1.1A bill for an act1.2 relating to retirement; various retirement plans; making various statutory changes 1.3needed to accommodate the dissolution of the Minnesota Post Retirement 1.4Investment Fund; redefining the value of pension plan assets for actuarial 1.5reporting purposes; revising various disability benefit provisions of the general 1.6state employees retirement plan, the correctional state employees retirement plan, 1.7and the State Patrol retirement plan; making various administrative provision 1.8changes; establishing a voluntary statewide lump-sum volunteer firefighter 1.9retirement plan administered by the Public Employees Retirement Association; 1.10revising various volunteer firefighters' relief association provisions; correcting 1.112008 drafting errors related to the Minneapolis Employees Retirement Fund and 1.12other drafting errors; granting special retirement benefit authority in certain 1.13cases; revising the special transportation pilots retirement plan of the Minnesota 1.14State Retirement System; expanding the membership of the state correctional 1.15employees retirement plan; adjusting reallocation of amortization state aid; 1.16extending the amortization target date for the Fairmont Police Relief Association; 1.17modifying the number of board of trustees members of the Minneapolis 1.18Firefighters Relief Association; permitting the Brimson Volunteer Firefighters' 1.19Relief Association to implement a different board of trustees composition; 1.20permitting employees of the Minneapolis Firefighters Relief Association and 1.21the Minneapolis Police Relief Association to become members of the general 1.22employee retirement plan of the Public Employees Retirement Association; 1.23creating a two-year demonstration postretirement adjustment mechanism for 1.24the St. Paul Teachers Retirement Fund Association; creating a temporary 1.25postretirement option program for employees covered by the general employee 1.26retirement plan of the Public Employees Retirement Association; setting a statute 1.27of limitations for erroneous receipts of the general employee retirement plan 1.28of the Public Employees Retirement Association; permitting the Minnesota 1.29State Colleges and Universities System board to create an early separation 1.30incentive program; permitting certain Minnesota State Colleges and Universities 1.31System faculty members to make a second chance retirement coverage election 1.32upon achieving tenure; including the Weiner Memorial Medical Center, Inc., 1.33in the Public Employees Retirement Association privatization law; increasing 1.34pension commission membership; extending the approval deadline date for the 1.35inclusion of the Clearwater County Hospital in the Public Employees Retirement 1.36Association privatization law; requiring a report; requiring a study; appropriating 1.37money;amending Minnesota Statutes 2008, sections 3.85, subdivision 3; 3A.02, 1.38subdivision 3, by adding a subdivision; 3A.03, by adding a subdivision; 3A.04, 1.39by adding a subdivision; 3A.115; 11A.08, subdivision 1; 11A.17, subdivisions 1, 2.12; 11A.23, subdivisions 1, 2; 43A.34, subdivision 4; 43A.346, subdivisions 2, 2.26; 69.011, subdivisions 1, 2, 4; 69.021, subdivisions 7, 9; 69.031, subdivisions 2.31, 5; 69.77, subdivision 4; 69.771, subdivision 3; 69.772, subdivisions 4, 6; 2.469.773, subdivision 6; 299A.465, subdivision 1; 352.01, subdivision 2b, by 2.5adding subdivisions; 352.021, by adding a subdivision; 352.04, subdivisions 2.61, 12; 352.061; 352.113, subdivision 4, by adding a subdivision; 352.115, by 2.7adding a subdivision; 352.12, by adding a subdivision; 352.75, subdivisions 3, 4; 2.8352.86, subdivisions 1, 1a, 2; 352.91, subdivision 3d; 352.911, subdivisions 3, 2.95; 352.93, by adding a subdivision; 352.931, by adding a subdivision; 352.95, 2.10subdivisions 1, 2, 3, 4, 5, by adding a subdivision; 352B.02, subdivisions 1, 1a, 2.111c, 1d; 352B.08, by adding a subdivision; 352B.10, subdivisions 1, 2, 5, by 2.12adding subdivisions; 352B.11, subdivision 2, by adding a subdivision; 352C.10; 2.13352D.06, subdivision 1; 352D.065, by adding a subdivision; 352D.075, by 2.14adding a subdivision; 353.01, subdivisions 2, 2a, 6, 11b, 16, 16b; 353.0161, 2.15subdivision 1; 353.03, subdivision 3a; 353.06; 353.27, subdivisions 1, 2, 3, 2.167, 7b; 353.29, by adding a subdivision; 353.31, subdivision 1b, by adding a 2.17subdivision; 353.33, subdivisions 1, 3b, 7, 11, 12, by adding subdivisions; 2.18353.65, subdivisions 2, 3; 353.651, by adding a subdivision; 353.656, subdivision 2.195a, by adding a subdivision; 353.657, subdivision 3a, by adding a subdivision; 2.20353.665, subdivision 3; 353A.02, subdivisions 14, 23; 353A.05, subdivisions 2.211, 2; 353A.08, subdivisions 1, 3, 6a; 353A.081, subdivision 2; 353A.09, 2.22subdivision 1; 353A.10, subdivisions 2, 3; 353E.01, subdivisions 3, 5; 353E.04, 2.23by adding a subdivision; 353E.06, by adding a subdivision; 353E.07, by adding a 2.24subdivision; 353F.02, subdivision 4; 354.05, by adding a subdivision; 354.07, 2.25subdivision 4; 354.33, subdivision 5; 354.35, by adding a subdivision; 354.42, 2.26subdivisions 1a, 2; 354.44, subdivisions 4, 5, by adding a subdivision; 354.46, 2.27by adding a subdivision; 354.47, subdivision 1; 354.48, subdivisions 4, 6, by 2.28adding a subdivision; 354.49, subdivision 2; 354.52, subdivisions 2a, 4b; 354.55, 2.29subdivisions 11, 13; 354.66, subdivision 6; 354.70, subdivisions 5, 6; 354A.096; 2.30354A.12, subdivision 2a, by adding subdivisions; 354A.29, subdivision 3; 2.31354A.36, subdivision 6; 354B.21, subdivision 2; 356.20, subdivision 2; 356.215, 2.32subdivisions 1, 11; 356.219, subdivision 3; 356.32, subdivision 2; 356.351, 2.33subdivision 2; 356.401, subdivisions 2, 3; 356.465, subdivision 1, by adding a 2.34subdivision; 356.611, subdivisions 3, 4; 356.635, subdivisions 6, 7; 356.96, 2.35subdivisions 1, 5; 422A.06, subdivision 8; 422A.08, subdivision 5; 423A.02, 2.36subdivisions 1, 3; 423C.03, subdivision 1; 424A.001, subdivisions 1, 1a, 2, 3, 2.374, 5, 6, 8, 9, 10, by adding subdivisions; 424A.01; 424A.02, subdivisions 1, 2.382, 3, 3a, 7, 8, 9, 9a, 9b, 10, 12, 13; 424A.021; 424A.03; 424A.04; 424A.05, 2.39subdivisions 1, 2, 3, 4; 424A.06; 424A.07; 424A.08; 424A.10, subdivisions 1, 2.402, 3, 4, 5; 424B.10, subdivision 2, by adding subdivisions; 424B.21; 490.123, 2.41subdivisions 1, 3; 490.124, by adding a subdivision; Laws 1989, chapter 319, 2.42article 11, section 13; Laws 2006, chapter 271, article 5, section 5, as amended; 2.43Laws 2008, chapter 349, article 14, section 13; proposing coding for new law 2.44in Minnesota Statutes, chapters 136F; 352B; 353; 354; 356; 420; 424A; 424B; 2.45proposing coding for new law as Minnesota Statutes, chapter 353G; repealing 2.46Minnesota Statutes 2008, sections 11A.041; 11A.18; 11A.181; 352.119, 2.47subdivisions 2, 3, 4; 352.86, subdivision 3; 352B.01, subdivisions 1, 2, 3, 3b, 2.484, 6, 7, 9, 10, 11; 352B.26, subdivisions 1, 3; 353.271; 353A.02, subdivision 2.4920; 353A.09, subdivisions 2, 3; 354.05, subdivision 26; 354.06, subdivision 2.506; 354.55, subdivision 14; 354.63; 354A.29, subdivisions 2, 4, 5; 356.2165; 2.51356.41; 356.431, subdivision 2; 422A.01, subdivision 13; 422A.06, subdivision 2.524; 422A.08, subdivision 5a; 424A.001, subdivision 7; 424A.02, subdivisions 4, 2.536, 8a, 8b, 9b; 424A.09; 424B.10, subdivision 1; 490.123, subdivisions 1c, 1e.2.54BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:3.1ARTICLE 13.2MINNESOTA POSTRETIREMENT INVESTMENT FUND 3.3DISSOLUTION ACCOMMODATION3.4    Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 3, is amended to read:3.5    Subd. 3. Appropriation.  The amounts required for payment of retirement 3.6allowances provided by this section are appropriated annually to the director from the 3.7participation of the legislators retirement plan in the Minnesota postretirement investment3.8fund or from the general fund as provided in section 3A.115. The retirement allowance 3.9must be paid is payable monthly to the recipients entitled to those retirement allowances.3.10    Sec. 2. Minnesota Statutes 2008, section 3A.02, is amended by adding a subdivision to 3.11read:3.12    Subd. 6.Postretirement adjustment eligibility.A retirement allowance under this 3.13section is eligible for postretirement adjustments under section 356.415.3.14    Sec. 3. Minnesota Statutes 2008, section 3A.03, is amended by adding a subdivision to 3.15read:3.16    Subd. 3.Legislators retirement fund.(a) The legislators retirement fund, a special 3.17retirement fund, is created within the state treasury and must be credited with assets equal 3.18to the participation of the legislators retirement plan in the Minnesota postretirement 3.19investment fund as of June 30, 2009, and any investment proceeds on those assets.3.20(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated 3.21from the legislators retirement fund.3.22    Sec. 4. Minnesota Statutes 2008, section 3A.04, is amended by adding a subdivision to 3.23read:3.24    Subd. 2a.Postretirement adjustment eligibility.A survivor benefit under this 3.25section is eligible for postretirement adjustments under section 356.415.3.26    Sec. 5. Minnesota Statutes 2008, section 3A.115, is amended to read:3.273A.115 RETIREMENT ALLOWANCE APPROPRIATION; 3.28POSTRETIREMENT ADJUSTMENT.3.29(a) The amount necessary to fund the retirement allowance granted under this 3.30chapter to a former legislator upon retirementretiring after June 30, 2003, is appropriated 3.31from the general fund to the director to pay pension obligations due to the retiree.4.1(b) The amount necessary to fund the retirement allowance granted under this 4.2chapter to a former legislator retiring before July 1, 2003, must be paid from the legislators 4.3retirement fund created under section 3A.03, subdivision 3, until the assets of the fund 4.4are exhausted and at that time, the amount necessary to fund the retirement allowances 4.5under this paragraph is appropriated from the general fund to the director to pay pension 4.6obligations to the retiree.4.7(c) Retirement allowances payable to retired legislators and their survivors under 4.8this chapter must be adjusted in the same manner, at the same times, and in the same 4.9amounts as are benefits payable from the Minnesota postretirement investment fund to 4.10retirees of a participating public pension fund as provided in sections 3A.02, subdivision 4.116, and 356.415.4.12    Sec. 6. Minnesota Statutes 2008, section 11A.08, subdivision 1, is amended to read:4.13    Subdivision 1. Membership. There is created an Investment Advisory Council 4.14consisting of 17 members. Ten of these members shallmust be experienced in general 4.15investment matters. They shall be appointed by the state board The state board must 4.16appoint the ten members. The other seven members shall be are: the commissioner of 4.17finance; the executive director of the Minnesota State Retirement System; the executive 4.18director of the Public Employees Retirement Association; the executive director of 4.19the Teachers Retirement Association; a retiree currently receiving benefits from the 4.20postretirement investment fund a statewide retirement plan; and two public employees 4.21who are active members of funds whose assets are invested by the state board. The 4.22governor must appoint the retiree and the public employees shall be appointed by the 4.23governor for four-year terms.4.24    Sec. 7. Minnesota Statutes 2008, section 11A.23, subdivision 1, is amended to read:4.25    Subdivision 1. Certification of assets not needed for immediate use. Each 4.26executive director administering a retirement fund or plan enumerated in subdivision 4 4.27shall, from time to time, certify to the state board for investment those portions of the 4.28assets of the retirement fund or plan which in the judgment of the executive director are 4.29not required for immediate use. Assets of the fund or plan required for participation in 4.30the Minnesota postretirement adjustment fund, the combined investment fund, or the 4.31supplemental investment fund shall be transferred to those funds as provided by sections 4.3211A.01 to 11A.25.4.33    Sec. 8. Minnesota Statutes 2008, section 11A.23, subdivision 2, is amended to read:5.1    Subd. 2. Investment. Retirement fund assets certified to the state board pursuant to5.2under subdivision 1 shall must be invested by the state board subject to the provisions 5.3of section 
         11A.24. Retirement fund assets transferred to the Minnesota postretirement 5.4investment fund, the combined investment fund or the supplemental investment fund shall5.5must be invested by the state board as part of those funds.  5.6    Sec. 9. Minnesota Statutes 2008, section 352.021, is amended by adding a subdivision 5.7to read:5.8    Subd. 5.Determining applicable law.An annuity under this chapter must be 5.9computed under the law in effect as of the last day for which the employee receives pay, 5.10or if on medical leave, the day that the leave terminates. However, if the employee has 5.11returned to covered employment following a termination, the employee must have earned 5.12at least six months of allowable service following a return to employment as a state 5.13employee in order to qualify for improved benefits resulting from any law change enacted 5.14subsequent to that termination.5.15    Sec. 10. Minnesota Statutes 2008, section 352.04, subdivision 1, is amended to read:5.16    Subdivision 1. Fund created.(a) There is created a special fund to be known as the 5.17general state employees retirement fund. In that fund, employee contributions, employer 5.18contributions, and other amounts authorized by law must be deposited.5.19(b) The general state employees retirement plan of the Minnesota State Retirement 5.20System must participate in the Minnesota postretirement investment fund. The amounts 5.21provided in section 352.119 must be deposited in the Minnesota postretirement investment 5.22fund.5.23    Sec. 11. Minnesota Statutes 2008, section 352.04, subdivision 12, is amended to read:5.24    Subd. 12. Fund disbursement restricted. The general state employees retirement 5.25fund and the participation in the Minnesota postretirement investment fund must be 5.26disbursed only for the purposes provided by law. The expenses of the system and any 5.27benefits provided by law, other than benefits payable from the Minnesota postretirement 5.28investment fund, must be paid from the general state employees retirement fund. The 5.29retirement allowances, retirement annuities, and disability benefits, as well as refunds of 5.30any sum remaining to the credit of a deceased retired employee or a disabled employee 5.31must be paid only from the general state employees retirement fund after the needs 5.32have been certified and the amounts withdrawn from the participation in the Minnesota 5.33postretirement investment fund under section 11A.18. The amounts necessary to make the 6.1payments from the general state employees retirement fund and the participation in the 6.2Minnesota postretirement investment fund are annually appropriated from these funds6.3that fund for those purposes.6.4    Sec. 12. Minnesota Statutes 2008, section 352.061, is amended to read:6.5352.061 INVESTMENT BOARD TO INVEST FUNDS.6.6The director shall, from time to time, certify to the State Board of Investment any 6.7portions of the state employees retirement fund that in the judgment of the director are 6.8not required for immediate use. Assets from the state employees retirement fund must 6.9be transferred to the Minnesota postretirement investment fund as provided in section 6.1011A.18. The State Board of Investment shall invest and reinvest sums so transferred, or6.11certified, in securities that are duly authorized legal investments under section 
         11A.24.  6.12    Sec. 13. Minnesota Statutes 2008, section 352.113, is amended by adding a subdivision 6.13to read:6.14    Subd. 13.Postretirement adjustment eligibility.A disability benefit under this 6.15section is eligible for postretirement adjustments under section 356.415.6.16    Sec. 14. Minnesota Statutes 2008, section 352.115, is amended by adding a subdivision 6.17to read:6.18    Subd. 14.Postretirement adjustment eligibility.A retirement annuity under 6.19this section and section 352.116 is eligible for postretirement adjustments under section 6.20356.415.6.21    Sec. 15. Minnesota Statutes 2008, section 352.12, is amended by adding a subdivision 6.22to read:6.23    Subd. 2c.Postretirement adjustment eligibility.A survivor benefit under 6.24subdivision 2, 2a, or 2b is eligible for postretirement adjustments under section 356.415.6.25    Sec. 16. Minnesota Statutes 2008, section 352.75, subdivision 3, is amended to read:6.26    Subd. 3. Existing retired members and benefit recipients. As of July 1, 1978, 6.27the liability for all retirement annuities, disability benefits, survivorship annuities, and 6.28survivor of deceased active employee benefits paid or payable by the former Metropolitan 6.29Transit Commission-Transit Operating Division employees retirement fund is transferred 6.30to the Minnesota State Retirement System, and is no longer the liability of the former 6.31Metropolitan Transit Commission-Transit Operating Division employees retirement 7.1fund. The required reserves for retirement annuities, disability benefits, and optional 7.2joint and survivor annuities in effect on June 30, 1978, and the required reserves for the 7.3increase in annuities and benefits provided under subdivision 6 must be determined using 7.4a five percent interest assumption and the applicable Minnesota State Retirement System 7.5mortality table and shall be transferred by the Minnesota State Retirement System to 7.6the Minnesota postretirement investment fund on July 1, 1978, but shall be considered 7.7transferred as of June 30, 1978. The annuity or benefit amount in effect on July 1, 1978, 7.8including the increase granted under subdivision 6, must be used for adjustments made 7.9under section 11A.18. For persons receiving benefits as survivors of deceased former 7.10retirement annuitants, the benefits must be considered as having commenced on the date 7.11on which the retirement annuitant began receiving the retirement annuity.  7.12    Sec. 17. Minnesota Statutes 2008, section 352.75, subdivision 4, is amended to read:7.13    Subd. 4. Existing deferred retirees. Any former member of the former 7.14Metropolitan Transit Commission-Transit Operating Division employees retirement 7.15fund is entitled to a retirement annuity from the Minnesota State Retirement System if 7.16the employee:7.17(1) is not an active employee of the Transit Operating Division of the former 7.18Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active 7.19continuous service with the Transit Operating Division of the former Metropolitan 7.20Transit Commission as defined by the former Metropolitan Transit Commission-Transit 7.21Operating Division employees retirement plan document in effect on December 31, 1977; 7.22(3) has not received a refund of contributions; (4) has not retired or begun receiving an 7.23annuity or benefit from the former Metropolitan Transit Commission-Transit Operating 7.24Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid 7.25application for a retirement annuity to the executive director of the Minnesota State 7.26Retirement System.7.27The person is entitled to a retirement annuity in an amount equal to the normal 7.28old age retirement allowance calculated under the former Metropolitan Transit 7.29Commission-Transit Operating Division employees retirement fund plan document in 7.30effect on December 31, 1977, subject to an early retirement reduction or adjustment in 7.31amount on account of retirement before the normal retirement age specified in that former 7.32Metropolitan Transit Commission-Transit Operating Division employees retirement fund 7.33plan document.7.34The deferred retirement annuity of any person to whom this subdivision applies 7.35must be augmented. The required reserves applicable to the deferred retirement annuity, 8.1determined as of the date the allowance begins to accrue using an appropriate mortality 8.2table and an interest assumption of five percent, must be augmented by interest at the rate 8.3of five percent per year compounded annually from January 1, 1978, to January 1, 1981, 8.4and three percent per year compounded annually from January 1, 1981, to the first day 8.5of the month in which the annuity begins to accrue. UponAfter the commencement of 8.6the retirement annuity, the required reserves for the annuity must be transferred to the 8.7Minnesota postretirement investment fund in accordance with subdivision 2 and section 8.8352.119 is eligible for postretirement adjustments under section 356.415. On applying 8.9for a retirement annuity under this subdivision, the person is entitled to elect a joint and 8.10survivor optional annuity under section 
         352.116, subdivision 3.  8.11    Sec. 18. Minnesota Statutes 2008, section 352.911, subdivision 3, is amended to read:8.12    Subd. 3. Investment.The correctional employees retirement fund shall participate 8.13in the Minnesota postretirement investment fund and in that fund there shall be deposited 8.14the amounts provided in section 352.119. The balance of any assets of the fund shall8.15must be deposited in the Minnesota combined investment funds as provided in section 8.1611A.14
         , if applicable, or otherwise under section 
         11A.23.  8.17    Sec. 19. Minnesota Statutes 2008, section 352.911, subdivision 5, is amended to read:8.18    Subd. 5. Fund disbursement restricted. The correctional employees retirement 8.19fund and its share of participation in the Minnesota postretirement investment fund shall8.20must be disbursed only for the purposes provided for in the applicable provisions in this 8.21chapter. The proportional share of the expenses of the system and any benefits provided 8.22in sections section352.90to 352.951, other than benefits payable from the Minnesota 8.23postretirement investment fund, shallmust be paid from the correctional employees 8.24retirement fund. The retirement allowances, retirement annuities, the disability benefits, 8.25the survivorship benefits, and any refunds of accumulated deductions shall must be paid 8.26only from the correctional employees retirement fund after those needs have been certified 8.27by the executive director and the amounts withdrawn from the share of participation in the 8.28Minnesota postretirement fund under section 11A.18. The amounts necessary to make the 8.29payments from the correctional employees retirement fund and the participation in the 8.30Minnesota postretirement investment fund are annually appropriated from those funds8.31that fund for those purposes.  8.32    Sec. 20. Minnesota Statutes 2008, section 352.93, is amended by adding a subdivision 8.33to read:9.1    Subd. 7.Postretirement adjustment eligibility.A retirement annuity under this 9.2section is eligible for postretirement adjustments under section 356.415.9.3    Sec. 21. Minnesota Statutes 2008, section 352.931, is amended by adding a subdivision 9.4to read:9.5    Subd. 6.Postretirement adjustment eligibility.A survivor benefit under this 9.6section is eligible for postretirement adjustments under section 356.415.9.7    Sec. 22. Minnesota Statutes 2008, section 352.95, is amended by adding a subdivision 9.8to read:9.9    Subd. 8.Postretirement adjustment eligibility.A disability benefit under this 9.10section is eligible for postretirement adjustments under section 356.415.9.11    Sec. 23. Minnesota Statutes 2008, section 352B.02, subdivision 1d, is amended to read:9.12    Subd. 1d. Fund revenue and expenses. The amounts provided for in this section 9.13must be credited to the State Patrol retirement fund. All money received must be deposited 9.14by the commissioner of finance in the State Patrol retirement fund. The fund must be used 9.15to pay the administrative expenses of the retirement fund, and the benefits and annuities 9.16provided in this chapter. Appropriate amounts shall be transferred to or withdrawn from 9.17the Minnesota postretirement investment fund as provided in section 352B.26.9.18    Sec. 24. Minnesota Statutes 2008, section 352B.08, is amended by adding a 9.19subdivision to read:9.20    Subd. 4.Postretirement adjustment eligibility.A retirement annuity under this 9.21section is eligible for postretirement adjustments under section 356.415.9.22    Sec. 25. Minnesota Statutes 2008, section 352B.10, is amended by adding a 9.23subdivision to read:9.24    Subd. 6.Postretirement adjustment eligibility.A disability benefit under this 9.25section is eligible for postretirement adjustments under section 356.415.9.26    Sec. 26. Minnesota Statutes 2008, section 352B.11, is amended by adding a subdivision 9.27to read:9.28    Subd. 2e.Postretirement adjustment eligibility.A survivor benefit under 9.29subdivision 2, 2b, or 2c is eligible for postretirement adjustments under section 356.415.10.1    Sec. 27. Minnesota Statutes 2008, section 352C.10, is amended to read:10.2352C.10 BENEFIT ADJUSTMENTS.10.3    Retirement allowances payable to retired constitutional officers and surviving spouse 10.4benefits payable must be adjusted in the same manner, at the same times and in the same 10.5amounts as are benefits payable from the Minnesota postretirement investment fund to 10.6retirees of a participating public pension fund under section 356.415.10.7    Sec. 28. Minnesota Statutes 2008, section 352D.06, subdivision 1, is amended to read:10.8    Subdivision 1. Annuity; reserves. When a participant attains at least age 55, 10.9terminates from covered service, and applies for a retirement annuity, the cash value of the 10.10participant's shares shallmust be transferred to the Minnesota postretirement investment10.11general state employees retirement fund and must be used to provide an annuity for the 10.12retired employee based upon the participant's age when the benefit begins to accrue 10.13according to the reserve basis used by the general state employees retirement plan in 10.14determining pensions and reserves. The annuity under this subdivision is eligible for 10.15postretirement adjustments under section 356.415.10.16    Sec. 29. Minnesota Statutes 2008, section 352D.065, is amended by adding a 10.17subdivision to read:10.18    Subd. 3a.Postretirement adjustment eligibility.A disability benefit under this 10.19section is eligible for postretirement adjustments under section 356.415.10.20    Sec. 30. Minnesota Statutes 2008, section 352D.075, is amended by adding a 10.21subdivision to read:10.22    Subd. 2b.Postretirement adjustment eligibility.A survivor benefit under this 10.23section is eligible for postretirement adjustments under section 356.415.10.24    Sec. 31. Minnesota Statutes 2008, section 353.06, is amended to read:10.25353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.10.26The executive director shall from time to time certify to the State Board of 10.27Investment for investment such portions of the retirement fund as in its judgment may not 10.28be required for immediate use. Assets from the public employees retirement fund shall 10.29be transferred to the Minnesota postretirement investment fund as provided in section 10.3011A.18. The State Board of Investment shall thereupon invest and reinvest the sum so 10.31certified, or transferred, in such securities as are duly authorized as legal investments for 10.32state employees retirement fund and shall have authority to sell, convey, and exchange 11.1such securities and invest and reinvest the securities when it deems it desirable to do so 11.2and shall sell securities upon request of the board of trustees when such funds are needed 11.3for its purposes. All of the provisions regarding accounting procedures and restrictions 11.4and conditions for the purchase and sale of securities for the state employees retirement 11.5fund shallunder chapter 11A must apply to the accounting, purchase and sale of securities 11.6for the public employees retirement fund.  11.7    Sec. 32. Minnesota Statutes 2008, section 353.27, subdivision 1, is amended to read:11.8    Subdivision 1. Income; disbursements. There is a special fund known as the 11.9"public employees retirement fund," the "retirement fund," or the "fund," which shall11.10must include all the assets of the association. This fund shall must be credited with all 11.11contributions, all interest and all other income authorized by law. From this fund there 11.12is appropriated the payments authorized by this chapter in the amounts and at such time 11.13provided herein, including the expenses of administering the fund, and including the 11.14proper share of the Minnesota postretirement investment fund.11.15    Sec. 33. Minnesota Statutes 2008, section 353.29, is amended by adding a subdivision 11.16to read:11.17    Subd. 9.Postretirement adjustment eligibility.An annuity under this section or 11.18section 353.30 is eligible for postretirement adjustments under section 356.415.11.19    Sec. 34. Minnesota Statutes 2008, section 353.31, subdivision 1b, is amended to read:11.20    Subd. 1b. Joint and survivor option. (a) Prior to payment of a surviving spouse 11.21benefit under subdivision 1, the surviving spouse may elect to receive the 100 percent 11.22joint and survivor optional annuity under section  
         353.32, subdivision 1a, rather than a 11.23surviving spouse benefit. 11.24(b) If there is a dependent child or children, and the 100 percent joint and survivor 11.25optional annuity for the surviving spouse, when added to the dependent children's benefit 11.26under subdivisions 1 and 1a, exceeds an amount equal to 70 percent of the member's 11.27specified average monthly salary, the 100 percent joint and survivor annuity under section  11.28353.32, subdivision 1a
         , must be reduced by the amount necessary so that the total family 11.29benefit does not exceed the 70 percent maximum family benefit amount under subdivision 11.301a. 11.31(c) The 100 percent joint and survivor optional annuity must be restored to the 11.32surviving spouse, plus applicable postretirement fund adjustments under Minnesota 11.33Statutes 2008, section  
         356.41, through January 1, 2009, and thereafter under section 12.1356.415, as the dependent child or children become no longer dependent under section  12.2353.01, subdivision 15
         . 12.3    Sec. 35. Minnesota Statutes 2008, section 353.31, is amended by adding a subdivision 12.4to read:12.5    Subd. 12.Postretirement adjustment eligibility.A survivor benefit under 12.6subdivision 1 or 1b or section 353.32, subdivision 1a, 1b, or 1c is eligible for 12.7postretirement adjustments under section 356.415.12.8    Sec. 36. Minnesota Statutes 2008, section 353.33, subdivision 3b, is amended to read:12.9    Subd. 3b. Optional annuity election. A disabled member may elect to receive the 12.10normal disability benefit or an optional annuity under section 
         353.30, subdivision 3. The 12.11election of an optional annuity must be made prior to the commencement of payment of 12.12the disability benefit. The optional annuity must begin to accrue on the same date as 12.13provided for the disability benefit. 12.14(1) If a person who is not the spouse of a member is named as beneficiary of the 12.15joint and survivor optional annuity, the person is eligible to receive the annuity only 12.16if the spouse, on the disability application form prescribed by the executive director, 12.17permanently waives the surviving spouse benefits under sections 
         353.31, subdivision 1, 12.18and 
         353.32, subdivision 1a. If the spouse of the member refuses to permanently waive 12.19the surviving spouse coverage, the selection of a person other than the spouse of the 12.20member as a joint annuitant is invalid. 12.21(2) If the spouse of the member permanently waives survivor coverage, the 12.22dependent children, if any, continue to be eligible for survivor benefits under section 12.23353.31, subdivision 1
         , including the minimum benefit in section 
         353.31, subdivision 1a. 12.24The designated optional annuity beneficiary may draw the monthly benefit; however, the 12.25amount payable to the dependent child or children and joint annuitant must not exceed 12.26the 70 percent maximum family benefit under section 
         353.31, subdivision 1a. If the 12.27maximum is exceeded, the benefit of the joint annuitant must be reduced to the amount 12.28necessary so that the total family benefit does not exceed the 70 percent maximum family 12.29benefit amount. 12.30(3) If the spouse is named as the beneficiary of the joint and survivor optional 12.31annuity, the spouse may draw the monthly benefits; however, the amount payable to 12.32the dependent child or children and the joint annuitant must not exceed the 70 percent 12.33maximum family benefit under section 
         353.31, subdivision 1a. If the maximum is 12.34exceeded, each dependent child will receive ten percent of the member's specified 13.1average monthly salary, and the benefit to the joint annuitant must be reduced to the 13.2amount necessary so that the total family benefit does not exceed the 70 percent maximum 13.3family benefit amount. The joint and survivor optional annuity must be restored to the 13.4surviving spouse, plus applicable postretirement adjustments under Minnesota Statutes 13.52008, section 
         356.41 or section 356.415, as the dependent child or children become no 13.6longer dependent under section 
         353.01, subdivision 15. 13.7    Sec. 37. Minnesota Statutes 2008, section 353.33, subdivision 7, is amended to read:13.8    Subd. 7. Partial reemployment. If, following a work or non-work-related injury 13.9or illness, a disabled person who remains totally and permanently disabled as defined 13.10in section 
         353.01, subdivision 19, has income from employment that is not substantial 13.11gainful activity and the rate of earnings from that employment are less than the salary 13.12rate at the date of disability or the salary rate currently paid for positions similar to the 13.13employment position held by the disabled person immediately before becoming disabled, 13.14whichever is greater, the executive director shall continue the disability benefit in an 13.15amount that, when added to the earnings and any workers' compensation benefit, does not 13.16exceed the salary rate at the date of disability or the salary currently paid for positions 13.17similar to the employment position held by the disabled person immediately before 13.18becoming disabled, whichever is higher. The disability benefit under this subdivision may 13.19not exceed the disability benefit originally allowed, plus any postretirement adjustments 13.20payable after December 31, 1988, in accordance with Minnesota Statutes 2008, section 13.2111A.18, subdivision 10
         , or Minnesota Statutes 2008, section 356.41, through January 1, 13.222009, and thereafter as provided in section 356.415. No deductions for the retirement fund 13.23may be taken from the salary of a disabled person who is receiving a disability benefit 13.24as provided in this subdivision. 13.25    Sec. 38. Minnesota Statutes 2008, section 353.33, is amended by adding a subdivision 13.26to read:13.27    Subd. 13.Postretirement adjustment eligibility.A disability benefit under this 13.28section is eligible for postretirement adjustments under section 356.415.13.29    Sec. 39. Minnesota Statutes 2008, section 353.651, is amended by adding a subdivision 13.30to read:13.31    Subd. 5.Postretirement adjustment eligibility.An annuity under this section is 13.32eligible for postretirement adjustments under section 356.415.14.1    Sec. 40. Minnesota Statutes 2008, section 353.656, subdivision 5a, is amended to read:14.2    Subd. 5a. Cessation of disability benefit. (a) The association shall cease the 14.3payment of any disability benefit the first of the month following the reinstatement of a 14.4member to full time or less than full-time service in a position covered by the police 14.5and fire fund.14.6    (b) A disability benefit paid to a disabled member of the police and fire plan, that 14.7was granted under laws in effect after June 30, 2007, terminates at the end of the month in 14.8which the member:14.9    (1) reaches normal retirement age; 14.10    (2) if the disability benefit is payable for a 60-month period as determined under 14.11subdivisions 1 and 3, as applicable, the first of the month following the expiration of 14.12the 60-month period; or14.13    (3) if the disabled member so chooses, the end of the month in which the member 14.14has elected to convert to an early retirement annuity under section 
         353.651, subdivision 4.14.15    (c) If the police and fire plan member continues to be disabled when the disability 14.16benefit terminates under this subdivision, the member is deemed to be retired. The 14.17individual is entitled to receive a normal retirement annuity or an early retirement annuity 14.18under section 
         353.651, whichever is applicable, as further specified in paragraph (d) 14.19or (e). If the individual did not previously elect an optional annuity under subdivision 14.201a, paragraph (a), the individual may elect an optional annuity under subdivision 1a, 14.21paragraph (b).14.22    (d) A member of the police and fire plan who is receiving a disability benefit under 14.23this section may, upon application, elect to receive an early retirement annuity under 14.24section 
         353.651, subdivision 4, at any time after attaining age 50, but must convert to a 14.25retirement annuity no later than the end of the month in which the disabled member attains 14.26normal retirement age. An early retirement annuity elected under this subdivision must be 14.27calculated on the disabled member's accrued years of service and average salary as defined 14.28in section 
         353.01, subdivision 17a, and when elected, the member is deemed to be retired.14.29    (e) When an individual's benefit is recalculated as a retirement annuity under this 14.30section, the annuity must be based on clause (1) or clause (2), whichever provides the 14.31greater amount:14.32    (1) the benefit amount at the time of reclassification, including all prior adjustments 14.33provided under Minnesota Statutes 2008, section 
         11A.18, through January 1, 2009, and 14.34thereafter as provided in section 356.415; or14.35    (2) a benefit amount computed on the member's actual years of accrued allowable 14.36service credit and the law in effect at the time the disability benefit first accrued, plus any 15.1increases that would have applied since that date under section 
         Minnesota Statutes 2008, 15.211A.18
         , through January 1, 2009, and thereafter as provided in section 356.415.15.3    Sec. 41. Minnesota Statutes 2008, section 353.656, is amended by adding a subdivision 15.4to read:15.5    Subd. 14.Postretirement adjustment eligibility.A disability benefit under this 15.6section is eligible for postretirement adjustments under section 356.415.15.7    Sec. 42. Minnesota Statutes 2008, section 353.657, subdivision 3a, is amended to read:15.8    Subd. 3a. Maximum and minimum family benefits. (a) The maximum monthly 15.9benefit per family must not exceed the following percentages of the member's average 15.10monthly salary as specified in subdivision 3:15.11    (1) 80 percent, if the member's death was a line of duty death; or15.12    (2) 70 percent, if the member's death was not a line of duty death or occurred while 15.13the member was receiving a disability benefit that accrued before July 1, 2007.15.14    (b) The minimum monthly benefit per family, including the joint and survivor 15.15optional annuity under subdivision 2a, and section 
         353.656, subdivision 1a, must not be 15.16less than the following percentage of the member's average monthly salary as specified in 15.17subdivision 3:15.18    (1) 60 percent, if the death was a line of duty death; or 15.19    (2) 50 percent, if the death was not a line of duty death or occurred while the member 15.20was receiving a disability benefit that accrued before July 1, 2007.15.21    (c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the 15.22joint annuitant must be reduced to the amount necessary so that the total family benefit 15.23does not exceed the applicable maximum. The joint and survivor optional annuity must 15.24be restored, plus applicable postretirement adjustments under Minnesota Statutes 2008, 15.25section 
         356.41 or section 356.415, as the dependent child or children become no longer 15.26dependent under section 
         353.01, subdivision 15.15.27    Sec. 43. Minnesota Statutes 2008, section 353.657, is amended by adding a subdivision 15.28to read:15.29    Subd. 5.Postretirement adjustment eligibility.A survivor benefit under this 15.30section is eligible for postretirement adjustments under section 356.415.15.31    Sec. 44. Minnesota Statutes 2008, section 353.665, subdivision 3, is amended to read:16.1    Subd. 3. Transfer of assets. Unless the municipality has elected to retain the 16.2consolidation account under subdivision 1, paragraph (b), the assets of the former local 16.3police or fire consolidation account must be transferred and upon transfer, the actuarial 16.4value of the assets of a former local police or fire consolidation account less an amount 16.5equal to the residual assets as determined under subdivision 7, paragraph (f), are the 16.6assets of the public employees police and fire fund as of July 1, 1999. The participation 16.7of a consolidation account in the Minnesota postretirement investment fund becomes 16.8part of the participation of the public employees police and fire fund in the Minnesota 16.9postretirement investment fund. The remaining assets, excluding the amounts for 16.10distribution under subdivision 7, paragraph (f), become an asset of the public employees 16.11police and fire fund. The public employees police and fire fund also must be credited as an 16.12asset with the amount of receivable assets under subdivision 7, paragraph (e).16.13    Sec. 45. Minnesota Statutes 2008, section 353A.02, subdivision 14, is amended to read:16.14    Subd. 14. Ineligible investments. "Ineligible investments" means any investment 16.15security or other asset held by the relief association at or after the initiation of the 16.16consolidation procedure which does not comply with the applicable requirements or 16.17limitations of sections 
         11A.09, 
         11A.18,11A.23, and 
         11A.24. 16.18    Sec. 46. Minnesota Statutes 2008, section 353A.02, subdivision 23, is amended to read:16.19    Subd. 23. Postretirement adjustment. "Postretirement adjustment" means any 16.20periodic or regular procedure for modifying the amount of a retirement annuity, service 16.21pension, disability benefit, or survivor benefit after the start of that annuity, pension, 16.22or benefit, including but not limited to modifications of amounts from the Minnesota 16.23postretirement investment fund under section 
         11A.18, subdivision 9 356.415, or any 16.24benefit escalation or benefit amount modification based on changes in the salaries payable 16.25to active police officers or salaried firefighters or changes in a cost-of-living index as 16.26provided for in the existing relief association benefit plan. 16.27    Sec. 47. Minnesota Statutes 2008, section 353A.05, subdivision 1, is amended to read:16.28    Subdivision 1. Commission actions. (a) Upon initiation of consolidation as 16.29provided in section 
         353A.04, the executive director of the commission shall direct the 16.30actuary retained under section 
         356.214 to undertake the preparation of the actuarial 16.31calculations necessary to complete the consolidation. 16.32(b) These actuarial calculations shall include for each active member, each deferred 16.33former member, each retired member, and each current beneficiary the computation of the 17.1present value of future benefits, the future normal costs, if any, and the actuarial accrued 17.2liability on the basis of the existing relief association benefit plan and on the basis of the 17.3public employees police and fire fund benefit plan. These actuarial calculations shall also 17.4include for the total active, deferred, retired, and benefit recipient membership the sum 17.5of the present value of future benefits, the future normal costs, if any, and the actuarial 17.6accrued liability on the basis of the existing relief association benefit plan, on the basis of 17.7the public employees police and fire fund benefit plan, and on the basis of the benefit plan 17.8which produced the largest present value of future benefits for each person. The actuarial 17.9calculations shall be prepared using the entry age actuarial cost method for all components 17.10of the benefit plan and using the actuarial assumptions applicable to the fund for the 17.11most recent actuarial valuation prepared under section 
         356.215, except that the actuarial 17.12calculations on the basis of the existing relief association benefit plan shall be prepared 17.13using an interest rate actuarial assumption during the postretirement period which is in 17.14the same amount as the interest rate actuarial assumption applicable to the preretirement 17.15period. The actuarial calculations shall include the computation of the present value of the 17.16initial postretirement adjustment anticipated by the executive director of the state board as 17.17payable after the effective date of the consolidation from the Minnesota postretirement 17.18investment fund under section 
         11A.18 356.415. 17.19(c) The chief administrative officer of the relief association shall, upon request, 17.20provide in a timely manner to the executive director of the commission and to the actuary 17.21retained under section 
         356.214 the most current available information or documents, 17.22whichever applies, regarding the demographics of the active, deferred, retired, and 17.23benefit recipient membership of the relief association, the financial condition of the relief 17.24association, and the existing benefit plan of the relief association.17.25(d) Upon completion of the actuarial calculations required by this subdivision, the 17.26actuary retained under section 
         356.214 shall issue a report in the form of an appropriate 17.27summary of the actuarial calculations and shall provide a copy of that report to the 17.28executive director of the commission, the executive director of the Public Employees 17.29Retirement Association, the chief administrative officer of the relief association, the chief 17.30administrative officer of the municipality in which the relief association is located, and 17.31the state auditor.17.32    Sec. 48. Minnesota Statutes 2008, section 353A.05, subdivision 2, is amended to read:17.33    Subd. 2. State board actions. (a) Upon approval of consolidation by the 17.34membership as provided in section 
         353A.04, the executive director of the state board 17.35shall review the existing investment portfolio of the relief association for compliance 18.1with the requirements and limitations set forth in sections 
         11A.09, 
         11A.14, 
         11A.18,18.211A.23
         , and 
         11A.24 and for appropriateness for retention in the light of the established 18.3investment objectives of the state board. The executive director of the state board, using 18.4any reporting service retained by the state board, shall determine the approximate market 18.5value of the existing assets of the relief association upon the effective date of consolidation 18.6and the transfer of assets from the relief association to the individual relief association 18.7consolidation accounts at market value. 18.8(b) The state board may require that the relief association liquidate any investment 18.9security or other item of value which is determined to be ineligible or inappropriate for 18.10retention by the state board. The liquidation shall occur before the effective date of 18.11consolidation and transfer of assets.18.12(c) If requested to do so by the chief administrative officer of the relief association 18.13or of the municipality, the state board shall provide advice on the means and procedures 18.14available to liquidate investment securities and other assets determined to be ineligible or 18.15inappropriate.18.16    Sec. 49. Minnesota Statutes 2008, section 353A.08, subdivision 1, is amended to read:18.17    Subdivision 1. Election of coverage by current retirees. (a) A person who is 18.18receiving a service pension, disability benefit, or survivor benefit is eligible to elect benefit 18.19coverage provided under the relevant provisions of the public employees police and fire 18.20fund benefit plan or to retain benefit coverage provided under the relief association benefit 18.21plan in effect on the effective date of the consolidation. The relevant provisions of the 18.22public employees police and fire fund benefit plan for the person electing that benefit 18.23coverage are limited to participation in the Minnesota postretirement investment fund for18.24any future postretirement adjustments under section 356.415 based on the amount of 18.25the benefit or pension payable on December 31, if December 31 is the effective date of 18.26consolidation, or on the December 1 following the effective date of the consolidation, if 18.27other than December 31. The survivor benefit payable on behalf of any service pension 18.28or disability benefit recipient who elects benefit coverage under the public employees 18.29police and fire fund benefit plan must be calculated under the relief association benefit 18.30plan and is subject to participation in the Minnesota postretirement investment fund for 18.31any future postretirement adjustments under section 356.415 based on the amount of the 18.32survivor benefit payable.18.33(b) A survivor benefit calculated under the relief association benefit plan which is first 18.34payable after June 30, 1997, to the surviving spouse of a retired member of a consolidation 18.35account who, before July 1, 1997, chose to participate in the Minnesota postretirement 19.1investment fundadjustments as provided under this subdivisionsection 356.415 must be 19.2increased on the effective date of the survivor benefit on an actuarial equivalent basis to 19.3reflect the change in the postretirement interest rate actuarial assumption under section 19.4356.215, subdivision 8
         , from five percent to six percent under a calculation procedure and 19.5tables adopted by the board and approved by the actuary retained under section 
         356.214. 19.6(c) By electing the public employees police and fire fund benefit plan, a current 19.7service pension or disability benefit recipient who, as of the first January 1 occurring after 19.8the effective date of consolidation, has been receiving the pension or benefit for at least 19.9seven months, or any survivor benefit recipient who, as of the first January 1 occurring 19.10after the effective date of consolidation, has been receiving the benefit on the person's own 19.11behalf or in combination with a prior applicable service pension or disability benefit for at 19.12least seven months is eligible to receive a partial adjustment payable from the Minnesota 19.13postretirement investment fund under section 
         11A.18, subdivision 9 356.415. 19.14(d) The election by any pension or benefit recipient must be made on or before 19.15the deadline established by the board of the Public Employees Retirement Association 19.16in a manner that recognizes the number of persons eligible to make the election and the 19.17anticipated time required to conduct any required benefit counseling.19.18    Sec. 50. Minnesota Statutes 2008, section 353A.08, subdivision 3, is amended to read:19.19    Subd. 3. Election of coverage by active members. (a) A person who is an active 19.20member of a police or fire relief association, other than a volunteer firefighter, has the 19.21option to elect benefit coverage under the relevant provisions of the public employees 19.22police and fire fund or to retain benefit coverage provided by the relief association benefit 19.23plan in effect on the effective date of consolidation. The relevant provisions of the public 19.24employee police and fire fund benefit plan for the person electing that benefit coverage 19.25are the relevant provisions of the public employee police and fire fund benefit plan 19.26applicable to retirement annuities, disability benefits, and survivor benefits, including 19.27participation in the Minnesota postretirement investment fund adjustments under section 19.28356.415, but excluding any provisions governing the purchase of credit for prior service 19.29or making payments in lieu of member contribution deductions applicable to any period 19.30which occurred before the effective date of consolidation.19.31(b) An active member is eligible to make an election at one of the following times:19.32(1) within six months of the effective date of consolidation;19.33(2) between the date on which the active member attains the age of 49 years and six 19.34months and the date on which the active member attains the age of 50 years; or20.1(3) on the date on which the active member terminates active employment for 20.2purposes of receiving a service pension or disability benefits, or within 90 days of the 20.3date the member terminates active employment and defers receipt of a service pension, 20.4whichever applies.20.5    Sec. 51. Minnesota Statutes 2008, section 353A.081, subdivision 2, is amended to read:20.6    Subd. 2. Election of coverage. (a) Individuals eligible under subdivision 1 may 20.7elect, on a form prescribed by the executive director of the Public Employees Retirement 20.8Association, to have survivor benefits calculated under the relevant provisions of the 20.9public employees police and fire fund benefit plan or to have survivor benefits calculated 20.10under the relief association benefit plan. The relevant provisions of the public employee 20.11police and fire fund benefit plan for the person electing that benefit coverage are the 20.12relevant provisions of the public employee police and fire fund benefit plan applicable 20.13to survivor benefits, including participation in the Minnesota postretirement investment 20.14fund adjustments under section 356.415.20.15(b) If the election results in an increased benefit amount to the surviving spouse 20.16eligible under subdivision 1, or to eligible children if there is no surviving spouse, the 20.17increased benefit accrues as of the date on which the survivor benefits payable to the 20.18survivors from the consolidation account were first paid. The back payment of any 20.19increase in prior benefit amounts, plus any postretirement adjustments payable under 20.20section 
         356.41 356.415, or any increase payable under the local relief association bylaws 20.21is payable as soon as practicable after the effective date of the election. 20.22    Sec. 52. Minnesota Statutes 2008, section 353A.09, subdivision 1, is amended to read:20.23    Subdivision 1. Establishment of consolidation accounts. (a) The board of trustees 20.24of the Public Employees Retirement Association shall establish a separate consolidation 20.25account for each local relief association of a municipality that consolidates with the Public 20.26Employees Retirement Association. The association shall credit to the consolidation 20.27account the assets of the individual consolidating local relief association upon transfer, 20.28member contributions received after consolidation under subdivision 4, municipal 20.29contributions received after consolidation under subdivision 5, and a proportionate share 20.30of any investment income earned after consolidation. From the consolidation account, 20.31the association shall pay for the transfer of any required reserves to the Minnesota 20.32postretirement investment fund on account of persons electing the type of benefit coverage 20.33provided by the public employees police and fire fund under subdivisions 2 and 3 and 20.34section 353.271, subdivision 2, the pension and benefit amounts on account of persons 21.1electing coverage by the relief association benefit plan under section 
         353A.08, the benefit 21.2amounts not payable from the Minnesota postretirement investment fund on account of 21.3persons electing the type of benefit coverage provided by the public employees police and 21.4fire fund under section 
         353A.08, and any direct administrative expenses related to the 21.5consolidation account, and the proportional share of the general administrative expenses 21.6of the association. 21.7(b) Except as otherwise provided for in this section, the liabilities and the assets 21.8of a consolidation account must be considered for all purposes to be separate from the 21.9balance of the public employees police and fire fund. The consolidation account must be 21.10subject to separate accounting, a separate actuarial valuation, and must be reported as a 21.11separate exhibit in any annual financial report or actuarial valuation report of the public 21.12employees police and fire consolidation fund, whichever applies. The executive director 21.13of the public employees retirement association shall maintain separate accounting records 21.14and balances for each consolidation account.21.15    Sec. 53. Minnesota Statutes 2008, section 353A.10, subdivision 2, is amended to read:21.16    Subd. 2. Collection of late contributions. In the event of a refusal by a 21.17municipality in which was located a local police or firefighters relief association which 21.18has consolidated with the fund to pay to the fund any amount or amounts due under 21.19section 
         353A.09, subdivisions 2 4 to 6, the executive director of the public employees 21.20retirement association may notify the Department of Revenue, the Department of Finance, 21.21and the state auditor of the refusal and commence the necessary procedure to collect the 21.22amount or amounts due from the amount of any state aid under sections 
         69.011 to 
         69.051, 21.23amortization state aid under section 
         423A.02, or supplemental amortization state aid under 21.24Laws 1984, chapter 564, section 48, as amended by Laws 1986, chapter 359, section 20, 21.25which is payable to the municipality or to certify the amount or amounts due to the county 21.26auditor for inclusion in the next tax levy of the municipality or for collection from other 21.27revenue available to the municipality, or both. 21.28    Sec. 54. Minnesota Statutes 2008, section 353A.10, subdivision 3, is amended to read:21.29    Subd. 3. Levy and bonding authority. A municipality in which was located a local 21.30police or firefighters relief association that has consolidated with the fund may issue 21.31general obligation bonds of the municipality to defray all or a portion of the principal 21.32amounts specified in section 
         353A.09, subdivisions 2 4 to 6, or certify to the county 21.33auditor a levy in the amount necessary to defray all or a portion of the principal amount 21.34specified in section 
         353A.09, subdivisions 2 4 to 6, or the annual amount specified in 22.1section 
         353A.09, subdivisions 2 4 to 6. The municipality may pledge the full faith, credit, 22.2and taxing power of the municipality for the payment of the principal of and interest on the 22.3general obligation bonds. Any municipal bond may be issued without an election under 22.4section 
         475.58 and may not be included in the net debt of the municipality for purposes of 22.5any charter or statutory debt limitation, nor may any tax levy for the payment of bond 22.6principal or interest be subject to any limitation concerning rate or amount established 22.7by charter or law. 22.8    Sec. 55. Minnesota Statutes 2008, section 353E.01, subdivision 3, is amended to read:22.9    Subd. 3. Investment.(a) The public employees local government correctional 22.10service retirement fund participates in the Minnesota postretirement investment fund.22.11(b) The amounts provided in section 353.271 must be deposited in that fund.  22.12(c) The balance of any Assets of the public employees local government correctional 22.13service retirement fund must be deposited in the Minnesota combined investment fund as 22.14provided in section 
         11A.14, if applicable, or otherwise invested under section 
         11A.23.  22.15    Sec. 56. Minnesota Statutes 2008, section 353E.01, subdivision 5, is amended to read:22.16    Subd. 5. Fund disbursement restricted. (a) The public employees local 22.17government correctional service retirement fund and its share of participation in the 22.18Minnesota postretirement investment fund may be disbursed only for the purposes 22.19provided for in this chapter.22.20(b) The proportional share of the necessary and reasonable administrative expenses 22.21of the association and any benefits provided in this chapter, other than benefits payable 22.22from the Minnesota postretirement investment fund, must be paid from the public 22.23employees local government correctional service retirement fund. Retirement annuities, 22.24disability benefits, survivorship benefits, and any refunds of accumulated deductions may 22.25be paid only from the correctional service retirement fund after those needs have been 22.26certified by the executive director and any applicable amounts withdrawn from the share 22.27of participation in the Minnesota postretirement fund under section 11A.18.  22.28(c) The amounts necessary to make the payments from the public employees local 22.29government correctional service retirement fund and its participation in the Minnesota 22.30postretirement investment fund are annually appropriated from those funds for those 22.31purposes.22.32    Sec. 57. Minnesota Statutes 2008, section 353E.04, is amended by adding a subdivision 22.33to read:23.1    Subd. 7.Postretirement adjustment eligibility.An annuity under this section is 23.2eligible for postretirement adjustments under section 356.415.23.3    Sec. 58. Minnesota Statutes 2008, section 353E.06, is amended by adding a subdivision 23.4to read:23.5    Subd. 9.Postretirement adjustment eligibility.A disability benefit under this 23.6section is eligible for postretirement adjustments under section 356.415.23.7    Sec. 59. Minnesota Statutes 2008, section 353E.07, is amended by adding a subdivision 23.8to read:23.9    Subd. 8.Postretirement adjustment eligibility.A survivor benefit under this 23.10section is eligible for postretirement adjustments under section 356.415.23.11    Sec. 60. Minnesota Statutes 2008, section 354.07, subdivision 4, is amended to read:23.12    Subd. 4. Certification of funds to State Board of Investment. It shall be is23.13the duty of the board from time to time to certify to the State Board of Investment for 23.14investment as much of the funds in its hands as shall not be needed for current purposes. 23.15Such funds that are certified as to investment in the postretirement investment fund shall 23.16include the amount as required for the total reserves needed for the purposes described 23.17in section 354.63. The State Board of Investment shall thereupon transfer such assets 23.18to the appropriate fund provided herein, in accordance with the procedure set forth in 23.19section 354.63, or invest and reinvest an amount equal to the sum so certified in such 23.20securities as are now or may hereafter be duly authorized legal investments for state 23.21employees retirement fund and all such securities so transferred or purchased shall must23.22be deposited with the commissioner of finance. All interest from these investments shall23.23must be credited to the appropriate fundsteachers retirement fund and used for current 23.24purposes or investments, except as hereinafter provided. The State Board of Investment 23.25shall have has authority to sell, convey, and exchange such securities and invest and 23.26reinvest the funds when it deems it desirable to do so, and shall must sell securities upon 23.27request of the officers of the association when such officers determine funds are needed 23.28for its purposes. All of the provisions regarding accounting procedures and restrictions 23.29and conditions for the purchase and sale of securities for the state employees retirement 23.30fund shallunder chapter 11A must apply to the accounting, purchase and sale of securities 23.31for the Teachers' Retirement Association. 23.32    Sec. 61. Minnesota Statutes 2008, section 354.33, subdivision 5, is amended to read:24.1    Subd. 5. Retirees not eligible for federal benefits. When any person retires after 24.2July 1, 1973, who (1) has ten or more years of allowable service, and (2) does not have any 24.3retroactive Social Security coverage by reason of the person's position in the retirement 24.4system, and (3) does not qualify for federal old age and survivor primary benefits at the 24.5time of retirement, the annuity must be computed under section 
         354.44, subdivision 2, of 24.6the law in effect on June 30, 1969, except that accumulations after June 30, 1957, must be 24.7calculated using the samemost recent mortality table approved under section 356.215, 24.8subdivision 18, and interest assumption as are used to transfer the required reserves to the 24.9Minnesota postretirement investment fund using the applicable postretirement interest rate 24.10assumption specified in section 356.215, subdivision 8.24.11    Sec. 62. Minnesota Statutes 2008, section 354.35, is amended by adding a subdivision 24.12to read:24.13    Subd. 3.Postretirement adjustment eligibility.An annuity under this section is 24.14eligible for postretirement adjustments under section 356.415.24.15    Sec. 63. Minnesota Statutes 2008, section 354.42, subdivision 1a, is amended to read:24.16    Subd. 1a. Teachers retirement fund. (a) Within the Teachers Retirement 24.17Association and the state treasury is created a special retirement fund, which must include 24.18all the assets of the Teachers Retirement Association and all revenue of the association. 24.19The fund is the continuation of the fund established under Laws 1931, chapter 406, section 24.202, notwithstanding the repeal of Minnesota Statutes 1973, section 
         354.42, subdivision 1, 24.21by Laws 1974, chapter 289, section 59.24.22(b) The teachers retirement fund must be credited with all employee and employer 24.23contributions, all investment revenue and gains, and all other income authorized by law.24.24(c) From the teachers retirement fund is appropriated the payments of annuities 24.25and benefits authorized by this chapter, the transfers to the Minnesota postretirement 24.26investment fund, and the reasonable and necessary expenses of administering the fund 24.27and the association.24.28    Sec. 64. Minnesota Statutes 2008, section 354.44, is amended by adding a subdivision 24.29to read:24.30    Subd. 7a.Postretirement adjustment eligibility.(a) A retirement annuity under 24.31subdivision 2 or 6 is eligible for postretirement adjustments under section 356.415.24.32(b) Retirement annuities payable from the teachers retirement plan must not be in 24.33an amount less than the amount originally determined on the date of retirement and as 25.1adjusted on each succeeding January 1 under Minnesota Statutes 2008, section 11A.18, 25.2before January 1, 2010, and under section 356.415 after December 31, 2009.25.3    Sec. 65. Minnesota Statutes 2008, section 354.46, is amended by adding a subdivision 25.4to read:25.5    Subd. 7.Postretirement adjustment eligibility.A survivor benefit under 25.6subdivision 1, 2, 2a, or 2b, is eligible for postretirement adjustments under section 356.415.25.7    Sec. 66. Minnesota Statutes 2008, section 354.48, is amended by adding a subdivision 25.8to read:25.9    Subd. 11.Postretirement adjustment eligibility.A disability benefit under this 25.10section is eligible for postretirement adjustments under section 356.415.25.11    Sec. 67. Minnesota Statutes 2008, section 354.55, subdivision 13, is amended to read:25.12    Subd. 13. Pre-1969 law retirements. Any person who ceased teaching service 25.13prior to July 1, 1968, who has ten years or more of allowable service and left accumulated 25.14deductions in the fund for the purpose of receiving when eligible a retirement annuity, 25.15and retires shall must have the annuity computed in accordance with the law in effect on 25.16June 30, 1969, except that the portion of the annuity based on accumulations after June 30, 25.171957, under Minnesota Statutes 1967, section 
         354.44, subdivision 2, and accumulations 25.18under Minnesota Statutes 1967, section 
         354.33, subdivision 1, shallmust be calculated 25.19using the mortality table established by the board under section 
         354.07, subdivision 1, 25.20and approved under section 356.215, subdivision 18, and the postretirement interest rate 25.21assumption specified in section 
         356.215, to transfer the required reserves to the Minnesota 25.22postretirement investment fund subdivision 8. 25.23    Sec. 68. Minnesota Statutes 2008, section 354.70, subdivision 5, is amended to read:25.24    Subd. 5. Transfer of assets. (a) On or before June 30, 2006, the chief administrative 25.25officer of the Minneapolis Teachers Retirement Fund Association shall transfer to the 25.26Teachers Retirement Association the entire assets of the special retirement fund of the 25.27Minneapolis Teachers Retirement Fund Association. The transfer of the assets of the 25.28Minneapolis Teachers Retirement Fund Association special retirement fund must include 25.29any accounts receivable that are determined by the executive director of the State Board of 25.30Investment as reasonably capable of being collected. Legal title to account receivables that 25.31are determined by the executive director of the State Board of Investment as not reasonably 25.32capable of being collected transfers to Special School District No. 1, Minneapolis, as of 26.1the date of the determination of the executive director of the State Board of Investment. 26.2If the account receivables transferred to Special School District No. 1, Minneapolis, 26.3are subsequently recovered by the school district, the superintendent of Special School 26.4District No. 1, Minneapolis, shall transfer the recovered amount to the executive director 26.5of the Teachers Retirement Association, in cash, for deposit in the teachers retirement 26.6fund, less the reasonable expenses of the school district related to the recovery.26.7(b) As of June 30, 2006, assets of the special retirement fund of the Minneapolis 26.8Teachers Retirement Fund Association are assets of the Teachers Retirement Association 26.9to be invested by the State Board of Investment pursuant to the provisions of section 26.10354.07
         , subdivision 4. The Teachers Retirement Association is the successor in interest to 26.11all claims which the Minneapolis Teachers Retirement Fund Association may have or may 26.12assert against any person and is the successor in interest to all claims which could have 26.13been asserted against the former Minneapolis Teachers Retirement Fund Association, 26.14subject to the following exceptions and qualifications: 26.15(1) the Teachers Retirement Association is not liable for any claim against the 26.16Minneapolis Teachers Retirement Fund Association, its former board or board members, 26.17which is founded upon a claim of breach of fiduciary duty, where the act or acts 26.18constituting the claimed breach were not done in good faith;26.19 (2) the Teachers Retirement Association may assert any applicable defense to any 26.20claim in any judicial or administrative proceeding that the former Minneapolis Teachers 26.21Retirement Fund Association or its board would otherwise have been entitled to assert; 26.22(3) the Teachers Retirement Association may assert any applicable defense that the 26.23Teachers Retirement Association may assert in its capacity as a statewide agency; and 26.24(4) the Teachers Retirement Association shall indemnify any former fiduciary of the 26.25Minneapolis Teachers Retirement Fund Association consistent with the provisions of the 26.26Public Pension Fiduciary Responsibility Act, in section 
         356A.11.26.27(c) From the assets of the former Minneapolis Teachers Retirement Fund Association 26.28transferred to the Teachers Retirement Association, an amount equal to the percentage 26.29figure that represents the ratio between the market value of the Minnesota postretirement 26.30investment fund as of June 30, 2006, and the required reserves of the Minnesota 26.31postretirement investment fund as of June 30, 2006, applied to the present value of 26.32future benefits payable to annuitants of the former Minneapolis Teachers Retirement 26.33Fund Association as of June 30, 2006, including any postretirement adjustment from the 26.34Minnesota postretirement investment fund expected to be payable on January 1, 2007, 26.35must be transferred to the Minnesota postretirement investment fund. The executive 26.36director of the State Board of Investment shall estimate this ratio at the time of the 27.1transfer. By January 1, 2007, after all necessary financial information becomes available 27.2to determine the actual funded ratio of the Minnesota postretirement investment fund, the 27.3postretirement investment fund must refund to the Teachers Retirement Association any 27.4excess assets or the Teachers Retirement Association must contribute any deficiency to 27.5the Minnesota postretirement investment fund with interest under Minnesota Statutes 27.62008, section 
         11A.18, subdivision 6. The balance of the assets of the former Minneapolis 27.7Teachers Retirement Fund Association after the transfer to the Minnesota postretirement 27.8investment fund must be credited to the Teachers Retirement Association.27.9(d) If the assets transferred by the Minneapolis Teachers Retirement Fund 27.10Association to the Teachers Retirement Association are insufficient to meet its obligation 27.11to the Minnesota postretirement investment fund, additional assets must be transferred by 27.12the executive director of the Teachers Retirement Association to meet the amount required.27.13    Sec. 69. Minnesota Statutes 2008, section 354.70, subdivision 6, is amended to read:27.14    Subd. 6. Benefit calculation. (a) For every deferred, inactive, disabled, and retired 27.15member of the Minneapolis Teachers Retirement Fund Association transferred under 27.16subdivision 1, and the survivors of these members, annuities or benefits earned before 27.17the date of the transfer, other than future postretirement adjustments, must be calculated 27.18and paid by the Teachers Retirement Association under the laws, articles of incorporation, 27.19and bylaws of the former Minneapolis Teachers Retirement Fund Association that were 27.20in effect relative to the person on the date of the person's termination of active service 27.21covered by the former Minneapolis Teachers Retirement Fund Association.27.22(b) Former Minneapolis Teachers Retirement Fund Association members who 27.23retired before July 1, 2006, must receive postretirement adjustments after December 31, 27.242006, only as provided in Minnesota Statutes 2008, section 
         11A.18 or section 356.415. All 27.25other benefit recipients of the former Minneapolis Teachers Retirement Fund Association 27.26must receive postretirement adjustments after December 31, 2006, only as provided in 27.27section 
         356.41 356.415.27.28(c) This consolidation does not impair or diminish benefits for an active, deferred, 27.29or retired member or a survivor of an active, deferred, or retired member under the 27.30former Minneapolis Teachers Retirement Fund Association in existence at the time of the 27.31consolidation, except that any future guaranteed or investment-related postretirement 27.32adjustments must be paid after July 1, 2006, in accordance with paragraph (b), and all 27.33benefits based on service on or after July 1, 2006, must be determined only by laws 27.34governing the Teachers Retirement Association.28.1    Sec. 70. Minnesota Statutes 2008, section 356.215, subdivision 1, is amended to read:28.2    Subdivision 1. Definitions. (a) For the purposes of sections 
         3.85 and 
         356.20 to 28.3356.23
         , each of the terms in the following paragraphs has the meaning given. 28.4    (b) "Actuarial valuation" means a set of calculations prepared by an actuary retained 28.5under section 
         356.214 if so required under section 
         3.85, or otherwise, by an approved 28.6actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit 28.7plan, according to the entry age actuarial cost method and based upon stated assumptions 28.8including, but not limited to rates of interest, mortality, salary increase, disability, 28.9withdrawal, and retirement and to determine the payment necessary to amortize over a 28.10stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial 28.11valuation of the benefit plan. 28.12    (c) "Approved actuary" means a person who is regularly engaged in the business of 28.13providing actuarial services and who is a fellow in the Society of Actuaries.28.14    (d) "Entry age actuarial cost method" means an actuarial cost method under which 28.15the actuarial present value of the projected benefits of each individual currently covered 28.16by the benefit plan and included in the actuarial valuation is allocated on a level basis over 28.17the service of the individual, if the benefit plan is governed by section 
         69.773, or over the 28.18earnings of the individual, if the benefit plan is governed by any other law, between the 28.19entry age and the assumed exit age, with the portion of the actuarial present value which is 28.20allocated to the valuation year to be the normal cost and the portion of the actuarial present 28.21value not provided for at the valuation date by the actuarial present value of future normal 28.22costs to be the actuarial accrued liability, with aggregation in the calculation process to be 28.23the sum of the calculated result for each covered individual and with recognition given to 28.24any different benefit formulas which may apply to various periods of service.28.25    (e) "Experience study" means a report providing experience data and an actuarial 28.26analysis of the adequacy of the actuarial assumptions on which actuarial valuations are 28.27based.28.28    (f) "Actuarial value of assets" means:28.29(1) For the July 1, 2009, actuarial valuation, the market value of all assets as of 28.30the preceding June 30, 2009, reduced by:28.31    (1)(i) 20 percent of the difference between the actual net change in the market value 28.32of assets other than the Minnesota postretirement investment fund between the June 30 28.33that occurred three years earlier, 2006, and the June 30 that occurred four years earlier, 28.342005, and the computed increase in the market value of assets other than the Minnesota 28.35postretirement investment fund over that fiscal year period if the assets had increased at 28.36the percentage preretirement interest rate assumption used in the actuarial valuation for 29.1the July 1 that occurred four years earlier earned a rate of return on assets equal to the 29.2annual percentage preretirement interest rate assumption used in the actuarial valuation 29.3for July 1, 2005;29.4    (2) (ii) 40 percent of the difference between the actual net change in the market 29.5value of assets other than the Minnesota postretirement investment fund between the29.6June 30 that occurred two years earlier, 2007, and the June 30 that occurred three years 29.7earlier, 2006, and the computed increase in the market value of assets other than the 29.8Minnesota postretirement investment fund over that fiscal year period if the assets had 29.9increased at the percentage preretirement interest rate assumption used in the actuarial 29.10valuation for the July 1 that occurred three years earlier earned a rate of return on assets 29.11equal to the annual percentage preretirement interest rate assumption used in the actuarial 29.12valuation for July 1, 2006;29.13    (3) (iii) 60 percent of the difference between the actual net change in the market 29.14value of assets other than the Minnesota postretirement investment fund between the29.15June 30 that occurred one year earlier, 2008, and the June 30 that occurred two years 29.16earlier, 2007, and the computed increase in the market value of assets other than the 29.17Minnesota postretirement investment fund over that fiscal year period if the assets had 29.18increased at the percentage preretirement interest rate assumption used in the actuarial 29.19valuation for the July 1 that occurred two years earlier earned a rate of return on assets 29.20equal to the annual percentage preretirement interest rate assumption used in the actuarial 29.21valuation for July 1, 2007; and29.22    (4) (iv) 80 percent of the difference between the actual net change in the market 29.23value of assets other than the Minnesota postretirement investment fund between the 29.24immediately prior June 30, 2009, and the June 30 that occurred one year earlier, 2008,29.25and the computed increase in the market value of assets other than the Minnesota 29.26postretirement investment fund over that fiscal year period if the assets had increased at 29.27the percentage preretirement interest rate assumption used in the actuarial valuation for 29.28the July 1 that occurred one year earlier. earned a rate of return on assets equal to the 29.29annual percentage preretirement interest rate assumption used in the actuarial valuation 29.30for July 1, 2008; and29.31(v) if applicable, 80 percent of the difference between the actual net change in the 29.32market value of the Minnesota postretirement investment fund between June 30, 2009, 29.33and June 30, 2008, and the computed increase in the market value of assets over that fiscal 29.34year period if the assets had increased at 8.5 percent annually.29.35(2) For the July 1, 2010, actuarial valuation, the market value of all assets as of 29.36June 30, 2010, reduced by: 30.1(i) 20 percent of the difference between the actual net change in the market value of 30.2assets other than the Minnesota postretirement investment fund between June 30, 2007, 30.3and June 30, 2006, and the computed increase in the market value of assets other than the 30.4Minnesota postretirement investment fund over that fiscal year period if the assets had 30.5earned a rate of return on assets equal to the annual percentage preretirement interest rate 30.6assumption used in the actuarial valuation for July 1, 2006;30.7(ii) 40 percent of the difference between the actual net change in the market value of 30.8assets other than the Minnesota postretirement investment fund between June 30, 2008, 30.9and June 30, 2007, and the computed increase in the market value of assets other than the 30.10Minnesota postretirement investment fund over that fiscal year period if the assets had 30.11earned a rate of return on assets equal to the annual percentage preretirement interest rate 30.12assumption used in the actuarial valuation for July 1, 2007;30.13(iii) 60 percent of the difference between the actual net change in the market value 30.14of assets other than the Minnesota postretirement investment fund between June 30, 2009, 30.15and June 30, 2008, and the computed increase in the market value of assets other than the 30.16Minnesota postretirement investment fund over that fiscal year period if the assets had 30.17earned a rate of return on assets equal to the annual percentage preretirement interest rate 30.18assumption used in the actuarial valuation for July 1, 2008; 30.19(iv) 80 percent of the difference between the actual net change in the market value of 30.20total assets between June 30, 2010, and June 30, 2009, and the computed increase in the 30.21market value of total assets over that fiscal year period if the assets had earned a rate of 30.22return on assets equal to the annual percentage preretirement interest rate assumption used 30.23in the actuarial valuation for July 1, 2009; and30.24(v) if applicable, 60 percent of the difference between the actual net change in the 30.25market value of the Minnesota postretirement investment fund between June 30, 2009, 30.26and June 30, 2008, and the computed increase in the market value of assets over that fiscal 30.27year period if the assets had increased at 8.5 percent annually.30.28(3) For the July 1, 2011, actuarial valuation, the market value of all assets as of 30.29June 30, 2011, reduced by:30.30(i) 20 percent of the difference between the actual net change in the market value of 30.31assets other than the Minnesota postretirement investment fund between June 30, 2008, 30.32and June 30, 2007, and the computed increase in the market value of assets other than the 30.33Minnesota postretirement investment fund over that fiscal year period if the assets had 30.34earned a rate of return on assets equal to the annual percentage preretirement interest rate 30.35assumption used in the actuarial valuation for July 1, 2007;31.1(ii) 40 percent of the difference between the actual net change in the market value of 31.2assets other than the Minnesota postretirement investment fund between June 30, 2009, 31.3and June 30, 2008, and the computed increase in the market value of assets other than the 31.4Minnesota postretirement investment fund over that fiscal year period if the assets had 31.5earned a rate of return on assets equal to the annual percentage preretirement interest rate 31.6assumption used in the actuarial valuation for July 1, 2008;31.7(iii) 60 percent of the difference between the actual net change in the market value 31.8of the total assets between June 30, 2010, and June 30, 2009, and the computed increase in 31.9the market value of the total assets over that fiscal year period if the assets had earned 31.10a rate of return on assets equal to the annual percentage preretirement interest rate 31.11assumption used in the actuarial valuation for July 1, 2009;31.12(iv) 80 percent of the difference between the actual net change in the market value of 31.13total assets between June 30, 2011, and June 30, 2010, and the computed increase in the 31.14market value of total assets over that fiscal year period if the assets had earned a rate of 31.15return on assets equal to the annual percentage preretirement interest rate assumption used 31.16in the actuarial valuation for July 1, 2010; and31.17(v) if applicable, 40 percent of the difference between the actual net change in the 31.18market value of the Minnesota postretirement investment fund between June 30, 2009, 31.19and June 30, 2008, and the computed increase in the market value of assets over that fiscal 31.20year period if the assets had increased at 8.5 percent annually.31.21(4) For the July 1, 2012, actuarial valuation, the market value of all assets as of 31.22June 30, 2012, reduced by:31.23(i) 20 percent of the difference between the actual net change in the market value of 31.24assets other than the Minnesota postretirement investment fund between June 30, 2009, 31.25and June 30, 2008, and the computed increase in the market value of assets other than the 31.26Minnesota postretirement investment fund over that fiscal year period if the assets had 31.27earned a rate of return on assets equal to the annual percentage preretirement interest rate 31.28assumption used in the actuarial valuation for July 1, 2008;31.29(ii) 40 percent of the difference between the actual net change in the market value of 31.30total assets between June 30, 2010, and June 30, 2009, and the computed increase in the 31.31market value of total assets over that fiscal year period if the assets had earned a rate of 31.32return on assets equal to the annual percentage preretirement interest rate assumption used 31.33in the actuarial valuation for July 1, 2009;31.34(iii) 60 percent of the difference between the actual net change in the market value 31.35of total assets between June 30, 2011, and June 30, 2010, and the computed increase in the 31.36market value of total assets over that fiscal year period if the assets had earned a rate of 32.1return on assets equal to the annual percentage preretirement interest rate assumption used 32.2in the actuarial valuation for July 1, 2010;32.3(iv) 80 percent of the difference between the actual net change in the market value of 32.4total assets between June 30, 2012, and June 30, 2011, and the computed increase in the 32.5market value of total assets over that fiscal year period if the assets had earned a rate of 32.6return on assets equal to the annual percentage preretirement interest rate assumption used 32.7in the actuarial valuation for July 1, 2011; and32.8(v) if applicable, 20 percent of the difference between the actual net change in the 32.9market value of the Minnesota postretirement investment fund between June 30, 2009, 32.10and June 30, 2008, and the computed increase in the market value of assets over that fiscal 32.11year period if the assets had increased at 8.5 percent annually.32.12(5) For the July 1, 2013, and following actuarial valuations, the market value of all 32.13assets as of the preceding June 30, reduced by:32.14(i) 20 percent of the difference between the actual net change in the market value 32.15of total assets between the June 30 that occurred three years earlier and the June 30 that 32.16occurred four years earlier and the computed increase in the market value of total assets 32.17over that fiscal year period if the assets had earned a rate of return on assets equal to the 32.18annual percentage preretirement interest rate assumption used in the actuarial valuation 32.19for the July 1 that occurred four years earlier;32.20(ii) 40 percent of the difference between the actual net change in the market value 32.21of total assets between the June 30 that occurred two years earlier and the June 30 that 32.22occurred three years earlier and the computed increase in the market value of total assets 32.23over that fiscal year period if the assets had earned a rate of return on assets equal to the 32.24annual percentage preretirement interest rate assumption used in the actuarial valuation 32.25for the July 1 that occurred three years earlier;32.26(iii) 60 percent of the difference between the actual net change in the market value 32.27of total assets between the June 30 that occurred one year earlier and the June 30 that 32.28occurred two years earlier and the computed increase in the market value of total assets 32.29over that fiscal year period if the assets had earned a rate of return on assets equal to the 32.30annual percentage preretirement interest rate assumption used in the actuarial valuation 32.31for the July 1 that occurred two years earlier; and32.32(iv) 80 percent of the difference between the actual net change in the market value 32.33of total assets between the most recent June 30 and the June 30 that occurred one year 32.34earlier and the computed increase in the market value of total assets over that fiscal year 32.35period if the assets had earned a rate of return on assets equal to the annual percentage 33.1preretirement interest rate assumption used in the actuarial valuation for the July 1 that 33.2occurred one year earlier.33.3    (g) "Unfunded actuarial accrued liability" means the total current and expected 33.4future benefit obligations, reduced by the sum of the actuarial value of assets and the 33.5present value of future normal costs.33.6    (h) "Pension benefit obligation" means the actuarial present value of credited 33.7projected benefits, determined as the actuarial present value of benefits estimated to be 33.8payable in the future as a result of employee service attributing an equal benefit amount, 33.9including the effect of projected salary increases and any step rate benefit accrual rate 33.10differences, to each year of credited and expected future employee service.33.11    Sec. 71. Minnesota Statutes 2008, section 356.215, subdivision 11, is amended to read:33.12    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating 33.13the level normal cost, the actuarial valuation of the retirement plan must contain an 33.14exhibit for financial reporting purposes indicating the additional annual contribution 33.15sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit 33.16for contribution determination purposes indicating the additional contribution sufficient 33.17to amortize the unfunded actuarial accrued liability. For the retirement plans listed in 33.18subdivision 8, paragraph (c), the additional contribution must be calculated on a level 33.19percentage of covered payroll basis by the established date for full funding in effect when 33.20the valuation is prepared, assuming annual payroll growth at the applicable percentage 33.21rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional 33.22annual contribution must be calculated on a level annual dollar amount basis. 33.23    (b) For any retirement plan other than the Minneapolis Employees Retirement Fund, 33.24the general employees retirement plan of the Public Employees Retirement Association, 33.25and the St. Paul Teachers Retirement Fund Association, if there has not been a change in 33.26the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a 33.27change in the benefit plan governing annuities and benefits payable from the fund, a 33.28change in the actuarial cost method used in calculating the actuarial accrued liability of all 33.29or a portion of the fund, or a combination of the three, which change or changes by itself 33.30or by themselves without inclusion of any other items of increase or decrease produce a 33.31net increase in the unfunded actuarial accrued liability of the fund, the established date for 33.32full funding is the first actuarial valuation date occurring after June 1, 2020.33.33    (c) For any retirement plan other than the Minneapolis Employees Retirement 33.34Fund and the general employees retirement plan of the Public Employees Retirement 33.35Association, if there has been a change in any or all of the actuarial assumptions used 34.1for calculating the actuarial accrued liability of the fund, a change in the benefit plan 34.2governing annuities and benefits payable from the fund, a change in the actuarial cost 34.3method used in calculating the actuarial accrued liability of all or a portion of the fund, 34.4or a combination of the three, and the change or changes, by itself or by themselves and 34.5without inclusion of any other items of increase or decrease, produce a net increase in the 34.6unfunded actuarial accrued liability in the fund, the established date for full funding must 34.7be determined using the following procedure:34.8    (i) the unfunded actuarial accrued liability of the fund must be determined in 34.9accordance with the plan provisions governing annuities and retirement benefits and the 34.10actuarial assumptions in effect before an applicable change;34.11    (ii) the level annual dollar contribution or level percentage, whichever is applicable, 34.12needed to amortize the unfunded actuarial accrued liability amount determined under item 34.13(i) by the established date for full funding in effect before the change must be calculated 34.14using the interest assumption specified in subdivision 8 in effect before the change;34.15    (iii) the unfunded actuarial accrued liability of the fund must be determined in 34.16accordance with any new plan provisions governing annuities and benefits payable from 34.17the fund and any new actuarial assumptions and the remaining plan provisions governing 34.18annuities and benefits payable from the fund and actuarial assumptions in effect before 34.19the change;34.20    (iv) the level annual dollar contribution or level percentage, whichever is applicable, 34.21needed to amortize the difference between the unfunded actuarial accrued liability amount 34.22calculated under item (i) and the unfunded actuarial accrued liability amount calculated 34.23under item (iii) over a period of 30 years from the end of the plan year in which the 34.24applicable change is effective must be calculated using the applicable interest assumption 34.25specified in subdivision 8 in effect after any applicable change;34.26    (v) the level annual dollar or level percentage amortization contribution under item 34.27(iv) must be added to the level annual dollar amortization contribution or level percentage 34.28calculated under item (ii);34.29    (vi) the period in which the unfunded actuarial accrued liability amount determined 34.30in item (iii) is amortized by the total level annual dollar or level percentage amortization 34.31contribution computed under item (v) must be calculated using the interest assumption 34.32specified in subdivision 8 in effect after any applicable change, rounded to the nearest 34.33integral number of years, but not to exceed 30 years from the end of the plan year in 34.34which the determination of the established date for full funding using the procedure set 34.35forth in this clause is made and not to be less than the period of years beginning in the 34.36plan year in which the determination of the established date for full funding using the 35.1procedure set forth in this clause is made and ending by the date for full funding in effect 35.2before the change; and35.3    (vii) the period determined under item (vi) must be added to the date as of which 35.4the actuarial valuation was prepared and the date obtained is the new established date 35.5for full funding.35.6    (d) For the Minneapolis Employees Retirement Fund, the established date for full 35.7funding is June 30, 2020.35.8    (e) For the general employees retirement plan of the Public Employees Retirement 35.9Association, the established date for full funding is June 30, 2031.35.10    (f) For the Teachers Retirement Association, the established date for full funding is 35.11June 30, 2037.35.12    (g) For the correctional state employees retirement plan of the Minnesota State 35.13Retirement System, the established date for full funding is June 30, 2038.35.14    (h) For the judges retirement plan, the established date for full funding is June 35.1530, 2038.35.16    (i) For the public employees police and fire retirement plan, the established date 35.17for full funding is June 30, 2038.35.18    (j) For the St. Paul Teachers Retirement Fund Association, the established date for 35.19full funding is June 30 of the 25th year from the valuation date. In addition to other 35.20requirements of this chapter, the annual actuarial valuation shall contain an exhibit 35.21indicating the funded ratio and the deficiency or sufficiency in annual contributions when 35.22comparing liabilities to the market value of the assets of the fund as of the close of the 35.23most recent fiscal year.35.24    (k) For the retirement plans for which the annual actuarial valuation indicates an 35.25excess of valuation assets over the actuarial accrued liability, the valuation assets in 35.26excess of the actuarial accrued liability must be recognized as a reduction in the current 35.27contribution requirements by an amount equal to the amortization of the excess expressed 35.28as a level percentage of pay over a 30-year period beginning anew with each annual 35.29actuarial valuation of the plan.35.30    (l) In addition to calculating the unfunded actuarial accrued liability of the retirement 35.31plan for financial reporting purposes under paragraphs (a) to (j), the actuarial valuation 35.32of the retirement plan must also include a calculation of the unfunded actuarial accrued 35.33liability of the retirement plan for purposes of determining the amortization contribution 35.34sufficient to amortize the unfunded actuarial liability of the Minnesota Post Retirement 35.35Investment Fund. For this exhibit, the calculation must be the unfunded actuarial accrued 35.36liability net of the postretirement adjustment liability funded from the investment 36.1performance of the Minnesota Post Retirement Investment Fund or the retirement benefit 36.2fund.36.3    Sec. 72. Minnesota Statutes 2008, section 356.351, subdivision 2, is amended to read:36.4    Subd. 2. Incentive. (a) For an employee eligible under subdivision 1, if approved 36.5under paragraph (b), the employer may provide an amount up to $17,000, to an employee 36.6who terminates service, to be used: 36.7    (1) unless the appointing authority has designated the use under clause (2) or the use 36.8under clause (3) for the initial retirement incentive applicable to that employing entity 36.9under Laws 2007, chapter 134, after May 26, 2007, for deposit in the employee's account 36.10in the health care savings plan established by section 
         352.98; 36.11    (2) notwithstanding section 
         352.01, subdivision 11, or 
         354.05, subdivision 13, 36.12whichever applies, if the appointing authority has designated the use under this clause 36.13for the initial retirement incentive applicable to that employing entity under Laws 2007, 36.14chapter 134, after May 26, 2007, for purchase of service credit for unperformed service 36.15sufficient to enable the employee to retire under section 
         352.116, subdivision 1, paragraph 36.16(b); 
         353.30; 
         354.44, subdivision 6, paragraph (b), or 
         354A.31, subdivision 6, paragraph 36.17(b), whichever applies; or 36.18    (3) if the appointing authority has designated the use under this clause for the initial 36.19retirement incentive applicable to the employing entity under Laws 2007, chapter 134, 36.20after May 26, 2007, for purchase of a lifetime annuity or an annuity for a specific number 36.21of years from the applicable retirement plan to provide additional benefits, as provided in 36.22paragraph (d). 36.23    (b) Approval to provide the incentive must be obtained from the commissioner 36.24of finance if the eligible employee is a state employee and must be obtained from the 36.25applicable governing board with respect to any other employing entity. An employee is 36.26eligible for the payment under paragraph (a), clause (2), if the employee uses money from 36.27a deferred compensation account that, combined with the payment under paragraph (a), 36.28clause (2), would be sufficient to purchase enough service credit to qualify for retirement 36.29under section 
         352.116, subdivision 1, paragraph (b); 
         353.30, subdivision 1a; 
         354.44, 36.30subdivision 6
         , paragraph (b), or 
         354A.31, subdivision 6, paragraph (b), whichever applies. 36.31    (c) The cost to purchase service credit under paragraph (a), clause (2), must be 36.32made in accordance with section 
         356.551.36.33    (d) The annuity purchase under paragraph (a), clause (3), must be made using 36.34annuity factors, as determined by the actuary retained under section 356.214, derived from 36.35the applicable factors used by the applicable retirement plan to transfer amounts to the 37.1Minnesota postretirement investment fund and to calculate optional annuity forms. The 37.2purchased annuity must be the actuarial equivalent of the incentive amount.37.3    Sec. 73. [356.415] POSTRETIREMENT ADJUSTMENTS; STATEWIDE 37.4RETIREMENT PLANS.37.5    Subdivision 1.Annual postretirement adjustments.(a) Retirement annuity, 37.6disability benefit, or survivor benefit recipients of a covered retirement plan are entitled to 37.7a postretirement adjustment annually on January 1, as follows:37.8(1) a postretirement increase of 2.5 percent must be applied each year, effective 37.9January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 37.10been receiving an annuity or a benefit for at least 12 full months prior to the January 1 37.11increase; and37.12(2) for each annuitant or benefit recipient who has been receiving an annuity or a 37.13benefit for at least one full month, an annual postretirement increase of 1/12 of 2.5 percent 37.14for each month the person has been receiving an annuity or benefit must be applied, 37.15effective January 1 following the year in which the person has been retired for less than 37.1612 months.37.17(b) The increases provided by this section commence on January 1, 2010.37.18(c) An increase in annuity or benefit payments under this section must be made 37.19automatically unless written notice is filed by the annuitant or benefit recipient with the 37.20executive director of the covered retirement plan requesting that the increase not be made.37.21(d) The retirement annuity payable to a person who retires before becoming eligible 37.22for Social Security benefits and who has elected the optional payment as provided in 37.23section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain 37.24retirement annuity and a life retirement annuity for the purposes of any postretirement 37.25adjustment. The period certain retirement annuity plus the life retirement annuity must be 37.26the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65, 37.27or normal retirement age, as selected by the member at retirement, for an annuity amount 37.28payable under section 354.35. A postretirement adjustment granted on the period certain 37.29retirement annuity must terminate when the period certain retirement annuity terminates.37.30    Subd. 2.Covered retirement plans.The provisions of this section apply to the 37.31following retirement plans:37.32(1) the legislators retirement plan established under chapter 3A;37.33(2) the correctional state employees retirement plan of the Minnesota State 37.34Retirement System established under chapter 352;38.1(3) the general state employees retirement plan of the Minnesota State Retirement 38.2System established under chapter 352;38.3(4) the State Patrol retirement plan established under chapter 352B;38.4(5) the elective state officers retirement plan established under chapter 352C;38.5(6) the general employees retirement plan of the Public Employees Retirement 38.6Association established under chapter 353;38.7(7) the public employees police and fire retirement plan of the Public Employees 38.8Retirement Association established under chapter 353;38.9(8) the local government correctional employees retirement plan of the Public 38.10Employees Retirement Association established under chapter 353E;38.11(9) the teachers retirement plan established under chapter 354; and38.12(10) the judges retirement plan established under chapter 490.38.13    Sec. 74. Minnesota Statutes 2008, section 490.123, subdivision 1, is amended to read:38.14    Subdivision 1. Fund creation; revenue and authorized disbursements. (a) There 38.15is created a special fund to be known as the "judges' retirement fund."38.16    (b) The judges' retirement fund must be credited with all contributions; all interest, 38.17dividends, and other investment proceeds; and all other income authorized by this chapter 38.18or other applicable law.38.19    (c) From this fund there are appropriated the payments authorized by this chapter, in 38.20the amounts and at the times provided, including the necessary and reasonable expenses of 38.21the Minnesota State Retirement System in administering the fund and the transfers to the 38.22Minnesota postretirement investment fund.38.23    Sec. 75. Minnesota Statutes 2008, section 490.123, subdivision 3, is amended to read:38.24    Subd. 3. Investment. (a) The executive director of the Minnesota State Retirement 38.25System shall, from time to time, certify to the State Board of Investment such portions 38.26of the judges' retirement fund as in the director's judgment may not be required for 38.27immediate use.38.28    (b) Assets from the judges' retirement fund must be transferred to the Minnesota 38.29postretirement investment fund for retirement and disability benefits as provided in 38.30sections 11A.18 and 352.119.38.31    (c)(b) The State Board of Investment shall thereupon invest and reinvest sums so 38.32transferred, or certified, in such securities as are duly authorized legal investments for such 38.33purposes under section 
         11A.24 in compliance with sections 
         356A.04 and 
         356A.06.39.1    Sec. 76. Minnesota Statutes 2008, section 490.124, is amended by adding a subdivision 39.2to read:39.3    Subd. 14.Postretirement adjustment eligibility.A retirement annuity under 39.4subdivision 1, 3, or 5, a disability benefit under subdivision 4, and a survivor's annuity 39.5under subdivision 9 or 11 are eligible for postretirement adjustments under section 39.6356.415.39.7    Sec. 77.  REPEALER.39.8Minnesota Statutes 2008, sections 11A.041; 11A.18; 11A.181; 352.119, subdivisions 39.92, 3, and 4; 352B.26, subdivisions 1 and 3; 353.271; 353A.02, subdivision 20; 353A.09, 39.10subdivisions 2 and 3; 354.05, subdivision 26; 354.55, subdivision 14; 354.63; 356.41; 39.11356.431, subdivision 2; 422A.01, subdivision 13; 422A.06, subdivision 4; and 490.123, 39.12subdivisions 1c and 1e, are repealed.39.13    Sec. 78. EFFECTIVE DATE.39.14Sections 1 to 77 are effective July 1, 2009.39.15ARTICLE 239.16DISABILITY BENEFIT PROVISION CHANGES39.17    Section 1. Minnesota Statutes 2008, section 43A.34, subdivision 4, is amended to read:39.18    Subd. 4. Officers exempted. Notwithstanding any provision to the contrary, (a) 39.19conservation officers and crime bureau officers who were first employed on or after July 39.201, 1973, and who are members of the State Patrol retirement fund by reason of their 39.21employment, and members of the Minnesota State Patrol Division and Alcohol and 39.22Gambling Enforcement Division of the Department of Public Safety who are members 39.23of the State Patrol Retirement Association by reason of their employment, shall may not 39.24continue employment after attaining the age of 60 years, except for a fractional portion 39.25of one year that will enable the employee to complete the employee's next full year of 39.26allowable service as defined pursuant to section 
         352B.01 352B.011, subdivision 3; and (b) 39.27conservation officers and crime bureau officers who were first employed and are members 39.28of the State Patrol retirement fund by reason of their employment before July 1, 1973, 39.29shall may not continue employment after attaining the age of 70 years.  39.30EFFECTIVE DATE.This section is effective July 1, 2009.39.31    Sec. 2. Minnesota Statutes 2008, section 299A.465, subdivision 1, is amended to read:40.1    Subdivision 1. Officer or firefighter disabled in line of duty. (a) This subdivision 40.2applies to any peace officer or firefighter:40.3    (1) who the Public Employees Retirement Association or the Minnesota State 40.4Retirement System determines is eligible to receive a duty disability benefit pursuant to 40.5section 
         353.656 or 352B.10, subdivision 1, respectively; or40.6    (2) who (i) does not qualify to receive disability benefits by operation of the 40.7eligibility requirements set forth in section 
         353.656, subdivision 1, paragraph (b), (ii) 40.8retires pursuant to section 
         353.651, subdivision 4, or (iii) is a member of a local police or 40.9salaried firefighters relief association and qualifies for a duty disability benefit under the 40.10terms of plans of the relief associations, and the peace officer or firefighter described in 40.11item (i), (ii), or (iii) has discontinued public service as a peace officer or firefighter as a 40.12result of a disabling injury and has been determined, by the Public Employees Retirement 40.13Association, to have otherwise met the duty disability criteria set forth in section 
         353.01, 40.14subdivision 41.40.15    (b) A determination made on behalf of a peace officer or firefighter described in 40.16paragraph (a), clause (2), must be at the request of the peace officer or firefighter made for 40.17the purposes of this section. Determinations made in accordance with paragraph (a) are 40.18binding on the peace officer or firefighter, employer, and state. The determination must 40.19be made by the executive director of the Public Employees Retirement Association or 40.20by the executive director of the Minnesota State Retirement System, whichever applies,40.21and is not subject to section 
         356.96, subdivision 2. Upon making a determination, the 40.22executive director shall provide written notice to the peace officer or firefighter and the 40.23employer. This notice must include:40.24    (1) a written statement of the reasons for the determination;40.25    (2) a notice that the person may petition for a review of the determination by 40.26requesting that a contested case be initiated before the Office of Administrative Hearings, 40.27the cost of which must be borne by the peace officer or firefighter and the employer; and40.28    (3) a statement that any person who does not petition for a review within 60 days 40.29is precluded from contesting issues determined by the executive director in any other 40.30administrative review or court procedure.40.31If, prior to the contested case hearing, additional information is provided to support the 40.32claim for duty disability as defined in section 
         353.01, subdivision 41, or 352B.011, 40.33subdivision 7, whichever applies, the executive director may reverse the determination 40.34without the requested hearing. If a hearing is held before the Office of Administrative 40.35Hearings, the determination rendered by the judge conducting the fact-finding hearing 40.36is a final decision and order under section 
         14.62, subdivision 2a, and is binding on the 41.1applicable executive director, the peace officer or firefighter, employer, and state. Review 41.2of a final determination made by the Office of Administrative Hearings under this section 41.3may only be obtained by writ of certiorari to the Minnesota Court of Appeals under 41.4sections 
         14.63 to 
         14.68. Only the peace officer or firefighter, employer, and state have 41.5standing to participate in a judicial review of the decision of the Office of Administrative 41.6Hearings.41.7    (c) The officer's or firefighter's employer shall continue to provide health coverage 41.8for:41.9    (1) the officer or firefighter; and41.10    (2) the officer's or firefighter's dependents if the officer or firefighter was receiving 41.11dependent coverage at the time of the injury under the employer's group health plan.41.12    (d) The employer is responsible for the continued payment of the employer's 41.13contribution for coverage of the officer or firefighter and, if applicable, the officer's 41.14or firefighter's dependents. Coverage must continue for the officer or firefighter and, if 41.15applicable, the officer's or firefighter's dependents until the officer or firefighter reaches or, 41.16if deceased, would have reached the age of 65. However, coverage for dependents does 41.17not have to be continued after the person is no longer a dependent.41.18EFFECTIVE DATE.This section is effective the day following final enactment 41.19and also applies to any member of the State Patrol retirement plan who was awarded a 41.20duty disability benefit on or after July 1, 2008.41.21    Sec. 3. Minnesota Statutes 2008, section 352.01, subdivision 2b, is amended to read:41.22    Subd. 2b.  Excluded employees. "State employee" does not include: 41.23    (1) students employed by the University of Minnesota, or the state colleges and 41.24universities, unless approved for coverage by the Board of Regents of the University of 41.25Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities, 41.26whichever is applicable; 41.27    (2) employees who are eligible for membership in the state Teachers Retirement 41.28Association, except employees of the Department of Education who have chosen or may 41.29choose to be covered by the general state employees retirement plan of the Minnesota 41.30State Retirement System instead of the Teachers Retirement Association; 41.31    (3) employees of the University of Minnesota who are excluded from coverage by 41.32action of the Board of Regents; 41.33    (4) officers and enlisted personnel in the National Guard and the naval militia who 41.34are assigned to permanent peacetime duty and who under federal law are or are required to 41.35be members of a federal retirement system; 42.1    (5) election officers; 42.2    (6) persons who are engaged in public work for the state but who are employed 42.3by contractors when the performance of the contract is authorized by the legislature or 42.4other competent authority; 42.5    (7) officers and employees of the senate, or of the house of representatives, or of a 42.6legislative committee or commission who are temporarily employed; 42.7    (8) receivers, jurors, notaries public, and court employees who are not in the judicial 42.8branch as defined in section 
         43A.02, subdivision 25, except referees and adjusters 42.9employed by the Department of Labor and Industry; 42.10    (9) patient and inmate help in state charitable, penal, and correctional institutions 42.11including the Minnesota Veterans Home; 42.12    (10) persons who are employed for professional services where the service is 42.13incidental to their regular professional duties and whose compensation is paid on a per 42.14diem basis; 42.15    (11) employees of the Sibley House Association; 42.16    (12) the members of any state board or commission who serve the state intermittently 42.17and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those 42.18boards if their compensation is $5,000 or less per year, or, if they are legally prohibited 42.19from serving more than three years; and the board of managers of the State Agricultural 42.20Society and its treasurer unless the treasurer is also its full-time secretary; 42.21    (13) state troopers and persons who are described in section 
         352B.01, subdivision 242.22352B.011, subdivision 10, clauses (2) to (6)(8); 42.23    (14) temporary employees of the Minnesota State Fair who are employed on or 42.24after July 1 for a period not to extend beyond October 15 of that year; and persons who 42.25are employed at any time by the state fair administration for special events held on the 42.26fairgrounds; 42.27    (15) emergency employees who are in the classified service; except that if an 42.28emergency employee, within the same pay period, becomes a provisional or probationary 42.29employee on other than a temporary basis, the employee shall must be considered a "state 42.30employee" retroactively to the beginning of the pay period; 42.31    (16) temporary employees in the classified service, and temporary employees in the 42.32unclassified service who are appointed for a definite period of not more than six months 42.33and who are employed less than six months in any one-year period; 42.34    (17) interns hired for six months or less and trainee employees, except those listed in 42.35subdivision 2a, clause (8); 43.1    (18) persons whose compensation is paid on a fee basis or as an independent 43.2contractor; 43.3    (19) state employees who are employed by the Board of Trustees of the Minnesota 43.4State Colleges and Universities in unclassified positions enumerated in section 
         43A.08, 43.5subdivision 1
         , clause (9); 43.6    (20) state employees who in any year have credit for 12 months service as teachers 43.7in the public schools of the state and as teachers are members of the Teachers Retirement 43.8Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for 43.9incidental employment as a state employee that is not covered by one of the teacher 43.10retirement associations or systems; 43.11    (21) employees of the adjutant general who are employed on an unlimited 43.12intermittent or temporary basis in the classified or unclassified service for the support of 43.13Army and Air National Guard training facilities; 43.14    (22) chaplains and nuns who are excluded from coverage under the federal Old 43.15Age, Survivors, Disability, and Health Insurance Program for the performance of service 43.16as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no 43.17irrevocable election of coverage has been made under section 3121(r) of the Internal 43.18Revenue Code of 1986, as amended through December 31, 1992; 43.19    (23) examination monitors who are employed by departments, agencies, 43.20commissions, and boards to conduct examinations required by law; 43.21    (24) persons who are appointed to serve as members of fact-finding commissions or 43.22adjustment panels, arbitrators, or labor referees under chapter 179; 43.23    (25) temporary employees who are employed for limited periods under any state or 43.24federal program for training or rehabilitation, including persons who are employed for 43.25limited periods from areas of economic distress, but not including skilled and supervisory 43.26personnel and persons having civil service status covered by the system; 43.27    (26) full-time students who are employed by the Minnesota Historical Society 43.28intermittently during part of the year and full-time during the summer months; 43.29    (27) temporary employees who are appointed for not more than six months, of 43.30the Metropolitan Council and of any of its statutory boards, if the board members are 43.31appointed by the Metropolitan Council; 43.32    (28) persons who are employed in positions designated by the Department of 43.33Finance as student workers; 43.34    (29) members of trades who are employed by the successor to the Metropolitan 43.35Waste Control Commission, who have trade union pension plan coverage under a 43.36collective bargaining agreement, and who are first employed after June 1, 1977; 44.1    (30) off-duty peace officers while employed by the Metropolitan Council; 44.2    (31) persons who are employed as full-time police officers by the Metropolitan 44.3Council and as police officers are members of the public employees police and fire fund; 44.4    (32) persons who are employed as full-time firefighters by the Department of Military 44.5Affairs and as firefighters are members of the public employees police and fire fund; 44.6    (33) foreign citizens with a work permit of less than three years, or an H-1b/JV visa 44.7valid for less than three years of employment, unless notice of extension is supplied which 44.8allows them to work for three or more years as of the date the extension is granted, in 44.9which case they are eligible for coverage from the date extended; and 44.10    (34) persons who are employed by the Board of Trustees of the Minnesota State 44.11Colleges and Universities and who elected to remain members of the Public Employees 44.12Retirement Association or the Minneapolis Employees Retirement Fund, whichever 44.13applies, under Minnesota Statutes 1994, section 
         136C.75. 44.14EFFECTIVE DATE.This section is effective July 1, 2009.44.15    Sec. 4. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 44.16to read:44.17    Subd. 17a.Occupational disability."Occupational disability," for purposes of 44.18determining eligibility for disability benefits for a correctional employee, means a 44.19disabling condition that is expected to prevent the correctional employee, for a period of 44.20not less than 12 months, from performing the normal duties of the position held by the 44.21correctional employee.44.22EFFECTIVE DATE.This section is effective July 1, 2009.44.23    Sec. 5. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 44.24to read:44.25    Subd. 17b.Duty disability, physical or psychological."Duty disability, physical 44.26or psychological," for a correctional employee, means an occupational disability that is the 44.27direct result of an injury incurred during, or a disease arising out of, the performance of 44.28normal duties or the performance of less frequent duties either of which are specific to 44.29the correctional employee.44.30EFFECTIVE DATE.This section is effective July 1, 2009.44.31    Sec. 6. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 44.32to read:45.1    Subd. 17c.Regular disability, physical or psychological."Regular disability, 45.2physical or psychological," for a correctional employee, means an occupational disability 45.3resulting from a disease or an injury that arises from any activities while not at work or 45.4from activities while at work performing normal or less frequent duties that do not present 45.5inherent dangers specific to covered correctional positions.45.6EFFECTIVE DATE.This section is effective July 1, 2009.45.7    Sec. 7. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 45.8to read:45.9    Subd. 17d.Normal duties."Normal duties" means specific tasks designated in the 45.10applicant's job description and which the applicant performs on a day-to-day basis, but 45.11do not include less frequent duties which may be requested to be done by the employer 45.12from time to time.45.13EFFECTIVE DATE.This section is effective July 1, 2009.45.14    Sec. 8. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision 45.15to read:45.16    Subd. 17e.Less frequent duties."Less frequent duties" means tasks designated 45.17in the applicant's job description as either required from time to time or as assigned, but 45.18which are not carried out as part of the normal routine of the applicant's job.45.19EFFECTIVE DATE.This section is effective July 1, 2009.45.20    Sec. 9. Minnesota Statutes 2008, section 352.113, subdivision 4, is amended to read:45.21    Subd. 4. Medical or psychological examinations; authorization for payment of 45.22benefit. (a) An applicant shall provide medical, chiropractic, or psychological evidence to 45.23support an application for total and permanent disability.45.24(b) The director shall have the employee examined by at least one additional 45.25licensed chiropractor, physician, or psychologist designated by the medical adviser. The 45.26chiropractors, physicians, or psychologists shall make written reports to the director 45.27concerning the employee's disability including expert opinions as to whether the employee 45.28is permanently and totally disabled within the meaning of section 
         352.01, subdivision 17. 45.29(c) The director shall also obtain written certification from the employer stating 45.30whether the employment has ceased or whether the employee is on sick leave of 45.31absence because of a disability that will prevent further service to the employer and as a 45.32consequence the employee is not entitled to compensation from the employer.46.1(d) The medical adviser shall consider the reports of the physicians, psychologists, 46.2and chiropractors and any other evidence supplied by the employee or other interested 46.3parties. If the medical adviser finds the employee totally and permanently disabled, the 46.4adviser shall make appropriate recommendation to the director in writing together with the 46.5date from which the employee has been totally disabled. The director shall then determine 46.6if the disability occurred within 180 days 18 months of filing the application, while still 46.7in the employment of the state, and the propriety of authorizing payment of a disability 46.8benefit as provided in this section.46.9(e) A terminated employee may apply for a disability benefit within 180 days 18 46.10months of termination as long as the disability occurred while in the employment of the 46.11state. The fact that an employee is placed on leave of absence without compensation 46.12because of disability does not bar that employee from receiving a disability benefit.46.13(f) Unless the payment of a disability benefit has terminated because the employee is 46.14no longer totally disabled, or because the employee has reached normal retirement age as 46.15provided in this section, the disability benefit must cease with the last payment received 46.16by the disabled employee or which had accrued during the lifetime of the employee unless 46.17there is a spouse surviving. In that event, the surviving spouse is entitled to the disability 46.18benefit for the calendar month in which the disabled employee died.46.19EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability 46.20benefit applicants whose last day of public employment was after June 30, 2009.46.21    Sec. 10. Minnesota Statutes 2008, section 352.95, subdivision 1, is amended to read:46.22    Subdivision 1. Job-related disability Duty disability; computation of benefit.46.23A covered correctional employee who becomes disabled and who is expected to be 46.24physically or mentally unfit to perform the duties of the position for at least one year as a 46.25direct result of an injury, sickness, or other disability that incurred in or arose out of any 46.26act of duty that makes the employee physically or mentally unable to perform the duties is 46.27determined to have a duty disability, physical or psychological, as defined under section 46.28352.01, subdivision 17b, is entitled to a duty disability benefit. The duty disability benefit 46.29may must be based on covered correctional service only. The duty disability benefit 46.30amount is 50 percent of the average salary defined in section 
         352.93, plus an additional 46.31percent equal to that specified in section 
         356.315, subdivision 5, for each year of covered 46.32correctional service in excess of 20 years, ten months, prorated for completed months.46.33EFFECTIVE DATE.This section is effective July 1, 2009.47.1    Sec. 11. Minnesota Statutes 2008, section 352.95, subdivision 2, is amended to read:47.2    Subd. 2. Non-job-related Regular disability; computation of benefit. A covered 47.3correctional employee who was hired before July 1, 2009, after rendering at least one year 47.4of covered correctional service, or a covered correctional employee who was first hired 47.5after June 30, 2009, after rendering at least three years of covered correctional plan service, 47.6becomes disabled and who is expected to be physically or mentally unfit to perform the 47.7duties of the position for at least one year because of sickness or injury that occurred while 47.8not engaged in covered employment and who is determined to have a regular disability, 47.9physical or psychological, as defined under section 352.01, subdivision 17c, is entitled 47.10to a regular disability benefit. The regular disability benefit must be  based on covered 47.11correctional service only. The regular disability benefit must be computed as provided 47.12in section 
         352.93, subdivisions 1 and 2, and. The regular disability benefit of a covered 47.13correctional employee who was first hired before July 1, 2009, and who is determined 47.14to have a regular disability, physical or psychological, under this subdivision must be 47.15computed as though the employee had at least 15 years of covered correctional service.47.16EFFECTIVE DATE.This section is effective July 1, 2009.47.17    Sec. 12. Minnesota Statutes 2008, section 352.95, subdivision 3, is amended to read:47.18    Subd. 3. Applying for benefits; accrual. No application for disability benefits 47.19shall may be made until after the last day physically on the job. The disability benefit 47.20shall begin begins to accrue the day following the last day for which the employee is paid 47.21sick leave or annual leave, but not earlier than 180 days before the date the application 47.22is filed. A terminated employee must file a written application within the time frame 47.23specified under section 352.113, subdivision 4, paragraph (e).47.24EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability 47.25benefit applicants whose last day of public employment was after June 30, 2009.47.26    Sec. 13. Minnesota Statutes 2008, section 352.95, subdivision 4, is amended to read:47.27    Subd. 4. Medical or psychological evidence. (a) An applicant shall provide 47.28medical, chiropractic, or psychological evidence to support an application for disability 47.29benefits. The director shall have the employee examined by at least one additional 47.30licensed physician, chiropractor, or psychologist who is designated by the medical adviser. 47.31The physicians, chiropractors, or psychologists with respect to a mental impairment, 47.32shall make written reports to the director concerning the question of the employee's 47.33disability, including their expert opinions as to whether the employee is disabledhas an 48.1occupational disability within the meaning of this section 352.01, subdivision 17a, and 48.2whether the employee has a duty disability, physical or psychological, under section 48.3352.01, subdivision 17b, or has a regular disability, physical or psychological, under 48.4section 352.01, subdivision 17c. The director shall also obtain written certification from 48.5the employer stating whether or not the employee is on sick leave of absence because of a 48.6disability that will prevent further service to the employer performing normal duties as 48.7defined in section 352.01, subdivision 17d, or performing less frequent duties as defined in 48.8section 352.01, subdivision 17e, and as a consequence, the employee is not entitled to 48.9compensation from the employer.48.10(b) If, on considering the reports by the physicians, chiropractors, or psychologists 48.11and any other evidence supplied by the employee or others, the medical adviser finds that 48.12the employee disabledhas an occupational disability within the meaning of this section48.13352.01, subdivision 17a, the advisor shall make the appropriate recommendation to the 48.14director, in writing, together with the date from which the employee has been disabled. 48.15The director shall then determine the propriety of authorizing payment of a duty disability 48.16benefit or a regular disability benefit as provided in this section.48.17(c) Unless the payment of a disability benefit has terminated because the employee 48.18is no longer disabled has an occupational disability, or because the employee has reached 48.19either age 6555 or the five-year anniversary of the effective date of the disability benefit, 48.20whichever is later, the disability benefit must cease with the last payment which was 48.21received by the disabled employee or which had accrued during the employee's lifetime. 48.22While disability benefits are paid, the director has the right, at reasonable times, to 48.23require the disabled employee to submit proof of the continuance of thean occupational 48.24disability claimed. If any examination indicates to the medical adviser that the employee 48.25is no longer disabled has an occupational disability, the disability payment must be 48.26discontinued upon the person's reinstatement to state service or within 60 days of the 48.27finding, whichever is sooner.48.28EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability 48.29benefit applicants whose last day of public employment was after June 30, 2009.48.30    Sec. 14. Minnesota Statutes 2008, section 352.95, subdivision 5, is amended to read:48.31    Subd. 5. Retirement status at normal retirement age. The disability benefit paid 48.32to a disabled correctional employee under this section shall terminate terminates at the end 48.33of the month in which the employee reaches age 65 55, or the five-year anniversary of 48.34the effective date of the disability benefit, whichever is later. If the disabled correctional 48.35employee is still disabled when the employee reaches age 65 55, or the five-year 49.1anniversary of the effective date of the disability benefit, whichever is later, the employee 49.2shall must be deemed to be a retired employee. If the employee had elected an optional 49.3annuity under subdivision 1a, the employee shall receive an annuity in accordance with 49.4the terms of the optional annuity previously elected. If the employee had not elected an 49.5optional annuity under subdivision 1a, the employee may within 90 days of attaining age 49.665 55 or reaching the five-year anniversary of the effective date of the disability benefit, 49.7whichever is later, either elect to receive a normal retirement annuity computed in the 49.8manner provided in section 
         352.93 or elect to receive an optional annuity as provided 49.9in section 
         352.116, subdivision 3, based on the same length of service as used in the 49.10calculation of the disability benefit. Election of an optional annuity must be made within 49.1190 days before attaining age 65 55 or reaching the five-year anniversary of the effective 49.12date of the disability benefit, whichever is later. If an optional annuity is elected, the 49.13optional annuity shall begin begins to accrue on the first of the month following the month 49.14in which the employee reaches age 65 55 or the five-year anniversary of the effective date 49.15of the disability benefit, whichever is later. 49.16EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability 49.17benefit applicants whose last day of public employment was after June 30, 2009.49.18    Sec. 15. [352B.011] DEFINITIONS.49.19    Subdivision 1.Scope.For the purposes of this chapter, the terms defined in this 49.20section have the meanings given them.49.21    Subd. 2.Accumulated deductions."Accumulated deductions" means the total 49.22sums deducted from the salary of a member and the total amount of assessments paid by 49.23a member in place of deductions and credited to the member's individual account as 49.24permitted by law without interest.49.25    Subd. 3.Allowable service.(a) "Allowable service" means:49.26(1) service in a month during which a member is paid a salary from which a member 49.27contribution is deducted, deposited, and credited in the State Patrol retirement fund;49.28(2) for members defined in subdivision 10, clause (1), service in any month for 49.29which payments have been made to the State Patrol retirement fund under law; and49.30(3) for members defined in subdivision 10, clauses (2) and (3), service for which 49.31payments have been made to the State Patrol retirement fund under law, service for which 49.32payments were made to the State Police officers retirement fund under law after June 49.3330, 1961, and all prior service which was credited to a member for service on or before 49.34June 30, 1961.50.1(b) Allowable service also includes any period of absence from duty by a member 50.2who, by reason of injury incurred in the performance of duty, is temporarily disabled and 50.3for which disability the state is liable under the workers' compensation law, until the date 50.4authorized by the executive director for commencement of payment of a disability benefit 50.5or until the date of a return to employment.50.6    Subd. 4.Average monthly salary.(a) Subject to the limitations of section 356.611, 50.7"average monthly salary" means the average of the highest monthly salaries for five 50.8years of service as a member upon which contributions were deducted from pay under 50.9section 352B.02, or upon which appropriate contributions or payments were made to 50.10the fund to receive allowable service and salary credit as specified under the applicable 50.11law. Average monthly salary must be based upon all allowable service if this service is 50.12less than five years.50.13(b) The salary used for the calculation of "average monthly salary" means the 50.14salary of the member as defined in section 352.01, subdivision 13. The salary used for 50.15the calculation of "average monthly salary" does not include any lump-sum annual leave 50.16payments and overtime payments made at the time of separation from state service, any 50.17amounts of severance pay, or any reduced salary paid during the period the person is 50.18entitled to workers' compensation benefit payments for temporary disability.50.19    Subd. 5.Department head."Department head" means the head of any department, 50.20institution, or branch of the state service that directly pays salaries from state funds 50.21to a member who prepares, approves, and submits salary abstracts of employees to the 50.22commissioner of Minnesota Management and Budget.50.23    Subd. 6.Dependent child."Dependent child" means a natural or adopted unmarried 50.24child of a deceased member under the age of 18 years, including any child of the member 50.25conceived during the lifetime of the member and born after the death of the member.50.26    Subd. 7.Duty disability."Duty disability" means a physical or psychological 50.27condition that is expected to prevent a member, for a period of not less than 12 months, 50.28from performing the normal duties of the position held by the person as a member of the 50.29State Patrol retirement fund, and that is the direct result of any injury incurred during, or a 50.30disease arising out of, the performance of normal duties or the actual performance of less 50.31frequent duties, either of which are specific to protecting the property and personal safety 50.32of others and that present inherent dangers that are specific to the positions covered by 50.33the State Patrol retirement fund.50.34    Subd. 8Fund."Fund" means the State Patrol retirement fund.50.35    Subd. 9.Less frequent duties."Less frequent duties" means tasks which are 50.36designated in the member's job description as either required from time to time or as 51.1assigned, but which are not carried out as part of the normal routine of the member's 51.2position.51.3    Subd. 10.Member."Member" means:51.4(1) a State Patrol member currently employed under section 299D.03 by the state, 51.5who is a peace officer under section 626.84, and whose salary or compensation is paid 51.6out of state funds;51.7(2) a conservation officer employed under section 97A.201, currently employed by 51.8the state, whose salary or compensation is paid out of state funds;51.9(3) a crime bureau officer who was employed by the crime bureau and was a member 51.10of the Highway Patrolmen's retirement fund on July 1, 1978, whether or not that person 51.11has the power of arrest by warrant after that date, or who is employed as police personnel, 51.12with powers of arrest by warrant under section 299C.04, and who is currently employed 51.13by the state, and whose salary or compensation is paid out of state funds;51.14(4) a person who is employed by the state in the Department of Public Safety in a 51.15data processing management position with salary or compensation paid from state funds, 51.16who was a crime bureau officer covered by the State Patrol retirement plan on August 51.1715, 1987, and who was initially hired in the data processing management position within 51.18the department during September 1987, or January 1988, with membership continuing 51.19for the duration of the person's employment in that position, whether or not the person 51.20has the power of arrest by warrant after August 15, 1987;51.21(5) a public safety employee who is a peace officer under section 626.84, subdivision 51.221, paragraph (c), and who is employed by the Division of Alcohol and Gambling 51.23Enforcement under section 299L.01;51.24(6) a Fugitive Apprehension Unit officer after October 31, 2000, who is employed 51.25by the Office of Special Investigations of the Department of Corrections and who is a 51.26peace officer under section 626.84;51.27(7) an employee of the Department of Commerce defined as a peace officer in section 51.28626.84, subdivision 1, paragraph (c), who is employed by the Division of Insurance Fraud 51.29Prevention under section 45.0135 after January 1, 2005, and who has not attained the 51.30mandatory retirement age specified in section 43A.34, subdivision 4; and51.31(8) an employee of the Department of Public Safety, who is a licensed peace officer 51.32under section 626.84, subdivision 1, paragraph (c), and is employed as the statewide 51.33coordinator of the Gang and Drug Oversight Council.51.34    Subd. 11.Normal duties."Normal duties" means specific tasks which are 51.35designated in the member's job description and which the applicant performs on a 52.1day-to-day basis, but do not include less frequent duties which may be requested to be 52.2done by the employer from time to time.52.3    Subd. 12.Regular disability."Regular disability" means a physical or 52.4psychological condition that is expected to prevent a member, for a period of not less than 52.512 months, from performing the normal duties of the position held by a person who is a 52.6member of the State Patrol retirement plan, and which results from a disease or an injury 52.7that arises from any activities while not at work, or while at work and performing those 52.8normal or less frequent duties that do not present inherent dangers that are specific to the 52.9occupations covered by the State Patrol retirement plan.52.10    Subd. 13.Surviving spouse."Surviving spouse" means a member's or former 52.11member's legally married spouse who resided with the member or former member at the 52.12time of death and was married to the member or former member, for a period of at least 52.13one year, during or before the time of membership.52.14EFFECTIVE DATE.(a) Except as provided in paragraph (b), this section is 52.15effective July 1, 2009.52.16(b) Subdivision 3, paragraph (a), clause (1), is effective retroactively from July 52.171, 1969, and allowable service on the records of the State Patrol retirement plan credit 52.18consistent with that provision is validated.52.19    Sec. 16. Minnesota Statutes 2008, section 352B.02, subdivision 1, is amended to read:52.20    Subdivision 1. Fund created; membership. A State Patrol retirement fund is 52.21established. Its membership consists of all persons defined in section 
         352B.01, subdivision 52.222 352B.011, subdivision 10. 52.23EFFECTIVE DATE.This section is effective July 1, 2009.52.24    Sec. 17. [352B.085] SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES 52.25OF ABSENCE.52.26A member on leave of absence receiving temporary workers' compensation 52.27payments and a reduced salary or no salary from the employer who is entitled to allowable 52.28service credit for the period of absence under section 352B.011, subdivision 3, paragraph 52.29(b), may make payment to the fund for the difference between salary received, if any, 52.30and the salary that the member would normally receive if the member was not on leave 52.31of absence during the period. The member shall pay an amount equal to the member 52.32and employer contribution rate under section 352B.02, subdivisions 1b and 1c, on 52.33the differential salary amount for the period of the leave of absence. The employing 53.1department, at its option, may pay the employer amount on behalf of the member. Payment 53.2made under this subdivision must include interest at the rate of 8.5 percent per year, and 53.3must be completed within one year of the member's return from the leave of absence.53.4EFFECTIVE DATE.This section is effective July 1, 2009.53.5    Sec. 18. [352B.086] SERVICE CREDIT FOR UNIFORMED SERVICE.53.6(a) A member who is absent from employment by reason of service in the uniformed 53.7services, as defined in United States Code, title 38, section 4303(13), and who returns to 53.8state employment in a position covered by the plan upon discharge from service in the 53.9uniformed services within the time frame required in United States Code, title 38, section 53.104312(e), may obtain service credit for the period of the uniformed service, provided that 53.11the member did not separate from uniformed service with a dishonorable or bad conduct 53.12discharge or under other than honorable conditions.53.13(b) The member may obtain credit by paying into the fund an equivalent member 53.14contribution based on the member contribution rate or rates in effect at the time that 53.15the uniformed service was performed multiplied by the full and fractional years being 53.16purchased and applied to the annual salary rate. The annual salary rate is the average 53.17annual salary during the purchase period that the member would have received if the 53.18member had continued to provide employment services to the state rather than to provide 53.19uniformed service, or if the determination of that rate is not reasonably certain, the annual 53.20salary rate is the member's average salary rate during the 12-month period of covered 53.21employment rendered immediately preceding the purchase period.53.22(c) The equivalent employer contribution and, if applicable, the equivalent employer 53.23additional contribution, must be paid by the employing unit, using the employer and 53.24employer additional contribution rate or rates in effect at the time that the uniformed 53.25service was performed, applied to the same annual salary rate or rates used to compute the 53.26equivalent member contribution.53.27(d) If the member equivalent contributions provided for in this subdivision are not 53.28paid in full, the member's allowable service credit must be prorated by multiplying the 53.29full and fractional number of years of uniformed service eligible for purchase by the 53.30ratio obtained by dividing the total member contributions received by the total member 53.31contributions otherwise required under this subdivision.53.32(e) To receive allowable service credit under this subdivision, the contributions 53.33specified in this section must be transmitted to the fund during the period which begins 53.34with the date on which the individual returns to state employment covered by the plan and 53.35which has a duration of three times the length of the uniformed service period, but not 54.1to exceed five years. If the determined payment period is calculated to be less than one 54.2year, the contributions required under this subdivision to receive service credit must be 54.3transmitted to the fund within one year from the discharge date.54.4(f) The amount of allowable service credit obtainable under this section may not 54.5exceed five years, unless a longer purchase period is required under United States Code, 54.6title 38, section 4312.54.7(g) The employing unit shall pay interest on all equivalent member and employer 54.8contribution amounts payable under this section. Interest must be computed at a rate of 54.98.5 percent compounded annually from the end of each fiscal year of the leave or break in 54.10service to the end of the month in which payment is received.54.11EFFECTIVE DATE.This section is effective July 1, 2009.54.12    Sec. 19. Minnesota Statutes 2008, section 352B.10, subdivision 1, is amended to read:54.13    Subdivision 1. Injuries; payment amounts Duty disability. A member who 54.14becomes disabled and who is expected to be physically or mentally unfit to perform duties 54.15for at least one year as a direct result of an injury, sickness, or other disability that incurred 54.16in or arose out of any act of duty is determined to qualify for duty disability as defined in 54.17section 352B.011, subdivision 7, is entitled to receive a duty disability benefitsbenefit54.18while disabled. The benefits must be paid in monthly installments. The duty disability54.19benefit is an amount equal to the member's average monthly salary multiplied by 60 54.20percent, plus an additional percent equal to that specified in section 
         356.315, subdivision 54.216
         , for each year and pro rata for completed months of service in excess of 20 years, if any.  54.22EFFECTIVE DATE.This section is effective July 1, 2009.54.23    Sec. 20. Minnesota Statutes 2008, section 352B.10, subdivision 2, is amended to read:54.24    Subd. 2. Disabled while not on duty Regular disability benefit.If A member with 54.25at least one year of service becomes disabled and is expected to be physically or mentally 54.26unfit to perform the duties of the position for at least one year because of sickness or injury 54.27that occurred while not engaged in covered employment, the individual who qualifies for 54.28a regular disability benefit as defined in section 352B.011, subdivision 12, is entitled to 54.29a regular disability benefitsbenefit. The regular disability benefit must be computed as if 54.30the individual were 55 years old at the date of disability and as if the annuity was payable 54.31under section 
         352B.08. If a regular disability under this subdivision occurs after one year 54.32of service but before 15 years of service, the regular disability benefit must be computed 54.33as though the individual had credit for 15 years of service.  55.1EFFECTIVE DATE.This section is effective July 1, 2009.55.2    Sec. 21. Minnesota Statutes 2008, section 352B.10, is amended by adding a 55.3subdivision to read:55.4    Subd. 2a.Applying for benefits; accrual.No application for disability benefits 55.5shall be made until after the last day physically on the job. The disability benefit begins to 55.6accrue the day following the last day for which the employee is paid sick leave or annual 55.7leave but not earlier than 180 days before the date the application is filed. A member 55.8who is terminated must file a written application within the time frame specified under 55.9section 352.113, subdivision 4, paragraph (e).55.10EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability 55.11benefit applicants whose last day of public employment was after June 30, 2009.55.12    Sec. 22. Minnesota Statutes 2008, section 352B.10, subdivision 5, is amended to read:55.13    Subd. 5. Optional annuity. A disabilitant may elect, in lieu of spousal survivorship 55.14coverage under section 
         352B.11, subdivisions 2b and 2c, the normal disability benefit or 55.15an optional annuity as provided in section 
         352B.08, subdivision 3. The choice of an 55.16optional annuity must be made in writing, on a form prescribed by the executive director, 55.17and must be made before the commencement of the payment of the disability benefit, or 55.18within 90 days before reaching age 65 55 or before reaching the five-year anniversary 55.19of the effective date of the disability benefit, whichever is later. The optional annuity 55.20is effective on the date on which the disability benefit begins to accrue, or the month 55.21following the attainment of age 65 55 or following the five-year anniversary of the 55.22effective date of the disability benefit, whichever is later. 55.23EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability 55.24benefit applicants whose last day of public employment was after June 30, 2009.55.25    Sec. 23. Minnesota Statutes 2008, section 352B.11, subdivision 2, is amended to read:55.26    Subd. 2. Death; payment to dependent children; family maximums.(a) Each 55.27dependent child, as defined in section 
         352B.01, subdivision 10 352B.011, subdivision 6, is 55.28entitled to receive a monthly annuity equal to ten percent of the average monthly salary 55.29of the deceased member.55.30(b) A dependent child over 18 and under 23 years of age also may receive the 55.31monthly benefit provided in this section if the child is continuously attending an accredited 55.32school as a full-time student during the normal school year as determined by the director. 56.1If the child does not continuously attend school, but separates from full-time attendance 56.2during any part of a school year, the annuity must cease at the end of the month of 56.3separation.56.4(c) In addition, a payment of $20 per month must be prorated equally to the 56.5surviving dependent children when the former member is survived by more than one 56.6dependent child.56.7(d) Payments for the benefit of any dependent child must be made to the surviving 56.8spouse, or if there is none, to the legal guardian of the child.56.9(e) The monthly benefit for any one family, including a surviving spouse benefit, if 56.10applicable, must not be less than 50 percent nor exceed 70 percent of the average monthly 56.11salary of the deceased member.  56.12EFFECTIVE DATE.This section is effective July 1, 2009.56.13    Sec. 24.  REPEALER.56.14Minnesota Statutes 2008, section 352B.01, subdivisions 1, 2, 3, 3b, 4, 6, 7, 9, 10, 56.15and 11, are repealed.56.16EFFECTIVE DATE.This section is effective July 1, 2009.56.17ARTICLE 356.18STATE CORRECTIONAL RETIREMENT PLAN56.19MEMBERSHIP CHANGES56.20    Section 1. Minnesota Statutes 2008, section 352.91, subdivision 3d, is amended to read:56.21    Subd. 3d. Other correctional personnel. (a) "Covered correctional service" means 56.22service by a state employee in one of the employment positions at a correctional facility or 56.23at the Minnesota Security Hospital specified in paragraph (b) if at least 75 percent of the 56.24employee's working time is spent in direct contact with inmates or patients and the fact of 56.25this direct contact is certified to the executive director by the appropriate commissioner.56.26    (b) The employment positions are:56.27    (1) automotive mechanic;56.28(2) baker;56.29    (2)(3) central services administrative specialist, intermediate;56.30    (3)(4) central services administrative specialist, principal;56.31    (4)(5) chaplain;56.32    (5)(6) chief cook;56.33    (6)(7) cook;57.1    (7)(8) cook coordinator;57.2    (8)(9) corrections program therapist 1;57.3    (9)(10) corrections program therapist 2;57.4    (10)(11) corrections program therapist 3;57.5    (11)(12) corrections program therapist 4;57.6    (12)(13) corrections inmate program coordinator;57.7    (13)(14) corrections transitions program coordinator;57.8    (14)(15) corrections security caseworker;57.9    (15)(16) corrections security caseworker career;57.10    (16)(17) corrections teaching assistant;57.11    (17)(18) delivery van driver;57.12    (18)(19) dentist;57.13    (19)(20) electrician supervisor;57.14    (20)(21) general maintenance worker lead;57.15    (21)(22) general repair worker;57.16    (22)(23) library/information research services specialist;57.17    (23)(24) library/information research services specialist senior;57.18    (24)(25) library technician;57.19    (25)(26) painter lead;57.20    (26)(27) plant maintenance engineer lead;57.21    (27)(28) plumber supervisor;57.22    (28)(29) psychologist 1;57.23    (29)(30) psychologist 3;57.24    (30)(31) recreation therapist;57.25    (31)(32) recreation therapist coordinator;57.26    (32)(33) recreation program assistant;57.27    (33)(34) recreation therapist senior;57.28    (34)(35) sports medicine specialist;57.29    (35)(36) work therapy assistant;57.30    (36)(37) work therapy program coordinator; and57.31    (37)(38) work therapy technician.57.32EFFECTIVE DATE.This section is effective retroactively from May 29, 2007.57.33    Sec. 2. MSRS-CORRECTIONAL; ELIMINATION OF CERTAIN POSITION 57.34FROM COVERAGE.58.1Notwithstanding any provision of Minnesota Statutes, section 352.91, to the contrary, 58.2including Minnesota Statutes, section 352.91, subdivision 2, "covered correctional service" 58.3does not mean service rendered by a state employee as an automotive mechanic lead.58.4EFFECTIVE DATE.This section is effective the day following final enactment.58.5ARTICLE 458.6ADMINISTRATIVE PROVISIONS58.7    Section 1. Minnesota Statutes 2008, section 43A.346, subdivision 2, is amended to 58.8read:58.9    Subd. 2. Eligibility. (a) This section applies to a terminated state employee who:58.10    (1) for at least the five years immediately preceding separation under clause (2), 58.11was regularly scheduled to work 1,044 or more hours per year in a position covered by 58.12a pension plan administered by the Minnesota State Retirement System or the Public 58.13Employees Retirement Association;58.14    (2) terminated state or Metropolitan Council employment;58.15    (3) at the time of termination under clause (2), met the age and service requirements 58.16necessary to receive an unreduced retirement annuity from the plan and satisfied 58.17requirements for the commencement of the retirement annuity or, for a terminated 58.18employee under the unclassified employees retirement plan, met the age and service 58.19requirements necessary to receive an unreduced retirement annuity from the plan and 58.20satisfied requirements for the commencement of the retirement annuity or elected a 58.21lump-sum payment; and58.22    (4) agrees to accept a postretirement option position with the same or a different 58.23appointing authority, working a reduced schedule that is both (i) a reduction of at least 25 58.24percent from the employee's number of previously regularly scheduled work hours; and 58.25(ii) 1,044 hours or less in state or Metropolitan Council service.58.26    (b) For purposes of this section, an unreduced retirement annuity includes a 58.27retirement annuity computed under a provision of law which permits retirement, without 58.28application of an earlier retirement reduction factor, whenever age plus years of allowable 58.29service total at least 90.58.30    (c) For purposes of this section, as it applies to staffstate employees who are 58.31members of the Public Employees Retirement Association who are at least age 62, the 58.32length of separation requirement and termination of service requirement prohibiting return 58.33to work agreements under section 
         353.01, subdivisions 11a and 28, are not applicable.58.34EFFECTIVE DATE.This section is effective the day following final enactment.59.1    Sec. 2. Minnesota Statutes 2008, section 43A.346, subdivision 6, is amended to read:59.2    Subd. 6. Duration. Postretirement option employment shall be is for an initial 59.3period not to exceed one year. During that period, the appointing authority may not 59.4modify the conditions specified in the written offer without the person's consent, except as 59.5required by law or by the collective bargaining agreement or compensation plan applicable 59.6to the person. At the end of the initial period, the appointing authority has sole discretion 59.7to determine if the offer of a postretirement option position will be renewed, renewed 59.8with modifications, or terminated. If the person is under age 62, an offer of renewal 59.9and any related verbal offer or agreement must not be made until at least 30 days after 59.10termination of the person's previous postretirement option employment. Postretirement 59.11option employment may be renewed for periods of up to one year, not to exceed a total 59.12duration of five years. No person shall may be employed in one or a combination of 59.13postretirement option positions under this section for a total of more than five years.59.14EFFECTIVE DATE.This section is effective the day following final enactment.59.15    Sec. 3. Minnesota Statutes 2008, section 352B.02, subdivision 1a, is amended to read:59.16    Subd. 1a. Member contributions. (a) EachThe member shall pay a sum equal to 59.17the followingcontribution is 10.40 percent of the member's salary, which constitutes the 59.18member contribution to the fund:.

59.19before July 1, 20078.4059.20from July 1, 2007, to June 30, 20089.1059.21from July 1, 2008, to June 30, 20099.8059.22from July 1, 2009, and thereafter10.40.

59.23(b) These contributions must be made by deduction from salary as provided in 59.24section 
         352.04, subdivision 4.59.25EFFECTIVE DATE.This section is effective July 1, 2009.59.26    Sec. 4. Minnesota Statutes 2008, section 352B.02, subdivision 1c, is amended to read:59.27    Subd. 1c. Employer contributions. (a) In addition to member contributions, 59.28department heads shall pay a sum equal to the following15.60 percent of the salary upon 59.29which deductions were made, which shall constitute constitutes the employer contribution 59.30to the fund:.

59.31before July 1, 200712.6059.32from July 1, 2007, to June 30, 200813.6059.33from July 1, 2008, to June 30, 200914.6059.34from July 1, 2009, and thereafter15.60.

60.1(b) Department contributions must be paid out of money appropriated to departments 60.2for this purpose.60.3EFFECTIVE DATE.This section is effective July 1, 2009.60.4    Sec. 5. Minnesota Statutes 2008, section 353.01, subdivision 16, is amended to read:60.5    Subd. 16. Allowable service; limits and computation. (a) "Allowable service" 60.6means:60.7    (1) service during years of actual membership in the course of which employee 60.8deductions were withheld from salary and contributions were made, at the applicable rates 60.9under section 353.27, 353.65, or 353E.03;60.10(2) periods of service covered by payments in lieu of salary deductions under section60.11sections 353.27, subdivision 12, and353.35; 60.12    (2)(3) service in years during which the public employee was not a member but for 60.13which the member later elected, while a member, to obtain credit by making payments to 60.14the fund as permitted by any law then in effect;60.15    (3)(4) a period of authorized leave of absence with pay from which deductions for 60.16employee contributions are made, deposited, and credited to the fund;60.17    (4)(5) a period of authorized personal, parental, or medical leave of absence without 60.18pay, including a leave of absence covered under the federal Family Medical Leave Act, 60.19that does not exceed one year, and for which a member obtained service credit for each 60.20month in the leave period by payment under section 
         353.0161 to the fund made in place of 60.21salary deductions. An employee must return to public service and render a minimum of 60.22three months of allowable service in order to be eligible to make payment under section 60.23353.0161
          for a subsequent authorized leave of absence without pay. Upon payment, the 60.24employee must be granted allowable service credit for the purchased period; 60.25    (5)(6) a periodic, repetitive leave that is offered to all employees of a governmental 60.26subdivision. The leave program may not exceed 208 hours per annual normal work 60.27cycle as certified to the association by the employer. A participating member obtains 60.28service credit by making employee contributions in an amount or amounts based on the 60.29member's average salary that would have been paid if the leave had not been taken. The 60.30employer shall pay the employer and additional employer contributions on behalf of the 60.31participating member. The employee and the employer are responsible to pay interest on 60.32their respective shares at the rate of 8.5 percent a year, compounded annually, from the 60.33end of the normal cycle until full payment is made. An employer shall also make the 60.34employer and additional employer contributions, plus 8.5 percent interest, compounded 60.35annually, on behalf of an employee who makes employee contributions but terminates 61.1public service. The employee contributions must be made within one year after the end of 61.2the annual normal working cycle or within 2030 days after termination of public service, 61.3whichever is sooner. The executive director shall prescribe the manner and forms to be 61.4used by a governmental subdivision in administering a periodic, repetitive leave. Upon 61.5payment, the member must be granted allowable service credit for the purchased period;61.6    (6)(7) an authorized temporary or seasonal layoff under subdivision 12, limited 61.7to three months allowable service per authorized temporary or seasonal layoff in one 61.8calendar year. An employee who has received the maximum service credit allowed for an 61.9authorized temporary or seasonal layoff must return to public service and must obtain a 61.10minimum of three months of allowable service subsequent to the layoff in order to receive 61.11allowable service for a subsequent authorized temporary or seasonal layoff; or61.12    (7)(8) a period during which a member is absent from employment by a 61.13governmental subdivision by reason of service in the uniformed services, as defined in 61.14United States Code, title 38, section 4303(13), if the member returns to public service with 61.15the same governmental subdivision upon discharge from service in the uniformed service 61.16within the time frames required under United States Code, title 38, section 4312(e), 61.17provided that the member did not separate from uniformed service with a dishonorable or 61.18bad conduct discharge or under other than honorable conditions. The service is credited 61.19if the member pays into the fund equivalent employee contributions based upon the 61.20contribution rate or rates in effect at the time that the uniformed service was performed 61.21multiplied by the full and fractional years being purchased and applied to the annual salary 61.22rate. The annual salary rate is the average annual salary during the purchase period that 61.23the member would have received if the member had continued to be employed in covered 61.24employment rather than to provide uniformed service, or, if the determination of that 61.25rate is not reasonably certain, the annual salary rate is the member's average salary rate 61.26during the 12-month period of covered employment rendered immediately preceding the 61.27period of the uniformed service. Payment of the member equivalent contributions must 61.28be made during a period that begins with the date on which the individual returns to 61.29public employment and that is three times the length of the military leave period, or 61.30within five years of the date of discharge from the military service, whichever is less. If 61.31the determined payment period is less than one year, the contributions required under 61.32this clause to receive service credit may be made within one year of the discharge date. 61.33Payment may not be accepted following 2030 days after termination of public service 61.34under subdivision 11a. If the member equivalent contributions provided for in this clause 61.35are not paid in full, the member's allowable service credit must be prorated by multiplying 61.36the full and fractional number of years of uniformed service eligible for purchase by the 62.1ratio obtained by dividing the total member contributions received by the total member 62.2contributions otherwise required under this clause. The equivalent employer contribution, 62.3and, if applicable, the equivalent additional employer contribution must be paid by the 62.4governmental subdivision employing the member if the member makes the equivalent 62.5employee contributions. The employer payments must be made from funds available to 62.6the employing unit, using the employer and additional employer contribution rate or 62.7rates in effect at the time that the uniformed service was performed, applied to the same 62.8annual salary rate or rates used to compute the equivalent member contribution. The 62.9governmental subdivision involved may appropriate money for those payments. The 62.10amount of service credit obtainable under this section may not exceed five years unless a 62.11longer purchase period is required under United States Code, title 38, section 4312. The 62.12employing unit shall pay interest on all equivalent member and employer contribution 62.13amounts payable under this clause. Interest must be computed at a rate of 8.5 percent 62.14compounded annually from the end of each fiscal year of the leave or the break in service 62.15to the end of the month in which the payment is received. Upon payment, the employee 62.16must be granted allowable service credit for the purchased period.; or62.17(9) a period specified under subdivision 40.62.18    (b) For calculating benefits under sections 
         353.30, 
         353.31, 
         353.32, and 
         353.33 for 62.19state officers and employees displaced by the Community Corrections Act, chapter 401, 62.20and transferred into county service under section 
         401.04, "allowable service" means the 62.21combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 62.22section 
         352.01, subdivision 11. 62.23    (c) For a public employee who has prior service covered by a local police or 62.24firefighters relief association that has consolidated with the Public Employees Retirement 62.25Association or to which section 
         353.665 applies, and who has elected the type of benefit 62.26coverage provided by the public employees police and fire fund either under section 62.27353A.08
          following the consolidation or under section 
         353.665, subdivision 4, "applicable 62.28service" is a period of service credited by the local police or firefighters relief association 62.29as of the effective date of the consolidation based on law and on bylaw provisions 62.30governing the relief association on the date of the initiation of the consolidation procedure. 62.31    (d) No member may receive more than 12 months of allowable service credit in a 62.32year either for vesting purposes or for benefit calculation purposes.62.33    (e) MS 2002 [Expired]62.34EFFECTIVE DATE.This section is effective the day following final enactment.62.35    Sec. 6. Minnesota Statutes 2008, section 353.01, subdivision 16b, is amended to read:63.1    Subd. 16b. Uncredited military service credit purchase. (a) A public employee 63.2who has at least three years of allowable service with the Public Employees Retirement 63.3Association or the public employees police and fire plan and who performed service in the 63.4United States armed forces before becoming a public employee, or who failed to obtain 63.5service credit for a military leave of absence under subdivision 16, paragraph (h) (a), 63.6clause 7, is entitled to purchase allowable service credit for the initial period of enlistment, 63.7induction, or call to active duty without any voluntary extension by making payment under 63.8section 
         356.551. This authority is voided if the public employee has not purchased service 63.9credit from any other Minnesota defined benefit public employee pension plan, other than 63.10a volunteer fire plan, for the same period of service, or if the separation from the United 63.11States armed forces was under less than honorable conditions.63.12    (b) A public employee who desires to purchase service credit under paragraph 63.13(a) must apply with the executive director to make the purchase. The application must 63.14include all necessary documentation of the public employee's qualifications to make the 63.15purchase, signed written permission to allow the executive director to request and receive 63.16necessary verification of applicable facts and eligibility requirements, and any other 63.17relevant information that the executive director may require.63.18    (c) Allowable service credit for the purchase period must be granted by the 63.19Public Employees Retirement Association or the public employees police and fire plan, 63.20whichever applies, to the purchasing public employee upon receipt of the purchase 63.21payment amount. Payment must be made before the effective date of retirement of the63.22public employee employee's termination of public service or termination of membership, 63.23whichever is earlier.63.24    (d) This subdivision is repealed July 1, 2013.63.25EFFECTIVE DATE.This section is effective the day after final enactment.63.26    Sec. 7. Minnesota Statutes 2008, section 353.0161, subdivision 1, is amended to read:63.27    Subdivision 1. Application. This section applies to employees covered by any plan 63.28specified in this chapter or chapter 353E for any period of authorized leave of absence 63.29specified in section 
         353.01, subdivision 16, paragraph (a), clause (4) (5), for which the 63.30employee obtains credit for allowable service by making payment as specified in this 63.31section to the applicable fund.63.32EFFECTIVE DATE.This section is effective the day following final enactment.63.33    Sec. 8. Minnesota Statutes 2008, section 353.03, subdivision 3a, is amended to read:64.1    Subd. 3a. Executive director. (a) Appointment. The board shall appoint an 64.2executive director on the basis of education, experience in the retirement field, and 64.3leadership ability. The executive director must have had at least five years' experience in 64.4an executive level management position, which has included responsibility for pensions, 64.5deferred compensation, or employee benefits. The executive director serves at the pleasure 64.6of the board. The salary of the executive director is as provided by section 
         15A.0815. 64.7    (b)  Duties. The management of the association is vested in the executive director 64.8who shall be the executive and administrative head of the association. The executive 64.9director shall act as adviser to the board on all matters pertaining to the association and 64.10shall also act as the secretary of the board. The executive director shall: 64.11    (1) attend all meetings of the board;64.12    (2) prepare and recommend to the board appropriate rules to carry out the provisions 64.13of this chapter;64.14    (3) establish and maintain an adequate system of records and accounts following 64.15recognized accounting principles and controls;64.16    (4) designate, with the approval of the board, up to two persons who may serve in 64.17the unclassified service and whose salaries are set in accordance with section 
         43A.18, 64.18subdivision 3
         , appoint a confidential secretary in the unclassified service, and appoint 64.19employees to carry out this chapter, who are subject to chapters 43A and 179A in the same 64.20manner as are executive branch employees; 64.21    (5) organize the work of the association as the director deems necessary to fulfill 64.22the functions of the association, and define the duties of its employees and delegate to 64.23them any powers or duties, subject to the control of, and under such conditions as, the 64.24executive director may prescribe;64.25    (6) with the approval of the board, contract for the services of an approved actuary, 64.26professional management services, and any other consulting services as necessary to fulfill 64.27the purposes of this chapter. All contracts are subject to chapter 16C. The commissioner 64.28of administration shall not approve, and the association shall not enter into, any contract 64.29to provide lobbying services or legislative advocacy of any kind. Any approved actuary 64.30retained by the executive director shall function as the actuarial advisor of the board and 64.31the executive director and may perform actuarial valuations and experience studies to 64.32supplement those performed by the actuary retained . In addition to filing requirements 64.33under section 
         356.214., any supplemental actuarial valuations or experience studies shall 64.34be filed with the executive director of the Legislative Commission on Pensions and 64.35Retirement. Copies of professional management survey reports shall be transmitted to the 64.36secretary of the senate, the chief clerk of the house of representatives, and the Legislative 65.1Reference Library as provided by section 
         3.195, and to the executive director of the 65.2commission at the same time as reports are furnished to the board. Only management 65.3firms experienced in conducting management surveys of federal, state, or local public 65.4retirement systems shall be qualified to contract with the director hereunder; 65.5    (7) with the approval of the board provide in-service training for the employees 65.6of the association;65.7    (8) make refunds of accumulated contributions to former members and to the 65.8designated beneficiary, surviving spouse, legal representative or next of kin of deceased 65.9members or deceased former members, as provided in this chapter;65.10    (9) determine the amount of the annuities and disability benefits of members covered 65.11by the association and authorize payment of the annuities and benefits beginning as of 65.12the dates on which the annuities and benefits begin to accrue, in accordance with the 65.13provisions of this chapter;65.14    (10) pay annuities, refunds, survivor benefits, salaries, and necessary operating 65.15expenses of the association;65.16    (11) prepare and submit to the board and the legislature an annual financial report 65.17covering the operation of the association, as required by section 
         356.20; 65.18    (12) prepare and submit biennial and annual budgets to the board for its approval 65.19and submit the approved budgets to the Department of Finance for approval by the 65.20commissioner;65.21    (13) reduce all or part of the accrued interest payable under section 
         353.27, 65.22subdivisions 12, 12a, and 12b
         , or 
         353.28, subdivision 5, upon receipt of proof by the 65.23association of an unreasonable processing delay or other extenuating circumstances of 65.24the employing unit; and notwithstanding section 353.27, subdivision 7, may waive the 65.25payment of accrued interest to the member if a credit has been taken by the employer to 65.26correct an employee deduction taken in error and if the accrued interest is $10 or less. 65.27The executive director shall prescribe and submit for approval by the board the conditions 65.28under which such interest may be reduced; and 65.29    (14) with the approval of the board, perform such other duties as may be required for 65.30the administration of the association and the other provisions of this chapter and for the 65.31transaction of its business.65.32EFFECTIVE DATE.This section is effective the day after final enactment.65.33    Sec. 9. Minnesota Statutes 2008, section 353.27, subdivision 2, is amended to read:65.34    Subd. 2. Employee contribution. (a) For a basic member, the employee 65.35contribution is the following applicable percentage of the total9.10 percent of salary66.1amount for a "basic member" and. For a "coordinated member": coordinated member, 66.2the employee contribution is six percent of salary plus any contribution rate adjustment 66.3under subdivision 3b.

66.4Basic ProgramCoordinated Program66.5Effective before January 1, 20069.105.1066.6Effective January 1, 20069.105.5066.7Effective January 1, 20079.105.7566.866.966.10Effective January 1, 20089.106.00 plus any contribution rate adjustment under subdivision 3b

66.11(b) These contributions must be made by deduction from salary as defined in section 66.12353.01, subdivision 10
         , in the manner provided in subdivision 4. If any portion of a 66.13member's salary is paid from other than public funds, the member's employee contribution 66.14must be based on the total salary received by the member from all sources.66.15EFFECTIVE DATE.This section is effective the day following final enactment.66.16    Sec. 10. Minnesota Statutes 2008, section 353.27, subdivision 3, is amended to read:66.17    Subd. 3. Employer contribution. (a) For a basic member, the employer 66.18contribution is the following applicable percentage of the total9.10 percent of salary 66.19amount for "basic members" and. For "coordinated members": a coordinated member, 66.20the employer contribution is six percent of salary plus any contribution rate adjustment 66.21under subdivision 3b.

66.22Basic ProgramCoordinated Program66.23Effective before January 1, 20069.105.1066.24Effective January 1, 20069.105.5066.25Effective January 1, 20079.105.7566.2666.2766.28Effective January 1, 20089.106.00 plus any contribution rate adjustment under subdivision 3b

66.29(b) This contribution must be made from funds available to the employing 66.30subdivision by the means and in the manner provided in section 
         353.28.66.31EFFECTIVE DATE.This section is effective the day following final enactment.66.32    Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 7, is amended to read:66.33    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except 66.34as provided in paragraph (b), erroneous employee deductions and erroneous employer 67.1contributions and additional employer contributions for a person, who otherwise does not 67.2qualify for membership under this chapter, are considered:67.3(1) valid if the initial erroneous deduction began before January 1, 1990. Upon 67.4determination of the error by the association, the person may continue membership in the 67.5association while employed in the same position for which erroneous deductions were 67.6taken, or file a written election to terminate membership and apply for a refund upon 67.7termination of public service or defer an annuity under section 
         353.34; or 67.8(2) invalid, if the initial erroneous employee deduction began on or after January 1, 67.91990. Upon determination of the error, the association shall refund all erroneous employee 67.10deductions and all erroneous employer contributions as specified in paragraph (d) (e). No 67.11person may claim a right to continued or past membership in the association based on 67.12erroneous deductions which began on or after January 1, 1990. 67.13(b) Erroneous deductions taken from the salary of a person who did not qualify 67.14for membership in the association by virtue of concurrent employment before July 1, 67.151978, which required contributions to another retirement fund or relief association 67.16established for the benefit of officers and employees of a governmental subdivision, are 67.17invalid. Upon discovery of the error, the association shall remove all invalid service and, 67.18upon termination of public service, the association shall refund all erroneous employee 67.19deductions to the person, with interest as determined under section 
         353.34, subdivision 2, 67.20and all erroneous employer contributions without interest to the employer. This paragraph 67.21has both retroactive and prospective application. 67.22(c) Adjustments to correct employer contributions and employee deductions taken in 67.23error from amounts which are not salary under section 
         353.01, subdivision 10, are invalid 67.24upon discovery by the association and must be refundedmade as specified in paragraph 67.25(d) (e). The period of adjustment must be limited to the fiscal year in which the error is 67.26discovered by the association and the immediate two preceding fiscal years. 67.27(d) If there is evidence of fraud or other misconduct on the part of the employee or 67.28the employer, the board of trustees may authorize adjustments to the account of a member 67.29or former member to correct erroneous employee deductions and employer contributions 67.30on invalid salary and the recovery of any overpayments for a period longer than provided 67.31for under paragraph (c).67.32(d)(e) Upon discovery of the receipt of erroneous employee deductions and 67.33employer contributions under paragraph (a), clause (2), or paragraph (c), the association 67.34must require the employer to discontinue the erroneous employee deductions and 67.35erroneous employer contributions reported on behalf of a member. Upon discontinuation, 67.36the association either must refund :68.1(1) for a member, provide a refund or credit to the employer in the amount of the 68.2invalid employee deductions to the person without interest and with interest on the invalid 68.3employee deductions at the rate specified under section 353.34, subdivision 2, from the 68.4received date of each invalid salary transaction through the date the credit or refund is 68.5made; and the employer must pay the refunded employee deductions plus interest to the 68.6member;68.7(2) for a former member who:68.8(i) is not receiving a retirement annuity or benefit, return the erroneous employee 68.9deductions to the former member through a refund with interest at the rate specified under 68.10section 353.34, subdivision 2, from the received date of each invalid salary transaction 68.11through the date the credit or refund is made; or68.12(ii) is receiving a retirement annuity or disability benefit, or a person who is 68.13receiving an optional annuity or survivor benefit, for whom it has been determined an 68.14overpayment must be recovered, adjust the payment amount and recover the overpayments 68.15as provided under this section; and68.16(3) return  the invalid employer contributions reported on behalf of a member 68.17or former member to the employer or provideby providing a credit against future 68.18contributions payable by the employer for the amount of all erroneous deductions and 68.19contributions. If the employing unit receives a credit under this paragraph, the employing 68.20unit is responsible for refunding to the applicable employee any amount that had been 68.21erroneously deducted from the person's salary. In the event that a retirement annuity or 68.22disability benefit has been computed using invalid service or salary, the association must 68.23adjust the annuity or benefit and recover any overpayment under subdivision 7b.68.24(e)(f) In the event that a salary warrant or check from which a deduction for the 68.25retirement fund was taken has been canceled or the amount of the warrant or check 68.26returned to the funds of the department making the payment, a refund of the sum 68.27deducted, or any portion of it that is required to adjust the deductions, must be made 68.28to the department or institution.68.29(f) Any refund to a member under this subdivision that is reasonably determined 68.30to cause the plan to fail to be a qualified plan under section 401(a) of the federal 68.31Internal Revenue Code, as amended, may not be refunded and instead must be credited 68.32against future contributions payable by the employer. The employer receiving the 68.33credit is responsible for refunding to the applicable employee any amount that had been 68.34erroneously deducted from the person's salary.68.35(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit 68.36is within the limitation period specified in paragraph (c), and an overpayment has resulted 69.1by using invalid service or salary, or due to any erroneous calculation procedure, the 69.2association must recalculate the annuity or benefit payable and recover any overpayment 69.3as provided under subdivision 7b.69.4(h) Notwithstanding the provisions of this subdivision, the association may apply 69.5the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans 69.6Compliance Resolution System and not issue a refund of erroneous employee deductions 69.7and employer contributions or not recover a small overpayment of benefits if the cost to 69.8correct the error would exceed the amount of the member refund or overpayment.69.9(i) Any fees or penalties assessed by the federal Internal Revenue Service for any 69.10failure by an employer to follow the statutory requirements for reporting eligible members 69.11and salary must be paid by the employer.69.12EFFECTIVE DATE.(a) This section is effective the day following enactment. 69.13(b) The interest required on deductions in error as provided in paragraph (e) must 69.14be applied to any refunds paid on or after June 1, 2009.69.15    Sec. 12. Minnesota Statutes 2008, section 353.27, subdivision 7b, is amended to read:69.16    Subd. 7b. Recovery of overpayments to members.(a) In the event of an 69.17overpayment to a member, retiree, beneficiary, or other person, the executive director shall 69.18recover the overpayment by suspending or reducing the payment of a retirement annuity, 69.19refund, disability benefit, survivor benefit, or optional annuity payable to the applicable 69.20person or the person's estate, whichever applies, under this chapter until all outstanding 69.21money has been recovered determines that an overpaid annuity or benefit that is the result 69.22of invalid salary included in the average salary used to calculate the payment amount must 69.23be recovered, the association must determine the amount of the employee deductions 69.24taken in error on the invalid salary, with interest determined in the manner provided for a 69.25former member under subdivision 7, paragraph (e), clause (2), item (i), and must subtract 69.26that amount from the total annuity or benefit overpayment, and the remaining balance of 69.27the overpaid annuity or benefit, if any, must be recovered.69.28(b) If the invalid employee deductions plus interest exceed the amount of the 69.29overpaid benefits, the balance must be refunded to the person to whom the benefit or 69.30annuity is being paid.69.31(c) Any invalid employer contributions reported on the invalid salary must be 69.32credited to the employer as provided in subdivision 7, paragraph (e).69.33(d) If a member or former member, who is receiving a retirement annuity or 69.34disability benefit for which an overpayment is being recovered, dies before recovery of 69.35the overpayment is completed and a joint and survivor optional annuity is payable, the 70.1remaining balance of the overpaid annuity or benefit must continue to be recovered from 70.2the payment to the optional annuity beneficiary.70.3(e) If the association finds that a refund has been overpaid to a former member, 70.4beneficiary or other person, the amount of the overpayment must be recovered.70.5(f) The board of trustees shall adopt policies directing the period of time and manner 70.6for the collection of any overpaid retirement or optional annuity, and survivor or disability 70.7benefit, or a refund that the executive director determines must be recovered as provided 70.8under this section.70.9EFFECTIVE DATE.This section is effective the day following final enactment.70.10    Sec. 13. Minnesota Statutes 2008, section 353.33, subdivision 1, is amended to read:70.11    Subdivision 1. Age, service, and salary requirements. A coordinated or basic 70.12member who has at least three years of allowable service and becomes totally and 70.13permanently disabled before normal retirement age, and a basic member who has at least 70.14three years of allowable service and who becomes totally and permanently disabled, upon 70.15application as defined under section 
         353.031, is entitled to a disability benefit in an amount 70.16determined under subdivision 3. If the disabled person's public service has terminated 70.17at any time, at least two of the required three years of allowable service must have been 70.18rendered after last becoming an active member. 70.19EFFECTIVE DATE.This section is effective the day following final enactment.70.20    Sec. 14. Minnesota Statutes 2008, section 353.33, is amended by adding a subdivision 70.21to read:70.22    Subd. 1a.Benefit restriction.No person is entitled to receive disability benefits 70.23and a retirement annuity at the same time.70.24EFFECTIVE DATE.This section is effective the day following final enactment.70.25    Sec. 15. Minnesota Statutes 2008, section 353.33, subdivision 11, is amended to read:70.26    Subd. 11. Coordinated member disabilitant transfer to retirement status.No 70.27person is entitled to receive disability benefits and a retirement annuity at the same time.70.28The disability benefits paid to a coordinated member must terminate when the person 70.29reaches normal retirement age. If the coordinated member is still totally and permanently 70.30disabled upon attaining normal retirement age, the coordinated member is deemed to be on 70.31retirement status. If an optional annuity is elected under subdivision 3a, the coordinated 70.32member shall receive an annuity under the terms of the optional annuity previously 71.1elected, or, if an optional annuity is not elected under subdivision 3a, the coordinated 71.2member may elect to receive a normal retirement annuity under section 
         353.29 or an 71.3annuity equal to the disability benefit paid before the coordinated member reaches normal 71.4retirement age, whichever amount is greater, or elect to receive an optional annuity 71.5under section 
         353.30, subdivision 3. The annuity of a disabled coordinated member who 71.6attains normal retirement age must be computed under the law in effect upon attainment 71.7of normal retirement age. Election of an optional annuity must be made before the 71.8coordinated member attains normal retirement age. If an optional annuity is elected, the 71.9election is effective on the date on which the person attains normal retirement age and 71.10the optional annuity begins to accrue on the first day of the month next following the 71.11month in which the person attains that age. 71.12EFFECTIVE DATE.This section is effective the day following final enactment.71.13    Sec. 16. Minnesota Statutes 2008, section 353.33, subdivision 12, is amended to read:71.14    Subd. 12. Basic disabilitydisabilitant transfer to retirement status; survivor 71.15benefits.(a) If a basic member who is receiving a disability benefit under subdivision 3:71.16(1) dies before attaining age 65 or within five years of the effective date of the 71.17disability, whichever is later, the surviving spouse is entitled to receive a survivor 71.18benefit under section 
         353.31, unlessand any dependent child or children are entitled to 71.19dependent child benefits under section 353.31, subdivision 1b, paragraph (b). If there are 71.20no dependent children, in lieu of the survivor benefit specified under section 353.31, the 71.21surviving spouse electedmay elect to receive a refund under section 
         353.32, subdivision 1;.71.22(2)(b) If a basic member who is receiving a disability benefit under subdivision 3 is 71.23living at age 65 or five years after the effective date of the disability, whichever is later, the 71.24basic member may continue to receive a normal retirement annuity equal to the disability 71.25benefit previously received, adjusted for the amount no longer payable under subdivision 71.263, paragraph (b), or the person may elect a joint and survivor optional annuity under 71.27section 
         353.31, subdivision 1b. The election of the joint and survivor optional annuity 71.28must occur within 90 days of attaining age 65 or of reaching the five-year anniversary 71.29of the effective date of the disability benefit, whichever is later. The optional annuity 71.30takes effect on the first day of the month following the month in which the person attains 71.31age 65 or reaches the five-year anniversary of the effective date of the disability benefit, 71.32whichever is later; or.71.33(3) if there is a dependent child or children under clause (1) or (2), the dependent 71.34child is entitled to a dependent child benefit under section 353.31, subdivision 1b, 71.35paragraph (b).72.1EFFECTIVE DATE.This section is effective the day following final enactment.72.2    Sec. 17. Minnesota Statutes 2008, section 353.65, subdivision 2, is amended to read:72.3    Subd. 2. Employee contribution rate.(a) The employee contribution is an amount 72.4equal to the9.4 percent of the total salary of the member specified in paragraph (b). This 72.5contribution must be made by deduction from salary in the manner provided in subdivision 72.64. Where any portion of a member's salary is paid from other than public funds, the 72.7member's employee contribution is based on the total salary received from all sources.72.8(b) For calendar year 2006, the employee contribution rate is 7.0 percent. For 72.9calendar year 2007, the employee contribution rate is 7.8 percent. For calendar year 2008, 72.10the employee contribution rate is 8.6 percent. For calendar year 2009 and thereafter, the 72.11employee contribution rate is 9.4 percent.72.12EFFECTIVE DATE.This section is effective the day following final enactment.72.13    Sec. 18. Minnesota Statutes 2008, section 353.65, subdivision 3, is amended to read:72.14    Subd. 3. Employer contribution rate.(a) The employer contribution shall be an 72.15amount equal to theis 14.1 percent of the total salary of everythe member as specified in 72.16paragraph (b). This contribution shallmust be made from funds available to the employing 72.17subdivision by the means and in the manner provided in section 
         353.28.72.18(b) For calendar year 2006, the employer contribution rate is 10.5 percent. For 72.19calendar year 2007, the employer contribution rate is 11.7 percent. For calendar year 2008, 72.20the employer contribution rate is 12.9 percent. For calendar year 2009 and thereafter, the 72.21employer contribution rate is 14.1 percent.72.22EFFECTIVE DATE.This section is effective the day following final enactment.72.23    Sec. 19. Minnesota Statutes 2008, section 353A.08, subdivision 6a, is amended to read:72.24    Subd. 6a. Military service contribution and refund. A person who was an active 72.25member of a local police or firefighters relief association upon its consolidation with the 72.26public employees retirement association, and who was otherwise eligible for automatic 72.27service credit for military service under Minnesota Statutes 2000, section 
         423.57, and 72.28who has not elected the type of benefit coverage provided by the public employees 72.29police and fire fund at the time of consolidation, must make employee contributions 72.30under section 
         353.01, subdivision 16, paragraph (h) (a), clause (8), to receive allowable 72.31service credit from the association for a military service leave after the effective date of the 72.32consolidation. A person who later elects, under subdivision 3, to retain benefit coverage 73.1under the bylaws of the local relief association is eligible for a refund from the association 73.2at the time of retirement. The association shall refund the employee contributions 73.3plus interest at the rate of six percent, compounded quarterly, from the date on which 73.4contributions were made until the first day of the month in which the refund is paid. The 73.5employer shall receive a refund of the employer contributions. The association shall not 73.6pay a refund to a person who later elects, under subdivision 3, the type of benefit coverage 73.7provided by the public employees police and fire fund or to the person's employer. 73.8EFFECTIVE DATE.This section is effective the day following final enactment.73.9    Sec. 20. Minnesota Statutes 2008, section 353F.02, subdivision 4, is amended to read:73.10    Subd. 4. Medical facility. "Medical facility" means:73.11    (1) Bridges Medical Services;73.12    (2) the City of Cannon Falls Hospital;73.13    (3) Clearwater County Memorial Hospital doing business as Clearwater Health 73.14Services in Bagley;73.15    (4) the Dassel Lakeside Community Home;73.16    (5) the Fair Oaks Lodge, Wadena;73.17    (6) the Glencoe Area Health Center;73.18    (7) Hutchinson Area Health Care;73.19    (8) the Lakefield Nursing Home;73.20    (9) the Lakeview Nursing Home in Gaylord;73.21    (10) the Luverne Public Hospital;73.22    (11) the Oakland Park Nursing Home;73.23    (12) the RenVilla Nursing Home;73.24    (13) the Rice Memorial Hospital in Willmar, with respect to the Department of 73.25Radiology and the Department of Radiation/Oncology;73.26(14) the St. Peter Community Health Care Center;73.27    (15) the Waconia-Ridgeview Medical Center; and73.28(16) the Weiner Memorial Medical Center, Inc.; and73.29(17) the Worthington Regional Hospital.73.30EFFECTIVE DATE.This section is effective upon compliance with Minnesota 73.31Statutes, section 353F.02, subdivision 3.73.32    Sec. 21. Minnesota Statutes 2008, section 354.05, is amended by adding a subdivision 73.33to read:74.1    Subd. 42.Fiscal year.The fiscal year of the association begins on July 1 of each 74.2calendar year and ends on June 30 of the following calendar year.74.3EFFECTIVE DATE.This section is effective the day following final enactment.74.4    Sec. 22. Minnesota Statutes 2008, section 354.42, subdivision 2, is amended to read:74.5    Subd. 2. Employee contribution. (a) For a basic member, the employee 74.6contribution to the fund is an amount equal to the following percentage9.0 percent of the 74.7member's salary of a member:. For a coordinated member, the employee contribution is 74.85.5 percent of the member's salary.74.9(1) after July 1, 2006, for a teacher employed by Special School District No. 1, 74.10Minneapolis, 5.5 percent if the teacher is a coordinated member, and 9.0 percent if the 74.11teacher is a basic member;74.12(2) for every other teacher, after July 1, 2006, 5.5 percent if the teacher is a 74.13coordinated member and 9.0 percent if the teacher is a basic member.74.14(b) This contribution must be made by deduction from salary. Where any portion 74.15of a member's salary is paid from other than public funds, the member's employee 74.16contribution must be based on the entire salary received.74.17EFFECTIVE DATE.This section is effective the day following final enactment.74.18    Sec. 23. Minnesota Statutes 2008, section 354.44, subdivision 4, is amended to read:74.19    Subd. 4. Retirement annuity accrual date. (a) An annuity payment begins to 74.20accrue, provided that the age and service requirements under subdivision 1 are satisfied, 74.21after the termination of teaching service, or after the application for retirement has been 74.22filed with the board, whichever is later executive director, as follows:74.23(1) on the 16th day ofafter the month of termination or filing if the termination or 74.24filing occurs on or before the 15th day of the month of teaching service;74.25(2) on the first day of the month following the month of termination or filing if 74.26the termination or filing occurs on or after the 16th day of the month day of receipt of 74.27application if the application is filed with the executive director after the six-month period 74.28that occurs immediately following the termination of teaching service;74.29(3) on July 1 for all school principals and other administrators who receive a full 74.30annual contract salary during the fiscal year for performance of a full year's contract 74.31duties; or75.1(4) a later date to be either the first or the 16th day of a month occurring within the 75.2six-month period immediately following the termination of teaching service as specified 75.3under paragraph (b) by the member.75.4(b)(4) if an application for retirement is filed with the boardexecutive director 75.5during the six-month period that occurs immediately following the termination of teaching 75.6service, the annuity may begin to accrue as if the application for retirement had been filed 75.7with the board on the date teaching service terminated or a later date under paragraph 75.8(a), clause (4).75.9(b) A member, or a person authorized to act on behalf of the member, may specify a 75.10different date of retirement from that determined in paragraph (a), as follows:75.11(1) if the application is filed on or before the date of termination of teaching service, 75.12the accrual date may be a date no earlier than the day after the termination of teaching 75.13service and no later than six months after the termination date; or75.14(2) if the application is filed during the six-month period that occurs immediately 75.15following the termination of teaching service, the accrual date may begin to accrue 75.16retroactively, but no earlier than the day after teaching service terminated and no later 75.17than six months after the termination date.75.18EFFECTIVE DATE.This section is effective January 1, 2010.75.19    Sec. 24. Minnesota Statutes 2008, section 354.44, subdivision 5, is amended to read:75.20    Subd. 5. Resumption of teaching service after retirement. (a) Any person who 75.21retired under the provisions of this chapter and has thereafter resumed teaching in any 75.22employer unit to which this chapter applies is eligible to continue to receive payments in 75.23accordance with the annuity except that all or a portion of the annuity payments must be 75.24deferred during the calendar year immediately following any calendarthe fiscal year in 75.25which the person's salary from the teaching service is in an amount greater than $46,000. 75.26The amount of the annuity deferral is one-half of the salary amount in excess of $46,000 75.27and must be deducted from the annuity payable for the calendar year immediately 75.28following the calendarfiscal year in which the excess amount was earned. 75.29    (b) If the person is retired for only a fractional part of the calendarfiscal year during 75.30the initial year of retirement, the maximum reemployment salary exempt from triggering a 75.31deferral as specified in this subdivision must be prorated for that calendarfiscal year.75.32    (c) After a person has reached the Social Security normal retirement age, no deferral 75.33requirement is applicable regardless of the amount of salary.75.34    (d) The amount of the retirement annuity deferral must be handled or disposed 75.35of as provided in section 
         356.47. 76.1    (e) For the purpose of this subdivision, salary from teaching service includes, but is 76.2not limited to:76.3    (1) all income for services performed as a consultant or an independent contractor 76.4for an employer unit covered by the provisions of this chapter; and76.5    (2) the greater of either the income received or an amount based on the rate paid 76.6with respect to an administrative position, consultant, or independent contractor in an 76.7employer unit with approximately the same number of pupils and at the same level as the 76.8position occupied by the person who resumes teaching service.76.9EFFECTIVE DATE.This section is effective January 1, 2010.76.10    Sec. 25. Minnesota Statutes 2008, section 354.47, subdivision 1, is amended to read:76.11    Subdivision 1. Death before retirement. (a) If a member dies before retirement 76.12and is covered under section 
         354.44, subdivision 2, and neither an optional annuity, nor a 76.13reversionary annuity, nor a benefit under section 
         354.46, subdivision 1, is payable to the 76.14survivors if the member was a basic member, then the surviving spouse, or if there is no 76.15surviving spouse, the designated beneficiary is entitled to an amount equal to the member's 76.16accumulated deductions with interest credited to the account of the member to the date of 76.17death of the member. If the designated beneficiary is a minor, interest must be credited to 76.18the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier.  76.19(b) If a member dies before retirement and is covered under section 
         354.44, 76.20subdivision 6
         , and neither an optional annuity, nor reversionary annuity, nor the benefit 76.21described in section 
         354.46, subdivision 1, is payable to the survivors if the member 76.22was a basic member, then the surviving spouse, or if there is no surviving spouse, 76.23the designated beneficiary is entitled to an amount equal to the member's accumulated 76.24deductions credited to the account of the member as of June 30, 1957, and from July 1, 76.251957, to the date of death of the member, the member's accumulated deductions plus 76.26six percent interest compounded annually.  76.27(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited 76.28under that paragraph must be credited to the date the beneficiary reaches legal age, or 76.29the date of receipt, whichever is earlier.76.30(d) The amount of any refund payable under this subdivision must be reduced by 76.31any permanent disability payment under section 354.48 received by the member.76.32EFFECTIVE DATE.This section is effective the day following final enactment.76.33    Sec. 26. Minnesota Statutes 2008, section 354.48, subdivision 4, is amended to read:77.1    Subd. 4. Determination by executive director. (a) The executive director shall 77.2have the member examined by at least two licensed physicians, licensed chiropractors, 77.3or licensed psychologists selected by the medical adviser.77.4(b) These physicians, chiropractors, or psychologists with respect to a mental 77.5impairment, shall make written reports to the executive director concerning the member's 77.6disability, including expert opinions as to whether or not the member is permanently and 77.7totally disabled within the meaning of section 
         354.05, subdivision 14. 77.8(c) The executive director shall also obtain written certification from the last 77.9employer stating whether or not the member was separated from service because of 77.10a disability which would reasonably prevent further service to the employer and as a 77.11consequence the member is not entitled to compensation from the employer.77.12(d) If, upon the consideration of the reports of the physicians, chiropractors, or 77.13psychologists and any other evidence presented by the member or by others interested 77.14therein, the executive director finds that the member is totally and permanently disabled, 77.15the executive director shall grant the member a disability benefit.77.16(e) An employee who is placed on leave of absence without compensation because 77.17of disability is not barred from receiving a disability benefit.77.18EFFECTIVE DATE.This section is effective the day following final enactment.77.19    Sec. 27. Minnesota Statutes 2008, section 354.48, subdivision 6, is amended to read:77.20    Subd. 6. Regular physical examinations. At least once each year during the first 77.21five years following the allowance of a disability benefit to any member, and at least once 77.22in every three-year period thereafter, the executive director shallmay require the disability 77.23beneficiaryrecipient to undergo an expert examination by a physician or physicians, 77.24by a chiropractor or chiropractors, or by one or more psychologists with respect to a 77.25mental impairment, engaged by the executive director. If an examination indicates that the 77.26member is no longer permanently and totally disabled or that the member is engaged or is 77.27able to engage in a substantial gainful occupation, payments of the disability benefit by 77.28the association must be discontinued. The payments must be discontinued as soon as the 77.29member is reinstated to the payroll following sick leave, but payment may not be made for 77.30more than 60 days after the physicians, the chiropractors, or the psychologists engaged by 77.31the executive director find that the person is no longer permanently and totally disabled.77.32EFFECTIVE DATE.This section is effective the day following final enactment.77.33    Sec. 28. Minnesota Statutes 2008, section 354.49, subdivision 2, is amended to read:78.1    Subd. 2. Calculation.(a) Except as provided in section 
         354.44, subdivision 1, any 78.2person who ceases to be a member by reason of termination of teaching service, shall is 78.3entitled to receive a refund in an amount equal to the accumulated deductions credited to 78.4the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions with 78.5interest at the rate of six percent per annum compounded annually. For the purpose of this 78.6subdivision, interest shall must be computed on fiscal year end balances to the first day of 78.7the month in which the refund is issued.  78.8(b) If the person has received permanent disability payments under section 354.48, 78.9the refund amount must be reduced by the amount of those payments.78.10EFFECTIVE DATE.This section is effective the day following final enactment.78.11    Sec. 29. Minnesota Statutes 2008, section 354.52, subdivision 2a, is amended to read:78.12    Subd. 2a. Annual Postretirement income reports reporting.On or before each 78.13February 15, a representative authorized by anEach employing unit must report to the 78.14executive director the amount of income earned during the previous calendarfiscal year 78.15by each retiree for teaching service performed after retirement. This annual report must be78.16shall be done through the payroll reporting system and is based on reemployment income 78.17as defined in section 
         354.44, subdivision 5, and it must be made on a form provided by the 78.18executive director. SigningSubmitting the reportsalary data through payroll reporting 78.19has the force and effect of an oath as to the correctness of the amount of postretirement 78.20reemployment income earned.  78.21EFFECTIVE DATE.This section is effective January 1, 2010.78.22    Sec. 30. Minnesota Statutes 2008, section 354.52, subdivision 4b, is amended to read:78.23    Subd. 4b. Payroll cycle reporting requirements. An employing unit shall provide 78.24the following data to the association for payroll warrants on an ongoing basis within 14 78.25calendar days after the date of the payroll warrant in a format prescribed by the executive 78.26director:78.27(1) association member number;78.28(2) employer-assigned employee number;78.29(3) Social Security number;78.30(4) amount of each salary deduction;78.31(5) amount of salary as defined in section 
         354.05, subdivision 35, from which each 78.32deduction was made;  78.33(6) reason for payment;79.1(7) service credit;79.2(8) the beginning and ending dates of the payroll period covered and the date 79.3of actual payment;79.4(9) fiscal year of salary earnings;79.5(10) total remittance amount including employee, employer, and additional employer 79.6contributions; and79.7(11) reemployed annuitant salary under section 354.44, subdivision 5; and79.8(11)(12)  other information as may be required by the executive director.79.9EFFECTIVE DATE.This section is effective January 1, 2010.79.10    Sec. 31. [354.543] PRIOR OR UNCREDITED MILITARY SERVICE CREDIT 79.11PURCHASE.79.12    Subdivision 1.Service credit purchase authorized.(a) If paragraph (b) does not 79.13apply, a teacher who has at least three years  of allowable service credit with the Teachers 79.14Retirement Association and who performed service in the United States armed forces 79.15before becoming a teacher as defined in section 354.05, subdivision 2, or who failed 79.16to obtain service credit for a military leave of absence under the provisions of section 79.17354.53, is entitled to purchase allowable and formula service credit for the initial period of 79.18enlistment, induction, or call to active duty without any voluntary extension by making 79.19payment under section 356.551.79.20(b) A service credit purchase is prohibited if:79.21(1) the teacher separated from service with the United States armed forces with a 79.22dishonorable or bad conduct discharge or under other than honorable conditions; or79.23(2) the teacher has purchased or otherwise received service credit from any 79.24Minnesota defined benefit public employee pension plan, other than a volunteer fire plan, 79.25for the same period of service.79.26    Subd. 2.Application and documentation.A teacher who desires to purchase 79.27service credit  under subdivision 1 must apply with the executive director to make the 79.28purchase. The application must include all necessary documentation of the teacher's 79.29qualifications to make the purchase, signed written permission to allow the executive 79.30director to request and receive necessary verification of applicable facts and eligibility 79.31requirements, and any other relevant information that the executive director may require.79.32    Subd. 3.Service credit grant.Allowable and formula service credit for the 79.33purchase period  must be granted by the Teachers Retirement Association to the purchasing 79.34teacher upon receipt of the purchase payment amount. Payment must be made before the 79.35teacher's termination of teaching service.80.1EFFECTIVE DATE.This section is effective the day following final enactment.80.2    Sec. 32. Minnesota Statutes 2008, section 354.55, subdivision 11, is amended to read:80.3    Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section 80.4354.44, subdivision 6
         , who ceases to render teaching service, may leave the person's 80.5accumulated deductions in the fund for the purpose of receiving a deferred annuity at 80.6retirement. Eligibility for an annuity under this subdivision is governed pursuant to 80.7section 354.44, subdivision 1, or 354.60.80.8(b) The amount of the deferred retirement annuity is determined by section 
         354.44, 80.9subdivision 6
         , and augmented as provided in this subdivision. The required reserves 80.10related to that portion offor the annuity which had accrued when the member ceased to 80.11render teaching service must be augmented, as further specified in this subdivision, by 80.12interest compounded annually from the first day of the month following the month during 80.13which the member ceased to render teaching service to the effective date of retirement.80.14(c)There shall be No augmentation is not creditable if thisthe deferral period is less 80.15than three months or if this period commences prior todeferral commenced before July 1, 80.161971. The rates of interest used for this purpose must be five percent compounded annually 80.17commencing July 1, 1971, until January 1, 1981, and three percent compounded annually 80.18thereafter until January 1 of the year following the year in which the former member 80.19attains age 55 and from that date to the effective date of retirement, the rate is five percent 80.20compounded annually if the employee became an employee before July 1, 2006, and at 2.5 80.21percent compounded annually if the employee becomes an employee after June 30, 2006.80.22(d) For persons who became covered employees before July 1, 2006, with a deferral 80.23period commencing after June 30, 1971, the annuity must be augmented using five 80.24percent interest compounded annually until January 1, 1981, and three percent interest 80.25compounded annually thereafter until January 1 of the year following the year in which 80.26the deferred annuitant attains age 55. From that date to the effective date of retirement, the 80.27rate is five percent compounded annually.80.28(e) For persons who become covered employees after June 30, 2006, the interest rate 80.29used to augment the deferred annuity is 2.5 percent interest compounded annually.80.30(f) If a person has more than one period of uninterrupted service, a separate average 80.31salary determined under section 
         354.44, subdivision 6, must be used for each period and 80.32the required reserves related to each period must be augmented by interest pursuant toas 80.33specified in this subdivision. The sum of the augmented required reserves so determined 80.34shall be the basis for purchasingis the present value of the deferred annuity. For the 80.35purposes of this subdivision, "period of uninterrupted service" means a period of covered 81.1teaching service during which the member has not been separated from active service for 81.2more than one fiscal year.81.3(g) If a person repays a refund, the service restored by the repayment must be 81.4considered as continuous with the next period of service for which the person has 81.5allowable service credit with this fund in the Teachers Retirement Association.81.6(h) If a person does not render teaching service in any one fiscal year or more 81.7consecutive fiscal years and then resumes teaching service, the formula percentages used 81.8from the date of the resumption of teaching service must be those applicable to new 81.9members.81.10(i) The mortality table and interest assumption used to compute the annuity must be 81.11the applicable mortality table established by the board under section 
         354.07, subdivision 81.121
         , and the interest rate assumption under section 
         356.215 in effect when the member 81.13retires. A period of uninterrupted service for the purposes of this subdivision means a 81.14period of covered teaching service during which the member has not been separated from 81.15active service for more than one fiscal year.81.16(c)(j) In no case shall may the annuity payable under this subdivision be less than 81.17the amount of annuity payable pursuant tounder section 
         354.44, subdivision 6. 81.18(d)(k) The requirements and provisions for retirement before normal retirement 81.19age contained in section 
         354.44, subdivision 6, clause (3) or (5),shall also apply to an 81.20employee fulfilling the requirements with a combination of service as provided in section 81.21354.60
         . 81.22(e)(l) The augmentation provided by this subdivision applies to the benefit provided 81.23in section 
         354.46, subdivision 2. 81.24(f)(m) The augmentation provided by this subdivision shall does not apply to any 81.25period in which a person is on an approved leave of absence from an employer unit 81.26covered by the provisions of this chapter.81.27(g)(n) The retirement annuity or disability benefit of, or the survivor benefit payable 81.28on behalf of, a former teacher who terminated service before July 1, 1997, which is not 81.29first payable until after June 30, 1997, must be increased on an actuarial equivalent basis 81.30to reflect the change in the postretirement interest rate actuarial assumption under section 81.31356.215, subdivision 8
         , from five percent to six percent under a calculation procedure and 81.32tables adopted by the board as recommended by an approved actuary and approved by the 81.33actuary retained under section 
         356.214.81.34EFFECTIVE DATE.This section is effective the day following final enactment.82.1    Sec. 33. Minnesota Statutes 2008, section 354A.096, is amended to read:82.2354A.096 MEDICAL LEAVE.82.3Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund 82.4Association or the new law coordinated program of the Duluth Teachers Retirement Fund 82.5Association who is on an authorized medical leave of absence and subsequently returns 82.6to teaching service is entitled to receive allowable service credit, not to exceed one year, 82.7for the period of leave, upon making the prescribed payment to the fund. This payment 82.8must include the required employee and employer contributions at the rates specified in 82.9section 
         354A.12, subdivisions 1 and 2 2a, as applied to the member's average full-time 82.10monthly salary rate on the date the leave of absence commenced plus annual interest at 82.11the rate of 8.5 percent per year from the end of the fiscal year during which the leave 82.12terminates to the end of the month during which payment is made. The member must pay 82.13the total amount required unless the employing unit, at its option, pays the employer 82.14contributions. The total amount required must be paid by the end of the fiscal year 82.15following the fiscal year in which the leave of absence terminated or before the member 82.16retires, whichever is earlier. Payment must be accompanied by a copy of the resolution or 82.17action of the employing authority granting the leave and the employing authority, upon 82.18granting the leave, must certify the leave to the association in a manner specified by the 82.19executive director. A member may not receive more than one year of allowable service 82.20credit during any fiscal year by making payment under this section. A member may not 82.21receive disability benefits under section 
         354A.36 and receive allowable service credit 82.22under this section for the same period of time. 82.23EFFECTIVE DATE.This section is effective the day following final enactment.82.24    Sec. 34. Minnesota Statutes 2008, section 354A.12, subdivision 2a, is amended to read:82.25    Subd. 2a.  Employer regular and additional contribution rates contributions.82.26(a) The employing units shall make the following employer contributions to teachers 82.27retirement fund associations: 82.28(1) for any coordinated member of a teachers retirement fund association in a city of 82.29the first class, the employing unit shall pay the employer Social Security taxes;82.30(2) for any coordinated member of one of the following teachers retirement fund 82.31associations in a city of the first class, the employing unit shall make a regular employer 82.32contribution to the respective retirement fund association in an amount equal to the 82.33designated percentage of the salary of the coordinated member as provided below: 

83.183.2Duluth Teachers Retirement 
                  		Fund Association 4.50 percent83.383.4St. Paul Teachers Retirement 
                  		Fund Association4.50 percent

83.5(3)(2) for any basic member of the St. Paul Teachers Retirement Fund Association, 83.6the employing unit shall make a regular employer contribution to the respective retirement 83.7fund in an amount equal to 8.00 percent of the salary of the basic member;83.8(4)(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the 83.9employing unit shall make an additional employer contribution to the respective fund in 83.10an amount equal to 3.64 percent of the salary of the basic member;83.11(5)(4) for a coordinated member of a teachers retirement fund association in a city 83.12of the first class, the employing unit shall make an additional employer contribution to 83.13the respective fund in an amount equal to the applicable percentage of the coordinated 83.14member's salary, as provided below:

83.1583.16Duluth Teachers Retirement 
                  		Fund Association1.29 percent83.1783.18St. Paul Teachers Retirement 
                  		Fund Association3.84 percent83.19July 1, 1993 - June 30, 19940.50 percent83.20July 1, 1994 - June 30, 19951.50 percent83.21July 1, 1997, and thereafter3.84 percent

83.22(b) The regular and additional employer contributions must be remitted directly to 83.23the respective teachers retirement fund association at least once each month. Delinquent 83.24amounts are payable with interest under the procedure in subdivision 1a.83.25(c) Payments of regular and additional employer contributions for school district 83.26or technical college employees who are paid from normal operating funds must be made 83.27from the appropriate fund of the district or technical college. 83.28EFFECTIVE DATE.This section is effective the day following final enactment.83.29    Sec. 35. Minnesota Statutes 2008, section 354A.12, is amended by adding a 83.30subdivision to read:83.31    Subd. 6.Adjustment for erroneous receipts.(a) Adjustments to correct employer 83.32contributions and employee deductions taken in error from amounts which are not salary 83.33under section 354A.011, subdivision 24, must be made as specified in this section.83.34(b) Upon discovery of the receipt of erroneous employee deductions and employer 83.35contributions under paragraph (a), the executive director must require the employer to 83.36discontinue the erroneous employee deductions and erroneous employer contributions 84.1reported on behalf of an active member. Upon discontinuation, the executive director 84.2must provide for a refund or credit to the employer in the amount of the invalid employee 84.3deductions with interest on the employee deductions at the rate specified in section 84.4354A.37, subdivision 3, from the received date of each invalid salary transaction to the 84.5first day of the month in which the credit or refund is made. The employer must pay the 84.6refunded employee deductions plus interest to the active member.84.7(c) If the individual is a former member who is not receiving a retirement annuity or 84.8benefit and has not received a refund under section 354A.37, subdivision 3, related to the 84.9applicable service, the executive director must return the erroneous employee deductions 84.10to the former member through a refund with interest at the rate specified in section 84.11354A.37, subdivision 3, from the received date of each invalid salary transaction to the 84.12first day of the month in which the credit or refund is made.84.13(d) The executive director must return the invalid employer contributions reported 84.14on behalf of a member or former member to the employer by providing a credit against 84.15future contributions payable by the employer.84.16EFFECTIVE DATE.This section is effective the day after final enactment.84.17    Sec. 36. Minnesota Statutes 2008, section 354A.12, is amended by adding a 84.18subdivision to read:84.19    Subd. 7.Recovery of benefit overpayments.(a) If the executive director discovers, 84.20within the time period specified in subdivision 8 following the payment of a refund or 84.21the accrual date of any retirement annuity, survivor benefit, or disability benefit, that 84.22benefit overpayment has occurred due to using invalid service or salary, or due to any 84.23erroneous calculation procedure, the executive director must recalculate the annuity or 84.24benefit payable and recover any overpayment. The executive director shall recover the 84.25overpayment by requiring direct repayment or by suspending or reducing the payment of a 84.26retirement annuity or other benefit payable under this chapter to the applicable person or 84.27the person's estate, whichever applies, until all outstanding amounts have been recovered.84.28(b) In the event the executive director determines that an overpaid annuity or benefit 84.29that is the result of invalid salary included in the average salary used to calculate the 84.30payment amount must be recovered, the executive director must determine the amount of 84.31the employee deductions taken in error on the invalid salary, with interest as determined 84.32under 354A.37, subdivision 3, and must subtract that amount from the total annuity or 84.33benefit overpayment, and the remaining balance of the overpaid annuity or benefit, if 84.34any, must be recovered.85.1(c) If the invalid employee deductions plus interest exceed the amount of the 85.2overpaid benefits, the balance must be refunded to the person to whom the benefit or 85.3annuity is being paid.85.4(d) Any invalid employer contributions reported on the invalid salary must be 85.5credited against future contributions payable by the employer.85.6(e) If a member or former member, who is receiving a retirement annuity or 85.7disability benefit for which an overpayment is being recovered, dies before recovery of the 85.8overpayment is completed and an optional annuity or refund is payable, the remaining 85.9balance of the overpaid annuity or benefit must continue to be recovered from the payment 85.10to the optional annuity beneficiary or refund recipient.85.11(f) The board of trustees shall adopt policies directing the period of time and manner 85.12for the collection of any overpaid retirement or optional annuity, and survivor or disability 85.13benefit, or a refund that the executive director determines must be recovered as provided 85.14under this section.85.15EFFECTIVE DATE.This section is effective the day after final enactment.85.16    Sec. 37. Minnesota Statutes 2008, section 354A.12, is amended by adding a 85.17subdivision to read:85.18    Subd. 8.Additional procedures.(a) If paragraph (b) does not apply, the period of 85.19adjustment under subdivisions 6 and 7 is limited to the fiscal year in which the error is 85.20discovered by the executive director and the immediate two preceding fiscal years. 85.21(b) If there is evidence of fraud or other misconduct on the part of the employee or 85.22the employer, the board of trustees may authorize adjustments to the account of a member 85.23or former member to correct erroneous employee deductions and employer contributions 85.24on invalid salary and the recovery of any overpayments for a period longer than specified 85.25under paragraph (a).85.26(c) Notwithstanding other provisions of this section, the executive director may 85.27apply the Revenue Procedures defined in the Internal Revenue Service Employee Plans 85.28Compliance Resolution System and not issue a refund of erroneous employee deductions 85.29and employer contributions or not recover a small overpayment of benefits if the cost to 85.30correct the error would exceed the amount of the refund or overpayment.85.31(d) Notwithstanding other provisions of this section, interest of $10 or less shall not 85.32be payable to a member or former member.85.33EFFECTIVE DATE.This section is effective the day after final enactment.86.1    Sec. 38. Minnesota Statutes 2008, section 354A.12, is amended by adding a 86.2subdivision to read:86.3    Subd. 9.Employer responsibility for fees, penalties.Any fees or penalties 86.4assessed by the Internal Revenue Service for any failure by an employer to follow the 86.5statutory requirements for reporting eligible members and salary must be paid by the 86.6employer.86.7EFFECTIVE DATE.This section is effective the day after final enactment.86.8    Sec. 39. Minnesota Statutes 2008, section 354A.36, subdivision 6, is amended to read:86.9    Subd. 6. Requirement for regular physical examinations. At least once each year 86.10during the first five years following the granting of a disability benefit to a coordinated 86.11member by the board and at least once in every three year period thereafter, the board shall86.12may require the disability benefit recipient to undergo an expert examination as a condition 86.13for continued entitlement of the benefit recipient to receive a disability benefit. If the board 86.14requires an examination, the expert examination must be made at the place of residence of 86.15the disability benefit recipient or at any other place mutually agreeable to the disability 86.16benefit recipient and the board. The expert examination must be made by a physician or 86.17physicians, by a chiropractor or chiropractors, or by one or more psychologists engaged 86.18by the board. The physician or physicians, the chiropractor or chiropractors, or the 86.19psychologist or psychologists with respect to a mental impairment, conducting the expert 86.20examination shall make a written report to the board concerning the disability benefit 86.21recipient and the recipient's disability, including a statement of the expert opinion of 86.22the physician, chiropractor, or psychologist as to whether or not the member remains 86.23permanently and totally disabled within the meaning of section 
         354A.011, subdivision 86.2414
         . If the board determines from consideration of the written expert examination report 86.25of the physician, of the chiropractor, or of the psychologist, with respect to a mental 86.26impairment, that the disability benefit recipient is no longer permanently and totally 86.27disabled or if the board determines that the benefit recipient is engaged or is able to 86.28engage in a gainful occupation, unless the disability benefit recipient is partially employed 86.29under subdivision 7, then further disability benefit payments from the fund must be 86.30discontinued. The discontinuation of disability benefits must occur immediately if the 86.31disability recipient is reinstated to the district payroll following sick leave and within 60 86.32days of the determination by the board following the expert examination and report of the 86.33physician or physicians, chiropractor or chiropractors, or psychologist or psychologists 86.34engaged by the board that the disability benefit recipient is no longer permanently and 86.35totally disabled within the meaning of section 
         354A.011, subdivision 14.  87.1EFFECTIVE DATE.This section is effective the day following final enactment.87.2    Sec. 40. Minnesota Statutes 2008, section 356.401, subdivision 2, is amended to read:87.3    Subd. 2. Automatic deposits. (a) The chief administrative officer of a covered 87.4retirement plan may remit, through an automatic deposit system, annuity, benefit, or 87.5refund payments only to a financial institution associated with the National Automated 87.6Clearinghouse Association or a comparable successor organization that is trustee for a 87.7person who is eligible to receive the annuity, benefit, or refund.87.8(b) Upon the request of a retiree, disabilitant, survivor, or former member, the chief 87.9administrative officer of a covered retirement plan may remit the annuity, benefit, or 87.10refund checkpayment to the applicable financial institution for deposit in the person's 87.11individual account or the person's joint account. If an overpayment of benefits is paid 87.12after the death of the annuitant or benefit recipient, the chief administrative officer of 87.13the pension plan is authorized to issue an administrative subpoena consistent with the 87.14requirements of section 13A.02, requiring the applicable financial institution to disclose 87.15the names of all joint and co-owners of the account and a description of all deposits to, 87.16and withdrawals from, the account which take place on or after the death of the annuitant 87.17or benefit recipient. An overpayment to a joint account after the death of the annuitant or 87.18benefit recipient must be repaid to the fund of the applicable covered retirement plan by 87.19the joint tenant if the overpayment is not repaid to that fund by the financial institution 87.20associated with the National Automated Clearinghouse Association or its successor. The 87.21governing board of the covered retirement plan may prescribe the conditions under which 87.22these payments may be made.87.23EFFECTIVE DATE.This section is effective the day following final enactment.87.24    Sec. 41. Minnesota Statutes 2008, section 356.465, subdivision 1, is amended to read:87.25    Subdivision 1. Inclusion as recipient.Notwithstanding any provision to the 87.26contrary of the laws, articles of incorporation, or bylaws governing a covered retirement 87.27plan specified in subdivision 3, A retiring member may designate a qualified supplemental 87.28needs trust under subdivision 2 as the remainder recipient on an optional retirement 87.29annuity form for a period not to exceed the lifetime of the beneficiary of the supplemental 87.30needs trust.87.31EFFECTIVE DATE.This section is effective the day following final enactment.88.1    Sec. 42. Minnesota Statutes 2008, section 356.465, is amended by adding a subdivision 88.2to read:88.3    Subd. 4.Expanded eligibility.(a) Notwithstanding subdivision 1, for a retirement 88.4plan specified in paragraph (b), a designation under subdivision 1 may be made by an 88.5active, disabled, deferred, or retiring member.88.6(b) The applicable plan is the Teachers Retirement Association established under 88.7chapter 354.88.8EFFECTIVE DATE.This section is effective the day following final enactment.88.9    Sec. 43. Minnesota Statutes 2008, section 356.611, subdivision 3, is amended to read:88.10    Subd. 3. Maximum benefit limitations. A member's annual benefit, if necessary, 88.11must be reduced to the extent required by section 415(b) of the federal Internal Revenue 88.12Code, as adjusted by the United States secretary of the treasury under section 415(d) of the 88.13Internal Revenue Code for any applicable increases in the cost of living after the member's 88.14termination of employment. For purposes of section 415 of the federal Internal Revenue 88.15Code, the limitation year of a pension plan covered by this section must be the fiscal year 88.16or calendar year of that plan, whichever is applicable. The accrued benefit limitation 88.17described in section 415(e) of the Internal Revenue Code must cease to be effective for 88.18limitation years beginning after December 31, 1999.88.19EFFECTIVE DATE.This section is effective July 1, 2009.88.20    Sec. 44. Minnesota Statutes 2008, section 356.611, subdivision 4, is amended to read:88.21    Subd. 4. Compensation. (a) For purposes of this section, compensation means 88.22a member's compensation actually paid or made available for any limitation year 88.23determined as provided byincluding items described in federal treasury regulation section 88.241.415-2(d)(10) 1.415(c)-2(b) and excluding items described in federal treasury regulation 88.25section 1.415(c)-2(c).88.26(b) Compensation for any period includes:88.27(1) any elective deferral as defined in section 402(g)(3) of the federal Internal 88.28Revenue Code;88.29(2) any elective amounts that are not includable in a member's gross income by 88.30reason of sections 125 or 457 of the federal Internal Revenue Code; and88.31(3) any elective amounts that are not includable in a member's gross income by 88.32reason of section 132(f)(4) of the federal Internal Revenue Code.88.33EFFECTIVE DATE.This section is effective July 1, 2009.89.1    Sec. 45. Minnesota Statutes 2008, section 356.635, subdivision 6, is amended to read:89.2    Subd. 6. Eligible retirement plan. (a) An "eligible retirement plan" is:89.3(1) an individual retirement account under section 408(a) of the federal Internal 89.4Revenue Code;89.5(2) an individual retirement annuity plan under section 408(b) of the federal Internal 89.6Revenue Code;89.7(3) an annuity plan under section 403(a) of the federal Internal Revenue Code;89.8(4) a qualified trust plan under section 401(a) of the federal Internal Revenue Code 89.9that accepts the distributee's eligible rollover distribution;89.10(5) an annuity contract under section 403(b) of the federal Internal Revenue Code; or89.11(6) an eligible deferred compensation plan under section 457(b) of the federal89.12Internal Revenue Code, which is maintained by a state or local government and which 89.13agrees to separately account for the amounts transferred into the plan; or89.14(7) in the case of an eligible rollover distribution to a nonspousal beneficiary, an 89.15individual account or annuity treated as an inherited individual retirement account under 89.16section 402(c)(11) of the federal Internal Revenue Code.89.17(b) For distributions of after-tax contributions which are not includable in gross 89.18income, the after-tax portion may be transferred only to an individual retirement account 89.19or annuity described in section 408(a) or (b) of the federal Internal Revenue Code, or 89.20to a qualified defined contribution plan described in either section 401(a) or 403(a) of 89.21the federal Internal Revenue Code, that agrees to separately account for the amounts 89.22transferred, including separately accounting for the portion of the distribution which is 89.23includable in gross income and the portion of the distribution which is not includable.89.24EFFECTIVE DATE.This section is effective July 1, 2009.89.25    Sec. 46. Minnesota Statutes 2008, section 356.635, subdivision 7, is amended to read:89.26    Subd. 7. Distributee. A "distributee" is:89.27(1) an employee or a former employee;89.28(2) the surviving spouse of an employee or former employee; or89.29(3) the former spouse of the employee or former employee who is the alternate 89.30payee under a qualified domestic relations order as defined in section 414(p) of the federal89.31Internal Revenue Code, or who is a recipient of a court-ordered equitable distribution of 89.32marital property, as provided in section 
         518.58.; or89.33(4) a nonspousal beneficiary of an employee or former employee who qualifies 89.34for a distribution under the plan and is a designated beneficiary as defined in section 89.35401(a)(9)(E) of the federal Internal Revenue Code.90.1EFFECTIVE DATE.This section is effective July 1, 2009.90.2    Sec. 47. Minnesota Statutes 2008, section 356.96, subdivision 5, is amended to read:90.3    Subd. 5. Petition for review. (a) A person who claims a right under subdivision 2 90.4may petition for a review of that decision by the governing board of the covered pension 90.5plan.90.6    (b) A petition under this section must be sent to the chief administrative officer 90.7by mail and must be postmarked no later than 60 days after the person received the 90.8notice required by subdivision 3. The petition must include the person's statement of 90.9the reason or reasons that the person believes the decision of the chief administrative 90.10officer should be reversed or modified. The petition may include all documentation and 90.11written materials that the petitioner deems to be relevant. In developing a record for 90.12review by the board when a decision is appealed, the executive director may direct that the 90.13applicant participate in a fact-finding session conducted by an administrative law judge 90.14assigned by the Office of Administrative Hearings and, as applicable, participate in a 90.15vocational assessment conducted by a qualified rehabilitation counselor on contract with 90.16the applicable retirement system.90.17EFFECTIVE DATE.This section is effective the day following final enactment.90.18    Sec. 48. Laws 2006, chapter 271, article 5, section 5, as amended by Laws 2008, 90.19chapter 349, article 5, section 36, is amended to read:90.20    Sec. 5. EFFECTIVE DATE.90.21    (a) Sections 1, 3, and 4 are effective the day following final enactment and section 3 90.22has effect retroactively from July 25, 2005. 90.23    (b) Section 2 with respect to the Cannon Falls Hospital District is effective upon the 90.24latter of: 90.25    (1) the day after the governing body of the Cannon Falls Hospital District and its 90.26chief clerical officer meet the requirements under Minnesota Statutes, section 
         645.021, 90.27subdivisions 2
          and 3; and 90.28    (2) the first day of the month following certification to the Cannon Falls Hospital 90.29District by the executive director of the Public Employees Retirement Association that the 90.30actuarial accrued liability of the special benefit coverage proposed for extension to the 90.31privatized City of Cannon Falls Hospital employees under section 1 does not exceed the 90.32actuarial gain otherwise to be accrued by the Public Employees Retirement Association, as 90.33calculated by the consulting actuary retained under Minnesota Statutes, section 
         356.214. 91.1The cost of the actuarial calculations must be borne by the current employer or by the 91.2entity which is the employer following the privatization. 91.3    (c) Section 2, with respect to Clearwater County Memorial Hospital, is effective 91.4upon the latter of: 91.5    (1) the day after the governing body of Clearwater County and its chief clerical 91.6officer meet the requirements under Minnesota Statutes, section 
         645.021, subdivisions 291.7and 3, except that the certificate of approval must be filed before January 1, 2009 2010; and 91.8    (2) the first day of the month following certification to Clearwater County by the 91.9executive director of the Public Employees Retirement Association that the actuarial 91.10accrued liability of the special benefit coverage proposed for extension to the privatized 91.11Clearwater Health Services employees under section 2 does not exceed the actuarial gain 91.12otherwise to be accrued by the Public Employees Retirement Association, as calculated by 91.13the consulting actuary retained under Minnesota Statutes, section 
         356.214. The cost of 91.14the actuarial calculations must be borne by the current employer or by the entity which is 91.15the employer following the privatization. 91.16    (d) Section 2 with respect to the Dassel Lakeside Community Home is effective 91.17upon the latter of: 91.18    (1) the day after the governing body of the city of Dassel and its chief clerical officer 91.19timely complete compliance with Minnesota Statutes, section 
         645.021, subdivisions 291.20and 3; and 91.21    (2) the first day of the month next following certification to the Dassel City 91.22Council by the executive director of the Public Employees Retirement Association that 91.23the actuarial accrued liability of the special benefit coverage proposed for extension to 91.24the privatized Dassel Lakeside Community Home employees under section 2 does not 91.25exceed the actuarial gain otherwise to be accrued by the Public Employees Retirement 91.26Association, as calculated by the consulting actuary retained under Minnesota Statutes, 91.27section 
         356.214. The cost of the actuarial calculations must be borne by the city of Dassel 91.28or by the entity which is the employer following the privatization.91.29EFFECTIVE DATE.This section is effective the day following final enactment.91.30    Sec. 49. CITY OF DULUTH AND DULUTH AIRPORT AUTHORITY; 91.31CORRECTING ERRONEOUS EMPLOYEE DEDUCTIONS, EMPLOYER 91.32CONTRIBUTIONS AND ADJUSTING OVERPAID BENEFITS.91.33    Subdivision 1.Application.Notwithstanding any provisions of Minnesota Statutes 91.342008, section 353.27, subdivisions 7 and 7b, or Minnesota Statutes 2008, chapters 353 91.35and 356, to the contrary, this section establishes the procedures by which the executive 92.1director of the Public Employees Retirement Association shall adjust erroneous employee 92.2deductions and employer contributions paid on behalf of active employees and former 92.3members by the city of Duluth and by the Duluth Airport Authority on amounts 92.4determined by the executive director to be invalid salary under Minnesota Statutes, section 92.5353.01, subdivision 10, reported between January 1, 1997, and October 23, 2008, and for 92.6adjusting benefits that were paid to former members and their beneficiaries based upon 92.7invalid salary amounts.92.8    Subd. 2.Refunds of employee deductions.(a) The executive director shall refund 92.9to active employees or former members who are not receiving retirement annuities or 92.10benefits all erroneous employee deductions identified by the city of Duluth or by the 92.11Duluth Airport Authority as deductions taken from amounts determined to be invalid 92.12salary. The refunds must include interest at the rate specified in Minnesota Statutes, 92.13section 353.34, subdivision 2, from the date each invalid employee deduction was received 92.14through the date each refund is paid.92.15(b) The refund payment for active employees must be sent to the applicable 92.16governmental subdivision which must pay the refunded employee deductions plus interest 92.17to the active members who are employees of the city of Duluth or who are employees of 92.18the Duluth Airport Authority, as applicable.92.19(c) Refunds to former members must be mailed by the executive director of the 92.20Public Employees Retirement Association to the former member's last known address.92.21    Subd. 3.Benefit adjustments.(a) For a former member who is receiving a 92.22retirement annuity or disability benefit, or for a person receiving an optional annuity or 92.23survivor benefit, the executive director must:92.24(1) adjust the annuity or benefit payment to the correct monthly benefit amount 92.25payable by reducing the average salary under Minnesota Statutes, section 353.01, 92.26subdivision 17a, by the invalid salary amounts;92.27(2) determine the amount of the overpaid benefits paid from the effective date of 92.28the annuity or benefit payment to the first of the month in which the monthly benefit 92.29amount is corrected;92.30(3) calculate the amount of employee deductions taken in error on invalid salary, 92.31including interest at the rate specified in Minnesota Statutes, section 353.34, subdivision 2, 92.32from the date each invalid employee deduction was received through the date the annuity 92.33or benefit is adjusted as provided under clause (1); and92.34(4) determine the net amount of overpaid benefits by reducing the amount of the 92.35overpaid annuity or benefit as determined in clause (2) by the amount of the erroneous 92.36employee deductions with interest determined in clause (3).93.1(b) If a former member's erroneous employee deductions plus interest determined 93.2under this section exceeds the amount of the person's overpaid benefits, the balance must 93.3be refunded to the person to whom the annuity or benefit is being paid.93.4(c) The executive director shall recover the net amount of all overpaid annuities or 93.5benefits as provided under subdivision 4.93.6    Subd. 4.Employer credits and obligations.(a) The executive director shall 93.7provide a credit without interest to the city of Duluth and to the Duluth Airport Authority 93.8for the amount of that governmental subdivision's erroneous employer contributions. The 93.9credit must first be used to offset the net amount of the overpaid retirement annuities and 93.10the disability and survivor benefits that remains after applying the amount of erroneous 93.11employee deductions with interest as provided under subdivision 3, paragraph (a), 93.12clause (4). The remaining erroneous employer contributions, if any, must be credited 93.13against future employer contributions required to be paid by the applicable governmental 93.14subdivision. If the overpaid benefits exceed the employer contribution credit, the balance 93.15of the overpaid benefits is the obligation of the city of Duluth or the Duluth Airport 93.16Authority, whichever is applicable.93.17(b) The Public Employees Retirement Association board of trustees shall determine 93.18the period of time and manner for the collection of overpaid retirement annuities and 93.19benefits, if any, from the city of Duluth and the Duluth Airport Authority.93.20EFFECTIVE DATE.(a) This section is effective for the city of Duluth the day after 93.21the Duluth city council and the chief clerical officer of the city of Duluth timely complete 93.22their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for 93.23members who are, and former members who were, employees of the city of Duluth.93.24(b) This section is effective for the Duluth Airport Authority the day after the Duluth 93.25Airport Authority and the chief clerical officer of the Duluth Airport Authority timely 93.26complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 93.27and 3, for members who are, and former members who were, employees of the Duluth 93.28Airport Authority.93.29    Sec. 50. APPLICATION OF PUBLIC EMPLOYEES RETIREMENT 93.30ASSOCIATION ERRONEOUS RECEIPTS AND DISBURSEMENTS PROVISION; 93.31ELECTION.93.32(a) If adjustments under Minnesota Statutes, section 353.27, subdivision 7, due 93.33to invalid salary amounts are in process as of the effective date of this section for 93.34employees or former employees of a governmental subdivision, the governing body of the 93.35governmental subdivision may elect to have the statute of limitations under Minnesota 94.1Statutes, section 353.27, subdivision 7, paragraphs (c) and (g), apply to adjustments or 94.2corrections in process as of the effective date of Minnesota Statutes, section 353.27, 94.3subdivision 7, by a resolution of the governing body transmitted to the Public Employees 94.4Retirement Association executive director within 90 days after the effective date of this 94.5section.94.6(b) If the governing body of the governmental subdivision declines the treatment 94.7permitted under paragraph (a) or fails to submit a resolution in a timely manner, the statute 94.8of limitations does not apply to adjustments or corrections in process as of the effective 94.9date.94.10EFFECTIVE DATE.This section is effective the day after final enactment.94.11    Sec. 51.  REPEALER.94.12Minnesota Statutes 2008, sections 354.06, subdivision 6; and 354.55, subdivision 94.1314, are repealed.94.14EFFECTIVE DATE.This section is effective the day following final enactment.94.15ARTICLE 594.16LOCAL GOVERNMENT POSTRETIREMENT OPTION PROGRAM94.17    Section 1. Minnesota Statutes 2008, section 353.01, subdivision 11b, is amended to 94.18read:94.19    Subd. 11b. Termination of membership. (a) "Termination of membership" means 94.20the conclusion of membership in the association for a person who has not terminated 94.21public service under subdivision 11a and occurs:94.22(1) when a person files a written election with the association to discontinue 94.23employee deductions under section 
         353.27, subdivision 7, paragraph (a), clause (1);94.24(2) when a city manager files a written election with the association to discontinue 94.25employee deductions under section 
         353.028, subdivision 2; or94.26(3) when a member transfers to a temporary position and becomes excluded from 94.27membership under subdivision 2b, clause (4).; or94.28(4) when a member is approved to participate in the postretirement option authorized 94.29under section 353.371.94.30(b) The termination of membership under clauseclauses (3) and (4) must be reported 94.31to the association by the governmental subdivision.94.32EFFECTIVE DATE.This section is effective the day following final enactment.95.1    Sec. 2. [353.371] POSTRETIREMENT OPTION.95.2    Subdivision 1.Eligibility.(a) This section applies to a basic or coordinated member 95.3of the general employees retirement plan of the Public Employees Retirement Association 95.4who:95.5(1) for at least the five years immediately preceding separation under clause (2), was 95.6regularly scheduled to work 1,044 or more hours per year in a position covered by the 95.7general employees retirement plan of the Public Employees Retirement Association;95.8(2) terminates membership as defined under section 353.01, subdivision 11b; 95.9(3) at the time of termination under clause (2), was at least age 62 and met the age 95.10and service requirements necessary to receive a retirement annuity from the plan and 95.11satisfied requirements for the commencement of the retirement annuity;95.12(4) agrees to accept a postretirement option position with the same or a different 95.13governmental subdivision, working a reduced schedule that is both:95.14(i) a reduction of at least 25 percent from the employee's number of previously 95.15regularly scheduled work hours; and 95.16(ii) 1,044 hours or less in public; and95.17(5) is not eligible for participation in the state employee postretirement option 95.18program under section 43A.346.95.19(b) For purposes of this section, the length of separation requirement and termination 95.20of service requirement prohibiting return to work agreements under section 353.01, 95.21subdivisions 11a and 28, are not applicable.95.22    Subd. 2.Annuity reduction not applicable.Notwithstanding any law to the 95.23contrary, the provisions of section 353.37 governing annuities of reemployed annuitants 95.24do not apply for the duration of a terminated member's employment in a postretirement 95.25option position.95.26    Subd. 3.Governing body discretion.The governing body of the governmental 95.27subdivision has sole discretion to determine if and the extent to which a postretirement 95.28option position under this section is available to a terminated member. Any offer of such 95.29a position must be made in writing to the person by the governing body's designee in a 95.30manner prescribed by the executive director.95.31    Subd. 4.Duration.Postretirement option employment shall be for an initial period 95.32not to exceed one year. At the end of the initial period, the governing body has sole 95.33discretion to determine if the offer of a postretirement option position will be renewed, 95.34renewed with modifications, or terminated. Postretirement option employment may be 95.35renewed annually, but may not be renewed after the individual attains retirement age as 95.36defined in United States Code, title 42, section 416(l). 96.1    Subd. 5.Copy to fund.The appointing authority shall provide the Public 96.2Employees Retirement Association with documentation, as prescribed by the executive 96.3director, of the terms of any agreement entered into with a member who accepts continuing 96.4employment with the appointing authority under the terms of this section, and any 96.5subsequent renewal agreement.96.6    Subd. 6.No service credit.Notwithstanding any law to the contrary, a person 96.7may not earn service credit in the general employees retirement plan of the Public 96.8Employees Retirement Association for employment covered under this section, and 96.9employer contributions and payroll deductions for the retirement fund must not be made 96.10based on earnings of a person working under an agreement covered by this section. No 96.11change may be made to a monthly annuity or retirement allowance based on employment 96.12under this section.96.13    Subd. 7.Subsequent employment.If a person has been in a postretirement option 96.14position and accepts any other position in public service beyond the period of time for 96.15which the person participated in the postretirement option provided under this section, the 96.16person may not earn service credit in the general employees retirement plan of the Public 96.17Employees Retirement Association, no employer contributions or payroll deductions for 96.18the retirement fund may be made, and the provisions of section 353.37 apply.96.19EFFECTIVE DATE.This section is effective the day following final enactment 96.20and expires on June 30, 2011. Individuals must not be appointed to a postretirement option 96.21position after that date.96.22ARTICLE 696.23MNSCU RELATED RETIREMENT PROVISIONS96.24    Section 1. [136F.481] EARLY SEPARATION INCENTIVE PROGRAM.96.25(a) Notwithstanding any provision of law to the contrary, the Board of Trustees 96.26of the Minnesota State Colleges and Universities may offer a targeted early separation 96.27incentive program for its employees.96.28(b) The early separation incentive program may include one or both of the following:96.29(1) cash incentives, not to exceed one year of base salary; or 96.30(2) employer contributions to the postretirement healthcare savings plan established 96.31under section 352.98.96.32(c) To be eligible to receive an incentive, an employee must be at least age 55 96.33and must have at least five years of employment by the Minnesota State Colleges and 96.34Universities System. The board of trustees shall establish the eligibility requirements 97.1for system employees to receive an incentive. The board of trustees shall file a copy 97.2of its proposed eligibility requirements with the chairs and ranking members of the 97.3Senate Committee on Higher Education and the Higher Education Budget and Policy 97.4Division of the Senate Committee on Finance and with the chair and ranking members of 97.5the Higher Education and Workforce Development Finance and Policy Division of the 97.6Finance Committee of the House of Representatives at least 30 days before their final 97.7adoption by the board of trustees, shall post the same document on the system website at 97.8the same time, and shall hold a public hearing on the proposed eligibility requirements. 97.9The type and any additional amount of the incentive to be offered may vary by employee 97.10classification, as specified by the board.97.11(d) The president of a college or university, consistent with paragraphs (b) and 97.12(c), may designate: 97.13(1) specific departments or programs at the college or university whose employees 97.14are eligible to be offered the incentive program; or97.15(2) positions at the college or university eligible to be offered the incentive program.97.16(e) The chancellor, consistent with paragraphs (b) and (c), may designate:97.17(1) system office divisions whose employees are eligible to be offered the incentive 97.18program; or97.19(2) positions at the system office eligible to be offered the incentive program.97.20(f) Acceptance of the offered incentive must be voluntary on the part of the employee 97.21and must be in writing. The incentive may only be offered at the sole discretion of the 97.22president of the applicable college or university.97.23(g) A decision by the president of a college or university or by the chancellor not to 97.24offer an incentive may not be challenged.97.25(h) The cost of the incentive is payable by the college or university on whose behalf 97.26the president offered the incentive or from the system office budget if the chancellor 97.27offered the incentive. If a college or university is merged, the remaining cost of any 97.28early separation incentive must be borne by the successor institution. If a college or 97.29university is closed, the remaining cost of any early separation incentive must be borne 97.30by the board of trustees.97.31(i) Annually, the chancellor and the president of each college or university must 97.32report on the number and types of early separation incentives which were offered and 97.33utilized under this section. The report must be filed annually with the board of trustees and 97.34with the Legislative Reference Library on or before September 1.97.35EFFECTIVE DATE; SUNSET.This section is effective the day following final 97.36enactment and expires June 30, 2014.98.1    Sec. 2. [136F.482] APPLICATION OF OTHER LAWS.98.2Unilateral implementation of section 136F.481 by the Board of Trustees of the 98.3Minnesota State Colleges and Universities, by the chancellor, or by a president of a college 98.4or university is not an unfair labor practice under chapter 179A.98.5EFFECTIVE DATE; SUNSET.This section is effective the day following final 98.6enactment and expires June 30, 2014.98.7    Sec. 3. Minnesota Statutes 2008, section 354B.21, subdivision 2, is amended to read:98.8    Subd. 2. Coverage; election.(a) For Eligible persons who were employed by 98.9the former state university system or the former community college system before May 98.101, 1995, the person has the retirement coverage that the person had for employment 98.11immediately before May 1, 1995.98.12(b) For all other eligible persons (a) Eligible persons who were employed by 98.13the Minnesota State Colleges and Universities System on or after June 30, 2009, 98.14unless otherwise specified in this section, the eligible person isare authorized to elect 98.15prospective Teachers Retirement Association plan coverage rather than coverage by 98.16the plan established by this chapter. The election of prospective Teachers Retirement 98.17Association plan coverage shallmust be made within one year of commencing eligible 98.18Minnesota State Colleges and Universities system employment. If an election is not made 98.19within the specified election period due to a termination of Minnesota State Colleges and 98.20Universities system employment, an election may be made within 90 days of returning to 98.21eligible Minnesota State Colleges and Universities system employment. All elections are 98.22irrevocable. Prior toBefore making an election, the eligible person shall beis covered by 98.23the plan indicated as default coverage under subdivision 3.98.24(b) Except as provided in paragraph (c), a purchase of service credit in the Teachers 98.25Retirement Association plan for any period or periods of Minnesota State Colleges and 98.26Universities system employment occurring prior tobefore the election under paragraph 98.27(b)(a) is prohibited.98.28(c) Notwithstanding paragraphs (a) and (b), a faculty member who is a member of 98.29the individual retirement account plan who first achieves tenure or its equivalent at a 98.30Minnesota state college or university after June 30, 2009, may elect to transfer retirement 98.31coverage under the teachers retirement plan within one year of the faculty member 98.32achieving tenure or its equivalent at a Minnesota state college or university. The faculty 98.33member electing Teachers Retirement Association coverage under this paragraph must 98.34purchase service credit in the Teachers Retirement Association for the entire period of 98.35time covered under the individual retirement account plan and the purchase payment 99.1amount must be determined under section 356.551. The Teachers Retirement Association 99.2may charge a faculty member transferring coverage a reasonable fee to cover the costs 99.3associated with computing the actuarial cost of purchasing service credit and making the 99.4transfer. A faculty member transferring from the individual retirement account plan to the 99.5Teachers Retirement Association may use any balances to the credit of the faculty member 99.6in the individual retirement account plan, any balances to the credit of the faculty member 99.7in the higher education supplemental retirement plan established under chapter 354C, or 99.8any source specified in section 356.441, subdivision 1, to purchase the service credit in the 99.9Teachers Retirement Association. If the total amount of payments under this paragraph are 99.10less than the total purchase payment amount under section 356.551, the payment amounts 99.11must be refunded to the applicable source. The retirement coverage transfer and service 99.12credit purchase authority under this paragraph expires with respect to any Minnesota State 99.13Colleges and Universities System faculty initially hired after June 30, 2014.99.14EFFECTIVE DATE.This section is effective July 1, 2009.99.15ARTICLE 799.16ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION99.17POSTRETIREMENT ADJUSTMENTS99.18    Section 1. Minnesota Statutes 2008, section 354A.29, subdivision 3, is amended to 99.19read:99.20    Subd. 3. Postretirement adjustment. (a) The postretirement adjustment described 99.21in the articles and bylaws of the St. Paul Teachers Retirement Fund Associationthis 99.22section  must be determined by the executive director of the St. Paul Teachers Retirement 99.23Fund Association and approved by the board annually after June 30using the procedures 99.24under this section.99.25(b)  On January 1,each eligible person who has been receiving an annuity or benefit 99.26under the articles of incorporation, the bylaws, or this chapter for at least 12three calendar 99.27months as of the end of the fiscallast day of the previous calendar year is eligible to 99.28receive a postretirement adjustment of 2.0 percent that is payable each January 1 increase 99.29as further specified in this subdivision.99.30(c) A percentage adjustment must be computed and paid under this subdivision to 99.31eligible persons under paragraph (b). This adjustment is determined by reference to the 99.32Consumer Price Index for urban wage earners and clerical workers all items index as 99.33reported by the Bureau of Labor Statistics within the United States Department of Labor 99.34each year as part of the determination of annual cost-of-living adjustments to recipients of 99.35federal old-age, survivors, and disability insurance. For calculations of the cost-of-living 100.1adjustment under paragraph (d), the term "average third quarter Consumer Price Index 100.2value" means the sum of the monthly index values as initially reported by the Bureau of 100.3Labor Statistics for the months of July, August, and September, divided by 3.100.4(d) Before January 1 of each year, the executive director must calculate the amount 100.5of the cost-of-living adjustment by dividing the most recent average third quarter index 100.6value by the same average third quarter index value from the previous year, subtract one 100.7from the resulting quotient, and express the result as a percentage amount, which must be 100.8rounded to the nearest one-tenth of one percent.100.9(e) The amount calculated under paragraph (d) is the full cost-of-living adjustment 100.10to be applied as a permanent increase to the regular payment of each eligible member 100.11on January 1 of the next calendar year. For any eligible member whose effective date 100.12of benefit commencement occurred during the calendar year before the cost-of-living 100.13adjustment is applied, the full increase amount must be prorated on the basis of whole 100.14calendar quarters in benefit payment status in the calendar year prior to the January 1 on 100.15which the cost-of-living adjustment is applied, calculated to the third decimal place.100.16(f) The adjustment may not be less than zero, nor greater than five percent. 100.17    Sec. 2. BYLAW REVISION AUTHORIZATION.100.18Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the board of 100.19the St. Paul Teachers Retirement Fund Association shall revise the bylaws or articles of 100.20incorporation of the teachers retirement fund association to conform with section 1.100.21    Sec. 3.  REPEALER.100.22Minnesota Statutes 2008, section 354A.29, subdivisions 2, 4, and 5, are repealed.100.23    Sec. 4. EFFECTIVE DATE.100.24Sections 1 to 3 are effective January 1, 2010, and expire June 30, 2011.100.25ARTICLE 8100.26LOCAL POLICE AND PAID FIRE RELIEF100.27ASSOCIATION CHANGES100.28    Section 1. Minnesota Statutes 2008, section 69.77, subdivision 4, is amended to read:100.29    Subd. 4. Relief association financial requirements; minimum municipal 100.30obligation. (a) The officers of the relief association shall determine the financial 100.31requirements of the relief association and minimum obligation of the municipality for 100.32the following calendar year in accordance with the requirements of this subdivision. 101.1The financial requirements of the relief association and the minimum obligation of the 101.2municipality must be determined on or before the submission date established by the 101.3municipality under subdivision 5.101.4(b) The financial requirements of the relief association for the following calendar 101.5year must be based on the most recent actuarial valuation or survey of the special fund of 101.6the association if more than one fund is maintained by the association, or of the association, 101.7if only one fund is maintained, prepared in accordance with sections 
         356.215, subdivisions 101.84 to 15
         , and 
         356.216, as required under subdivision 10. If an actuarial estimate is prepared 101.9by the actuary of the relief association as part of obtaining a modification of the benefit 101.10plan of the relief association and the modification is implemented, the actuarial estimate 101.11must be used in calculating the subsequent financial requirements of the relief association.101.12(c) If the relief association has an unfunded actuarial accrued liability as reported in 101.13the most recent actuarial valuation or survey, the total of the amounts calculated under 101.14clauses (1), (2), and (3), constitute the financial requirements of the relief association for 101.15the following year. If the relief association does not have an unfunded actuarial accrued 101.16liability as reported in the most recent actuarial valuation or survey, the amount calculated 101.17under clauses (1) and (2) constitute the financial requirements of the relief association for 101.18the following year. The financial requirement elements are:101.19(1) the normal level cost requirement for the following year, expressed as a dollar 101.20amount, which must be determined by applying the normal level cost of the relief 101.21association as reported in the actuarial valuation or survey and expressed as a percentage 101.22of covered payroll to the estimated covered payroll of the active membership of the relief 101.23association, including any projected change in the active membership, for the following 101.24year;101.25(2) for the Bloomington Fire Department Relief Association, the Fairmont Police 101.26Relief Association, and the Virginia Fire Department Relief Association, to the dollar 101.27amount of normal cost determined under clause (1) must be added an amount equal to the 101.28dollar amount of the administrative expenses of the special fund of the association if more 101.29than one fund is maintained by the association, or of the association if only one fund is 101.30maintained, for the most recent year, multiplied by the factor of 1.035. The administrative 101.31expenses are those authorized under section 
         69.80. No amount of administrative expenses 101.32under this clause are to be included in the financial requirements of the Minneapolis 101.33Firefighters Relief Association or the Minneapolis Police Relief Association; and101.34(3) to the dollar amount of normal cost and expenses determined under clauses 101.35(1) and (2) must be added an amount equal to the level annual dollar amount which is 101.36sufficient to amortize the unfunded actuarial accrued liability by December 31, 2010, the 102.1Fairmont Police Relief Association, the Minneapolis Firefighters Relief Association, 102.2and the Virginia Fire Department Relief Association, by the date determined under 102.3section 356.216, paragraph (a), clause (2), for the Bloomington Fire Department Relief 102.4Association, and by December 31, 2020, for the Minneapolis Police Relief Association, as 102.5determined from the actuarial valuation or survey of the fund, using an interest assumption 102.6set at the applicable rate specified in section 
         356.215, subdivision 8. The, by that 102.7fund's amortization date as specified in this clause applies to all local police or salaried 102.8firefighters' relief associations and that date supersedes any amortization date specified in 102.9any applicable special law paragraph (d).102.10(d) The Minneapolis Firefighters Relief Association special fund amortization date 102.11is determined under section 423C.15, subdivisions 3 and 4. The Virginia Fire Department 102.12Relief Association special fund amortization date is December 31, 2010. The Minneapolis 102.13Police Relief Association special fund and the Fairmont Police Relief Association 102.14special fund amortization date is December 31, 2020. The Bloomington Fire Department 102.15Relief Association special fund amortization date is determined under section 356.216, 102.16paragraph (a), clause (2). The amortization date specified in this paragraph supersedes any 102.17amortization date specified in any applicable special law.102.18(d) (e) The minimum obligation of the municipality is an amount equal to the 102.19financial requirements of the relief association reduced by the estimated amount of 102.20member contributions from covered salary anticipated for the following calendar year and 102.21the estimated amounts anticipated for the following calendar year from the applicable 102.22state aid program established under sections 
         69.011 to 
         69.051 receivable by the relief 102.23association after any allocation made under section 
         69.031, subdivision 5, paragraph (b), 102.24clause (2), or 
         423A.01, subdivision 2, paragraph (a), clause (6), from the local police 102.25and salaried firefighters' relief association amortization aid program established under 102.26section 
         423A.02, subdivision 1, from the supplementary amortization state-aid program 102.27established under section 
         423A.02, subdivision 1a, and from the additional amortization 102.28state aid under section 
         423A.02, subdivision 1b.102.29EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after 102.30the Fairmont City Council and the chief clerical officer of the city of Fairmont timely 102.31complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.102.32    Sec. 2. Minnesota Statutes 2008, section 423A.02, subdivision 1, is amended to read:102.33    Subdivision 1. Amortization state aid. (a) A municipality in which is located 102.34a local police or salaried firefighters' relief association to which the provisions of 102.35section 
         69.77, apply, that had an unfunded actuarial accrued liability in the most recent 103.1relief association actuarial valuation, is entitled, upon application as required by the 103.2commissioner of revenue, to receive local police and salaried firefighters' relief association 103.3amortization state aid if the municipality and the appropriate relief association both comply 103.4with the applicable provisions of sections 
         69.031, subdivision 5, 
         69.051, subdivisions 1 103.5and 3
         , and 
         69.77. If a municipality loses entitlement for amortization state aid in any year 103.6because its local relief association no longer has an unfunded actuarial accrued liability, 103.7the municipality is not entitled to amortization state aid in any subsequent year.103.8(b) The total amount of amortization state aid to all entitled municipalities must 103.9not exceed $5,055,000.103.10(c) Subject to the adjustment for the city of Minneapolis provided in this paragraph, 103.11the amount of amortization state aid to which a municipality is entitled annually is an 103.12amount equal to the level annual dollar amount required to amortize, by December 31, 103.132010, the unfunded actuarial accrued liability of the special fund of the appropriate 103.14relief association as reported in the December 31, 1978, actuarial valuation of the 103.15relief association prepared under sections 
         356.215 and 
         356.216, reduced by the dollar 103.16amount required to pay the interest on the unfunded actuarial accrued liability of the 103.17special fund of the relief association for calendar year 1981 set at the rate specified in 103.18Minnesota Statutes 1978, section 
         356.215, subdivision 8. For the city of Minneapolis, the 103.19amortization state aid amount thus determined must be reduced by $747,232 on account of 103.20the Minneapolis Police Relief Association and by $772,768 on account of the Minneapolis 103.21Fire Department Relief Association. If the amortization state aid amounts determined 103.22under this paragraph exceed the amount appropriated for this purpose, the amortization 103.23state aid for actual allocation must be reduced pro rata. 103.24(d) Payment of amortization state aid to municipalities must be made directly to 103.25the municipalities involved in three equal installments on July 15, September 15, and 103.26November 15 annually. Upon receipt of amortization state aid, the municipal treasurer 103.27shall transmit the aid amount to the treasurer of the local relief association for immediate 103.28deposit in the special fund of the relief association.103.29(e) The commissioner of revenue shall prescribe and periodically revise the form for 103.30and content of the application for the amortization state aid.103.31    Sec. 3. Minnesota Statutes 2008, section 423A.02, subdivision 3, is amended to read:103.32    Subd. 3. Reallocation of amortization or supplementary amortization state 103.33aid. (a) Seventy percent of the difference between $5,720,000 and the current year 103.34amortization aid or supplemental amortization aid distributed under subdivisions 1 and 1a 103.35that is not distributed for any reason to a municipality for use by a local police or salaried 104.1fire relief association must be distributed by the commissioner of revenue according to this 104.2paragraph. The commissioner shall distribute 70 50 percent of the amounts derived under 104.3this paragraph to the Teachers Retirement Association, ten percent to the Duluth Teachers 104.4Retirement Fund Association, and 30 40 percent to the St. Paul Teachers Retirement Fund 104.5Association to fund the unfunded actuarial accrued liabilities of the respective funds. 104.6These payments shall be made on or before June 30 each fiscal year. The amount required 104.7under this paragraph is appropriated annually from the general fund to the commissioner 104.8of revenue. If the St. Paul Teachers Retirement Fund Association becomes fully funded, 104.9its eligibility for this aid ceases. Amounts remaining in the undistributed balance account 104.10at the end of the biennium if aid eligibility ceases cancel to the general fund.104.11    (b) In order to receive amortization and supplementary amortization aid under 104.12paragraph (a), Independent School District No. 625, St. Paul, must make contributions 104.13to the St. Paul Teachers Retirement Fund Association in accordance with the following 104.14schedule:

104.15Fiscal YearAmount104.161996$0104.171997$0104.181998$200,000104.191999$400,000104.202000$600,000104.212001 and thereafter$800,000

104.22    (c) Special School District No. 1, Minneapolis, and the city of Minneapolis must 104.23each make contributions to the Teachers Retirement Association in accordance with the 104.24following schedule:

104.25104.26Fiscal YearCity amountSchool district 
                  		amount104.271996$0$0104.281997$0$0104.291998$250,000$250,000104.301999$400,000$400,000104.312000$550,000$550,000104.322001$700,000$700,000104.332002$850,000$850,000104.342003 and thereafter$1,000,000$1,000,000

104.35    (d) Money contributed under paragraph (a) and either paragraph (b) or (c), as 104.36applicable, must be credited to a separate account in the applicable teachers retirement 104.37fund and may not be used in determining any benefit increases. The separate account 104.38terminates for a fund when the aid payments to the fund under paragraph (a) cease.105.1    (e) Thirty percent of the difference between $5,720,000 and the current year 105.2amortization aid or supplemental amortization aid under subdivisions 1 and 1a that is not 105.3distributed for any reason to a municipality for use by a local police or salaried firefighter 105.4relief association must be distributed under section 
         69.021, subdivision 7, paragraph (d), 105.5as additional funding to support a minimum fire state aid amount for volunteer firefighter 105.6relief associations. The amount required under this paragraph is appropriated annually 105.7to the commissioner of revenue.105.8    Sec. 4. Minnesota Statutes 2008, section 423C.03, subdivision 1, is amended to read:105.9    Subdivision 1. Board composition and elections. The board shall consist of 105.10two persons appointed by the city and tenthe number of other members specified in 105.11the association bylaws, but not to exceed ten, who must be selected by the members. 105.12Elections for active and retired positions on the board shall be conducted pursuant to 105.13the association's bylaws.105.14EFFECTIVE DATE.This section is effective the day following final enactment.105.15ARTICLE 9105.16VOLUNTARY STATEWIDE LUMP SUM VOLUNTEER105.17FIREFIGHTER RETIREMENT PLAN105.18    Section 1. Minnesota Statutes 2008, section 11A.17, subdivision 1, is amended to read:105.19    Subdivision 1. Purpose; accounts; continuation.(a) The purpose of the 105.20supplemental investment fund is to provide an investment vehicle for the assets of various 105.21public retirement plans and funds.105.22(b) The fund consists of seveneight investment accounts: an income share account, 105.23a growth share account, an international share account, a money market account, a fixed 105.24interest account, a bond market account, and a common stock index account, and a 105.25volunteer firefighter account.105.26(c) The supplemental investment fund is a continuation of the supplemental 105.27retirement fund in existence on January 1, 1980.105.28    Sec. 2. Minnesota Statutes 2008, section 11A.17, subdivision 2, is amended to read:105.29    Subd. 2. Assets.(a) The assets of the supplemental investment fund shall consist 105.30of the money certified and transmitted to the state board from the participating public 105.31retirement plans and funds orfrom the board of the Minnesota State Colleges and105.32Universities under section 136F.45 and from the voluntary statewide lump-sum volunteer 105.33firefighter retirement plan under section 353G.08.106.1(b) With the exception of the assets of the voluntary statewide lump-sum volunteer 106.2firefighter retirement fund, the assets must be used to purchase investment shares in 106.3the investment accounts as specified by the plan or fund. The assets of the voluntary 106.4statewide lump-sum volunteer firefighter retirement fund must be invested in the volunteer 106.5firefighter account.106.6(c) These accounts must be valued at least on a monthly basis but may be valued 106.7more frequently as determined by the State Board of Investment.  106.8    Sec. 3. Minnesota Statutes 2008, section 69.011, subdivision 1, is amended to read:106.9    Subdivision 1. Definitions. Unless the language or context clearly indicates that a 106.10different meaning is intended, the following words and terms shall, for the purposes of this 106.11chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:106.12    (a) "Commissioner" means the commissioner of revenue.106.13    (b) "Municipality" means:106.14    (1) a home rule charter or statutory city;106.15    (2) an organized town;106.16    (3) a park district subject to chapter 398;106.17    (4) the University of Minnesota;106.18    (5) for purposes of the fire state aid program only, an American Indian tribal 106.19government entity located within a federally recognized American Indian reservation;106.20    (6) for purposes of the police state aid program only, an American Indian tribal 106.21government with a tribal police department which exercises state arrest powers under 106.22section 
         626.90, 
         626.91, 
         626.92, or 
         626.93; 106.23    (7) for purposes of the police state aid program only, the Metropolitan Airports 106.24Commission with respect to peace officers covered under chapter 422A; and106.25    (8) for purposes of the police state aid program only, the Department of Natural 106.26Resources and the Department of Public Safety with respect to peace officers covered 106.27under chapter 352B.106.28    (c) "Minnesota Firetown Premium Report" means a form prescribed by the 106.29commissioner containing space for reporting by insurers of fire, lightning, sprinkler 106.30leakage and extended coverage premiums received upon risks located or to be performed 106.31in this state less return premiums and dividends.106.32    (d) "Firetown" means the area serviced by any municipality having a qualified fire 106.33department or a qualified incorporated fire department having a subsidiary volunteer 106.34firefighters' relief association.107.1    (e) "Market value" means latest available market value of all property in a taxing 107.2jurisdiction, whether the property is subject to taxation, or exempt from ad valorem 107.3taxation obtained from information which appears on abstracts filed with the commissioner 107.4of revenue or equalized by the State Board of Equalization.107.5    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the 107.6commissioner for reporting by each fire and casualty insurer of all premiums received 107.7upon direct business received by it in this state, or by its agents for it, in cash or otherwise, 107.8during the preceding calendar year, with reference to insurance written for insuring against 107.9the perils contained in auto insurance coverages as reported in the Minnesota business 107.10schedule of the annual financial statement which each insurer is required to file with 107.11the commissioner in accordance with the governing laws or rules less return premiums 107.12and dividends.107.13    (g) "Peace officer" means any person:107.14    (1) whose primary source of income derived from wages is from direct employment 107.15by a municipality or county as a law enforcement officer on a full-time basis of not less 107.16than 30 hours per week;107.17    (2) who has been employed for a minimum of six months prior to December 31 107.18preceding the date of the current year's certification under subdivision 2, clause (b);107.19    (3) who is sworn to enforce the general criminal laws of the state and local 107.20ordinances;107.21    (4) who is licensed by the Peace Officers Standards and Training Board and is 107.22authorized to arrest with a warrant; and107.23    (5) who is a member of a local police relief association to which section 
         69.77 107.24applies, the State Patrol retirement plan, the public employees police and fire fund, or the 107.25Minneapolis Employees Retirement Fund. 107.26    (h) "Full-time equivalent number of peace officers providing contract service" means 107.27the integral or fractional number of peace officers which would be necessary to provide 107.28the contract service if all peace officers providing service were employed on a full-time 107.29basis as defined by the employing unit and the municipality receiving the contract service.107.30    (i) "Retirement benefits other than a service pension" means any disbursement 107.31authorized under section 
         424A.05, subdivision 3, clauses (2) and (3). 107.32    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means the person 107.33who was elected or appointed to the specified position or, in the absence of the person, 107.34another person who is designated by the applicable governing body. In a park district, 107.35the clerk is the secretary of the board of park district commissioners. In the case of the 107.36University of Minnesota, the clerk is that official designated by the Board of Regents. 108.1For the Metropolitan Airports Commission, the clerk is the person designated by the 108.2commission. For the Department of Natural Resources or the Department of Public Safety, 108.3the clerk is the respective commissioner. For a tribal police department which exercises 108.4state arrest powers under section 
         626.90, 
         626.91, 
         626.92, or 
         626.93, the clerk is the person 108.5designated by the applicable American Indian tribal government. 108.6(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the 108.7retirement plan established by chapter 353G.108.8    Sec. 4. Minnesota Statutes 2008, section 69.011, subdivision 2, is amended to read:108.9    Subd. 2. Qualification for fire or police state aid. (a) Unless retirement coverage 108.10is provided by the voluntary statewide lump-sum volunteer firefighter retirement plan, in 108.11order to qualify to receive fire state aid, on or before March 15 annually, in conjunction 108.12with the financial report required pursuant to section 
         69.051, the clerk of each municipality 108.13having a duly organized fire department as provided in subdivision 4, or the secretary of 108.14each independent nonprofit firefighting corporation having a subsidiary incorporated 108.15firefighters' relief association whichever is applicable, and the fire chief, shall jointly 108.16certify the existence of the municipal fire department or of the independent nonprofit 108.17firefighting corporation, whichever is applicable, which meets the minimum qualification 108.18requirements set forth in this subdivision, and the fire personnel and equipment of the 108.19municipal fire department or the independent nonprofit firefighting corporation as of the 108.20preceding December 31. 108.21(b) Where retirement coverage is provided by the voluntary statewide lump-sum 108.22volunteer firefighter retirement plan, the executive director of the Public Employees 108.23Retirement Association shall certify the existence of that coverage for each municipality 108.24and the municipal clerk or independent nonprofit firefighting corporation secretary, 108.25whichever applies, and the applicable fire chief shall certify the fire personnel and fire 108.26department equipment as of the preceding December 31. 108.27(c) Certification shallmust be made to the commissioner on a form prescribed 108.28by the commissioner and shall include any other facts the commissioner may require. 108.29The certification shallmust be made to the commissioner in duplicate. Each copy of the 108.30certificate shallmust be duly executed and is deemed to be an original. The commissioner 108.31shall forward one copy to the auditor of the county wherein the fire department is located 108.32and shall retain one copy.  108.33(b) (d) On or before March 15 annually the clerk of each municipality having a duly 108.34organized police department and having a duly incorporated relief association shall certify 108.35that fact to the county auditor of the county where the police department is located and to 109.1the commissioner on a form prescribed by the commissioner together with the other facts 109.2the commissioner or auditor may require.109.3(e) Except as provided in subdivision 2b, on or before March 15 annually, the clerk 109.4of each municipality and the auditor of each county employing one or more peace officers 109.5as defined in subdivision 1, clause (g), shall certify the number of such peace officers to 109.6the commissioner on forms prescribed by the commissioner. Credit for officers employed 109.7less than a full year shallmust be apportioned. Each full month of employment of a 109.8qualifying officer during the calendar year shall entitleentitles the employing municipality 109.9or county to credit for 1/12 of the payment for employment of a peace officer for the entire 109.10year. For purposes of sections 
         69.011 to 
         69.051, employment of a peace officer shall 109.11commencecommences when the peace officer is entered on the payroll of the respective 109.12municipal police department or county sheriff's department. No peace officer shallmay be 109.13included in the certification of the number of peace officers by more than one municipality 109.14or county for the same month.  109.15    Sec. 5. Minnesota Statutes 2008, section 69.011, subdivision 4, is amended to read:109.16    Subd. 4. Qualification for state aid. Any municipality in this state having for more 109.17than one year an organized fire department and officially established by the governing 109.18body of the municipality or an independent nonprofit fire fighting corporation created 109.19under the nonprofit corporation act of this state and operating exclusively for fire fighting 109.20purposes and providing retirement and relief benefits to its members or, having a separate 109.21subsidiary incorporated firefighter's relief and pension association providing retirement and 109.22relief benefits, or participating in the voluntary statewide lump-sum volunteer firefighter 109.23retirement plan, may qualify to receive state aid if it meets the following minimum 109.24requirements or equivalent as determined by the state fire marshal by July 1, 1972:109.25(a) ten paid or volunteer firefighters including a fire chief and assistant fire chief, and109.26(b) regular scheduled meetings and frequent drills including instructions in fire 109.27fighting tactics and in the use, care, and operation of all fire apparatus and equipment, and109.28(c) a motorized fire truck equipped with a motorized pump, 250 gallon or larger 109.29water tank, 300 feet of one inch or larger fire hose in two lines with combination spray 109.30and straight stream nozzles, five-gallon hand pumps--tank extinguisher or equivalent, dry 109.31chemical extinguisher or equivalent, ladders, extension ladders, pike poles, crow bars, 109.32axes, lanterns, fire coats, helmets, boots, and109.33(d) apparatus suitably housed in a building of good construction with facilities for 109.34care of hose and equipment, and110.1(e) a reliable and adequate method of receiving fire alarms by telephone or with 110.2electric siren and suitable means of sounding an alarm, and110.3(f) if response is to be provided outside the corporate limits of the municipality 110.4wherein the fire department is located, the municipality has another piece of motorized 110.5apparatus to make the response, and110.6(g) other requirements the commissioner establishes by rule.110.7    Sec. 6. Minnesota Statutes 2008, section 69.021, subdivision 7, is amended to read:110.8    Subd. 7. Apportionment of fire state aid to municipalities and relief associations.110.9(a) The commissioner shall apportion the fire state aid relative to the premiums reported 110.10on the Minnesota Firetown Premium Reports filed under this chapter to each municipality 110.11and/or firefighters relief association.110.12(b) The commissioner shall calculate an initial fire state aid allocation amount for 110.13each municipality or fire department under paragraph (c) and a minimum fire state aid 110.14allocation amount for each municipality or fire department under paragraph (d). The 110.15municipality or fire department must receive the larger fire state aid amount.110.16(c) The initial fire state aid allocation amount is the amount available for 110.17apportionment as fire state aid under subdivision 5, without inclusion of any additional 110.18funding amount to support a minimum fire state aid amount under section 
         423A.02, 110.19subdivision 3
         , allocated one-half in proportion to the population as shown in the last 110.20official statewide federal census for each fire town and one-half in proportion to the market 110.21value of each fire town, including (1) the market value of tax exempt property and (2) the 110.22market value of natural resources lands receiving in lieu payments under sections 
         477A.11110.23to 
         477A.14, but excluding the market value of minerals. In the case of incorporated or 110.24municipal fire departments furnishing fire protection to other cities, towns, or townships 110.25as evidenced by valid fire service contracts filed with the commissioner, the distribution 110.26must be adjusted proportionately to take into consideration the crossover fire protection 110.27service. Necessary adjustments shallmust be made to subsequent apportionments. In 110.28the case of municipalities or independent fire departments qualifying for the aid, the 110.29commissioner shall calculate the state aid for the municipality or relief association on the 110.30basis of the population and the market value of the area furnished fire protection service 110.31by the fire department as evidenced by duly executed and valid fire service agreements 110.32filed with the commissioner. If one or more fire departments are furnishing contracted 110.33fire service to a city, town, or township, only the population and market value of the 110.34area served by each fire department may be considered in calculating the state aid and 110.35the fire departments furnishing service shall enter into an agreement apportioning among 111.1themselves the percent of the population and the market value of each service area. The 111.2agreement must be in writing and must be filed with the commissioner. 111.3(d)  The minimum fire state aid allocation amount is the amount in addition to the 111.4initial fire state allocation amount that is derived from any additional funding amount 111.5to support a minimum fire state aid amount under section 
         423A.02, subdivision 3, and 111.6allocated to municipalities with volunteer firefighters relief associations or covered by the 111.7voluntary statewide lump-sum volunteer firefighter retirement plan based on the number 111.8of active volunteer firefighters who are members of the relief association as reported 111.9in the annual financial reporting for the calendar year 1993 to the Office of the State 111.10Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or 111.11fire departments with volunteer firefighters relief associations receive in total at least a 111.12minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of 111.1330 firefighters. If a relief association is established after calendar year 1993 and before 111.14calendar year 2000, the number of active volunteer firefighters who are members of the 111.15relief association as reported in the annual financial reporting for calendar year 1998 111.16to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters, 111.17shall be used in this determination. If a relief association is established after calendar 111.18year 1999, the number of active volunteer firefighters who are members of the relief 111.19association as reported in the first annual financial reporting submitted to the Office of 111.20the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this 111.21determination. If a relief association is terminated as a result of providing retirement 111.22coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer 111.23firefighter retirement plan under chapter 353G, the number of active volunteer firefighters 111.24of the municipality covered by the statewide plan as certified by the executive director of 111.25the Public Employees Retirement Association to the commissioner and the state auditor, 111.26but not to exceed 30 active firefighters, must be used in this determination.111.27(e) Unless the firefighters of the applicable fire department are members of the 111.28voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must 111.29be paid to the treasurer of the municipality where the fire department is located and the 111.30treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit 111.31the aid to the relief association if the relief association has filed a financial report with the 111.32treasurer of the municipality and has met all other statutory provisions pertaining to the 111.33aid apportionment. If the firefighters of the applicable fire department are members of 111.34the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid 111.35must be paid to the executive director of the Public Employees Retirement Association 111.36and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.112.1(f) The commissioner may make rules to permit the administration of the provisions 112.2of this section.112.3(g) Any adjustments needed to correct prior misallocations must be made to 112.4subsequent apportionments.112.5    Sec. 7. Minnesota Statutes 2008, section 69.021, subdivision 9, is amended to read:112.6    Subd. 9. Appeal. In the event that anya municipality, a county, a fire relief 112.7association, ora police relief association, or the voluntary statewide lump-sum volunteer 112.8firefighter retirement plan, feels itself to be aggrieved, it may request the commissioner to 112.9review and adjust the apportionment of funds within the county in the case of police state 112.10aid, or within the state in the case of fire state aid. The decision of the commissioner is 112.11subject to appeal, review, and adjustment by the district court in the county in which the 112.12applicable municipality, fire department, or police department is located.112.13    Sec. 8. Minnesota Statutes 2008, section 69.031, subdivision 1, is amended to read:112.14    Subdivision 1. Commissioner of finance's warrant.(a) The commissioner of 112.15finance shall issue to the Public Employees Retirement Association on behalf of a 112.16municipality or independent nonprofit firefighting corporation that is a member of the 112.17voluntary statewide lump-sum volunteer firefighter retirement plan under chapter 353G or 112.18to the county, municipality, or independent nonprofit firefighting corporation certified to 112.19the commissioner of finance by the commissioner a warrant for an amount equal to the 112.20amount of fire state aid or police state aid, whichever applies, certified for the applicable 112.21state aid recipient by the commissioner under section 
         69.021.112.22(b) The amount of state aid due and not paid by October 1 accrues interest at the rate 112.23of one percent for each month or part of a month the amount remains unpaid, beginning 112.24the preceding July 1.  112.25    Sec. 9. Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:112.26    Subd. 5. Deposit of state aid. (a) If the municipality or the independent nonprofit 112.27firefighting corporation is covered by the voluntary statewide lump-sum volunteer 112.28firefighter retirement plan under chapter 353G, the executive director shall credit the 112.29fire state aid against future municipal contribution requirements under section 353G.08 112.30and shall notify the municipality or independent nonprofit firefighting corporation of 112.31the fire state aid so credited at least annually. If the municipality or the independent 112.32nonprofit firefighting corporation is not covered by the voluntary statewide lump-sum 112.33volunteer firefighter retirement plan, the municipal treasurer shall, within 30 days after 113.1receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters' 113.2relief association if there is one organized and the association has filed a financial report 113.3with the municipality. If the relief association has not filed a financial report with the 113.4municipality, the municipal treasurer shall delay transmission of the fire state aid to 113.5the relief association until the complete financial report is filed. If the municipality or 113.6independent nonprofit firefighting corporation is not covered by the voluntary statewide 113.7lump-sum volunteer firefighter retirement plan, if there is no relief association organized, 113.8or if the association has dissolved, or has been removed as trustees of state aid, then the 113.9treasurer of the municipality shall deposit the money in the municipal treasury as provided 113.10for in section 
         424A.08 and the money may be disbursed only for the purposes and in the 113.11manner set forth in that section.  113.12(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the 113.13police state aid in the following manner:113.14(1) For a municipality in which a local police relief association exists and all peace 113.15officers are members of the association, the total state aid must be transmitted to the 113.16treasurer of the relief association within 30 days of the date of receipt, and the treasurer 113.17of the relief association shall immediately deposit the total state aid in the special fund 113.18of the relief association;113.19(2) For a municipality in which police retirement coverage is provided by the public 113.20employees police and fire fund and all peace officers are members of the fund, including 113.21municipalities covered by section 
         353.665, the total state aid must be applied toward the 113.22municipality's employer contribution to the public employees police and fire fund under 113.23sections 
         353.65, subdivision 3, and 
         353.665, subdivision 8, paragraph (b), if applicable; or  113.24(3) For a municipality other than a city of the first class with a population of more 113.25than 300,000 in which both a police relief association exists and police retirement 113.26coverage is provided in part by the public employees police and fire fund, the municipality 113.27may elect at its option to transmit the total state aid to the treasurer of the relief association 113.28as provided in clause (1), to use the total state aid to apply toward the municipality's 113.29employer contribution to the public employees police and fire fund subject to all the 113.30provisions set forth in clause (2), or to allot the total state aid proportionately to be 113.31transmitted to the police relief association as provided in this subdivision and to apply 113.32toward the municipality's employer contribution to the public employees police and fire 113.33fund subject to the provisions of clause (2) on the basis of the respective number of active 113.34full-time peace officers, as defined in section 
         69.011, subdivision 1, clause (g).  113.35For a city of the first class with a population of more than 300,000, in addition, the 113.36city may elect to allot the appropriate portion of the total police state aid to apply toward 114.1the employer contribution of the city to the public employees police and fire fund based 114.2on the covered salary of police officers covered by the fund each payroll period and to 114.3transmit the balance to the police relief association; or114.4(4) For a municipality in which police retirement coverage is provided in part by 114.5the public employees police and fire fund and in part by a local police consolidation 114.6account governed by chapter 353A and established before March 2, 1999, for which the 114.7municipality declined merger under section 
         353.665, subdivision 1, or established after 114.8March 1, 1999, the total police state aid must be applied towards the municipality's total 114.9employer contribution to the public employees police and fire fund and to the local police 114.10consolidation account under sections 
         353.65, subdivision 3, and 
         353A.09, subdivision 5.  114.11(c) The county treasurer, upon receipt of the police state aid for the county, shall 114.12apply the total state aid toward the county's employer contribution to the public employees 114.13police and fire fund under section 
         353.65, subdivision 3.  114.14(d) The designated Metropolitan Airports Commission official, upon receipt of the 114.15police state aid for the Metropolitan Airports Commission, shall apply the total police 114.16state aid first toward the commission's employer contribution for police officers to the 114.17Minneapolis Employees Retirement Fund under section 
         422A.101, subdivision 2a, and, if 114.18there is any amount of police state aid remaining, shall apply that remainder toward the 114.19commission's employer contribution for police officers to the public employees police and 114.20fire plan under section 
         353.65, subdivision 3.  114.21(e) The police state aid apportioned to the Departments of Public Safety and Natural 114.22Resources under section 
         69.021, subdivision 7a, is appropriated to the commissioner of 114.23finance for transfer to the funds and accounts from which the salaries of peace officers 114.24certified under section 
         69.011, subdivision 2a, are paid. The commissioner of revenue 114.25shall certify to the commissioners of public safety, natural resources, and finance the 114.26amounts to be transferred from the appropriation for police state aid. The commissioners 114.27of public safety and natural resources shall certify to the commissioner of finance the 114.28amounts to be credited to each of the funds and accounts from which the peace officers 114.29employed by their respective departments are paid. Each commissioner must shall allocate 114.30the police state aid first for employer contributions for employees funded from the general 114.31fund and then for employer contributions for employees funded from other funds. For 114.32peace officers whose salaries are paid from the general fund, the amounts transferred from 114.33the appropriation for police state aid must be canceled to the general fund.  114.34    Sec. 10. [353G.01] DEFINITIONS.115.1    Subdivision 1.Scope.For the purposes of this chapter, the words or terms defined 115.2in this section have the meanings given to them unless the context of the word or term 115.3clearly indicates otherwise.115.4    Subd. 2.Advisory board."Advisory board" means the board established by section 115.5353G.03.115.6    Subd. 3.Board."Board" means the board of trustees of the Public Employees 115.7Retirement Association operating under section 353.03.115.8    Subd. 4.Commissioner of finance."Commissioner of finance" means the state 115.9official appointed and qualified under section 16A.01.115.10    Subd. 5.Executive director; director."Executive director" or "director" means 115.11the person appointed under section 353.03, subdivision 3a.115.12    Subd. 6.Fund."Fund" means the voluntary statewide lump-sum volunteer 115.13firefighter retirement fund established under section 353G.02, subdivision 3.115.14    Subd. 7.Good time service credit."Good time service credit" means the length of 115.15service credit for an active firefighter that is reported by the applicable fire chief based 115.16on the minimum firefighter activity standards of the fire department. The credit may be 115.17recognized on an annual or monthly basis.115.18    Subd. 8.Member."Member" means a volunteer firefighter who provides active 115.19service to a municipal fire department or an independent nonprofit firefighting corporation 115.20where the applicable municipality or corporation has elected coverage by the retirement 115.21plan under section 353G.05, and which service is covered by the retirement plan.115.22    Subd. 9.Municipality."Municipality" means a governmental entity specified in 115.23section 69.011, subdivision 1, paragraph (b), clauses (1), (2), and (5).115.24    Subd. 10.Plan."Plan" means the retirement plan established by this chapter.115.25    Subd. 11.Retirement fund."Retirement fund" means the voluntary statewide 115.26lump-sum volunteer firefighter retirement fund established under section 353G.02, 115.27subdivision 3.115.28    Subd. 12.Retirement plan."Retirement plan" means the retirement plan 115.29established by this chapter.115.30    Subd. 13.Standards for actuarial work."Standards for actuarial work" means 115.31the standards adopted by the Legislative Commission on Pensions and Retirement under 115.32section 3.85, subdivision 10.115.33    Subd. 14.State Board of Investment."State Board of Investment" means the 115.34board created by article XI, section 8, of the Minnesota Constitution and governed by 115.35chapter 11A.116.1    Subd. 15.Volunteer firefighter."Volunteer firefighter" means a person who is 116.2an active member of a municipal fire department or independent nonprofit firefighting 116.3corporation and who, in that capacity, engages in fire suppression activities, provides 116.4emergency response services, or delivers fire education or prevention services on an 116.5on-call basis.116.6    Sec. 11. [353G.02] PLAN AND FUND CREATION.116.7    Subdivision 1.Retirement plan.The voluntary statewide lump-sum volunteer 116.8firefighter retirement plan is created.116.9    Subd. 2.Administration.The policy-making, management, and administrative 116.10functions related to the voluntary statewide lump-sum volunteer firefighter retirement 116.11plan and fund are vested in the board of trustees and the executive director of the Public 116.12Employees Retirement Association. Their duties, authority, and responsibilities are as 116.13provided in section 353.03. Fiduciary activities of the plan and fund must be undertaken 116.14in a manner consistent with chapter 356A.116.15    Subd. 3.Retirement fund.(a) The voluntary statewide lump-sum volunteer 116.16firefighter retirement fund is created. The fund contains the assets attributable to the 116.17voluntary statewide lump-sum volunteer firefighter retirement plan.116.18(b) The State Board of Investment shall invest those portions of the retirement 116.19fund not required for immediate purposes in the voluntary statewide lump-sum volunteer 116.20firefighter retirement plan in the statewide lump-sum volunteer firefighter account of the 116.21Minnesota supplemental investment fund under section 11A.17.116.22(c) The commissioner of finance is the ex officio treasurer of the voluntary statewide 116.23lump-sum volunteer firefighter retirement fund. The commissioner of finance's general 116.24bond to the state covers all liability for actions taken as the treasurer of the retirement fund.116.25(d) The revenues of the retirement plan beyond investment returns are governed by 116.26section 353G.08 and must be deposited in the retirement fund. The disbursements of the 116.27retirement plan are governed by section 353G.08. The commissioner of finance shall 116.28transmit a detailed statement showing all credits to and disbursements from the retirement 116.29fund to the executive director monthly.116.30    Subd. 4.Audit; actuarial valuation.(a) The legislative auditor shall periodically 116.31audit the voluntary statewide lump-sum volunteer firefighter retirement fund.116.32(b) An actuarial valuation of the voluntary statewide lump-sum volunteer firefighter 116.33retirement plan may be performed periodically as determined to be appropriate or useful 116.34by the board. An actuarial valuation must be performed by the approved actuary retained 116.35under section 356.214 and must conform with section 356.215 and the standards for 117.1actuarial work. An actuarial valuation must contain sufficient detail for each participating 117.2employing entity to ascertain the actuarial condition of its account in the fund and the 117.3contribution requirement towards its account.117.4    Subd. 5.Legal advisor; attorney general.(a) The legal advisor of the board 117.5and the executive director with respect to the voluntary statewide lump-sum volunteer 117.6firefighter retirement plan is the attorney general.117.7(b) The board may sue, petition, be sued, or be petitioned under this chapter with 117.8respect to the plan or the fund in the name of the board.117.9(c) The attorney general shall represent the board in all actions by the board or 117.10against the board with respect to the plan or the fund.117.11(d) Venue of all actions related to the plan or fund is in the court for the first judicial 117.12district unless the action is an appeal to the Court of Appeals under section 356.96.117.13    Sec. 12. [353G.03] VOLUNTARY STATEWIDE LUMP-SUM VOLUNTEER 117.14FIREFIGHTER RETIREMENT PLAN ADVISORY BOARD.117.15    Subdivision 1.Establishment.A Voluntary Statewide Lump-Sum Volunteer 117.16Firefighter Retirement Plan Advisory Board is created.117.17    Subd. 2.Function; purpose.The advisory board shall provide advice to the board 117.18of trustees of the Public Employees Retirement Association about the retirement coverage 117.19needs of volunteer firefighters who are members of the plan and about the legislative and 117.20administrative changes that would assist the retirement plan in accommodating volunteer 117.21firefighters who are not members of the plan.117.22    Subd. 3.Composition.(a) The advisory board consists of seven members.117.23(b) The advisory board members are:117.24(1) one representative of Minnesota townships, appointed by the Minnesota 117.25Association of Townships;117.26(2) two representatives of Minnesota cities, appointed by the League of Minnesota 117.27Cities;117.28(3) one representative of Minnesota fire chiefs, who is a fire chief, appointed by the 117.29Minnesota State Fire Chiefs Association;117.30(4) two representatives of Minnesota volunteer firefighters, who are active volunteer 117.31firefighters, appointed by the Minnesota State Fire Departments Association; and117.32(5) one representative of the Office of the State Auditor, designated by the state 117.33auditor.117.34    Subd. 4.Term.(a) The initial terms on the advisory board for the Minnesota 117.35townships representative and the Minnesota fire chiefs representative are one year. The 118.1initial terms on the advisory board for one of the Minnesota cities representatives and one 118.2of the Minnesota active volunteer firefighter representatives are two years. The initial 118.3terms on the advisory board for the other Minnesota cities representative and the other 118.4Minnesota active volunteer firefighter representative are three years. The term for the 118.5Office of the State Auditor representative is determined by the state auditor.118.6(b) Subsequent terms on the advisory board other than the Office of the State 118.7Auditor representative are three years.118.8    Subd. 5.Compensation of advisory board.The compensation of members of the 118.9advisory board other than the Office of the State Auditor representative is governed by 118.10section 15.0575, subdivision 3.118.11    Sec. 13. [353G.04] INFORMATION FROM MUNICIPALITIES AND FIRE 118.12DEPARTMENTS.118.13The chief executive officers of municipalities and fire departments with volunteer 118.14firefighters covered by the voluntary lump-sum volunteer firefighter retirement plan shall 118.15provide all relevant information and records requested by the board, the executive director, 118.16and the State Board of Investment as required to perform their duties.118.17    Sec. 14. [353G.05] PLAN COVERAGE ELECTION.118.18    Subdivision 1.Coverage.Any municipality or independent nonprofit firefighting 118.19corporation may elect to have its volunteer firefighters covered by the retirement plan.118.20    Subd. 2.Election of coverage.(a) The process for electing coverage of volunteer 118.21firefighters by the retirement plan is initiated by a request to the executive director for a 118.22cost analysis of the prospective retirement coverage.118.23(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief 118.24association governed by chapter 424A, the cost analysis of the prospective retirement 118.25coverage must be requested jointly by the secretary of the volunteer firefighters' relief 118.26association, following approval of the request by the board of the volunteer firefighters' 118.27relief association, and the chief administrative officer of the entity associated with the 118.28relief association, following approval of the request by the governing body of the entity 118.29associated with the relief association. If the relief association is associated with more than 118.30one entity, the chief administrative officer of each associated entity must execute the 118.31request. If the volunteer firefighters are not currently covered by a volunteer firefighters' 118.32relief association, the cost analysis of the prospective retirement coverage must be 118.33requested by the chief administrative officer of the entity operating the fire department. 119.1The request must be made in writing and must be made on a form prescribed by the 119.2executive director.119.3(c) The cost analysis of the prospective retirement coverage by the statewide 119.4retirement plan must be based on the service pension amount under section 353G.11 119.5closest to the service pension amount provided by the volunteer firefighters' relief 119.6association, if there is one, or to the lowest service pension amount under section 353G.11 119.7if there is no volunteer firefighters' relief association, rounded up, and any other service 119.8pension amount designated by the requester or requesters. The cost analysis must be 119.9prepared using a mathematical procedure certified as accurate by an approved actuary 119.10retained by the Public Employees Retirement Association.119.11(d) If a cost analysis is requested and a volunteer firefighters' relief association exists 119.12that has filed the information required under section 69.051 in a timely fashion, upon 119.13request by the executive director, the state auditor shall provide the most recent data 119.14available on the financial condition of the volunteer firefighters' relief association, the most 119.15recent firefighter demographic data available, and a copy of the current relief association 119.16bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association 119.17exists, the chief administrative officer of the entity operating the fire department shall 119.18provide the demographic information on the volunteer firefighters serving as members 119.19of the fire department requested by the executive director.119.20(e) If a cost analysis is requested, the executive director of the State Board of 119.21Investment shall review the investment portfolio of the relief association, if applicable, 119.22for compliance with the applicable provisions of chapter 11A and for appropriateness 119.23for retention under the established investment objectives and investment policies of the 119.24State Board of Investment. If the prospective retirement coverage change is approved 119.25under paragraph (f), the State Board of Investment may require that the relief association 119.26liquidate any investment security or other asset which the executive director of the State 119.27Board of Investment has determined to be an ineligible or inappropriate investment for 119.28retention by the State Board of Investment. The security or asset liquidation must occur 119.29before the effective date of the transfer of retirement plan coverage. If requested to do 119.30so by the chief administrative officer of the relief association, the executive director of 119.31the State Board of Investment shall provide advice about the best means to conduct the 119.32liquidation.119.33(f) Upon receipt of the cost analysis, the governing body of the municipality or 119.34independent nonprofit firefighting corporation associated with the fire department shall 119.35approve or disapprove the retirement coverage change within 90 days. If the retirement 119.36coverage change is not acted upon within 90 days, it is deemed to be disapproved. If the 120.1retirement coverage change is approved by the applicable governing body, coverage by 120.2the voluntary statewide lump-sum volunteer firefighter retirement plan is effective on the 120.3next following January 1.120.4    Sec. 15. [353G.06] DISESTABLISHMENT OF PRIOR VOLUNTEER 120.5FIREFIGHTERS' RELIEF ASSOCIATION SPECIAL FUND UPON 120.6RETIREMENT COVERAGE CHANGE.120.7    Subdivision 1.Special fund disestablishment.(a) On the date immediately prior 120.8to the effective date of the coverage change, the special fund of the applicable volunteer 120.9firefighters' relief association, if one exists, ceases to exist as a pension fund of the 120.10association and legal title to the assets of the special fund transfers to the State Board of 120.11Investment, with the beneficial title to the assets of the special fund remaining in the 120.12applicable volunteer firefighters.120.13(b) If the market value of the special fund of the volunteer firefighters' relief 120.14association for which retirement coverage changed under this chapter declines in the 120.15interval between the date of the most recent financial report or statement, and the special 120.16fund disestablishment date, the applicable municipality shall transfer an additional amount 120.17to the State Board of Investment equal to that decline. If more than one municipality is 120.18responsible for the direct management of the fire department, the municipalities shall 120.19allocate the additional transfer amount among the various applicable municipalities 120.20one-half in proportion to the population of each municipality and one-half in proportion 120.21to the market value of each municipality.120.22    Subd. 2.Other relief association changes.In addition to the transfer and 120.23disestablishment of the special fund under subdivision 1, notwithstanding any provisions 120.24of chapter 424A or 424B to the contrary, upon the effective date of the change in volunteer 120.25firefighter retirement coverage, if the relief association membership elects to retain the 120.26relief association after the benefit coverage election, the following changes must be 120.27implemented with respect to the applicable volunteer firefighters' relief association:120.28(1) the relief association board of trustees membership is reduced to five, comprised 120.29of the fire chief of the fire department and four trustees elected by and from the relief 120.30association membership;120.31(2) the relief association may only maintain a general fund, which continues to 120.32be governed by section 424A.06;120.33(3) the relief association is not authorized to receive the proceeds of any state aid or 120.34to receive any municipal funds; and121.1(4) the relief association may not pay any service pension or benefit that was not 121.2authorized as a general fund disbursement under the articles of incorporation or bylaws of 121.3the relief association in effect prior to the plan coverage election process.121.4    Subd. 3.Successor in interest.Upon the disestablishment of the special fund of 121.5the volunteer firefighters' relief association under this section, the voluntary statewide 121.6lump-sum volunteer firefighter retirement plan is the successor in interest of the special 121.7fund of the volunteer firefighters' relief association for all claims against the special fund 121.8other than a claim against the special fund, the volunteer firefighters' relief association, 121.9the municipality, the fire department, or any person connected with the volunteer 121.10firefighters' relief association in a fiduciary capacity under chapter 356A or common law 121.11that was based on any act or acts which were not performed in good faith and which 121.12constituted a breach of a fiduciary obligation. As the successor in interest of the special 121.13fund of the volunteer firefighters' relief association, the voluntary statewide lump-sum 121.14volunteer firefighter retirement plan may assert any applicable defense in any judicial 121.15proceeding which the board of trustees of the volunteer firefighters' relief association or 121.16the municipality would have been entitled to assert.121.17    Sec. 16. [353G.07] CERTIFICATION OF GOOD TIME SERVICE CREDIT.121.18(a) Annually, by March 31, the fire chief of the fire department with firefighters who 121.19are active members of the retirement plan shall certify to the executive director the good 121.20time service credit for the previous calendar year of each firefighter rendering active 121.21service with the fire department.121.22(b) The fire chief shall provide to each firefighter rendering active service with 121.23the fire department notification of the amount of good time service credit rendered by 121.24the firefighter for the calendar year. The good time service credit notification must be 121.25provided to the firefighter 60 days before its certification to the executive director of the 121.26Public Employees Retirement Association, along with an indication of the process for the 121.27firefighter to challenge the fire chief's determination of good time service credit. If the 121.28good time service credit amount is challenged in a timely fashion, the fire chief shall hold 121.29a hearing on the challenge, accept and consider any additional pertinent information, 121.30and make a final determination of good time service credit. The final determination of 121.31good time service credit by the fire chief is not reviewable by the executive director of 121.32the Public Employees Retirement Association or by the board of trustees of the Public 121.33Employees Retirement Association.122.1(c) The good time service credit certification is an official public document. If a 122.2false good time service credit certification is filed or if false information regarding good 122.3time service credits is provided, section 353.19 applies.122.4(d) The good time service credit certification must be expressed as a percentage of a 122.5full year of service during which an active firefighter rendered at least the minimum level 122.6and quantity of fire suppression, emergency response, fire prevention, or fire education 122.7duties required by the fire department under the rules and regulations applicable to the 122.8fire department. No more than one year of good time service credit may be certified 122.9for a calendar year.122.10(e) If a firefighter covered by the retirement plan leaves active firefighting service 122.11to render active military service that is required to be covered by the federal Uniformed 122.12Services Employment and Reemployment Rights Act, as amended, the person must be 122.13certified as providing a full year of good time service credit in each year of the military 122.14service, up to the applicable limit of the federal Uniformed Services Employment and 122.15Reemployment Rights Act. If the firefighter does not return from the military service in 122.16compliance with the federal Uniformed Services Employment and Reemployment Rights 122.17Act, the good time service credits applicable to that military service credit period are 122.18forfeited and cancel at the end of the calendar year in which the federal law time limit 122.19occurs.122.20    Sec. 17. [353G.08] RETIREMENT PLAN FUNDING; DISBURSEMENTS.122.21(a) Annually, the executive director shall determine the funding requirements of 122.22each account in the voluntary statewide lump-sum volunteer firefighter retirement plan 122.23on or before August 1. The funding requirements as directed under this section, must be 122.24determined using a mathematical procedure developed and certified as accurate by an 122.25approved actuary retained by the Public Employees Retirement Association and based on 122.26present value factors using a six percent interest rate, without any decrement assumptions. 122.27The funding requirements must be certified to the entity or entities associated with the fire 122.28department whose active firefighters are covered by the retirement plan.122.29(b) The overall funding balance of each account for the current calendar year must 122.30be determined in the following manner:122.31(1) The total accrued liability for all active and deferred members of the account as 122.32of December 31 of the current year must be calculated based on the good time service 122.33credit of active and deferred members as of that date.122.34(2) The total present assets of the account projected to December 31 of the current 122.35year, including receipts by and disbursements from the account anticipated to occur on or 123.1before December 31, must be calculated. To the extent possible, the market value of assets 123.2must be utilized in making this calculation.123.3(3) The amount of the total present assets calculated under clause (2) must be 123.4subtracted from the amount of the total accrued liability calculated under clause (1). If the 123.5amount of total present assets exceeds the amount of the total accrued liability, then the 123.6account is considered to have a surplus over full funding. If the amount of the total present 123.7assets is less than the amount of the total accrued liability, then the account is considered 123.8to have a deficit from full funding. If the amount of total present assets is equal to the 123.9amount of the total accrued liability, then the special fund is considered to be fully funded.123.10(c) The financial requirements of each account for the following calendar year must 123.11be determined in the following manner:123.12(1) The total accrued liability for all active and deferred members of the account 123.13as of December 31 of the calendar year next following the current calendar year must be 123.14calculated based on the good time service used in the calculation under paragraph (b), 123.15clause (1), increased by one year.123.16(2) The increase in the total accrued liability of the account for the following calendar 123.17year over the total accrued liability of the account for the current year must be calculated.123.18(3) The amount of anticipated future administrative expenses of the account must be 123.19calculated by multiplying the dollar amount of the administrative expenses for the most 123.20recent prior calendar year by the factor of 1.035.123.21(4) If the account is fully funded, the financial requirement of the account for the 123.22following calendar year is the total of the amounts calculated under clauses (2) and (3).123.23(5) If the account has a deficit from full funding, the financial requirement of the 123.24account for the following calendar year is the total of the amounts calculated under clauses 123.25(2) and (3) plus an amount equal to one-tenth of the amount of the deficit from full 123.26funding of the account.123.27(6) If the account has a surplus over full funding, the financial requirement of 123.28the account for the following calendar year is the financial requirement of the account 123.29calculated as though the account was fully funded under clause (4) and, if the account has 123.30also had a surplus over full funding during the prior two years, additionally reduced by an 123.31amount equal to one-tenth of the amount of the surplus over full funding of the account.123.32(d) The required contribution of the entity or entities associated with the fire 123.33department whose active firefighters are covered by the retirement plan is the annual 123.34financial requirements of the account of the retirement plan under paragraph (c) reduced 123.35by the amount of any fire state aid payable under sections 69.011 to 69.051 reasonably 123.36anticipated to be received by the retirement plan attributable to the entity or entities during 124.1the following calendar year, and an amount of interest on the assets projected to be 124.2received during the following calendar year calculated at the rate of six percent per annum. 124.3The required contribution must be allocated between the entities if more than one entity 124.4is involved. A reasonable amount of anticipated fire state aid is an amount that does not 124.5exceed the fire state aid actually received in the prior year multiplied by the factor 1.035.124.6(e) The required contribution calculated in paragraph (d) must be paid to the 124.7retirement plan on or before December 31 of the year for which it was calculated. If 124.8the contribution is not received by the retirement plan by December 31, it is payable 124.9with interest at an annual compound rate of six percent from the date due until the date 124.10payment is received by the retirement plan. If the entity does not pay the full amount of 124.11the required contribution, the executive director shall collect the unpaid amount under 124.12section 353.28, subdivision 6.124.13(f) The assets of the retirement fund may only be disbursed for:124.14(1) the administrative expenses of the retirement plan;124.15(2) the investment expenses of the retirement fund; 124.16(3) the service pensions payable under section 353G.10, 353G.11, 353G.14, or 124.17353G.15; and 124.18(4) the survivor benefits payable under section 353G.12.124.19    Sec. 18. [353G.09] RETIREMENT BENEFIT ELIGIBILITY.124.20    Subdivision 1.Entitlement.Except as provided in subdivision 3, an active member 124.21of the retirement plan is entitled to a lump-sum service pension from the retirement plan 124.22if the person:124.23(1) has separated from active service with the fire department for at least 30 days;124.24(2) has attained the age of at least 50 years;124.25(3) has completed at least five years of good time service credit as a member of 124.26the retirement plan; and124.27(4) applies in a manner prescribed by the executive director for the service pension.124.28    Subd. 2.Vesting schedule; nonforfeitable portion of service pension.If an 124.29active member has completed less than 20 years of good time service credit, the person's 124.30entitlement is to the nonforfeitable percentage of the applicable service pension amount, 124.31as follows:

124.32124.33Completed years of good time service creditNonforfeitable percentage of the service pension124.34540 percent124.35644 percent124.36748 percent125.1852 percent125.2956 percent125.31060 percent125.41164 percent125.51268 percent125.61372 percent125.71476 percent125.81580 percent125.91684 percent125.101788 percent125.111892 percent125.121996 percent125.1320 and thereafter100 percent

125.14    Subd. 3.Alternative pension eligibility and computation.(a) An active member 125.15of the retirement plan is entitled to an alternative lump-sum service pension from the 125.16retirement plan if the person:125.17(1) has separated from active service with the fire department for at least 30 days;125.18(2) has attained the age of at least 50 years or the age for receipt of a service pension 125.19under the benefit plan of the applicable former volunteer firefighters' relief association 125.20as of the date immediately prior to the election of the retirement coverage change, 125.21whichever is later;125.22(3) has completed at least five years of active service with the fire department and at 125.23least five years in total as a member of the applicable former volunteer firefighters' relief 125.24association or of the retirement plan, but has not rendered at least five years of good time 125.25service credit as a member of the retirement plan; and125.26(4) applies in a manner prescribed by the executive director for the service pension.125.27(b) The alternative lump-sum service pension is the service pension amount specified 125.28in the bylaws of the applicable former volunteer firefighters' relief association either 125.29as of the date immediately prior to the election of the retirement coverage change or 125.30as of the date immediately before the termination of firefighting services, whichever is 125.31earlier, multiplied by the total number of years of service as a member of that volunteer 125.32firefighters' relief association and as a member of the retirement plan.125.33    Sec. 19. [353G.10] DEFERRED SERVICE PENSION AMOUNT.125.34A person who was an active member of a fire department covered by the retirement 125.35plan who has separated from active firefighting service for at least 30 days and who has 125.36completed at least five years of good time service credit, but has not attained the age of 125.3750 years, is entitled to a deferred service pension on or after attaining the age of 50 years 126.1and applying in a manner specified by the executive director for the service pension. The 126.2service pension payable is the nonforfeitable percentage of the service pension under 126.3section 353G.09, subdivision 2, and is payable without any interest over the period of 126.4deferral.126.5    Sec. 20. [353G.11] SERVICE PENSION LEVELS.126.6    Subdivision 1.Levels.The retirement plan provides the following levels of service 126.7pension amounts to be selected at the election of coverage, or, if fully funded, thereafter:

126.8Level A$500 per year of good time service credit126.9Level B$750 per year of good time service credit126.10Level C$1,000 per year of good time service credit126.11Level D$1,500 per year of good time service credit126.12Level E$2,000 per year of good time service credit126.13Level F$2,500 per year of good time service credit126.14Level G$3,000 per year of good time service credit126.15Level H$3,500 per year of good time service credit126.16Level I$4,000 per year of good time service credit126.17Level J$4,500 per year of good time service credit126.18Level K$5,000 per year of good time service credit126.19Level L$5,500 per year of good time service credit126.20Level M$6,000 per year of good time service credit126.21Level N$6,500 per year of good time service credit126.22Level O$7,000 per year of good time service credit126.23Level P$7,500 per year of good time service credit

126.24    Subd. 2.Level selection.At the time of the election to transfer retirement coverage, 126.25or on April 30 thereafter, the governing body or bodies of the entity or entities operating 126.26the fire department whose firefighters are covered by the retirement plan may request 126.27a cost estimate from the executive director of an increase in the service pension level 126.28applicable to the active firefighters of the fire department. Within 90 days of the receipt of 126.29the cost estimate prepared by the executive director using a procedure certified as accurate 126.30by the approved actuary retained by the Public Employees Retirement Association, the 126.31governing body or bodies may approve the service pension level change, effective for the 126.32following calendar year. If not approved in a timely fashion, the service pension level 126.33change is considered to have been disapproved.126.34    Subd. 3.Supplemental benefit.The retirement plan also shall pay a supplemental 126.35benefit as provided for in section 424A.10.126.36    Subd. 4.Ancillary benefits.No disability, death, funeral, or other ancillary benefit 126.37beyond a service pension or a survivor benefit is payable from the retirement plan.127.1    Sec. 21. [353G.12] SURVIVOR BENEFIT.127.2    Subdivision 1.Entitlement.(a) A survivor of a deceased active member of the 127.3retirement plan or a deceased deferred member of the retirement plan, upon application as 127.4prescribed by the executive director, is entitled to receive a survivor benefit.127.5(b) A survivor is the spouse of the member, or if none, the minor child or children of 127.6the member, or if none, the estate of the member.127.7    Subd. 2.Survivor benefit amount.The amount of the survivor benefit is the 127.8amount of the service pension that would have been payable to the member of the 127.9retirement plan on the date of death if the member had been age 50 or older on that date.127.10    Sec. 22. [353G.13] PORTABILITY.127.11    Subdivision 1.Eligibility.An active firefighter who is a member of the retirement 127.12plan who also renders firefighting service and has good time service credit in the retirement 127.13plan from another fire department, if the good time service credit in the plan from a 127.14combination of periods totals at least five years, is eligible, upon complying with the other 127.15requirements of section 353G.09, to receive a service pension upon filing an application in 127.16the manner prescribed by the executive director, computed as provided in subdivision 2.127.17    Subd. 2.Combined service pension computation.The service pension payable to 127.18a firefighter who qualifies under subdivision 1 is the per year of good time service credit 127.19service pension amount in effect for each account in which the firefighter has good time 127.20service credit as of the date on which the firefighter terminated active service with the fire 127.21department associated with the applicable account, multiplied by the number of years of 127.22good time service credit that the firefighter has in the applicable account.127.23    Subd. 3.Payment.A service pension under this section must be paid in a single 127.24payment, with the applicable portion of the total service pension payment amount 127.25deducted from each account.127.26    Sec. 23. [353G.14] PURCHASE OF ANNUITY CONTRACTS.127.27The executive director may purchase an annuity contract on behalf of a retiring 127.28firefighter with a total premium payment in an amount equal to the lump-sum service 127.29pension payable under section 353G.09 if the purchase was requested by the retiring 127.30firefighter in a manner prescribed by the executive director. The annuity contract must 127.31be purchased from an insurance carrier that is licensed to do business in this state. If 127.32purchased, the annuity contract is in lieu of any service pension or other benefit from the 127.33retirement plan. The annuity contract may be purchased at any time after the volunteer 128.1firefighter discontinues active service, but the annuity contract must stipulate that no 128.2annuity amounts are payable before the former volunteer firefighter attains the age of 50.128.3    Sec. 24. [353G.15] INDIVIDUAL RETIREMENT ACCOUNT TRANSFER.128.4Upon receipt of a determination that the retirement plan is a qualified pension plan 128.5under section 401(a) of the Internal Revenue Code, as amended, the executive director, 128.6upon request, shall transfer the service pension amount under sections 353G.08 and 128.7353G.11 of a former volunteer firefighter who has terminated active firefighting services 128.8covered by the plan and who has attained the age of at least 50 years to the person's 128.9individual retirement account under section 408(a) of the federal Internal Revenue Code, 128.10as amended. The transfer request must be in a manner prescribed by the executive director 128.11and must be filed by the former volunteer firefighter who has sufficient service credit to be 128.12entitled to a service pension or, following the death of a participating active firefighter, 128.13must be filed by the deceased firefighter's surviving spouse.128.14    Sec. 25. [353G.16] EXEMPTION FROM PROCESS.128.15The provisions of section 356.401 apply to the retirement plan.128.16    Sec. 26. Minnesota Statutes 2008, section 356.20, subdivision 2, is amended to read:128.17    Subd. 2. Covered public pension plans and funds. This section applies to the 128.18following public pension plans:128.19    (1) the general state employees retirement plan of the Minnesota State Retirement 128.20System;128.21    (2) the general employees retirement plan of the Public Employees Retirement 128.22Association;128.23    (3) the Teachers Retirement Association;128.24    (4) the State Patrol retirement plan;128.25    (5) the St. Paul Teachers Retirement Fund Association;128.26    (6) the Duluth Teachers Retirement Fund Association;128.27    (7) the Minneapolis Employees Retirement Fund;128.28    (8) the University of Minnesota faculty retirement plan;128.29    (9) the University of Minnesota faculty supplemental retirement plan;128.30    (10) the judges retirement fund;128.31    (11) a police or firefighter's relief association specified or described in section 
         69.77, 128.32subdivision 1a
         ;129.1    (12) a volunteer firefighter relief association governed by section 
         69.771, subdivision 129.21
         ; 129.3    (13) the public employees police and fire plan of the Public Employees Retirement 129.4Association;129.5    (14) the correctional state employees retirement plan of the Minnesota State 129.6Retirement System; and129.7    (15) the local government correctional service retirement plan of the Public 129.8Employees Retirement Association; and129.9(16) the voluntary statewide lump-sum volunteer firefighter retirement plan.129.10    Sec. 27. Minnesota Statutes 2008, section 356.401, subdivision 3, is amended to read:129.11    Subd. 3. Covered retirement plans. The provisions of this section apply to the 129.12following retirement plans:129.13(1) the legislators retirement plan, established by chapter 3A;129.14(2) the general state employees retirement plan of the Minnesota State Retirement 129.15System, established by chapter 352;129.16(3) the correctional state employees retirement plan of the Minnesota State 129.17Retirement System, established by chapter 352;129.18(4) the State Patrol retirement plan, established by chapter 352B;129.19(5) the elective state officers retirement plan, established by chapter 352C;129.20(6) the unclassified state employees retirement program, established by chapter 129.21352D;129.22(7) the general employees retirement plan of the Public Employees Retirement 129.23Association, established by chapter 353;129.24(8) the public employees police and fire plan of the Public Employees Retirement 129.25Association, established by chapter 353;129.26(9) the public employees defined contribution plan, established by chapter 353D;129.27(10) the local government correctional service retirement plan of the Public 129.28Employees Retirement Association, established by chapter 353E;129.29(11) the voluntary statewide lump-sum volunteer firefighter retirement plan, 129.30established by chapter 353G;129.31(12) the Teachers Retirement Association, established by chapter 354;129.32(12)(13) the Duluth Teachers Retirement Fund Association, established by chapter 129.33354A;129.34(13) the Minneapolis Teachers Retirement Fund Association, established by chapter 129.35354A;130.1(14) the St. Paul Teachers Retirement Fund Association, established by chapter 130.2354A;130.3(15) the individual retirement account plan, established by chapter 354B;130.4(16) the higher education supplemental retirement plan, established by chapter 354C;130.5(17) the Minneapolis Employees Retirement Fund, established by chapter 422A;130.6(18) the Minneapolis Police Relief Association, established by chapter 423B;130.7(19) the Minneapolis Firefighters Relief Association, established by chapter 423C; 130.8and130.9(20) the judges retirement fund, established by chapter 490.130.10    Sec. 28. Minnesota Statutes 2008, section 356.96, subdivision 1, is amended to read:130.11    Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that 130.12a different meaning is intended, for the purpose of this section, the terms in paragraphs 130.13(b) to (e) have the meanings given them.130.14    (b) "Chief administrative officer" means the executive director of a covered pension 130.15plan or the executive director's designee or representative.130.16    (c) "Covered pension plan" means a plan enumerated in section 
         356.20, 130.17subdivision 
         2, clauses (1) to (4), (10), and (13) to (15) (16), but does not mean the 130.18deferred compensation plan administered under sections 
         352.965 and 
         352.97 or to the 130.19postretirement health care savings plan administered under section 
         352.98.130.20    (d) "Governing board" means the Board of Trustees of the Public Employees 130.21Retirement Association, the Board of Trustees of the Teachers Retirement Association, or 130.22the Board of Directors of the Minnesota State Retirement System.130.23    (e) "Person" includes an active, retired, deferred, or nonvested inactive participant in 130.24a covered pension plan or a beneficiary of a participant, or an individual who has applied 130.25to be a participant or who is or may be a survivor of a participant, or a state agency or 130.26other governmental unit that employs active participants in a covered pension plan.130.27    Sec. 29. Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:130.28    Subdivision 1.  Definitions. For purposes of this section: 130.29    (1) "qualified recipient" means an individual who receives a lump-sum distribution 130.30of pension or retirement benefits from a firefighters' relief association or from the 130.31voluntary statewide lump-sum volunteer firefighter retirement plan for service that the 130.32individual has performed as a volunteer firefighter;131.1    (2) "survivor of a deceased active or deferred volunteer firefighter" means the legally 131.2married spouse of a deceased volunteer firefighter, or, if none, the surviving minor child or 131.3minor children of a deceased volunteer firefighter; 131.4    (3) "active volunteer firefighter" means a person who regularly renders fire 131.5suppression service for a municipal fire department or an independent nonprofit firefighting 131.6corporation, who has met the statutory and other requirements for relief association 131.7membership, and who has been a fully qualified member of the relief association or from 131.8the voluntary statewide lump-sum volunteer firefighter retirement plan for at least one 131.9month; and131.10    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who 131.11terminated active firefighting service, has sufficient service credit from the applicable 131.12relief association or from the voluntary statewide lump-sum volunteer firefighter 131.13retirement plan to be entitled to a service pension, but has not applied for or has not 131.14received the service pension.131.15    Sec. 30. Minnesota Statutes 2008, section 424A.10, subdivision 2, is amended to read:131.16    Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a 131.17firefighters' relief association or by the voluntary statewide lump-sum volunteer firefighter 131.18retirement plan of a lump-sum distribution to a qualified recipient, the association must 131.19pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the 131.20contrary, the relief association must pay the supplemental benefit out of its special fund131.21and the voluntary statewide lump-sum volunteer firefighter retirement plan must pay 131.22the supplemental benefit out of the voluntary statewide lump-sum volunteer firefighter 131.23retirement plan. The amount of this benefit equals ten percent of the regular lump-sum 131.24distribution that is paid on the basis of the recipient's service as a volunteer firefighter. 131.25In no case may the amount of the supplemental benefit exceed $1,000. A supplemental 131.26benefit under this paragraph may not be paid to a survivor of a deceased active or deferred 131.27volunteer firefighter in that capacity.131.28    (b) Upon the payment by a relief association or the retirement plan of a lump-sum 131.29survivor benefit or funeral benefit to a survivor of a deceased active volunteer firefighter 131.30or of a deceased deferred volunteer firefighter, the association may pay a supplemental 131.31survivor benefit to the survivor of the deceased active or deferred volunteer firefighter 131.32from the special fund of the relief association if its articles of incorporation or bylaws so 131.33provide and the retirement plan may pay a supplemental survivor benefit to the survivor of 131.34the deceased active or deferred volunteer firefighter from the retirement fund if chapter 132.1353G so provides. The amount of the supplemental survivor benefit is 20 percent of the 132.2survivor benefit or funeral benefit, but not to exceed $2,000.132.3    (c) An individual may receive a supplemental benefit under paragraph (a) or under 132.4paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer 132.5firefighter benefit.132.6    Sec. 31. Minnesota Statutes 2008, section 424A.10, subdivision 3, is amended to read:132.7    Subd. 3.  State reimbursement. (a) Each year, to be eligible for state reimbursement 132.8of the amount of supplemental benefits paid under subdivision 2 during the preceding 132.9calendar year, the relief association mustor the voluntary statewide lump-sum volunteer 132.10firefighter retirement plan shall apply to the commissioner of revenue by February 15. 132.11By March 15, the commissioner shall reimburse the relief association for the amount of 132.12the supplemental benefits paid to qualified recipients and to survivors of deceased active 132.13or deferred volunteer firefighters. 132.14    (b) The commissioner of revenue shall prescribe the form of and supporting 132.15information that must be supplied as part of the application for state reimbursement. 132.16The commissioner of revenue shall reimburse the relief association by paying the 132.17reimbursement amount to the treasurer of the municipality where the association is 132.18located and shall reimburse the retirement plan by paying the reimbursement amount to 132.19the executive director of the Public Employees Retirement Association. Within 30 days 132.20after receipt, the municipal treasurer shall transmit the state reimbursement to the treasurer 132.21of the association if the association has filed a financial report with the municipality. If 132.22the relief association has not filed a financial report with the municipality, the municipal 132.23treasurer shall delay transmission of the reimbursement payment to the association until 132.24the complete financial report is filed. If the association has dissolved or has been removed 132.25as a trustee of state aid, the treasurer shall deposit the money in a special account in the 132.26municipal treasury, and the money may be disbursed only for the purposes and in the 132.27manner provided in section 
         424A.08. When paid to the association, the reimbursement 132.28payment must be deposited in the special fund of the relief association and when paid to 132.29the retirement plan, the reimbursement payment must be deposited in the retirement 132.30fund of the plan. 132.31    (c) A sum sufficient to make the payments is appropriated from the general fund 132.32to the commissioner of revenue. 132.33    Sec. 32. EFFECTIVE DATE.132.34Sections 1 to 31 are effective August 1, 2009.133.1ARTICLE 10133.2VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES133.3    Section 1. Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:133.4    Subd. 5. Deposit of state aid. (a) The municipal treasurer shall, within 30 days 133.5after receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters' 133.6relief association if there is one organized and the association has filed a financial report 133.7with the municipality. If the relief association has not filed a financial report with the 133.8municipality, the municipal treasurer shall delay transmission of the fire state aid to the 133.9relief association until the complete financial report is filed. If there is no relief association 133.10organized, or if the association has dissolved, or has been removed as trustees of state aid, 133.11then the treasurer of the municipality shall deposit the money in the municipal treasury 133.12as provided for in section 424A.08 and the money may be disbursed only for the purposes 133.13and in the manner set forth in that section 424A.08 or for the payment of the employer 133.14contribution requirement with respect to firefighters covered by the public employees 133.15police and fire retirement plan under section 353.65, subdivision 3.133.16(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the 133.17police state aid in the following manner:133.18(1) For a municipality in which a local police relief association exists and all peace 133.19officers are members of the association, the total state aid must be transmitted to the 133.20treasurer of the relief association within 30 days of the date of receipt, and the treasurer 133.21of the relief association shall immediately deposit the total state aid in the special fund 133.22of the relief association;133.23(2) For a municipality in which police retirement coverage is provided by the public 133.24employees police and fire fund and all peace officers are members of the fund, including 133.25municipalities covered by section 
         353.665, the total state aid must be applied toward the 133.26municipality's employer contribution to the public employees police and fire fund under 133.27sections 
         353.65, subdivision 3, and 
         353.665, subdivision 8, paragraph (b), if applicable; or133.28(3) For a municipality other than a city of the first class with a population of more 133.29than 300,000 in which both a police relief association exists and police retirement 133.30coverage is provided in part by the public employees police and fire fund, the municipality 133.31may elect at its option to transmit the total state aid to the treasurer of the relief association 133.32as provided in clause (1), to use the total state aid to apply toward the municipality's 133.33employer contribution to the public employees police and fire fund subject to all the 133.34provisions set forth in clause (2), or to allot the total state aid proportionately to be 133.35transmitted to the police relief association as provided in this subdivision and to apply 134.1toward the municipality's employer contribution to the public employees police and fire 134.2fund subject to the provisions of clause (2) on the basis of the respective number of active 134.3full-time peace officers, as defined in section 
         69.011, subdivision 1, clause (g).134.4For a city of the first class with a population of more than 300,000, in addition, the 134.5city may elect to allot the appropriate portion of the total police state aid to apply toward 134.6the employer contribution of the city to the public employees police and fire fund based 134.7on the covered salary of police officers covered by the fund each payroll period and to 134.8transmit the balance to the police relief association; or134.9(4) For a municipality in which police retirement coverage is provided in part by 134.10the public employees police and fire fund and in part by a local police consolidation 134.11account governed by chapter 353A and established before March 2, 1999, for which the 134.12municipality declined merger under section 
         353.665, subdivision 1, or established after 134.13March 1, 1999, the total police state aid must be applied towards the municipality's total 134.14employer contribution to the public employees police and fire fund and to the local police 134.15consolidation account under sections 
         353.65, subdivision 3, and 
         353A.09, subdivision 5.134.16(c) The county treasurer, upon receipt of the police state aid for the county, shall 134.17apply the total state aid toward the county's employer contribution to the public employees 134.18police and fire fund under section 
         353.65, subdivision 3.134.19(d) The designated Metropolitan Airports Commission official, upon receipt of the 134.20police state aid for the Metropolitan Airports Commission, shall apply the total police 134.21state aid first toward the commission's employer contribution for police officers to the 134.22Minneapolis Employees Retirement Fund under section 
         422A.101, subdivision 2a, and, if 134.23there is any amount of police state aid remaining, shall apply that remainder toward the 134.24commission's employer contribution for police officers to the public employees police and 134.25fire plan under section 
         353.65, subdivision 3.134.26(e) The police state aid apportioned to the Departments of Public Safety and Natural 134.27Resources under section 
         69.021, subdivision 7a, is appropriated to the commissioner of 134.28finance for transfer to the funds and accounts from which the salaries of peace officers 134.29certified under section 
         69.011, subdivision 2a, are paid. The commissioner of revenue 134.30shall certify to the commissioners of public safety, natural resources, and finance the 134.31amounts to be transferred from the appropriation for police state aid. The commissioners 134.32of public safety and natural resources shall certify to the commissioner of finance the 134.33amounts to be credited to each of the funds and accounts from which the peace officers 134.34employed by their respective departments are paid. Each commissioner must shall allocate 134.35the police state aid first for employer contributions for employees funded from the general 134.36fund and then for employer contributions for employees funded from other funds. For 135.1peace officers whose salaries are paid from the general fund, the amounts transferred from 135.2the appropriation for police state aid must be canceled to the general fund.135.3EFFECTIVE DATE.This section is effective July 1, 2009.135.4    Sec. 2. Minnesota Statutes 2008, section 69.771, subdivision 3, is amended to read:135.5    Subd. 3. Remedy for noncompliance; determination. (a) A municipality in which 135.6there exists a firefighters' relief association as specified in subdivision 1 which does not 135.7comply with the applicable provisions of sections 
         69.771 to 
         69.776 or the provisions of 135.8any applicable special law relating to the funding or financing of the association does 135.9not qualify initially to receive, and is not entitled subsequently to retain, fire state aid 135.10under sections 
         69.011 to 
         69.051 until the reason for the disqualification specified by the 135.11state auditor is remedied, whereupon the municipality or relief association, if otherwise 135.12qualified, is entitled to again receive fire state aid for the year occurring immediately 135.13subsequent to the year in which the disqualification is remedied.135.14(b) The state auditor shall determine if a municipality to which a firefighters' relief 135.15association is directly associated or a firefighters' relief association fails to comply with 135.16the provisions of sections 
         69.771 to 
         69.776 or the funding or financing provisions of any 135.17applicable special law based upon the information contained in the annual financial report 135.18of the firefighters' relief association required under section 
         69.051, the actuarial valuation 135.19of the relief association, if applicable, the relief association officers' financial requirements 135.20of the relief association and minimum municipal obligation determination documentation 135.21under section 
         69.772, subdivisions 3 and 4; 
         69.773, subdivisions 4 and 5; or 
         69.774, 135.22subdivision 2
         , if requested to be filed by the state auditor, the applicable municipal or 135.23nonprofit firefighting corporation budget, if requested to be filed by the state auditor, and 135.24any other relevant documents or reports obtained by the state auditor.135.25(c) The municipality or nonprofit firefighting corporation and the associated relief 135.26association are not eligible to receive or to retain fire state aid if:135.27(1) the relief association fails to prepare or to file the financial report or financial 135.28statement under section 
         69.051;135.29(2) the relief association treasurer is not bonded in the manner and in the amount 135.30required by section 
         69.051, subdivision 2;135.31(3) the relief association officers fail to determine or improperly determine the 135.32accrued liability and the annual accruing liability of the relief association under section 135.3369.772, subdivisions 2, 2a, and 3
         , paragraph (c), clause (2), if applicable;135.34(4) if applicable, the relief association officers fail to obtain and file a required 135.35actuarial valuation or the officers file an actuarial valuation that does not contain the 136.1special fund actuarial liability calculated under the entry age normal actuarial cost 136.2method, the special fund current assets, the special fund unfunded actuarial accrued 136.3liability, the special fund normal cost under the entry age normal actuarial cost method, 136.4the amortization requirement for the special fund unfunded actuarial accrued liability 136.5by the applicable target date, a summary of the applicable benefit plan, a summary of 136.6the membership of the relief association, a summary of the actuarial assumptions used 136.7in preparing the valuation, and a signed statement by the actuary attesting to its results 136.8and certifying to the qualifications of the actuary as an approved actuary under section 136.9356.215, subdivision 1
         , paragraph (c);136.10(5) the municipality failed to provide a municipal contribution, or the nonprofit 136.11firefighting corporation failed to provide a corporate contribution, in the amount equal 136.12to the minimum municipal obligation if the relief association is governed under section 136.1369.772
         , or the amount necessary, when added to the fire state aid actually received 136.14in the plan year in question, to at least equal in total the calculated annual financial 136.15requirements of the special fund of the relief association if the relief association is 136.16governed under section 
         69.773, and, if the municipal or corporate contribution is deficient, 136.17the municipality failed to include the minimum municipal obligation certified under 136.18section 
         69.772, subdivision 3, or 
         69.773, subdivision 5, in its budget and tax levy or the 136.19nonprofit firefighting corporation failed to include the minimum corporate obligation 136.20certified under section 
         69.774, subdivision 2, in the corporate budget;136.21(6) the defined benefit relief association did not receive municipal ratification for 136.22the most recent plan amendment when municipal ratification was required under section 136.2369.772, subdivision 6
         ; 
         69.773, subdivision 6; or 
         424A.02, subdivision 10;136.24(7) the relief association invested special fund assets in an investment security 136.25that is not authorized under section 
         69.775;136.26(8) the relief association had an administrative expense that is not authorized under 136.27section 
         69.80 or 
         424A.05, subdivision 3, or the municipality had an expenditure that 136.28is not authorized under section 
         424A.08;136.29(9) the relief association officers fail to provide a complete and accurate public 136.30pension plan investment portfolio and performance disclosure under section 
         356.219;136.31(10) the relief association fails to obtain the acknowledgment from a broker of the 136.32statement of investment restrictions under section 
         356A.06, subdivision 8b;136.33(11) the relief association officers permitted to occur a prohibited transaction under 136.34section 
         356A.06, subdivision 9, or 
         424A.001 424A.04, subdivision 7 2a, or failed to 136.35undertake correction of a prohibited transaction that did occur; or137.1(12) the relief association pays a defined benefit service pension in an amount 137.2that is in excess of the applicable service pension maximum under section 
         424A.02, 137.3subdivision 3
         .137.4EFFECTIVE DATE.This section is effective July 1, 2009.137.5    Sec. 3. Minnesota Statutes 2008, section 69.772, subdivision 4, is amended to read:137.6    Subd. 4. Certification of financial requirements and minimum municipal 137.7obligation; levy. (a) The officers of the relief association shall certify the financial 137.8requirements of the special fund of the relief association and the minimum obligation of 137.9the municipality with respect to the special fund of the relief association as determined 137.10under subdivision 3 to the governing body of the municipality on or before August 1 of 137.11each year. The financial requirements of the relief association and the minimum municipal 137.12obligation must be included in the financial report or financial statement under section 137.1369.051
         . The schedule forms related to the determination of the financial requirements 137.14must be filed with the state auditor by March 31, annually, if the relief association is 137.15required to file a financial statement under section 69.051, subdivision 1a, or by June 30, 137.16annually, if the relief association is required to file a financial report and audit under 137.17section 69.051, subdivision 1.137.18(b) The municipality shall provide for at least the minimum obligation of the 137.19municipality with respect to the special fund of the relief association by tax levy or from 137.20any other source of public revenue.137.21(c) The municipality may levy taxes for the payment of the minimum municipal 137.22obligation without any limitation as to rate or amount and irrespective of any limitations 137.23imposed by other provisions of law upon the rate or amount of taxation until the balance 137.24of the special fund or any fund of the relief association has attained a specified level. In 137.25addition, any taxes levied under this section must not cause the amount or rate of any other 137.26taxes levied in that year or to be levied in a subsequent year by the municipality which are 137.27subject to a limitation as to rate or amount to be reduced.137.28(d) If the municipality does not include the full amount of the minimum municipal 137.29obligations in its levy for any year, the officers of the relief association shall certify that 137.30amount to the county auditor, who shall spread a levy in the amount of the certified 137.31minimum municipal obligation on the taxable property of the municipality.137.32(e) If the state auditor determines that a municipal contribution actually made in a 137.33plan year was insufficient under section 
         69.771, subdivision 3, paragraph (c), clause (5), 137.34the state auditor may request a copy of the certifications under this subdivision from the 137.35relief association or from the city. The relief association or the city, whichever applies, 138.1must provide the certifications within 14 days of the date of the request from the state 138.2auditor.138.3EFFECTIVE DATE.This section is effective July 1, 2009.138.4    Sec. 4. Minnesota Statutes 2008, section 69.772, subdivision 6, is amended to read:138.5    Subd. 6. Municipal ratification for plan amendments. If the special fund of the 138.6relief association does not have a surplus over full funding pursuant to subdivision 3, 138.7clause (2), subclause (e), or if the municipality is required to provide financial support 138.8to the special fund of the relief association pursuant to this section, the adoption of or 138.9any amendment to the articles of incorporation or bylaws of a relief association which 138.10increases or otherwise affects the retirement coverage provided by or the service pensions 138.11or retirement benefits payable from the special fund of any relief association to which this 138.12section applies shall is not be effective until it is ratified by the governing body of the 138.13municipality in which the relief association is located and the officers of a relief association 138.14shall not seek municipal ratification prior to preparing and certifying an estimate of 138.15the expected increase in the accrued liability and annual accruing liability of the relief 138.16association attributable to the amendment. If the special fund of the relief association has 138.17a surplus over full funding pursuant to subdivision 3, clause (2), subclause (e), and if the 138.18municipality is not required to provide financial support to the special fund of the relief 138.19association pursuant to this section, the relief association may adopt or amend its articles 138.20of incorporation or bylaws which increase or otherwise affect the retirement coverage 138.21provided by or the service pensions or retirement benefits payable from the special fund 138.22of the relief association which shall be are effective without municipal ratification so 138.23long as this does not cause the amount of the resulting increase in the accrued liability 138.24of the special fund of the relief association to exceed 90 percent of the amount of the 138.25prior surplus over full funding reported in the prior year and this does not result in the 138.26financial requirements of the special fund of the relief association exceeding the expected 138.27amount of the future fire state aid to be received by the relief association as determined 138.28by the board of trustees following the preparation of an estimate of the expected increase 138.29in the accrued liability and annual accruing liability of the relief association attributable 138.30to the change. If a relief association adopts or amends its articles of incorporation or 138.31bylaws without municipal ratification pursuant to this subdivision, and, subsequent to 138.32the amendment or adoption, the financial requirements of the special fund of the relief 138.33association pursuant to this section are such so as to require financial support from the 138.34municipality, the provision which was implemented without municipal ratification shall138.35is no longer be effective without municipal ratification and any service pensions or 139.1retirement benefits payable after that date shall may be paid only in accordance with the 139.2articles of incorporation or bylaws as amended or adopted with municipal ratification.139.3EFFECTIVE DATE.This section is effective July 1, 2009.139.4    Sec. 5. Minnesota Statutes 2008, section 69.773, subdivision 6, is amended to read:139.5    Subd. 6. Municipal ratification for plan amendments. If the special fund of the 139.6relief association does not have a surplus over full funding pursuant to subdivision 4, or if 139.7the municipality is required to provide financial support to the special fund of the relief 139.8association pursuant to this section, the adoption of or any amendment to the articles of 139.9incorporation or bylaws of a relief association which increases or otherwise affects the 139.10retirement coverage provided by or the service pensions or retirement benefits payable 139.11from the special fund of any relief association to which this section applies shall is not 139.12be effective until it is ratified by the governing body of the municipality in which the 139.13relief association is located. If the special fund of the relief association has a surplus over 139.14full funding pursuant to subdivision 4, and if the municipality is not required to provide 139.15financial support to the special fund of the relief association pursuant to this section, 139.16the relief association may adopt or amend its articles of incorporation or bylaws which 139.17increase or otherwise affect the retirement coverage provided by or the service pensions or 139.18retirement benefits payable from the special fund of the relief association which shall be139.19are effective without municipal ratification so long as this does not cause the amount of 139.20the resulting increase in the accrued liability of the special fund of the relief association to 139.21exceed 90 percent of the amount of the prior surplus over full funding reported in the prior 139.22year and this does not result in the financial requirements of the special fund of the relief 139.23association exceeding the expected amount of the future fire state aid to be received by the 139.24relief association as determined by the board of trustees following the preparation of an 139.25updated actuarial valuation including the proposed change or an estimate of the expected 139.26actuarial impact of the proposed change prepared by the actuary of the relief association. 139.27If a relief association adopts or amends its articles of incorporation or bylaws without 139.28municipal ratification pursuant to this subdivision, and, subsequent to the amendment or 139.29adoption, the financial requirements of the special fund of the relief association pursuant to 139.30this section are such so as to require financial support from the municipality, the provision 139.31which was implemented without municipal ratification shall is no longer be effective 139.32without municipal ratification and any service pensions or retirement benefits payable 139.33after that date shall be may paid only in accordance with the articles of incorporation or 139.34bylaws as amended or adopted with municipal ratification.140.1EFFECTIVE DATE.This section is effective July 1, 2009.140.2    Sec. 6. Minnesota Statutes 2008, section 356.219, subdivision 3, is amended to read:140.3    Subd. 3. Content of reports. (a) The report required by subdivision 1 must include 140.4a written statement of the investment policy. Following that initial report, subsequent 140.5reports must include investment policy changes and the effective date of each policy 140.6change rather than a complete statement of investment policy, unless the state auditor 140.7requests submission of a complete current statement. The report must also include the 140.8information required by the following paragraphs, as applicable.140.9(b) If, after four years of reporting under this paragraph, the total portfolio time 140.10weighted rate of return, net of all investment related costs and fees, provided by the public 140.11pension plan differs by no more than 0.1 percent from the comparable return for the plan 140.12calculated by the Office of the State Auditor, and if a public pension plan has a total 140.13market value of $25,000,000 or more as of the beginning of the calendar year, and if the 140.14public pension plan's annual audit is performed by the state auditor or by the legislative 140.15auditor, the report required by subdivision 1 must include the market value of the total 140.16portfolio and the market value of each asset class included in the pension fund as of the 140.17beginning of the calendar year and as of the end of the calendar year. At the discretion of 140.18the state auditor, the public pension plan may be required to submit the market value of the 140.19total portfolio and the market value of each investment account, investment portfolio, or 140.20asset class included in the pension fund for each month, and the amount and date of each 140.21injection and withdrawal to the total portfolio and to each investment account, investment 140.22portfolio, or asset class. If the market value of a public pension plan's fund drops below 140.23$25,000,000 in a subsequent year, it must continue reporting under this paragraph for any 140.24subsequent year in which the public pension plan is not fully invested as specified in 140.25subdivision 1, paragraph (b), except that if the public pension plan's annual audit is not 140.26performed by the state auditor or legislative auditor, paragraph (c) applies.140.27(c) If paragraph (b) would apply if the annual audit were provided by the state 140.28auditor or legislative auditor, the report required by subdivision 1 must include the market 140.29value of the total portfolio and the market value of each asset class included in the pension 140.30fund as of the beginning of the calendar year and for each month, and the amount and date 140.31of each injection and withdrawal to the total portfolio and to each investment account, 140.32investment portfolio, or asset class.140.33(d) For public pension plans to which paragraph (b) or (c) applies, the report required 140.34by subdivision 1 must also include a calculation of the total time-weighted rate of return 140.35available from index-matching investments assuming the asset class performance targets 141.1and target asset mix indicated in the written statement of investment policy. The provided 141.2information must include a description of indices used in the analyses and an explanation 141.3of why those indices are appropriate. This paragraph does not apply to any fully invested 141.4plan, as defined by subdivision 1, paragraph (b). Reporting by the State Board of 141.5Investment under this paragraph is limited to information on the Minnesota public pension 141.6plans required to be invested by the State Board of Investment under section 
         11A.23. 141.7(e) If a public pension plan has a total market value of less than $25,000,000 as of 141.8the beginning of the calendar year and was never required to file under paragraph (b) or 141.9(c), the report required by subdivision 1 must include the amount and date of each total 141.10portfolio injection and withdrawal. In addition, the report must include the market value 141.11of the total portfolio as of the beginning of the calendar year and for each quarter.141.12(f) Any public pension plan reporting under paragraph (b) or (c) must include 141.13computed time-weighted rates of return with the report, in addition to all other required 141.14information, as applicable. The chief administrative officer of the public pension plan 141.15submitting the returns must certify, on a form prescribed by the state auditor, that the 141.16returns have been computed by the pension plan's investment performance consultant or 141.17custodial bank. The chief administrative officer of the public pension plan submitting the 141.18returns also must certify that the returns are net of all costs and fees, including investment 141.19management fees, and that the procedures used to compute the returns are consistent 141.20with Bank Administration Institute studies of investment performance measurement 141.21and presentation standards set by the Certified Financial AnalystCFA Institute. If the 141.22certifications required under this paragraph are not provided, the reporting requirements of 141.23paragraph (c) apply.141.24(g) For public pension plans reporting under paragraph (e), the public pension plan 141.25must retain supporting information specifying the date and amount of each injection and 141.26withdrawal to each investment account and investment portfolio. The public pension plan 141.27must also retain the market value of each investment account and investment portfolio at 141.28the beginning of the calendar year and for each quarter. Information that is required to be 141.29collected and retained for any given year or years under this paragraph must be submitted 141.30to the Office of the State Auditor if the Office of the State Auditor requests in writing that 141.31the information be submitted by a public pension plan or plans, or be submitted by the 141.32State Board of Investment for any plan or plans for which the State Board of Investment is 141.33the investment authority under this section. If the state auditor requests information under 141.34this subdivision, and the public plan fails to comply, the pension plan is subject to penalties 141.35under subdivision 5, unless penalties are waived by the state auditor under that subdivision.141.36EFFECTIVE DATE.This section is effective July 1, 2009.142.1    Sec. 7. [420.20] PROHIBITION OF SERVICE BY MINORS AS VOLUNTEER 142.2FIREFIGHTERS.142.3It is unlawful for any municipality or independent nonprofit firefighting corporation 142.4to employ a minor to serve as a firefighter or to permit a minor to serve in any capacity 142.5performing any firefighting duties with a fire department, except for members of a youth, 142.6civic, or educational organization or program who participate with uninterrupted adult 142.7supervision, as allowed by federal law and by section 181A.04. Such organizations or 142.8programs include, but are not limited to, Boy Scout Explorer programs or firefighting 142.9degree programs.142.10EFFECTIVE DATE.This section is effective July 1, 2009.142.11    Sec. 8. Minnesota Statutes 2008, section 424A.001, subdivision 1, is amended to read:142.12    Subdivision 1. Terms defined.Unless the context clearly indicates otherwise, as 142.13used in this chapter, the terms defined in this section have the meanings given.142.14EFFECTIVE DATE.This section is effective July 1, 2009.142.15    Sec. 9. Minnesota Statutes 2008, section 424A.001, subdivision 1a, is amended to read:142.16    Subd. 1a. Ancillary benefit. "Ancillary benefit" means a benefit payable from the 142.17special fund of the relief association other than a service pension that is permitted by law 142.18and that is provided for in the relief association bylaws.142.19EFFECTIVE DATE.This section is effective July 1, 2009.142.20    Sec. 10. Minnesota Statutes 2008, section 424A.001, is amended by adding a 142.21subdivision to read:142.22    Subd. 1b.Defined benefit relief association."Defined benefit relief association" 142.23means a volunteer firefighters' relief association that provides a lump-sum service pension, 142.24provides a monthly benefit service pension, or provides a lump-sum service pension as an 142.25alternative to the monthly benefit service pension.142.26EFFECTIVE DATE.This section is effective July 1, 2009.142.27    Sec. 11. Minnesota Statutes 2008, section 424A.001, is amended by adding a 142.28subdivision to read:142.29    Subd. 1c.Defined contribution relief association."Defined contribution relief 142.30association" means a volunteer firefighters' relief association that provides a service 143.1pension based solely on an individual account balance rather than a specified annual 143.2lump-sum or monthly benefit service pension amount.143.3EFFECTIVE DATE.This section is effective July 1, 2009.143.4    Sec. 12. Minnesota Statutes 2008, section 424A.001, subdivision 2, is amended to read:143.5    Subd. 2. Fire department. "Fire department" includes a municipal fire department 143.6andor an independent nonprofit firefighting corporation.143.7EFFECTIVE DATE.This section is effective July 1, 2009.143.8    Sec. 13. Minnesota Statutes 2008, section 424A.001, subdivision 3, is amended to read:143.9    Subd. 3. Municipality. "Municipality" means a municipality which has 143.10established a fire department with which the relief association is directly associated, or 143.11the municipalities which have entered into a contract with the independent nonprofit 143.12firefighting corporation of which the relief association is a subsidiary.143.13EFFECTIVE DATE.This section is effective July 1, 2009.143.14    Sec. 14. Minnesota Statutes 2008, section 424A.001, subdivision 4, is amended to read:143.15    Subd. 4. Relief association. "Relief association" means (a)143.16(1) a volunteer firefighters' relief association or a volunteer firefighters' division or 143.17account of a partially salaried and partially volunteer firefighters' relief association that is 143.18organized and incorporated under chapter 317A and any laws of the state, is governed by 143.19this chapter and chapter 69, and is directly associated with a fire department established by 143.20municipal ordinance; or 143.21(b)(2) any separateseparately incorporated volunteer firefighters' relief association 143.22that is subsidiary to and providingthat provides service pension and retirement benefit 143.23coverage for members of an independent nonprofit firefighting corporation that is 143.24organized under the provisions of chapter 317A, is governed by this chapter, and operating143.25operates exclusively for firefighting purposes. A relief association is a governmental entity 143.26that receives and manages public money to provide retirement benefits for individuals 143.27providing the governmental services of firefighting and emergency first response.143.28EFFECTIVE DATE.This section is effective July 1, 2009.143.29    Sec. 15. Minnesota Statutes 2008, section 424A.001, subdivision 5, is amended to read:144.1    Subd. 5. Special fund. "Special fund" means the special fund of a volunteer 144.2firefighters' relief association or the account for volunteer firefighters within the special 144.3fund of a partially salaried and partially volunteer firefighters' relief association.144.4EFFECTIVE DATE.This section is effective July 1, 2009.144.5    Sec. 16. Minnesota Statutes 2008, section 424A.001, subdivision 6, is amended to read:144.6    Subd. 6. Surviving spouse. For purposes of this chapter, and the governing bylaws 144.7of anygoverning a relief association to which this chapter applies, the term "surviving 144.8spouse" means the spouse of a deceased member who was legally married to the member 144.9at the time of the member's death.144.10EFFECTIVE DATE.This section is effective July 1, 2009.144.11    Sec. 17. Minnesota Statutes 2008, section 424A.001, subdivision 8, is amended to read:144.12    Subd. 8. Firefighting service. "Firefighting service," if the applicable municipality 144.13approves for a fire department that is a municipal department, or if the applicable 144.14contracting municipality or municipalities approve for a fire department that is an 144.15independent nonprofit firefighting corporation, includes fire department service rendered 144.16by fire prevention personnel.144.17EFFECTIVE DATE.This section is effective July 1, 2009.144.18    Sec. 18. Minnesota Statutes 2008, section 424A.001, subdivision 9, is amended to read:144.19    Subd. 9. Separate from active service. "Separate from active service" means 144.20tothat a firefighter permanently ceaseceases to perform fire suppression duties with 144.21a particular volunteer fire department, to permanently ceaseceases to perform fire 144.22prevention duties, to permanently ceaseceases to supervise fire suppression duties, and to144.23permanently ceaseceases to supervise fire prevention duties.144.24EFFECTIVE DATE.This section is effective July 1, 2009.144.25    Sec. 19. Minnesota Statutes 2008, section 424A.001, subdivision 10, is amended to 144.26read:144.27    Subd. 10. Volunteer firefighter. "Volunteer firefighter" means a person who either:144.28(1) was a member of the applicable fire department or the independent nonprofit 144.29firefighting corporation and a member of the relief association on July 1, 2006; or145.1(2) became a member of the applicable fire department or the independent nonprofit 145.2firefighting corporation and is eligible for membership in the applicable relief association 145.3after June 30, 2006, and145.4(i) is engaged in providing emergency response services or delivering fire education 145.5or prevention services as a member of a municipal fire department, a joint powers entity 145.6fire department, or an independent nonprofit firefighting corporation;145.7(ii) is trained in or is qualified to provide fire suppression duties or to provide fire 145.8prevention duties under subdivision 8; and145.9(iii) meets any other minimum firefighter and service standards established by the 145.10fire department or the independent nonprofit firefighting corporation or specified in the 145.11articles of incorporation or bylaws of the relief association.145.12EFFECTIVE DATE.This section is effective July 1, 2009.145.13    Sec. 20. [424A.002] AUTHORIZATION OF NEW OR CONTINUING 145.14VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATIONS.145.15    Subdivision 1.Authorization.A municipal fire department or an independent 145.16nonprofit firefighting corporation, with approval by the applicable municipality or 145.17municipalities, may establish a new volunteer firefighters' relief association or may retain 145.18an existing volunteer firefighters' relief association.145.19    Subd. 2.Defined benefit or defined contribution relief association.The articles 145.20of incorporation or the bylaws of the volunteer firefighters' relief association must specify 145.21that the relief association is either a defined benefit relief association subject to sections 145.2269.771 to 69.774, 424A.015, and 424A.02 or is a defined contribution relief association 145.23subject to sections 424A.015 and 424A.016.145.24EFFECTIVE DATE.This section is effective July 1, 2009.145.25    Sec. 21. Minnesota Statutes 2008, section 424A.01, is amended to read:145.26424A.01 MEMBERSHIP IN A VOLUNTEER FIREFIGHTERS' RELIEF 145.27ASSOCIATION.145.28    Subdivision 1. Minors.It is unlawful for any(a) No volunteer firefighters' relief 145.29association associated with a municipality or an independent nonprofit firefighting 145.30corporation to employmay include as a relief association member a minor serving as 145.31a volunteer firefighter or to permit a minor to serve in any capacity performing any 145.32firefighting duties with a volunteer fire department, except for members of a youth, 145.33civic, or educational organization or program who participate with uninterrupted adult 146.1supervision, as allowed by federal law and by section 181A.04. Such organizations or 146.2programs include, but are not limited to, Boy Scout Explorer programs or firefighting 146.3degree programs.146.4(b) No volunteer firefighters' relief association associated with a municipality or an 146.5independent nonprofit firefighting corporation may include as a relief association member 146.6a minor serving as a volunteer firefighter.146.7    Subd. 2. Status of substitute volunteer firefighters. No person who is serving as a 146.8substitute volunteer firefighter shall be deemedmay be considered to be a firefighter for 146.9purposes of chapter 69 or this chapter nor shall beand no substitute volunteer firefighter is 146.10authorized to be a member of any volunteer firefighters' relief association governed by 146.11chapter 69 or this chapter.146.12    Subd. 3. Status of nonmember volunteer firefighters. No person who is serving 146.13as a firefighter in a fire department but who is not a member of the applicable firefighters' 146.14relief association shall beis entitled to any service pension or ancillary benefits from 146.15the relief association.146.16    Subd. 4. Exclusion of persons constituting an unwarranted health risk. The 146.17board of trustees of every relief association may exclude from membership in the relief 146.18association all applicants who, due to some medically determinable physical or mental 146.19impairment or condition, wouldis determined to constitute a predictable and unwarranted 146.20risk of imposing liability for an ancillary benefit at any age earlier than the minimum 146.21age specified for receipt of a service pension. Notwithstanding any provision of section 146.22363A.25
         , it shall beis a good and valid defense to a complaint or action brought under 146.23chapter 363A that the board of trustees of the relief association made a good faith 146.24determination that the applicant suffers from an impairment or condition constituting a 146.25predictable and unwarranted risk for the relief association if the determination was made 146.26following consideration of: (a)(1) the person's medical history; and (b)(2) the report of 146.27the physician completing a physical examination of the applicant completedundertaken at 146.28the expense of the relief association.146.29    Subd. 5. Fire prevention personnel. (a) If the fire department is a municipal 146.30department and the applicable municipality approves, or if the fire department is an 146.31independent nonprofit firefighting corporation and the contracting municipality or 146.32municipalities approve, the fire department may employ or otherwise utilize the services 146.33of persons as volunteer firefighters to perform fire prevention duties and to supervise 146.34fire prevention activities.146.35(b) Personnel serving in fire prevention positions are eligible to be members of 146.36the applicable volunteer firefighter relief association and to qualify for service pension 147.1or other benefit coverage of the relief association on the same basis as fire department 147.2personnel who perform fire suppression duties.147.3(c) Personnel serving in fire prevention positions also are eligible to receive any 147.4other benefits under the applicable law or practice for services on the same basis as 147.5personnel who are employed to perform fire suppression duties.147.6    Subd. 6.Return to active firefighting after break in service.(a) If a former active 147.7firefighter who has ceased to perform or supervise fire suppression and fire prevention 147.8duties for at least 60 days resumes performing active firefighting with the fire department 147.9associated with the relief association, if the bylaws of the relief association so permit, the 147.10person may again become an active member of the relief association.147.11(b) A firefighter who returns to active relief association membership under paragraph 147.12(a) may qualify for the receipt of a service pension from the relief association for the 147.13resumption service period if the firefighter meets a minimum period of resumption service 147.14specified in the relief association bylaws.147.15(c) A firefighter who returns to active lump-sum relief association membership and 147.16who qualifies for a service pension under paragraph (b) must have, upon a subsequent 147.17cessation of duties, any service pension for the resumption service period calculated as 147.18a separate benefit. If a lump-sum service pension had been paid to the firefighter upon 147.19the firefighter's previous cessation of duties, a second lump-sum service pension for the 147.20resumption service period must be calculated to apply the service pension amount in effect 147.21on the date of the firefighter's termination of the resumption service for all years of the 147.22resumption service. No firefighter may be paid a service pension twice for the same period 147.23of service. If a lump-sum service pension had not been paid to the firefighter upon the 147.24firefighter's previous cessation of duties and the firefighter meets the minimum service 147.25requirement of section 424A.02, subdivision 2, a service pension must be calculated to 147.26apply the service pension amount in effect on the date of the firefighter's termination of the 147.27resumption service for all years of service credit.147.28(d) A firefighter who had not been paid a lump-sum service pension returns to active 147.29relief association membership under paragraph (a), who does not qualify for a service 147.30pension under paragraph (b), but who does meet the minimum service requirement of 147.31section 424A.02, subdivision 2, based on the firefighter's previous years of active service, 147.32must have, upon a subsequent cessation of duties, a service pension calculated for the 147.33previous years of service based on the service pension amount in effect on the date of the 147.34firefighter's termination of the resumption service, or, if the bylaws so provide, based on the 147.35service pension amount in effect on the date of the firefighter's previous cessation of duties.148.1(e) If a firefighter receiving a monthly benefit service pension returns to active 148.2monthly benefit relief association membership under paragraph (a), any monthly benefit 148.3service pension payable to the firefighter is suspended as of the first day of the month next 148.4following the date on which the firefighter returns to active membership. If the firefighter 148.5was receiving a monthly benefit service pension, and qualifies for a service pension under 148.6paragraph (b), the firefighter is entitled to an additional monthly benefit service pension 148.7upon a subsequent cessation of duties calculated based on the resumption service credit 148.8and the service pension accrual amount in effect on the date of the termination of the 148.9resumption service. The suspended initial service pension resumes as of the first of 148.10the month next following the termination of the resumption service. If the firefighter 148.11was not receiving a monthly benefit service pension and meets the minimum service 148.12requirement of section 424A.02, subdivision 2, a service pension must be calculated to 148.13apply the service pension amount  in effect on the date of the firefighter's termination of the 148.14resumption service for all years of service credit.148.15(f) A firefighter who was not receiving a monthly benefit service pension returns 148.16to active relief association membership under paragraph (a), who does not qualify for a 148.17service pension under paragraph (b), but who does meet the minimum service requirement 148.18of section 424A.02, subdivision 2, based on the firefighter's previous years of active 148.19service, must have, upon a subsequent cessation of duties, a service pension calculated for 148.20the previous years of service based on the service pension amount in effect on the date 148.21of the firefighter's termination of the resumption service, or, if the bylaws so provide, 148.22based on the service pension amount in effect on the date of the firefighter's previous 148.23cessation of duties.148.24EFFECTIVE DATE.This section is effective July 1, 2009.148.25    Sec. 22. [424A.015] GENERALLY APPLICABLE VOLUNTEER 148.26FIREFIGHTERS' RELIEF ASSOCIATION PENSION PLAN REGULATION.148.27    Subdivision 1.Separation from active service; exception.(a) No service pension 148.28is payable to a person while the person remains an active member of the respective fire 148.29department, and a person who is receiving a service pension is not entitled to receive any 148.30other benefits from the special fund of the relief association.148.31(b) No relief association as defined in section 424A.001, subdivision 4, may pay a 148.32service pension or disability benefit to a former member of the relief association if that 148.33person has not separated from active service with the fire department to which the relief 148.34association is directly associated, unless: 149.1(1) the person is employed subsequent to retirement by the municipality or the 149.2independent nonprofit firefighting corporation, whichever applies, to perform duties within 149.3the municipal fire department or corporation on a full-time basis;149.4(2) the governing body of the municipality or of the corporation has filed its 149.5determination with the board of trustees of the relief association that the person's 149.6experience with and service to the fire department in that person's full-time capacity 149.7would be difficult to replace; and149.8(3) the bylaws of the relief association were amended to provide for the payment of 149.9a service pension or disability benefit for such full-time employees.149.10    Subd. 2.No assignment or garnishment.A service pension or ancillary benefits 149.11paid or payable from the special fund of a relief association to any person receiving or 149.12entitled to receive a service pension or ancillary benefits is not subject to garnishment, 149.13judgment, execution, or other legal process, except as provided in section 518.58, 518.581, 149.14or 518A.53. No person entitled to a service pension or ancillary benefits from the special 149.15fund of a relief association may assign any service pension or ancillary benefit payments, 149.16and the association does not have the authority to recognize any assignment or pay over 149.17any sum which has been assigned.149.18    Subd. 3.Purchase of annuity contract.A relief association that provides a service 149.19pension in a single payment, if the governing articles of incorporation or bylaws so 149.20provide, may purchase an annuity contract on behalf of a retiring member in an amount 149.21equal to the service pension otherwise payable at the request of the person and in place of 149.22a direct payment to the person. The annuity contract must be purchased from an insurance 149.23carrier licensed to do business in this state.149.24    Subd. 4.Transfer to individual retirement account.A relief association that is a 149.25qualified pension plan under section 401(a) of the Internal Revenue Code, as amended, 149.26and that provides a single payment service pension, at the written request of the applicable 149.27retiring member or, following the death of the active member, at the written request of the 149.28deceased member's surviving spouse, may directly transfer on an institution-to-institution 149.29basis the eligible member's lump-sum pension or the death or survivor benefit attributable 149.30to the member, whichever applies, to the requesting person's individual retirement account 149.31under section 408(a) of the Internal Revenue Code, as amended.149.32EFFECTIVE DATE.This section is effective July 1, 2009.149.33    Sec. 23. [424A.016] DEFINED CONTRIBUTION VOLUNTEER 149.34FIREFIGHTERS' RELIEF ASSOCIATION SPECIFIC REGULATION.150.1    Subdivision 1.Defined contribution relief association authorization.If the 150.2articles of incorporation or the bylaws governing the volunteer firefighters' relief 150.3association so provide exclusively, the relief association may pay a defined contribution 150.4lump-sum service pension instead of a defined benefit service pension governed by section 150.5424A.02.150.6    Subd. 2.Defined contribution service pension eligibility.(a) A relief association, 150.7when its articles of incorporation or bylaws so provide, may pay out of the assets of its 150.8special fund a defined contribution service pension to each of its members who:150.9(1) separates from active service with the fire department;150.10(2) reaches age 50;150.11(3) completes at least five years of active service as an active member of the 150.12municipal fire department to which the relief association is associated;150.13(4) completes at least five years of active membership with the relief association 150.14before separation from active service; and150.15(5) complies with any additional conditions as to age, service, and membership that 150.16are prescribed by the bylaws of the relief association.150.17(b) In the case of a member who has completed at least five years of active service as 150.18an active member of the fire department to which the relief association is associated on 150.19the date that the relief association is established and incorporated, the requirement that 150.20the member complete at least five years of active membership with the relief association 150.21before separation from active service may be waived by the board of trustees of the relief 150.22association if the member completes at least five years of inactive membership with the 150.23relief association before the date of the payment of the service pension. During the period 150.24of inactive membership, the member is not entitled to receive any disability benefit 150.25coverage, is not entitled to receive additional individual account allocation of fire state 150.26aid or municipal contribution towards a service pension, and is considered to have the 150.27status of a person entitled to a deferred service pension.150.28(c) The service pension earned by a volunteer under this chapter and the articles 150.29of incorporation and bylaws of the relief association may be paid whether or not the 150.30municipality or nonprofit firefighting corporation to which the relief association is 150.31associated qualifies for the receipt of fire state aid under chapter 69.150.32    Subd. 3.Reduced vesting schedule.If the articles of incorporation or bylaws of a 150.33defined contribution relief association so provide, a relief association may pay a reduced 150.34service pension not to exceed the nonforfeitable percentage of the account balance to a 150.35retiring member who has completed fewer than 20 years of service. The reduced service 150.36pension may be paid when the retiring member meets the minimum age and service 151.1requirements of subdivision 2. The nonforfeitable percentage of pension amounts are 151.2as follows:

151.3151.4Completed Years of ServiceNonforfeitable Percentage of Pension Amount151.5540 percent151.6652 percent151.7764 percent151.8876 percent151.9988 percent151.1010and thereafter100 percent

151.11    Subd. 4.Individual accounts.(a) An individual account must be established for 151.12each firefighter who is a member of the relief association.151.13(b) To each individual active member account must be credited an equal share of:151.14(1) any amounts of fire state aid received by the relief association;151.15(2) any amounts of municipal contributions to the relief association raised from 151.16levies on real estate or from other available municipal revenue sources exclusive of fire 151.17state aid; and151.18(3) any amounts equal to the share of the assets of the special fund to the credit of:151.19(i) any former member who terminated active service with the fire department to 151.20which the relief association is associated before meeting the minimum service requirement 151.21provided for in subdivision 2, paragraph (b), and has not returned to active service with 151.22the fire department for a period no shorter than five years; or151.23(ii) any retired member who retired before obtaining a full nonforfeitable interest in 151.24the amounts credited to the individual member account under subdivision 2, paragraph 151.25(b), and any applicable provision of the bylaws of the relief association. In addition, any 151.26investment return on the assets of the special fund must be credited in proportion to the 151.27share of the assets of the special fund to the credit of each individual active member 151.28account. Administrative expenses of the relief association payable from the special 151.29fund may be deducted from individual accounts in a manner specified in the bylaws of 151.30the relief association. 151.31(c) Amounts to be credited to individual accounts must be allocated uniformly for all 151.32years of active service and allocations must be made for all years of service, except for 151.33caps on service credit if so provided in the bylaws of the relief association. The allocation 151.34method may utilize monthly proration for fractional years of service, as the bylaws or 151.35articles of incorporation of the relief association so provide. The bylaws or articles of 151.36incorporation may define a "month," but the definition must require a calendar month to 151.37have at least 16 days of active service. If the bylaws or articles of incorporation do not 152.1define a "month," a "month" is a completed calendar month of active service measured 152.2from the member's date of entry to the same date in the subsequent month. 152.3(d) At the time of retirement under subdivision 2 and any applicable provision of the 152.4bylaws of the relief association, a retiring member is entitled to that portion of the assets 152.5of the special fund to the credit of the member in the individual member account which is 152.6nonforfeitable under subdivision 3 and any applicable provision of the bylaws of the relief 152.7association based on the number of years of service to the credit of the retiring member.152.8(e) Annually, the secretary of the relief association shall certify the individual 152.9account allocations to the state auditor at the same time that the annual financial statement 152.10or financial report and audit of the relief association, whichever applies, is due under 152.11section 69.051.152.12    Subd. 5.Service pension installment payments.A defined contribution relief 152.13association, if the governing bylaws so provide, may pay, at the option of the retiring 152.14member and in lieu of a single payment of a service pension, the service pension in 152.15installments. The election of installment payments is irrevocable and must be made by the 152.16retiring member in writing and filed with the secretary of the relief association no later 152.17than 30 days before the commencement of payment of the service pension. The amount of 152.18the installment payments must be the fractional portion of the remaining account balance 152.19equal to one divided by the number of remaining annual installment payments.152.20    Subd. 6.Deferred service pensions.(a) A member of a relief association is entitled 152.21to a deferred service pension if the member:152.22    (1) has completed the lesser of the minimum period of active service with the fire 152.23department specified in the bylaws or 20 years of active service with the fire department;152.24    (2) has completed at least five years of active membership in the relief association; 152.25and152.26    (3) separates from active service and membership before reaching age 50 or the 152.27minimum age for retirement and commencement of a service pension specified in the 152.28bylaws governing the relief association if that age is greater than age 50.152.29    (b) The deferred service pension is payable when the former member reaches age 152.3050, or the minimum age specified in the bylaws governing the relief association if that age 152.31is greater than age 50, and when the former member makes a valid written application.152.32    (c) A defined contribution relief association may, if its governing bylaws so provide, 152.33credit interest or additional investment performance on the deferred lump-sum service 152.34pension during the period of deferral. If provided for in the bylaws, the interest must be 152.35paid:153.1(1) at the investment performance rate actually earned on that portion of the assets 153.2if the deferred benefit amount is invested by the relief association in a separate account 153.3established and maintained by the relief association or if the deferred benefit amount is 153.4invested in a separate investment vehicle held by the relief association; or 153.5(2) the investment return on the assets of the special fund of the defined contribution 153.6volunteer firefighter relief association in proportion to the share of the assets of the special 153.7fund to the credit of each individual deferred member account through the date on which 153.8the investment return is recognized by and credited to the special fund.153.9    (d) The deferred service pension is governed by and must be calculated under 153.10the general statute, special law, relief association articles of incorporation, and relief 153.11association bylaw provisions applicable on the date on which the member separated from 153.12active service with the fire department and active membership in the relief association.153.13    Subd. 7.Limitation on ancillary benefits.(a) A defined contribution relief 153.14association may only pay an ancillary benefit which would constitute an authorized 153.15disbursement as specified in section 424A.05. The ancillary benefit for active members 153.16must equal the vested or nonvested amount of the individual account of the member.153.17(b) For deferred members, the ancillary benefit must equal the vested amount of 153.18the individual account of the member. For the recipient of installment payments of a 153.19service pension, the ancillary benefit must equal the remaining balance in the individual 153.20account of the recipient.153.21    Subd. 8.Filing of bylaw amendments.Each relief association to which this section 153.22applies must file a revised copy of its governing bylaws with the state auditor upon the 153.23adoption of any amendment to its governing bylaws by the relief association. Failure of 153.24the relief association to file a copy of the bylaws or any bylaw amendments with the state 153.25auditor disqualifies the municipality from the distribution of any future fire state aid until 153.26this filing requirement has been completed.153.27EFFECTIVE DATE.This section is effective July 1, 2009.153.28    Sec. 24. Minnesota Statutes 2008, section 424A.02, subdivision 1, is amended to read:153.29    Subdivision 1. Authorization. (a) A defined benefit relief association, when its 153.30articles of incorporation or bylaws so provide, may pay out of the assets of its special fund 153.31a defined benefit service pension to each of its members who: (1) separates from active 153.32service with the fire department; (2) reaches age 50; (3) completes at least five years of 153.33active service as an active member of the municipal fire department to which the relief 153.34association is associated; (4) completes at least five years of active membership with 153.35the relief association before separation from active service; and (5) complies with any 154.1additional conditions as to age, service, and membership that are prescribed by the bylaws 154.2of the relief association. A service pension computed under this section may be prorated 154.3monthly for fractional years of service,ifas the bylaws or articles of incorporation of 154.4the relief association so provide. The bylaws or articles of incorporation may define 154.5a "month," but the definition must require a calendar month to have at least 16 days of 154.6active service. If the bylaws or articles of incorporation do not define a "month," a 154.7"month" is a completed calendar month of active service measured from the member's 154.8date of entry to the same date in the subsequent month. The service pension earned by a 154.9volunteer firefighter under this chapter and the articles of incorporation and bylaws of the 154.10volunteer firefighters' relief association may be paid whether or not the municipality or 154.11nonprofit firefighting corporation to which the relief association is associated qualifies for 154.12the receipt of fire state aid under chapter 69.154.13(b) In the case of a member who has completed at least five years of active service as 154.14an active member of the fire department to which the relief association is associated on 154.15the date that the relief association is established and incorporated, the requirement that 154.16the member complete at least five years of active membership with the relief association 154.17before separation from active service may be waived by the board of trustees of the relief 154.18association if the member completes at least five years of inactive membership with the 154.19relief association before the date of the payment of the service pension. During the 154.20period of inactive membership, the member is not entitled to receive disability benefit 154.21coverage, is not entitled to receive additional service credit towards computation of a 154.22service pension, and is considered to have the status of a person entitled to a deferred 154.23service pension under subdivision 7.154.24(c) No municipality or nonprofit firefighting corporation may delegate the power to 154.25take final action in setting a service pension or ancillary benefit amount or level to the 154.26board of trustees of the relief association or to approve in advance a service pension or 154.27ancillary benefit amount or level equal to the maximum amount or level that this chapter 154.28would allow rather than a specific dollar amount or level.154.29(d) No relief association as defined in section 
         424A.001, subdivision 4, may pay a 154.30defined benefit service pension or disability benefit to a former member of the relief 154.31association if that person has not separated from active service with the fire department to 154.32which the relief association is directly associated, unless:154.33(1) the person is employed subsequent to retirement by the municipality or the 154.34independent nonprofit firefighting corporation, whichever applies, to perform duties within 154.35the municipal fire department or corporation on a full-time basis;155.1(2) the governing body of the municipality or of the corporation has filed its 155.2determination with the board of trustees of the relief association that the person's 155.3experience with and service to the fire department in that person's full-time capacity 155.4would be difficult to replace; and155.5(3) the bylaws of the relief association were amended to provide for the payment of 155.6a service pension or disability benefit for such full-time employees.155.7EFFECTIVE DATE.This section is effective July 1, 2009.155.8    Sec. 25. Minnesota Statutes 2008, section 424A.02, subdivision 2, is amended to read:155.9    Subd. 2. Nonforfeitable portion of service pension. (a) If the articles of 155.10incorporation or bylaws of a defined benefit relief association so provide, athe relief 155.11association may pay a reduced service pension to a retiring member who has completed 155.12fewer than 20 years of service. The reduced service pension may be paid when the retiring 155.13member meets the minimum age and service requirements of subdivision 1.155.14(b) The amount of the reduced service pension may not exceed the amount calculated 155.15by multiplying the service pension appropriate for the completed years of service as 155.16specified in the bylaws timesmultiplied by the applicable nonforfeitable percentage of 155.17pension.155.18(c) For a defined benefit volunteer firefighter relief association that pays a lump-sum 155.19service pension, a monthly benefit service pension, or a lump-sum service pension or a 155.20monthly benefit service pension as alternative benefit forms, the nonforfeitable percentage 155.21of pension amounts are as follows:

155.22155.23Completed Years of ServiceNonforfeitable Percentage of 
                  		Pension Amount155.24540 percent155.25644 percent155.26748 percent155.27852 percent155.28956 percent155.291060 percent155.301164 percent155.311268 percent155.321372 percent155.331476 percent155.341580 percent155.351684 percent155.361788 percent155.371892 percent156.11996 percent156.220and thereafter100 percent

156.3(d) For a volunteer firefighter relief association that pays a defined contribution 156.4service pension, the nonforfeitable percentage of pension amounts are as follows:

156.5156.6Completed Years of ServiceNonforfeitable Percentage of Pension Amount 156.7540 percent156.8652 percent156.9764 percent156.10876 percent156.11988 percent156.1210and thereafter100 percent

156.13EFFECTIVE DATE.This section is effective July 1, 2009.156.14    Sec. 26. Minnesota Statutes 2008, section 424A.02, subdivision 3, is amended to read:156.15    Subd. 3. Flexible service pension maximums. (a) Annually on or before August 1 156.16as part of the certification of the financial requirements and minimum municipal obligation 156.17determined under section 
         69.772, subdivision 4, or 
         69.773, subdivision 5, as applicable, 156.18the secretary or some other official of the relief association designated in the bylaws of 156.19each defined benefit relief association shall calculate and certify to the governing body 156.20of the applicable qualified municipality the average amount of available financing per 156.21active covered firefighter for the most recent three-year period. The amount of available 156.22financing shall includeincludes any amounts of fire state aid received or receivable by the 156.23relief association, any amounts of municipal contributions to the relief association raised 156.24from levies on real estate or from other available revenue sources exclusive of fire state 156.25aid, and one-tenth of the amount of assets in excess of the accrued liabilities of the relief 156.26association calculated under section 
         69.772, subdivision 2; 
         69.773, subdivisions 2 and 4; 156.27or 
         69.774, subdivision 2, if any.156.28    (b) The maximum service pension which the defined benefit relief association has 156.29authority to provide for in its bylaws for payment to a member retiring after the calculation 156.30date when the minimum age and service requirements specified in subdivision 1 are met 156.31must be determined using the table in paragraph (c) or (d), whichever applies.156.32    (c) For a defined benefit relief association where the governing bylaws provide for 156.33a monthly service pension to a retiring member, the maximum monthly service pension 156.34amount per month for each year of service credited that may be provided for in the bylaws 156.35is the greater of the service pension amount provided for in the bylaws on the date of the 156.36calculation of the average amount of the available financing per active covered firefighter 157.1or the maximum service pension figure corresponding to the average amount of available 157.2financing per active covered firefighter:

157.3157.4157.5Minimum Average Amount of Available 
                  		Financing per FirefighterMaximum Service Pension Amount 
                  		Payable per Month for Each 
                  		Year of Service157.6$ ...$ .25157.741.50157.8811.00157.91221.50157.101622.00157.112032.50157.122433.00157.132843.50157.143244.00157.153654.50157.164055.00157.174866.00157.185677.00157.196488.00157.207299.00157.2181010.00157.2289111.00157.2397212.00157.24105313.00157.25113414.00157.26121515.00157.27129616.00157.28137717.00157.29145818.00157.30153919.00157.31162020.00157.32170121.00157.33178222.00157.34182322.50157.35186323.00157.36194424.00157.37202525.00157.38210626.00157.39218727.00157.40226828.00157.41234929.00157.42243030.00157.43251131.00157.44259232.00158.1267333.00158.2275434.00158.3283435.00158.4291636.00158.5299737.00158.6307838.00158.7315939.00158.8324040.00158.9332141.00158.10340242.00158.11348343.00158.12356444.00158.13364545.00158.14372646.00158.15380747.00158.16388848.00158.17396949.00158.18405050.00158.19413151.00158.20421252.00158.21429353.00158.22437454.00158.23445555.00158.24453656.00158.25Effective beginning December 31, 2008158.26461757.00158.27469858.00158.28477959.00158.29486060.00158.30494161.00158.31502262.00158.32510363.00158.33518464.00158.34526565.00158.35Effective beginning December 31, 2009158.36534666.00158.37542767.00158.38550868.00158.39558969.00158.40567070.00158.41575171.00158.42583272.00158.43591373.00159.1599474.00159.2Effective beginning December 31, 2010159.3607575.00159.4615676.00159.5623777.00159.6631878.00159.7639979.00159.8648080.00159.9656181.00159.10664282.00159.11672383.00159.12Effective beginning December 31, 2011159.13680484.00159.14688585.00159.15696686.00159.16704787.00159.17712888.00159.18720989.00159.19729090.00159.20737191.00159.21745292.00159.22Effective beginning December 31, 2012159.23753393.00159.24761494.00159.25769595.00159.26777696.00159.27785797.00159.28793898.00159.29801999.00159.308100100.00159.31any amount in excess of 159.328100100.00

159.33    (d) For a defined benefit relief association in which the governing bylaws provide 159.34for a lump-sum service pension to a retiring member, the maximum lump-sum service 159.35pension amount for each year of service credited that may be provided for in the bylaws is 159.36the greater of the service pension amount provided for in the bylaws on the date of the 159.37calculation of the average amount of the available financing per active covered firefighter 159.38or the maximum service pension figure corresponding to the average amount of available 159.39financing per active covered firefighter for the applicable specified period:

160.1160.2160.3Minimum Average Amount of Available 
                  		Financing per FirefighterMaximum Lump-Sum Service 
                  		Pension Amount Payable for 
                  		Each Year of Service160.4$ ...$ 10160.51120160.61630160.72340160.82750160.93260160.104380160.1154100160.1265120160.1377140160.1486160160.1597180160.16108200160.17131240160.18151280160.19173320160.20194360160.21216400160.22239440160.23259480160.24281520160.25302560160.26324600160.27347640160.28367680160.29389720160.30410760160.31432800160.32486900160.335401000160.345941100160.356481200160.367021300160.377561400160.388101500160.398641600160.409181700160.419721800160.4210261900160.4310802000160.4411342100161.111882200161.212422300161.312962400161.413502500161.514042600161.614582700161.715122800161.815662900161.916203000161.1016723100161.1117263200161.1217533250161.1317803300161.1418203375161.1518343400161.1618883500161.1719423600161.1819963700161.1920233750161.2020503800161.2121043900161.2221584000161.2322124100161.2422654200161.2523194300161.2623734400161.2724274500161.2824814600161.2925354700161.3025894800161.3126434900161.3226975000161.3327515100161.3428055200161.3528595300161.3629135400161.3729675500161.3830215600161.3930755700161.4031295800161.4131835900161.4232376000161.4332916100162.133456200162.233996300162.334536400162.435076500162.535616600162.636156700162.736696800162.837236900162.937777000162.1038317100162.1138857200162.1239397300162.1339937400162.1440477500162.15Effective beginning December 31, 2008162.1641017600162.1741557700162.1842097800162.1942637900162.2043178000162.2143718100162.2244258200162.2344798300162.24Effective beginning December 31, 2009162.2545338400162.2645878500162.2746418600162.2846958700162.2947498800162.3048038900162.3148579000162.3249119100162.33Effective beginning December 31, 2010162.3449659200162.3550199300162.3650739400162.3751279500162.3851819600162.3952359700162.4052899800162.4153439900162.42539710,000163.1any amount in excess of163.2539710,000

163.3    (e) For a defined benefit relief association in which the governing bylaws provide 163.4for a monthly benefit service pension as an alternative form of service pension payment 163.5to a lump-sum service pension, the maximum service pension amount for each pension 163.6payment type must be determined using the applicable table contained in this subdivision.163.7    (f) If a defined benefit relief association establishes a service pension in compliance 163.8with the applicable maximum contained in paragraph (c) or (d) and the minimum average 163.9amount of available financing per active covered firefighter is subsequently reduced 163.10because of a reduction in fire state aid or because of an increase in the number of active 163.11firefighters, the relief association may continue to provide the prior service pension 163.12amount specified in its bylaws, but may not increase the service pension amount until 163.13the minimum average amount of available financing per firefighter under the table in 163.14paragraph (c) or (d), whichever applies, permits.163.15    (g) No defined benefit relief association is authorized to provide a service pension in 163.16an amount greater than the largest applicable flexible service pension maximum amount 163.17even if the amount of available financing per firefighter is greater than the financing 163.18amount associated with the largest applicable flexible service pension maximum.163.19(h) The method of calculating service pensions must be applied uniformly for all 163.20years of active service. Credit must be given for all years of active service except for caps 163.21on service credit if so provided in the bylaws of the relief association.163.22EFFECTIVE DATE.This section is effective July 1, 2009.163.23    Sec. 27. Minnesota Statutes 2008, section 424A.02, subdivision 3a, is amended to read:163.24    Subd. 3a. Penalty for paying pension greater than applicable maximum. (a) 163.25If a defined benefit relief association pays a service pension greater than the maximum 163.26service pension associated with the applicable average amount of available financing per 163.27active covered firefighter under the table in subdivision 3, paragraph (c) or (d), whichever 163.28applies, the maximum service pension under subdivision 3, paragraph (f), or the applicable 163.29maximum service pension amount specified in subdivision 3, paragraph (g), whichever is 163.30less, the state auditor shall:163.31(1) disqualify the municipality or the nonprofit firefighting corporation associated 163.32with the relief association from receiving fire state aid by making the appropriate 163.33notification to the municipality and the commissioner of revenue, with the disqualification 163.34applicable for the next apportionment and payment of fire state aid; and164.1(2) order the treasurer of the applicable relief association to recover the amount of 164.2the overpaid service pension or pensions from any retired firefighter who received an 164.3overpayment.164.4(b) Fire state aid amounts from disqualified municipalities for the period of 164.5disqualifications under paragraph (a), clause (1), must be credited to the amount of 164.6fire insurance premium tax proceeds available for the next subsequent fire state aid 164.7apportionment.164.8(c) The amount of any overpaid service pension recovered under paragraph (a), 164.9clause (2), must be credited to the amount of fire insurance premium tax proceeds 164.10available for the next subsequent fire state aid apportionment.164.11(d) The determination of the state auditor that a relief association has paid a service 164.12pension greater than the applicable maximum must be made on the basis of the information 164.13filed by the relief association and the municipality with the state auditor under sections 164.1469.011, subdivision 2
         , and 
         69.051, subdivision 1 or 1a, whichever applies, and any other 164.15relevant information that comes to the attention of the state auditor. The determination 164.16of the state auditor is final. An aggrieved municipality, relief association, or person may 164.17appeal the determination under section 
         480A.06.164.18EFFECTIVE DATE.This section is effective July 1, 2009.164.19    Sec. 28. Minnesota Statutes 2008, section 424A.02, subdivision 7, is amended to read:164.20    Subd. 7. Deferred service pensions. (a) A member of a defined benefit relief 164.21association is entitled to a deferred service pension if the member:164.22    (1) has completed the lesser of either the minimum period of active service with 164.23the fire department specified in the bylaws or 20 years of active service with the fire 164.24department;164.25    (2) has completed at least five years of active membership in the relief association; 164.26and164.27    (3) separates from active service and membership before reaching age 50 or the 164.28minimum age for retirement and commencement of a service pension specified in the 164.29bylaws governing the relief association if that age is greater than age 50.164.30    (b) The deferred service pension is payable when the former member reaches age 164.3150, or the minimum age specified in the bylaws governing the relief association if that age 164.32is greater than age 50, and when the former member makes a valid written application.164.33    (c) A defined benefit relief association that provides a lump-sum service pension 164.34governed by subdivision 3 may, when its governing bylaws so provide, pay interest on the 165.1deferred lump-sum service pension during the period of deferral. If provided for in the 165.2bylaws, interest must be paid in one of the following manners:165.3    (1) at the investment performance rate actually earned on that portion of the assets 165.4if the deferred benefit amount is invested by the relief association in a separate account 165.5established and maintained by the relief association or if the deferred benefit amount is 165.6invested in a separate investment vehicle held by the relief association; or165.7    (2) at an interest rate of up to five percent, compounded annually, as set by the board 165.8of directors and approved as provided in subdivision 10.165.9    (d) Interest under paragraph (c), clause (2), is payable following the date on which 165.10the municipality has approved the deferred service pension interest rate established by 165.11the board of trustees.165.12    (e) A relief association that provides a defined contribution service pension may, 165.13if its governing bylaws so provide, credit interest or additional investment performance 165.14on the deferred lump-sum service pension during the period of deferral. If provided for 165.15in the bylaws, the interest must be paid in one of the manners specified in paragraph 165.16(c) or alternatively the relief association may credit any investment return on the assets 165.17of the special fund of the defined contribution volunteer firefighter relief association in 165.18proportion to the share of the assets of the special fund to the credit of each individual 165.19deferred member account through the date on which the investment return is recognized 165.20by and credited to the special fund.165.21    (f)(e) For a deferred service pension that is transferred to a separate account 165.22established and maintained by the relief association or separate investment vehicle held 165.23by the relief association, the deferred member bears the full investment risk subsequent 165.24to transfer and in calculating the accrued liability of the volunteer firefighters relief 165.25association that pays a lump-sum service pension, the accrued liability for deferred service 165.26pensions is equal to the separate relief association account balance or the fair market value 165.27of the separate investment vehicle held by the relief association.165.28    (g)(f) The deferred service pension is governed by and must be calculated under 165.29the general statute, special law, relief association articles of incorporation, and relief 165.30association bylaw provisions applicable on the date on which the member separated from 165.31active service with the fire department and active membership in the relief association.165.32EFFECTIVE DATE.This section is effective July 1, 2009.165.33    Sec. 29. Minnesota Statutes 2008, section 424A.02, subdivision 8, is amended to read:165.34    Subd. 8. Lump-sum service pensions; installment payments. (a) AnyA defined 165.35benefit relief association, if the governing bylaws so provide, may pay, at the option of the 166.1retiring memberintended recipient and in lieu of a single payment of a lump-sum service 166.2pension or survivor benefit, a lump-sum service pension or survivor benefit in installments.166.3(b) The election of installment payments shall beis irrevocable and shallmust be 166.4made by the retiring memberintended recipient in writing and filed with the secretary of 166.5the relief association no later than 30 days prior tobefore the commencement of payment 166.6of the service pension or survivor benefit. The amount of the installment payments shall166.7must be determined so that the present value of the aggregate installment payments 166.8computed at an interest rate of five percent, compounded annually, is equal to the amount 166.9of the single lump-sum payment which would have been made had the installment 166.10payments option not been elected. The payment of each installment shall include interest 166.11at the rate of five percent, compounded annually on the reserve supporting the remaining 166.12installment payments as of the date on which the previous installment payment was paid 166.13and computed from the date on which the previous installment payment was paid to the 166.14date of payment for the current installment payment in any reasonable manner provided 166.15for in the governing bylaws, but the total amount of installment payments may not exceed 166.16the single payment service pension amount plus interest at an annual rate of five percent 166.17on the amount of delayed payments for the period during which payment was delayed.166.18(c) To the extent that the commissioner of commerce deems it to be necessary or 166.19practical, the commissioner may specify and issue procedures, forms or mathematical 166.20tables for use in performing the calculations required pursuant to this subdivision.166.21EFFECTIVE DATE.This section is effective July 1, 2009.166.22    Sec. 30. Minnesota Statutes 2008, section 424A.02, subdivision 9, is amended to read:166.23    Subd. 9. Limitation on ancillary benefits.AnyA defined benefit relief association, 166.24including any volunteer firefighters relief association governed by section 
         69.77 or any 166.25volunteer firefighters division of a relief association governed by chapter 424, may only 166.26pay ancillary benefits which would constitute an authorized disbursement as specified in 166.27section 
         424A.05 subject to the following requirements or limitations:166.28    (1) with respect to a defined benefit relief association in which governing bylaws 166.29provide for a lump-sum service pension to a retiring member, no ancillary benefit may 166.30be paid to any former member or paid to any person on behalf of any former member 166.31after the former member (i) terminates active service with the fire department and active 166.32membership in the relief association; and (ii) commences receipt of a service pension as 166.33authorized under this section; and166.34    (2) with respect to any defined benefit relief association, no ancillary benefit paid or 166.35payable to any member, to any former member, or to any person on behalf of any member 167.1or former member, may exceed in amount the total earned service pension of the member 167.2or former member. The total earned service pension must be calculated by multiplying 167.3the service pension amount specified in the bylaws of the relief association at the time of 167.4death or disability, whichever applies, by the years of service credited to the member or 167.5former member. The years of service must be determined as of (i) the date the member or 167.6former member became entitled to the ancillary benefit; or (ii) the date the member or 167.7former member died entitling a survivor or the estate of the member or former member to 167.8an ancillary benefit. The ancillary benefit must be calculated without regard to whether the 167.9member had attained the minimum amount of service and membership credit specified in 167.10the governing bylaws. For active members, the amount of a permanent disability benefit 167.11or a survivor benefit must be equal to the member's total earned service pension except 167.12that the bylaws of anya defined benefit relief association may provide for the payment of 167.13a survivor benefit in an amount not to exceed five times the yearly service pension amount 167.14specified in the bylaws on behalf of any member who dies before having performed five 167.15years of active service in the fire department with which the relief association is affiliated.167.16EFFECTIVE DATE.This section is effective July 1, 2009.167.17    Sec. 31. Minnesota Statutes 2008, section 424A.02, subdivision 9a, is amended to read:167.18    Subd. 9a. Postretirement increases. Notwithstanding any provision of general or 167.19special law to the contrary, a defined benefit relief association paying a monthly service 167.20pension may provide a postretirement increase to retired members and ancillary benefit 167.21recipients of the relief association if (1) the relief association adopts an appropriate bylaw 167.22amendment; and (2) the bylaw amendment is approved by the municipality pursuant to 167.23subdivision 10 and section 
         69.773, subdivision 6. The postretirement increase shall be167.24is applicable only to retired members and ancillary benefit recipients receiving a service 167.25pension or ancillary benefit as of the effective date of the bylaw amendment. The authority 167.26to provide a postretirement increase to retired members and ancillary benefit recipients 167.27of a relief association contained in this subdivision shall supersedesupersedes any prior 167.28special law authorization relating to the provision of postretirement increases.167.29EFFECTIVE DATE.This section is effective July 1, 2009.167.30    Sec. 32. Minnesota Statutes 2008, section 424A.02, subdivision 9b, is amended to read:167.31    Subd. 9b. Repayment of service pension in certain instances. If a retired 167.32volunteer firefighter does not permanently separate from active firefighting service as 167.33required by subdivision 1 and section 
         424A.001, subdivision 9, by resuming active service 168.1as a firefighter in the same volunteer fire department or as a person in charge of firefighters 168.2in the same volunteer fire department, no additional service pension amount is payable 168.3to the person, no additional service is creditable to the person, and the person shallmust 168.4repay to the defined benefit relief association any previously received service pension.168.5EFFECTIVE DATE.This section is effective July 1, 2009.168.6    Sec. 33. Minnesota Statutes 2008, section 424A.02, subdivision 10, is amended to read:168.7    Subd. 10. Local approval of bylaw amendments; filing requirements. (a) Each 168.8defined benefit relief association to which this section applies shallmust file a revised 168.9copy of its governing bylaws with the state auditor upon the adoption of any amendment 168.10to its governing bylaws by the relief association or upon the approval of any amendment 168.11to its governing bylaws granted by the governing body of each municipality served by the 168.12fire department to which the relief association is directly associated. Failure of the relief 168.13association to file a copy of the bylaws or any bylaw amendments with the state auditor 168.14shall disqualifydisqualifies the municipality from the distribution of any future fire state 168.15aid until this filing requirement has been completed.168.16(b) If the special fund of the relief association does not have a surplus over full 168.17funding pursuant tounder section 
         69.772, subdivision 3, clause (2), subclause (e), or 168.1869.773, subdivision 4
         , and if the municipality is required to provide financial support to 168.19the special fund of the relief association pursuant tounder section 
         69.772 or 
         69.773, no 168.20bylaw amendment which would affect the amount of, the manner of payment of, or the 168.21conditions for qualification for service pensions or ancillary benefits or disbursements 168.22other than administrative expenses authorized pursuant tounder section 
         69.80 payable 168.23from the special fund of the relief association shall beis effective until it has been ratified 168.24by the governing body or bodies of the appropriate municipalities. If the municipality is 168.25not required to provide financial support to the special fund pursuant tounder this section, 168.26the relief association may adopt or amend without municipal ratification its articles 168.27of incorporation or bylaws which increase or otherwise affect the service pensions or 168.28ancillary benefits payable from the special fund so long as the changes do not cause the 168.29amount of the resulting increase in the accrued liability of the special fund to exceed 90 168.30percent of the amount of the prior surplus over full funding reported in the prior year and 168.31the changes do not result in the financial requirements of the special fund exceeding the 168.32expected amount of the futuresubsequent calendar year's fire state aid to be received 168.33by the relief association.168.34(c) If the relief association pays only a lump-sum pension, the financial requirements 168.35are to be determined by the board of trustees following the preparation of an estimate 169.1of the expected increase in the accrued liability and annual accruing liability of the 169.2relief association attributable to the change. If the relief association pays a monthly 169.3benefit service pension, the financial requirements are to be determined by the board of 169.4trustees following either an updated actuarial valuation including the proposed change 169.5or an estimate of the expected actuarial impact of the proposed change prepared by the 169.6actuary of the relief association. If a relief association adopts or amends its articles of 169.7incorporation or bylaws without municipal ratification pursuant tounder this subdivision, 169.8and, subsequent to the amendment or adoption, the financial requirements of the special 169.9fund pursuant tounder this section are such so as to require financial support from the 169.10municipality, the provision which was implemented without municipal ratification shallis 169.11no longer be effective without municipal ratification, and any service pensions or ancillary 169.12benefits payable after that date shallmust be paid only in accordance with the articles of 169.13incorporation or bylaws as amended or adopted with municipal ratification.169.14EFFECTIVE DATE.This section is effective July 1, 2009.169.15    Sec. 34. Minnesota Statutes 2008, section 424A.02, subdivision 12, is amended to read:169.16    Subd. 12. Transfer of service credit to new district. Notwithstanding the 169.17requirements of subdivision 1 or any other law, a member of a fire department which is 169.18disbanded upon formation of a fire district to serve substantially the same geographic 169.19area, who serves as an active firefighter with the new district fire department, and is a 169.20member of the district firefighters' defined benefit relief association shall beis entitled 169.21to a nonforfeitable service pension from the new relief association upon completion of 169.22a combined total of 20 years active service in the disbanded and the new departments. 169.23The amount of the service pension shall beis based upon years of service in the new 169.24department only, and shallmust be in an amount equal to the accrued liability for the 169.25appropriate years of service calculated in accordance with section 
         69.772, subdivision 2.169.26    Sec. 35. Minnesota Statutes 2008, section 424A.02, subdivision 13, is amended to read:169.27    Subd. 13. Combined service pensions. (a) If the articles of incorporation or bylaws 169.28of the defined benefit relief associations so provide, a volunteer firefighter with credit for 169.29service as an active firefighter in more than one defined benefit volunteer firefighters relief 169.30association is entitled, when the applicable requirements of paragraph (b) are met and 169.31when otherwise qualified, to a prorated service credit from each relief association.169.32(b) A volunteer firefighter receiving a prorated service pension under this subdivision 169.33must have a total amount of service credit of ten years or more, if the bylaws of every 169.34affected relief association doesdo not requirespecify only a five-year service vesting 170.1requirement, or five years or more, if the bylaws of every affected relief association 170.2requiresrequire only a five-year service vesting requirement, as a member of two or more 170.3relief associations otherwise qualified. The member must have one year or more of service 170.4credit in each relief association. The prorated service pension must be based on the service 170.5pension amount in effect for the relief association on the date on which active volunteer 170.6firefighting services covered by that relief association terminate. To receive a service 170.7pension under this subdivision, the firefighter must become a member of the second or 170.8succeeding association and must give notice of membership to the prior association within 170.9two years of the date of termination of active service with the prior association. The notice 170.10must be attested to by the second or subsequent relief association secretary.170.11EFFECTIVE DATE.This section is effective July 1, 2009.170.12    Sec. 36. Minnesota Statutes 2008, section 424A.021, is amended to read:170.13424A.021 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED 170.14SERVICE.170.15    Subdivision 1. Authorization. Subject to restrictions stated in this section, a 170.16volunteer firefighter who is absent from firefighting service due to service in the uniformed 170.17services, as defined in United States Code, title 38, section 4303(13), may obtain service 170.18credit if the relief association is a defined benefit plan or an allocation of any fire state 170.19aid, any municipal contributions, and any investment return received by the relief 170.20association as though the person was an active member if the relief association is a defined 170.21contribution plan for the period of the uniformed service, not to exceed five years, unless a 170.22longer period is required under United States Code, title 38, section 4312.170.23    Subd. 2. Limitations. (a) To be eligible for service credit or an investment return170.24allocation as though an active member under this section, the volunteer firefighter must 170.25return to firefighting service with coverage by the same relief association or by the 170.26successor to that relief association upon discharge from service in the uniformed service 170.27within the time frame required in United States Code, title 38, section 4312(e).170.28(b) Service credit or an investment return allocation as though an active member is 170.29not authorized if the firefighter separates from uniformed service with a dishonorable or 170.30bad conduct discharge or under other than honorable conditions.170.31(c) Service credit or an investment return allocation as though an active member 170.32is not authorized if the firefighter fails to provide notice to the fire department that the 170.33individual is leaving to provide service in the uniformed service, unless it is not feasible to 170.34provide that notice due to the emergency nature of the situation.171.1EFFECTIVE DATE.This section is effective July 1, 2009.171.2    Sec. 37. Minnesota Statutes 2008, section 424A.03, is amended to read:171.3424A.03 UNIFORMITY OF VOLUNTEER FIREFIGHTER SERVICE 171.4PENSION AND RETIREMENT BENEFITS.171.5    Subdivision 1. Limitation on nonuniformity of pensions. Every partially salaried 171.6and partially volunteer firefighters' relief association shallmust provide service pensions 171.7to volunteer firefighter members based on the years of service of the members not on 171.8the compensation paid to the members for firefighting services. Each relief association 171.9shallmust provide service pensions to salaried members as set forth in chapter 424 and 171.10applicable special laws.171.11    Subd. 2. Penalties for violations.AnyA municipality which has a fire department 171.12to whichassociated with a relief association which violates the provisions of subdivision 171.131 is directly associated or which contracts with an independent nonprofit firefighting 171.14corporation of whichassociated with a relief association which violates the provisions 171.15of subdivision 1 is a subsidiary shallmay not be included in the apportionment of fire 171.16state aid by the commissioner of commerce to the applicable county auditor pursuant to171.17under section 
         69.021, subdivision 6, and shallmay not be included in the apportionment 171.18of fire state aid by the county auditor to the various municipalities pursuant tounder 171.19section 
         69.021, subdivision 7.171.20    Subd. 3. Exception to application of limitation and penalty. The limitation 171.21provided for in subdivision 1 shalldoes not apply to any relief association which prior to171.22before January 1, 1957, had established a definite service pension formula for members 171.23of the partially salaried and partially volunteer firefighters' relief association who are 171.24regularly employed firefighters.171.25EFFECTIVE DATE.This section is effective July 1, 2009.171.26    Sec. 38. Minnesota Statutes 2008, section 424A.04, is amended to read:171.27424A.04 VOLUNTEER RELIEF ASSOCIATIONS; BOARD OF TRUSTEES.171.28    Subdivision 1. Membership. (a) A relief association that is directly associated with 171.29a municipal fire department must be managed by a board of trustees consisting of nine 171.30members. Six trustees must be elected from the membership of the relief association and 171.31three trustees must be drawn from the officials of the municipalities served by the fire 171.32department to which the relief association is directly associated. The bylaws of a relief 171.33association which provides a monthly benefit service pension may provide that one of 172.1the six trustees elected from the relief association membership may be a retired member 172.2receiving a monthly pension who is elected by the membership of the relief association. 172.3The three municipal trustees must be one elected municipal official and one elected or 172.4appointed municipal official who are designated as municipal representatives by the 172.5municipal governing board annually and the chief of the municipal fire department.172.6(b) A relief association that is a subsidiary of an independent nonprofit firefighting 172.7corporation must be managed by a board of trustees consisting of nine members. Six 172.8trustees must be elected from the membership of the relief association, two trustees must 172.9be drawn from the officials of the municipalities served by the fire department to which 172.10the relief association is directly associated, and one trustee shallmust be the fire chief 172.11serving with the independent nonprofit firefighting corporation. The bylaws of a relief 172.12association may provide that one of the six trustees elected from the relief association 172.13membership may be a retired member receiving a monthly pension who is elected by the 172.14membership of the relief association. The two municipal trustees must be elected or 172.15appointed municipal officials, selected as follows:172.16(1) if only one municipality contracts with the independent nonprofit firefighting 172.17corporation, the municipal trustees must be two officials of the contracting municipality 172.18who are designated annually by the governing body of the municipality; or172.19(2) if two or more municipalities contract with the independent nonprofit corporation, 172.20the municipal trustees must be one official from each of the two largest municipalities 172.21in population who are designated annually by the governing bodies of the applicable 172.22municipalities.172.23(c) The municipal trustees for a relief association that is directly associated with a 172.24fire department operated as or by a joint powers entity must be the fire chief of the fire 172.25department and two trustees designated annually by the joint powers board. The municipal 172.26trustees for a relief association that is directly associated with a fire department service 172.27area township must be the fire chief of the fire department and two trustees designated by 172.28the township board.172.29(d) If a relief association lacks the municipal board members provided for in 172.30paragraph (a), (b), or (c) because the fire department is not located in or associated with an 172.31organized municipality, joint powers entity, or township, the municipal board members 172.32must be the fire chief of the fire department and two board members appointed from the 172.33fire department service area by the board of commissioners of the applicable county.172.34(e) The term of thesethe appointed municipal board members is one year or until the 172.35person's successor is qualified, whichever is later.173.1(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights 173.2and duties accorded to any other trustee, except the right to be an officer of the relief 173.3association board of trustees.173.4(g) A board must have at least three officers, who are a president, a secretary and a 173.5treasurer. These officers must be elected from among the elected trustees by either the full 173.6board of trustees or by the relief association membership, as specified in the bylaws. In 173.7no event may any trustee hold more than one officer position at any one time. The terms 173.8of the elected trustees and of the officers of the board must be specified in the bylaws of 173.9the relief association, but may not exceed three years. If the term of the elected trustees 173.10exceeds one year, the election of the various trustees elected from the membership must be 173.11staggered on as equal a basis as is practicable.173.12    Subd. 2. Fiduciary duty. The board of trustees of a relief association shall 173.13undertake their activities consistent with chapter 356A.173.14    Subd. 2a.Fiduciary responsibility.In the discharge of their respective duties, the 173.15officers and trustees shall be held to the standard of care specified in section 11A.09. In 173.16addition, the trustees shall act in accordance with chapter 356A. Each member of the 173.17board is a fiduciary and shall undertake all fiduciary activities in accordance with the 173.18standard of care of section 11A.09, and in a manner consistent with chapter 356A. No 173.19fiduciary of a relief association shall cause a relief association to engage in a transaction if 173.20the fiduciary knows or should know that the transaction constitutes one of the following 173.21direct or indirect transactions:173.22(1) sale or exchange or leasing of any real property between the relief association 173.23and a board member;173.24(2) lending of money or other extension of credit between the relief association and 173.25a board member or member of the relief association;173.26(3) furnishing of goods, services, or facilities between the relief association and a 173.27board member; or173.28(4) transfer to a board member, or use by or for the benefit of a board member, of any 173.29assets of the relief association. A transfer of assets does not mean the payment of relief 173.30association benefits or administrative expenses permitted by law.173.31    Subd. 3. Conditions on relief association consultants. (a) If a volunteer firefighter 173.32relief association hiresemploys or contracts with a consultant to provide legal or financial 173.33advice, the secretary of the relief association shall obtain and the consultant shall provide 173.34to the secretary of the relief association a copy of the consultant's certificate of insurance.174.1(b) A consultant is any person who is employed under contract to provide legal or 174.2financial advice and who is or who represents to the volunteer firefighter relief association 174.3that the person is:174.4(1) an actuary;174.5(2) a licensed public accountant or a certified public accountant;174.6(3) an attorney;174.7(4) an investment advisor or manager, or an investment counselor;174.8(5) an investment advisor or manager selection consultant;174.9(6) a pension benefit design advisor or consultant; or174.10(7) any other financial consultant.174.11EFFECTIVE DATE.This section is effective July 1, 2009.174.12    Sec. 39. Minnesota Statutes 2008, section 424A.05, subdivision 1, is amended to read:174.13    Subdivision 1. Establishment of special fund. Every volunteer firefighters' relief 174.14association shall establish and maintain a special fund within the relief association.174.15EFFECTIVE DATE.This section is effective July 1, 2009.174.16    Sec. 40. Minnesota Statutes 2008, section 424A.05, subdivision 2, is amended to read:174.17    Subd. 2. Special fund assets and revenues. The special fund shallmust be credited 174.18with all fire state aid moneys received pursuant tounder sections 
         69.011 to 
         69.051, 174.19all taxes levied by or other revenues received from the municipality pursuant tounder 174.20sections 
         69.771 to 
         69.776 or any applicable special law requiring municipal support for 174.21the relief association, any moneys or property donated, given, granted or devised by any 174.22person which is specified for use for the support of the special fund and any interest or 174.23investment return earned upon the assets of the special fund. The treasurer of the relief 174.24association shall beis the custodian of the assets of the special fund and shallmust be the 174.25recipient on behalf of the special fund of all revenues payable to the special fund. The 174.26treasurer shall maintain adequate records documenting any transaction involving the assets 174.27or the revenues of the special fund. These records and the bylaws of the relief association 174.28shall beare public and shallmust be open for inspection by any member of the relief 174.29association, any officer or employee of the state or of the municipality, or any member of 174.30the public, at reasonable times and places.174.31EFFECTIVE DATE.This section is effective July 1, 2009.174.32    Sec. 41. Minnesota Statutes 2008, section 424A.05, subdivision 3, is amended to read:175.1    Subd. 3. Authorized disbursements from the special fund. (a) Disbursements 175.2from the special fund aremay not permitted to be made for any purpose other than one of 175.3the following:175.4    (1) for the payment of service pensions to retired members of the relief association if 175.5authorized and paid under law and the bylaws governing the relief association;175.6    (2) for the payment of temporary or permanent disability benefits to disabled 175.7members of the relief association if authorized and paid pursuant tounder law and 175.8specified in amount in the bylaws governing the relief association;175.9    (3) for the payment of survivor benefits to surviving spouses and surviving children, 175.10or if none, to designated beneficiaries, of deceased members of the relief association, and 175.11if no survivors and if no designated beneficiary, for the payment of a death benefit to the 175.12estate of the deceased active or deferred firefighter, if authorized by and paid pursuant to175.13under law and specified in amount in the bylaws governing the relief association;175.14    (4) for the payment of the fees, dues and assessments to the Minnesota State Fire 175.15Department Association,and to the Minnesota Area Relief Association Coalition, and to 175.16the state Volunteer Firefighters Benefit Association in order to entitle relief association 175.17members to membership in and the benefits of these associations or organizations; and175.18(5) for the payment of insurance premiums to the state Volunteer Firefighters Benefit 175.19Association, or an insurance company licensed by the state of Minnesota offering casualty 175.20insurance, in order to entitle relief association members to membership in and the benefits 175.21of the association or organization; and175.22    (5)(6) for the payment of administrative expenses of the relief association as 175.23authorized under section 
         69.80. 175.24    (b) For purposes of this chapter, for a monthly benefit volunteer fire relief association 175.25or for a combination lump-sum and monthly benefit volunteer fire relief association where 175.26a monthly benefit service pension has been elected by or a monthly benefit is payable with 175.27respect to a firefighter, a designated beneficiary must be a natural person. For purposes of 175.28this chapter, for a defined contribution volunteer fire relief association, for a lump-sum 175.29volunteer fire relief association, or for a combination lump-sum and monthly benefit 175.30volunteer fire relief association where a lump-sum service pension has been elected by 175.31or a lump-sum benefit is payable with respect to a firefighter, a designated beneficiary 175.32may be a trust created under chapter 501B.175.33EFFECTIVE DATE.This section is effective July 1, 2009.175.34    Sec. 42. Minnesota Statutes 2008, section 424A.05, subdivision 4, is amended to read:176.1    Subd. 4. Investments of assets of the special fund. The assets of the special fund 176.2shallmust be invested only in securities authorized by section 
         69.775.176.3EFFECTIVE DATE.This section is effective July 1, 2009.176.4    Sec. 43. Minnesota Statutes 2008, section 424A.06, is amended to read:176.5424A.06 RELIEF ASSOCIATION GENERAL FUND.176.6    Subdivision 1. Establishment of general fund.AnyA volunteer firefighters' relief 176.7association may establish and maintain a general fund within the relief association.176.8    Subd. 2. General fund assets and revenues. To the general fund, if established, 176.9shallmust be credited all moneys received from dues, fines, initiation fees, entertainment 176.10revenues and any moneys or property donated, given, granted or devised by any person, 176.11for unspecified uses. The treasurer of the relief association shall beis the custodian of the 176.12assets of the general fund and shallmust be the recipient on behalf of the general fund of 176.13all revenues payable to the general fund. The treasurer shall maintain adequate records 176.14documenting any transaction involving the assets or the revenues of the general fund. 176.15These records shallmust be open for inspection by any member of the relief association 176.16at reasonable times and places.176.17    Subd. 3. Authorized disbursements from the general fund. Disbursements from 176.18the general fund may be made for any purpose that is authorized by either the articles of 176.19incorporation or bylaws of the relief association.176.20    Subd. 4. Investment of assets of the general fund. The assets of the general 176.21fund may be invested in any securities that are authorized by the bylaws of the relief 176.22association and may be certified for investment by the State Board of Investment in fixed 176.23income pools or in a separately managed account at the discretion of the State Board of 176.24Investment as provided in section 
         11A.14.176.25EFFECTIVE DATE.This section is effective July 1, 2009.176.26    Sec. 44. Minnesota Statutes 2008, section 424A.07, is amended to read:176.27424A.07 NONPROFIT FIREFIGHTING CORPORATIONS; 176.28ESTABLISHMENT OF RELIEF ASSOCIATIONS.176.29Prior toBefore paying any service pensions or retirement benefits pursuant to176.30under section 
         424A.02 or before becoming entitled to receive any amounts of fire state 176.31aid upon transmittal from a contracting municipality pursuant tounder section 
         69.031, 176.32subdivision 5
         , a nonprofit firefighting corporation shall establish a volunteer firefighters' 176.33relief association governed by this chapter.177.1    Sec. 45. Minnesota Statutes 2008, section 424A.08, is amended to read:177.2424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION; 177.3AUTHORIZED DISBURSEMENTS.177.4(a) Any qualified municipality which is entitled to receive fire state aid but which 177.5has no volunteer firefighters' relief association directly associated with its fire department 177.6and which has no full-time firefighters with retirement coverage by the public employees 177.7police and fire retirement plan shall deposit the fire state aid in a special account 177.8established for that purpose in the municipal treasury. Disbursement from the special 177.9account shallmay not be made for any purpose except:177.10(1) payment of the fees, dues and assessments to the Minnesota State Fire 177.11Department Association and to the state Volunteer Firefighters' Benefit Association in 177.12order to entitle its firefighters to membership in and the benefits of these state associations;177.13(2) payment of the cost of purchasing and maintaining needed equipment for the 177.14fire department; and177.15(3) payment of the cost forof construction, acquisition, repair and, or maintenance 177.16of buildings or other premises to house the equipment of the fire department.177.17(b) A qualified municipality which is entitled to receive fire state aid, which has no 177.18volunteer firefighters' relief association directly associated with its fire department and 177.19which has full-time firefighters with retirement coverage by the public employees police 177.20and fire retirement plan may disburse the fire state aid as provided in paragraph (a), for the 177.21payment of the employer contribution requirement with respect to firefighters covered by 177.22the public employees police and fire retirement plan under section 353.65, subdivision 3, 177.23or for a combination of the two types of disbursements.177.24EFFECTIVE DATE.This section is effective July 1, 2009.177.25    Sec. 46. Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:177.26    Subdivision 1.  Definitions. For purposes of this section: 177.27    (1) "qualified recipient" means an individual who receives a lump-sum distribution 177.28of pension or retirement benefits from a volunteer firefighters' relief association for service 177.29that the individual has performed as a volunteer firefighter;177.30    (2) "survivor of a deceased active or deferred volunteer firefighter" means the legally 177.31marriedsurviving spouse of a deceased active or deferred volunteer firefighter under 177.32section 424A.001, subdivision 6, or, if none, the surviving minor child or minor children 177.33of a deceased active or deferred volunteer firefighter; 178.1    (3) "active volunteer firefighter" means a person who regularly renders fire 178.2suppression service for a municipal fire department or an independent nonprofit firefighting 178.3corporation, who has met the statutory and other requirements for relief association 178.4membership, and who has beenis deemed by the relief association under law and its 178.5bylaws to be a fully qualified member of the relief association for at least one month; and178.6    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who 178.7terminated active firefighting service, has sufficient service credit from the applicable relief 178.8association to be entitled to a service pension under the bylaws of the relief association, 178.9but has not applied for or has not received the service pension.178.10EFFECTIVE DATE.This section is effective July 1, 2009.178.11    Sec. 47. Minnesota Statutes 2008, section 424A.10, subdivision 2, is amended to read:178.12    Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a volunteer 178.13firefighters' relief association of a lump-sum distribution to a qualified recipient, the 178.14association must pay a supplemental benefit to the qualified recipient. Notwithstanding 178.15any law to the contrary, the relief association must pay the supplemental benefit out of 178.16its special fund. The amount of This benefit equalsis an amount equal to ten percent of 178.17the regular lump-sum distribution that is paid on the basis of the recipient's service as 178.18a volunteer firefighter. In no case may the amount of the supplemental benefit exceed 178.19$1,000. A supplemental benefit under this paragraph may not be paid to a survivor of a 178.20deceased active or deferred volunteer firefighter in that capacity.178.21    (b) Upon the payment by a relief association of a lump-sum survivor benefit or178.22funeral benefit to a survivor of a deceased active volunteer firefighter or of a deceased 178.23deferred volunteer firefighter, the association may pay a supplemental survivor benefit 178.24to the survivor of the deceased active or deferred volunteer firefighter from the special 178.25fund of the relief association if its articles of incorporation or bylaws so provide. The 178.26amount of the supplemental survivor benefit is 20 percent of the survivor benefit or funeral178.27benefit, but not to exceed $2,000.178.28    (c) An individual may receive a supplemental benefit under paragraph (a) or under 178.29paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer 178.30firefighter benefit.178.31EFFECTIVE DATE.This section is effective July 1, 2009.178.32    Sec. 48. Minnesota Statutes 2008, section 424A.10, subdivision 3, is amended to read:179.1    Subd. 3.  State reimbursement. (a) Each year, to be eligible for state reimbursement 179.2of the amount of supplemental benefits paid under subdivision 2 during the preceding 179.3calendar year, the volunteer firefighters' relief association must shall apply to the 179.4commissioner of revenue by February 15. By March 15, the commissioner shall 179.5reimburse the relief association for the amount of the supplemental benefits paid by the 179.6relief association to qualified recipients and to survivors of deceased active or deferred 179.7volunteer firefighters. 179.8    (b) The commissioner of revenue shall prescribe the form of and supporting 179.9information that must be supplied as part of the application for state reimbursement. 179.10The commissioner of revenue shall reimburse the relief association by paying the 179.11reimbursement amount to the treasurer of the municipality where the association is located. 179.12Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement 179.13to the treasurer of the association if the association has filed a financial report with the 179.14municipality. If the relief association has not filed a financial report with the municipality, 179.15the municipal treasurer shall delay transmission of the reimbursement payment to the 179.16association until the complete financial report is filed. If the association has dissolved or 179.17has been removed as a trustee of state aid, the treasurer shall deposit the money in a 179.18special account in the municipal treasury, and the money may be disbursed only for the 179.19purposes and in the manner provided in section 
         424A.08. When paid to the association, 179.20the reimbursement payment must be deposited in the special fund of the relief association. 179.21    (c) A sum sufficient to make the payments is appropriated from the general fund 179.22to the commissioner of revenue. 179.23EFFECTIVE DATE.This section is effective July 1, 2009.179.24    Sec. 49. Minnesota Statutes 2008, section 424A.10, subdivision 4, is amended to read:179.25    Subd. 4. In lieu of income tax exclusion. (a) The supplemental benefit provided 179.26by this section is in lieu of the state income tax exclusion for lump-sum distributions of 179.27retirement benefits paid to volunteer firefighters. 179.28(b) If the law is modified to exclude or exempt volunteer firefighters' lump-sum 179.29distributions from state income taxation, the supplemental benefits under this section 179.30mayare no longer be paidpayable, beginning with the first calendar year in which the 179.31exclusion or exemption is effective. This subdivision does not apply to exemption of all or 179.32part of a lump-sum distribution under section 
         290.032 or 
         290.0802. 179.33EFFECTIVE DATE.This section is effective July 1, 2009.180.1    Sec. 50. Minnesota Statutes 2008, section 424A.10, subdivision 5, is amended to read:180.2    Subd. 5. Retroactive reimbursement in certain instances.  A supplemental 180.3survivor or funeral benefit may be paid by a relief association for the death of an active 180.4volunteer firefighter or of a deferred volunteer firefighter that occurred on or after August 180.51, 2005, if the relief association articles of incorporation or bylaws so provide for a 180.6supplemental survivor benefit and provide for retroactivity.180.7EFFECTIVE DATE.This section is effective July 1, 2009.180.8    Sec. 51. Minnesota Statutes 2008, section 424B.10, is amended by adding a 180.9subdivision to read:180.10    Subd. 1a.Applicability.This section applies when all of the volunteer firefighters' 180.11relief associations involved in the consolidation are defined benefit relief associations as 180.12defined in section 424A.001, subdivision 1b.180.13EFFECTIVE DATE.This section is effective July 1, 2009.180.14    Sec. 52. Minnesota Statutes 2008, section 424B.10, is amended by adding a 180.15subdivision to read:180.16    Subd. 1b.Benefits.(a) The successor relief association following the consolidation 180.17of two or more defined benefit relief associations must be a defined benefit relief 180.18association.180.19(b) Notwithstanding any provision of section 424A.02, subdivision 3, to the contrary, 180.20the initial service pension amount of the subsequent defined benefit relief association as 180.21of the effective date of consolidation is either the service pension amount specified in 180.22clause (1) or the service pension amounts specified in clause (2), as provided for in the 180.23consolidated relief association's articles of incorporation or bylaws:180.24(1) the highest dollar amount service pension amount of any prior volunteer 180.25firefighters relief association in effect immediately before the consolidation initiation if the 180.26pension amount was implemented consistent with section 424A.02; or180.27(2) for service rendered by each individual volunteer firefighter before consolidation, 180.28the service pension amount under the consolidating volunteer firefighters relief association 180.29that the firefighter belonged to immediately before the consolidation if the pension amount 180.30was implemented consistent with section 424A.02 and for service rendered after the 180.31effective date of the consolidation, the highest dollar amount service pension of any of the 180.32consolidating volunteer firefighters relief associations in effect immediately before the 180.33consolidation if the pension amount was implemented consistent with section 424A.02.181.1(c) Any increase in the service pension amount beyond the amount implemented 181.2under paragraph (a) must conform with the requirements and limitations of sections 181.369.771 to 69.775 and section 424A.02.181.4EFFECTIVE DATE.This section is effective July 1, 2009.181.5    Sec. 53. Minnesota Statutes 2008, section 424B.10, subdivision 2, is amended to read:181.6    Subd. 2. Funding. (a) Unless the applicable municipalities agree in writing to 181.7allocate the minimum municipal obligation in a different manner, the minimum municipal 181.8obligation under section 
         69.772 or 
         69.773, whichever applies, must be allocated between 181.9the applicable municipalities in proportion to their fire state aid.181.10(b) If any applicable municipality fails to meet its portion of the minimum municipal 181.11obligation to the subsequent relief association, all other applicable municipalities are 181.12jointly obligated to provide the required funding upon certification by the relief association 181.13secretary. An applicable municipality that pays the minimum municipal obligation 181.14amount for another applicable municipality, the municipality may collect thethat payment 181.15amount, plus a 25 percent surcharge, from the responsible applicable municipality by any 181.16available means, including a deduction from any state aid or payment amount payable 181.17to the responsible municipality upon certification of the necessary information to the 181.18commissioner of finance.181.19EFFECTIVE DATE.This section is effective July 1, 2009.181.20    Sec. 54. [424B.11] CONSOLIDATING DEFINED CONTRIBUTION RELIEF 181.21ASSOCIATIONS; INDIVIDUAL ACCOUNTS; FUNDING.181.22    Subdivision 1.Applicability.This section applies when all of the volunteer 181.23firefighters' relief associations involved in the consolidation are defined contribution relief 181.24associations as defined in section 424A.001, subdivision 1c.181.25    Subd. 2.Individual accounts.The successor relief association following the 181.26consolidation of two or more defined contribution relief associations must be a defined 181.27contribution relief association and the successor relief association board shall establish 181.28individual accounts for every active member, inactive member, deferred member, or 181.29retired member receiving installment payments with that status as of the consolidation 181.30date. To each individual account the successor relief association must credit the amount to 181.31the credit of each person by a predecessor relief association as of the date of consolidation 181.32plus a proportional share, based on account value, of any subsequent net revenue during 181.33the consolidation process.182.1    Subd. 3.Funding.Unless the articles of incorporation or bylaws of the successor 182.2relief association specify that municipal contributions are wholly voluntary or unless the 182.3municipalities associated with the consolidating defined contribution relief associations 182.4agree in writing to a different municipal support arrangement, each municipality must 182.5continue to provide the same amount of municipal support to the successor relief 182.6association as the municipality provided to the applicable predecessor relief association in 182.7the calendar year immediately prior to the calendar year in which the consolidation occurs.182.8EFFECTIVE DATE.This section is effective July 1, 2009.182.9    Sec. 55. [424B.12] MIXED CONSOLIDATING RELIEF ASSOCIATIONS; 182.10BENEFIT PLAN; FUNDING.182.11    Subdivision 1.Applicability.This section applies where one or more of the 182.12volunteer firefighters' relief associations involved in the consolidation are defined benefit 182.13relief associations as defined in section 424A.001, subdivision 1b, and one or more of 182.14the volunteer firefighters' relief associations involved in the consolidation are defined 182.15contribution relief associations as defined in section 424A.001, subdivision 1c.182.16    Subd. 2.Benefit plan.The articles of incorporation or bylaws of the successor 182.17relief association must specify whether the relief association is a defined benefit relief 182.18association or whether the relief association is a defined contribution relief association. If 182.19the successor relief association is a defined benefit relief association, the relief association 182.20benefits must comply with sections 424A.02 and 424B.11, subdivision 1a. If the successor 182.21relief association is a defined contribution relief association, the relief association must 182.22comply with sections 424A.016 and 424B.12, subdivision 2.182.23    Subd. 3.Funding.If the successor relief association is a defined benefit relief 182.24association, the relief association funding is governed by section 424B.11, subdivision 2. 182.25If the successor relief association is a defined contribution relief association, the relief 182.26association funding is governed by section 424B.12, subdivision 3.182.27EFFECTIVE DATE.This section is effective July 1, 2009.182.28    Sec. 56. Minnesota Statutes 2008, section 424B.21, is amended to read:182.29424B.21 ANNUITY PURCHASES UPON DISSOLUTION.182.30The board of trustees of a volunteer firefighters relief association that is scheduled 182.31for dissolution may purchase annuity contracts under section 
         424A.02 424A.015, 182.32subdivision 8a 3, instead of transferring special fund assets to a municipal trust fund 182.33under section 
         424B.20, subdivision 4. Payment of an annuity for which a contract is 183.1purchased may not commence before the retirement age specified in the relief association 183.2bylaws and in compliance with section 
         424A.016, subdivision 2, or 424A.02, subdivision 183.31
         . Legal title to the annuity contract transfers to the municipal trust fund under section 183.4424B.20, subdivision 4
         .183.5EFFECTIVE DATE.This section is effective July 1, 2009, if article 1 is also 183.6enacted.183.7    Sec. 57. BRIMSON FIREFIGHTERS RELIEF ASSOCIATION; BOARD OF 183.8TRUSTEES MEMBERSHIP.183.9Notwithstanding any provisions of Minnesota Statutes, section 424A.04, or other 183.10law to the contrary, the Brimson Firefighters Relief Association must be managed by a 183.11board of trustees consisting of ten members, with six trustees elected from the membership 183.12of the relief association, one trustee drawn from the officials of each municipality served 183.13by the fire department to which the relief association is directly associated, and one trustee 183.14who is the fire chief serving with the independent nonprofit firefighting corporation.183.15EFFECTIVE DATE.This section is effective the day after the governing body 183.16of the Fairbanks Township and its chief clerical officer timely comply with Minnesota 183.17Statutes, section 645.021, subdivisions 2 and 3.183.18    Sec. 58.  REPEALER.183.19    Subdivision 1.Repealed for recodification.Minnesota Statutes 2008, sections 183.20424A.001, subdivision 7; 424A.02, subdivisions 4, 6, 8a, and 8b; and 424B.10, subdivision 183.211, are repealed.183.22    Subd. 2.Repealed as obsolete.Minnesota Statutes 2008, section 424A.09, is 183.23repealed.183.24    Subd. 3.Substantive repeal. Minnesota Statutes 2008, section 424A.02, 183.25subdivision 9b, is repealed.183.26ARTICLE 11183.27CORRECTION OF PRIOR DRAFTING ERRORS183.28    Section 1. Minnesota Statutes 2008, section 354.66, subdivision 6, is amended to read:183.29    Subd. 6. Insurance. A board of an employing district entering into an agreement 183.30authorized by this section shall take all steps necessary to assure continuance of any 183.31insurance programs furnished or authorized a full-time teacher on an identical basis and 183.32with identical sharing of costs for a part-time teacher pursuant to this section, provided, 184.1however, that the requirements of this sentence may be modified by a collective bargaining 184.2agreement between a board and an exclusive representative pursuant to chapter 179 179A. 184.3Teachers as defined in section 
         136F.43 employed on a less than 75 percent time basis 184.4pursuant to this section shall be eligible for state paid insurance benefits as if the teachers 184.5were employed full time.  184.6EFFECTIVE DATE.This section is effective the day following final enactment.184.7    Sec. 2. Minnesota Statutes 2008, section 356.32, subdivision 2, is amended to read:184.8    Subd. 2. Covered retirement plans. The provisions of this section apply to the 184.9following retirement plans:184.10(1) the general state employees retirement plan of the Minnesota State Retirement 184.11System, established under chapter 352;184.12(2) the correctional state employees retirement plan of the Minnesota State 184.13Retirement System, established under chapter 352;184.14(3) the State Patrol retirement plan, established under chapter 352B;184.15(4) the general employees retirement plan of the Public Employees Retirement 184.16Association, established under chapter 353;184.17(5) the public employees police and fire plan of the Public Employees Retirement 184.18Association, established under chapter 353;184.19(6) the Teachers Retirement Association, established under chapter 354;184.20(7) the Minneapolis Employees Retirement Fund, established under chapter 422A;184.21(8) the Duluth Teachers Retirement Fund Association, established under chapter 184.22354A; and184.23(9) the Minneapolis Teachers Retirement Fund Association, established under 184.24chapter 354A; and184.25(10)(9) the St. Paul Teachers Retirement Fund Association, established under 184.26chapter 354A.184.27EFFECTIVE DATE.This section is effective the day following final enactment.184.28    Sec. 3. Minnesota Statutes 2008, section 422A.06, subdivision 8, is amended to read:184.29    Subd. 8. Retirement benefit fund. (a) The retirement benefit fund consists of 184.30amounts held for payment of retirement allowances for members retired under this chapter, 184.31including any transfer amount payable under subdivision 3, paragraph (c).184.32    (b) Unless subdivision 3, paragraph (c), applies, assets equal to the required 184.33reserves for retirement allowances under this chapter determined in accordance with the 185.1appropriate mortality table adopted by the board of trustees based on the experience of the 185.2fund as recommended by the actuary retained under section 
         356.214 must be transferred 185.3from the deposit accumulation fund to the retirement benefit fund as of the last business 185.4day of the month in which the retirement allowance begins. The income from investments 185.5of these assets must be allocated to this fund and any interest charge under subdivision 185.63, paragraph (c), must be credited to the fund. There must be paid from this fund the 185.7retirement annuities authorized by law. A required reserve calculation for the retirement 185.8benefit fund must be made by the actuary retained under section 
         356.214 and must be 185.9certified to the retirement board by the actuary retained under section 
         356.214.185.10    (c) There is established a deferred yield adjustment account which must be increased 185.11by the sale or disposition of any debt securities at less than book value and must be 185.12decreased by the sale or disposition of debt securities at more than book value. At the 185.13end of each fiscal year, a portion of the balance of this account must be offset against the 185.14investment income for that year. The annual portion of the balance to be offset must be 185.15proportional to the reciprocal of the average remaining life of the bonds sold, unless the 185.16amounts are offset by gains on the future sales of these securities. The amount of this 185.17account must be included in the recognized value of assets other than corporate stocks 185.18and all other equity investments. In any fiscal year in which the gains on the sales of debt 185.19securities exceed the discounts realized on the sales of such securities, the excess must 185.20be used to reduce the balance of the account. If the realized capital gains are sufficient 185.21to reduce the balance of the account to zero, any excess gains must be available for the 185.22calculation of postretirement adjustments.185.23    (d)(1) Annually, following June 30, the board shall use the procedures in clauses (2), 185.24(3), and (4), to determine whether a postretirement adjustment is payable and to determine 185.25the amount of any postretirement adjustment.185.26    (2) If the Consumer Price Index for urban wage earners and clerical workers all 185.27items index published by the Bureau of Labor Statistics of the United States Department 185.28of Labor increases from June 30 of the preceding year to June 30 of the current year, the 185.29board shall certify the percentage increase. The amount certified must not exceed the 185.30lesser of the difference between the preretirement interest assumption and postretirement 185.31interest assumption in section 356.215, subdivision 8, paragraph (a), or 3.5 percent.185.32    (3) In addition to any percentage increase certified under paragraph (b), the board 185.33shall use the following procedures to determine if a postretirement adjustment is payable 185.34under this paragraph:185.35    (i) the board shall determine the market value of the fund on June 30 of that year;186.1    (ii) the amount of reserves required as of the current June 30 for the annuity or 186.2benefit payable to an annuitant and benefit recipient must be determined by the actuary 186.3retained under section 
         356.214. An annuitant or benefit recipient who has been receiving 186.4an annuity or benefit for at least 12 full months as of the current June 30 is eligible to 186.5receive a full postretirement adjustment. An annuitant or benefit recipient who has been 186.6receiving an annuity or benefit for at least one full month, but less than 12 full months as of 186.7the current June 30, is eligible to receive a partial postretirement adjustment. The amount 186.8of the reserves for those annuitants and benefit recipients who are eligible to receive a 186.9full postretirement benefit adjustment is known as "eligible reserves." The amount of 186.10the reserves for those annuitants and benefit recipients who are not eligible to receive a 186.11postretirement adjustment is known as "noneligible reserves." For an annuitant or benefit 186.12recipient who is eligible to receive a partial postretirement adjustment, additional "eligible 186.13reserves" is an amount that bears the same ratio to the total reserves required for the 186.14annuitant or benefit recipient as the number of full months of annuity or benefit receipt as 186.15of the current June 30 bears to 12 full months. The remainder of the annuitant's or benefit 186.16recipient's reserves are "noneligible reserves";186.17    (iii) the board shall determine the percentage increase certified under clause (2) 186.18multiplied by the eligible required reserves, as adjusted for mortality gains and losses, 186.19determined under item (ii);186.20    (iv) the board shall add the amount of reserves required for the annuities or benefits 186.21payable to annuitants and benefit recipients of the participating public pension plans or 186.22funds as of the current June 30 to the amount determined under item (iii);186.23    (v) the board shall subtract the amount determined under item (iv) from the market 186.24value of the fund determined under item (i);186.25    (vi) the board shall adjust the amount determined under item (v) by the cumulative 186.26current balance determined under item (viii) and any negative balance carried forward 186.27under item (ix);186.28    (vii) a positive amount resulting from the calculations in items (i) to (vi) is the excess 186.29market value. A negative amount is the negative balance;186.30    (viii) the board shall allocate one-fifth of the excess market value or one-fifth of the 186.31negative balance to each of five consecutive years, beginning with the fiscal year ending 186.32the current June 30; and186.33    (ix) to calculate the postretirement adjustment under this paragraph based on 186.34investment performance for a fiscal year, the board shall add together all excess market 186.35value allocated to that year and subtract from the sum all negative balances allocated to 186.36that year. If this calculation results in a negative number, the entire negative balance must 187.1be carried forward and allocated to the next year. If the resulting amount is positive, a 187.2postretirement adjustment is payable under this paragraph. The board shall express a 187.3positive amount as a percentage of the total eligible required reserves certified to the 187.4board under item (ii).187.5    (4) The board shall determine the amount of any postretirement adjustment which 187.6is payable using the following procedure:187.7    (i) the total "eligible" required reserves as of the first of January next following the 187.8end of the fiscal year for the annuitants and benefit recipients eligible to receive a full or 187.9partial postretirement adjustment as determined by item (ii) must be certified to the board 187.10by the actuary retained under section 
         356.214. The total "eligible" required reserves 187.11must be determined by the actuary retained under section 
         356.214 on the assumption that 187.12all annuitants and benefit recipients eligible to receive a full or partial postretirement 187.13adjustment will be alive on the January 1 in question; and187.14    (ii) the board shall add the percentage certified under clause (2) to any positive 187.15percentage calculated under clause (3). The board shall not subtract from the percentage 187.16certified under paragraph (b) any negative amount calculated under clause (3). The sum 187.17of these percentages must be carried to five decimal places and must be certified as the 187.18full postretirement adjustment percentage.187.19    (e) The board shall determine the amount of the postretirement adjustment payable 187.20to each eligible annuitant and benefit recipient. The dollar amount of the postretirement 187.21adjustment must be calculated by applying the certified postretirement adjustment 187.22percentage to the amount of the monthly annuity or benefit payable to each eligible 187.23annuitant or benefit recipient eligible for a full adjustment.187.24    The dollar amount of the partial postretirement adjustment payable to each annuitant 187.25or benefit recipient eligible for a partial adjustment must be calculated by first determining 187.26a partial percentage amount that bears the same ratio to the certified full adjustment 187.27percentage amount as the number of full months of annuity or benefit receipt as of the 187.28current June 30 bears to 12 full months. The partial percentage amount determined 187.29must then be applied to the amount of the monthly annuity or benefit payable to each 187.30annuitant or benefit recipient eligible to receive a partial postretirement adjustment. The 187.31postretirement adjustments are payable on January 1 following the calculations required 187.32under this section and must thereafter be included in the monthly annuity or benefit paid to 187.33the recipient. Any adjustments under this section must be paid automatically unless the 187.34intended recipient files a written notice with the applicable participating public pension 187.35fund or plan requesting that the adjustment not be paid.188.1    (f) As of June 30 annually, the actuary retained under section 
         356.214 shall calculate 188.2the amount of required reserves representing any mortality gains and any mortality losses 188.3incurred during the fiscal year and report the results of those calculations to the plan. 188.4The actuary shall report separately the amount of the reserves for annuitants and benefit 188.5recipients who are eligible for a postretirement benefit adjustment and the amount of 188.6reserves for annuitants and benefit recipients who are not eligible for a postretirement 188.7benefit adjustment. If the net amount of required reserves represents a mortality gain, 188.8the board shall sell sufficient securities or transfer sufficient available cash to equal the 188.9amount. If the amount of required reserves represents a mortality loss, the plan shall 188.10transfer an amount equal to the amount of the net mortality loss. The amount of the 188.11transfers must be determined before any postretirement benefit adjustments have been 188.12made. All transfers resulting from mortality adjustments must be completed annually 188.13by December 31 for the preceding June 30. Interest is payable on any transfers after 188.14December 31 based upon the preretirement interest assumption for the participating plan 188.15or fund as specified in section 
         356.215, subdivision 8, stated as a monthly rate. Book 188.16values of the assets of the fund must be determined only after all adjustments for mortality 188.17gains and losses for the fiscal year have been made.188.18    (g) All money necessary to meet the requirements of the certification of withdrawals 188.19and all money necessary to pay postretirement adjustments under this section are hereby 188.20and from time to time appropriated from the postretirement investment fund to the board.188.21    (h) Annually, following the calculation of any postretirement adjustment payable 188.22from the retirement benefit fund, the board of trustees shall submit a report to the 188.23executive director of the Legislative Commission on Pensions and Retirement and to the 188.24commissioner of finance indicating the amount of any postretirement adjustment and 188.25the underlying calculations on which that postretirement adjustment amount is based, 188.26including the amount of dividends, the amount of interest, and the amount of net realized 188.27capital gains or losses utilized in the calculations.188.28    (i) With respect to a former contributing member who began receiving a retirement 188.29annuity or disability benefit under section 
         422A.151, paragraph (a), clause (2), after June 188.3030, 1997, or with respect to a survivor of a former contributing member who began 188.31receiving a survivor benefit under section 
         422A.151, paragraph (a), clause (2), after June 188.3230, 1997, the reserves attributable to the one percent lower amount of the cost-of-living 188.33adjustment payable to those annuity or benefit recipients annually must be transferred back 188.34to the deposit accumulation fund to the credit of the Metropolitan Airports Commission. 188.35The calculation of this annual reduced cost-of-living adjustment reserve transfer must be 188.36reviewed by the actuary retained under section 
         356.214.189.1EFFECTIVE DATE.This section is effective retroactively from June 30, 2008.189.2    Sec. 4. Minnesota Statutes 2008, section 422A.08, subdivision 5, is amended to read:189.3    Subd. 5. Service credit purchase. Any contributor who prior to entering the service 189.4of the city was an employee of a public corporation, is authorized, using the procedure in 189.5subdivision 5a section 356.551, to purchase allowable service credit in the retirement fund 189.6for employment by the public corporation in the same manner as though the service had 189.7been rendered to the city, providing that the individual has not received service credit and 189.8is not eligible to receive service credit for this period under any other plan or fund listed 189.9in section 
         356.30, subdivision 3. Before receiving credit for service rendered to a public 189.10corporation as herein set forth, the contributing employee shall make application therefor 189.11in writing to the retirement board, and shall contribute to the retirement fund the amount 189.12specified in subdivision 5a section 356.551.  189.13EFFECTIVE DATE.This section is effective the day following final enactment.189.14    Sec. 5. Laws 1989, chapter 319, article 11, section 13, is amended to read:189.15    Sec. 13. REPEALER.189.16    Laws 1967, chapter 815; Laws 1978, chapter 683; and Laws 1981, chapter 224, 189.17sections 2 and 5 section 245, are repealed.189.18EFFECTIVE DATE.This section is effective the day following final enactment 189.19and applies retroactively from June 2, 1989.189.20    Sec. 6. Laws 2008, chapter 349, article 14, section 13, is amended to read:189.21    Sec. 13. REPEALER OF PRIOR INCONSISTENT SPECIAL VOLUNTEER 189.22FIRE RELIEF ASSOCIATION ANCILLARY BENEFIT LEGISLATION.189.23    Subdivision 1. Anoka. Laws 1969, chapter 352 252, section 1, subdivisions 3, 189.244, 5, and 6, are repealed.189.25    Subd. 2. Butterfield. Laws 1975, chapter 185, section 1, is repealed.189.26    Subd. 3. Coon Rapids. Laws 1973, chapter 304, section 1, subdivisions 3, 4, 5, 6, 189.277, 8, and 9, are repealed.189.28    Subd. 4. Edina. (1) Laws 1965, chapter 592, section 3, as amendedadded by Laws 189.291969, chapter 644, section 2, and amended by Laws 1975, chapter 229, section 2; (2) Laws 189.301965, chapter 592, section 4, as amendedadded by Laws 1969, chapter 644, section 2, and 189.31amended by Laws 1975, chapter 229, section 3, Laws 1985, chapter 261, section 37, and 190.1Laws 1991, chapter 125, section 1; (3) Laws 1985, chapter 261, section 37, as amended by 190.2Laws 1991, chapter 125, section 1; and (4) Laws 1991, chapter 125, section 1, are repealed.190.3    Subd. 5. Fairmont. Laws 1967, chapter 575, sections 2, as amended by Laws 1979, 190.4chapter 201, section 23; 3; and 4, are repealed.190.5    Subd. 6. Falcon Heights. Laws 1969, chapter 526, sections 3; 4; 5, as amended 190.6by Laws 1974, chapter 208, section 2; and 7, as amended by Laws 1974, chapter 208, 190.7section 3, are repealed.190.8    Subd. 7. Golden Valley. Laws 1971, chapter 140, sections 2, as amended by Laws 190.91973, chapter 30, section 2; 3, as amended by Laws 1973, chapter 30, section 3; 4, as 190.10amended by Laws 1973, chapter 30, section 4; and 5, as amended by Laws 1973, chapter 190.1130, section 5; and Laws 1993, chapter 244, article 4, section 1, are repealed.190.12    Subd. 8. Wayzata. Laws 1973, chapter 472, section 1, as amended by Laws 1976, 190.13chapter 272, section 1, and Laws 1979, chapter 201, section 33, is repealed.190.14    Subd. 9. White Bear Lake. Laws 1971, chapter 214, section 1, subdivisions190.15sections 1, 2, 3, 4, and 5, are repealed.190.16EFFECTIVE DATE; LOCAL APPROVAL.(a) Subdivision 1 is effective the day 190.17after the governing body of Anoka and its chief clerical officer timely complete their 190.18compliance with Minnesota Statutes, section 
         645.021, subdivisions 2 and 3, after June 190.1930, 2009.190.20    (b) Subdivision 2 is effective the day after the governing body of Butterfield and its 190.21chief clerical officer timely complete their compliance with Minnesota Statutes, section 190.22645.021, subdivisions 2
          and 3, after June 30, 2009.190.23    (c) Subdivision 3 is effective the day after the governing body of Coon Rapids and 190.24its chief clerical officer timely complete their compliance with Minnesota Statutes, section 190.25645.021, subdivisions 2
          and 3, after June 30, 2009.190.26    (d) Subdivision 4 is effective the day after the governing body of Edina and its 190.27chief clerical officer timely complete their compliance with Minnesota Statutes, section 190.28645.021, subdivisions 2
          and 3, after June 30, 2009.190.29    (e) Subdivision 5 is effective the day after the governing body of Fairmont and its 190.30chief clerical officer timely complete their compliance with Minnesota Statutes, section 190.31645.021, subdivisions 2
          and 3, after June 30, 2009.190.32    (f) Subdivision 6 is effective the day after the governing body of Falcon Heights 190.33and its chief clerical officer timely complete their compliance with Minnesota Statutes, 190.34section 
         645.021, subdivisions 2 and 3, after June 30, 2009.191.1    (g) Subdivision 7 is effective the day after the governing body of Golden Valley and 191.2its chief clerical officer timely complete their compliance with Minnesota Statutes, section 191.3645.021, subdivisions 2
          and 3, after June 30, 2009.191.4    (h) Subdivision 8 is effective the day after the governing body of Wayzata and its 191.5chief clerical officer timely complete their compliance with Minnesota Statutes, section 191.6645.021, subdivisions 2
          and 3, after June 30, 2009.191.7    (i) Subdivision 9 is effective the day after the governing body of White Bear Lake 191.8and its chief clerical officer timely complete their compliance with Minnesota Statutes, 191.9section 
         645.021, subdivisions 2 and 3, after June 30, 2009.191.10EFFECTIVE DATE.This section is effective the day following final enactment.191.11    Sec. 7.  REPEALER.191.12Minnesota Statutes 2008, sections 356.2165; and 422A.08, subdivision 5a, are 191.13repealed.191.14EFFECTIVE DATE.This section is effective the day following final enactment.191.15ARTICLE 12191.16ONE PERSON AND SMALL GROUP RETIREMENT PROVISIONS191.17    Section 1. Minnesota Statutes 2008, section 352.86, subdivision 1, is amended to read:191.18    Subdivision 1. Eligibility; retirement annuity.A person who is employed by191.19This section applies to any employee of the Department of Transportation in the civil 191.20service employment classification of aircraft pilot or chief pilot, who is covered for 191.21that employment by the general employee retirement plan of the system under section 191.22352.01, subdivision 23, and who elects thiselected before June 1, 2008, special retirement 191.23coverage under subdivision 3, who is prohibited from performing the duties of aircraft 191.24pilot or chief pilot after reaching age 65 by a policy adopted by the commissioner of 191.25transportation, andthis section by an irrevocable election on forms provided by the 191.26executive director.191.27    Subd. 2.Retirement annuity.An eligible person under subdivision 1 who 191.28terminates employment as a state employee on or after age 62 but prior to normal 191.29retirement age is entitled, upon application, to a retirement annuity computed under 191.30section 
         352.115, subdivisions 2 and 3, without any reduction for early retirement under 191.31section 
         352.116, subdivision 1.191.32EFFECTIVE DATE.This section is effective the day following final enactment.192.1    Sec. 2. Minnesota Statutes 2008, section 352.86, subdivision 1a, is amended to read:192.2    Subd. 1a 3. Disability benefits. An employee described in subdivision 1, who is 192.3less than 62 years of age and who becomes disabled and physically or mentally unfit 192.4to perform occupational duties due to injury, sickness, or other disability, and who is 192.5found disqualified for retention as chief pilot or pilot as a result of a physical examination 192.6required by applicable federal laws or regulations, is entitled upon application to disability 192.7benefits for a maximum of five years in the amount ofmay submit an application for 192.8disability benefits calculated under section 352.113, subdivision 3. In considering the 192.9disability benefit application, the executive director must use the disability standard 192.10specified in this subdivision rather than the total and permanent standard specified in 192.11section 352.113, subdivision 1. If disability benefits commence under section 352.113, 192.12subdivision 3, the appointing authority shall also provide payments from the state airports 192.13fund, totaling 75 percent of current monthly salary, to be paid by the appointing authority192.14less the amount payable under section 352.113, subdivision 3. Payments from the state 192.15airports fund must be made for five years or until normal retirement age, whichever is 192.16earlier. Disability benefits must not continue after the employee reaches age 62. These 192.17benefits are in lieu of all other state benefits for the disability, including, but not limited to, 192.18workers' compensation benefits.192.19EFFECTIVE DATE.This section is effective the day following final enactment.192.20    Sec. 3. Minnesota Statutes 2008, section 352.86, subdivision 2, is amended to read:192.21    Subd. 2 4. Additional contributions.The special retirement annuity authorized 192.22by subdivision 1 shall be financed by An employee covered by this section must pay an 192.23additional employee contribution from the covered aircraft pilot or chief pilot of 1.6 192.24percent and an employer contribution fromof salary. The Department of Transportation 192.25must pay an additional employer contribution of of 1.6 percent of salary. These 192.26contributions are in addition to the contributions required by section 
         352.04, subdivisions 192.272 and 3
         . They must be made in the manner provided for in section 
         352.04, subdivisions 4, 192.285, and 6
         .  192.29EFFECTIVE DATE.This section is effective the day following final enactment.192.30    Sec. 4. Minnesota Statutes 2008, section 353.01, subdivision 2, is amended to read:192.31    Subd. 2. Public employee. "Public employee" means a governmental employee 192.32performing personal services for a governmental subdivision defined in subdivision 6, 192.33whose salary is paid, in whole or in part, from revenue derived from taxation, fees, 193.1assessments, or from other sources. The term includes the classes of persons described or 193.2listed in subdivision 2a. The term also includes persons who elect association membership 193.3under subdivision 2d, paragraph (a), and persons for whom the applicable governmental 193.4subdivision had elected association membership under subdivision 2d, paragraph (b). The 193.5term also includes full-time employees of the Dakota County Agricultural Society. The 193.6term excludes the classes of persons listed in subdivision 2b for purposes of membership 193.7in the association.193.8EFFECTIVE DATE.This section is effective the first day of the first full payroll 193.9period commencing after final enactment.193.10    Sec. 5. Minnesota Statutes 2008, section 353.01, subdivision 2a, is amended to read:193.11    Subd. 2a. Included employees. (a) Public employees whose salary from 193.12employment in one or more positions within one governmental subdivision exceeds $425 193.13in any month shall participate as members of the association. If the salary is less than 193.14$425 in a subsequent month, the employee retains membership eligibility. Eligible public 193.15employees shall participate as members of the association with retirement coverage by 193.16the public employees retirement plan or the public employees police and fire retirement 193.17plan under this chapter, or the local government correctional employees retirement plan 193.18under chapter 353E, whichever applies, as a condition of their employment on the first 193.19day of employment unless they:193.20    (1) are specifically excluded under subdivision 2b;193.21    (2) do not exercise their option to elect retirement coverage in the association as 193.22provided in subdivision 2d, paragraph (a); or193.23    (3) are employees of the governmental subdivisions listed in subdivision 2d, 193.24paragraph (b), where the governmental subdivision has not elected to participate as a 193.25governmental subdivision covered by the association.193.26    (b) A public employee who was a member of the association on June 30, 2002, 193.27based on employment that qualified for membership coverage by the public employees 193.28retirement plan or the public employees police and fire plan under this chapter, or the 193.29local government correctional employees retirement plan under chapter 353E as of June 193.3030, 2002, retains that membership for the duration of the person's employment in that 193.31position or incumbency in elected office. Except as provided in subdivision 28, the person 193.32shall participate as a member until the employee or elected official terminates public 193.33employment under subdivision 11a or terminates membership under subdivision 11b.193.34    (c) Public employees under paragraph (a) include:194.1(1) physicians under section 
         353D.01, subdivision 2, who do not elect public 194.2employees defined contribution plan coverage under section 
         353D.02, subdivision 2.;194.3(2) full-time employees of the Dakota County Agricultural Society; and194.4(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis 194.5Police Relief Association who are not excluded employees under subdivision 2b due to 194.6coverage by the relief association pension plan and who elect Public Employee Retirement 194.7Association general plan coverage under section 5.194.8EFFECTIVE DATE.This section is effective the first day of the first full payroll 194.9period commencing after final enactment.194.10    Sec. 6. Minnesota Statutes 2008, section 353.01, subdivision 6, is amended to read:194.11    Subd. 6. Governmental subdivision. (a) "Governmental subdivision" means a 194.12county, city, town, school district within this state, or a department, unit or instrumentality 194.13of state or local government, or any public body established under state or local 194.14authority that has a governmental purpose, is under public control, is responsible for the 194.15employment and payment of the salaries of employees of the entity, and receives a major 194.16portion of its revenues from taxation, fees, assessments or from other public sources.194.17    (b) Governmental subdivision also means the Public Employees Retirement 194.18Association, the League of Minnesota Cities, the Association of Metropolitan 194.19Municipalities, charter schools formed under section 
         124D.10, service cooperatives 194.20exercising retirement plan participation under section 
         123A.21, subdivision 5, joint powers 194.21boards organized under section 
         471.59, subdivision 11, paragraph (a), family service 194.22collaboratives and children's mental health collaboratives organized under section 
         471.59, 194.23subdivision 11, paragraph (b) or (c), provided that the entities creating the collaboratives 194.24are governmental units that otherwise qualify for retirement plan membership, public 194.25hospitals owned or operated by, or an integral part of, a governmental subdivision or 194.26governmental subdivisions, the Association of Minnesota Counties, the Minnesota 194.27Inter-county Association, the Minnesota Municipal Utilities Association, the Metropolitan 194.28Airports Commission, the University of Minnesota with respect to police officers covered 194.29by the public employees police and fire retirement plan, the Minneapolis Employees 194.30Retirement Fund for employment initially commenced after June 30, 1979, the Range 194.31Association of Municipalities and Schools, soil and water conservation districts, economic 194.32development authorities created or operating under sections 
         469.090 to 
         469.108, the Port 194.33Authority of the city of St. Paul, the Spring Lake Park Fire Department, incorporated, 194.34the Lake Johanna Volunteer Fire Department, incorporated, the Red Wing Environmental 194.35Learning Center, the Dakota County Agricultural Society, and Hennepin Healthcare 195.1System, Inc., and the Minneapolis Firefighters Relief Association and Minneapolis Police 195.2Relief Association with respect to staff covered by the Public Employees Retirement 195.3Association general plan.195.4    (c) Governmental subdivision does not mean any municipal housing and 195.5redevelopment authority organized under the provisions of sections 
         469.001 to 
         469.047; 195.6or any port authority organized under sections 
         469.048 to 
         469.089 other than the Port 195.7Authority of the city of St. Paul; or any hospital district organized or reorganized prior 195.8to July 1, 1975, under sections 
         447.31 to 
         447.37 or the successor of the district; or the 195.9board of a family service collaborative or children's mental health collaborative organized 195.10under sections 
         124D.23, 
         245.491 to 
         245.495, or 
         471.59, if that board is not controlled 195.11by representatives of governmental units.195.12    (d) A nonprofit corporation governed by chapter 317A or organized under Internal 195.13Revenue Code, section 501(c)(3), which is not covered by paragraph (a) or (b), is not a 195.14governmental subdivision unless the entity has obtained a written advisory opinion from 195.15the United States Department of Labor or a ruling from the Internal Revenue Service 195.16declaring the entity to be an instrumentality of the state so as to provide that any future 195.17contributions by the entity on behalf of its employees are contributions to a governmental 195.18plan within the meaning of Internal Revenue Code, section 414(d).195.19    (e) A public body created by state or local authority may request membership on 195.20behalf of its employees by providing sufficient evidence that it meets the requirements in 195.21paragraph (a).195.22    (f) An entity determined to be a governmental subdivision is subject to the reporting 195.23requirements of this chapter upon receipt of a written notice of eligibility from the 195.24association. 195.25EFFECTIVE DATE.This section is effective the first day of the first full payroll 195.26period commencing after final enactment.195.27    Sec. 7. PRIOR PENSION PLAN TERMINATION.195.28As of the effective date of this section, contributions to the defined contribution or 195.29defined benefit pension plan or plans which previously provided primary pension coverage 195.30for any individual who elects coverage by the general employees retirement plan of the 195.31Public Employee Retirement Association under section 5 must terminate and must not be 195.32resumed.195.33EFFECTIVE DATE.This section is effective the first day of the first full payroll 195.34period commencing after final enactment.196.1    Sec. 8. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; SERVICE 196.2CREDIT PURCHASE AUTHORIZATION.196.3(a) Notwithstanding any provision of Minnesota Statutes, chapter 353, to the 196.4contrary, unless the period to be purchased is credited as allowable service by another 196.5retirement plan covered by Minnesota Statutes, section 356.30, or would be ineligible 196.6for credit as allowable service under Minnesota Statutes, section 353.01, subdivision 196.716, if the service had been performed after the effective date of this section, an eligible 196.8person described in paragraph (b) may purchase allowable service credit under Minnesota 196.9Statutes, section 353.01, subdivision 16, from the general employees retirement plan of 196.10the Public Employees Retirement Association for the period specified in paragraph (c), by 196.11making the payment required under paragraph (d). 196.12(b) An eligible person is a person who began employment as staff to the Minneapolis 196.13Firefighters Relief Association or the Minneapolis Police Relief Association prior to 196.14the effective date of this section, and due to that employment became a member of the 196.15general employees retirement plan of the Public Employees Retirement Association on 196.16the effective date of this section.196.17(c) The period of prior service credit available for purchase is the period of 196.18employment with the Minneapolis Firefighters Relief Association or the Minneapolis 196.19Police Relief Association,  whichever is applicable, which would be includable service 196.20under the Public Employees Retirement Association general plan if that service had been 196.21performed after the effective date rather than before. 196.22(d) Except as otherwise stated under this section, Minnesota Statutes, section 196.23356.551, applies to this purchase. 196.24(e) An eligible person may purchase allowable service credit for a portion of the 196.25eligible period, resulting in prorated service credit.196.26(f) The election to purchase prior service credit under this section must be made in 196.27writing and must be filed with the executive director of the Public Employees Retirement 196.28Association.196.29(g) This section expires one year after the effective date of this section.196.30EFFECTIVE DATE.This section is effective the first day of the first full payroll 196.31period commencing after final enactment.196.32    Sec. 9. ELECTION OF COVERAGE.196.33(a) An individual who is an employee of the Minneapolis Firefighters Relief 196.34Association or the Minneapolis Police Relief Association on the effective date of this 196.35section, and who is not excluded under section 353.01, subdivision 2b, due to coverage 197.1by the relief association pension plan, may elect prospective coverage by the general 197.2employees retirement plan of the Public Employees Retirement Association under an 197.3election as specified in this section.197.4(b) An eligible individual under paragraph (a) may elect coverage by the general 197.5employees retirement plan of the Public Employees Retirement Association by making an 197.6election on a form provided by the Public Employees Retirement Association executive 197.7director. For an election to be valid, it must be made within 90 days of the effective date 197.8of this section and is irrevocable.197.9(c) The Public Employees Retirement Association must provide eligible individuals 197.10with information and counseling regarding the general employees retirement plan of the 197.11Public Employees Retirement Association and the implications of electing that coverage.197.12(d) If an eligible individual elects not to be covered by the general employees 197.13retirement plan of the Public Employees Retirement Association, or if no election is made, 197.14the prior coverage, if any, remains unchanged.197.15EFFECTIVE DATE.This section is effective the first day of the first full payroll 197.16period commencing after final enactment.197.17    Sec. 10. PERA-GENERAL; PURCHASE OF CREDIT FOR OMITTED 197.18CONTRIBUTION PERIOD.197.19(a) An eligible person described in paragraph (b) is entitled, upon written application 197.20filed with the executive director of the Public Employees Retirement Association, to 197.21purchase service credit for the period of omitted contributions specified in paragraph (c) 197.22by paying the amount determined under paragraph (d). The employer of the eligible 197.23person shall pay the amount determined under paragraph (e) within 30 days of being 197.24notified by the Public Employees Retirement Association executive director that the 197.25eligible person made the person's payment.197.26(b) An eligible person is a person who:197.27(1) was born on December 16, 1946;197.28(2) was first employed by the city of Elizabeth, Minnesota, municipal liquor store on 197.29July 23, 2004;197.30(3) was first eligible for coverage by the general employees retirement plan of the 197.31Public Employees Retirement Association in September 2004;197.32(4) was not reported as a general employees retirement plan member by the city of 197.33Elizabeth, Minnesota, to the Public Employees Retirement Association until January 197.342005; and198.1(5) did not receive service credit under Minnesota Statutes, section 353.27, 198.2subdivision 12, paragraph (e), in a timely fashion.198.3(c) The period of purchasable service credit is that portion of the period September 198.41, 2004, until January 1, 2005, during which the eligible person was an included employee 198.5under Minnesota Statutes, section 353.01, subdivision 2a, and during which the required 198.6deductions from the compensation of the eligible employee were not made under 198.7Minnesota Statutes, section 353.27, subdivision 2.198.8(d) The member purchase amount is the amount of the omitted member contributions 198.9during the period of purchasable service credit, plus compound annual interest at the rate 198.10of 8.5 percent from October 15, 2004, to the date on which payment is made.198.11(e) The employer purchase amount is either the balance of the full actuarial value 198.12purchase payment amount determined under Minnesota Statutes, section 356.551, 198.13remaining after subtracting the amount under paragraph (d) or the amount of the employer 198.14and employer additional contributions under Minnesota Statutes, section 353.27, 198.15subdivisions 3 and 3a, plus compound annual interest at the rate of 8.5 percent from 198.16October 15, 2004, to the date on which payment is made, whichever is larger. If the 198.17employer fails to pay the employer purchase amount in a timely fashion, the executive 198.18director of the Public Employees Retirement Association shall certify the unpaid 198.19amount, plus monthly compound interest at the rate of 0.71 percent for the period, to the 198.20commissioners of finance and revenue, who shall deduct the unpaid amount from any state 198.21aid or state transfers that the employing unit is eligible to receive and shall transmit the 198.22amount to the Public Employees Retirement Association.198.23(f) Purchase authority under this section expires on July 1, 2010.198.24EFFECTIVE DATE.This section is effective the day following final enactment.198.25    Sec. 11. PERA-GENERAL AND TRA; ANNUITY APPLICATION 198.26REVOCATION.198.27(a) An eligible person specified in paragraph (b) may elect to revoke retirement 198.28annuity applications as provided in paragraph (c). The election must be made in writing 198.29and must be filed with the executive director of the applicable retirement plan.198.30(b) An eligible person is a person who:198.31(1) was born in 1943;198.32(2) was employed as publications editor for St. Cloud State University for twenty 198.33years, ending in 1998, and was covered by virtue of that employment by the general state 198.34employees retirement plan of the Minnesota State Retirement System;199.1(3) retired from the general state employees retirement plan of the Minnesota State 199.2Retirement System in 2007;199.3(4) was employed by the Underwood, Minnesota, municipal liquor store in early 199.42008, terminated that employment on April 18, 2008, applied for a retirement annuity from 199.5the general employee retirement plan of the Public Employees Retirement Association 199.6and from the Teachers Retirement Association under Minnesota Statutes, section 356.30, 199.7in April or May 2008, and was subsequently reemployed by the municipal liquor store 199.8on or about May 20, 2008; and199.9(5) was informed by the Public Employees Retirement Association of a retirement 199.10annuity overpayment of $349.65 on July 22, 2008.199.11(c) If elected, the eligible person may revoke the person's application for a retirement 199.12annuity from the general employee retirement plan of the Public Employees Retirement 199.13Association, or revoke the person's application for a retirement annuity from the Teachers 199.14Retirement Association, or revoke the person's application for a retirement annuity from 199.15both retirement plans. If a retirement application is revoked, the person's retirement 199.16annuity ends, the entitlement of the person to a future retirement annuity is restored, and 199.17that future retirement annuity amount must be adjusted by subtracting the total value of 199.18the retirement annuity amounts received from that retirement plan from the actuarial 199.19present value of the eligible person's future annuity without adjustment, calculated based 199.20on the mortality table for retired lives of the applicable retirement plan and 8.5 percent 199.21interest rate assumption, and determining the adjusted annuity amount from the remaining 199.22actuarial present value amount using the same interest and mortality assumption.199.23EFFECTIVE DATE.This section is effective the day following final enactment.199.24    Sec. 12. MSRS-GENERAL AND PERA-GENERAL; PLAN MEMBERSHIP 199.25EXCLUSION AND DEFERRED ANNUITY AUGMENTATION.199.26(a) A qualified person described in paragraph (b) may, upon written application 199.27filed with the executive director of the Public Employees Retirement Association, elect 199.28retroactive exclusion from coverage by the general employees retirement plan of the 199.29Public Employees Retirement Association for any period of teacher assistant service for 199.30Independent School District No. 623, Roseville, and qualification for deferred annuities 199.31augmentation for the retroactively excluded period.199.32(b) A qualified person is a person who:199.33(1) was born on January 17, 1951;199.34(2) was employed by Ramsey County from January 20, 1975, to June 22, 1999;199.35(3) was employed by the state of Minnesota from June 22, 1999, to April 4, 2006; and200.1(4) was employed by Independent School District No. 623, Roseville, as a teacher 200.2assistant following terminating state employment from December 13, 2007, to June 6, 200.32008.200.4(c) If the retroactive exclusion is elected, all member and employer contributions to 200.5the general employees retirement plan of the Public Employees Retirement Association 200.6made with respect to Independent School District No. 623, Roseville, teacher assistant 200.7employment must be refunded with interest under Minnesota Statutes, section 353.27, 200.8subdivision 7, and the qualified person is entitled, if otherwise eligible, for deferred 200.9annuities augmentation from the general employees retirement plan of the Public 200.10Employees Retirement Association and from the general state employees retirement plan 200.11of the Minnesota State Retirement System for the period of retroactive exclusion.200.12(d) Authority to make the election under this section expires September 1, 2009.200.13EFFECTIVE DATE.This section is effective the day following final enactment.200.14    Sec. 13. MSRS-GENERAL; EXCEPTION TO DISABILITY BENEFIT 200.15APPLICATION DEADLINE.200.16(a) Notwithstanding any provision of Minnesota Statutes, section 352.113, 200.17subdivision 4, paragraph (e), to the contrary, an eligible person described in paragraph 200.18(b) is entitled to file a disability benefit application with the general state employees 200.19retirement plan of the Minnesota State Retirement System and, if otherwise qualified under 200.20Minnesota Statutes, section 352.113, receive a disability benefit from the retirement plan.200.21(b) An eligible person is a person who:200.22(1) was born on March 8, 1966;200.23(2) was an employee of the Minnesota Veterans Home at Silver Bay, Minnesota;200.24(3) terminated state employment on July 25, 2007;200.25(4) attempted to apply for a disability benefit in February 2008;200.26(5) had a request to apply for a disability benefit denied by the executive director of 200.27the Minnesota State Retirement System on April 3, 2008;200.28(6) appealed the executive director's decision to the Minnesota State Retirement 200.29System board of directors on April 24, 2008; and200.30(7) had the appeal to the Minnesota State Retirement System board of directors 200.31denied on August 4, 2008.200.32(c) This section expires on June 1, 2010.200.33EFFECTIVE DATE.This section is effective the day following final enactment.201.1    Sec. 14. MSRS-GENERAL; ALLOWABLE SERVICE CREDIT REVISION FOR 201.2JOB-SHARE EMPLOYEES.201.3(a) An eligible person as described in paragraph (b) is entitled to have any partial 201.4month allowable service credit in the general state employees retirement plan of the 201.5Minnesota State Retirement System for part-time employment as a job-share employee 201.6revised to be identical to allowable service credit for part-time state employment under 201.7Minnesota Statutes, section 352.01, subdivision 11, that was not rendered as a job-share 201.8employee.201.9(b) An eligible person:201.10(1) is an active member of the general state employees retirement plan or a retired 201.11member of the general state employees retirement plan;201.12(2) was employed in the demonstration job-sharing project under Laws 1980, 201.13chapter 572, or in the job-sharing program under Minnesota Statutes 1998, sections 201.1443A.41 to 43A.46;201.15(3) was employed in the demonstration job-sharing project or in the job-sharing 201.16program for one-half of full time; and201.17(4) received partial month allowable service credit under Minnesota Statutes, section 201.18352.01, subdivision 11.201.19(c) To have allowable service credit revised under this section, an eligible person 201.20shall provide the executive director of the Minnesota State Retirement System any 201.21relevant documentation that the executive director requests.201.22(d) If the eligible person is a retired member of the general state employees 201.23retirement plan, the person's retirement annuity must be recomputed based on the revised 201.24service credit under this section and the recomputed retirement annuity is payable on the 201.25first day of the month next following the effective date of this section.201.26(e) Nothing in this section may be interpreted to authorize the crediting of more than 201.27one year of allowable service during any 12-month period or to authorize the payment of 201.28any retroactive recomputed retirement annuity amounts.201.29EFFECTIVE DATE.This section is effective the day following final enactment.201.30    Sec. 15. HENNEPIN COUNTY EMPLOYEE WAIVER OF SERVICE 201.31REQUIREMENT TO APPLY FOR DISABILITY.201.32(a) Notwithstanding Minnesota Statutes, section 353.33, subdivision 1, an eligible 201.33person specified in paragraph (b) is authorized to submit an application for disability 201.34benefits from the general employees retirement plan of the Public Employees Retirement 201.35Association.202.1(b) An eligible person is a person who:202.2(1) was born May 6, 1972;202.3(2) was employed by Independent School District No. 11, Anoka-Hennepin, from 202.4September 11, 1995, to August 6, 1996;202.5(3) was employed by Hennepin County from July 31, 2000, to December 30, 2004;202.6(4) was again employed by Hennepin County starting April 2, 2007, with the most 202.7recent employment position being a principal child support officer;202.8(5) has service credit with the Public Employees Retirement Association due to the 202.9employment under clauses (2), (3), and (4); and202.10(6) has had several leaves from Hennepin County employment of a medical-related 202.11nature.202.12(c) If an eligible person under paragraph (b) files a valid application, the executive 202.13director of the Public Employees Retirement Association shall determine whether that 202.14eligible person qualifies to receive a disability benefit under the laws and procedures 202.15applicable to the general employees retirement plan of the Public Employees Retirement 202.16Association.202.17(d) This section expires one year after the effective date of this section.202.18EFFECTIVE DATE.This section is effective the day following final enactment.202.19    Sec. 16.  REPEALER.202.20Minnesota Statutes 2008, section 352.86, subdivision 3, is repealed.202.21ARTICLE 13202.22PENSION COMMISSION202.23    Section 1. Minnesota Statutes 2008, section 3.85, subdivision 3, is amended to read:202.24    Subd. 3. Membership. The commission consists of five seven members of the 202.25senate appointed by the Subcommittee on Committees of the Committee on Rules and 202.26Administration and five seven members of the house of representatives appointed by 202.27the speaker. No more than five members from each chamber may be from the majority 202.28caucus in that chamber. Members shall be appointed at the commencement of each regular 202.29session of the legislature for a two-year term beginning January 16 of the first year of the 202.30regular session. Members continue to serve until their successors are appointed. Vacancies 202.31that occur while the legislature is in session shall be filled like regular appointments. If the 202.32legislature is not in session, senate vacancies shall be filled by the last Subcommittee on 202.33Committees of the senate Committee on Rules and Administration or other appointing 203.1authority designated by the senate rules, and house of representatives vacancies shall be 203.2filled by the last speaker of the house, or if the speaker is not available, by the last chair of 203.3the house of representatives Rules Committee.203.4    Sec. 2. COMMISSION STUDY; PENSION FUND CONSOLIDATION 203.5ASSISTANCE FUND.203.6(a) The Legislative Commission on Pensions and Retirement shall study the policy 203.7advantages and disadvantages of creating a state pension relief fund and, if deemed 203.8sufficiently advantageous, shall recommend in the form of draft proposed legislation 203.9the details of a state pension relief fund.203.10(b) The state pension relief fund is intended to be an account in the state treasury to 203.11which ongoing appropriations would be made or a revenue source would be dedicated 203.12and could provide financial support to offset some or all of the costs of smaller public 203.13retirement plans to consolidate, subject to Minnesota Statutes, chapter 353A, as applicable, 203.14into one of the three largest statewide public retirement plans.203.15(c) The commission shall consider provisions for relief funds established in other 203.16states, the potential revenue sources for a state pension relief fund, the appropriate fund 203.17administration, the appropriate investment vehicle or vehicles for the fund, the eligibility 203.18criteria for determining when fund assets could be disbursed to assist in plan funding and 203.19the amount of any fund disbursements, the appropriate level of ongoing funding that is 203.20required with respect to a consolidating retirement plan, and the extent of state and local 203.21responsibility for local retirement plan funding deficiencies.203.22(d) The commission shall file the results of this study on or before February 15, 203.232010, with the chair and the ranking minority member of the State and Local Government 203.24Operations Reform, Technology, and Elections Committee of the house of representatives, 203.25the chair and ranking minority member of the Finance Committee of the house of 203.26representatives, the chair and ranking minority member of the State and Local Government 203.27Operations and Oversight Committee of the senate, and the chair and ranking minority 203.28member of the Finance Committee of the senate.203.29(e) Nothing in this section alters the provisions of Minnesota Statutes, chapter 353A.