associations governed by and in full 
1.12 	compliance with the requirements of section 69.77, that had an unfunded actuarial accrued 
1.13 	liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the 
1.14 	preceding December 31; 
1.15 	(2) all local police or salaried firefighter consolidation accounts governed by chapter 
1.16 	353A that are certified by the executive director of the public employees retirement 
1.17 	association as having for the current fiscal year an additional municipal contribution 
1.18 	amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented 
1.19 	section 353A.083, subdivision 1, if the effective date of the consolidation preceded May 
1.20 	24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date 
1.21 	of the consolidation preceded June 1, 1995; and 
1.22 	(3) the municipalities that are required to make an additional municipal contribution 
1.23 	under section 353.665, subdivision 8, for the duration of the required additional 
1.24 	contribution. 
2.1 	(b) The commissioner shall allocate the state aid on the basis of the proportional share 
2.2 	of the relief association or consolidation account of the total unfunded actuarial accrued 
2.3 	liability of all recipient relief associations and consolidation accounts as of December 31, 
2.4 	1993, for relief associations, and as of June 30, 1994, for consolidation accounts.
2.5 	(c) Beginning October 1, 2000, and annually thereafter, the commissioner shall 
2.6 	allocate the state aid, including any state aid in excess of the limitation in subdivision 
2.7 	4, on the following basis:
2.8 	(1) 64.5 percent to the municipalities to which section 353.665, subdivision 
2.9 	8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in 
2.10 	accordance with paragraph (b) and subject to the limitation in subdivision 4; 
2.11 	(2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued 
2.12 	liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the 
2.13 	preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis 
2.14 	Fire Department Relief Association; and 
2.15 	(3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability 
2.16 	in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding 
2.17 	December 31 for the Virginia Fire Department Relief Association. 
2.18 	If there is no unfunded actuarial accrued liability in both the Minneapolis Police 
2.19 	Relief Association and the Minneapolis Fire Department Relief Association as disclosed 
2.20 	in the most recent actuarial valuations for the relief associations prepared under sections 
2.21 	356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as 
2.22 	follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul 
2.23 	Teachers Retirement Fund Association, and 30 percent as additional funding to support 
2.24 	minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded 
2.25 	actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed 
2.26 	in the most recent actuarial valuation for the relief association prepared under sections 
2.27 	356.215 and 356.216, the commissioner shall allocate that 1.3 percent of the aid as 
2.28 	follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul 
2.29 	Teachers Retirement Fund Association, and 30 percent as additional funding to support 
2.30 	minimum fire state aid for volunteer firefighters relief associations. Upon the final payment 
2.31 	to municipalities required by section 353.665, subdivision 8, paragraph (b), or 353A.09, 
2.32 	subdivision 5, paragraph (b), the commissioner shall allocate that 64.5 percent of the aid 
2.33 	as follows: 25 percent to the St. Paul Teachers Retirement Fund Association, 25 percent to 
2.34 	the city of Minneapolis to fund any unfunded actuarial accrued liability in the actuarial 
2.35 	valuation proposed under sections 356.215 and 356.216 as of the preceding December 
2.36 	31 for the Minneapolis Police Relief Association or the Minneapolis Fire Fighters Relief 
3.1 	Association, 25 percent for the city of Duluth to pay for any costs associated with the 
3.2 	police and firefighters relief associations, and 25 percent as additional funding to support 
3.3 	minimum fire state aid for volunteer firefighters relief associations. The allocation must be 
3.4 	made by the commissioner at the same time and under the same procedures as specified 
3.5 	in subdivision 3. With respect to the St. Paul Teachers Retirement Fund Association, 
3.6 	annually, beginning on July 1, 2005, if the applicable teacher's association five-year 
3.7 	average time-weighted rate of investment return does not equal or exceed the performance 
3.8 	of a composite portfolio assumed passively managed (indexed) invested ten percent in 
3.9 	cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent in 
3.10 	domestic stock calculated using the formula under section 11A.04, clause (11), the aid 
3.11 	allocation to that retirement fund under this section ceases until the five-year annual rate 
3.12 	of investment return equals or exceeds the performance of that composite portfolio. 
3.13 	(d) The amounts required under this subdivision are annually appropriated to the 
3.14 	commissioner of revenue.